Perplexity revolutionizes the way people discover information

AJ Audino of Perplexity - Podcast Transcript

Scott:	Welcome to the Founders and Friends Podcast with Scott Orn at Kruze Consulting, and today my very special guest is AJ Audino of Perplexity. Welcome, AJ.
AJ:	Hey, thanks so much for having me.
Scott:	My pleasure. And for those that don’t know, Perplexity is a client of Kruze. So, this is the friends of the family podcast here, but Perplexity is probably one of the most exciting companies we’ve worked with in a long time, and it’s awesome to have AJ. AJ actually has a specialty inside of Perplexity. Maybe just introduce what you do and how you landed at Perplexity.
AJ:	Yeah, absolutely. So, at Perplexity, I’m leading enterprise growth. And what that really means is we have a consumer application used by 11 million plus people. On the enterprise side, I’m working with companies large and small to then use Perplexity where they work.
Scott:	And not everyone, but most of us have learned about Perplexity through web search. And I can’t tell you how many people, and it’s not even just tech people, it’s normal human beings, business people who use Perplexity and they use it instead of Google now. It’s like their default search engine for many, many people. I think what’s really cool, you were telling me before we started recording, but the enterprise version’s new. This is a new thing you guys are working on. And first of all, I always tell entrepreneurs that we work with velocity, speed. The faster you’re moving, that’s a really strong sign that the company’s onto something and doing well. And I don’t think this could have happened any faster. This is a very new initiative.
AJ:	Yeah, it’s been insane, honestly, the growth. So, when I joined Perplexity and just kind of give you a quick career kind of path to tell you how I got here, I, out of college was in consulting, but always wanted to get into entrepreneurship. And so, I left strategy consulting and was at a small startup, and that failed. After about a year. Moved to another startup, that failed after a year. And so, I was trying to decide after two failed startups, is this just not for me?
Scott:	Am I cursed?
AJ:	Am I cursed? And so, I actually had the opportunity to co-found a health tech company in the API data space with a really good friend of mine, Troy, and the company’s Particle Health. We ran that for five and a half years, raised some money. And I learned a ton from that experience. But as I got to know more about AI, I just thought, you know what? This is a really cool space. I jumped from there over to Perplexity about four months ago, like I said. Which means that I’m a seasoned vet. We were about 50 employees when I joined, and now we’re over a hundred.
Scott:	Wow. Amazing.
AJ:	And when I joined to lead enterprise growth, we had just launched it really. And now we have thousands of companies for using it. So, it’s pretty crazy.
Scott:	And it’s amazing and it’s good for you for sticking with it. First of all, after a couple failures, I don’t know if people know this on the outside, but know Kruze, we have 800 and something clients. And so, we see the ebbs and flows and we see companies that had entrepreneurs that worked so hard and had a good idea, but just didn’t come together or something happened. And I love working with those people another time, because oftentimes the second time or the third time, they’re onto something again and it clicks. It’s like shots on goal. So, if you’re listening to this, and you’re someone who’s that one that’s struggling, AJ is a great example. Stick with it, keep going. You eventually hit something good and it opens your career up and it’s really exciting. So good for you for sticking with that, but what’s the vision for the enterprise product? You gave me a little snippet before we started recording here.
AJ:	Yeah, so one of the reasons that I joined Perplexity, and one of the things that our CEO Aravind talks about all the time is the lightning, the user. How do we make magic for somebody when they first use Perplexity? And so, I got on calls all the time and people join, they say, “Hey, I love using Perplexity. How do I bring that to my business?” The reason I joined just because I was using it and I said, “Okay, this is pretty cool.”
Scott:	It’s like the greatest lead gen ever for an enterprise business. It’s like, “Oh my God-“
AJ:	“It makes my job so easy. Yeah, it’s really nice.” So, when we first released Perplexity Enterprise, we were focused on two things, security and admin. Those are the basics. So, for security and privacy, what that means is that we can’t, I shouldn’t say can’t, but Perplexity and our partners, OpenAI, Anthropic, and Meta, we can’t access an enterprise org’s data to train our models. And so, it’s really important for enterprises to know your data is private. We then have some admin functionality where you as an admin can manage your organization, add users, and that kind of thing.
Scott:	Console view, yeah,
AJ:	Again, the basics. The basics that we have there. And I should mention maybe quickly, very quickly what Perplexity does? Or is that too much-
Scott:	[inaudible 00:05:46] I think a lot of people know, but maybe people who’ve seen this for the first time who are interested.
AJ:	And it’ll take 30 seconds. So what Perplexity is, it’s two things in one. So, the first thing is it is a high powered search engine, so much like a Google or a Bing, we index the live web. And when somebody asks the question, we’re able to find information about that question wherever it lives. Then we do a bunch of credibility ranking on that information. And the second part of Perplexity is an AI powered answer engine. And so, we use LLMs or large language models from OpenAI, Anthropic, and ones that we fine tune. Take all that information from the search and put it into these LLMs. And use AI to really again, delight the user answering questions. And so again, we’re a search plus AI together.
Scott:	Yeah. And a good example is the other day, we’re a CPA firm, and I was looking at something, I forget what it was, but I was searching for something about the CPA regulations or something like that. And I just used Perplexity. And sure enough, it busts out this two page answer that was amazing, super thorough. And also, one of the things that’s cool about it can give you its sources or the things that it referenced for that. And so, I actually did a little bit deeper digging to make sure something was straightforward and I understood what was happening there. But it’s like having an amazing graduate student who can do research for you, and just figure stuff out. And it does tons of other stuff, but that was just the use case I can think of that I used it for last week. So, it’s just incredibly powerful and its format, you can ask in-depth questions back to it. And have it summarize things or go into more depth on things too.
AJ:	So I’ll tell you about where we’re headed on the enterprise side, but just to respond to what you just said and give you a sense underneath the hood, one of the things we’ve done with Perplexity is we have designed it so that anything in the response has to be cited back to a specific source that we find that’s credible. And so, you might have heard of hallucinations with AI. So, for a large language model, like a ChatGPT, hallucinations could be a feature where you might want it to do something creative, write a poem, that kind of thing. For Perplexity, hallucinations are a bug. And so, one way that we’re trying to reduce them where we can, is again, when you ask a question, we find those sources that you’re talking about and then we tell Perplexity you have to cite those within anything that you write.
Scott:	Yeah, it was cool. I was actually impressed that it was doing the citations. Because I was like, “Oh.” Because I think we’re still in the early days of this now. And the hallucinations are exactly right. I’m glad you clarified that because I was like, “Well, is this right?” It sounded right kind of thing. But then actually getting citations made it really easy. And that’s what I was doing actually. I was going to the citation. It also made going to the citation super easy and save me a ton of time on that too, which is also super valuable.
AJ:	Yeah. So, I’ll tell you about where we’re headed. So again, right now our core product is live web search, and what we’re doing is we’re marrying it up with two different data sources. So, the first is private data sets. Think in finance, Bloomberg, FactSet. For law firms, maybe data sets around case law. For healthcare firms about healthcare data, go on down the line. So again, pulling private data into your Perplexity experience. And then the third category is your own internal enterprise knowledge or data. So now you have tons of files, research, RFPs, security questionnaires, memos, whatever you want to do, call it. You can basically point Perplexity at private data and your own internal data. And where the real magic comes is where you are doing something that involves maybe all three of those things.
Scott:	Yeah, that sounds really cool. Really cool.
AJ:	We’re testing with clients right now. We’re going to release it pretty soon to the public, and it is really powerful. So, I’ll just give you a quick example. We’re talking to a bunch of investment firms. And what they can do is they can upload their investment strategies, investment memos, that kind of thing. And ask Perplexity, “Hey, can you analyze our research and strategies and whatnot and come up with a summary.” And then using the live web, you can say, “Okay, based on the analysis that you’ve come up with, now go onto the web or go into Bloomberg and find for me actual stocks, equities, companies that align with this strategy and find the latest news on these companies.” Again, we’re connected to live web, so this is all in real time. And we just talked to a bank who said, “You’re short-cutting like a month of diligence and work into a few hours.” It’s pretty cool.
Scott:	It’s incredible. And can we talk about the files and all that kind of stuff real fast? So I’m just going to the Kruze, our little data stack, we use Box, we use Google apps, things like that. How do I unleash that? How do I give it the sunshine it needs to get into Perplexity. How [inaudible 00:11:16]?
AJ:	Yeah, so the first iteration, you’re going to upload documents to Perplexity. And there’s some companies out there who are really good at finding a needle in the haystack. You’re like, “What was that email two years ago about XYZ?” That’s not what we’re trying to be. We’re trying to help you use these specific information about a specific topic or task that you have. So again, the first iteration, you upload let’s say 10, 15, 20, whatever documents to Perplexity, PDF, Word, Excel, PowerPoint, and then you work within Perplexity on those. The next iteration-
Scott:	That’s a manual thing? I’m like, “I know which I’m going to upload.” Okay, that makes sense.
AJ:	The next iteration likely by the end of the year is going to be pointing Perplexity at your own internal share drive, so SharePoint, Google Drive, Dropbox, et cetera. So, trying to get rid of that manual step if we can. That’s coming eventually.
Scott:	Yep. I was actually thinking, I don’t know if you’ve ever interacted with this guy, Dan Croak, but he’s at IVP, he’s one of your early investors.
AJ:	Oh yeah, sure.
Scott:	And he does a lot of this stuff. IVP is really smart. They figured out that, and a lot of venture firms have done this, they’re like, “Okay, what other data sources can we use to drive a signal for the best startups we should be investing in?” And my buddy, Dan Croak is at IVP. You should meet with him next time you’re at IVP.
AJ:	I would say I know Kat at IVP well, so she’s one of the early investors too. And she’s on their team. Yeah, so that marriage of, again, web sources, private data sets and your own internal data together within Perplexity, which is really good at understanding natural language is pretty cool. The other thing I’ll just mention quickly is another area we’re headed is personalization. So now imagine that you are in Perplexity and you get alerted on different news or information that you are interested in. Where this gets really powerful is let’s say you tell Perplexity, “I am a product manager in the healthcare space.” Perplexity will be able to then give you examples of use cases or queries that people like you are doing and are really powerful.
Scott:	Is that the Facebook lookalike audience kind of thing. But not exactly. But hey, other people are asking these kinds of questions, they might be helpful for you.
AJ:	Exactly right.
Scott:	Oh my God, that’s incredible. I never even thought about that. That’s a really great idea. Well, sometimes this is venture capital centric, but a lot of times I used to work in VC and I don’t like this question really, to be honest with you. I think it’s a little lazy. But hey, you guys are automating it. The venture capitalists at the end of the pitch be like, “What question am I not asking you that I should ask?” That kind of thing. You’re like, “Come on, dude.” Or ma’am.
AJ:	I hate that question. Yeah.
Scott:	Come on. But the fact that you guys are automating that is actually pretty incredible. Okay, we’re going to crowdsource better questions. And that’s really, really cool.
AJ:	The thing that I compare it to is if you have a Word document and it’s blank and you’re just like, “Well, I have so many ideas, but where do I start?” That blank document just kind of stares back at you.
Scott:	Yeah, that’s true.
AJ:	True. If you are on Perplexity, there’s this box where you ask your questions, it just says ask anything. And you’re kind of like, well, “Where do I start? What do I do?” And so, this is about how do I get from that to now a place where, “Oh, I know how to use Perplexity, here’s where the real value is.”
Scott:	Yep, yep, yep, yep. The unleashing all your files and unifying the enterprises, that’s a really big idea too. This is maybe too nuts and bolts, so tell me if this is too nuts and bolts here, but how do you control who in an organization can see everything. There’s got to be some pretty high tech/granular security controls for that kind of stuff, right?
AJ:	So that all comes down to the admin functionality that we have. So as an admin, you can customize the feature set that’s available within Perplexity. I will say too that right now there’s some functionality that is on our roadmap for the next quarter around this. So, we don’t make it easy for you to see what all your users are doing from a security standpoint. But we want to give a little more metrics and dashboard in there for you.
Scott:	That’s actually really smart though, to be able to see what people are doing. Sometimes that tips you off. I’ve actually seen some things in our box admin console and I’m like, “Oh, we got to lock that down or do something like that.”
AJ:	So that’s certainly, again, we have some of that. But I think where we’re headed is allowing the organization to really make sure that they’re using Perplexity in the right way and also that it’s secure and compliant.
Scott:	Also, I guess if they have any questions about it, they can just ask Perplexity. And Perplexity will tell them exactly how to do it. And we’ll unify the universe with this. That’s really cool. Now, you guys are going to market on this pretty… You’re in market, it’s been released and everything like that, but is this a Fortune 500 thing? Is this a SMB thing? Who’s the target market for this? And how are you guys thinking about that?
AJ:	Great question. So, the target market is really, it’s anyone. But we have a self-serve and then more of a larger enterprise white glove, I would say, experience. So, the self-serve is really easy. You just go on to our website, go to the enterprise section, and it’s sign up for Perplexity Enterprise. There’s no minimum order. So, we have tons of folks who are either a one person company or within a larger company. But if you are a larger enterprise, then typically this is about 50 plus people using Perplexity within a company. You talk to us and actually one of these, what we’re doing is we’re offering, if somebody qualifies for a one-month pilot to make sure there’s value to then roll out after that to a broader audience.
Scott:	And that’s really smart. Actually. I think we have a coupon code or something like that too. We’ll attach it to this podcast so that people can try it out.
AJ:	Definitely.
Scott:	That was actually the other thing I saw with it. We’re going to roll it out to the Kruze team pretty soon, and it seemed very affordable. Because we’re 180 people, so we’re not small, but we’re also not big. We’re maybe a classic medium-sized business or slightly [inaudible 00:18:00] bigger smaller business. But for us it was at a price point, I’m forgetting what the exact price point was, but it was like, “Oh, I don’t even really need to worry about it too much. It’s worth trying.” Maybe telling you too much because next thing you’ll be like, “Oh, we got to raise the price on that.” But it was very accessible was my point. And you don’t have to work at Microsoft or Google or Square or whatever to use this to be able to afford it. It’s priced for the masses, it’s priced for accessibility, and I think that’s actually really smart by you guys. You’re going to also see how people use it and get distribution. And you’ll probably make the product a lot better also. And there’s a lot of us out there. There’s a lot of companies that have 200 employees who can really use this stuff. And I’d actually almost make the argument that maybe we’re going to benefit the most out of it because 200 person companies tend to have headcount constraints and budget constraints and things like this. And I feel like this is going to be a real catalyst for innovation inside a Kruze. I think we’re actually pretty excited about it.
AJ:	I’ll say two things. The first, where I’ve seen companies be the most successful is when they start with a specific use case and they make sure that the value is there, but they get people to understand what Perplexity does and how to use it. And then go from there. So, I think starting with a specific use case is really important. And then, yeah, the price point. So, it starts at $40 per person per month or $400 per person per year. I’ll say two things about that. Drew Venker used to work for Kruze. He’s now our VP of finance who’s awesome.
Scott:	He’s a great guy.
AJ:	So I know that we have a type of connection. You guys are now a channel partner of ours. We can talk about that. But the second thing is that we are focused today on usage over revenue. So, we want to make sure that people are using it. There’s value. And so know, pardon me, I shouldn’t say that, but we’re always going to be more interested in people using it than trying to make sure there’s real revenue coming in today.
Scott:	We’ll worry about the cash cow thing 10 years from now kind of thing.
AJ:	Exactly.
Scott:	The other thing about it is if you do the math on what our accountants cost per hour, it’s up there. We have a lot of really ultra professional tax and accountant people. And even our people in the services like sales tax or state registration, things like that, they’re expensive people. And so, 40 bucks a month, that’s not even one hour of what are these people’s cost to us? So, if I save them 30 minutes a month, I’m at break even. And so, when you do the math that way, and also just the professionalism and the thoroughness, and I’m thinking about more of the nuts and bolts, Q&A, and how Perplexity can help with that. I’m not even thinking about what could happen with unleashing some data, some files that people can’t see right now or don’t even know about or could be the key to some breakthrough product that we ultimately release or something like that. Just for any kind of knowledge worker when you make them that much more efficient. The payback is really, really high. And accountants are expensive, but pretty much any knowledge worker is expensive. And so, the IRR is very easy to calculate and it’s right there.
AJ:	It’s right there. The last company I was at, Particle Health, healthcare data and something that makes me motivated is making an impact. I think a lot of people here are the same way. And when I was joining Perplexity, I thought to myself, this tool in someone’s hands makes them so much more efficient, but also better at their job. That multiplied across a whole company. I just thought the impact here is pretty massive. So that’s what made me really excited is talking to folks all day about, “Hey, here’s what we can do. Here’s how it can help you out in your company.” And again, the great news is that we have a ton of people using it on the consumer side who are like, “Yeah, I get it, but how do I now use it in my day to day?”
Scott:	Totally. And also, we were talking earlier about the velocity of a startup and how that’s a great barometer. But for employees, that’s a thing. I always think of team members as their career’s their greatest asset. And when they’re accelerating their growth and learning faster and doing more stuff for the company or more stuff for themselves or making their job better. And for us, we have a saying: Kruze cares more. So, when they’re going the extra mile for our clients, that’s a huge win too. So, there’s just a lot of great things. It is an incredible product. I use it myself all the time. And I’m excited for the enterprise version to unleash that inside of Kruze and see what happens there. So yeah, man, you’re onto something. Well, maybe I think we’ll have a coupon code and something, a link in this. But maybe tell everyone like, Hey, how to reach out or go through the Kruze link or do email AJ. What do we do here?
AJ:	Yeah, yeah, definitely. If you’re interested, there’s a few different ways you can do it. I would use the coupon code that we’ll have here. There also is on just perplexity.ai, there is an enterprise form you can fill out that goes essentially directly to me. And then-
Scott:	You might have to change that pretty soon. You might need a lot of emails.
AJ:	That’s right. I’m imagining when we release this internal file search, what’s going to happen in the next couple of weeks, yeah, I think it’s going to be crazy. But yeah, reach out that way and we will get to you. Like I said, we are pretty excited about what we’re doing.
Scott:	I love it. Well, congrats. This is one of the things we love at Kruze. I think Arvin came when there were like three people. And now a hundred. But they’ll probably be 200 in three more months. And it’s really rewarding and fun to watch the growth of this company. And lots of great people working there too. That’s really, really neat. So best of luck and let us know if we can help. But folks, look, there’ll be some coupon code here. You can click through that or you can email AJ, and we’ll get you going. Awesome, man. Thank you.
AJ:	Sounds good. Awesome. Yeah, thanks Scott.

Perplexity revolutionizes the way people discover information

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