Y Combinator Startup Podcast From Idea to $650M Exit: Lessons in Building AI Startups
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Oct 28, 2025 
Jake Heller, co-founder and former CEO of Casetext, shares insights from leading an AI legal startup to a $650 million acquisition. He discusses choosing AI startup ideas, emphasizing tasks people already pay for. Heller breaks down effective building strategies, highlighting the importance of understanding workflows and rigorous evaluations. He reveals how to refine prompts for high accuracy and stresses that product quality surpasses marketing. Additionally, he shares tips on pricing, building trust with buyers, and ensuring product adoption.
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Founder Journey To A $650M Exit
- Jake Heller recounts founding Casetext after leaving law and building CoCounsel on GPT-4 access in 2022.
- That product led to a $650M acquisition by Thomson Reuters two years later, showing long timelines can pay off.
Pick Jobs People Already Pay For
- Target jobs people already pay humans to do because that reveals clear demand and pricing.
- AI lets you assist, replace, or enable previously unthinkable work at massive scale.
AI Expands Addressable Market Tremendously
- AI enlarges addressable markets from seat-based pricing to the combined salaries of people currently doing the work.
- That raises the potential value capture by orders of magnitude compared to traditional SaaS pricing.