Jasper.ai Journey with Dave Rogenmoser

To me, the zero-to-one journey is manual. It is just 100% conversations with individuals. Literally, going and getting the people that you want to use your thing and telling them exactly why they need to, and observing how that conversation goes and then figuring out what needs to happen to make it better for them. Every story I've ever heard about a company doing great in the beginning, that was it. And you have to hold this — I think a lot of founders get too excited about their V1 and feel like they have to be this salesperson showman: 'This is the greatest thing ever, you're going to love it.' You have to have some of that, but if you do it too much, you lose the curiosity. You need to go into these conversations being like, 'Okay, 10% of this pitch is right, 90% is wrong, and I'm mostly curious to figure out what the wrong parts are, not convince you that the whole thing is right.' It takes vulnerability to be like, 'I want you to tell me my baby's ugly. I know there are cool parts and terrible parts.' Having the curiosity to enter conversations with that is so key. If you get too hyped and think this is the greatest thing, and if someone doesn't understand it you blame them — 'Oh, they're idiots' — you miss these key little things you'll pick up from customer conversations. They'll tell you what you need to do to make it amazing.

I think the underlying framing is coming at it from a level of service. You want to be in this mindset: 'I'm just here to serve you,' not 'become a unicorn, raise a bunch of money, grow super fast.' If you do that, you have to position yourself, look really good all the time, can't share anything bad. But if you come at it from service level, like you said, we never thought a unicorn would come out of this. We weren't talking about wanting to grow a unicorn. You thinking when you started this company is one of my favorite parts of this story. It was just, 'Okay, we want to serve customers.' That thinking allows you to come with the right frame of mind to build a company that could ultimately become a unicorn. A lot of people get that flipped and think they've got to fake it till you make it the whole time, but you'll miss these key insights.

We loved it. We weren't in the software space at all, just internet marketers. I looked at where the best software companies come from — a lot come from YC — and I thought, if I'm going to learn to be a great software entrepreneur, I better learn from the best. We applied with Proof, didn't get in the first time. They said it's kind of a toy, asked me what our dream was for it to be. I didn't have an answer for a billion-dollar company, so they said keep building, come back with the answer. We reapplied six months later, got in. It was a no-brainer. It's a big investment to move out there for three months and learn from the best, but there's nothing magical about YC — all their content is online. What it gave us was our team moving out, moving really fast, picking one metric — growth — and being around all these people who normalized building a really huge company. That was the biggest thing. I'd sit down with founders who'd built billion-dollar companies, and they seemed kind of like me. Paul Buchheit, creator of Gmail, did these 30-minute sessions. He said, 'Let's dream about how to build a hundred billion dollar company someday. You may not get there, but you definitely won't get there if you don't think about what that could look like.' I walked out of there never figuring out all the components, but all of a sudden a billion-dollar company didn't seem nearly as big — it's 1% as big as Paul Buchheit wants us to get. It reframed how I thought about scale and what was normal.

I love that. So that brings us to: how did it go from Proof to Jasper?

My recollection is it was kind of like you were stuck before with Proof. Proof got stuck at about that $2.5-3 million mark. We went into our hole, built out this website personalization thing, didn't talk to any customers. We'd been to YC, got some money in the bank, thought we know what we're doing now and don't have to do customer discovery. At some point I started feeling this probably isn't going to work. But I recruited this team on this vision, we've got a lot of code written, spent $1.5 million building Proof 2.0. We got to a point where it was miserable, but we were already this far, let's see it through for another six months. Then GetEmails really took off. You'd pop into my office every hour or two saying, 'Dude, you wouldn't believe this.' I'm sitting there stuck. We ended up doing layoffs, deciding we didn't want to work on that problem anymore. You just kind of hail-married this new thing out of nowhere. Your office — I didn't have this thing, and then it was there. It was the four-minute mile thing. I know you're super smart, super sharp, huge hustler, but you were still the same guy floundering around with Robly. Now by picking a different market and product, you pivoted into this thing taking off. I was like, 'Adam's figuring this out, I'm still a loser stuck here.' We started sitting down talking. I said, 'I need one of these. I've been stuck on this thing for two years. I want what you have.' Even just that mindset caused me to step back and say, 'I'm not going to work on Proof anymore.' We tried to sell it. Talked to some brokers. We were growing super slow, burning a bunch of money. The brokers said you either grow fast and sell at a revenue multiple, or be profitable and sell at an EBITDA multiple. We were neither. He said you need to grow faster — we've been trying that for two years. Or get profitable — we'd lay off the team, refactor code, run it like a lifestyle business for two years to show profitable P&Ls. You said on LinkedIn it'd be pennies on the dollar, like $2-3 million. With investors and other shares, we'd walk out with maybe $500,000 to a million, which isn't a bad outcome, but for all the work it certainly wasn't ideal.

The lesson here as I reflect on it is: if you're listening and you've been stuck for a while — six months, a year — you're probably not going to get out of it by small iterations. This is anecdotal from my experience talking to a lot of people. Jasper was me not adding some feature or redoing the homepage of Proof. It was me saying, 'I'm done tweaking this website optimization business. I'm going to step all the way back, look at all the options of what I could do with my life, and laser in on a new thing.' Jasper was tangential to Proof — similar market, software, some things in our wheelhouse. But as you said, when you have product-market fit, everything works. When you don't, nothing works. I remember having this moment: Austin Distel, amazing marketer, built out this huge funnel for Proof — all the upsells, down sells, 45 different emails. It was perfect. He launched it one morning, supposed to blow up the business. I came in the next day and asked how it went. He said, 'I actually turned it off. I've got a little different idea.' I looked at him and thought, 'Dude, we're in trouble. You don't even care anymore. We were so used to losing. That was two months of work, and you're already on to the next thing.' I realized we were doing such good work and it wasn't working. Fast forward: the same team with Jasper, on our best day early on, we added $4 million in ARR in one day. Same guy who built the funnel we turned off 24 hours later built a funnel five months later that adds $4 million in ARR. Different skills, but we had product-market fit, we were riding a different wave. My advice: if you've been stuck for a period of time — not a week or two, but even a few months — you probably need to make a pretty big swing to get it working again. A pretty big different product iteration. You've got to zig way harder than most people think. Almost all my successes have come from a pretty big zig out of what we were doing.

Somebody asked a question up here — they're looking through the headlines, 'What happens next?' But before we go to the fundraising thing, I want to ask you: can we go over again, because we were talking about it a little bit before the show. When someone... Oh, I want to say something first. I don't think money is the answer to this hard pivot. I don't think, 'Oh, we're stuck, I need to go raise a million dollars from investors and experiment.' The dream scenario is you fire everybody, milk Proof for all it's worth, and that funds other stuff, because you don't know when it's going to hit. The problem with raising money for something that doesn't exist yet is you're on this treadmill. You can die, and if you destroy your credibility, you're done. That's my personal view. Now, what were the indications to you that this might be something big? What was the difference between when Proof was starting and when you were in beta with Jasper?

Totally. With this RB2 thing, which is my new product — we went out with a massive free offer, and I hear things like, 'This feels like I'm cheating. What the f*** am I looking at?' I always had this thing I'd tell my team: 'Nothing ever works as well as you think it will.' We'd host a webinar, estimate 300 registrants, get 400, convert at 30%, got 12%. I'd say take your estimates and cut them in half — if half is still good, it's viable. After Jasper, just a few months in, I turned to a guy and said, 'Everything works better than you think it will.' That was totally different from the previous six years. You'd think you'd get 1,000 webinar registrants, you'd get 9,000. Everything was better. Same team, same stuff, everything was better. So if you're in a situation where nothing works as well as you hope, and you're not getting these riding-the-wave scenarios where you're doing good work — and we were doing good work, great team, early to market, moved super quick — but at the same time, we were riding an awesome wave, right place, right time.

We were growing super fast. Investors started reaching out. We were of this mindset that we didn't want to hire big teams, just run it lean. By the way, I'm back there — you're still there — I didn't last long there. But we got to this point where we thought, 'How do you actually exit a company?' Jasper was getting so big so fast. I tried to sell it to your buddies, and they said, 'We can't touch this, it's too weird. Come back in a few years when we see how the data irons out.' We had nine people still, having a blast, but we were getting worn out. We were either going to have to go public or build a company that could endure long enough to get bought by a strategic acquirer. We were all getting so gassed putting in 20-hour days of customer support. We decided we needed to build a team. I didn't really want to raise money, but I also felt I'd regret not giving this thing a big swing. Investors said they'd never seen a company grow this fast. I have the rest of my life to grow little lifestyle businesses, but this feels like I should really see it through. So we raised the money to scale up, build the team, grow engineering — we had one engineer, my co-founder JP — and also get great investors who knew how to navigate the next phase, because I didn't know how to go public. You and I would have just been sitting in our office doing it. I missed that office, you guys had a parking problem, crossing the river sucked. I was in Clarksville, taking a scooter into this loft with brick walls. It was the perfect environment for dudes building early-stage startups. We raised $125 million from really great investors. Here's a good lesson: I raised that round with my email address still '[email protected]'. People get all prettied up, try to make everything look great. I'd get on calls and say, 'Listen, I don't really want to be here, I want to work on my product and talk to customers. I'm going to do two weeks of raising money. I don't even have a Jasper email address, we haven't had time to set that up.' Because the product was great, the community was great, investors threw money at it. You can raise with an Outlook email if you've got a great product. Our vision was we had all these SMB customers and freelancers — enterprises weren't using AI, it was too scary. This was all before ChatGPT. We always knew there'd be a moment when this goes mainstream and all the big players get involved. We needed to get ready for that moment, build an enterprise-quality product. I didn't know if it'd be two months later or 12 or 24. Frankly, I couldn't believe we'd gotten as far as we did without the cat getting out of the bag. But it's the greatest space to play in.

I remember seeing it posted in our internal Slack. At first I was like, 'No, ChatGPT — we don't do chat. That's a different framing, a bad name.' It wasn't until two or three days later I looked back and thought, 'This is really great.' They were essentially doing the same thing we were — taking an underlying API, packaging it in an intuitive UI, doing prompt engineering in the backend, and making a cohesive end-to-end tool. Turns out that's a very natural interface for people. We missed that. We could have done something like ChatGPT. For us, the conundrum was always teaching people how to use AI — no one had ever used this before. Do you teach them a whole new way of interacting with a computer, or make it similar to previous ways? Turns out just chatting with a computer — people are texting all day, sending emails — that's a pretty good way to do it. We just didn't see it at the time. For the first three months, our business expanded even faster. A lot of people were sitting around over Thanksgiving and Christmas, signing up for AI tools. After that, we started seeing the bottom end of our market churn out — people paying $60 or $99 a month who could get most of their job done with a $20 tool. They should churn. If we're not five times better for their use case, they should churn. But we also saw these big enterprises come to the table for the first time. They'd ghosted us six months before, now they're saying, 'My boss said we're getting on AI this year. Can we do another call?' It was time to shift fully to enterprise and move upmarket as fast as possible, because someone needs to be ready for Home Depot, Adidas, to build a tool fully for them. That whole next year was about shifting our company culture to one for enterprises.

The hard part was I'd never done that before. I didn't know how to do it, didn't know how to talk to those people. Frankly, I didn't enjoy enterprise sales. It's one reason I started a company — I don't want to be involved in corporate America, I hate the politics. But when I raised the Series A, we hired some really great executives. These people are awesome, nothing like you and me, but equally talented in a different set of things. They love being on calls all day, navigating org charts and finding decision makers. I hate that, they love it. I knew AI was moving so fast we had to make that pivot quickly. I called one of our lead investors and said, 'I don't know if I'm the right guy to move us into the enterprise.' He said, 'That could be true, but I wouldn't tell anybody you're thinking that. It's a one-way road — once people start thinking that, you kind of have to do it. Sit on it for four or five months, make sure it's what you're thinking.' So I did. We helped turn the corner, cleaned up some baggage from hyperscaling. Then I called him back in September 2023, a little over a year ago, and said, 'I've thought about it. We'll be in a better position if we hire a CEO with real enterprise experience.' He told me he'd been doing this for 25 years and had never had a founder call him to say they wanted to hire a CEO — it was always him calling them. That still confuses me. To me it makes all the sense in the world. I've taken it as far as I can, we're going into a new place, have to do it fast. If I can find someone better at this, I don't have to do the work I'm terrible at, my stock price goes up, company happier, customers better served. There's no loss. We ran a quick process and found our now-current CEO, Timothy Young. He was Dropbox president at the time. We clicked right out of the gate. He's a former founder but also climbed the corporate ladder. I said, 'I need you to do the enterprise thing. Can you come in and take over?' It was a great culture fit. From first talk to CEO was 45 days. I moved onto the board and stepped out. That's been so good for the company. He's so much better than me at this stage. A year ago, just a little over a year ago. For people listening, it's okay to step out of your own company. Your identity is not your company. You have to do right by your shareholders, employees, customers. Sometimes that means it's not you doing it. For me that was easy, but for a lot of people it's painfully hard.

I think there's a world where that could work. I don't think that company could grow revenue ultimately for super long, no. But you could optimize for profit per employee. Run it relaxed, have your favorite people in the same room. You'd optimize for slightly different things — not going public, but pulling in $100 million of profit over three years. But eventually the only path is to go enterprise. If those nine people couldn't figure that out, you'd be in trouble, have to sell to private equity at a 1x multiple. That was what I was considering doing. That was always the plan you and I talked about: let's run these things with eight or nine people, super fun, throwing the football in the office, no politics, just doing it as long as you can. It was a stressful two or three years, but super fun, super high highs, super low lows. The full gamut — ten years of work compressed into a tiny timeframe. It's just so wild. Seeing it from where I was, you were either smiling ear to ear or totally sullen.

We're probably not going to do anything in SaaS right now. I want to do something local. You know this being online — most people I knew weren't in Austin. I don't know a ton of people here. I'm going to be in Austin the rest of my life, want to be in the ins and outs of the community. Let's do something local. I've always wanted to know how you build real things in the world. I know how to build software and landing pages, but if you say, 'Can you install a sign in that field over there?' I don't know how to do it or who to call. We've been working on this family restaurant/pickleball hangout area two blocks from my house on an acre of land I've always wanted to buy. It's real life, tangible. I'm big on community, families getting together. It's totally up my alley. It's not going to make a bunch of money — you can't IPO a pickleball hangout — but it's a fun project to apply all the learnings from software. JP is my technical co-founder, and I have a hard time doing SaaS without him. He's taking a step back from the keyboard. I have to wait for him to get the itch again. I don't think I could build a company without Tate. If JP's out, I'm going to the restaurant/pickleball thing.

I used to have a good answer — it was davidjper.com. I don't know. Probably tweet at me. That's where I'm hanging out most days. Mostly I'm figuring out how to build a restaurant, which is not being an influencer in the online space. But yeah, you go, I'm in the seat now. Thank you for being my Roger Bannister and showing me how it's done.

Yep, dude. Appreciate it. Thank you everybody for attending another Inbound Outbound Live. Let me know if you like this format. Dave's getting a phone call. Perfect timing. It's my wife. All right, man, take care.