Transcript: ‘The Secret to Building Sticky AI Products’

The transcript of AI & I with Chris Pedregal is below. Watch on X or YouTube, or listen on Spotify or Apple Podcasts.

Timestamps

1. Introduction: 00:00:48
2. How Chris made early product decisions at Granola: 00:09:14
3. Chris’s philosophy around product development: 00:13:36
4. When to follow your intuition v. listen to your users: 00:19:24
5. How to build a product with “soul”: 00:20:40
6. Chris’s advice on becoming a better product thinker: 00:25:12
7. The role travel plays in shaping Chris’s intuition: 00:31:17
8. Why having fewer users is an advantage for AI startups: 00:45:52
9. Why Chris is bullish on startups building specialized AI tools: 00:52:09
10. Where Chris sees Granola in the next year: 00:56:52

Transcript

Dan Shipper (00:00:49)

Chris, welcome to the show.

Chris Pedregal (00:00:50)

Hey, Dan. Thanks so much for having me.

Dan Shipper (00:00:51)

Really glad to have you on the show. So, for people who don't know, you are the cofounder and CEO of Granola, which is actually one of my favorite pieces of AI software. Whenever people ask me who's doing it right in the AI consumer business product world, Granola is one of the first things that comes up. I use it for pretty much all my meetings. So, basically, it just sits in the background of my computer. It doesn't join Zoom or anything. It's not like the Fireflies bot, which I find to be the most annoying thing in the world. And it just records everything and then it turns it into a transcript and then has some automated notes, which is really cool. But one of my favorite features is, you've got this thing where I can send the transcript to someone else or the Granola meeting to someone else and then they can ask questions about it. Because we're operating at a scale now, inside of Every, I can't be in every meeting. Other people can't be in every meeting, but there's always questions about, what did this person say? What did that person say? And just being like, don't bother me with the questions, here's the whole thing. That you can ask questions of the actual transcript is really nice. So long-winded way of saying, I think you're doing awesome stuff and I'm really excited to have you on the show.

Chris Pedregal (00:02:05)

Thanks so much, Dan. And you've been giving us feedback for a while, which I appreciated from day one. So, thanks so much.

Dan Shipper (00:02:21)

That's great. And you just raised a huge round—$20 million. Tell me, where are you right now in the business? What's going on? What's in your mind?

Chris Pedregal (00:2:23)

I mean, we're honestly super early. So, Granola launched in May. We were a team of four when it launched. and we ended up signing a term sheet not that long after launch. I guess it's helpful if you build a product that a lot of VCs use because it becomes less of an analytic exercise where it's actually, they can use the product and see if it's a useful thing. So we're super early. We're still very, very much focused on the product—on growing it. We definitely seem to have struck a nerve for some users like yourself—the early adopters. And I just think we need to grow from there.

Dan Shipper (00:03:01)

Who are the people that you think it strikes a nerve with? What are the characteristics of those kinds of people?

Chris Pedregal (00:03:10)

Yeah. So, I think there's two ways to answer that in terms of job title. It's a lot of founders—startup founders, specifically. Both small startups and big startups and a lot of investors right now. And I'd say it's people for whom they need to make high-leverage decisions on the backs of meetings and really care about the quality of their judgment.

Dan Shipper (00:03:47)

That’s really interesting. And one of the things I'm really curious to dig in with you is, you raised a big round. You said you built the first version with a very small team. I assume the team is still fairly small. Tell me about that decision because I'll just lay my cards on the table. One of the things I've been playing with is you can get a lot more done in AI land with much less money in a much smaller team. And I think for me, as a personality, I like that because I haven't really wanted to raise a lot of money—I’ve raised a little bit of money for Every, not a lot. And we're incubating these products and we're kind of seeing how far we can get with only a little bit of money. And I'm always interested in the total opposite perspective. So tell me about that decision and how you think about building a company in this environment.

Chris Pedregal (00:04:35)

Yeah, great question. So, I'd say my natural tendencies are similar to yours, right, which is a small team, don't raise too much money. We found ourselves in an interesting space. So AI is kind of nuts for a few reasons. One is, it's quite expensive to run a lot of these products today, but it won't be expensive to run them in two years. But in two years, the leaders and winners will already be defined. So there's this middle passage, this middle period here where you're going to be running expensive products that will not be so expensive to run in the future, but you need to make it through that period. The other one is just, there's so much volatility. It's really hard to predict the future. Things are moving really quickly and we had an opportunity to raise capital and we decided to take it basically to protect ourselves against that volatility. We don't know what the world's going to look like 12 months from now, 18 months from now, and we otherwise would need to raise again. And also, it's like I said, it's early, but I do think Granola kind of struck a nerve. So I do think we have the opportunity to scale the user base pretty quickly, which will involve money.

Dan Shipper (00:06:02)

That makes sense. And what do you think about— There's this double-edged sword. We actually think we have that at Every, because we always build products that we kind of want ourselves. And there's a double-edged sword to that because you can get immediate adoption with the founder-VC crowd, but then expanding beyond that is tricky. You know, a good comp is maybe Superhuman, where I think they were the hot SaaS thing for any VC or any founder to use for a while. And I think they've had some success breaking into enterprise, but it's certainly taken a long time. How do you think about moving from the cohort of people that seem to love this today to whatever the next step is?

Chris Pedregal (00:06:47)

Yeah, that's a great question. I think there are two parts there. I think what you want to be careful of— Also, I don't have all the right answers. I'll just tell you what I think, right? And what we're trying to do—

Dan Shipper (00:07:00)

That's what we're doing here. No, no one has all the answers.

Chris Pedregal (00:07:03)

Okay. Cool. Proceed at your own risk. I feel like the real danger is to get pigeonholed in a vertical that you don't want to get pigeonholed in. So it's interesting. It's like, building products for VCs is notoriously a bad signal because, for investors, they say the TAM is so small, right? Sure, they have willingness to spend, but there aren't that many of them. So you can't build a really big, big business there. So I think it's really important that you protect against that. So, if you don't want to build a product for a specific vertical, make sure you diversify your user base early so you get signals. Otherwise, if you go too far down that path too early, it'll be really hard to switch, I think. By focusing on early adopters, I think you can do that for a while because two things will happen. I think one, if you get early adopters to really love you, they will evangelize you to their friends and their teams. And I also think that with some of these tools that just might be like a changing of the guard. I remember when Notion came out. And it's not like big companies were switching to Notion. I think what happened is that they got all the startups, all the scale-ups using it, and some of those companies have become really, really big. And then over time they've become established and it's easier to get companies to switch. But I don't think you need to. I think it would be a mistake to try to go after a mass-market product too early because you lose what makes you special, if you do that.

Dan Shipper (00:08:38)

That makes total sense. I totally agree with that. I'm wondering— The place where my mind goes, I just think you're such a great product thinker. And the reason I can tell is because you managed to make an AI product that’s not just the shiny bells-and-whistles thing. It's actually useful. It's a useful product that includes AI. And it's not a bolt-on—it does something that would only uniquely be possible in the AI world, but it's not this weird hype-y demo that you use once and then you just never look at again. So, how did you think about making those decisions? How did you get into Granola and how do you think about the initial product decisions?

Chris Pedregal (00:09:17)

Yeah, I guess the short answer is that it took a while. We launched in May and, I think we've gotten a lot of attention since launch, but we had been working on it for a year before then with 100–150 people using it and giving us tons of feedback. I can't remember. You might've been one of them. I actually can't remember if you were in the beta group or maybe you started using it after launch.

Dan Shipper (00:09:48)

I don't think so. I think I tweeted you and then you didn't respond and I was like, fuck this guy.

Chris Pedregal (00:09:52)

It sounds like me. I'm not great at social media. Alright, so you weren't part of the original 150. I guess a few things. One is it took us a really long time to figure out what the core interaction would be in Granola. So the core interaction right now is basically Granola looks like Apple Notes. For those who haven't used it looks like Apple Notes during the meeting. You type into it like a normal text editor. It's transcribing real time. It's listening to the conversation. And then the moment the meeting ends, you see this bar go down and it transforms your notes into really nice notes. It fleshes stuff out. It adds points you didn't write down. It took us a long time to get to that. That's not at all what we thought the product was going to look like at the beginning. The core interaction was real-time during the meeting, you'd be invoking the AI and typing keywords and it'd be writing notes. And that interface, that interaction was really cool— it looked cool, it made for a great demo, it made it look completely different than anything that came before. It just turned out to be really distracting in actual meetings because what would happen is if you have any kind of AI augmentation that happens real-time, you can't help but read what the AI is writing. And if it doesn't get it exactly right, then you can't help but want to fix it. And then you realize you've stopped paying attention to the person you're talking to. So, actually, it took us a long time. We went through a few different interaction paradigms, until we finally settled on the one that's in Granola now. And once we did that, we cut out 50 percent of the features we had built, not because they aren't stuff we'll build one day, just because they weren't good enough. But with AI, it's very, very easy to build a demo version of a feature, right? The happy path. But it's actually still a lot of work to build a great feature that works consistently and reliably and that people love. So, that was a big part of it, I think, is we cut out a lot of the stuff that didn't work, and we just tried to do one thing really well, which is hard in AI. It takes a good amount of discipline because you can do so much so easily.

Dan Shipper (00:12:09)

I guess the thing that I imagine people are—and I'm sort of wondering about it too—is okay, so you had the original thing and it's doing the real-time transcription, which is a really cool—wow—thing. And then you did a bunch of iterations and you realized that this much simpler interaction pattern, that's maybe a slightly less of a wow, especially while you're in the meeting, it turns into a wow at the end. What's really funny, actually, before I go there is that I don't use it that way at all. I don't ever take notes in it. Sorry! I just record and then get the notes. So, it's really interesting, and I think that actually is getting to my question, which is, I think a lot of people, myself included, but, I think I've gotten a little better over time. A lot of people are like, okay, but how do you know who to listen to? How are you getting that feedback and then sorting through it? You have that UI, you have that user interaction. And when you say it's distracting, are you paying attention to yourself using it? Are you just watching lots of different users and listening to some group of them? Because I imagine there's some group of people that really maybe liked the distraction. I don't know. I'm just making stuff up. So, how are you sorting through all that stuff?

Chris Pedregal (00:13:30)

I don't know. I don't know if you get it perfectly right. My product philosophy is, I think you need to make product decisions based on your own intuition. And you want to inform or give your intuition as much of the relevant context as possible. So to me, it's less about, okay, you talk to a user and you write down exactly what they say, right? And then you go and do exactly what they say. I think we're lucky with Granola where we actually use Granola ourselves. We don't have the same experiences like an investor would or, let's say, like a salesperson directly, but we do do sales calls. So we can kind of empathize there. I think the most important thing is basically to build your internal mental intuition model of what feels good or bad and then the best way to do that is to get— I FaceTime with users. Written feedback is a data point, but I think it's when you talk to the human and you can kind of see the human in their full context that it becomes a lot easier. So what's worked best for us, and it's harder as you scale is to have a few people you talk to a lot. And we do that basically with over Slack, and then with periodic calls like this. Ideally, you go into their office and shadow them for a day, which is logistically really hard to pull off. But whenever we've done it's been super valuable.

Dan Shipper (00:15:08)

Yeah, I love this. So, I mean, I think you're saying there isn't some list of rules or set of processes. There is some data gathering, but ultimately it's about having a perspective and that perspective or that sense of taste is implicit rather than explicit. And it's sort of about trusting that to some degree, and informing it and having it evolve over time. So what does that feel like? What does it feel like when you're making a decision and you're letting the— Because intuition is a hard thing, some intuitions are bad, some intuitions are good. What does it feel like to you when you're kind of aligned and you kind of get into the intuition of, this is what I want to do.

Chris Pedregal (00:15:59)

This is generic, but deep down, you need to believe in something. And it's easiest when you're building for yourself, because you can be like, okay, this is what I want, or this is what feels right to me. And I think there should always be that anchoring, because otherwise there are lots of products you could build in the world, right? The one that you're anchored on is the one that you care about. There's another school of thought, which is don't even talk to users, just pure design, follow your truth. I don't subscribe to that. And the reason I don’t subscribe to that is because it is unfathomably hard to put yourself in another person's shoes. If you try to do it in an abstract way, you're like, okay, what does this person think or feel? And I think perhaps anyone who's been in a marriage or a long-term relationship can kind of attest to that, which is it doesn't matter how well you know the person, it's so freaking hard to put yourself in someone else's shoes. What I find is that I love user tests, I love putting a piece or a feature in front of users and seeing how they react and usually it's not the small things that you notice along the way. Usually very quickly you're like, oh yeah, my mental model was right, or it's completely wrong. And you feel that very quickly, right? There are lots of different people out there. People have different preferences. So there's a lot of noise, but usually you're like, oh, I had this implicit assumption I didn't realize I had, and that thing is wrong. And therefore everything downstream is going to be a piece of crap. Or, okay, maybe it didn't hit exactly the bar, but it's generally there. We're getting there.

Dan Shipper (00:17:47)

I mean, I really agree with that. I mean, I do think you can make products for people that are not like you and sometimes that's necessary, but there's something about that building mindset that I think people miss or people misunderstand or misapply, which is, and I've done this too— There's that whole, over the last 10 years, it's the lean startup and you want to treat business like a science or whatever. And so you want to objectively study your users and your customers and sort of find out what are their needs and what are their problems so you can solve them or whatever. And I think what people don't realize about that is if you go in without a perspective you evoke that lack of perspective in the other person. They don't have the answers. They don't know what their problems are. And to some degree, in your mutual interaction, you are creating a world that potentially has a problem or doesn't have a problem. And there is some reality there, but you have to evoke it in the right way. And so when you come in with a product or a specific perspective, it's much more valuable for figuring out what's working or sort of training that intuition vs. going in with just so what kind of product do you want? Or what problems do you have or whatever? You just are going to get blankness because you're presenting blankness. And that's a very subtle distinction that I think is really interesting.

Chris Pedregal (00:19:24)

Yeah, I guess that made me think of two things. One, in my last startup, Socratic, we were building for high schoolers, teenagers, right? This was a little while ago, but they're completely different from me. So I couldn't trust a lot of my intuition to what I would want to do as a user and it took us a while to figure this out, but what made a huge difference was after, I don't know, maybe two years, we figured this out. So we're building this startup in New York. So on Tuesdays and Thursdays, we would have high school kids come into the office and spend time with us. And on Tuesdays, it was the same group of kids so that we would get to know them and they would trust us. And teenagers have been trained to tell adults what they want to hear from an early age. So it took a while to break through that before they're kind of honest. And then on Thursdays, it was a new group of kids who had never seen the product before and, getting that kind of face time week in week out made a tremendous difference because there was constantly like, I can't trust what I want. They've grown up with a very different technology. They've grown up with very different cultural norms. How does that work for them? And then the second thing that made me think of this is, this is a weird terminology, but you're talking about if you come into that perspective or not, I basically think you can look at products and you can kind of tell whether they have soul or not. I've tried to find a better word for it, but soul is the best one I've found. And I think if when you're building a product, you should absolutely, absolutely react to what people are saying, but if you don't have an opinion or a perspective, then it's kind of empty, right? Whatever they say, you'll just run after that thing. Whereas some products you can kind of tell if they have soul and you can also tell when they lose it over time. Oftentimes organizations will scale or grow and something that is really captured in essence, but gets distilled until it's not really there anymore. But I think that's a good test. You can kind of look at most products and be like, is there a human-like element at the core of this that feels coherent.

Dan Shipper (00:21:34)

What is a product in your head that has soul?

Chris Pedregal (00:21:36)

Well, maybe it's because I was just talking about Socratic, but this was in 2015 and we were talking to teenagers and, at that time, Snapchat felt like it was full of soul. You could tell it had a real perspective. There was a lot there that was— You don't focus group your way to Snapchat, right? It felt very teenage-native at that time.

Dan Shipper (00:22:07)

And is that the original Snapchat where it's mostly the disappearing pictures? Or were there other parts of it that like they'd added on at that point? I just don't remember where in its evolution it was at that point.

Chris Pedregal (00:22:19)

Yeah, it was just, honestly, the whole interface was so different. Everything was. And they're disappearing pictures, stories are out, there are these kinds of what felt to me like canonical new types of media that they had come up with. But if you looked at it, because I had to look at it really closely, because I was designing for teenagers and that was where a lot of, at that point, Snapchat was dominant and a lot of the interaction patterns that teenagers expected came from Snapchat. But if you looked at it very carefully, it was thoughtful. It was the fastest way to take a photo and share it. Or the fastest way to go through lots of photos. But for older users, they'd try to use Snapchat and they'd be like, I can't figure this thing out. It's too confusing. It’s too different.

Dan Shipper (00:23:05)

Yeah, that makes sense. I want to go back to—and I'm sorry, you can tell me to stop asking you about how you feel, but I'm really just on this intuition thing right now. You're really speaking my language. So I'm going to just keep pushing on it until you tell me to stop. But I think for me, one of the interesting things about intuition is that I was definitely on the more rationalist, more finding rules, doing science kind of path. And I think if you go down that path and you are really serious about it, you realize that underneath any scientific advance is typically a lot of creative intuition, and a lot of stuff that's inexplicit and that's the sort of necessary thing. So, I think for me, one of the things that has been really interesting as I've kind of grown in building products is learning to recognize the feeling that I get when I'm like paying attention to other people and how other people feel or what other people expect or what I think I should be feeling vs. what I actually feel and when that's happening vs. when it's sort of out there vs. like when I'm too confused and I'm like, there's too much signal and I'm just a mess basically.And, I think, when we talk about like knowledge in the West, you're pretty much talking about, sort of scientific knowledge. And this is a sort of different type of knowledge that we don't really talk about too much. And I'm trying to explore for people who are, I think like you— I mean, you're talking about soul and products and intuition or whatever. I think you have something there that we don't talk about enough. So I'm wondering, does this experience resonate with you or how does it feel for you or what is that for you?

Chris Pedregal (00:25:06)

Yeah, I think that made me think of something that's really challenging—that you need space for it, right? It’s not something you can kind of look at, I mean, perhaps it's not that different from writing. I don't know where it's a creative act, but you need to focus. I think a hard thing about a product is that you get busy. And when you get busy, you actually lose the space to do product thinking. And we can kind of talk about what I think product thinking is a lot of the time. But I remember, at some point, I was looking at Google PMs where their schedules were packed with meetings, from the start of the day to the end of the day. And I was like, you literally have designed an org where there is zero time for actual product thought. And there are different types of roles in project management—you're pushing stuff forward you need to do that. But I think a lot of the product thought that when you come up with something good, you kind of need to get in that space. And that's one point. 

It's interesting what you're saying about listening to yourself or noticing when you're listening to what you feel or what other people are thinking. It’s not always easy to do this, but I find that a lot of products are actually very simple. What you're really trying to do is say, how did this make me feel? And a lot of that is subconscious or it happens so quickly that it's like, you almost have to replay the video in slow motion to see what's actually happening. You have to replay the emotions. Because I look at something, I'll feel something. Why? And then, going back and figuring that out and then asking the question to other people, what does this make you feel when you see it? And again, it's not always going to be easy for them to talk about it, but I think that, at the end of the day, that's a lot of what building great products about. It's just hard to get to the answers of that, but if you can—

Dan Shipper (00:27:07)

I totally agree with you and I totally agree about the time thing and it's not just about time in your schedule. You can have no meetings for a couple hours, but it's also about emotional time or emotional space. If you're just so stressed about the 50 things you have to do, even if you have a couple hours, you're not going to have the time to really figure out how you feel about something. For me, I have been running Every for five years. So over the last year or two, I have started to really just be very mindful of my schedule. I really try not to do meetings before noon, Tuesday, Wednesday, Thursday, Friday, and I also I'm lucky enough I have a lot of people on my team who are doing a lot of the day-to-day stuff. So I have time to do stuff like this, where I can kind of let my mind roam, which is really amazing. You’re in the belly of the beast right now. and I'm curious how you're doing that for yourself. How do you think about if, as you're saying this kind of intuitive thinking is so important or feeling is so important, but you can't do it if you're too busy, but also you're running a startup and startups are fucking crazy. How are you doing that?

Chris Pedregal (00:28:24)

Poorly. Poorly at the moment is the answer. I guess where my thinking is now— And check in a couple of months, it might be totally different. I think different companies are going to win off of the different strengths. And I think for Granola, there's a lot of things we're going to have to do to be successful. But, I guarantee that if we mess up the product, right, if we mess up that soul, then we definitely won't be successful. So I do think it's a big priority and we definitely got more attention after our launch than we expected. So I think we've been playing catch-up there and now I'm actively trying to be really thoughtful about hiring—hiring the right folks—so that I can have that space to do product and a bunch of other things as well. But a bit inspired— Actually, we talked to a couple of months ago and you told me about how you've done a really good job hiring different people in different areas. I was like, that sounds amazing. I'm gonna have to try to try to replicate that.

Dan Shipper (00:29:35)

I love that. Hopefully I can— It took me five years to do that. So hopefully it saves you a little bit of time. I think that makes a lot of sense. I want to talk to you about it after this. I guess, another thing on the intuition point, there's the part of intuition where you're sort of training on the current project that you're on. So, how are people liking Granola or not liking it or whatever? But then there's also just being a fan of different things and really kind of in your day-to-day life, just loving this particular kind of thing and getting deep into how it works and all that kind of stuff. What are some things that you love, that have informed that intuitive side of how you make decisions and how you build products.

Chris Pedregal (00:30:20)

Interesting. Product-wise, or just generally?

Dan Shipper (00:30:22)

I mean, wherever you want to go with this is totally fine. Whatever's exciting to you.

Chris Pedregal (00:30:30)

I try to be a good dad. I try to be a good partner, husband, I try to be a good CEO. And I think I can be two of those three at any given time. I don't think I can be great at all three. And I think the trick is to rotate it, right? If you stay too long with the same two, then that third one gets in trouble, right? And I think that's the sad reality. I don't know. Startups take a lot and I wouldn't have it any other way. I've had other jobs and I'm not happy in those. They’re the right trade off for me, but they do take a lot. In terms of the things that I love, a lot of interests I had when I was younger, I've kind of given up or maybe I'll pick it up one day in the future. The things that have stuck around, I guess, are, I just love to travel. Travel is a really big one for me. And just being in a different changing environment, I just find to be really, really helpful. The other thing I do, which, I don't know, when I was younger, I thought it sounded super weird, but maybe my friends have gotten weirder over time, so now I think it's more normal. Or maybe because I'm so busy now that it's more necessary. I will go off by myself, periodically. Every birthday, the day before my birthday, I'd go off somewhere super remote where there's no one around and just be stuck in my thoughts. And I think it's kind of one of these reactions to the day-to-day can get so hectic and you can get so reactive. And I think you periodically need to break that cycle and zoom out and feel small. I do this pilgrimage. I just went to Big Sur. I don't know if you've been there, Dan, but it's a place that's like, oh man, it's one of those places. Everything about it is just almost, if you want to feel small and insignificant, it's that place. It's huge cliffs, the ocean, stars, redwoods. It just makes you feel like you're like this tiny little speck, which is, I think, a really helpful perspective to get periodically.

Dan Shipper (00:32:35)

I love that. I mean, first of all, I think, that's one of the most emo things anyone's ever said on this podcast. But also, I feel the same way. And one thing that I've not done on my birthday, but I'm Jewish and we have a holiday called Yom Kippur. I don't know if you're Jewish or not, but, basically you it's the day of atonement. So you're supposed to reflect on all your sins and repent basically. And you fast and you're supposed to go to synagogue, but I don't really do that. I just sit by myself, try to turn my phone off, and I have a notebook there and I'm just thinking about my year and things I didn't do or did wrong or people I hurt or whatever, but just more generally it's sort of a way to step back. And it's also, it's really interesting to do that because you're fasting and that gives you a little bit more mental clarity, which is interesting, but also you walk by restaurants and people are eating and you're like, I can't eat. And that puts you in a totally different place than normal. And there's a lot of people who feel that way all the time. And so you're kind of getting a very, very slight taste of that. Anyway, you just get into this completely different frame. And I always find that I feel different after that. So I totally resonate with that.

Chris Pedregal (00:34:15)

Cool. Let's move on before I say more emo stuff.

Dan Shipper (00:34:20)

No, I want the emo stuff, but that makes sense. We could talk about travel. What do you think it is about those experiences that informs your taste or kind of scratches that itch or what have you taken away from those experiences? Or maybe tell me about one in particular that stands out to you.

Chris Pedregal (00:34:45)

Yeah, it's interesting. You can try to talk about how travel opens your horizons and makes you more aware of the human condition and things like that. You can build products better because of that. But it’s just an emotional reaction. I don't think it's an intellectual one. It's just being in different places. I think it's all about just breaking that routine. Routines are how you get stuff done. There’s something really nice about it, but I think it also goes by really quickly when you're in a routine. And that's kind of the beauty of it because there's you don't notice all the details because your brain is already ingested all the details and kind of it cancels that out so you can just focus on the thing in front of you and I think when you're traveling all those details kind of rush in and that breaks you out of your mold and that gives you perspective. But for me, I love it. I'm just one of those things where I don't know. I think most people know whether travel is a core thing for them or not from an early age. So a lot of people who aren't tempted to or interested in seeing a lot of the world when they're kids and there are others that they know that from an early age. I don't know, maybe it's a core human type or something.

Dan Shipper (00:36:10)

Yeah. There's some personality type system that includes people. It’s sort of a neurotransmitter base and who knows if it's actually scientific or whatever, but that's not the point. And it hypothesizes that people that have a little bit more dopamine-forward leaning brains just like travel, they're called explorers in the system.

Chris Pedregal (00:36:38)

What's dopamine-forward? Like they're dopamine trigger happy or—

Dan Shipper (00:36:40)

If you had to pick a neurotransmitter that's more dominant. So dopamine vs. serotonin vs. I can't remember what the other ones were—probably norepinephrine and one other one. If you had to pick one, traveler people are more dopamine. Who knows if it's real, but what you said reminded me of this routine vs. travel, which always reminds me a little bit of, in computer science. There's this trade-off in algorithms between exploring and exploiting, and I think that's reflected also in just creative lives, which is sometimes you're in explore mode. Sometimes you're in exploit mode. Same thing in companies. Sometimes you're in explore mode before product-market fit, and then you're in exploit mode when you're in product-market fit. And for me, I often just think of it like breathing in vs. breathing out. So breathing in is explored and breathing out is exploited. And knowing where you are as a person in your life in your week, because days have explored exploits, it's fractal on different levels and knowing where you are as a person and as a company or in your product, I think is really important. Because for example, often you're in explore mode, but then you're looking at other people who are in exploit mode and you're like, I should be doing that. And it's like, no, you absolutely should not be doing that. That doesn't work. So that's what I brought up for me.

Chris Pedregal (00:38:22)

I love that.I think what you said about knowing in which mode you are and being prescriptive about that, I think is so important because they're completely different. You approach those two worlds very, very differently. And if you approach an explorer task with an exploitative mindset, I mean, you're going to discover some really crappy stuff.

Dan Shipper (00:38:54)

Yeah. And I think that's why, after you sell your company, it's often hard for entrepreneurs because you're like, I'm used to the exploit mode and explore mode only happens once every a couple of years or whatever. So you just have to put yourself back together and that's kind of hard. 

Okay, so how far do you think you can get with a great product? An example would be, people always sort of point to Slack vs. Microsoft Teams. And Slack is clearly a great product or at least has a better product than Teams. I don't mean, now they've been acquired. So, I don't know. We use Discord. I'm not even up-to-date on the current happenings with Slack, but for a while, certainly, Slack was a much better product and Teams just kind of ate their lunch. So as a product-focused founder, product-forward founder, let's say, what do you think about that and how far do you think you can get with a good product?

Chris Pedregal (00:39:52)

Yes, it's interesting. I mean, the Slack example is an interesting one. It's the kind of thing that investors bring up when they're trying to see how big an opportunity can be. And I mean, I think of Slack as a huge success, right? There’s basically this new paradigm—short chats have been around for a while, but I feel like the way we do real-time chat with teams and the workspace was invented by Slack in my mind, in terms of that modern version of it. And what were they acquired for $30 billion—it’s something like that.

Dan Shipper (00:40:32)

Something like that. I mean, chump change compared to Microsoft's—whatever. But yeah, I mean, they were acquired for a lot. I mean, yes, it's a good outcome.

Chris Pedregal (00:40:40)

Sure. Agreed. But I feel like that product did— I think it was both a commercial success and a product success. So I wouldn't choose that as a negative example. I think maybe the question is a bit misleading. I don't think a product by itself is going to get you very far, right? There are plenty of great products that aren't great businesses. I think there is this overarching question, which is in the world of AI where data is so important and context is so important, for the dominant players, will their natural advantage with both having all your company data and all the users be that impenetrable or not? And I think that's the real question with Slack. And I mean, that's a hard one. I think that's almost one where if anyone who is starting a company today is like, okay, I know that I have the perfect strategy to make sure that Microsoft won't be able to do this or copy or whatever, I think they're lying. I think you just have to believe that you have some product that you believe desperately needs to exist in the world. And then I think you need to be really savvy and strategic about how you go and do that. And some of it is just up to luck. That’s my personal view. I mean, I think so. I think the Notion guys did an exceptional job of this. There's no technical moat in Notion. I think it's like their advantage is that it was out there enough when they started working on it that no one really took it seriously or could wrap their head around that this was like a real thing, which is an interesting type of moat. I think if you tell most investors that's your moat, don't be like, what? But, I mean, it's still interesting to see how that will play out. Slack, Notion, Zoom—they're all the contenders trying to go up against the big folks.

Dan Shipper (00:42:46)

Yeah. That's interesting. First of all, I love the way that you just rejected the premise of the question. Great answer. Second of all, I actually have a slightly different take—I'm curious about your perspective—which is that big companies always fumble the bag. And the limits to performance or the way to maximize the performance of products on dimensions that customers care about are not going to end up being really usually limited by data or compute or, I mean, maybe distribution is a different one. But data or computers, which the big companies have, it's going to be about risk appetite. And if you're releasing software to hundreds of millions of people or tens of millions of people who are used to it working a certain way, your risk appetite just has to be a lot lower. And there has to be many more levels of people being like, is this such a good idea? And if you're a four-person team, you can just do weird shit that big companies can't do. And especially because I think a lot of their users will keep them in the paradigm that they're used to. A lot of people have invested like their whole careers in Salesforce working a certain way. Salesforce can't just be like, no, it's actually this other thing because there's a small group of AI early adopters that want that. But everyone else is like, bolt-on chat will be fine. And so that's kind of what I think is there's going to just be a lot of small companies doing weird stuff that it feels a lot more AI-native, that large companies that early AI early adopters, really people who have already been using ChatGPT and Claude for forever and are just like, okay, now I'm ready for the new thing that big companies are not going to be able to do because it's going to be too weird for their users. And even they'll bolt on chat experiences and all these big company products that all suck because they're so afraid of saying the wrong thing that it's usually like, the answers are not good. What do you think about that?

Chris Pedregal (00:45:04)

Oh, I mean, I completely agree with all of that, but I think that's kind of a disconnected point. I think basically what tends to happen is that startups are way better at discovering new product categories because they can explore and test it out. And then usually there's like a seven-year period before the big companies are like, oh, this is a big deal. We should invest in this. And then that's like, for sure. Startups are going to vastly outperform in that first stage. I think that the slot question is in that second stage. Once it's clear that this is what the product is, what the need is, and Microsoft, like the eye of Sauron, turns on you, will you be able to defend yourself against that? And I think that's a totally different question. Something you did say, though, I think is an interesting topic here— What are the advantages in this—in the AI space? Because a lot of times people you might say like, okay, everyone has access to the models. The big companies are clearly taking AI very seriously. And they're trying, they're shifting AI features left and right. So, what's your advantage as a startup? And one of them is you don't have a lot of users, which is amazing, and what that means is that you can ship features that use frontier models. And you can figure out what works and what doesn't work because Google can't do that. Google can't ship something that uses GPT-4-level intelligence to its billions of users. It's physically not possible today. And then, the other thing you can do is if you don't have that many users you can just do this, even if it's really expensive. Because my view is if you're building an AI startup at the app layer— I actually don't know anything about building an AI startup where you're training your own models from scratch or something like that. But if you're building at the app layer, I think your job is basically to figure out what's the perfect product for two years in the future. And then what that means is you use the latest models, you don't worry about how much it costs because you don't have any users, and it's going to take a while to scale your user base. And you just trust in the forces of capitalism and whatever the equivalent of Moore's law is for AI intelligence, that AI costs are going to plummet right in that time. And when that happens, you'll have a product that is that is AI-native and exactly what users want and also financially viable at that time.

Dan Shipper (00:47:34)

And how do you know what the perfect product is in two years? Put aside the cost question.

Chris Pedregal (00:47:38)

Yeah, that's a great question. I think one of the really hard things about building space is that the technology is changing so quickly, right? And I think if you’re like, hey, Chris, what's the world going to look like in five years? What's AI going to be able to do? There's a wide spectrum of answers. No one really knows, right? Some people might be more informed than others, but I think 12–18 months is a lot easier to imagine. There might be some step changes there. And I think what you can do— When we started, so it's interesting— Granola is not weird now. The idea of it, when we started Granola, there are a lot of things about it that— Context window sizes weren't big enough—they were super slow. The intelligence level wasn't there. The quality of transcription wasn't really good enough. You couldn't even capture audio, it's only the latest version of MacOS.

Dan Shipper (00:48:45)

I think it's still weird because of that. No one's doing that, the on-device audio.

Chris Pedregal (00:48:49)

Yeah. It's true. They're starting now. But, anyway, we sat down, we're basically like, what's going to happen? And we might have gotten lucky. We now try to do this periodically. We're like, okay, we think the cost of inference is going to go down. We think context windows are going to get much bigger. We think the cost of transcription will trend towards zero over time. That one's still to be TBC, but with Whisper and things like that, I think we're on the right path. And we just were just, if we're going to assume these things are going to happen, we're going to build a product based on that premise. It's one of the reasons why Granola does real-time transcription as opposed to asynchronous transcription after the meetings ended, because we're like, one day real-time transcription will be just as good as asynchronous or good enough. And then it's clearly better to have your notes immediately at the end of the meeting, not five minutes or 10 minutes after the meeting ended.

Dan Shipper (00:49:42)

That's interesting. And I think to your other, earlier point, and just us talking about big companies and not having a lot of users and that being a good thing for startups to sort of be able to take risks and learn. I think when GPT-3 and -4 were coming out and ChatGPT first came on the scene, there was this thing that was like, our startups are over. Because big companies are just going to have the AGI that just figures out exactly what the customer wants, and you're just never going to be able to compete. And, it just turned out, I think that's just totally wrong. And it seems like, even when you have a lot of intelligence at your disposal, there's so many different ways to use it. And there's so much involved in giving the AI the right knowledge and the right perspective and the right task to do that. Even as they're getting smarter, I don't think— We kind of posited the god and then the big companies are going to use the god. And then it's just like, oh yeah, startups are over. And it's so interesting to see that kind of fantasy get pulled away and you start to see all the nuances of, even if you have this incredible tool, how complicated it actually is to use it well and make something good with it. You know, it's really interesting to me.

Chris Pedregal (00:51:14)

Yeah, it would be interesting to see how that one plays out. The way I think about this is I think that there are two kind of competing tensions. One is convenience and accessibility are very real, right? And, if people have built a habit of going to ChatGPT or Claude or whatnot for eight out of their 10 tasks, then it's a lot easier for them to use it for their ninth and tenth task, right? I think that's one, human laziness is something that I will always bet on as a product builder. I think the competing tension is specialization for a problem. And when the experience or the output or the quality really matters to you and I think those are at odds. So, actually, whatever, I can't predict the future, but I'm kind of bullish on anybody who's building tools for professionals or experts. I think you don't have to worry about OpenAI taking over the world. I think if you are building something for consumers and it's a task where the consumer doesn't— It's a bit like Google, right? There could have been lots of niche specialized search engines, but the reality is that most of the time people just use the thing that they use for everything else, even if it's not the best search engine. So I think about that a lot. I think the other thing from a startup builder perspective is, if you know one of these big companies do get AGI and take over them, well, what are you going to do in the meantime? It's like Pascal's dilemma, right? It's like, shouldn't you try to build a really great company or product in case that doesn't happen or they don't dominate. Because if they do— Otherwise you can sit around and twirl your thumbs. And then if, and then they fumble the ball, you're going to be like, damn it. I should have been building the startup the whole time.

Dan Shipper (00:53:10)

You can't just hold out for UBI and AGI.

Chris Pedregal (00:53:12)

One thing about that though is, which I think this is a good piece of advice and served us well, But it's basically, when you're building your product or your company, don't solve problems that won't be problems 12 months from now. It's very easy to do that. You're like, ah, shit, users keep asking for this product. Doesn't do it well—whatever—the models aren't good enough. So I'm gonna spend a bunch of time fixing it. And it always takes longer to fix things than you think. And it always takes longer to grow your users than you think. And then 12 months go by and the next version of the model, as you predicted, solves it for you. And that was all wasted effort. Whereas you could have spent that time on something else. I think that's one of those moments where it's really important, I think, not to listen to your users right now because the shelf life of that fix is very short. So you, yeah got to make sure you're riding that tsunami of technical innovation, that wave, rather than trying to paddle in front of it.

Dan Shipper (00:54:12)

I think that's great. I want to go back to your specialization vs. generalization point, which if I had to reframe it would be, for startups, the sweet spot or a pretty good bet is if you're specialized in a particular thing, you're not going to get blown out by the opening eyes of the world. You'll be really good at the doctor chat or I don't know. I'm just making something up. But then if you're doing the general thing, then you're really playing with the big boys and maybe you can win, but,it's at least getting the mindshare to be the thing that people type in instead of ChatGPT is really hard. And you have to be really, really useful. How do you think for yourself—where does Granola fit in on that generalization vs. specialization continuum?

Chris Pedregal (00:55:05)

Yeah. And just to make a point there, when I say specialize, I mean, in the type of worker task that you have. So I guess, an example here is Photoshop vs. the default photo editing thing on your phone. I think there will always be something like Photoshop or Final Cut Pro or whatever the thing that's used by experts that are trying to be the best at their domain. I think it all needs to be in that category. I think right now, and we've always thought this, meeting notes are a stepping stone to actually helping you do all the work that you need to do. I think product designers spend a lot of time in Figma, engineers spend a lot of time in Visual Studio or whatever ID they choose. And I don't think there's an equivalent, or there hasn't been an equivalent until now, for people whose jobs center around other people and relationships, whether it's meetings or emails or things like that. But I do think Granola needs to move much further down that line. It's like, how do we make you a 10 times better version of yourself when it comes to that type of work? And that's very much in our sights. I think right now you look at and it's like, okay, meaning notes. Maybe you really like it. Maybe there's lots of reasons to like us, but, I think that we need to go further down the specialization route.

Dan Shipper (00:56:35)

I don't know what you feel like you can share, but if we're looking to the future of the next year or so, what are some of the things that are on your mind? What are you thinking about? What does that mean for you in the next year or so?

Chris Pedregal (00:56:52)

So I think there are some obvious things about Granola. Right now it's just on your computer. It should be on your phone right now. It's single-player. It should work with your team. So that stuff aside, I think in the future, 80 percent of the value that users are going to get from Granola are is going to come from Granola helping them do the tasks or the workflows that get spawned in a meeting, and we don't yet know what that looks like exactly, but lots of different prototypes internally my belief is so there, I think there's a view out there, which is going to create these agents and they're going to do all these things for you, right? And I think that's a valid view. And I'm really curious to see what products or experiences come out of those. That's not the view we're taking at Granola. The view we're taking Granola is one where–same thing with the notes—we want to remove the busy work so that you can better apply your judgment on the stuff that matters. And I think if you come out of a meeting, and right now we're just thinking about one meeting at a time, but I think we'll be more expansive in the future. There's a lot of busy work and, okay, I need to send a follow-up email and describe what we've done or schedule another meeting. But the way I see Granola is like, I'd Like Granola to take you 85 percent of the way there. Anything that involves a lot of unnecessary clicks, Granola should do, but ultimately the tasks that work should always come from you. And it should have your spin. And I think that's what people want, to be honest. I think if you daydream, you're like, oh yeah, wouldn't it be great if my AI agent did all my work for me. But I think if you actually think about it carefully, it's not really what you want because, It's just not coming from you. No, it's not like it's never going to do it like you would, right? I think what you want to do is you want it to be a better version of yourself.

Dan Shipper (00:58:50)

I totally agree. I love that version of the future. And, I think I'm rooting for you to achieve that. I can't wait to try what you make next. This is a really great conversation. I had a lot of fun. I love the product. Thank you so much for coming on.

Chris Pedregal (00:59:10)

Thank you so much, Dan. It just felt like we were chatting. I wonder what it'd be like to listen to this.

Dan Shipper (00:59:23)

That's the goal. So, for people who want to find out more, want to find Granola or follow you on whatever social platforms or whatever, where can people find you online?

Chris Pedregal (00:59:33)

Yeah. So, Granola.ai. Check out the website. It's a Mac-only app for now, but more things are coming. And then you can follow me on Twitter. You can follow Granola on Twitter. It's @meetgranola on Twitter X. and I'm @cjpedregal on X and we really need to up our LinkedIn game, but we haven't done that yet. So don't follow us there or do, but don't have high expectations.

Dan Shipper (00:59:55)

Excellent. Cool. Thanks, Chris.

Chris Pedregal (00:59:59)

Thanks a lot. Have a great one.

Thanks to Scott Nover for editorial support.

Dan Shipper is the cofounder and CEO of Every, where he writes the Chain of Thought column and hosts the podcast AI & I. You can follow him on X at @danshipper and on LinkedIn, and Every on X at @every and on LinkedIn.

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