First Block: Interview with Brendan Foody, Co-Founder and CEO of Mercor

Now is the most exciting time in history to build a company. Like the difference between what's possible with AI and what's been actualized in the economy is so large. There's so much to do that it would if there was any time to do it, it would be now. Um, and I think that many more people should

chase after that. Choose the thing that they love doing and want to do for the next 10 years and commit to it. Welcome to First Block, a Notion series where founders from the world's leading companies tell us what it was like to navigate the many first of their journey and what they learned

from that experience. Our guest today is Brendan Foody, co-founder and CEO of Mercor. [Music] Thank

you so much for joining us this evening. We're so excited to have Brendan here, the CEO and co-founder of Mercor. We'll jump right in. So, when you were young, you told me backstage that you had some really interesting first jobs that I thought would be helpful in providing context for the team here about how you got to where you are. What was uh some of those first jobs

for you? Well, so I had a dozen different side hustles in one form or another growing up. Um,

for you? Well, so I had a dozen different side hustles in one form or another growing up. Um,

but one of my favorite memories was selling donuts in 8th grade where I noticed that Safeway donuts sold for $5 a dozen and that my friends would pay $2 for each donut. So, I would bike to Safeway, buy Safeway donuts for $5 a dozen, sell them to my friends, and then I started I want to scale it

up. So, I started paying my mom uh $20 to drive me and her minivan to Safeway. Uh, then selling tens

up. So, I started paying my mom uh $20 to drive me and her minivan to Safeway. Uh, then selling tens of dozens of donuts each week. I had competition pop up and so they were selling Chuck's donuts which if anyone doesn't know are on the peninsula this like you know higherend donut but they had a

higher cost basis so I dropped my prices to $1 for two weeks uh to drive them out of business didn't know about anti-competitive practices at the time in high school I started this business doing AWS consulting where I realized that a lot of my friends were eligible for AWS startup credits uh and they're like small businesses or startups that they're running, but they weren't applying

to claim those credits. A lot of them didn't have websites to fill out the application, all this kind of stuff. So, I started charging $495 to build a website for them, help them apply, get their AWS credits, and then I did that a few hundred times uh when I was in high school. And so, I was making a bunch of money and didn't want to go to college. I was like,

school. And so, I was making a bunch of money and didn't want to go to college. I was like, "This is awesome. I'll just do this full-time." Um, but eventually my mom persuaded me to go to college. first employee. Uh circle. Yeah, exactly. And so, uh yeah, that was that was

college. first employee. Uh circle. Yeah, exactly. And so, uh yeah, that was that was another fun escapade. And how did you land in the land of software for recruiting? Yeah, I mean it grew out of a lot of those experiences early on. I think as with many people in this room, uh early stage founders, a lot of the hardest problem in scaling is always how do you build

your team, right? like this problem of processing so many different people, finding people that are interested in doing it. And it just felt like all of the processes for how people find candidates and assess them and match them with jobs are enormously

antiquated. and we could build far more efficient processes to automate everything um with Merore

antiquated. and we could build far more efficient processes to automate everything um with Merore and walk us through some of your metrics so that we understand the scale of what you're building.

What can you share with us? Yeah. Yeah. So, it's it's been pretty wild. Uh in so far as what's public, we scaled from one to 100 million in revenue run rate in 11 months. Um so fast. Yeah,

Bass is growing um out of uh pretty much you know any company in Silicon Valley uh haven't shared other updates in terms of topline from there but we're uh well over half a million users. We have

done many hundreds of thousands of interviews across all kinds of roles ranging from software engineering to uh medicine, law, finance, HR. Um, and so it's been an exciting time. We work with, let's see, other ones are we work with six out of the magnificent seven. Uh, we work with all of the

top five, uh, AI labs. Um, and so it's all all happened very quickly. That's amazing. So, walk

us through kind of your founding story. I think so many of us in the room have that aspiration like how did you everything kind of clicked together for you? Absolutely. So it ties to the question earlier of thinking a lot about hiring growing up and companies I was building and initially I was working with my best friends from high school who I met when I was 14 and we were building a lot

of software for fun and so we wanted to do that faster and we would hire engineers internationally in India. Uh we partnered with the code club at IT Kragpur uh to hire people, build projects and

in India. Uh we partnered with the code club at IT Kragpur uh to hire people, build projects and match them with our friends because our friends asked to um hire engineers as well. And as we saw chatbt taking off, we realized that there were all of these processes that we were doing manually

and how we would manually review resumes, manually decide who to hire and manually conduct all of the interviews that went into that uh that we could automate with LMS. And so we did that iteratively um while we were scaling the business, dropped out of college um and then uh scaled up from there.

If you have any advice for people who are maybe they have some product market fit, there's some semblance that things could work out and they're considering should I bet at all? I think go for it. I mean, maybe I'm a little biased because I didn't want to go to college in the first place

it. I mean, maybe I'm a little biased because I didn't want to go to college in the first place and so I I tend to be very against a lot of the well-defined career tracks. But I just think that what framed it for me and I think should for many people here is that now is the most exciting time in history to build a company. Like the difference between what's possible with AI and what's been

actualized in the economy is so large. There's so much to do that it would if there's any time to do it, it would be now. Um and I think that many more people should chase after that. choose the

thing that they love doing and want to do for the next 10 years and commit to it. It's that

level of obsession. Absolutely. And in fact, one thing that I always felt is I've never been super disciplined. Like I was I was not great at like, you know, always doing my like college homework on

disciplined. Like I was I was not great at like, you know, always doing my like college homework on time and all of that or holding myself accountable to whatever exams I need to study for. It was much more about obsession about like find the problem that you can't stop thinking about. um where even when you're like hanging out with your friends, your mind just like comes back to it because you

need that level of commitment and longing to spend the next 10 years on it. Um and so it's all about finding that. Some of the founders I've supported say like find a problem you can be obsessed about

finding that. Some of the founders I've supported say like find a problem you can be obsessed about 247. Why was that hiring for you? I think it's because it feels like it's the most important

247. Why was that hiring for you? I think it's because it feels like it's the most important problem in the world. what everyone does every day, right? Of like how we spend our time. Yet at

the same time, it's so underaddressed, right? Like there's so few companies that are actually working on this problem of talent allocation. And so it felt like there was this big divide in that way.

Uh and correspondingly an enormous opportunity to solve so much of the inefficiency that we saw in the market. What advice do you have with those first, let's say 10 hires that you make?

I think for the first 10, it's keep as high a bar as possible. Like this advice is redundant intentionally. Uh don't compromise. I remember we were incredibly patient for our first 10. Um and

intentionally. Uh don't compromise. I remember we were incredibly patient for our first 10. Um and

that is because those people will shape the next hundred, right? and will be the most important decisions that you make in scaling your company. Um, and so I think especially for the first 10, I think you get to a point as we were discussing where you do there's always a trade-off between speed and quality and you should always keep a high bar, but eventually like you need to

build the team. Um, and so but I think for the first time the highest bar is possible.

Can we talk about your most recent fund raise? For sure. you had a big one. Congrats. Thank you. Very

fast growth. Yeah. What um were some lessons that came from that experience? Yeah. Um well,

we've had a fortunate fundraising history cuz when we first dropped out, we was sort of like the only time we somewhat ran a process. And then our series A and our series B, the investors just saw the business inflecting. Um, and so, uh, they at our series B, I think they talked to some of our

customers, they, uh, heard some of the numbers, and then it moved moved pretty quickly from there. But I think, uh, one thing I've learned to your question is that a lot of people treat

there. But I think, uh, one thing I've learned to your question is that a lot of people treat fundraising as like an outcome, and that's totally wrong. It's an input to building valuable products and experiences for users. Um, and so trying to spend as little time as possible thinking about

fundraising and getting back to spending time You're kind of crossing that 100 person threshold.

You're up to 140. Exactly. Now, what has changed as you've evolved and grown the culture and the company? Yeah, I think that you get to a point where I think initially it feels like a friend

company? Yeah, I think that you get to a point where I think initially it feels like a friend group almost, right? You're hiring very slowly and you have a lot of time to get to know everyone, right? And interview everyone and all of this. Um, and eventually you get to the point where

right? And interview everyone and all of this. Um, and eventually you get to the point where you don't know everyone. You need to have the processes that a business would have. Uh,

and so it feels a little a little bit unfamiliar uh, and certainly takes some some getting used to, but it's it's a process and it's obviously an important part of growing up, so to speak. So,

as a founder and CEO, how have you thought about scaling yourself?

Yeah, I think that the most important thing is how many people you have in your team that you really trust where it's like they can quarterback an initiative and take something that you give to them or work on with them uh all the way to the finish line. Um, and so I think that's

most important almost like these each individual that you have immense trust in and trying to have as many of those people throughout the org cuz you can't expect that people on day one or even day 30 are going to get there. It takes building context, having the right Exactly. the right uh training,

the right culture, um all the right experiences um to to get there. Yeah. One characteristic I really like about certain people on my team is having strong opinions loosely held where they have immense conviction in whatever idea they're telling to me, but when they're presented with,

you know, an idea that is counter to that or or data or evidence against it, they change their mind very quickly. Um, and I found that that's a very good habit and value. Um, so indexing on on that and people that make decisions and you know sometimes it's their call, sometimes it's mine,

but always trying to have a very thoughtful way of arriving at that answer. So scaling your culture is one of the hardest things to get right and one of the easiest things to get wrong it seems even when it feels right. I'm curious to know what have been some of those cultural um uniquely you things

that you want Merkore to keep. Yeah. So, there's three values that jump out the most that we always preach to everyone. The first one is having a can do attitude in that when we set really high goals, the decision making forms around those goals to optimize for much larger outcomes. So, people that

have this sense of optimism and ambition around how they approach problems is very important. The

second is having really high standards. Going back to hiring and keeping a really high bar for who we want to work with, what we expect of them is incredibly important. And I think one of the most uh largest differentiators between the legendary companies and those that don't get there. And then

the third is intensity. And that we work really hard. And if you look at the early cultures of all of the greatest businesses, they work like no one else. Um, and so I think that's important to maintain as much as possible. Let's talk about your product a little bit.

Can you walk us through the power behind Merkore? Absolutely. So it goes back the right mental model is really automating all these manual processes and and repetitive processes. Exactly. Repetitive

processes. And the way I think about our product over a long time horizon is that there's three big things that we need to get right. We know that there's a lot that will change, but for the duration of the business, our customers will always want more candidates available on our platform. They'll always want better matching with those candidates, and they'll always want to be able to hire more quickly. How does matching work? Matching is

that's a tough one. a very the most challenging problem because there's sort of two sides to it, both of which are very highdimensional. The first side is is the candidate interested in the job, right? And so there's all the characteristics of the role, the people they'd be working with, the

right? And so there's all the characteristics of the role, the people they'd be working with, the compensation of that role, the other opportunities they have present. And so we have models that predict the probability that said candidate's interest in the job. The other side of it is from the company perspective of what is the probability that said candidate will perform well on the job

once they're hired. And so you need to collect all of the performance data as your eval set to make better predictions around what are the types of interview responses and the characteristics on people's resume uh and all of that that predict that they're going to do well on a particular job.

And it's the blend of those two problems that really go into um matching effectively. I love

that. Something I've always struggled with is the bias that creeps into the human decision-m that is part of the recruiting process. Walk me through how you think about that within your technology.

For sure. I I mean, I find it so fascinating because so much of the way people hire is very vibes based, right? Of like does this person seem like I get along well with them? uh and it's not data driven around who's going to perform well on the job and what are all of the features that

actually prove that that person is more likely to succeed. And so I think the first answer is grounding everything in performance data. Um obviously you need to be thoughtful around how you're evaluating performance and thoughtful about that. But so much as you can do that, it's the most effective way to make decisions and optimize for the right thing that you should be

hiring for. And I think the second thing is that in automated systems you can get very thoughtful

hiring for. And I think the second thing is that in automated systems you can get very thoughtful about the features that you consider. One example of that is that when humans are interviewing, we consider all of the vibes. When our AI interviewer is talking to people and evaluating interviews, it can just look at the transcript, the substance of what people say, right? Leaving out all of the

like multimodal aspects of whether that person sounds like us or looks like us and all of that.

That's fascinating. What about nuance? I mean, does that matter? It does. I mean,

a big part of who we hire is like the vibes matter in some ways, right? Matter. Yeah. I

And so there's a little bit of a balance there. Um I I think that our mi our mission as a platform is very much to avoid that bias and to have as much transparency as possible uh around who we think is going to be as successful as possible in the particular role. But at the same time,

um, a lot of the time, humans will make the final final call. And there's some things that they should consider that they shouldn't, and there's others that, uh, you know, it's the way it is and the people that that they get along well with. I think that's really meaningful. you know,

you're you're diversifying the top of the funnel so that when you get to your final few candidates, you can apply that level of judgment, taste, uh, perspective that is really valuable, I think, when you're making that final decision. For sure. So, what can you share about your fundraising

history? Let's see. So, we uh started the business January 2023. We bootstrapped it to a million-doll

history? Let's see. So, we uh started the business January 2023. We bootstrapped it to a million-doll revenue run rate before we dropped out of college. And then uh and our seed round was with with General Catalyst. And then we were really focused just on like product and not scaling up as much

General Catalyst. And then we were really focused just on like product and not scaling up as much for the subsequent call it 6 months or so. And then we saw this huge transition underway in the human data market where it used to be this crowdsourcing problem of how do you find a bunch

of low and mediumskilled people that are writing barely grammatically correct sentences for the early versions of chatbt that everyone is familiar with scale AI solving. Um, but we realized that it was transitioning away from crowdsourcing towards this sourcing and vetting problem of how do you find some of the most exceptional people in the world that can work directly with AI researchers

to help push the frontier of model capabilities. And the platform that we'd been building for the prior year and a half was perfectly positioned for it. And so we went right place, right time, right product. Yeah, there there's a lot there's a lot of fortune in find and luck in finding the

right product. Yeah, there there's a lot there's a lot of fortune in find and luck in finding the right market. Um, and so we went to uh, OpenAI and we shared our vision of how the world was going to

right market. Um, and so we went to uh, OpenAI and we shared our vision of how the world was going to change. Um, and they along with all of the other top AI labs correspondingly brought us in. And,

change. Um, and they along with all of the other top AI labs correspondingly brought us in. And,

uh, I remember Benchmark invested at a $250 million valuation for 10% dilution when the business was at one and a half million in revenue. And we were like, "No, this is such a discount."

Because we know that the business is about to inflect. They thought we were absolutely crazy at the time. Uh and then our series B was four months later at$ two billion dollars$2 billion valuation

the time. Uh and then our series B was four months later at$ two billion dollars$2 billion valuation but a lower revenue multiple uh at a $20 million revenue run rate uh because the business was growing so quickly um and have obviously grown another order of magnitude since then. Um and

so it's been certainly beyond our wildest really started working. It felt like this roller coaster where it oscillated between the best day in the world when we'd signed

a big customer contract. We worked with a lot of seedstage customers, so the customer would go out of business the next month and it felt like the worst day in the world. Uh,

and it was just very very tumultuous and I think it was once it started really working and we saw the inflection it was a little bit more consistent but there's still there's still this very strong hyonic treadmill where within 3 months you get acclimated to the new thing and then it you know

raises your expectations and uh every day there's you know a new thing that's popping up that I have to worry about. And so I think it's always less glamorous uh than than people think on the outside because running a startup that's growing quickly um is always bound to come with uh you know a million problems. Good problems to have. Good problems to have uh but problems nonetheless.

How do you keep that perspective? You know, the highs are never as high as they feel and the lows are never as low as they feel. Yeah. I think it's about being very long-term oriented.

I like that. I find that it's easy to reflect on something that happened this week and think I didn't have to deal with that thing last week, so this week is horrible, right? But if I zoom out to where were we last year or the year before that, it gives a lot of perspective around broadly things are going pretty well. Uh and where will we be next year and in 10 years because

ultimately that's what matters. And it it's hard to say that in the moment. Everyone gets sucked into the day-to-day of all the problems that they have. Um, but trying to always ground ourselves in that is what's most helpful. I found Yeah, I like that quite a bit. Something

that I've been thinking about and reflecting on as your journey between becoming, you know, a leader of people to a leader of managers to a leader of function to a leader of company is how do you kind of be that mirror to provide the steady perspective about let's keep our eye on the long term? Let's keep our eye on the prize. Absolutely. Do you find yourself doing that for

your org? I do and I I find that how you do that changes over time as well. Like I think early on

your org? I do and I I find that how you do that changes over time as well. Like I think early on it's about great storytelling of what will the world look like in 10 years and and that remains important but I think one of the changes is grounding that storytelling in metrics of what is

the northstar metric that matters uh what are all the things that feed into that these numbers that you can compound over a decade because you know that those will drive immense customer value and that's something that I've certainly gained more of an appreciation for over the last year or so.

Let's talk about some of your favorite habits and tools. Of course, other than notion or Well, well, we can we can definitely talk about Notion, but I'm curious to know like what have you leaned on as a CEO founder? What tools have helped you? Well, I I am serious in saying I use Notion a ton. In fact, even so much as like UI inspiration because Notion's obviously beautiful.

And so I one of our front end engineers always jokes that I'll never be annoyed with a front end if they just make it look more like notion. Uh it's Ivan will be very happy. Yeah. Yeah. Yeah. I

use it most to track uh relationships whether it's customers or candidates. I find it very helpful.

um less so a template from the community, more so that I love that it's very flexible in being able to configure all of the different dimensions and have charts that spin up to show me the analytics on our pipeline and how we're doing. And so uh yeah, those those sort of analysis

where because an issue with spreadsheets is you can't like click and have the page uh that you're editing. And so that's the reason that I love it so much that you can have a document embedded within each of the cells and and units that um are stored in the database. Yeah,

the databases are incredibly helpful and having that context on our platform. Absolutely. Well,

this is one thing uh we were talking about a lot on our team is that notion AI can now connect with all of our different knowledge bases. Uh I think my coeter said a message like ignor ignorance is now uh unacceptable. uh because people should just ask questions to the knowledge base. So

you've talked a little bit about how you use notion. What about our AI products? Yeah,

I really like drafting things with them of course. Um I think is the first one and then I think the second thing is the knowledgebased retrieval. Um, especially I know the connectors are newer, but as those develop over time to not just read from all of our applications, but also write in all of them, I think that's really exciting because ultimately context is at the heart of

all productivity and having the tool that has all the context on our interactions is the, you know, most important way to leverage that. What's one building block of advice you'd leave

behind for early stage founders? I think it's find the thing that you're obsessed with because selfd disccipline will only go so far. It's the problem that especially if you're not disciplined to begin with. Especially if you're not disciplined to begin with, right? Uh it's a thing that you can't stop thinking about and you just need to keep coming back to because that's

the draw that will last for the decade that it takes to build a business. And my last question is if you had to rebuild Mercor from scratch today, what is the first block you'd start with?

I think it would be the team because I think that early on you do a lot to discover the market and the problem and what it needs to look like versus now that I have more of an understanding of that.

It's like I need to have the people that I really trust in place to execute. Um and so it all does come back to hiring in one way or another. Doing it great. Yeah. Right. Doing it great with people you want to build with. Absolutely. I love that. All right. Thank you. [Applause] [Music]

you want to build with. Absolutely. I love that. All right. Thank you. [Applause] [Music]