When your customer leads your Series A
I’ll never forget how surreal it felt the first time one of our customers paid us. I know, I know, for most of human history (and for most people living in agricultural societies today) the experience of making something and then exchanging it for money has been a common one. But I’m a creature of the 21st century, a particle in an ever more abstract global economy, and so the experience was weird for me. Somebody valued this thing we’d built with our own two hands enough to pay us for it. I was in shock for several days.
Time went on, our revenue grew, but the feeling didn’t really diminish that much. I think part of it is that I have a love-hate relationship with our product. On the one hand, it’s an incredible magic box that you put your software into and it just finds your bugs for you and makes them perfectly reproducible. No, actually! Try it! But on the other hand, it’s still the palest shadow of the thing that I see when I close my eyes and imagine. Part of me wonders why people are paying for the thing as it is, when we are still working on the thing as it should be. But I’m very grateful that they do.
The next thing that shocked me was when our customers started coming to work for us. The first time this almost happened, somebody told me, “You have to tell them no! We need that person working over there being a fan of ours, not here,” and I went along with it. But they kept applying. I think we now have four employees who came because they’d experienced the other side of working with us (and two more currently interviewing). At various times our sales team has joked that it’s a crisis, but these men and women have brought us an irreplaceable perspective. They’ve been in the trenches with our product without the benefit of inside knowledge, and they know the customer journey because they’ve lived it. I’m not exaggerating when I say that they’re one of our secret weapons. More of you should be hiring your customers.
We’re especially blessed to have these people right now, because they’ve helped us pull off a challenging cultural pivot. Outside some extreme cases, the right way to think about corporate culture isn’t whether it’s good or bad, but rather whether it’s adaptive or maladaptive for your current strategy and ecological niche. Every culture carries tradeoffs, and which tradeoffs are the right ones depends on the situation facing your company. Contrary to what HR tells you, you can’t have all good things in a culture: some values just conflict.1 But you can tune your culture for the situation you face, and as the situation changes you can change your culture too. We spent five and a half years in stealth doing deep research, and you can imagine the kind of culture you need to make that possible. But we knew that those same habits and attitudes wouldn’t carry us through our next phase of growth. So we changed.
That brings me to today. If I was shocked when customers started paying us money, and shocked when customers started asking to work for us, then you can only imagine my reaction when a customer offered to lead our Series A financing! And not just any customer, but Jane Street. They’re one of the most elite technology organizations on the planet, legendary for their taste, discernment, and preference for homegrown solutions. They’d been very happy Antithesis customers for a while, but we’d always honored their request not to tell the world about it. I was planning to ask them to go on the record endorsing us, but I didn’t imagine that it would happen like this!
What Jane Street aren’t known for is venture investing, which is why my first reaction to their offer, and the advice I got from the first people I spoke to, was, “That’s crazy. Nobody does that. Go find a normal VC like a normal person.” But one thing that’s stayed the same about our culture is that we don’t consider “nobody does that” to be a satisfactory argument over here. A poem we often quote at this company is The Calf-Path. We do a lot of seemingly-crazy things that nobody does, when we have a good understanding of why nobody else does them and think it makes sense for us anyways.2 Well, nobody else has a customer lead their Series A because nobody else gets offers like that. Which meant, even more than usual, that we couldn’t rely on Chesterton’s Fence to guide us here. We needed to do some real first-principles thinking and figure it out.
With any raise, once you’ve agreed on the numbers, the most interesting and important question is around alignment: how would Jane Street’s incentives differ from those of a traditional venture investor? Focusing on this question made the answer blindingly obvious: we had to do this. Jane Street are primarily investing because they think Antithesis is going to be very successful, but they’re also partly doing it because they love our product. They use it every day, they understand our vision, roadmap, and technology incredibly deeply, and they want to help us bring into existence the thing that I see when I close my eyes. Which is good, because that’s what I want too.
But the thing that really won me over was the glimpse I got of their culture while we were negotiating the deal. I’ve been in the tech industry for about 15 years, which makes me officially an old person, so I’m going to shake my cane at the sky for a moment. As our industry has gotten richer and more central to how everything in the world works, it’s also gotten a little more tolerant of charlatanry and flimflam, a little lower trust, and a little more nihilistic. Look, I enjoy a good high-energy pitch as much as the next guy, and like I think every other founder I’ve occasionally gotten out over my skis making promises, because the thing I see when I close my eyes feels so real. Some amount of that is healthy and natural, but the last few years in tech have not always felt healthy and natural. Again, I’m not a hater! There are some very exciting things happening in our industry right now, and we’ve also always had some hucksterism to spice things up.3 It’s just that lately the relative proportions of these things has felt out of whack.
I like to think our company is an exception to that. We don’t make giant spectacles of ourselves, and when we do speak we try to underpromise. Talking to the Jane Street team gave me an immediate feeling of kinship. I looked at them and I saw all the things I love about my coworkers, and I instantly knew it would be a fit. They’re laid back, humble, funny, hard-working but mellow, zero drama and zero pretense, extremely smart but don’t take themselves seriously at all. They set my expectations low and then overdelivered. They were true to their word and expected me to be true to mine. There’s a lot of social-science research that will tell you why high-trust cultures win in the end, but I care less about that than I do about the fact that life is too short to put up with anything else.
