Jake Aaron Villarreal: Welcome to our podcast, From the Ground Up, where we interview startup founders exploring their journeys, their successes, challenges, and lessons learned. We hope you'd be inspired in discovering what it takes to build a thriving startup. I'm your host, Jake Aaron Villarreal, and here with us today we have Gleb Polyakov, the founder of Nylas, a venture-backed startup that's raised $175 million in funding. Gleb, welcome to the show.
Gleb Polyakov: Thank you very much, really happy to be here.
Jake Aaron Villarreal: Great. So as the co-founder and CEO of Nylas, Gleb is focused on empowering developers and their organizations to think big, innovate, and build a better future through unlocking the true power of their communications data. With an emphasis on accelerating corporate growth and nurturing company culture, that has been recognized by some as one of the top CEOs in North America. Impressive, Gleb. Love what you guys are creating and we'll dive in here. Uh before we do, tell us a little bit about you. How did you get into technology?
Gleb Polyakov: Yeah, oh absolutely, and excited to, to have uh the conversation on the podcast. But uh, I guess I've just always been a geek. I've always been super, super interested in uh the PBS science shows, the Discovery Channel shows, the, the Bill Nye the Science Guys. Uh and it took me down a path of technology and physics and science being just what fascinated me. Um for me, I, I just sort of love anything that's um really, really big in scope and scale, like really tops down, but like complicated, that you have to be like clever to figure out. You have to like run the right experiments. And like for me, physics is what I studied in school so like that fits in that bucket, but linguistics, economics, business for sure. Any field that's like "okay, there's so many different dimensions involved, there are so many different variables, but there is some sort of like consistent base level reality that if you find the right lever and you pull those right levers, you can get a predictable outcome." Figuring out what those levers are, getting that outcome I just find super cool. And technology is one of the uh best ways to uh get into that space.
Jake Aaron Villarreal: Well we'll get into Nylas and what you're solving there. But talk to us a little bit about companies prior to this. I know that you are not a first-time founder. You went out, you've built companies, acquired companies, sold companies. How many companies have you built so far?
Gleb Polyakov: So far... so Nylas is my second VC funded company. Um before that I had uh several other businesses, small businesses in Atlanta. I had a, a deli out of Marietta, uh an import store. I've had like a computer repair shop. And I've done a couple of um consulting and contracting services. Uh but yeah, Nylas far and away is the largest, both in terms of you know headcount, funding, and actual reach of product and impact it can have in the world, that I've been lucky to uh run so far. Um and it's been, it's been a journey! Definitely in my first few businesses I made all the first-time founder mistakes. So it's uh, if you're out there, if you're a first-time founder, don't, don't feel bad that you got stuff to learn. It's, it is... we see this a lot, we hear this a lot.
Jake Aaron Villarreal: Um, as an entrepreneur, what is, what's the main driver for you that you really get out of being your own boss, of leading? What, what is it that really inspired you to even try and build your own, your own future?
Gleb Polyakov: It's a good question. Man, the best version of an answer to that, that I've heard is like: "An entrepreneur is somebody who will work 12 hours a day to avoid working eight hours a day." Uh I think there's like a little bit of uh insanity out there uh if you're gonna, gonna go out and try to start your own company and like do that kind of work. Uh for me personally it's tied into: I, I just need that sense of agency. I don't actually thrive working for someone else because I want to like be involved, I want to make an impact at a scale that I, that I can't as like a lower level uh IC at like a much larger organization. Um I just care a lot about opportunities and I'm also real stubborn about the way I see the world and the things I want to accomplish. And mo-, most folks I've met in the founder space are kind of similar, right? There's some combination of like internalized anxiety and ambition and grit, combined with a desire for agency and a strong perspective on the type of value either they have internally or the type of value they want to bring to the world.
Jake Aaron Villarreal: You know, as a founder of a company myself and having built organizations and hired a lot of people, I always struggled with: when I bring people into the company, I want them to be somewhat like me in terms of the drive and the commitment and the passion. But because it's not always their company when they start (they might get equity down the road), but it's always a challenge of finding the same level of grit or the same level of commitment as you build a company like you're building today. It's got you know, hundreds of people. Um, how do you ensure that you get the right people and the right drive behind what you're looking for when you start to build a company?
Gleb Polyakov: Yeah, no I, I always actually see those as slightly separate questions almost. Because I see a lot of founders, a lot of business owners get, get a little bit frustrated uh by that part you mentioned, like "hey the, the people I'm hiring on, they're just not as motivated as me. Why aren't they working nights on weekends or whatever?" It's like, why would they? I kind of feel like it's a bit of an unreasonable expectation to uh think that somebody who's getting comped at a much lower level than you, equity-wise, is going to have the same level of buy-in.
At the same time, like that's not just, you have to hire for grit, you have to hire for perseverance. Uh especially if you're uh an earlier startup, especially if you were a smaller startup. By which I mean you know, call it under 200 people, still within that range of like Dunbar's Number, where people are wearing hats, there aren't purely specialized roles. Uh you, you've got to have that grit, you've got to have that perseverance, that work ethic. Um part of it is I think that uh, especially in like the current macroeconomic climate, people who go into startups kind of self-select into that. Uh definitely in you know 2021, 2020 we saw some folks who just like "Well, startups are cool, there's infinite money and uh I just want to find the, the billion dollar valuation startup that I can go off and like have my startup secret, when like they'd only worked at IBM for like 20 years." And like, no offense to IBM, but like grit is not the word that I associate with the, with a mid-level manager from IBM.
And like, the um hiring process that you and your team and your company choose has to optimize around the values that you have as a company and the needs you have as a company. For me like, that grit, that perseverance, that desire for agency and ownership is the big thing. So I always say that my job as CEO at the company is to make anyone who works at Nylas as rich and as famous as they want to be, and the rest is up to you you know. If you want agency, come to a startup. If you want to uh be given the direction of like "hey here's what we need to do," but have the how owned directly by you and entirely by you and uh almost in an unsupported way by you, so you have to go and, and learn and collaborate with other people on the team, uh figure out your own processes, then a startup is where you should be. Then you fit in well with Nylas's culture. But not everyone uh has that. I think it's making sure that you do look out for it in the hiring process, and that you do like regularly speak to it to make sure that there is that alignment on the type of person you want to be with, or the type of person that you want to be with at work, the type of person you want your company to have. The energy and vibe, the cultural mores that you want to be there. Because if that part gets misaligned, if you get a bunch of folks with different perspectives on um any number of uh work type stuffs, like that causes a lot of friction. That process is also natural, but that's why you got to have a regular conversation because you got to, got to bring it all back and align around those cultural values.
Jake Aaron Villarreal: Yeah, I agree with that. I mean I believe that companies first and foremost are about people. And I think it's lost sometimes, where you, you hire people and you grow the company and it's about the financials and about what you're building. But at the end of the day, what's your people strategy? What are you doing for the people to nurture them, to optimize them, to grow them um, to put them on the right ladder (individual contributor versus leadership)? So there's a lot of areas that we see companies succeed well in and others are learning as they go. You're in rare form where you've built a company that's been upwards of 300 and plus people and had to kind of build it and downsize a little bit (we'll kind of get into that a little bit later). But what was the inspiration around what you created with Nylas? Where did the idea come from?
Gleb Polyakov: Yeah, I mean the idea behind Nylas, and for, for those listening who aren't intimately familiar with every aspect of the Nylas API platform: uh we have a email, calendar, and contacts API that allows you [to] connect directly to a mailbox, to uh a person's account, build a scheduling software, build emailing software. Uh and then we also have uh parsing, AI parsing on top of that that actually pulls out from the inbox either something as simple as just a clean conversation without the signature blocks and everything else, or something as interesting as you know the content or the sentiment. Or like "give me every uh line item of everything I bought from Amazon," "give me every tracking number," "give me you know every flight I have." Like uh really whatever structured data you want to pull out of that unstructured content, we help, help you accomplish with a simple, easy to build API.
The reason that's fun and interesting to me is that like "okay, uh there's the 'software is eating the world', that piece of it, it's a super high leverage place to be." But looking beyond just software, and this is a bit of my physics brain talking, but uh the most interesting industries to me, the ones that have always changed the world the most, affected people's lives the most... like pretty much for the past 10,000 years it's been energy, transportation, and communication. The you know, heating our homes, powering what we build. Uh getting uh goods and services around, between different places. And then just talking to each other, collaborating with each other. It's one of the only things that makes humans a unique species. It's how we get things done. The more people work alongside each other, the more we accomplish, the more people are on message, the more we get done. You know, we go to the moon, we win wars, we have revolutions that bring uh expanded rights to more and more people. That comes from people working together. And so with software eating the world, uh there needs to be a way to easily work with and access the most common uh communication channel out there. Email is, uh to the surprise of many, still growing and it is the most common communication channel out there. It's something like 10 times more volume of uh than SMS. That's excluding the spam messages I promise. Uh and it's one that like everybody uses, like everyone has a calendar. Uh you meet through time, you have to coordinate that. If you want to build software that helps you be productive, you have to let them talk. You have to let them coordinate with each other. So that's, that's sort of the goal with Nylas. We want to build technology that helps people collaborate together. We want to unlock that potential to work productively for everyone in the world.
Jake Aaron Villarreal: So if you're a developer out there and you're working at a software company, you're building a platform and you need to integrate with calendaring or email or other platforms that aren't yours, but you want to build this in, does your technology make it simpler for them and faster to do that integration without having to build it?
Gleb Polyakov: Yeah, exactly. L- so in uh with just a couple lines of code, uh and we... if you go and sign up for one of our free sandbox accounts, it's, we've written all the code out for you. You can, you, you can pick your use case, you can pick your language, and it outputs the, the code blocks of what you might want to go copy, paste, and run directly. Obviously your, your production environment is going to interact with other parts of your code, but uh it's a good quick head start. Um and yes, so like during COVID we helped um over 50 million people get uh COVID vaccinations, or at least we, we did, we powered the scheduling for 50 million vaccinations (I'm not sure how many people that is underneath, at most 50 million). The uh healthcare and telemedicine is a big vertical of ours, uh both on the communication and on the scheduling side. We work with uh a lot of e-commerce companies, uh companies like Klarna that build those user experiences that allow you to have great digital e-commerce type buying and purchasing uh flows.
We work with real estate companies. Uh something like 60% of all the real estate transactions in North America at this point go through our servers, either on the commercial or residential side. Um and we do everything from you know help power CRMs for brokers to run websites, uh you know the, the, the e-commerce house buying websites, the communication flows there. To the back end on the lending side, help uh insurance lenders, mortgage underwriters have uh a source of truth. So you can really drop the time it takes for someone to get a mortgage, the origination time from you know 20 some days to 7 days or less, if you know all the communication... instead of having to TP [transfer] all the financial records, all everything else between multiple boxes, everyone's emailing them to each other, connect the banker, the home buyer, the real estate agent, the underwriter all in one tech stack using a Nylas API. Because it's all in email. So just pull it from the mailbox and you have a quicker, better experience product-wise. Yeah, we help primarily on time to market, on ongoing cost, scale and maintenance, and then on the privacy and security side. Because if you're touching calendar, private...
Jake Aaron Villarreal: Great. I, I'm sure I'm a user at the application level, probably don't know what your technology underneath it...
Gleb Polyakov: One of my favorite tricks is uh when we're pitching like to investors or whatever is um they'll like, "Oh I'm not sure, will people actually connect their mailboxes though?" And then reliably they'll like, "Oh well what's your, your email?" And we look them up in the server and, and it's like "okay, well you're connected to like five different uh, uh customers."
Jake Aaron Villarreal: So you did, you bring up investors. Um when you went out to raise capital, uh you have the idea, was it in market before you started to really go for your Series A? Did you raise a seed round? And in your journey of raising capital what was that like? How often did you have to pitch before you finally landed in your Series A, and obviously you've raised more capital since then, but what's that journey been like for you?
Gleb Polyakov: Great question. The very, very first round we raised was uh both pre-revenue and um pre-product in a way. So the money was raised ahead of the actual um end customer tool being available. Uh and I said "but also we pivoted." So we had built the API already. So we proved out the core technology, but we raised money at the very, very beginning on this idea of being a email client, like an end user email client, like a, like a Front app or a Superhuman, that kind of tool. That ended up not being a great business for a lot of reasons, um but the API was already built, the API was open source. It was growing organically, it was getting a lot of traction in [the] developer community. So by the time that like the original money we had raised uh for an email client business ran out, we uh went to pivot to uh the API company, being like an email API dev tools company. Um by that point we had something like one and a half million in ARR just on the API product. So we were able to go and raise off that traction.
Jake Aaron Villarreal: Wow. Every company we talk to has gone through a pivot. Was there a breakthrough or an area within your technology since then that you pivoted again, or had to transition into um for market conditions, for product conditions, anything that come, comes to mind?
Gleb Polyakov: Uh quite a lot. Oh and actually, let me answer the second part of your previous question before I move on to that one. Which is uh, for the fundraising process, uh I would say each round we talk to somewhere between at least 50 to a 100 people. Later rounds, the Series C, the Series D, you're, yeah see fewer people just because there are fewer funds that do deals in your space at that size. Um but earlier rounds definitely quite a lot of folks. My advice there to anyone trying to raise funds would be segment people out into tiers, groups of five or six people that you'll talk to, funds that you'll go out and talk to. Have a mix, don't go with you know the worst funds all up front, don't go with the best funds all up front. In each tier, in each bucket, mix and match uh the you know quality, size of the investment partner you're going to talk to. Uh the reason for that is one, you don't want to burn through all those layers immediately. And two, the feedback, the messages you're going to get in that fundraising process is going to be different. Your, your, your Sequoia Capital is going to give you different feedback and advice, whether right or wrong it'll be different. And if you want to target that segment, you'll want to optimize for them. Uh then you know some you know twoers, first fund of a $20 million uh VC who uh is just getting [in] the game right. It's, the concerns, the messaging, you want to adjust your pitch to mesh the market. So have a process, go through it rigorously, and definitely expect a lot of painful no's and rejection um.
And then the question you had was around uh pivots and market adjustments and changes. Uh I kind of think that's, that's constant. I, people talk about pivoting as a um milestone event, but in my mind like as a business, as an organization... and I think you said it super well, like a business only has two stakeholders. It's the employees, because like [a] company is made up out of people, so it has to serve the interest of the people. And the customers. Because if they stop paying you, you stop being a company. Uh you got to play, play to both of those. So you have to adjust the culture to make sure you're able to attract the best talent. You have to adjust the product to react to the market and attract the customers.
For us, uh the core email API concept has been the same. But over the past 5 years we've really developed um the uh higher order like intelligence functionality, what we do like the structuring unstructured data. Um that I see more of as a evolution of the core product. It's not something that was there originally, but it's a natural extension of the data set we have access to and the type of use cases that we help our customers achieve. Uh and and then there have been (I mentioned the email client one), that is more your classical "this idea didn't work at all, let's try something new."
We've had to respond to uh various uh sort of ecosystem changes. Uh for example the um Gmail API maybe three or four years ago had its security policies change. So a lot of customers that wanted to use, wanted to access Google data, because in North America it's something like 40% market share is on um G Suite. Uh if you are like a SMB SaaS business trying to sell to other SMB SaaS businesses, like more likely than not they're going to be on G Suite. Uh to build into that data story you had to jump through quite a few security hoops. So we had to go and introduce uh, find a corral of partners uh externally, third party auditors, work with Google directly, to create a product that allowed us to walk our customers through that really, white glove them through that deeply painful process on the Google side. It became like a, a nice source of you know revenue for us as well. At least top line, it was you know 10% margin. We're not trying to you know uh hurt people on the getting started side. Uh but thankfully last year Google um went and revised their policies to make that part so much easier for folks. It hurt us a little bit on the top line side because we don't need to renew a contract for a service that people don't need, uh but on the other hand it helped us uh get more logos faster because well, okay, now overall for the whole ecosystem it's easier for folks to uh, for folks to integrate and get to the value they want through our product.
Jake Aaron Villarreal: As you look at the market today it, it's impacted a lot of companies positively, negatively. It's made some more innovative, it's taken other companies really out of the market totally. Um we've seen companies that have had uh downsize multiple times. Um transparently we've, I know you've had to downsize a few times. What are some of the lessons you've learned in that process and what's been the outcome coming out of that as a company?
Gleb Polyakov: Yeah, uh so for us we went up to 350 people total after we raised our Series C round of about 120 million. Uh and then we've since then gone down to, we're about uh just over 150 uh on the Nylas side. So a pretty radical change and adjustment. What we learned is like, when we grew that head count, um we did, we did [it] super quickly. Like we did it over the course of a year, and we went from 100 to 350, so we more than tripled our headcount in a year. Um one very painful lesson there is that effectively at, at the end of the day what we did is we hired, but we didn't scale. Our processes didn't go with us. So we had always a really strong focus on communication, transparency, uh writing things down. Doing that kind of work in person, uh I'm sorry, within the company, and a lot of that was done in person too. A lot of the conversations were... then you know COVID hit, we went full remote uh during the COVID times. We tried hybridizing since then, uh and then that's its own continual thing.
But we were small enough that we didn't really pay attention to the processes at the level we should have. We were small enough that we didn't pay attention to the culture to [the] level we should have, because it's you know, it's 50 people in a room! If it's 100 folks, each like really behind the mission and the product and excited about what they're doing, it's not as needed. But then when you triple over the course of a year, the average tenure plummets. People don't know, they haven't been working with each other for the past two years. They don't know how work is done, or why. They don't understand why a process is there. If you're hiring that many people, you're, you're also bringing in folks that expect a certain level of like operational support or rigor to be there. Um which is, which is one side of it is really easy to get across. You can say "well hey, that part's not there, go and um figure it out, go fix it, go do it." Those people who are used to that [are] so good at figuring it out and doing it because they have experience with it.
The part that uh I think was a painful lesson for us was a lot of times there's an assumption that something's not there for a reason. A lot of times there's an assumption that like "oh, if someone's not doing something, it's because somebody said don't do that." Uh where for a startup often it's uh, the more universal answer is "oh, well we should be doing that and nobody has until now, so let's figure out whether that's [a] priority now or next month or uh at all, and then if it is let's do it." So yeah, for us it's the scaling side I think of the culture and the process that was the, the very critical need for us to do.
And then when the capital markets changed, when a lot of the uh "okay let's just hire up 50 salespeople because on a quota basis this number we want to hit, and we need this capacity to support it, with a little bit of over-assign"... um when those assumptions didn't pan out and like the capital conditions... the, as we all know the SVB collapse, the interest rates changed, the general macro on and on and on... um we just had to adjust to uh make sure that we as a company were focused carefully on our goals, on our product, on our end customers. And on getting it through and out the other side of uh any downturn as the market leader. Uh so anyway, there, there's a lot more to that topic. Where, where can I jump in to clarify?
Jake Aaron Villarreal: Yeah, what would you have done differently now? Aside from scaling up maybe too fast, what would you have done differently now that you've kind of been through it looking back?
Gleb Polyakov: I mean, a universe of things. Do you mean like during the reorg in particular? Maybe on the scale up and on the re-, on the [reorg] as well. Yeah, on the scale up side, for the go-to-market piece, I would say that only hiring salespeople when the opportunity flow really demands it. Like really pushing folks to work more opportunities than they want to and then hiring up as opposed to saying "alright well we need to hire now because we're going to get a bunch of opportunities in the, in the future and people will just know how to work them." Um because it led to us seeing a drop of attainment rates across our sales team from the like really healthy numbers we were at to something like 50. I think at the worst it got like 45% attainment across the sales team. Um and to be clear this is not me saying those sales people were at fault. They weren't set up for success by the company. Um but sales is very much a team sport, so as those attainment rates drop, as the morale drops, it uh gets harder and harder to feel motivated to go out and hit your number and feel like you're on a winning team. So on the go-to-market side, that would be my lesson one for scaling is: focus on having enough opportunities, generating those opportunities, and then hiring into the, the, the sales functions to go and go out, out after them.
Um the second one is like literally just the, the values, the culture piece. How do we want things to work? What is the process for getting this done? How do we focus on our goals to make sure we're not running in too many directions? To make sure that teams have the clarity and permission to say "no" to things because they're prioritizing what's more important. Um and I know that's a bit high level and everyone has different frameworks and OKRs and V2MOMs for how to get there. But find some way that, that works for you because that structure can only come from the leadership team, it can only come from a founding team. And it's what will set the team up for success. Um that's, that's what I really wish we had spent a lot more time on. That, that type of company and leadership alignment piece.
And then the second part, for learnings for a reorg, is make sure that there's clarity. Especially when it, I had a lot of lessons that I think we were lucky enough to be in a spot where we were well enough capitalized to make sure that everyone had a uh good exit package. Um I'm very, very proud of: within six months 90% of all the, the folks that uh we laid off they had found fantastic roles uh other places. Um engage your alumni network to make sure that you're supporting the people who you brought on and that uh had to lose their jobs because of poor choices made by leadership, like that is I think morally pretty critical. Um and then from a messaging perspective, be honest, be direct. Everyone's adults, no one needs sugarcoating. Um I think the, the first one what we did poorly was we spent a bit too long um feeling the pain of the reorg. And feeling like it is pain and trauma and it, it certainly is. But on the leadership level, if you let yourself spend so long there, that then resonates to the rest of the team. That then creates a space where that anxiety can grow. And so when we had to reorg uh a second time, uh we focused much more on: "But here specifically is the new org chart, here's the goals for each department on the medium and short term. Here's what specifically you on this team uh we want to get done over the next week and two weeks and month uh to make sure that we are getting, that we're you know changing the reason behind having to reorg, that we're actually making impact." And that like level on execution and results drives the, the focus and I think camaraderie that allowed us to uh really turn things around, get back on track and continue the growth path.
Jake Aaron Villarreal: From a morale perspective as the leader in those times where you're going, downsizing and continuing to right-size the business, what tools or what things did you use that kind of keep your own morale up in these, in the tough times?
Gleb Polyakov: For me personally, I wish I could, I could say going to the gym every day! Unfortunately I was um, talking to people, talking to the folks at the company. Um the folks uh, ICs know exactly what the core issues are. You know it's the, the old joke of like, "All a consultant does when they're hired in is they go and talk to uh the, the lower level teams. They'll tell them exactly what's wrong and they go report that back to, to upper management." Uh but yeah, talk to folks at the company, understand what the issues are, understand how folks are feeling, um and get support from people more experienced than you. Have advisors, have mentors in your professional life, personal life. Again, for, for us we're deeply grateful for the support we got from our board, from the advisors we have. We have folks, everyone from John Chambers and Tony Fadell to folks like Alex Moore on our board uh supporting us. And uh the perspectives and like different boom and bust cycles that uh those folks have been through and uh clarity they can drive on purpose and direction for me personally was, was really helpful to hear. Because I was, I was freaking out, I was feeling like just I did a bad job. That I, I was scared for myself, the, the team, the work we put in. And trying to figure out like "okay, well now my job is to lead through that. Lead through that on the emotional side for the team, lead through that on the business side to make sure we actually accomplish goals, and uh not getting caught in the past, not getting caught um in a place of analysis, and instead of going towards action and looking forward into the future." Um at the end of the day I think was, was what was best for the morale. And then the, doing that as a team, actually talking and having conversations with people about these things. Everyone on the team about these things. Um because again, people are adults and if you treat them like adults they'll respond as adults. Um that was what allowed our morale to recover pretty quickly.
Jake Aaron Villarreal: As you look at the market today as a company, and it sounds like you're in a healthy position now, where a lot of companies had to make tough decisions, you kind of come out of it in a different position. Um what's the biggest challenge you're looking to solve for today? Some, for some it's revenue, for others it's you know making their people better. Um for, for, for your company, what is it that you're looking at solving now?
Gleb Polyakov: Yeah, I think, well I have no idea what the capital markets will look like over the next couple of years. Um so it's been a focus on how can we build the strongest business possible under the you know, perhaps incorrect assumption that the better the business on like core fundamentals, is the more easily uh you have access to capital. So it's like I'm looking at top-line ARR growth, I'm looking at like year-over-year um acceleration. We're looking at the uh expansion rate and retention rates for our customers, we're looking at gross margin. Um those are really like the core KPIs. Oh and uh the number of new logos. Like the logo velocity of who you're able to bring in. And those are the, the top level KPIs we really focus on. Uh and then behind each of them we have uh like leading indicators. So logo velocity, that goes down and becomes pipeline velocity, that becomes lead velocity, uh and so each one of those has a... it's not always a direct funnel, but each of them has leading indicators that you can go and track to make sure that you're, you're getting back on uh a direction you're going to be happy with.
So for me the challenge that we're facing now uh is trying to figure out "Okay, I can easily say what the right goal is for the company. It's like 'cool, let's, let's double year-over-year,' and figure out how that, make that happen. Um picking the right leading indicators, especially in a place where like 'okay, I don't know what GenAI tools will look like a year from now, five years from now.' I'm not sure when the uh chips will come onto the market that will allow like a real explosion. I'm not sure when you know Starlink and its competitors will allow like the other half of the world, the other four billion to get online, or what the impact of that will be. Uh but I have hypotheses." So how can we predict the future? How can we figure out what's going to happen from now and make sure we're steering the ship in the right direction? That's uh, that's the biggest challenge I think of, of any leader and for us in the technology space. Um well maybe I shouldn't say technology, for us in the startup space. Uh the interplay between that and when either VC funding at later stages uh sort of comes back and like, hopefully doesn't come back to 2020 levels, hopefully it comes back to though to 2018 levels. Um when that marketplace, those like narrative strs return, or whether other um avenues for making sure that your business can sustain comes back is always interesting for us. We're in a place where we have the runway we need because of our last raise to get to a place of um profitability, great. And the tough part I saw though for a lot of businesses is they, by no fault of their own honestly, just got caught by the macro, right. They had a plan, they were executing against the plan, they did a good job, but they only had uh four months of runway when the downturn happened. And there was... the numbers didn't matter right, they had to go out and uh go into an M&A transaction process. Um trying to stay ahead of that next turn and trying to make sure that your business is healthy enough across all the metrics to either weather a storm or give you maximum optionality, uh I think that's, that's the, the biggest challenge of any leader right now.
Jake Aaron Villarreal: Well said. There's a lot of companies we're talking to uh that are in the same situation you're in, and some are you know much in, in different positions, maybe not as favor-, favorable as your, you are. Um there's companies that are, have a different path for growth, some are through acquisition. I know you've been through an acquisition uh your current company. What was that like and what was the result?
Gleb Polyakov: Yeah, so we acquired a company called June.ai oh I'm gonna get the date wrong... something like four, four years ago. Um they were a tool that actually had built uh on top of our core APIs as a big part of their product. But they had been doing just insanely cool ML and NLP work on top of the Nylas data store. And they struggled a bit to get the right go-to-market and distribution motion for what they were doing, but the tech was insanely awesome. And they were familiar with uh our company, our tech stack, um our product because they were using it to uh build theirs. So it felt like a very, very natural place for us to come in and uh join forces. Um the team was I want to say five or six people in size at the time. Um we've retained all but one of them still today. Um the, the CTO is uh the, the VP of Engineering here at Nylas and leads a lot of our AI work. Which is something like 20% of our revenue right now comes from that like AI/ML parsing uh type product line. Um that's pretty, pretty quickly growing.
So a very interesting experience. I think we got, kind of got lucky, it was a bit of a perfect storm. Because we've been down that M&A road with maybe 10 other companies and something always came up as a bit of a blocker. Either like the integration story wouldn't have worked out because there were you know, the personalities involved, the locations, the technology uh just wasn't conducive to us like making a successful marriage. Uh or there were um, what's the word... say this, we couldn't get to a meeting of the minds on the structure of the uh agreements. Um you know uh, or for one of them it was just like, the under due diligence all their claims just didn't, didn't pan out. Um so yeah for me M&A is like when it's opportunistic and it's a perfect storm, great, it makes sense, it's going to work really well. When it's a strategy of growing through um M&A, like inorganic growth, that requires a very special skill set. Um we haven't really done that that much at Nylas. We've been more on the opportunistic side. But in a previous life I was on the PE side where it was a little bit more of the "okay how can we go out and um actually find these opportunities for inorganic growth?" Uh it's a full-time job. It requires a lot of deal sourcing, it requires a lot of uh relationship building with founders, with uh... and hars- a ton of understanding of the space you're in um or the space you're trying to, to get into. And what the... I want to say cultural, but I guess I mean like what the shape of the sales motions in that industry or vertical or category are. Because I found that that's where, if you're trying to like acquire a company that's like purely enterprise sales to like a uh incumbent industry that is used to a little bit more of a relational sales motion, but your company is like a PLG self-service, a growth... you're not going to be able to understand the trade-offs made uh intuitively on the sales funnel. And you would have to put in a perhaps uh irrationally high level of trust in the org you're bringing on to uh make that successful. And oftentimes I see companies that acquire smaller companies not give the uh smaller companies that credit because they're like, "Well we're acquiring you, so we know best." Um and you know that, that's where...
Jake Aaron Villarreal: Yeah, I understand that. We've been through that process ourselves. Um as you look going forward, what's on the roadmap for Nylas, what's coming on the roadmap?
Gleb Polyakov: Yeah, so we have coming up in a couple of months a whole new version of our API. Um the... my co-founder and CTO Christine Spang, she said it best, it's like "finally I have a product I can be proud of." Uh always thrive to have a product you're proud of, but like anyone who's built a company before knows there's always that like voice that's like "ah if we only had this, then we'd be a real company," even if you have you know a thousand plus employees. Um or like "I just wish I could fix like these two things about the customer experience or the way that uh developers have to use this." And so we have something coming out uh in two months, three months time that will uh really just help all of our customers have a much more reliable experience, for existing customers a faster product, um but more importantly for me, a much better developer experience for anyone new coming on. Um it'll be so much easier to get to your intended use case, to build it and deploy it. To build an authentication flow, to build like the token management stuff. To like listen to incoming events and do the filtering and only uh have to process and spend time on uh in your code or in your computing on what, what actually matters to you. I don't know, that, that customer value piece I'm, I'm pretty stoked about.
And then long term, like uh the, the AI stuff uh for a company like Nylas is just deeply exciting. Because again, what we do in large part is we give access and the ability to work with these super important data stores of natural language email and scheduling flows uh, and the attachments and the, the things that people are trying to accomplish with them. Uh there's just like a wealth of opportunity. Uh so like we have a lot of companies that um use us to build their sales outreach tools. So these are the, the Saleslofts, the ActiveCampaigns, the, the, the Outreaches and the Gong type uh tools, uh because we give them access to that data. Um the LLM side allows us to instead of like "hey go and build uh sales tools," like "go and build the Grammarly, go and build a generative function on top of the exact same use cases and expand the functionality you already have without having to have the expertise on like the deep LLMOps, without having to have the expertise on the like fine tuning uh that you would otherwise have to learn from scratch." And a lot of um vertical specific or use case specific end user companies don't have that deep, deep talent, that tech bench to uh go and do that on their own.
Jake Aaron Villarreal: That sounds amazing. I know AI is everywhere right now, and you have been there for some time, and it looks like there's a huge opportunity ahead of you. If companies wanted to find out about Nylas, where would they go? If they wanted to connect with you, how would they find you?
Gleb Polyakov: Yeah, go to nylas.com and sign up for a free account. It's a, a free developer sandbox, build something cool. Uh if you want to get in contact with me, build something cool, I'll definitely look at it. But yeah, contact me on LinkedIn. I'm also gleb@nylas.com if you want to shoot me an email. Though uh I will say that the other side of the rise of LLMs is that man, my box has been slammed in the past month or past couple of months with just, just a flood of terrible cold outreach, much of which I can, I can see is just programmatically AI generated. So um if I don't email you back right away, give me some grace.
Jake Aaron Villarreal: Yeah, that's great. Well Gleb, thank you so much for joining us today. I really appreciate your time, and to all our listeners that are out there listening, appreciate you spending your time with us today as well. Really excited to see Gleb how things go for you in the future and the growth of Nylas. And for all those that are looking forward to hearing more insightful episodes like this, make sure to join us uh in the next week following Nylas. Uh until then, or Nylas and Gleb, I'm going to talk to both of you here. Uh appreciate your time here and we'll uh we'll keep plugging away. Catch up with you online, take it easy.
Before we wrap up, I want to give a big shout out to all the entrepreneurs that are joined to make this podcast possible. And for all the listeners for listening, it means the world to me that you chose to spend your time with us today. I'm your host Jake Aaron Villarreal signing off for now, we can't wait to connect with you all soon on the next episode. Take care.
This show is sponsored by Match Relevant, a company that helps venture-backed startups find the best people in the market. And they do it in three simple steps. First, they sit down with founders to understand their story. Second, they tell their story into multiple candidate channels. And third, they schedule interviews within 48 hours. Find us at matchrelevant.com to learn more about how we do it.
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