Paul Monasterio - CEO and Co-Founder of Kalepa: Being Transparent, Finding the Ideal Co-Founder, and First Customers

Paul Monasterio  00:00

It is very easy to be transparent when you're saying something that the other person wants to hear and that you want to say. That's actually not hard at all. It is much harder to say something that is truthful that needs to be said. But that is difficult.

Callan Harrington  00:13

You're listening to That Worked, a show that breaks down the careers of top founders and executives and pulls out those key items that led to their success. I'm your host, Callan Harrington, founder of Flashgrowth, and I couldn't be more excited that you're here. Welcome back, everyone, to another episode of That Worked. This week I'm joined by Paul Monasterio. Paul is the CEO and co founder of Kalepa. Kalepa's AI-powered Copilot workbench empowers underwriters to write more profitable business faster. Kalepa was recognized as one of the most innovative insuretechs in the world, as part of FinTech Global's Insurtech 100 in 2022 and 2023. Prior to founding Kalepa, Paul was an executive at Facebook, MasterCard, and Applied Predictive Technologies. Paul also graduated with a PhD in Nuclear Science and Engineering at MIT. This was a great conversation, because Paul doesn't hold back on anything. We talked about the importance of finding the right first customer, the benefits of previously working in a startup before founding your own, and also the benefits of having previous sales experience as a founder. One of the areas that I thought was really interesting was hearing Paul's take on what makes a great co founder. The co founder topic is one that I'm almost always interested in, but Paul brought a take that I had never heard before. And I really enjoyed hearing it and made me think about the topic differently than I have in the past. As good as all that was, the part of the conversation that I enjoyed the most was hearing Paul's viewpoint on being transparent. It's a big part of their culture at Kalepa. And I personally believe that it is critical in a startup, especially when interviewing future employees. I know personally, when I haven't been fully transparent, and I haven't set the right expectations, that has came to backfire with me every single time. And Paul walked us through how they approach being transparent with employees, with investors, and I thought it was excellent. So with that, let's get to the show. Paul, it's been time coming, man. I'm excited to have this conversation today.

Paul Monasterio  02:52

Great talking to you, Callan.

Callan Harrington  02:53

Okay, here's where I want to start this out. We had a lot of great conversations in New York, but one that we didn't get to that I'm excited to dive into is, tell me about how you bought the domain for Kalepa.

Paul Monasterio  03:02

That's a story that is pretty funny and legendary, to a certain degree within Kalepa lore, and one of the things that we cared about as a company is hustle all these resources, and making the proverbial lemonade when when life gives you lemons, and figuring things out. And that's a story that that is important to us. So you know, Kalepa, it's a Hawaiian word. My co founder is Israeli, I'm Venezuelan, there's nothing Hawaiian about us. So people asked what is Kalepa? Why is the company called Kalepa? Kalepa actually means a number of things in Hawaiian, it's marketplace, and it's commerce, and it's trade, and it's flag. And initially, when we started the company, we had a broader orientation around how you could use data in a broader way, thinking through the concept of data marketplace, and very quickly we converge on data is an ingredient, you really need a platform, and we converge on insurance. And that's kind of a separate story. But long story short it's this Hawaiian word. Turns out actually there are two interesting meanings to that word that actually are quite helpful. First one is ended up being quite quite practical for insurance. There's a trail in the north of Kaua'i called the Kalepa Ridge Trail. It's a beautiful place on the Napali coast; it's actually not that hard to hike. So it's not particularly strenuous, but it gets foggy. And when it gets foggy, there are exposed cliffs, so it's dangerous. So you can go and kill yourself. And it's kind of a great analogy for what insurance is, and understanding insurance, which is, if you remove that fog of war, if you will, you can prevail well. The second meaning of the word, we found out only a few years after. Turns out, we were talking to a friend of ours, he's Italian, but went to school in Italy and studied Greek in high school, and said Kalepa's a Greek word. Okay, what does it mean? There's a phrase that's in Greek that says Kalepa Takala. I'm probably butchering it, butchering it for whoever is Greek, but it translates to something like: anything worthwhile doing, anything beautiful is difficult. And I think that's a great, great journey and great metaphor for what a startup i. Now going back to your question and how we got that domain. We started a company, finding the domain was a core component, but this was really a process that took a couple minutes in an afternoon. We found a domain, but the Kalepa.com domain was not available. Kalepa.co was, we bought that, and we tried to figure out why is Kalepa.com taken. And at that point, actually that domain had the- they had who the owner was publicly, and I messaged the person, this is back in 2018, we're starting the company. Emailed the guy from my Gmail, right, at that point, we had the domain. I said, hey, we're interested in buying the domain. He said, well, it's a set of three; we have Kalepa.com, Kalepa.net, Kalepa.org. And I originally didn't know why this person would have these domain. I literally think at that point, what they were going for was something like "Kale PA," you know, this was when the vegetarian hype and such were going, so maybe this person wanted to sell kale in Pennsylvania or something. Long story short, I basically said, you know, we said, how much do you want? I quoted some small number. I mean, at that point, I'm like, we're starting a company, I'm not going to blow $100,000 in a domain. He's like, no chance, come back to me when you have $10,000, whatever, which at that point, I mean, I wasn't going to spend $10,000, even on a domain. Okay, fine. So, couple years later, after we're kind of, you know, gaining some traction for a few years. So, a few years later, I reached back out to the guy. And at that point, you know, we had we had a sizable business, I think probably wasn't right after we had raised a Series A, but we had announced it. I reached back out again, from my Gmail thing. I'm like, hey, you know, I've been saving for all these couple years. So now I have, you know, the amount from last time. Well, I don't have- I don't quite have the amount for the last time, but I'm close, and I have something, whatever, so let's call it five thousand. So I said, here we go. He said okay, fine, I'll sell you those. So we're feeling pretty good ourselves, we've got the domain for you know, whatever, a pretty reasonable, small amount. Then, a few weeks after, I see another friend who's very good, very successful. He's a great company. But he's hilarious. They have put a blog post on like, how they spent $500,000 buying a domain name. And a bunch of people from like, one of those broker firms are reaching out to me and say, hey, you know, you want to get these domain, we'll help you get it for cheap, for like $200,000. I said, I just bought the domain for $5,000 last week, right. So it's kind of just a hilarious story of like, you got to figure out a way, there's always a way, and you're resourceful, you're thoughtful, you don't burn any bridges, I think you're generally fine.

Callan Harrington  07:17

This is gonna be a bold statement, and totally untrue, but the worst part of starting a business is getting the domain. It's the search. It's the trademark. It's going through all the names like, oh, I love this name, the domain's five grand. And it's like, you gotta be shitting me. I spent so much time trying to find the domain, that does nothing for the business, in those earliest stages. I can relate. I love that story. That's fantastic. So Paul, here's what I'm curious about. What led up before Kalepa?

Paul Monasterio  07:46

It's interesting, because up until a few years ago, the notion of someone coming from a science background, even data background, and ending up in insurance was unusual. The reality is actually that it's less uncommon now. That is, I mean, you look at a lot of fellow founders and executives in insurance, and you see all our people with degrees in physics, computer science, and math, right? So, so profiles change. But certainly I come from that side of the equation, right? I'm a scientist by training. When I went to college, I came to the US for college, and really, I majored in math, I majored in nuclear engineering, nuclear physics, as an undergrad. And I went into my PhD thinking I was going to be a professor. My plan was to be an academic, and I had been spending a lot of time around academic research, and that's what I was set out to do. And I was excited about that. I enjoy science, I enjoy doing research. What I realized as I was doing my PhD was that, while I really enjoy science, as is not particularly uncommon these days, I appreciated a faster pace of results than that you have in academia. Academia is a slower moving field. And that drew me to work in the private sector. And I joined a company Applied Predictive Technologies, which is what happens when you let an MIT person name a company. You don't know what we were talking about. It was a unique company at that time, they had a number of things that were attractive. So the idea of the company was, can we use software to tackle problems that normally will be tackled by management consultants, questions around pricing strategy, marketing strategy, in the retail case, capital expenses, etc. And they'd be all kind of a product or software product that allow businesses to run experiments and use those experiments to empirically inform strategy. So I find that appealing on two fronts. The first one is the notion of being in a broad bay kind of management-consultant-type career path was attractive to me, like it is to many people from academia because it gives you a lot of room to try things out, right? You don't know what you're doing and where you want to go. You kind of get the sample. But I didn't want to really squander the quantitative aspects of my education. This was a nice hybrid of the two. So I was there for a number of years, I started in a role that was sort of a hybrid of data science and operational, but very quickly moved into business development growth, and actually ended up building a lot of business for APT in Asia. So I spent a number of years in Taiwan, in Japan, Australia. That's where I met my co founder. My co founder was at APT in the US, we started working together very closely in Australia, then started working more closely in financial services. He had started the insurance practice for APT, I started working in several of those engagements with carriers, as well as with banks and other financial institutions, and then went deep, right. The two of us really built a lot of insurance practice at APT, got to understand that and build the business. And that was exciting, right. Then APT got acquired. Master Card bought APT in 2015.

Callan Harrington  10:00

So if I heard what you just mentioned, it was you started on the data science, and then you moved over, and, or at least in addition to that, you were taking on a lot of the business development and growth side. How was that transition for you?

Paul Monasterio  10:57

I had a lot of fun doing it, right. So I enjoyed it, that transition was was a lot of fun, actually. So I come from a quantitative background, and that part of the world is something that has always been exciting to me. But I do enjoy some of the more external facing aspects, if you will, of a building, knowing that that requires in one form or another sales and business development. And one thing that I think a lot of people with my background, you know, technical individuals, do is kind of dismiss the importance of that. I think that when you dismiss the importance of relationships, you dismiss the importance of sales, right? I think if you build it, they will come. And I think the best products are if you build it, they will come, but also you have to go out and sell them. Because a lot of times the best products out there are new, and because of the fact that they're new, and they're going by the world differently, there's a component of education, of bringing folks along. And that's where, you know, I think exceptional sales professionals really showcase their skill, and their talent, and bringing folks along, and solving problems for them. So I'll always start business development that way. And when I started doing that, at APT, especially abroad, we were a very US-centric company, and then building business in greater China, Japan, Australia and Southeast Asia. It was different, it was fun. It was fun building from nothing. It was fun, basically, bringing this product to markets where it hadn't been tested or battle tested before. And figure out how to get it to work, figure out how to get leading companies there to understand why we could be helpful for them, like we have been to their peers in the US and Europe. And I enjoyed it. It was a great time, I learned a lot while I was there, grew a lot professionally and personally. And then yeah, when I came back to the US, I came back basically shortly before the acquisition, about a month before APT was officially acquired by MasterCard, and then stayed for about a year after that, at that point essentially running the technology and services practice for APT, and well, for MasterCard at that point. MasterCard Advisors is the kind of entity that APT was put under. Now it's called MasterCard Data and Services. Then Facebook poached me. So Facebook was our client. I did have a lot of interest in seeing one of these big tech behemoths from the inside. It was a formative experience being that year in Facebook, but then I realized the direction I wanted to go through was not bigger than MasterCard. I went from APT having you know, at the point, I joined APT when we had probably about thirty people. We sold to MasterCard when we had about 600 people. And then I joined MasterCard, which was 13,000 people. And then Facebook had 35,000. I think Facebook had like 25,000 when I joined and by the time I left was like 40,000. So that was not the direction I was going to, so I went the opposite. I went to zero.

Callan Harrington  13:45

You had this big company experience. One of the things I'm really curious about is, you know, you've got this data science background, you got to experience sales, you got to experience building a business unit just in general, and you got to see this at Facebook as well. How much did that impact you as a founder? I have to assume it's incredibly beneficial getting such a well rounded experience. Am I right on that? Or what what was that like for you?

Paul Monasterio  14:10

You're right. I mean, I think in many ways, my education in business was my years of APT and subsequently my my year plus at Facebook. Of course, that was very formative, right, in a number of ways. I think, in many ways, the reason that- I mean a lot of founders, for example, shy away from tackling enterprise type industries, and particularly highly regulated, difficult to sell into industries, like insurance, is because surprisingly, it's tough to sell into. My philosophy is that that is true, but there are a lot of important problems to solve within these industries. These industries are really the economy, right? You basically take world GDP; insurance, eight percent of that, banking is probably another six, seven percent of it, health care here is, you know, ten percent of that, defense, energy, that is the economy. That is the economy, and the economy is not Shopify stores, right. I mean, it is important, but like, that's not the economy. So my my take is, by virtue of having worked with these massive enterprise clients at APT, simply, you know, learn what needed to be done to provide a solution that was that was helpful. And the same thing for my co founder. My co founder, he's very typical, I think for a lot of sales professionals, but APT had a lot of sales folks that, frankly, they groom out of college. You know, they will hire people out of college and then build them from- we didn't even have SDRs for a long time. When I joined APT, a lot of folks would be like, very junior account executives, but they had pretty good end to end ownership of the sales process. And my co founder did that, right, he finished his undergrad, I mean, he was a little older, because he had done the IDF service prior to college, but kind of jumped in the deep end and started selling. Right, figure out the sale, your accounts, you need to start selling, and selling to these tough enterprises. So that was very educational. I mean, I think both of us learned a lot about business, both of us learned a lot of what it takes to build a company, about selling, about delivering to these enterprise clients. And that has been critical to how we operate now. Certainly a lot of other components that you mentioned, the technical part, right, you know, working in data science, working product, working at various scales. That has obviously been very helpful in founding Kalepa. They want you to do everything, and as you can start growing you, you find people that do various things better than you do. But it is helpful to be able to flex in a number of different ways in the early days.

Callan Harrington  16:40

So you had this experience, as you just mentioned, of selling to large enterprise accounts, which is a totally different motion than than SMB, and you started a startup going after selling to large insurance entities. The audience probably has heard me say this many times, but I spent the majority of my career in insurance, and selling to the agencies all the way up to the largest carriers, and a small insurance carrier is a two billion dollars a year business. That's a small one. Those are the ones that are saying like, oh, yeah, they're really small. But they're two billion dollars a year. When you're starting out Kalepa, I'm really excited to go to the origin story, but before we get there, what tactics did you do to sell these extremely large companies right from the beginning?

Paul Monasterio  17:26

Before you would write a line of code, you have to talk to a lot of people. And that's what we did, you know, we had work, we had the privilege of having worked prior to starting Kalepa, as part of our work at ATP, with many, many large carriers globally, right, in the US, Europe, and Asia. And the first thing we did was talk to them. We understood that underwriting was something that needed improvement, but that was very difficult, and that a lot of really smart people have been working on that problem for a long time. So we were pretty humble on how we approached the problem. We started talking to folks, and at the beginning, we thought, hey, what they need is more data. When an underwriter is looking at a risk, they want to understand what's going on, and having more information will be alpha, right? Underwriting insights are the alpha of insurance. So firms were like, what what you need is data. But then when we talked to people, and we talked to chief underwriting officers, to pressings of property, the GM of workers compensation, what we found out is data is not a problem. They have tons of data. They could have more data, but the question is, that data does not get turned into better underwriting decisions. Why is that? Because they buy the data, they spend five years kind of structuring a number of components, assembling those together, maybe bring in a consultant for those pieces, maybe a local solution, and assemble that. At the end of the day, you build a dashboard, that has some data points, and that's very nice, very useful. The underwriters don't use it. And even if they use it, and you say, well, are you actually driving better underwriting performance or recording more? Are you buying anymore? And conversely, are you actually lowering loss ratios? The answer is no. So we decided, well, what you need is not more data, what you need is better underwriting, and data is an ingredient in that. We need to build a number of components to turn that data into something useful, and that's what we came for. Right? You know, there are a number of pieces that go on behind the scenes. But the first thing we needed to do was just talk to people and find out, you know, what exactly are the pain points that you're seeing?

Callan Harrington  19:16

One of the things that I want to circle back to is, and you talked about this, and I think it's- whether it's a services business, a tech company, whatever that business is, those early clients are nine times out of ten going to come from your network. And one of the things I've always found interesting, and I'm curious if this is what was the case for you when you were starting this, was when I start to have those- it's kind of the age old, if you ask for advice, you get money. If you ask for money, you get advice. And when you start to have these prospects and potential customer interviews, they tell you exactly what the problem is. After about five you iterate, do five more, you iterate again, do five more, and now you've got the exact thing. And almost at the end of that, I would always find, they'd say, yeah, if you could build this, we'd pay for that. That solves a big pain. Was this similar? Did you guys have a similar experience?

Paul Monasterio  20:08

In some ways, yes. In some ways, no. We did go about a pretty similar route of what you describe, right? Talk to a bunch of folks within our network, within our extended network, friends of friends, acquaintances, until you know, we felt that we have covered many of our bases. And we were pretty thoughtful, or tried to be pretty thoughtful, about who will be a better design partner, to start with. Someone who really saw the world the way we did, and you know, was open to doing things differently, but understanding that the product was the product.  Within insurance, that's not easy, right? Because you can imagine that we're talking to, as you point out, right, there is no small business in insurance, right? When I'm talking to folks about the segmentation of the market, what we consider to be the small end of the market, are enterprise companies, not only two-billion ones, but you see, you know, a little mutual in the middle of Wyoming makes 500 million dollars in premium. I mean, that's 500 million dollars in revenue. And then you're like, well, what is it, like there's two thousand firms. So that's something that I think a lot of folks fail to appreciate, but because of that size, the flip side of that, of course, is there's some minimum threshold of capability that needs to be present for you to enter business, right? That I think is something that's a little atypical, of building a product, for insurance, for for lending, or for other large enterprise ones, which is, what is an MVP is a little bit different than your proverbial MVP, right? You cannot have just a landing page and see what will happen when the chief underwriting officer of AIG clicks on it, that just doesn't work. Right? That just doesn't work. So there was a little more heavy lifting there. And I think, you know, part of the fact that we had worked with those individuals in the past was helpful. But then there needed to be some kernel of capability that was larger than is maybe necessary elsewhere for the product to have some legs. So that took some time, right? When we started the company in 2018, we really started selling, we felt that we had a product, obviously a lot of iterations with customers and such. We really started selling in towards the end of 2020, which was great time with COVID. But that's really when the product was ready. During COVID, we're like, well, what's going to happen here? And it turns out that actually, if anything, that that expedited or accelerated the digital transformation of many of the carriers and insurers. So it actually turned out to be, while it was a scary for a few months, it turned out to be a tailwind for us. 2020 was a good year, 2021 was a great year, and it kind of continues hence.

Callan Harrington  22:39

Why did you start Kalepa at all? You know, your past has largely been, I wanted to be a professor, I worked at a good size company that became- well, when you started, it was very small, but it became a very big company, you went to a bigger company, and then a much larger company. Did you always want to start a business? Was this always kind of in the back of your mind, is like, I just got to make this jump? Or what was that?

Paul Monasterio  22:59

Yeah, it's interesting, because it wasn't. And it's actually funny, you know, I think there's the proverbial kind of person that has entrepreneurial blood in their veins. You can see it from when this person is a child, they can't wait to have their lemonade stand, they have six newspaper routes, or trading cards in elementary school, right? You see many of those folks, and then like, many of those are great founders. And I wasn't like that. When I was a kid, I really was more interested in a lot of academic pursuits. And there were a number of other things I did, in terms of other activities, but never that. And, and it actually was surprising because a lot of folks were surprised by that when I was in college. So I went to Berkeley for undergrad, and you know, Berkeley and Stanford, have a lot of folks that pretty much go to those schools to start companies, right. And many of those folks have that gene, your Silicon Valley and such, and many of my friends and such, were surprised that actually, I did not have the desire to be entrepreneurial in that context. Part of that was because I think I was doing, in the back of my head, some entrapreneurial things within school, like student groups and the like, and try to do things differently. But I say, I'm gonna be a professor. That's just what I'm going to do. That's what I want to do. It really hit me when I started working, right. So when I started working at APT, the company was small. It was like thirty people. But then I went to Asia, when there were like two of us building there. It wasn't a startup, because you still have all the support of a larger company, even if it wasn't a, you know, 20,000 person company. The risk reward rate of there was very different from, you know, going to zero. But I did love just the ability to build from scratch, right? Just the fact that's just green field, like you're just doing something new. I really enjoyed that. And once I got into it, I got addicted. Like after that I just, I just couldn't see another way. So even though you say, you know, you went to- MasterCard acquired APT, and then I went to Facebook, and I went to those two large company steps, those were pretty brief. And they were pretty brief for a reason. Right? Like I legitimately enjoy, and found myself much more attracted to, the building that took place in my six years at APT than in what I call the maintenance at both MasterCard and Facebook. The jump from those last two stints, which were short, to start something was not particularly surprising. I knew that I was going to do that. I basically knew that, and as we got acquired at MasterCard, I never really thought that I was going to be there for very long. And frankly, the Facebook move was, in many ways I just wanted to see what this was like, and saw it, and got what I needed. And then, you know, started Kalepa right after.

Callan Harrington  25:38

I think there's a ton of value in that. I think there's a ton of value in experiencing it, so you could just check it off, right? Because what you don't- I think, if you're sitting there, and you're always thinking like, well, I never tried the big company thing, or I never tried the start up thing, it sits there, it sits in the back of your mind. And then until you try it, and then okay, well I tried it, this sucked, I'm out. Whether, either way, right. I've seen it happen on both sides. People go to big company, and they were always at small companies hate it, and I've seen people go from big companies go to small companies and hate it, right? There's no right or wrong answer to it.

Paul Monasterio  26:11

I completely agree, Callan. I mean, I think you just need to do what is a fit for you, right? And actually, when we hire people, I make that very clear, right. Which is when anyone's considering joining Kalepa, and we're interviewing them, and we really value being transparent, internally and externally, and frankly, to a fault. But we tell them that we're pretty opinionated in the way we do things here, and Kalepa is not for everybody, right? It doesn't mean that they're phenomenal people from Kalepa's demographic. I mean, like, there are excellent people who will do terribly. And for a variety of reasons. And conversely, there are some folks that, you know, love what we do, and thrive here, and haven't thrived elsewhere. And I think part of that is you need to find that fit. And it changes. Sometimes it changes with people's career trajectory and their life trajectory, right. There's some people who basically are not very entrepreneurial early in their career and become very entrepreneurial after they feel they have done a lot of things, and hey, you know what, like, I still feel that hunger, I feel like there's something I haven't done. Conversely, there's some people who are very entrapreneurial earlier, they prioritize certain things. And that's totally fine. It's something I think a lot of companies try to do. You try to you find someone who's very talented, who's really capable, who has great resume, and you really want to sell them into why they should join your company. I think there has to be a limit on selling as part of that, because you also want to make sure that it's the right fit for them, right? Like it has to go both ways, right? Like no company, no, no setup is perfect. But it doesn't have to be perfect, it has to be perfect for you. And I think that's what we, that we try to do with people, right, which is, hey, here's what some people find great, here's what some people find not so great. It tends to be the same thing, that a lot of companies that say, for example, for us at Kalepa, you know, that resourcefulness that I mentioned, and frankly, I use the word hustle, which has sort of fallen out of favor, but it's right. You know, there are many reasons why the hustle culture has kind of, you know, gotten a bad rap, but, but the reality that startup is tough work is not lost at Kalepa. And we all have it, right? I think there's a lot of companies that kind of sell themselves on, you're going to have the startup experience, but you're going to work the hours of Google. That does not exist. Like, let's just be honest here. Like, the reality is that these are two very different companies for very different reasons. And at Kalepa we understand there's a trade-off, right? Like, there's sometimes like, no one wants to basically work long hours for no reason. We don't do it for sport. But the reality is, there are times we do. Why? Because there's way more work than people. And that's the nature of a company that has thirty people, right? And that's successful, right? You know, we're growing faster than our head count. And that's a good problem. But it is a problem nonetheless. And I think hiding that, it's just not helpful for anybody, right? If we find someone that we think is great, they think we are great, they come in and they say like, wow, that's not what I expected at all. I was at Facebook, and I wasn't working very hard. I know, I've been there. I know how it works. That's not at all what a startup is like.

Callan Harrington  29:01

I totally agree with that, especially in a startup. The distinction, I always tell people, is like, if you don't want to work before nine or after five, that's fine. That is totally fine. Do whatever fits your life better. I haven't found that to be possible in a startup. And I'm not saying this right. I'm not saying that's wrong. It's just what is, because there's always things that need to be done. Maybe somebody's cracked this code. I haven't found it. What I'm curious about is and you've made hustle a part of the culture, and I totally agree, right? Like, and I'm not saying like I'm for or against hustle culture, or whatever it may be. I'm wired to work. It's just what's exciting to me. Like, I love to build, I love all that aspect. How do you maintain that as you grow? From the hiring perspective, from a cultural perspective, how do you make sure that that's top of mind and that you're bringing on people that identify with that culture.

Paul Monasterio  29:57

It's difficult, right? I think it's difficult, because there's always- anybody can go out and get hired, unless the company is extraordinarily relaxed about hiring, which I think a lot of companies did become in 2021, most startups really are hiring because they have a need, right? They really are bringing folks on board, because they have a problem that they need these individual to solve. Too many clients, which is a great problem to have, so they need to grow their client tea. The product, it's just getting tons of traction, so they need to grow their sales team. The product is getting so much traction, that it's breaking apart, so they need to hire their engineering team. Startups hire because they have a problem to solve, and they're hoping that whoever they bring on board will help them solve it. I think, at least, that's my philosophy, I think it's a philosophy that's shared by a lot of founders. With that in mind, there's always pressure to hire, right? The pressure for a company that's growing is there's way more work than there's people before you do that, I think a lot of folks tend to then compromise on some aspects as the company gets larger and as the pressure increases. Sometimes they're compromising what are called the hard skills, sales experience, ability to fund, engineering skills, but sometimes they compromise on fit. Why? Because fit tends to be a more diffuse concept. In some places, the culture might not necessarily be as permeate. We are very, very, very adamant about the fact that we want individuals who understand our culture very well and are excited by it. And we know that that will not be for everybody. And I do not subscribe to the notion that you can please everybody, because it means that you will have a fairly inane culture where you're saying you have contradictory values that don't really actually help you make decisions, which is ultimately what those values to help you make. So our take is we try to be explicit. So one of the things we care about is transparency and integrity. And transparency is something that a lot of companies preach, but I think fewer companies that preach it, practice it, because oftentimes transparency tends to come in conflict with another value that a lot of people hold here, which is harmony, right? It is very easy to be transparent when you're saying something that the other person wants to hear and that you want to say. That's actually not hard at all, it is much harder to say something that is truthful, that needs to be said. But that is difficult, right. And that can be done politely, that can be done respectfully, that can be done constructively. But it needs to be done. And actually that's helped us, the fact that we think about it in those terms. It helps us in hiring, you know, when we are talking to folks in the interview process. We don't hire, we basically tell people how we operate, what is good and what is bad, and all the good comes with that. So going back to your question, we really emphasize this by being so explicit about it, by being so transparent about it, we minimize the number of folks that we bring on board that, frankly, are surprised. We want to avoid surprises on both ends. So, I mean, that's kind of the approach we take. I still pretty much interview every single person we hire, and I expect to do that, probably until we have 500,000 employees. But the reality is that I think the culture right now is so pervasive, and it's something we put a lot of emphasis on, that it's not really necessary for me to do that. I just like doing it. I just like talking to everyone who is considering joining Kalepa.

Callan Harrington  33:12

Here's a question. What do you have to give up in order to do that? And when does that become too much to give up in order to get to the business to the next level?

Paul Monasterio  33:20

Yeah, I mean, at some point, it's unstable. There's no 10,000 person company where the CEO founder interviews every person. It just does not exist. So it's clear to me that practice has an expiration date. I don't know when that expiration date will be, but I like to prolong it for as long as possible. The obvious one is time, right? Time spent interviewing, time spending in hiring, is time spent not somewhere else. On the other hand, I think hiring decisions are the most consequential for a startup, certainly in the early days. Every single person that we bring on board at our stage has a transformative impact on how we operate as a company, because there are few of us right now. This is certainly not a- we're nowhere close, as a company, to the trade off where this would be lower priority than other things, because of how consequential the first- certainly when we have five people, the first five hires were, but that has been through when we have had ten, twenty, thirty probably throught when we have 100, probably through when we have 500 as well. Maybe when we have 10,000 people, and this is kind of interesting, because it's part of one of the things I did learn at Facebook, and taught me different skill sets that I might need when we get to that scale. That's a very different ballpark. Right. At that point, like building for that scale, and hiring at that scale, is a completely different way on a number of ways. That is something that for now this is not a problem at Kalepa or a concern, but at some point it will be.

Callan Harrington  34:44

There's no question. I think those early hires, everyone's important, and you hear this advice all the time, and I totally agree with this, is the founder should be interviewing upwards to- and I don't know, everyone's got a different number on what it is, and I think depends on how much you value that culture and being able to- because that's really at that point, you're really just assessing the culture fit.

Paul Monasterio  35:05

That's mostly what I do at this point. To be honest, in my interviews, there are many ways for a lot of other skills, a specific kind of role specific abilities, in large part of they are best assessed by others in the team. My co founder, Danny, who has much more experience in enterprise sales than me, having been  a vice president sales, can go into the nuance of objection handling, and procurement, etc, better than I can. So I really tend to mostly focus on culture.

Callan Harrington  35:33

You mentioned your co founder, and you've talked about your co founder a couple of times in other interviews. And one of the things I heard you mention, I'd love to dive into is, you had said in the past that you didn't understand the huge need to have a co founder. And then once you had a co founder and saw the benefits from it, you couldn't imagine doing it essentially, without it. Could you dive into some of those specific benefits that really changed your thought process around that?

Paul Monasterio  36:02

I actually don't think this was a particularly conscious decision. Danny and I had worked together for many years at APT, enjoy working together, enjoy building many classic stories of figuring something out, and hustling our way out of you know, a car that breaks down on the way to a meeting while we were in like Australia, and then somehow we get to the meeting and do it right, you know, that kind of bond that builds through adversity a number of ways. And we naturally had toggle ideas and building. So Danny and I kind of very organically decided to found Kalepa together. On the other hand, my natural personality is that of a lone wolf, always kind of being more on that side of the continuum. And certainly had you asked me in a vacuum, without me thinking of building Kalepa specifically, I probably would have thought about doing it myself. That actually never came into practice or anywhere close because it was a very organic process. With that said, now that I've done it, I mean, the bottom line is, you know, starting a company is hard business, right. There are a lot of ups, and then ups are really good. All of that. And there are a lot of downs, and the downs are very bad. And it's just tough. And it's tough in some ways that I think non founders don't necessarily get a lot of experience with, because there really aren't many roles that are similar to that of a founder. I've worn a number of hats in my my career, but it's been a completely different job from any job I've done before. What I found most important, and you know, I think like, there are a number of folks that I think have probably thought more about the science of these, right? Like YC is notorious for not accepting solo founders. And it's funny, because also like, I think the most frequent stat that YC shares about company collapse is founder conflict, right. So, there's something interesting going on there, right? But but the reality is that in the tough road to build a generational company, the proverbial kind of, you want to go fast, go alone, and you want to go far, go together, I think holds true. And it holds true, I think, for a number ways. I think you can find founders that have very complementary skill sets. And that tends to be important, and you're more well rounded and such. But actually, I think it's mostly an emotional component, right? Like, you know, when you have someone that you trust, and I think it's very important that your co founder is someone you deeply trust, and that you're ready to be on, you know, really have a relationship with for for a decade plus, if not longer, it's great. There's just a lot of stuff that like, the only other person that you actually can talk about it with, and really have a productive back and forth is your co founder. I think a lot of other folks find, you know, obviously talking to other founders and such, we should all have the same, right. And like, I remember times were I called Danny at, whatever, you know, 10pm, and we're ranting to each other until four in the morning. And like, I mean, I could do that with my wife, I could do that with some friends, I could do that with some more people, I could do that with some of our leaders at Kalepa. It's different. That, to me, has been the most important part. It's hard to explain in, kind of, very specifics on what is it that you should be looking for in a co founder. I frankly think you need to trust that person. You need to think that that person is got your back and frankly, that you respect them, that you respect what they bring to the table, they respect what you bring to the table. I think that makes for a healthy relationship. It's not going to be rose colored glasses. It's not going to be the Carebears all day, like, it's gonna be tough. You're going to have tough conversations often. When you have that respect, when you have that camaraderie, that trust, that's critical in being able to, you know, make it through when the going gets tough.

Callan Harrington  39:28

That's such a great breakdown of it. I think you bring up something I never even thought about before. But when you've worked with somebody for years, and you've gone through all this garbage, right, the good, the bad, the nights drinking a beer at a bar in Nebraska, and you're like what are we doing? And that's so interesting, because like there's nothing to hide, right? Everything was already there before you got into it, and when you can find that, that's amazing. So I love that so What's next for Kalepa? And a question I guess I have with that is, how do you make sure you're still the right person as the company grows and your skill skill set grows with it?

Paul Monasterio  40:12

Two very important questions, right. So, you know, the first one of what's next for us is, we're really at an inflection point, as a company, for a variety of reasons. Some that we have nothing to do with, like, what the Fed is doing, and the fact that the economy remains resilient, our business is exploding. On the other hand, you know, the product, I think, is really, really hitting a need in the market. So knock on wood, we are doing quite well, we're growing quite quickly. Frankly, we are kind of at that very, very aggressive slope. And we have been for the last couple of months. So, that's putting a lot of pressure on us as an organization, which as a good problem to have, is a problem nonetheless. So now we're really now starting to build Kalepa for the next phase, right, you know, in terms of building the functions we have, before scaling for the demands on both the product and the organization that we had before. And that's exciting. It's new. Basically, it means I have a new job than the job I had six months ago, and certainly than the job I had twelve months ago. Which leads me to your next question. You know, the short answer, there is, I don't know. Given the stage of our company, where we are right now, I feel pretty good about the steps we are taking, and I feel pretty good about the leadership team we have assembled, and we're assembling. This is entirely self-serving, but as of now, I still think I am the best leader for the organization. Again, I don't assess that, the market does. And I'm using the word market broadly, right? Our customers, our partners, our employees, our investors. Will that always be the case? I don't know. I think if you look at the numbers and realities it's rare, right? It's very rare to see the same founder that takes a company from inception to IPO. That is exceedingly rare. It is rare to see someone who stays with the company post IPO. Do I expect, and I'm excited to, go with Kalepa through the entire journey? I absolutely am. I do reflect on some of my experiences on the larger end of that spectrum. Hopefully, in terms of experience, on the other hand, I did tell you that I moved to zero from 35,000. So it's entirely possible that'll happen again. It's entirely possible that, at some point, that 35,000 person company that I'll move away from will be Kalepa, but we're nowhere close to that yet.

Callan Harrington  42:30

It gets back to fit. You could gain all the skills that you need, you might already have all the skills that you need, but will you even enjoy it, right? And it's something that I think about from time to time.

Paul Monasterio  42:38

What is important to us, and I think this is also why it's it's important to be transparent, when Danny and I founded Kalepa, there were a number of things that drove us to do that. One of them was we had an idea, and we saw an important problem that we thought we had a unique way of addressing. But you could do that in a number of ways, right? You don't have to start a company for that. Two, we had a strong opinion on what would be the kind of company we would want to work in, right? So that was important to us. And that's why culture is so important. And then three, we thought that the best mechanism to bring those two together, solving that problem and building that company we want to work out, was to start our own company, Right. You know, I think that was the kind of simple thought process. That might not be the case always. These three objectives, building a generational company, ensuring that the product, Copilot, is doing what it should be doing, and has the reach that it has, might actually come in conflict with us basically being the parties that are going to keep taking it to the next level. And I think when that is the case, it's time to go. Right? I mean, I think at that point, we want Kalepa to be as large and as generationally important as it can be. And we're pretty cocky guys, but that's the one part where we don't have ego, which is the reality is, like, I will not see it as any way shameful if we're about to go to IPO, and then we need to get a CEO that has IPO experience, because Kalepa is about to have forty percent of all premium rating worldwide being written through Copilot. I mean, all considered, we have been extremely successful. We have helped solve a very important problem. And, you know, if we can then take that to the next level by bringing someone else on board, then so be it. I mean, frankly, even the stage we're in right now, which is we're still very much a young company, very young company, a lot of road ahead of us. That is as first world problem as it gets for us. I could not agree more there, Paul. And last question I have for you, if you can have a conversation with your younger self, age totally up to you, what would that conversation be, and what advice would you give him? I tend to oscillate on my answer. There are days, like today, when I would basically tell my young self to just do whatever you're going to do, right? Like I just have a hard time predicting my path from when I was ten years old, twenty years old, thirty years old, to where I am today, from there. It was when I was in college, I was studying math, and now I'm building an insurtech company. Like, that's not something I predicted, right? I grew up in Venezuela, and now I'm commercial insurance in the US. So there's some element of serendipity that I think people who have quantitative persuasions, such as myself, tend to miss, which is you can lay out a great map and a great plan. And what you need to be ready to do is to toss that map out and, you know, roll with the punches. So that's where I tend to be. With that said, though, there are certainly a number of learnings I've had throughout my career, that when I'm speaking to younger folks, I share, because if you can learn from others' mistakes, you'll save yourself a couple bumps in the road. You have to have your share of bumps in the road to just grow as a person. But there's certain things that I think I would tell, right? One, actually, is one I mentioned to you, I think, I think. A lot of people who are quantitative, who come from a science background, and certainly a lot of founders were technical, think that sales doesn't matter. And professionally, that's probably the dumbest thing I thought early in my career. And you're a sales professional, so I'm not saying that actually, just to please you. But like, I legitimately think that at the end of the day, every single job is sales, right? You're selling yourself, you're selling your product, you're selling your idea, you need to sell someone to come join you on a difficult journey. And that is one of the most difficult skills that there is. So, you know, when I was a cocky seventeen-year-old, studying math, who thought only salespeople were just, you know, full of fluff. I would rectify that if I was talking to my seven year old self earlier. Certainly I'm far from those days, but that's something I actually find funny. And you see kind of, you watch Silicon Valley, and you see kind of like, the engineers, and salespeople, and those cultures don't mesh and they kind of characterize it. But like the reality is that very, very few important things sell themselves. You're doing something new, something difficult. You need to go basically get people to buy into your vision, and that takes skill.

Callan Harrington  47:10

You know, a lot of times somebody that really started out their career in sales in tech will take the tech for granted. Now, that tends to change real fast when you don't sell a great product. So I love that. I totally get that on the flip side of that as well, like a good engineering team, and a good product team, versus one that's under invested and doesn't keep up with it, is night and day. So I love that. Paul, just in general. I've loved this entire conversation. This was a blast. I appreciate you coming on today, man. This was excellent.

Paul Monasterio  47:45

Well, Callan, great chatting with you. Thank you for having me. Looking forward to the next one.

Callan Harrington  47:54

I hope you enjoyed Paul and I's conversation. I think the type of transparency that Paul described is absolutely critical in the startup. If you want to learn more about Paul, you could find him on LinkedIn in the show notes. Also, if you liked this episode, you can find me on LinkedIn to let me know. And if you really want to support the show, a review on Apple Podcast or Spotify is very much appreciated. Thanks for listening, everybody, and I'll see you next week.