First and foremost, congratulations to Chris, Bill, and the entire Hatch team for creating something truly special and achieving a strong outcome for everyone involved. This experience reinforced two insights about capital efficiency and customer relationships that I’ll carry through the rest of my career and that I believe are broadly applicable to both investors and entrepreneurs. I learn something from the founders in every venture investment I’m involved in, and this was no exception.

Lesson #1: Capital efficiency and aggressiveness are not opposites. They can reinforce each other.

After I led the company’s $2.5M seed round, Hatch raised only one additional $11M round. While spending less than half of that capital, the company scaled to tens of millions in revenue.

The phrase “capital efficient” is often used as shorthand for slow growth or a cautious posture. That was not the case here. Chris and Bill are disciplined and frugal operators, but when they identified opportunities to accelerate the business, they acted decisively.

Their mindset was not to raise eye-popping sums to build a war chest. Instead, it was to take the capital they had and deploy it exceptionally well. Capital efficiency does not imply passivity. It can represent a focused, right-sized form of aggressiveness.

Lesson #2: Do not just listen to your customers. Truly understand their businesses.

While Hatch is a horizontal messaging and voice marketing platform with customers spanning verticals, the vast majority of its customers are in the home services space. Chris and Bill have embedded themselves in this industry since the inception of the company. From substantial time spent at trade shows to extensive one-on-one conversations directly with their customers, I recognize that they don’t just seek feedback about their product, they strive to understand how their businesses truly work.

Importantly, Hatch was built well before generative AI became broadly accessible. It was already a scaled and successful business when the ChatGPT moment arrived. Because Chris and Bill had such a deep understanding of their customers and their workflows, they did not view generative AI as a novelty or a feature in search of a problem.

Once the team gained access to OpenAI’s API, they did not need to guess what to build or ask customers what AI could do for them. They already knew. Rather than chasing the proverbial faster horses, they focused on applying this new technology in ways that meaningfully supercharged an existing product and business.

Hatch’s AI product launched in spring of 2024, and market reception was immediately positive, as was the impact on top-line growth. Because the team understood precisely how AI could benefit their customer base, they were able to move quickly and establish a meaningful lead over competitors.  Deep customer understanding does not come from listening alone. It comes from sustained immersion in how your customers actually run their businesses.

I believe this acquisition is a signal of what lies ahead. Publicly traded companies increasingly recognize that an AI-driven transformation is underway. Due to the innovator’s dilemma and the speed at which adoption is occurring in specific markets, many are motivated not merely to buy AI software from vendors, but to acquire AI-native businesses and capture the full economic go-forward upside.

Looking ahead, the combination of Hatch and Yelp feels entirely natural. Hatch’s technology enables Yelp to embed more deeply into its customer relationships, while bringing an authentic and hard-earned understanding of the home services vertical into the organization. It has been a pleasure working with Chris and Bill, as well as the broader Hatch team. I am excited for what the future holds for this team within Yelp and beyond.