Why experts writing AI evals is creating the fastest-growing companies in history | Brendan Foody (CEO of Mercor)
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
This episode features Brendan Foody, CEO and co-founder of Mercor, the fastest-growing company in history to reach $400 million in revenue run rate in just 16 months. Mercor helps AI labs hire expert professionals to create evaluations and training data that improve AI model capabilities. The conversation explores the emergence of the "era of evals," where human experts write sophisticated tests and rubrics to measure and enhance AI performance across specialized domains like law, medicine, and engineering.
• Main themes: The critical importance of evaluations in AI development, the transformation of labor markets due to AI, and the strategies behind building an explosively successful company in the AI ecosystem.Speakers
Brendan Foody
Brendan Foody is the CEO and co-founder of Mercor, making him the youngest Unicorn founder ever at age 21. He started building companies in eighth grade with "Doughnut Dynasty" and has launched over a dozen projects. Mercor recently raised $100 million at a $2 billion valuation and has achieved the fastest revenue growth in corporate history, scaling from $1 million to $400 million revenue run rate in 16 months. (60:00)
Key Takeaways
Focus on Leading Indicators in Fast-Moving Markets
Rather than competing in established, stagnant markets with incumbents, Foody emphasizes identifying new pockets of demand where customers are willing to pay premium prices. (39:45) He discovered that AI labs desperately needed high-quality experts to create evaluations, not the low-skilled crowdsourced labor that dominated the previous market. This shift from identifying product-market fit to market-product fit allowed Mercor to capture an entirely new category of demand before competitors recognized the opportunity.
Build Customer Obsession Before Sales and Marketing
Mercor operated without any sales or marketing team for over a year, focusing 100% of resources on creating exceptional customer experiences. (40:28) This approach generated powerful word-of-mouth growth, with customers at one lab wanting to work with Mercor when they moved to other companies. The strategy demonstrates that in emerging markets, product excellence and customer satisfaction can drive growth more effectively than traditional go-to-market approaches.
Set Ridiculously Ambitious Goals
Foody's "can-do attitude" involves setting goals that seem impossible and then organizing the entire company around achieving them. (46:11) When Mercor was at $1.5 million run rate, he told Benchmark they'd reach $50 million by year-end - a goal investors called "absolutely insane." They hit it within two weeks of the deadline. These stretch goals create organizational alignment and push teams to find innovative solutions they wouldn't have discovered with modest targets.
Hire Extraordinary People Early, Then Scale Fast
Mercor invested heavily in hiring exceptional talent for their first 10 employees, including former Scale head of growth and multiple successful founders. (49:08) However, Foody acknowledges they may have moved too slowly scaling from 10 to 100 people. The key insight is being extremely selective until you've proven product-market fit, then accelerating hiring once you have more demand than you can handle.
Leverage AI to Enhance Rather Than Replace Human Capabilities
Instead of viewing AI as a threat, focus on domains with "elastic demand" - areas where increased productivity creates more opportunities rather than job displacement. (22:27) Software development exemplifies this: when developers become 10x more productive, companies build 100x more features rather than hiring fewer developers. The most valuable skill is learning to use AI tools to dramatically amplify your existing capabilities in your chosen field.
Statistics & Facts
- Mercor grew from $1 million to $400 million in revenue run rate in 16 months, making it the fastest-growing company in history. (11:21)
- The median pay rate in Mercor's marketplace is $95 per hour, with expert rates reaching up to $500 per hour for specialized knowledge. (37:18)
- Mercor works with 6 out of the "Magnificent Seven" tech companies and all of the top 5 AI labs, with over 1,600% net retention and zero customer churn. (01:52)
