How Fathom AI Dominated a Competitive Market
How Fathom AI Dominated a Competitive Market
How can business owners use AI and transcription to cut costs and improve services?
We started our business in 2020 with the idea that transcription services would become almost cost-free and AI technology would improve significantly. At that time, many investors were skeptical about AI because the initial AI products did not perform well. However, we anticipated that AI capabilities would eventually excel. Our theory was that although transcriptions might not be in high demand on their own, they are essential for leveraging AI technologies. We recognized the importance of establishing foundational infrastructure for video recording and transcription early on, so we could be ahead when AI advanced. This approach allowed us to reduce costs and offer more of our product for free, which remains a key strategy since the majority of our users access our product at no cost. We don't have a traditional marketing team; instead, our user base is growing through data-sharing, which is our marketing strategy. Additionally, we have a dedicated team testing the latest large language models to enhance our existing services and develop new AI functionalities. They explore ways to provide insights across sets of meetings, whether they relate to ongoing projects, interactions with a company, or recurring team meetings. We aim to integrate these advancements into our product, taking advantage of the rapid improvements in AI that reduce costs and double the capabilities approximately every six months.
How does AI improve note-taking in business meetings?
Taking notes is surprisingly ineffective when considering how rich our conversations are, yet we retain only a fraction of the content in simple bullet points on a document. Despite being proficient at multitasking and note-taking during meetings, I would often struggle to recall the specifics of those discussions weeks later. Many people believe that taking detailed notes is essential for success in business and have refined their note-taking skills over the years. However, the transition to using AI for this task can be challenging because it feels like the technology might not perform as well.
Instead of traditional note-taking, I've adopted a new approach using an AI system that provides immediate action items after meetings. This way, I don't try to remember every detail; the system catalogs each interaction. When I meet someone again, I quickly review the AI-generated summary and specific moments from our last meeting. This method feels like I'm continuing the conversation seamlessly, even if weeks or months have passed.
This AI tool doesn't just create notes; it links back to the original meeting like a table of contents, which I can reference anytime. It's like having an assistant constantly available to retrieve information on demand. This shift in how we manage meeting information represents a significant change in working efficiently.
Why is minimal distraction critical for startup founders when launching a new company?
Starting a company can seem ideal during times when distractions are minimal. For instance, when I launched my first company in my late 20s, I was living with my co-founders in Santa Cruz—a quiet beachside town, especially in the winter. We had intense focus due to the lack of social distractions, often coding until we fell asleep. This extreme focus is challenging to maintain as a multi-time founder in your 30s and 40s, given the increase in social commitments and enjoyable life activities. However, the COVID-19 pandemic presented a unique situation where there was little else to do but focus on work from home. This period also coincided with a significant shift towards widespread use of video conferencing tools, which benefited our startup, Fathom, that we had conceptualized before the pandemic. The timing was fortuitous, blending our preparedness with an external boost from increased familiarity with the digital tools our business utilizes.
How can startups use partnerships to quickly gain users and grow?
Zoom has been a significant factor in our success. We were right about AI improving and transcription costs decreasing, which were crucial for our business. We were also fortunate with our timing, as transcription costs dropped faster than anticipated. We theorized that Fathom would spread through word-of-mouth as users brought it into their meetings to take notes, creating a natural opportunity to introduce the product to others. However, the challenge was acquiring the first 10,000 users.
Just three weeks after we started the company, Zoom announced they were creating a new marketplace. This was both exciting and intimidating, given the short notice and our absence from the list of 35 initial companies. To address this, I sought investments from individuals with connections to Zoom, including its employees. Eventually, I learned the name of the person leading the marketplace program, Ross, and sent him a cold email explaining why Fathom was a good fit. Thankfully, he agreed and invited us to join the program.
This opportunity was remarkable, especially during the peak of COVID-19 when Zoom was scaling up and launching its marketplace with well-known applications like JIRA and Asana. At that time, Fathom didn't even have a working alpha, but our launch was successful. We quickly became one of the top apps in Zoom’s marketplace, which led to further opportunities, including investments and building relationships with Zoom's product team.
How can identifying common, widespread problems lead to a scalable business idea?
The most beneficial aspect of my journey with Fathom has been addressing a personal challenge I faced. At my previous company, I conducted numerous Zoom calls daily for user research. Trying to take notes while engaging in conversation was inefficient and frustrating. This led me to develop a prototype of Fathom, which, although not perfect initially, was a step in the right direction. As the tool improved, it became an essential part of my workday.
Most of my startups, except one, have been focused on solving problems that I personally experienced. If the problem is common and not limited to a niche market, it builds a strong conviction about the solution's potential, provided you remain objective about its impact. The product must not just function; it must excel and seem almost magical to users. Despite the challenges, such as unexpected outcomes with our Zoom integration post-launch, my personal experience with the product has given me the conviction to persevere through difficulties. This foundation of personal utility and validation is what I rely on to navigate the setbacks encountered along the way.
*This interview has been edited and condensed for clarity.*
