Paul Yacoubian is the founder of copy.ai, a startup that’s growing at rocket speed. Copy.ai helps you automatically create marketing copy using artificial intelligence. Paul has been building the company in public, and he’d scaled the company to about $50,000 in MRR when we spoke to him in February 2021.
In this episode, Paul talks about how he came up with the idea of copy.ai, how to build a company in public, the advantages of building a company in public and the future he sees for marketers with marketing and AI converging.
Q. How did you come up with the idea of copy.ai?
Paul: My co-founder and I have been working together in venture capital for about four and a half years. In October 2020 we started building side projects using GPT-3 which was released this past summer by OpenAI.
Its ability to generate natural language that sounds like a human is uncanny and it’s by far the most powerful AI ever publicly released. We decided to build a project around copywriting using the AI service to create common marketing use case tools. We started with blog writing, social media copy and digital ad copy. We continued to add tools to the platform, and we just passed $46,000 a month in recurring revenue. I’ve been tweeting the entire journey and been trying to build this in public.
Q. A lot of founders and investors have been talking about building in public but very few people actually do it. How has it worked for you?
Paul: I concluded that we should be building in public after thinking about how Elon Musk builds in public with his companies. I was trying to figure out why he can work on the most impossible problems? How is he able to raise unlimited amounts of capital for his companies? And how is he able to create these brands that both customers and noncustomers adore. It became apparent that his willingness to be open and communicate and build his own audience on Twitter was the differentiating factor.
On Twitter, your followers are the community that you build around yourself. You will attract people that are interested in what you tweet about. The easiest way to get started is to engage with people that you want in your community. If you prioritize trying to add value to that community, they will start following you. It creates this flywheel effect. We would get more followers every time we launched a side project.
If you’re successful and you start sharing your results, it gets more people interested. This leads to more free trial signups, which lead to more paying customers. Be authentic when you do this, don’t put on a facade. Be open about your company, the journey and the mission. And try to be straightforward and honest with people.
Q. What are the things that you need to be wary of when building in public?
Paul: The most common pushback people have about building in public is that their competitors will know what they’re doing. That is the case, and you just got to deal with it. At the end of the day, if you’re good at building your product and if you believe in the mission, your odds of getting success are going to be pretty high. If you don’t like the idea of competition, I don’t suggest starting a company. People underestimate how many competitors are out there in every single category. If it’s a new category, there will be 50 in a few weeks. Now with low-code tools, it’s easy to build an entire platform from end to end. And in that kind of environment, your only advantage will be your brand and your ability to attract resources through organic marketing, which doesn’t cost you money. That becomes your competitive advantage and boost your odds of success, even in a competitive market.
Q. You started with a lean MVP. How did you then iterate?
Paul: One problem we had as we kept releasing tools was that it gets more challenging for a user to know what’s available. We redesigned the interface to make it easier for people to see all the tools. Another improvement was integrating language translation both on the inputs and the outputs. Now we have 11 languages that you can enter your user input in, and you can get an output in any other of the 11 languages you want. We added another button next to ‘Results’ where you can get more results like that specific result. For example, if you’re trying to generate a Facebook ad copy and generate around ten ideas. There may be one or two that you like, maybe they have a particular theme to it, or it’s the wording or marketing angle, and you want more like that. You can click that button, and it’ll push ten more results like that one. From a user standpoint, these three additions are pretty powerful together.
Q. Now that you have product-market fit, are you going to continue with organic customer acquisition?
Paul: Right now, we’re still experimenting. We have many opportunities on the organic side that are high leverage, and those are the ones that we’re focusing on right now. With organic channels, it’s easier to build trust with your target customers and user base. If I run ads or if I send cold e-mails, it doesn’t convey that.
The other issue with these tools is that it’s something that you have to play with yourself, and you have to see the results come out for yourself. You can’t describe, ‘enter your information in this box and it just magically generates results’. Nobody believes it. Even when we’re doing a rendered example, if the example is not relevant to the prospect, they’re not going to be that interested in it.
Q. You were an investor, and now you’re a founder. What does your fund-raising experience look like?
Paul: If you look at the startup market at all these venture investors, they say that 1% of all venture-backed companies will return the value of the entire venture ecosystem. That means that your average seed-stage startup is going against all odds. It’s hard to get to product-market fit and to have a market that’s scaling. For most businesses, including the ones I’ve invested with low rates of growth early on. It’s a massive risk for the founder because they could spend years of their life working on a project that cannot create enough value for users and customers.
I see this problem a lot more clearly now as a startup founder. What founders have to do is ruthless prioritisation on every attribute of their company. What we got right is that we knew the only thing that investors care about is traction. They don’t care about the other stuff. The other stuff is just indicators. They’re like predictors that raise the odds of success of finding traction.
Another thing is that if you’re looking for venture capital money or angel investment money, I would highly advise you to be building in public. And especially sharing your revenue stats because that’s how you let people know where you are. Investors will reach out to you once you hit some milestone that is meaningful to them. And those are easy investments to close on as a founder. This is coming from me both as an investor and a founder. You must flip the script and give everyone as much information as they need to be helpful if they want to. That could be becoming an investor or a customer. It could be people who are not customers, but when they run across somebody who has a need and know of your company, they will refer your company to that person, and they’ll do it publicly on social media.
Q. As we look into the future at the intersection of marketing and AI,-how should marketers think about their careers?
Paul: With AI and automation, you have things headed in two different directions. One is a high degree of automation for non-creative outputs. If you’re talking about blog content, you’re going to see a blog about everything. That’s not going to be any different than it is now because there are already a lot of AI blog generation tools but what’s going to improve is AI’s ability to be more creative. And when you accelerate creativity, you can generate results that people find attractive. So rather than being a tool to generate paid advertisements or passive SEO blog content, you’re able to generate content people will share organically on social media.
Marketers are going to use these tools to be more creative as well. In the end, though, when most of the things that can be automated are automated but you’ll still have this massive need for creativity. The goal for marketers is to understand how to build those brands and increase engagement creatively in an organic way while leveraging these new tools and AI.