Momentum to Millions - Shensi Ding - Merge - Episode #74

If we're the one who's always like pushing it forward and like move thinking through, like how like the industry's evolving, you do have that gap where you're the industry leader and like you are the only one with features and no one else has.

Welcome to Not Another CEO podcast. I'm your host, David Politis. Every week we talk to inspiring leaders and get the true stories, the ups and downs, the lessons learned, and come away with actionable advice for our own journeys.

Today's guest is Shenci Ding, co founder and CEO of Merge. I met Shenc very early on in her journey and have watched what her and her team have built over a pretty short period of time and it's amazing. I believe that a big part of the success that she's had is because of her crazy work ethic, grit and true understanding of how to solve her customers problems. Before starting Merge, she was the chief of staff at Expanse, where she helped scale the company through its hypergrowth phase. The company was ultimately acquired by Palo Alto Networks for $800 million. In 2020. She co founded Merge to solve one of the biggest pain points for technology companies, integrations, something I know very well now. Merge provides integrations for products and AI agents. Under her leadership, Merge has raised more than $75 million from world class investors like Excel. And addition, it's now trusted by thousands of customers from fast growing startups to category leaders like Ramp, OpenAI, Perplexity, MasterCard, Uber and many more. Shenzi, welcome to the show.

Thanks for having me.

I'm excited to be doing this.

I'm excited to be doing this too.

All right, so Shenzi, what is the one thing that you've done at Merge, big or small, that's had the biggest impact? And you do again if you're CEO of another company in the future.

We were in person first from 2020. So we started the company June 2020 and out of Gil's apartment, my co founder and we were having so much fun that we were like, wow, what if we added a few more people to the company and also had them in San Francisco and we worked out of like a wework and wore masks and so that's what we did. And as we got bigger, Covid got better and we just kept it going. We weren't sure how long it would last and if also a lot of other companies would be in person or fully remote. But yeah, we kept it going. And being in person has been a really big part of our culture, our company, our team and how we grow. Um, yeah. So I think that's had a really big difference in both our recruiting process, but also how we operate as a company.

Yeah, I mean, the first time that we met, I remember you telling me there was someone I had known that was interviewing for a job and they said, dave, they're in person every day. They're like stuck on that, you know, like, and, and it was, it was at that time really nobody was really doing.

Yeah, it was very controversial.

How did you maintain that? Like, how did you find people to even join you during that time?

Oh my gosh, it was so hard. And it's still, it still impacts us when it comes to like senior, senior employees, but it's just ton of sourcing. Like, I think because it was so hard for us to find people who would be even open to that, we had to do a ton of sourcing. And sourcing still is a very important part of our business. We reach out to tons of candidates just to see if they would be even be even open to it. But back then like the pass through rate for people who'd be open to in person was extremely low. So yeah, it was just a ton of outreach.

And even when you had great people, you like candidates, you would just hold the line.

Yes. I mean that candidate, I remember, yeah, he looks amazing and like, I would have loved to have him at the company, but he would not be as effective in an in person company if he was the only remote person. And we've had plenty of leaders who are, who are amazing like, like tier one companies, like amazing track record, clearly very effective, but they just won't be effective at our company because our whole team will be in person.

And so you've continued that to today. But you went from San Francisco, you came to New York.

Yes.

So can you talk about that? Kind of. And you have an office now in both places and I think other places.

Yes.

And Berlin as well. Yeah.

Well, it's partially driven by recruiting. So back then in San Francisco it was getting a little bit sad. A lot of people had left. There weren't a ton of people who were still in the city. It was also a very remote first city and it was starting to impact a lot of our, like our recruiting processes. And we started expanding internationally from day one just because of COVID bit. So everyone was everywhere. It was, we were just selling to like Europe, to Africa, to like Asia. There were really no boundaries when it came to who we were having conversations with. And California, even though it's very beautiful and like very central for tech Very hard for international phone conversations and like zoom calls. And so New York felt like a natural extension for us, especially if we wanted to be able to open up a new talent market. So I moved to New York around three or four years ago, opened our, he opened up our office and it mostly became a go to market hub at first, but then over time we hired more engineers and it was really critical for us during that time when no one was coming to the office because people in New York were.

Yeah, I think one of the things, again, I, I mean it when I said in the intro, you know, your work ethic, I, I felt it from day one when we met. And I remember after the meeting I met you and Gil in my office, you know, during that Covid kind of period. And I said, wow, I wish I could do what they're doing culturally with better cloud. But again, at that point everyone was all over the place and everything but you. I felt it like we are going to grind and we're going to do what's necessary. We're now, five years later, there's this whole996 trend that's going on. Have you been able to maintain that as the company is scaled, as you've hired all these very impressive people, but like, have you been able to maintain that throughout?

Yeah. So I'll admit I was probably a little bit naive back then that we help for how long you can maintain it. And I think a lot of people won't talk about this publicly, but after a certain point it becomes more about decision making versus just working a lot and making really good decisions and just making sure that you're moving in the right direction and not just spinning your wheels. But I think when you're starting, you have to work a lot. And so when we would do interviewing in the beginning, there'd be a filter of are you open to in person, yes or no. And then most people would say no. And then after like, okay, we eat dinner at the office every night and you have to work until 9pm every night. And that would be another filter as well. Um, and it was really important because back then when we were just 10 people and then even up to 50 people, we had to do everything we could. It was a complete new market and there were no moats and software and the only thing to do was just put in hours. Um, but it started becoming clear around like 75, 80 people that we were missing really good decision making and that we were also going in directions and wasting a lot of time on things that someone who had experience could have just corrected it. And that's when we started bringing in more senior people, like parents, people who had a lot more tenure at companies that had done it before and that really made things more efficient. I think there are still benefits to working hard. Like our team still works very hard. And even people who are not like physically in the office super late, they're always available and they work late at night. But it's not the same as before where we had to just put in so many hours because we weren't sure what to do. We need to just shoot our shot in different directions and see what worked and didn't work. Now we have a lot more direction and data for what is effective. And it's mostly about good decision making.

Yeah, it's, I think in the early days of any business, in my opinion, when it's when you're starting from zero and literally nothing, you have to power through, you have to build inertia, momentum, kind of some way. And I think one of the challenges is that people who do it multiple times, the second time, they forget that part of the journey. That's what I've been noticing as I've been through multiple journeys. And I see multi time founders and they start new companies and they forget, oh, it's hard. You get old, you get old. It is hard. It's exhausting. Yeah, it's a different kind of muscle to be able to do that, you know, and to be on the plane all the time and to be going to customers and that is, it is exhausting. But I think it is what, what's necessary to get stuff kind of off the ground 100%.

And with our new product we did, we didn't want to take resources away from our core product. And so the only engineers that we had were me, Gil and one engineer. And we had to work every weekend. We had to work because we had meetings during the day. So from five to midnight every night, Gil and I were coding and then on the weekends all day, we just didn't have any plans and we were coding. Um, and even now, like the team for that product is smaller whenever anyone wants to join that team. Because it's, you know, it's sexy, it's AI right. I say, okay, well are you willing to work late every night and then you have to work weekends? It's a requirement for this team because it's a completely new thing. You're building something from nothing and we don't. If you don't do this, the product dies. So a Lot of people are like, oh, okay. That's definitely a little bit different.

Yeah.

Yeah.

I think some people are scared to say what you said in the beginning when, with those first set of people you brought on board and what you just said now, I think people, maybe because of that Covid period of time, like, people are scared to say, this requires a lot of hours. This requires a lot of work. But when you talk about that with, like, this new team, what I find is there's a lot of people who actually raise their hand for that. Yeah, some people want to get energy from that.

Yeah, for sure. And we found that team, like, they work super hard, they're always on call, and it's exciting. It's really exciting. Like, the wins that you have, it feels like more concentrated. But, yeah, like, it's not something that everyone wants to do.

Yeah. So you and Gil have both, I mean, evolved and matured so much since the first time that we. We met and since you started the company. How have you done that? Like, have you done that purposely or that just happened?

That's a great question. I think it requires a lot of, like, reflection and mistakes that we've made with, like, our team, products, customers. And every time we made a really big mistake, that's helped impact the direction of where we end up going and how we end up growing. And also, it's partially like, market forces, like, we talked about this previously, but the market has changed so much now compared to companies that were started in, like, the 2010s. Like, every year there's, like, a new challenge, and it's like you're going through a game that's just, like, changing so fast to compare to before. Where, you know, is that you. You had an expectation of what, like, next year might look like. And so I think because of that, I've just learned to be a lot more dynamic and more flexible and just understanding that, like, things are going to change and I just have to be okay with it. But we have to be open to learning new things and then adapting our company and our product and our team and maybe people. We lose some people along the way, but in the end, like, if we really believe in, like, where we're going and how we can end up changing the industry and the problem. Problems we're solving, that's what really matters.

I just interviewed a. I started interviewing VCs for this, and I interviewed someone yesterday, and they said that what they look for is the slope of learning in founders that they invest in. And that's the number one Thing because the speed that things are changing is so fast that if you can't evolve that fast, you're just going to get left behind. Yeah. So one of the things that, you know, I know you do, is you bring people into the company to speak to the company. And I think it's a great idea. Could you maybe share a little bit about how you do that and who you bring in?

Oh, my gosh. Yeah. It's made such a big difference for our team. So we have, obviously you come in and speak. Greg shot this, former CEO of Mulesoft. He came in, he was amazing. We also had John Denigra, the CTO of Plaid. Uh, we had Jack Altman come in, the former CEO of Lattice and founder. Um, and all of them had such amazing stories to talk about.

It's.

It's hard. Like, it's not always like a straight line and it's just super easy and you end up getting knocked down a few times and you always have to figure out how to come back up. Um, and I think it gave our team a lot of context for how, like, this is very normal. Um, because a lot of times, like, internally we have people who've worked at other startups and one of my team members, Charlie, he's always like, merge is a smooth shit. He's like, this is, like the most, like, well operated. Like, this is so smooth. I'm, like, loving this. And then meanwhile, some of our other team members, where this is their first company, they're like, oh, my God, like, this is chaos. And then, like, they just don't listen to Charlie. So it's like, nice to have, like, people who, who, like, basically, like, made it and, like, have, like, accomplished where we want to go, share stories about, like, times where, like, things were hard and how they made it through and, like, how it's like, totally normal and it's part of the fun. And, like, now they're, like, laughing about it. Uh, so I think it's nice to have that perspective and it's just cool. Like, there's like star power people come, come to our office.

It's interesting because when you tell your team, when I tell my team, when anyone tells their own team, no one really hears what they think.

I'm spreading propaganda.

Yeah. But when you bring people in, you can actually tell them that this is just, this is the journey.

Yeah.

This is what I've been recently, I've been talking to a lot of founder groups and I've been telling them, like, when you hear, when you're a First time founder and you hear about someone else's journey online or LinkedIn or some podcast, it feels like it's just up and to the right. When in reality there's many near death experiences, roadblocks, challenges. You feel like it's only your. If you're, you know, you're a salesperson, like, this product sucks everyone, that everyone else's products are the best things in the world. When you realize that the other companies, they have it just, just as bad. It's. Yeah, I like that you do that. You know, I think that that's, that's really. How do you get to these people? I mean, I know we've met each other, but like, how do you. How do you get to these people?

Yeah, it's a combination of them being investors in the company in previous rounds. It's also just like we network. We just inherently meet a lot of people. Gil and I are really into meeting people in person and that has created, like, more personal connections to different people who could, like, inspire our business.

So does anyone say no if you ask them to do it?

We've been pretty selective about who we ask so far, so not yet, but I'm sure that's gonna happen.

I don't know. I don't know. I think most people want to pay it forward and, and do that. All right, I'm gonna go back all the way to the beginning. How did you get your first five customers?

Oh, my gosh. Yeah. Tons of outbound, almost begging, promising people that we would do whatever they wanted. And we did. We really did do everything, like, to make them happy. But yeah, it was just a lot of outbound.

Did you have real design partners or did you, did you give it to them for free? Did you charge? This is a question. Early on, when I started the podcast, everyone said, I want to know what every single one of these CEOs did for that first five to know. Did they charge? Did they not charge? They haven't signed something like, can you talk about what those first.

Yeah, I mean, my hot take is that time to 1 million that like a company takes. It's really annoying, but it's an artificial metric that a lot of VCs care about. And so you should do it for free until you, until you feel like you have pipeline where you can have momentum. Because, like, the whole company is about momentum. Like, you need to have, like, momentum for, like, how you get like the first million and then you like, fundraise and like that like, beginning is so critical and if you like, slowly drip like 10,000 here, 10,000 here, 10,001 here. It's not. It's not like, it's not as fast of, like, a push. And so even for, like, our newer product, what we did was, like, we did it for free for, like, a month or two, because we really. Our product was not that good. Right. Like, if your product's not that good, like, why are you asking people to pay you very little for it? Wait until your product is very good. You know, you're actually adding a lot of value, then actually charge them, and then at that point, hopefully, you'll have generated enough pipeline around you that you can also start getting other customers onboarded, and they already have a product that's much more baked.

I. So I took the same approach that you took, where I didn't charge until I felt like the product was at a place where I should charge.

Why are you charging people for?

I couldn't agree with that more. I actually, I feel like nowadays there's more people saying you should be charging right away and have these design partners. And I, I. That. The other thing you said, I don't want to skip over is the momentum to a million dollars, the speed to a million. Unfortunately, it is kind of stupid, but unfortunately, it does matter to fundraising. Yeah. So. And. And when did you start charging? Oh, you started charging here. Oh, and you got to a million in three weeks. Oh, my God, you're amazing. Yeah. Versus you got your first design partner. It's the same period of actual time. Yeah, that. That's an important. That. That's a really important point. And so did you. So you kind of built up. How many customers. Do you remember how many customers you had before you started to. To charge?

We had, I think, just two or three. Like, a third one to test in the beginning, but two had been, like, yelling at us for months, being like, oh, you guys need to make these improvements. We worked really closely with them, too. But, yeah, the third one was, like, waiting in the wings by the time we were ready to, like, go live.

Yeah, you have had. You really created this category in, you know, and you have. I don't know how many copy. I think I. I saw you at an event one time, some conference, and at that conference, you had your big booth, and then there was, like, 42 other. Yeah.

And they all came up to me being like, you're my hero. And I was like, oh, my God, get out of my face. But also, thank you.

Yeah, that was. That was. I. At that conference. I remember being, wow, this is crazy. But you have continued to elevate the company above kind of that fray. How have you done that?

So I met the CMO of Gong and he inspired me so much because Gong, obviously, there's so many copycats, they're the premium product and people love Gong. And I was like, okay, well how do you guys maintain your price point? Like, how do you have all these people love you and there's companies literally offering it for free? And he was like, shenzi, you can't be the best and the cheapest. Like, you need to decide what you want to do. And I was like, that is so true. Like, if someone is optimizing for the cheapest, I just cannot win them. That's not something that I'm going to be optimizing for. I want us to have the best product, I want us to have the best customer success. I want us to have the best team. I want all around for us to be able to provide like the most premium experience for our customers. Because that's what I care about. Like, I want, I want quality. And so I think throughout the whole time we've always thought through, okay, we need to have like a really high quality product and we also need to be the ones thinking through new ideas. It's really unfortunate because it's much easier to copy than it is to innovate. But like, if we're the one who's always like pushing it forward and like move thinking through, like how like the industry is evolving, um, you do have that gap where you are the industry leader and like you are the only one with features and no one else has. And that's really important for like the company momentum and just having an edge. But yeah, it's always just thinking through like, what are the like new edges for how we end up advancing the company.

It's it. This feels like a problem that didn't exist when I started my career 20 something years ago because to start a company, like to stand up software, you had to literally go to a colo facility and rack servers. I literally did it in Iraq. And you're like, okay, now they're stood up. Now we're gonna go write the software, then we're gonna have to put. Then the server goes down, then you gotta. And just the work required to set up a new company was a technology company. Was a lot and the money and everything. And now people literally can go to your website and just copy and tell some AI tool to copy paste it. And I mean I think I've seen people with your API docs like full copy copies.

Yeah.

Right. I think I've seen, like, people literally just copy and paste.

They died. But yeah, she's FYI.

But it's, it's, it's crazy. I mean, and so how do you get your team? I wonder how, because I haven't dealt with it in this era. How do you get your team? Because I'm sure they get frustrated. They probably come to you and say, hey, there's nine copycats, they're all cheaper. How do you get your team to feel what you just described to me?

Yeah, I mean, I think it's just continuing to have wins and also making it a little bit more human. Like, the reason why people purchase our product isn't just because of, like, certain features or, like, certain functionality that we offer. It's also because our customer success team is so good. Like, we have the best customer success team, we have the best solutions engineering team, we have the best technical support team. And that's like human and that's training and that's, that's them. And because they're so good, it has such a big impact on our business. And you can't copy that.

Hmm. It's trust, actually, I think it's trust. It ends up being the customer trust. Trust you and trust you can't, you can't buy the trust. You can't make your product so cheap that they trust you. You got to. Actually, I think that, that I've been really. You and I have spent a lot of time talking about this and, and the more I think about it, the more I think literally everything could get summarized into trust. Just, you are the, you are the thought leader. You're the one creating this market. You're, like you said, you're the one knowing where it's going, not just copying where it's been. And that is trust for, especially for your customers. I mean, can you talk maybe a little bit more about just the product evolution because. And you can give a little more detail on the actual product because the product has, has evolved quite a bit, especially recently. Can you talk about that?

So our vision for Merge was always, especially on the Unified API product, was to always be cross category. And when we ended up, when we started fundraising for our seed, that was what we pitched like we were going to be cross category, we were going to cover everything, but we had to start with two categories because it's a hard product to build. And I think because we started with HR and ats, a lot of people just perceived us as only being like an HR and ATS company that we could never expand our TAM beyond that and that it was going to be really hard for us to be able to land companies in like accounting or like file storage or ticketing. And the past few years was really critical for us to prove them wrong. And so we've landed some really big logos obviously in the AI space that are not HR ATS related. We landed at the largest financial services companies this morning. Actually we landed like our second largest payments processor in the world, which is really, really exciting. And we've gotten even like very popular ride sharing companies like you mention. And that was all in categories that were not HR and ETS and I, it was really hard to do. Like they were very different, the sales process was very different. But we had to do it because the industry was changing. HR and ETS was really great for back then when remote work was really popular and like people were doing a lot of like remote like productivity software and like remote payroll companies or like doing a ton of recruiting. But the industry changed a lot and it was just really clear that it just was not enough. Like, and even if you focus on only file storage, we're only ticketing, the TAM is just not enough. And this was always what we believed and always what we knew. But it became even more critical for the business to become enterprise ready in those other categories. So we rapidly tried to advance our company. And obviously like one of the main industries that can pay very heavily is AI. We had to be able to sell into AI use cases. So yeah, basically just like did a refounding of the company in April where there were three different vectors. We needed to be able to use AI more internally. Like every single team member was required to use AI and if you weren't, that was going to be a part of your performance review. Second, we need to be able to sell to AI use cases. We were able to sell to some AI use cases, but not all of them. But we also needed to make sure we were absolutely best in class, like objectively the best company for AI use cases. And then lastly we needed to launch an AI product. So there was a month and I talked to you about this at the time, but there was a month where we were in process with a really big account and we were unfortunately just because we were small, we were going to allocate all of our company resources for that account. The deal died for a month and it was devastating for our business. We had a bunch of people quit. It was really big hit, more for morale. And in that time Gil And I had to reflect, like, how do we restart this company? Because we can't just pray that people are just going to come in and buy our product. So we spent those four weeks just really digging deep on how we innovate, how we reorient our company and how we started again. And the Handshake CEO and the Intercom CEO, they really inspired me because both of them had to do that. If you're a pre AI company, like, how you're doing things does not work now. And you have to rapidly adapt to the industry. You have to relearn, you have to understand, like, how AI works and how your company can fit in that industry. And so that's what we did. And then the deal came back four weeks later, which was so annoying, but really great for our company, obviously. And we were completely. We came out of completely different business. And so now where we are compared to where we were back then, night and day. And we actually got an email from someone like a few, like a few days ago that was really beautiful for us was that, like, it's really clear. Like, we did a deep analysis of the entire industry and you guys are the clear leader for our, like, AI use case. And that was like, really, really validating for us because the team has worked so hard. It's only been six months, but the company is completely different now.

I think there are probably, I mean, probably not exaggerating. 10,000 companies, SaaS, companies that need to hear this because.

Refounding is a good way to put it. Like, you need to really rethink everything. Did you actually say refound? Like, did you go to the company and say, this is a refound?

Not in that word, but we were basically, we are changing the entire company. There are three pillars that we have to orient towards. And if we don't do this, this is existential for our business.

And. And that was in April.

It was in April.

And how long did it take for people to start hearing or, you know, start making that change? Was that instantaneous or probably a few weeks?

I think a big difference was that Gil and I started using AI coding tools and like different AI tools. We were able to personally see the difference and impact on the. On like our own workflows. And if we were doing it, no one has an excuse for not doing it. And it's not fun. Like, there's. It's a little bit scary to feel like AI can take your job. It's a little bit scary to be like, learning a new tool and feeling unsure of, like, how Things are working, but we were getting so much productivity when we were building this new product. We were like, if we force everyone to do this for our current product, we could move so much faster. And if we also added more AI in our product so we could move even faster, like internally, there's no reason why we shouldn't be doing that. So, yeah, it has really changed our workflows.

One of the things you said that I've now heard with three different CEOs on the show is when having to make this type of shift that you're making, even though you've said it in a better and more explicit way than I think I've heard so far, but they said they had to kind of create like a new team to go after this new product because trying to do it inside the old product, like, was never going to work.

And also you.

That's what you did, right?

Yeah. I mean, you also responsibility to your existing customers to continue, like, continue investing in them and then also making sure you're providing high quality service. So, yeah, it was me, Gil, one engineer, and that one engineer was a big decision. Like, we didn't even want to do that. Um, but yeah, five to midnight every night after our meetings were done, Dylan, I were coding and then on weekends, all day we were coding. And that engineer, like, every night, like really late hours, they were coding too. And of course, weekends.

For how long?

Yeah, six months.

Yeah, it was. It was really tough. Yeah, we just were working nonstop. Um, and then. Yeah. And then only until we were able to close revenue did we deserve more resources.

Wow.

Yeah.

And now how big is that team now?

It is. We have three engineers. We have a PM or two PMs and then we have a TPM. And then Gil and myself still. Yeah.

Yeah. This is. Seems to be the most common thing that I'm hearing from people is when you want to kind of make this change, especially around AI, you put it over here. This team works on it, this team goes and gets it off the ground.

Yeah, it's. And like, like, objectively, it's actually not a super expensive investment, but like, it has such a halo effect on your existing business. Like, we have had so many opportunities now come in because of this new product when they actually need to use our old product. And it's very, like, it's very odd to be seeing that, but if you force. It's kind of a Gossip Girl. You have to put yourself in the story, you know, and then if you're in the story, then everyone's like, oh, like interesting. Like, oh, like even though there's something that's old, but they're like, oh, we actually need that instead of. So there's new products that added that halo effect for like our old product. Even though it's the same exact product, hiring, recruiting, so much easier, response rates way higher. And it's just, and it's created like a new growth factor for our business, of course. And then it's very motivating to see a lot of deals needing both products that we never would have had access to previously.

Can you talk me through, Pretend I'm AI company and I want to use this new product. Where, where do I use this in my. Inside my product. Like how, what's the use case?

Yeah, so our unified API is really great deterministic use cases. Like I have a button, I need to press this button and I always need to post an invoice or I always need to create a ticket with this button. It's also really great for syncing use cases. So I need to sync all the tickets I've ever created historically so I can query across them, ask questions. I need to sync all my files so I can ask questions about like, you know, all the data that we have internally or knowledge based sources, like you name it. So that's what our unified API is really great for, like synced synced integrations or deterministic use cases. So our agent handler product, our merchant agent handler product is really great for on the fly actions. It's for agentic use cases. So like today someone might want to like create a ticket and like the next minute they might want to uphold their latest emails and the next minute they might want to like create a new calendar event.

It's very dynamic. That's what our new product is better for. And a lot of times we're noticing people need both. You want to be able to sync all the data that exists so you can query across and have really flexible access patterns and then also be able to use semantic search. But then sometimes you might also want to do actions too. And so they're very complimentary. And I think the nice thing about this is that it wasn't like we just were like, we need to build something, so we're just going to build it. We kept doing sales conversations. We were noticing the industry was moving a little bit and there was a gap in a use case that we couldn't fulfill. But we knew very well, like we were experts at it. And so why not us? Like why can't we fill that Gap. And so that's what our new product fills in.

And then in terms of having people internally using AI tools, coding assistance, the other things that they're using, how do you promote. I mean, it sounds like there's a little carrot and a lot of stick, but, you know, how do you promote that? Because I have seen that even people that I would expect to use, marketing people like things that are just very obvious, easy use cases. They don't. And it's not like they're. These are young people who, like, know technology well, but there's something about, like, a new behavior or something.

Yeah.

I don't know what it is that. Yeah, they're scared to adopt it. How do you do. How did you. How did you motivate? I mean, you said you and Gil did it to start, but was there something else that you did?

So I think it starts from other things. It starts from keyboard shortcuts. If you don't force everyone at your company to use keyboard shortcuts, you can't really force everyone to use AI. And I view them to be very similar. Because shortcuts, one of my team members said, is a mentality like, if you are. If you care about optimizing your life and your time and, like, making sure you aren't, like, using a mouse like a fucking loser, like, then you're going to try to use AI to make your workflows a little bit easier. And so when, day one, I have told everyone you have to use shortcuts. And in banking, what I learned was that, like, minutes add up to hours, which add up to days of your life where you could be moving so much faster, and also just, like, improving yourself. And so we, every year or like, every six months or so, I'll do a training for my whole company. You have to use shortcuts. Here's how you go through tabs on Chrome. Here's how you, like, you know, create a new message in Slack. Like, I never want to see you using your mouse, like, for these. For these things, because it's so fast if you just use your shortcut. And so it started with that. Like, it just was a requirement for a business. Like, if you are not able to move fast on a laptop, I can't even really expect you to use AI. But everyone, of course, is baseline expects to do that. And then now with AI, obviously, like, if there's workflows that you were doing every single day, it is your responsibility to figure out how to automate that. Because if you aren't someone else Will. And also it's good for you in your career to try to always be thinking about how to use AI. But yeah, it comes from our managers. Our managers are always like learning and like experimenting with new tools, having an understanding of the industry. It's not, it's interesting because the job now isn't just like doing like, like being good at it. You have to understand the industry and like what's coming up, like what tools are there. Like everyone has to become a, like have an understanding of how things are changing.

It's amazing. Like once you actually start using I, I guess I would put myself in, now that I'm saying it out loud, I've put myself in that bucket because in the beginning I'm not going to use this note taking, you know, I'm not going to use granola, I'm not going to use this thing. I'm not. And then you start using stuff, you're like, why would I not. Yeah, to your point, minutes, it's, in some cases, I would say it saves probably many, many hours for small functions. You know and I did get deep into Nano Banana Google image generator and it, I was in it for like eight hours actually and I couldn't get it to actually do what I wanted to do and I was getting so annoyed. I'm like have these people going up a mountain and they were going down the mountain and I was like, please have them go up the mountain. It's like, sorry, I made a mistake, still going down. So sometimes frustrating.

We can get to AI fights too.

Exactly. Yeah, exactly. All right, so you, you have raised money from legit, I mean the best investors in the world and you did it early and you know, was that for you, Was that really easy for you? I mean did you just go and first meeting, you know, you got the.

The, the, the, the check seed round was harder. Series A and B were easier but the seed round was really hard because it was, there were companies that weren't actually incumbents but people just associate that they're similar. And so it becomes hard to clarify how you're different, especially to a non technical investor. So that was part of the challenge. But it got us, it forced us to be really good at explaining how we were different and how the problem we were solving was completely, was just not the same at all because it would come up with customers and would come up with candidates and so you have to get good at explaining that.

And why do you think it got easier? Why, why did it become so much? Was that just the market Timing or.

People use cases became super clear. They started seeing companies that they knew using us. And that obviously helps a lot. But, like, when you have nothing, like, no one knows, like, what the problem is. They don't actually understand it. It's not. It's not the same. And also, it becomes even harder when you're, like, at the beginning of an industry that's growing, which is what we were doing. Um, so they didn't really viscerally feel it, but, like, as years went on, like, every board meeting, people are like, oh, my God, integrations are bruining. And then, like, as they kept. It kept getting worse and worse and worse, and I was like, I told you so. Yeah, that's how it got a little bit easier. But it was. It was partially right time, right place, but also just having, like, real customers that were really loving the product.

Yeah, you've told me some interesting fundraising stories. You feel comfortable sharing any of them?

Yeah, one of our investors, we love them, but they took us to Carbone and we got. We got Blackout. And obviously, like, they were like, oh, like, you know, we, like, love you guys. Like, let's just, like, sign this term. She, like, agree on terms. And like, we. We were. We were, like, not functioning. It's. We're like, oh, okay, well, yeah, maybe we'll agree on this. And we were basically like, yeah, like, this sounds great. And then I heard from one of my friends who are fundraising, the same investor. They're like, oh, my gosh. Yeah, we. We got Blackout. We went to Carbon. Oh, and then, like. And then we, like, sign this, like, napkin. And I was like, oh, my God, you use the same trick. Like, I feel like you took us on the same exact date. And they were like, we don't have that many tricks up our sleeve. Like, this is it. I was like, oh, my God, it worked. It really worked.

Funny, because actually, two weeks ago, someone I'm working who's going through a fundraiser called me, and they the same thing.

Oh, my God. I feel like I've been cheated on.

Oh, it's a. You know, I think especially when it's like, a competitive deal. And yeah, there is. It's. I think that a lot of times I. I say this a lot, that especially now when I'm working with a bunch of founders, you don't understand what's happening on the other side of the table. Like, as founders, when you're fundraising, you don't really know what's happening in the VC kind of side of the table. And there's Some, you know, there's the pressure to get deals like this closed. Yeah. Is just like a sales team. Yeah. With a big deal that's been in the pipe. I don't think founders fully appreciate that.

Yeah. One time. He might kill me, but one time, there's an investor that called me and he was like. He was like, oh, like, we have this term. She out. Like, you guys have to accept it tomorrow. We're like, oh, like, you know, we can't. Like, we're just busy right now. Like, well, like, we'll spend another day. He's like, oh, okay, okay. And then he called us back, like, 10 minutes later. He clearly had just gotten yelled at. Like, oh, yeah, sorry. Like, we can't wait, like, another day. Like, we really need you to, like, make a decision. Others will. I was like, okay. But, like, it was so obvious he had just kind of yelled at. But yeah. Like, there's. Yeah. A sales process.

You don't actually realize that. I. I tell founders all the time, you don't know that in the Monday morning partner meetings, they're going through their pipeline just like you do. Sales pipeline. And if some person shows up to that Monday morning meeting says, I've been talking to Shenzi from Merge, they're crushing it. They love me. You know, I have a great relationship. When they come up to fundraise, I'm gonna. I'm gonna get them. And then you come up to fundraise and they don't get you. They're gonna. That's gonna. They may get fired. They. They definitely are not gonna have the same kind of brand inside the firm. So I. I think that anyway, those. I've been to some of those dinners myself as a founder, and. And you know, one time I told my wife, I said, I know exactly what's gonna happen. And I got to the dinner and I just started eating bread as fast as I could.

Just so smart. Oh, my God.

Get too drunk.

That's so. Yeah, I'm a lightweight too, so it's not. Not great.

Very different. Very different.

So you mentioned, you know, all these changes that. That have been that. That are going on with the. With the company. Where is Merge three years from today?

I think I have completely adapted that. We obviously have to be multi product, and we have to just be accepting that as the industry changes, you have to build and also kill things that do not align with the industry. And so that is the biggest change that I've had over the past six months. Because previously I was like, we're going to Be like an infra company. Integrations are always going to be super important, which I do think they will be important. But I think the form like the way people connect to third party systems or the types of problems that arise from that issue will change and we're fully ready to adapt to that. And so I think us just becoming accepting that we are going to be multi product flexible in what we build that has been really important for us.

And one of the things that you've done seems very well is moved up market. I have attempted that multiple times at multiple companies and not been successful with that.

It, I mean some of the customers you have, it's literally, I mean compared to where it was even three years ago. It's amazing you remember? Yeah, I remember. So how have you been able to do that? Is that a product thing or is that a go to market everything?

Absolutely everything. When we first started the company it was basically lord of the flies. We were all children, we were all super, super young. And so it made sense that we were selling to other startups but we had to change a lot of things. Like the go to market motion is completely different for enterprise, pre sales and post sales and like this and the POCs that you run also QBRs like you have to go on site, you have to have a deck that's very, very different. But the product has completely changed. Security requirements, efficiency, uptime requirements. There's just so many things that are very, very different and also deviate from the needs of smaller companies. So you have to find resourcing for that and you also have to make sacrifices on both ends.

So one of the things I think people again now seeing this so many times with so many companies, they feel like we're going to go up market by just adding these features. And what you just said actually was all not feature. I mean yes, there's product changes but that was all go to market.

Yeah, I think it has to start with go to market because you just don't know what to build and sometimes it's not what you think. And yeah, we hired our first enterprise sales rep I think two and a half years ago and back then like a 300 person company was enterprise for us and we were so not ready. There's so many features we didn't have. But it wasn't just that like it was like how we communicated about the product is more value versus like features, how we were different, where the roadmap was going. They were also going to look more like design partnerships because if you're they're paying that much money. It's just different. Like it's not, it's almost part services. Like it's not really going to be the same where it's like a, like here's a product, you buy it or you don't. And yeah, I think it has to start with go to market.

Yeah, I think like something like a qbr. It seems so such a small thing, but these big customers, that is how they're used to engaging with their vendors. This is not a fly by night. Oh, we're paying you this much money and hope the product work. They them, they've bet their, their jobs.

They will get fired. Yeah.

And they want to hear directly from, from the vendors 100 on that.

Yeah. It's interesting because like I would never want to spend a QBR with a vendor ever in my life and I would never pick up a cold call. But it's. Yeah, if you're like selling to enterprise, you got a cold call, you gotta get on a flight, you gotta be with people in person. You have to have a deck.

Right, Right.

Yeah.

Okay. I want to, I want to transition to your background a little bit more. So where are you from originally?

I'm from the suburbs outside of Boston.

Okay, and where'd you go to school?

I. Oh, I went to. Oh, college or undergrad or. Sorry, college or high school?

To college.

Oh, college. I went to Columbia.

Okay, and is that, that's where you met Gil?

That's where I met Gil, yeah.

Were you in a class together? Were you just.

Uh, yeah, we. I think we met during like orientation week because everyone's just partying and like the whole week. But we. Back then the CS department at Columbia was really small. I think it was like 50 or 50 people or maybe almost. It was really small. And so you knew everyone? Like I, we knew every one of them because you were in the same classes every single day. And so I just met him that way. And then we were on engineering student council together. And then senior year I was class president, he was vice president. But yeah, we've known each other for like all four years.

And did you know you were going to start a company with him?

No, we were just like partying back then. I don't even think we were thinking that far ahead.

When did you decide to come together to start merge?

A year before we started the company. We were just talking about work. It was just work and seeing whether or not.

Seeing like what was going on. What problems are you running into? What's hard right now and I think when both of our companies were running into that issue, we started talking a little bit more about it. And our skill sets were so complimentary that I thought it could be interesting. And we were young and we had, like, time and we had experience and we've both been managers. Like, I was kind of like, why not now? Like, if not now, like, it's going to get harder, especially if we feel like we're uniquely able to solve this problem or uniquely going to be able to be good at this. And so that's how we did it.

And you, did you have something in your childhood where you knew you wanted to be an entrepreneur?

Not quite. I think I was fully ready to be, like, in finance.

And that's where you started your career?

So I started. I studied CSV. My first job was at Credit Suisse as, like, an investment banker. And I just. Because my mom was a software engineer. And so I was kind of like, oh, I don't, I don't want to do that. It sounds so boring. And so. And also when you're in New York, like in the 2010s, you're like, oh, my God, finance. Like, I'm going to be such a baller. Like, I wanted to invest in banking. I want to be, like, hardcore. So, yeah, I didn't invest in banking. And I probably. If I hadn't met my husband, I probably would have, like, kept it going. But he was, he was really interested in tech and he was in finance. He was like, I really think, like, we should move to San Francisco. Like, I think we need to get into tech. Like, I think this is going to be really interesting and, like, a great career path for, like, myself. And I, I was like, oh, maybe I should check that out too. And I happened to have an opportunity where I was going to be doing growth investing in tech in San Francisco. So I was moving anyway, and I was like, okay, then come with me.

And.

Yeah, and that got me really interested because I was meeting all these founders who knew everything about their company. And I was shook at how passionate they were, how much information they knew and how. Yeah, they were just experts and so excited about what they were doing. And I didn't feel like I cared about anything. I was like, I don't care about anything. I don't care about, like, my, Like, I don't even care about, like, this, like, modeling this thing. Like, it just doesn't matter to me. And I was like. And I was talking to the founder of the firm, and he was employee 26 at Apple.

He was like you.

He was like, I know. He was really rich. And he was like, you should go work at a company. Like, I think you'll really like it. And I loved it. And like, it's interesting now. I care so much about everything and I care so much about everything we do and like the quality of everything and like our customers. But back then I just didn't care. And I think it's just really hard to care in finance.

Did you, did you. Where does the work ethic come from?

Probably investment banking. I was really lazy in high school. My parents were always yelling, getting mad at me. Um, yeah, they were like, really mad at me because I was inherently lazy. And in college I started, I started having like my own ambition, like my own motivations. But, but investment banking was just such like a muscle that like, I just got really good at working hard. And nothing is as hard as those hours. So now I'm like.

Even now I'm like this.

Yeah, it's just not the same. Like physically being in the office from 10 till 2pm, 2am every night is so different from like being in the office until like 9. And to me it's like that was an early night in banking. So I think it's such a treat to be able to work in tech, make so much money, like in an industry where I'm so interested in what I'm doing and I don't have to work as hard as I did in banking. And I have friends now in private equity who are in their mid-30s working till 4, 5am and I, compared to that, this is nothing.

You may be the first person so far who've said, who said to me that they were lazy at some point in their life and then that a job changed that.

So sharply.

Yeah, that's why, like, it's. I, I don't always think that working investment banking is the right thing if you know you want to be in tech, because it does it limits like the type of roles you can get in tech sometimes. But it was so good for just making me have a great work ethic versus if you go out of college, like people work so hard in college. And if you go to a company where it's like very chill and very lazy, your like, default assumption for what work should look like is much lower.

That's a good, that's, that's a very good point.

And then everything after feels so much harder. But for me, this is nothing compared to what I was doing back then.

That's a good point. That first job does kind of set the tone of what you think is normal work.

Yeah.

But you do work a lot.

I do work a lot, yeah. Travel, the physical travel is a lot.

Yeah. You work a lot. You travel a lot.

Have you had to make sacrifices to. To do that?

Yeah, like, sometimes there's, like, health sacrifices that you make, and there's, like, time with, like, your loved ones that you have to make sacrifices for. But this is such an important part of me and, like, my life, and when things are not going well at Merge, that makes me also deeply unhappy. And so for me to be happy in my personal life, I know this might be toxic, but I need to feel like I'm in control of, like, my business as well. And a part of that is, from what I put in, if I feel like I haven't done anything and like, I have not, like, given it my all, and so things. Because of that, things are not going as well, it makes me deeply unhappy in my personal life, too.

I think that is actually every. Not every. Let's say every good founder. I would say that that's exactly how every good founder feels. And maybe toxic. I'm not even sure. I don't think you can disassociate. It's like a child, basically. I mean, you can't really disassociate the two things, but the sacrifices, you know.

Yeah, it's. It's. It's. It's a lot. And.

Yeah, the travel stuff, of all the things I miss a lot of things about running a company and having a team and everything, the travel is something that I do not miss. I think it's the most. It's. It just kills. It's so exhausting.

It's a lot. And economy, too.

That's the. Yeah.

Like, we're like. And you go all over the world, right?

Yeah, all over the world for just, like, a few days, too. So that's really hard. But you know what? I. I don't really listen to this guy, but I happen to listen to, like, a clip on TikTok with Bio Vaughan about travel. And he was like. And he's like, in his mid-40s, and he was like, once I accepted that, you know what? Like, I love my job, but travel is, like, a part of it, and I hate travel, but, like, it's a part of it. I just was like, I get over it. And he got over it, and I was like, I need to just get over it. That's so. I need to just get. Get over it. Like, why? Like, I love my job. Sure. I hate the travel, but, like, I need to just get over it.

Yeah. Have you had someone, a person, a kind of a mentor or a role model, or has there been someone like that in your. In your career, in your life?

No, because I think everyone's really busy. There's been periods where someone's very, like, inspirational for me, but, like, the closest was my old CEO because we were working together every day, and I was chief of staff. I would ask him any question I wanted, and he would answer it, like, literally anything, which was very unique exposure. Like. And, yeah, like, obviously we get, like, fights, and he'd be like, me to me, or, like, I would, you know, whatever. But, like, yeah, I could ask him anything I wanted. And that was really helpful for me, just understanding how hard it is. Like, it was. He would have really hard situations, and he would always get through it. And it was also interesting because back then, any time there was something where I was like, someone quit, like, really important quit, or like, a deal was about to die, I was like, oh, he can save it. And he would. And then now I'm expected to do that. I'm like, oh, my God. Like, I don't know how to do this. But it's interesting because when Gil has to solve it, I'm like, gil's got it. But then in reverse, he's like, oh, shads. He's got, like, I don't. But, yeah, so it. It was interesting to see that. But he. Yeah, he probably was, like, the closest. But I just assume that anyone that I want to learn from is very busy, and I can't expect them to, like, you know, be around me all the time. Yeah.

Last time I walked into your office, you were actually saving a deal. Oh, you were doing that thing.

Shenzi, thank you for doing this. I. It's been really. It's been amazing to watch what you've built and. And what you and Gil have done together and the team, and I think it feels like it may actually just be the beginning in a lot of ways, of the journey. You may or may not want to hear that, but it's probably the beginning of the journey more than you know. You have a long ways ahead of you, so congrats.

Thank you so much.

Awesome. Thank you. And for those of you listening, hopefully you enjoyed. And if you did, please share with your networks and we'll see you for the next episode of Not Another CEO Podcast. That's a wrap for this week's episode of Not Another CEO Podcast. Thanks for joining for show notes and more, please Visit not another CEOPodcast.com we'll see you next week.