The perils of a huge pre-PMF Series A: My story at Element AI

This story was originally published on Product Hunt.

In 2016, I co-founded Element AI. In 2017 we raised $100M. It went weird.

Peak Zeitgeist

We hit peak zeitgeist. AI was super hot. Many investors believed that early AI would be a talent game. Montreal — where Element AI was headquartered — was seen as one of the largest untapped beds of AI talent.

In the months between December 2016 (our seed) and June 2017 (our Series A), we had executed super well on the talent game. We had signed a lot of big logos who wanted to undergo an AI transformation. We had built a world-class network of academics and managed to actively engage them on consulting engagement with these big customers. More importantly, we did it with enough collegiality that researchers enjoyed the time they spent discussing with us — and amongst themselves — around our customer’s problems.

Talent Tsunami

We managed to translate researcher engagement into hiring momentum. Very talented AI researchers and AI engineers heard of the exciting discussions that were going on between top researchers in our meeting rooms. Some of them were stuck in data science jobs, some were at Google or Facebook but dreamt of having more impact.

We brought them in.

At that point, any C-level of any large corporation who walked into Element AI went into jaw-drop mode. They saw equations doodled on the windows in the kitchen, they heard researchers discuss the latest deep learning result. They saw the kind of energy they dreamt of having in-house but that they just couldn’t get.

We closed them.

We became the fastest growing startup in Canada.

Customers Everywhere

We had so many marquee customers. I gave talks all around the world. I found myself on a stage next to Andrew Ng, only him and I, addressing a room of hundreds of Hyundai executives. That’s where I learned that jokes don’t survive live translation.

We had an exceptional team of consultants. Ex-McKinsey. Ex-Deloitte. They looked top-notch in meetings. They could wow our customers by bringing in the brightest AI minds at a moment’s notice. We delivered.

We opened offices in Toronto, in London, in Singapore, in Seoul.

Too Much of a Good Thing

Then there were the products. We had a lot of great initiatives. We built infra to help our researchers develop and train their models more efficiently. We built a solid information platform using top-notch NLP, a top-of-the-line visual text processing tool, a product using AI to help manage user permissions in large organizations… Lots of potentially very useful products.

But the problem was that none of these products had the traction our consulting group had. We tried to align our consulting outreach with the products we were building, but there was always this new customer that was too big to pass and that we just had to accept.

We had incredibly talented and driven people. People who wanted to bring value to the organization. Only, that value came mostly from consulting. This led to internal tensions. On one side you had those who believed success would come from products and asked for more freedom to build them. On the other, you had those who wanted to bring in revenue and asked for engineers and researchers to work on consulting engagements.

The Exit

That tension became really hard to manage. After 4 years, it’s the kind of thing you could feel in the air, just walking through our gorgeous headquarters in the center of Montreal’s Quartier de l’IA.

On March 13th 2020, the day the world shut-down, I caught the last flight out of London Heathrow. This was my last business trip with Element AI.

I had decided to follow my dream and found Waverly. A product-centric startup. Yes, yes, AI. Yes, deep tech. Researchers, all of that. But first: a product. First, value that can scale. Real traction. Something small that could grow, grow, and grow.

A year later Element AI was sold to Service Now.

My Takeaway

I loved my journey at Element AI. I loved my coworkers. This was the best team I ever worked with. They had the brains of my Google coworkers and the grit of entrepreneurs.

As founders, I think we took a reasonable bet. I still think that talent was key. I believe we executed it well. It was bold, and being bold was not our mistake.

Our mistake was not seeing the tensions that could come from having too much money. Money gave us the ability to bring in the best customers, but it did not pressure us into building products. Building products and despairing because they’re not finding traction. Building products and testing them, pivoting them, validating them…

That’s why I’m posting this on ProductHunt. Because you understand what it means to relentlessly push and pivot a product.

That’s what I want to do now, with Waverly, and I know you can help me.


The original publication of this article has generated a lot of discussions, I encourage you to read the very thoughtful response of Jerome Pasquero, former PM at Element AI.