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This Week in Startups
Even great startups sometimes need to pivot (feat. Francisco Cornejo of Theo) | E2214
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- [00:00]
Jason
The lesson here is fairly obvious. Running experiments consistently can lead to a founder learning about a new opportunity. This is Ray Kroc. At 55 years old, as a traveling salesman, I tell that story because it's never too late. Where did the idea to run this experiment come from? Can you remember the moment in time? Was it somebody on the team? Was it you who had this idea to include prayer?
- [00:26]
Francisco Cornejo
I guess there was always the relationship between prayer and sleep. Like sleep is universal and prayer was present in most of our family's routines. We are as founders also deeply spiritual. I would say deeply Christian. And we thought, yes, this is something we would use. Why don't we run this experiment? Let's launch some prayer and Bible stories on a storybook. We launched the Bible stories like in 2024, but the data, the insight really came about by the end of 2024 when we realized, hey, something interesting is happening with people who consume these stories.
- [01:02]
Alex
This week in Startups is brought to you by Interpret Interpret turns feedback noise into customer intelligence so your team knows exactly what to fix and build next. Head to interpret.com twist to book a demo and see it in action. Sentry. Your team should be focused on shipping features, not chasing down bugs. New users get 3 months free of the business plan which covers 150,000 errors. Go to Sentry IO Twist and use the code Twist and Squarespace. Turn your idea into a beautiful website. Go to squarespace.com twist for a free trial. When you're ready to launch, use offer code Twist to save 10% off your first purchase of a website or domain. Welcome back to Twist. This is Alex and today on the show we have an absolute banger run of interviews. We are talking to Familify. This is the startup behind an app called Storybook. It did very well on the app Store. It helps kids get to sleep. But Familify has a second act, an app called Theo that is growing even faster and took this company from doing well to hyper growth. Then we're going to talk to on Verite. They are a startup building a service that that helps founders get their due diligence in order and VCs ensure that what they're buying is actually what they think it is. Then as part of our Gamma Pitch competition we're talking to Pitch Perfect. They are building an SMS based marketing tool that I once stays on the right side of the law and hopefully won't annoy all of us by sending us too many messages. Let's go.
- [02:33]
Jason
One of my favorite things, Alex, having one of Our portfolio companies from the accelerator and the launch fund on the program. And one of the things that happens that is lovely when you're an investor is that founders figure things out and sometimes they'll email you and say, hey, we figured something out. And then the best of those emails is when it's accompanied by a chart. I'll give you an example. Com.com was $10 when you bought the app. Right. You just buy the app for 10 bucks. And then they figured something out. $10 a month as a subscription increased 12 times as much money per year from the one time purchase. It actually increased the adoption of their amazing meditation app. Our next guest. They had a really nicely growing business and then they found a way to accelerate it with a second product. Now, everybody knows startups win when they focus, but. But sometimes you run an experiment and it takes off. And that's what you're going to hear from our guest today.
- [03:40]
Alex
Yeah. So coming up on the show, we have Francisco Cornejo from Familify, two products. Now, as Jason mentioned, the first one's called Storybook. It's a mobile app for children's bedtimes. Thousands of reviews, Jason, very popular. And then there is Theo, their latest offering. Also thousands of reviews came out earlier this year. And Francisco, apparently it's storming the castle doing quite well.
- [04:02]
Francisco Cornejo
Hello, guys. Thanks so much for having me. Yes, Theo just launched this year and it's going fantastically well. Happy to run you through all of it and has a ton to do with all the advice on the launch accelerator. So I'm super happy to be here back.
- [04:16]
Jason
Well, it's great to see you. You went through which accelerator class? I think 20 over 20. Oh, 20. Got it. Wow. So I think we're doing 35 right now. So you went years ago and you had a meditation app for putting kids to bed. Now, I was in the thick of it four or five years ago with my four or five year olds who are now nine. My twins and I understood baby massage and story time. These are two of the things to relax the body. Also happens to work. Alex. For adults, being read to is a really powerful device for going to bed, whether you're an adult listening to an audiobook or a child listening to your parents read it to you. So I said, hey, this is a business that Francisco is building that I know from the calm days and it's based on some science. So, you know, the entrepreneur has something there. They had, they were very good at design. I remember you were based in South America at the Time, I believe. And you might still be. But tell us a little bit about the first business, the first product.
- [05:15]
Francisco Cornejo
I prepared a few slides to walk you through the journey on that launch. Fashion. Jason, you mentioned that we launched storybook early 2020 because at the time especially, but even to the day, children's mental health is in crisis. We found this way of helping our own kids through relaxation techniques like massage techniques or meditations and bedtime stories. And it worked fantastically well. We quickly scaled to a few tens of thousands of subscribers, hundreds of thousands of users. We worked through the research and realized that Storybook was pretty effective. Like there's no doubt about it. Like if you wanted your kid to relax and fall asleep, Storybook was a fantastic solution. And Apple loved us. We had a ton of features. We grew in over 90 countries. Alex, you mentioned that tens of thousands of five star reviews, but we simply weren't growing as fast as we wanted. You said that at the very end of the Cohort 20 class, now going, growing 3x every year and come back for more funding and grow another 3x the next year, we simply weren't hitting those goals. So in 2025 we did something different. We started to grow way faster than we've ever had. Because of that insight that you just mentioned, we run an experiment like the tons of experiments we run and we launch bible based stories on the Storybook app. This was optional if some parents wanted to download those stories and play those stories. What happened next was fantastic. We saw how these users not only had a better conversion to subscription rate, they were also cheaper to acquire. Their retention was way better. Instead of throwing more religious content into the Storybook app, we decided to run this experiment. What happens if we create something for their need and taste? The use case was pretty different for them. It wasn't about getting my kids to sleep, it was about transmitting passing on my faith to my own kids. So we launched Theo, a prayer and meditation app, pretty similar to Storybook. Like it runs on the same code, like it's a rebranding and a ton of new stories and content. We have a team who has been doing this for the last five years and a quick demo. But you can figure how this works. Like you play a story and your child and yourself are listening to these stories and meditations. I won't bore you with that, but this is the crazy thing about it. We launched Theo in March 2025 and it only took a few weeks for Theo to surpass Storybook's daily sales. This is probably the chart you were referring to. In just a few weeks, Theo became the number one product. As of today, Theo represents around 90% of our revenues. Close to 90%. And our year over year growth just skyrocketed. Thank you to. Thanks to Theo App.
- [08:07]
Jason
The lesson here is fairly obvious. Running experiments consistently can lead to a founder learning about a new opportunity. And you know, this is a tried and true method of entrepreneurship. There's a great film called the Founder and in it a guy named Ray Kroc is selling milkshakes. And then a certain store, he was having a hard time selling them. Cause people are like, why do I need one with four, four different blenders in it? Like I can make one at a time, right? I don't need to have four. And then all of a sudden this one burger stand decided they would order like four of them. And then they kept calling back, how can you get, how quickly can you get me these milkshakes machines? And they brought the milkshake makers and he saw McDonald's and then he wound up licensing it. And at the age of 55 or something, he had a career pivot which was to license McDonald's. This is Ray Kroc at 55 years old as a traveling salesman. I tell that story because it's never too late. And so with your data, you had a bunch of investors, Francisco, I guess, wondering, is this startup gonna ever return money? Is it ever gonna grow again? Cause you were growing modestly. Where did the idea to run this experiment come from? Can you remember the moment in time? Was it somebody on the team? Was it you who had this idea to include prayer? And how does that inform how you run the business going forward?
- [09:40]
Francisco Cornejo
No, that's a great question. I guess there was always the relationship between prayer and sleep. Sleep is universal and prayer was present in most of our family's routines. We are, as founders, also deeply spiritual, I would say deeply Christian. And we thought, yes, this is something we would use. Why don't we run this experiment? Let's launch some prayer and Bible stories on a storybook.
- [10:05]
Jason
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- [11:21]
Francisco Cornejo
I guess that was one of the conversations with Daniela, my co founder, who happens to be my wife. So that's one of the conversations we've had. I don't recall the exact conversation because we launched the Bible stories like in 2024, but the data, the insight really came about by the end of 2024 when we realized, hey, something interesting is happening with people who consume these stories.
- [11:45]
Jason
Your wife saw in the data, the trend, and it was not just the launching of it. It was that you took the time to research the data and then you found something in the data.
- [11:56]
Francisco Cornejo
Yeah, absolutely. Yeah. Now the next chapter to that, because you get the insight, then what do you do with that insight? That was another conversation. Should we launch a new app for this or should we just stick more Christian content on Storybook? That was another conversation. And we made that decision in January. Three weeks later, we launched Theo for testing and officially launched it on March.
- [12:18]
Alex
Why did you make that decision, though? What was the tipping point that pushed you into making a separate app versus adding more to the first app? Because in some sense I think it's great. But also I can see the power of a super app. We talk about that quite often.
- [12:29]
Francisco Cornejo
The obvious reason for us was talking to users and realizing that it was a different use case. So Storybook is, I want my kids to fall asleep. And for this one is I want to pass on my faith. It was different. Like, we don't. And this is a good example for Theo. As an example, we don't do only audio. We also have video because they. They don't care if their kids are sleeping well or not, as long as they are understanding their faith and passing on their faith. It's not their main cause to get my kids to fall asleep.
- [12:59]
Alex
It's. So I'm not trying to avoid blue light and screen time. I'm really trying to pass on a faith message. So it's just a different focus, different product, different. Okay, that makes a lot of sense to me. How did you advertise it? The growth you saw out the gates, Quite incredible. But, Francisco, I've also heard that it's pretty hard to build momentum on the App Store these days. Marketing costs are high, hard to break through. How'd you guys pull it off?
- [13:18]
Francisco Cornejo
Well, the App Store is a wild place. It's pretty expensive these days to get an app to grow. And for Theo, the market was hungry for something like this. And this happened across every initiative that we've done with Theo. And you're seeing this in the culture, even in the politics. There's such a revival of Christianity happening in the US we launched our social media channels, and everything went viral. Like a post, a reel, a story. Everything goes viral super fast. There was such a hunger for a product like Theo in so many households in the U.S. yeah, we started organically with social media. We tried some ads or roas on that. Advertising was crazy. Like, for every dollar we invested, we got two or three dollars back.
- [13:59]
Alex
Roas for folks who don't know is return on ad spend. Roas just want to throw that in for folks out there who might not know. That's fantastic, man. So question, though. On the Christian side of things, I know this is a kind of Catholic themed app. Is there a. Are you going to do kind of one for each of the major Christian denominations, or is it going to be one Theo app for all of global Christendom?
- [14:18]
Francisco Cornejo
Yeah.
- [14:18]
Jason
No.
- [14:19]
Francisco Cornejo
We firmly believe in unity, and that's a case that happens in our home. I'm not Catholic. I'm Protestant. My wife is Catholic. And that conversation led us to create a product that is available for everyone. We don't want this to be exclusive for a group. We want this available for everyone. It's built on the history of the Catholic Church. There's a ton of content for Catholics, but if you're not Catholic, you can select evangelical, and you will get the content that suits your family. At the end of the day, 95% of the stories and the content are for everyone. So we decided, let's not lock in this place and let's make these available for everyone.
- [14:56]
Jason
The great irony or paradox here is meditation, where you started and prayer both have similar origin stories of where they came from. And they both activate. My friend Sam Harris has done a ton of research, neurological like, brain scan research, on prayer and meditation. Turns out they both do the same thing, which is they turn off that active mind, your wandering mind that goes around and ruminates and makes you wonder about the world and flutter around and it gets you centered. And when that happens, it actually lowers your heart rate, it lowers your cortisol, lowers your stress. All of this is biologically studied, proven long ago, decades ago by scientists and thousands of years ago by just monks and religious people. So there is a bunch of science behind this. And prayer comes loaded with a bunch of baggage. Meditation tends to be bucketed in as like some sort of more elite intellectual pursuit. They're actually pretty much the same thing. And if you do it regularly, that's when the gains compound. So regularly doing it, you then regularly lower your heart rate, you get more sleep. And if you look at the obsession right now in the world, we talk to any of these people who are biohackers, from Tim Ferriss to Peter Attia, Andrew Huberman, all of them are focused on sleep and relaxation and centering and meditation, all in the same zone. So what I really like about what you did here, Francisco, is the intellectual curiosity. Hey, what's going on in our metrics? Let's take a look at them. There are many startups listening to the show today who probably haven't done that. So here's a reason to look at your numbers. There might be something in your numbers that leads you to a diamond mine. You could have been chipping away, just taking coal out of the mine, getting dirty every day, pulling out, you know, 10% growth rate every quarter over quarter. And then all of a sudden, at the bottom of the coal mine, if you make a right turn and you keep going right, you find the diamond mined. That opportunity is always there. I use the analogy with founders. Sometimes you're in like a dark room and you start feeling around for product, market fit. You're trying to find something, and then all of a sudden you feel a light switch and you flick it, and then the entire room becomes illuminated. In a way, that's what happened to you. You were looking through the data, you're kind of flying blind through this soup of clouds and turbulence that is running a startup. And you find a pocket of clean air. You find a beautiful path to growth and profitability. So I'M super excited for you. And I guess you take this forward and you start thinking, hey, I wonder if there's another app that we could add to this. And obviously there are other apps in this zone that you could keep adding to. And you also are pretty efficient. You were able to launch this in three weeks, which then adds what we look for in startups to invest in, which is product velocity. And when we saw you initially, Francisco, one of the things we tagged about your startup was you had great design and you had product velocity and you were builder founders. So for my investment team, that's listening, you are the perfect example of a founder with product velocity, world class design and your builders. So you put those three things together. Alex, what you have is a founder who could find the diamond mined. And I really congratulate you on finding the diamond mined. Great things I'm sure to come for you. Anything we can do to be helpful as investors in your company. And then I guess the converse, which is looking back, is there anything that we did particularly well in helping you get this company off the ground? And if so, let me know so my team, who's listening, can get a little atta boy, atta girl, or maybe knowledge of what to lean into as we invest in another hundred companies this year in 2025 and next year we'll probably hit 150.
- [19:05]
Francisco Cornejo
Thanks for that. There's so many things I can point to, especially with the accelerator, like Those days, those 16 weeks pitching day and night to investors. Every week, 20 investors getting feedback from them. And some of them were brutal, like go back and rebuild your deck and pitch again. That was such a great exercise because I wouldn't stop selling. I'll be selling, I'll be raising money. I've been doing deals for the next years to come and those 16 weeks were amazing to help me polish that. So I think that was fantastic. That was great. And throughout these few years, I've gotten introductions to some of the top tier investment funds. We'll be knocking those doors next year. We'll be at probably 15 million run rate by Q2 next year. And that's when we think we can raise a pretty significant round to achieve our next goals.
- [20:00]
Jason
I've been working with and investing in founders for so long, I've got supernatural startup powers. For example, I know your team is spending too much time on debugging. Your engineers are chasing down bugs at 1am, 8am and every time in between, instead of building amazing new features or pushing fresh code, just admit it, you'll feel Better. The reality is, from time to time, your code is going to break. We all know that. But it doesn't have to be the end of the world. Now they're Sentry. They're the one stop application monitoring platform that's not just going to tell you, hey, something's broke, but what specifically happened, where, and most importantly, why. Plus they've added Sentry logs. So now when something goes wrong, you get a complete report. No more random jobs that just don't run, no more tab hopping, just actionable information with tons of context. And that means faster fixes. And we want to give you three months free of Sentry's team plan. That's right. F R E E. Just for being a loyal twist listener. That covers 150,000 errors. Just go to Century IO and use the code twist. That's S E N T R Y IO and make sure you use that code twist so they know we sent you. Amazing. And so for people who are on my team and wondering, is it necessary to torture founders by making them present week after week after week? Ask yourself, is it necessary to make Steph Curry, when he's in high school, shoot three pointers over and over and free throws all over and over again and videotape them and then tell them, hey, here's where your elbow was out, here's where your fingers weren't on the seams, and then here's your percentage when your fingers were on the seams of the basketball I'm referring to here. Yeah. And you know when you, when pitching becomes second nature and you were so good at it, you took all of the pointers we have to heart. I'll just tell you what those are because we believe in systems, not goals. We want you to be the best at presenting your startup 10 times better than the last person who came into a VC's office.
- [22:09]
Francisco Cornejo
Right.
- [22:10]
Jason
We want you to be more efficient than them. So even in your two minute pitch today, gosh, so efficient. So much to take from that number one show don't tell. Right? It's just a very simple guiding principle to show what you're trying to explain to the viewer as opposed to telling them, well, you show the chart or you show the product, they're going to understand a lot better. Examples matter. Give examples that are illustrative of the product. Now here you aren't doing a product pitch exactly, you're doing a performance pitch and the results. But you did show the product over and over and over again. And you gave examples of it working. Synchronicity, what you're saying matches what's on the screen. It's a simple one, but it's an important one. Sometimes people will go off on tangents. One slide, one message. So don't try to explain two things with one slide or three things or four things. You know, we ever see those bullet point slides, Alex, where they're just reading a bullet point slide of and then they decide they'll put a bunch of slides on the. A bunch of bullet points on the right, a bunch of bullet points on the left, and then three notes on the bottom and you're like, oh, my God, this is a book, not a slide. One slide, one message. Always a good idea. Get to the product in the first 15 seconds when you're pitching to investors. Always a good idea. So those are the things that are top of mind for me when I'm teaching people how to present. And I learned that from doing the launch festival TechCrunch 50, which became TechCrunch Disrupt. Before that, I just looked at the great pitches and I wrote down what I liked about them and eventually came up with that short list of five rules. And you just know those inherently. What doesn't work? Rambling. Oh, man. When you're just rambling and the slide's not moving and you're telling your life story like people are busy. Get to the point. Less is more. You should be able to present your company in 2 minutes, maximum 3 minutes, and then start a discussion with investors, and they should understand almost everything. And then you could always go deep into metrics, et cetera. But what a great job you've done.
- [24:11]
Francisco Cornejo
Francisco, do you remember how you decided to invite us to the launch accelerator?
- [24:16]
Jason
I do not. Please tell me.
- [24:18]
Francisco Cornejo
We joined the founder University. You did it online. I was in Ecuador back then. Now I moved to Miami, but I was in Ecuador back then. And you asked for the audience, like, I want one minute pitches. Like, just pitch your startup for one minute. I want 10 people to do it. So, yeah, I went, did my one minute pitch, and one week later, your team reach out. Hey, do you want to join the cohort?
- [24:42]
Jason
One of the things that you learn as an investor is you're going to take chances, you can take risks, and talent can come from anywhere. So one of the things I learned so early on was the talented people were in Los Angeles, New York, and the talented people I knew in San Francisco were not from San Francisco. So there's this bias in the world. Oh, all the great founders are in San Francisco. They may wind up there at Some point in their career for sure, but almost none of them were born there. Shocker. Like, literally 5% of the top 100 top founders in Silicon Valley were born in the Bay area. The other 95 came to the Bay Area at some point, and a lot of them then relocated. Elon's living here. Joe Lonsdale is living here in Texas. You know, people can come from anywhere. Canva worth 40 billion is in Australia. Spotify is in Sweden. Great founders can come from anywhere. Francesco, good luck. It's a pleasure to be on the cap table. You have my phone number. If you ever need anything or you're ever panicked, remember there is the bat signal. You can text me at any time. I'm a night owl. If you're scared, if something's terrifying or inspiring, just text me. Say, jake, al you up? And if I am, I'll call you back. Great job, Francisco.
- [26:02]
Francisco Cornejo
Thank you for that. Christmas is coming. That's our best season of the year. So looking forward to seeing you using the app for the next weeks. And it's an invitation for everyone to download Theo and get to the Advent event with your kids.
- [26:15]
Jason
Black Friday, Cyber Monday. People don't realize that people do a lot of gifting and gifting the Theo app. Hey, that's a beautiful thing you could do for somebody in your family. So go gift the app and look up Theo and go subscribe to the app. Get a little more Jesus in your life. If you need more Jesus, Theo's waiting for you. If you got enough Jesus, you don't need it. But maybe, maybe you want a little more Jesus in your life. All right, it's the Theo Prayer app. You can search for it on all your different social media and theopray.com T H E O P R A Y.com thank you, Jason.
- [26:51]
Francisco Cornejo
Thank you, Alex.
- [26:54]
Alex
All right, next up on the show, we are going to talk to On Verite's Colin Sebastian. This is a company, Jason, that builds software for both startups to get their data rooms and diligence information in order and also helps VCs parse that information, do the busy work of deal making. And Colin also has a couple of slides for us talking about the state of investing that his company sees so we can better understand the pre seed and seed market. Everybody, please welcome to the show, Colin.
- [27:18]
Jason
Hey, Colin, how are you?
- [27:19]
Jake Triton
Hey, I'm good.
- [27:20]
Colin Sebastian
How are you guys?
- [27:21]
Jason
We're well. I, you know, my team saw your product. I think you applied for funding or somebody introduced you to us and my team, I always tell them if you see something really interesting or weird, either of those two things or traction, I have, like a small set of things that we want to know about. Just text me, text me the transcript, text me whatever you got. People when they saw in verite, were like, this is incredible. Explain to the audience what you've done, built and why it's important.
- [27:46]
Colin Sebastian
I'll start with the founder side. A lot of people don't realize this, but 80% of new founders will fail due diligence the first time they try it. And how we define fail is a VC will actually walk away from the deal without getting to a due diligence questionnaire. So they look at the data room, they say, we're going to hard pass. So we've got a platform that helps founders build their financial cash flow and fundraising models, get their data room together, and just get really thoroughly prepared to talk to investors, and actually pass due diligence. We can typically shave about 50 hours of due diligence prep off of a founder's time. And right now we're knocking about two months off of the average fundraising cycle. And then on the investor side, this is a horrifying statistic. But 85% of early stage investors don't perform confirmatory due diligence before they cut checks.
- [28:36]
Jason
Explain that word confirm. Confirmatory due diligence, as opposed to regular due diligence. For people who don't know, due diligence is basically confirming what the founders told you. So when you put this word confirmatory in, I've never heard that before, did you come up with that term?
- [28:50]
Colin Sebastian
No. So it's actually, it's something that we typically use in private equity. So we've got exploratory due diligence where, you know, we're going to take a look at the data room, we might take a look at the financial models. More mature funds may actually assess the assumptions that are being made in the financial models, if they're realistic at all. But confirmatory due diligence is actually the process of doing the reconciliation between the P and L and the balance sheet and the bank statement, the cap table and the, you know, deal docs. And it's becoming increasingly more evident how important that is. Like, if you've paid attention to builder AI, that's a half billion dollars worth of venture capital that got written off. If you remember Castle, from a couple of months ago, that's $540 million of VC that got written off. Right.
- [29:36]
Jason
In those cases, they didn't actually check that the numbers were correct. It is possible for a founder to commit fraud. It is possible for a founder to spin the and weave a story that uses some correct information but maybe is not as honest or might omit things. So if you're not listening to your customers and iterating based on their feedback, your startup will fail. So if you're drowning in feedback from support reviews calls, it's time for N terprit. Interpret is the customer intelligence platform that helps you turn random comments and feedback into actionable insights that help grow your company. Their AI system is already trained on your business and your product. It then reads all your support tickets, it reads all your reviews, call transcripts and surveys. Then their agents actually update your team in Jira, Linear, Zendesk and Slack. So this feedback doesn't just sit in some email or messaging thread, but it actually helps keep your team moving the ball forward. Find out why Canva, Notion and Perplexity are already using Interpret to stay on top of what they need to fix or build next. So if you're ready to turn feedback chaos into customer intelligence, head to interpret.com twist to book a demo and see it in action. That's E N T E R p r e et.com twist examples of this in my experience might be somebody literally makes a fake bank statement. That has happened in our industry. Another one is they say they have a contract and they have a customer and the customer is spending this amount of money and there is no contract. It was a verbal and the money's never come in but in a presentation deck or in a statement or a sales report, it might show that that money is coming in or it might give the appearance that that money has already arrived. And in my book Angel, I literally gave an example of somebody told me that they had Google and Facebook as a customer. We were made a commitment, we went into diligence, we asked to see the contracts. He said it was a verbal. And I said, okay, well who did you make the verbal with? And he said, well, I don't remember the guy's name. I was, it was actually at your conference, he verbally committed. And I said do you understand what the term securities fraud is? You told me you had these two people as customers. That's like a really perfect term for they pay you for a service and you don't even know the name of a somebody who was a sales lead.
- [32:13]
Alex
Explain to us this infographic from your website. Cause I think this shows where you get all the data from. What here helps end fraud like that?
- [32:20]
Colin Sebastian
The thing that we do that is Particularly special is again that reconciliation between all of the financial documents and we get down to core data. So for example, we can actually integrate into the bank accounts of these founders and pull the statements directly from, you know, that digital API we have access on the founder side. When a founder joins our platform, they're typically using us both to get prepped for due diligence, but also as real time business intelligence. So they're integrating, you know, their accounting suite, they're integrating their, you know, their cap table management software, all of that. We actually end up having a unique data set which is granular transaction level detail across the lifespan of a company. And so we can actually watch and see how a pre seed company matures into a seed matures into a series A and an exit, which is not a data set that's really commonly available. But Jason, to your point, there, there are two things that I would want to say to that. So the first is, you know, there are a couple of things that often get overlooked. So as an example, trial revenue. One of the things that we see is revenue from trials often getting represented as annual recurring revenue.
- [33:27]
Jason
Yeah, yeah.
- [33:28]
Colin Sebastian
You know, the other thing that we see is sales contracts that are recognized as ARR, that have out for convenience clauses. And so it's not, you know, it's not technically by GAAP definition, annual return recurring. But the thing that actually I think is more, I want to say dangerous both to the founder and the investor is the financial models. Even if you never get to the bank statements, I think a lot of investors are really not assessing financial model credibility as well as they should be. You know, you probably know this in, in your career. What's the first thing that a VC does when they get a financial model? They give it a 50, 75% haircut. That is, I think very problematic on both sides of the equation because things like financial models have become more akin to marketing assets than actually like financial planning tools. And so we're trying to correct that on both sides of the cap table.
- [34:19]
Jason
Am I correct that the platform will authenticate with the bank? And so when the bank statements are in there, you've had them authenticate, or if they had, using FreshBooks or whatever, QuickBooks, you're authenticating in your due diligence platform with the founder. So if I look at it as an investor, you've said, hey, this came from QuickBooks, this came from the bank statement.
- [34:42]
Francisco Cornejo
Yeah, yeah, yeah.
- [34:44]
Jason
And that saves you from this potential screenshot editing that people have done in the past where they put a different number in the bank account. And it might also protect the founder from having to give, you know, complete access to their bank account. What we did when we started doing this is we do due diligence training with founders in our accelerator. We'll just have them pull up on the zoom and say, okay, yeah, go to your bank, log in. And we watch them on zoom, log in and we see the URL. So for them to fake that would take, you know, a lot of theatrics.
- [35:19]
Jake Triton
Is it possible?
- [35:20]
Jason
Of course they could make a movie that played exactly what we asked them to do and opening up their bank account, but that would be pretty far out there. And again, you know, when you're doing diligence, you're just trying to do the best you can to reduce the chance of outright fraud and the best you can, I think, to understand as much as possible to make an informed decision. And depending on the stage, this stuff becomes more important. Yeah. So which stage are you targeting for your ideal customer profile for your initial market as a startup?
- [35:51]
Colin Sebastian
So about 70% of the deals that come through our platform are precede through series A. So you can say early stage. The other thing that we do is we're automating the generation of deal memos. We're automating the generation of deal docs like safes and term sheets and side letters. And the deal docs that we produce are actually customized based on, or tailored based on the findings of our due diligence. So for example, you know, if it's a high risk company, we might have maturation clauses that we stick into a side of letter. We may have, you know, certain board rights that would normally be there. What we're trying to do is de risk these deals for investors, but we're also trying to build better relationships between founders and investors. And I think one of the things that we were trying to address and I don't know if you, I don't know if you were briefed on this. I come from Softbank.
- [36:43]
Jason
Oh, really? That's a fascinating place to come from. They had some very, yeah, robust, vibrant investments at robust valuations.
- [36:53]
Colin Sebastian
I loved my time there. But when I was at slotbank, I used to joke that we, we in Tiger Capital back then were both the cause and cure of every problem in vc. And I think one of the things that the like mega valuations did is we pushed, we pushed business principles to focus more on the narrative and the potential of the company versus the likely outcome of the company. And so, you know, valuation multiples saw four 12s. They started increasing. You know, we gave out like 100, 150x sometimes. But I think as narrative and optics became more important, the relationships between the typical investor and founder deteriorate. And that's actually one of the things that we're trying to fix with this, with this platform.
- [37:33]
Jason
I mean, if people don't use a platform like this, that would be a bit of a tell, right? So what does it cost? Just brass tacks. If I'm a founder and I want to use use it, I'm a seed stage founder. I haven't done my Series A, I'm coming out of Y Combinator launch Accelerate. How much you charging me? How do you charge me?
- [37:49]
Colin Sebastian
On the founder side, it's $30 per user per month. On the investor side, it's $150 per user per month, unlimited use.
- [37:55]
Jason
So it's basically free.
- [37:56]
Colin Sebastian
Yeah, that's how we designed it.
- [37:58]
Jason
If I was an investor in your company, I would tell you to double it. No, I would make it $30 a month for a founder. And they're at that level. You know, if they had co founders, they'd be like, yeah, fine, we'll do two accounts. I would just make it a flat rate of. For series a or below 500 a year. Yeah, I would just say it's 500 a year. You can have two or three members of your team on it. Just make it easy peasy lemon squeezy for them. I think Carta and cake and a bunch of the cap tables. They just say, hey, if Your company's under 10 million raised under, I think that's actually a way to do it. Like if you have a startup program, if you just have a startup program and you say if you're under 10 million raised, under 100 employees, under 10 million in revenue, any of those 500 bucks a year, then it's like, oh, well, it costs nothing. And then for the VC side, you know, yeah, you're probably should just do firm based pricing. If you have whatever your last fund is, if your fund is 10 million to 50 million, it's a thousand a year. If it's 50 to 250, it's 5,000 a year. And if you have over a billion in management, it's 50,000 a year. Boom, you're just done. So anyway, lots of interesting things you can do with pricing. Colin, appreciate you coming on the show. Continued success. And how can people learn more if they're a startup or an investor and they want to meet with you or hear more about the product?
- [39:17]
Colin Sebastian
Yeah, you can email me directly.
- [39:19]
Jake Triton
It's Colin.
- [39:20]
Colin Sebastian
C O L L I N Verte AI or you can visit our website.
- [39:24]
Jason
Well done. Very excited about what you're building. It's one of these things we all need help with and if we can build a standard here and you can help the industry build a standard and just make it super easy for all of us to just pay for it, I think it's going to be really interesting. So I'm very excited to use the platform.
- [39:47]
Alex
Next up, we're going to talk to Jake Triton from Pitch Perfect. He's here as part of our Gamma Pitch competition. Jake is building a way to send out text messages Jason on mosque without annoying the hell out of everybody and without breaking the law. There's quite a lot of regulations here. Jake, welcome to the show, man.
- [40:04]
Jason
Hey, Jake, how are you?
- [40:05]
Jake Triton
Thanks you guys. Good to see you.
- [40:07]
Jason
Jason, nice to see you. How's everything going in the accelerator? You were in the current class or the last class? You're in the current, yeah, current.
- [40:14]
Jake Triton
Current class, yeah. We got, you know, SF coming up next month, so looking forward to that.
- [40:19]
Jason
You know what to do. Share your screen and we'll have you pitch and then I'll give you a little feedback here on your gamma pitch. Three, two, go.
- [40:26]
Jake Triton
Hi, I'm Jake, co founder of Pitch Perfect. We help salespeople and SMBs send compliant texts that close deals faster. Meet Mike. He spends more time dealing with texting rules than selling. His current SMS platform is stuck in compliance review, stalling his outreach. This isn't just Mike's problem. Phone networks now make businesses register something called a 2p10 DLC before sending texts. Approvals can take weeks, so Mike loses momentum and wastes money. We simplify 10 DLC. Mike enters his business information once and we automate the rest. What took three weeks now takes us three days, getting Mike back to selling faster. On top of that, Mike spends Mondays and Tuesdays filling his pipeline, then runs appointments on Wednesdays and Thursdays. To save time, he paid an appointment center $25 an hour to handle text and book calls. But now our SMS appointment center does it automatically, saving him thousands a month while he focuses on closing deals. Competitors charge 2 to 8 cents per text and we deliver at 0.7 cents, cutting monthly texting bills considerably while maintaining higher deliverability. We're growing 300% month over month. We made $115k in October and we're on pace for 170k in November, which will put us at a $2 million run. Rate. And we're profitable just off Reddit posts, cold emails and a referral program alone. And we haven't even gotten started on paid ads yet. We understand both sides of this problem. I post 6 million insurance sales and built apps for 5000 plus users while Roman was a lead engineer at Sonics. Building enterprise AI. So we're called pitch perfect and not text perfect for a reason.
- [42:03]
Francisco Cornejo
Right?
- [42:04]
Jake Triton
Texting is just a wedge into a $350 million market. But to get to 100 mil, we can't just stop there. Which is why we're building the first end to end AI sales platform for high volume outbound reps, which is 2.8 million agents in insurance, real estate and solar. We're price agnostic and will happily pay 2 to 5k a month to double their sales. The category is wide open and we're already in motion. Orchid's perfect and we help salespeople and SMBs send compliance that close deals faster.
- [42:32]
Jason
That's a great pitch. I think you figured out some level of product market fit here and you know your customer base. The question I was having the whole time is okay, who is it for? Who is it for? And at the end you said, hey, insurance, solar, all these annoying salespeople who grind it out and who, you know, it's a considered purchase. The type of sales you're talking about are, are not like I'm selling you a pair of jeans, it's hey, if you're gonna get solar on your house, this is a thoughtful multi step process. Or you're gonna buy insurance, life insurance, where you're gonna do real estate, you're gonna buy a home or sell a home. These are things that are relationship based and they're multi dimensional. They're multi step processes.
- [43:21]
Jake Triton
Correct. The typical workflow, you know, like what you just mentioned with like E Commerce or something like that, you might have like abandoned cart workflows or different type of flows for that. But when it comes to, you know, more like B2C sales, like you know, solar, real estate, insurance, most people are going online, they're submitting requests and nobody really wants to talk about insurance, right? So it might take multiple follow ups before you get that person on the phone to talk about insurance. So that's kind of where the drip messaging comes into play and that's how most of our users really interesting to.
- [43:54]
Jason
Me as a boomer Gen Xer, that these conversations have actually moved to people's sms, right? Like I think for some folks are like, I can't believe people want to do this on sms. And for the people who do it on sms, they're like, why would I do it over email? That's annoying. I got to, I have my phone right here and if I want to stop talking to the person, I can just block them or just unsubscribe. So this has been normalized, I think, and you get less complaints. People love submitting their phone number to somebody selling them insurance or solar. That's their preferred communication method today.
- [44:31]
Jake Triton
Yeah. Typically most customers prefer being contacted over sms, you know, up to a certain point, obviously. Right. Like when it comes to, you know, email automation, we notice that the reply rates are much lower compared to sms. So that, that tells us enough right there that, you know, SMS kind of moves the needle a little bit better.
- [44:50]
Alex
Jake, what's the differential between the open rates on SMS versus email? I'm really curious how much more active people are in their text message inbox.
- [44:57]
Jake Triton
It really depends on the campaign. Right. And like the purpose of messages. But I see five, typically five times, you know, reply rates. When it comes to sms. You can't track open rates on like through, through a SMS API. Like typically it has to be through a cloud if you're going to track open rates. You can't track that with, with sms. But like the one reliable metric I would say would be reply rates. And we typically see about five times higher reply rates on sms.
- [45:21]
Alex
All right, that's a lot more.
- [45:23]
Jason
The key piece to this is being able to build your script and the workflow of an SMS conversation. Like step one, ask them what their needs are. Step two, book an appointment. Or step three, send them pricing. Whatever it is, the person on the other side doing solar needs to know, is this a single family home? Do you own the home? You know, have you.
- [45:48]
Jake Triton
Yeah.
- [45:49]
Jason
Gotten a quote for solar before? Do you have batteries? Whatever it is, who's your energy provider? There's a bunch of steps that go into this and then a key piece of this is you have an AI builder that helps people build those scripts.
- [46:02]
Jake Triton
Yeah, right. So we should have the AI workflow builder done by Q1. So something that we're still working on. Essentially what you do is you'll, you'll just go on the AI builder. You write a prompt so I can say something along the lines of, you know, write a five sequence SMS campaign that follows up about solar or follows up about real estate. And then you can give it a little bit more context and you can also tell it like, what are the delays between steps? So like send the first message and then wait, you know, one day or seven days or you know, whatever the case might be, like depending on, you know, what your typical like follow up processes. So you go on, you write a script, you write a prompt and then it'll automatically generate the workflow for you. And then as a user you can just go in, you can make, make edits by yourself.
- [46:41]
Jason
Awesome. Really, your pitch is amazing. You know the feedback you'll get from some venture capitalists is, oh, it's a small, you know, vertical idea. It's never going to get to a billion in revenue. You know, when we look at that, we always look at founders and they kind of start putting the wedge in things crack open and they find more opportunities. What do you think if you nail this use case and you get to tens of millions in revenue, which you know, seems completely probable given your progress, that you could get to 10 million in revenue if you get there. What do you think the sort of Next Markets feature sets, you know, where does this all wind up? What can we see happening? If you get to 100 million, 200 million in revenue, what would cause that to happen?
- [47:28]
Jake Triton
I think just, you know, just from those verticals that we talked about, like real estate, you know, solar and insurance. Those markets are big enough to achieve a billion dollar valuation. Right. Like you look at a company like Follow Up Boss, for example, who sold to Zillow a few years ago and they were only focused on real estate. Right. So I believe those verticals should be plenty. The way that we're going to get there is, you know, of course not just by sms, by building like a more robust and gentic CRM for our customers, but then also the majority of insurance agents and even some real estate agents. Estate agents, they have VAs. So there's a huge market there to be able to replace VAs and appointment centers. Like, you know, in tech we call them, well I want to say SVRs, right. Insurance agents, you know, they don't, they don't use these like this jargon, they'll just call them appointment centers. Right. So building AI, you know, appointment centers through AI voice, SMS, VAs being virtual assistants like Athena.
- [48:28]
Jason
Yeah, they use virtual assistants to do their scheduling, to get people on the phone, et cetera. So you're saying, hey, we might be able to do that agentically as well.
- [48:36]
Jake Triton
Yeah, exactly. So it'll, it'll take all the context from all of your conversations, you know, sms, phone call, and then it'll essentially use that, aggregate all that context and set the appointments for you.
- [48:47]
Jason
It's interesting, Alex. Like you, you hear founders now talking about like building software and it's like, yeah, we'll just add a CRM to it. Like CRM used to be like, okay, that's like a two or three year project to build a CRM company. Now it's like, yeah, we can just build the CRM. That would take us like two months to just add it. The, the pace, Jake of development has sped up. In your experience?
- [49:10]
Jake Triton
Yeah, oh yeah, yeah, absolutely. So, you know, we were just talking about, you know, Gemini, Gemini 3 earlier and how excited I was to, you know, get to playing with that. So hopefully that'll speed it up even more. You know, we've seen like really, really fast growth using some of the AI coding tools like, you know, Claude code and cursor.
- [49:26]
Alex
So I, I know you guys do SaaS and usage based pricing. I'm, I'm curious about the revenue kind of mix split.
- [49:32]
Jake Triton
Right now we have a, a monthly subscription model and then also it's, you know, pay as you go. Right. Our pricing is the most competitive in the industry. We, we charge.07 cents per message and the way that we were able to accomplish that is we negotiated with our, our tier one aggregator, which is, you know, basically like our SMS wholesalers. So we negotiate better texting rates and we just don't take like crazy, you know, we don't charge crazy markups on those estimates.
- [49:57]
Alex
So your margins on the SaaS part are much stronger than your margin on the extra SMS capacity. So those are more at cost. And then you have software margins on that half. Okay, yeah, cool. I just wanted to better understand that part of the business because you said in your last slide you had 13x LTV to CAC and I was like, hot damn, that's impressive. I'm curious how they're getting there as.
- [50:15]
Jake Triton
Far as customer acquisition. Like, like I mentioned in the slides, we started kind of off with Reddit and then, you know, cold email as well. And then we've really been able to expand by like offering a, a referral program. Right. So I, I don't know if you guys are familiar with like the new Sora app. You have to like send your friends a code and then they sign up using the code and there's no other way to use the platform. We've actually kind of like deployed something similar where, you know, you can refer to your friends. It's a pitch perfect. Otherwise, just pitch perfect. And they have to schedule a call with us because we have to be able to scale. We have over 4 million messages being processed through our system every single week. To be able to scale effectively, we kind of have to control the amount of users that come on the platform and also like the quality of users. When you have a high volume texting platform like this, you need to make sure it's not the wrong people. You have to have kind of like a know your customer process as well.
- [51:01]
Alex
Yeah.
- [51:01]
Jake Triton
So, yeah, that's. That's been pretty effective for us.
- [51:03]
Jason
Yeah. You don't want to get caught up in some crypto scammer using the platform to. Yeah, it will happen. At some point. You'll have some bad actor, you know, fake that they're using it for insurance and then they'll do something gnarly or whatever. So you just got to be vigilant. All platforms get abused. It's really just the percentage of abuse in a system is. And how you react to it. So. Awesome. Well done. Continued success. Jake and I will see you on December 5th in the Bay Area. We'll get some dip some.
- [51:32]
Jake Triton
Sounds good. Pleasure, guys. Thank you for having me.
- [51:34]
Alex
The URL, in case you want to take a closer look at Pitch Perfect is pitch PRF ct.com and everyone, if you're feeling inspired, head to Gamma app and start working on an idea of your own and maybe we'll see you here on a future episode of this week in startups.