Sub Club Podcast | Fueling Growth with AI and Viral Product Features — Ajay Mehta, Portola

Date: April 2, 2025
Hosts: David Barnard, Jacob Eiting
Guest: Ajay Mehta, Co-Founder of Portola (makers of Tolen, the AI alien friend app)

Episode Overview

This episode explores the meteoric rise of Tolen, a consumer AI companion app created by Portola. Hosts David Barnard and Jacob Eiting sit down with Ajay Mehta, co-founder of Portola, to discuss the unique opportunities AI is unlocking for app creators, the building and scaling of viral product features, and the operational lessons learned from rapid monetization. Ajay shares insights into product-market fit, creative growth strategies—especially on TikTok—and why being “forced to monetize” early was pivotal for both growth and product development.

Founding Story and Early Inspiration (01:25–06:51)

• Genesis of Tolen:

  • Sparked by the explosion of generative AI tools like ChatGPT and Midjourney about 18 months ago.
  • Portola’s founders wondered what computers could now do that hadn’t been possible for consumer products, with a strong focus on highly personalized experiences for the youngest generation.
  • “Something that AI really allows you to do is make a consumer experience that just feels like there is totally something on the other side that knows you, understands you, and an experience that could be highly, highly personalized.” (Ajay, 03:33)

• The Founding Team:

  • Ajay co-founded Portola with longtime friends Quentin Farmer and Evan Goldschmidt, both previous founders with an exit (Even, acquired by Walmart).
  • Bringing complementary backgrounds: fintech, e-commerce, and social apps (YC alumni).

• San Francisco Advantage:

  • Serendipitous founder networking enabled by location.
  • “You can't shake a stick without hitting somebody who had two acquisitions…” (Jacob, 05:29)

The AI Consumer App Revolution (06:51–08:19)

• A New Wave of Consumer Technology:

  • For years, there was a stagnation in “novel” consumer experiences—until generative AI.
  • “The kinds of explosion of totally new kinds of consumer apps, how quickly they're growing, how quickly they're monetizing, is all because of generative AI, really.” (Ajay, 07:02)

• Novelty vs. Incrementalism:

  • “This is the story of novel technology through human history… you have to take that general purpose technology and multiply it against every previously existing niche. But there’s also another dimension: all the net new niches of stuff that could not have been built, period.” (Jacob, 07:16)

Venture vs. Bootstrapping and Fundraising Path (08:19–12:05)

• Why Portola Chose Venture:

  • Ajay had previously bootstrapped companies, but believed world-class AI companions would require substantial capital and talent.
  • Seed round was part pre-seed with just “three cofounders and an idea,” then quickly followed by more investment after early traction (lead: Lachy Groom, ex-Stripe).

• The Fundraising Timeline:

  • Raised a small round pre-prototype.
  • After public soft launch and initial traction, lead investor doubled down.
  • “Raise as little as you need to validate an idea. And once you have something, go back to market and raise some more.” (Jacob, 10:07)

• High Ambition Justifies Venture:

  • Only venture scale ambitions or net-new technology justify the VC path for consumer apps now.
  • “If you really want some incredibly high ambition output… then maybe raise money. Otherwise, I almost wouldn’t.” (Jacob, 11:34)

Product Vision: Beyond Just Another AI Utility (12:05–16:21)

• Category Creation:

  • Not just using AI to upgrade old categories (eg. recipes), but building a new one: AI companions.
  • “To me it seems clear that we will all have an AI companion of some kind… There’s this insatiable desire for people, for a highly personalized helper, friend, confidant.” (Ajay, 12:05)

• Emotional, Not Just Assistive:

  • The strategy is to create emotional resonance, a “friend first” model, not just a tool.
  • “I have no emotional connection with Siri… But maybe there’s an approach that the winning one, which is like, let’s go in as a low stakes friend first.” (Jacob, 13:01)

• Distinctly Non-Romantic Design:

  • Tolen is cute, friendly, intentionally non-sexualized, and not another “AI girlfriend/boyfriend.” This differentiator attracted an audience of primarily young women (15–25).
  • “We’ve designed this like very cute and cuddly friendly alien that is not sexual in any way…most of our users…are 15 to 25 year old women. And a lot…have totally large friend groups and totally normal social lives.” (Ajay, 15:23)

Finding Product-Market Fit: Usage, Monetization, and Iteration (16:21–20:07)

• Initial Traction and Monetization Imperative:

  • Post soft-launch with no monetization, saw users engaging 30-40 minutes/day—triggering steep API/model costs.
  • “Our bill now at OpenAI is ramping pretty significantly…Very quickly it became pretty expensive for us to actually support a user…That's when we put in monetization, put up a paywall. That's right when we signed up for RevenueCat…” (Ajay, 17:17)
  • Forced to “get smart” on monetization much sooner than anticipated.

• Key Success Metric:

  • Early signs of PMF: “People were talking to for like 30, 40 minutes a day and we were like, okay, we have no way of monetizing this.” (Ajay, 17:17)

• Investment in Personality and Animation:

  • The team invested heavily in design and animation. Ajay highlights collaboration with creative artists and the hybrid native/Unity canvas rendering for Tolen's dynamic look and feel.
  • “We've invested a lot of time and energy in trying to make that onboarding experience amazing.” (Ajay, 20:07)

Onboarding That Delights and Converts (20:26–25:23)

• Unique Onboarding Experience:

  • The onboarding is a highly interactive, voice-driven, and personality-infused “quiz” that personalizes each user’s Tolen, reflecting their answers with wit and emotional resonance.
  • “We tried to ask more fun questions a little bit like, you know, what a personality test might be like an Enneagram test… We actually give the user some output to say, here's kind of what we learn about you. Not only that, here's the Tolen that is kind of a natural fit for you based on everything that we just learned.” (Ajay, 24:02)

• Immediate Contextualization:

  • Initial onboarding context is preserved and referenced in early chats, creating a sense of continuity and care.
  • “The Oracle told me that you are like really into cooking pizza right now or something, right?... it's kind of a wow moment for people when they're like wait… it was actually listening and it actually cares.” (Ajay, 25:23)

• Power of Real-Time Generative Technology:

  • “Before LLMs and being able to just like stuff context into a machine… now we can do it. There was this like very kind of gap… where we never thought this would really deliver. And now like we're here, which is cool.” (Jacob, 25:53)

From Early PMF to Viral Growth (26:29–33:52)

Iterating Post-Launch (26:29–28:46)

• Improving Retention & Experience:

  • “We had inklings of product market fit, right? We didn't have total product market fit. The app was sort of bare bones when we had this soft launch…So it really took through then the fall and just continue to iterate…” (Ajay, 26:50)
  • Added a “Tolen planet” feature as a shared space, improved onboarding, animations, and conversation quality.

• Activation and Retention:

  • Focused on getting more users to the “activation moment” (first long, meaningful conversation).
  • “As we did that…we started to feel like, okay, now we're at retention that actually feels very, very healthy.” (Ajay, 26:50)

Building a TikTok Growth Engine (28:46–37:14)

• TikTok as Growth Catalyst:

  • Organic and influencer-based TikTok videos generated viral moments—a single video could drive 10,000+ installs in a day.
  • “TikTok is wild…you could just have a handful of TikToks start to take off and then it's like, okay, we're number one in our category now. And that happened overnight.” (Ajay, 29:15)

• Process & Strategy:

  • “From the get go…let’s make organic content…with a couple of creators who we think make awesome stuff. Then…run some small scale paid ads…” (Ajay, 29:15)
  • “If you're a game, it's a lot easier to acquire customers…given our audience and given like, visual aspects of Tolen… TikTok has just been where it reached escape velocity.” (Ajay, 29:47)
  • Organic content and UGC (“user-generated content”) eventually began to snowball, with non-affiliated users sharing Tolen in their daily life.

• Influencer Collaboration and UGC (User-Generated Content):

  • Mixed approach with content creators: some on retainer/paid per post, some local/remote, lots of experimentation with different life activity angles (studying, cooking, makeup, relationships).
  • “Try a bunch of angles, see what clicks... Some actually catch in the algorithm.” (Ajay, 36:21)

• Key Quote:

  • “You try a bunch of those and like one out of maybe 20 videos kind of pops off. But then when it does…it can really reach escape velocity.” (Ajay, 33:17)

Defensibility: Creative IP, Operational Complexity, and Moat (37:17–41:54)

• Creative and Technical Moat:

  • Depth of design, animation, and technical integration (voice latency, memory systems) is not easily replicated by copycats.
  • “A lot of copycats…don’t understand what’s actually making it successful.” (David, 40:15)
  • “It's kind of easy at first glance to look at something like Tolen and say, oh, well, it's like voice AI and they might be based on GPT, and like you could kind of copy that. But…there's a reason that there are like two or three on the App Store.” (Ajay, 40:59)

• Value in the App Layer:

  • “I think…where the most margin capture happens will be at the cute character that you can't replicate in an API level, in my opinion.” (Jacob, 41:34)

Recent Growth & Current Status (41:54–44:43)

• Explosive Metrics:

  • $1MM+ ARR achieved rapidly; 800,000+ downloads, #1 in App Store category after several TikTok virality spikes.
  • “Since we launched publicly…we announced 1 million ARR…we then continued to see…TikTok virality…now north of 800,000 downloads…revenue, ARR is sort of multiples of that…” (Ajay, 42:10)
  • Still early days: primarily US + Canada, English only, with plans to localize and globalize.

• Team Size and Focus:

  • 9-person, highly experienced, multidisciplinary team.
  • “The North Star is always just like how do we make the product awesome…there's still so much to build there.” (Ajay, 44:43)

Growth vs. Retention vs. Product Prioritization (44:43–48:20)

• Key KPIs:

  • Retention (day 7, 15, 30) is the main product health metric.
  • “Retention…has to be the North Star…If we're doing a good job, then in theory, like a companion should be one of the most retention retentive products out there.” (Ajay, 45:19)

• Tradeoffs and Roadmapping:

  • Must focus on a few things at once due to small team.
  • “In some ways if the product is good, it doesn't really matter like if…you do X first then Y or Y first then X… The most important thing is just like to like keep doing stuff…” (Jacob, 47:20)

Lessons from Monetization & Sustainable Growth (48:20–51:30)

• Paywall as Forcing Function:
  • High API/model costs required putting up a paywall early, forcing focus on real value for real (paying) users.
  • “Being forced because of high token costs to monetize relatively early on has actually been kind of a real help…” (Ajay, 50:33)
  • Clearer product signals from paying/renewing users.

Building for Multiple Products and a Platform Approach (51:30–54:47)

• Beyond Tolen:

  • Vision is to build a generalizable platform for future AI companions and products, not just Tolen.
  • “There's just no way that companions or AI companions are going to be one thing. There's gonna be a lot of different variants and versions of it.” (Ajay, 52:36)

• Comparison to Niantic:

  • Path parallels to building core tech that can be licensed or extended; inspiration from Niantic’s journey with AR tech and Pokemon Go.

Hiring and Final Thoughts (55:36–end)

• Team Expansion:

  • Actively hiring, especially experienced iOS engineers, ideally with indie/startup or game backgrounds.

• Closing Insight:

  • Even apps not on the “cutting edge” of AI can learn from Tolen’s onboarding and emotional engagement strategies—apply AI in clever, small ways for personalization and improved user experience.
  • “I think there's a lot of inspiration to draw from just the capabilities of making your onboarding more personal, of using AI in novel ways even in some of the more boring apps.” (David, 54:49)

Memorable Quotes

• “Raise as little as you need to validate an idea. Right. And then once you have something, it's like, okay, go back to market maybe and raise some more capital and it's kind of how the game plays out the whole way.” — Jacob (10:07)

• “There's this insatiable desire for people, for a highly personalized helper, friend, confidant that just will be useful to most.” — Ajay (13:01)

• “Our bill now at OpenAI is ramping pretty significantly… very quickly it became pretty expensive for us to actually support a user…That's when we sort of like immediately… put up a paywall.” — Ajay (17:17)

• “Monetization is a forcing function for product. You have to deliver the value or people are just going to churn.” — David (51:30)

• “Where the most margin capture happens will be at the cute character that you can't replicate in an API level, in my opinion.” — Jacob (41:34)

Key Timestamps

• 01:25 — Origins and founding inspiration
• 06:51 — AI as enabling new consumer categories
• 08:19 — Fundraising journey, pre-seed to $10MM
• 12:05 — Product vision: AI companions as category
• 15:23 — Deliberate “non-romantic” product design
• 17:17 — Launch, surprising usage, instant need for monetization
• 20:26 — Animation/character design and onboarding
• 26:29 — Post-product market fit iteration
• 28:46 — TikTok as breakout channel
• 33:17 — UGC/viral growth mechanics
• 40:15 — On creative/technical moat
• 42:10 — Recent metrics and next steps
• 44:43 — Team focus and tradeoffs
• 50:33 — Monetization as growth accelerator
• 52:36 — Platform vision and future directions
• 55:36 — Hiring and closing thoughts

Summary Takeaways

• AI is enabling entirely new app categories—not just improving existing ones.
• Personalization and emotional resonance trump mere utility in breakthrough consumer AI products.
• Fast monetization, enforced by high costs, can validate product value and focus development.
• Viral, cost-effective growth is possible with the right product-creativity fit—especially on platforms like TikTok.
• A strategic focus on delight, onboarding, and character design creates defensibility that’s difficult to clone.
• Emerging AI companies are likely to become multi-product powerhouses, leveraging core “companion” technology across domains.

Interested in joining Portola? Ajay is hiring passionate iOS developers—contact the team if you want to help build the next big thing in AI companions!