Inc - The Chat GPT Growth Story with OpenAI

AI is rapidly changing the way we work. It’s only been ten months since ChatGPT launched, and since then, we’ve seen a huge increase in AI applications being created and used globally. 

OpenAI’s Head of Sales, Aliisa Rosenthal, joined OpenAI a year and a half ago — before ChatGPT launched. She joined a team of two, and there was a lack of product-market fit beyond small groups of researchers. 

After the launch of ChatGPT, they went from 30 leads a week to 10,000. 

How did they get here? 

Aliisa took to the stage at SaaStr Annual to share how far AI has come since the launch of ChatGPT, how it can change the way we work for the better, and what the future holds. 

Ok to some of you this will make no sense.  But now I’ve seen this happen again and again, including just the other day at one of my top portfolio companies.

The #1 or #2 rep in a start-up, that’s making lots of money, and has it all dialed in, and doesn’t want to be a VP or Director — still quits.  Often, for another job where realistically, they won’t make nearly as much money.  And often, where the working environment isn’t clearly any better.  And where they have to start all over again.

Why would a sales rep quit a job where they are making top 1%-5% money, respected, treated well, and have it dialed it?

It may not be 100% logical, but looking back, here’s where I see it happen:

• A new VP of Sales comes in.  Always a risky time.  The #1 rep will usually stick it out, but if they don’t feel they are treated well, they may leave.  Even if they are treated well — just not the same as before.  The best VPs of Sales know how to handle this.  But hire a mediocre VP of Sales?  You’ll often see the #1 rep leave for the hills pretty shortly thereafter.  A real risk.
• The VP of Sales leaves.  Also a risky time.  Often, the #1 rep is sheltered and protected by the VP of Sales.  Anxiety levels can go up if their VP leaves.
• Their comp goes down, or simply, looks harder to achieve.  A sales exec I know in their first true AE role was the #1 rep at a startup doing $20m ARR, and made almost $800k.  She quit to go a big public company as one of hundreds of reps, and start over.  I asked her why.  She said the next year just looked a lot harder.  But so it was for almost everyone.

The constant here? 

Change. 

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So G2 put out its latest Quarterly State of the Software and there’s lots of good stuff in there, but what really stood out to be is how they quantify what we’ve all known for a while — just how many top vendors there are in each category.

Not every vendor is on G2, but we can probably assume most with a significant customer base is on G2.

So how many is that, per category?

• 5,876 total Marketing software vendors
• 4,199 total HR software vendors
• 3,008 total Security software vendors
• 2,040 total Design software vendors
• and 1,232 total AI software vendors, already

That’s probably even more competition than you realized.

The 75% Rule once you are VC Funded for more than a few million dollars is a good one. But if you raise less than that — 75% may well be too high. You need the cash to last 24 months.

And of course, stage and timing does matter.  Once you are profitable and at scale, I don’t think any VC expects founders to take anything less than market salaries 

There are lots of good ideas for all different situations:

• 75% of market for founders’ salaries.
• $10k a year, if it’s very early and you have no cash!
• $10k a month, a good place once you have some cash but not that much.
• Market once you are well funded, not until then.
• Etc. etc.

There are lots of good answers.  And also — lots of different situations.

In my first start-up, we raised $9.2m in the seed round.  So it really didn’t matter that much in that scenario. The second time, I funded the prototype myself ($0 salary) and then we raised a $2.6m seed and I took a small salary (no need to be $0 anymore, but anything large would decrease the runway).  So different situations = different answers, up to a point.

One thing I have learned, though:

If the founders are the highest compensated people in the start-up, especially pre-Scale (e.g., pre $10m ARR) … IMHE, something is wrong.

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