From Weekend Project to Fortune 10 Adoption — Reducto's Path to Product-Market Fit

Introduction

Adit Abraham, co-founder and CEO of Reducto, shares how he closed millions in ARR and a Fortune 10 customer with no sales hires.

Early brushes with entrepreneurship

Abraham’s entrepreneurial ambitions can be traced back to perhaps an unlikely place — the mobile game Flappy Bird. “Games were the thing that drew me to computers and Flappy Bird was what made me interested in programming,” he says. So as young, ambitious high schoolers, Abraham and his friend started making their own apps.

Most company profiles chronicle the rise to success long after it's already been cemented. While we've shared a number of stories in our "Paths to PMF" series, we think there's equal value in mining the stories of startups that are a few clicks earlier in their PMF journeys.

The team up

After running Sidewalk for a year, he joined the ads team at YouTube. “We were both in a transition phase. Raunak had wrapped up his previous company and was going to be graduating from M.I.T. soon. I was vocal about being ready for something new,” Abraham says.

They applied to hackathons together and won some trophies. Eventually, they broached the topic: Did they want to start a company together? “At least for me, it was an immediate yes. There was no question in my mind that Raunak would be an exceptional person to work with,” Abraham says.

The initial idea

Their initial YC application was far removed from PDF processing — it was a long-term memory solution for language models. However, during onboarding calls, they found that while there was interest, there wasn’t sufficient demand: “It was more of a ‘This seems cool’ curiosity.”

The pivot

Buried within directionless enthusiast chats was an ember of an idea that needed fanning. “One of the most common feature requests for Remembrall was, ‘Hey, you’re managing my user’s chat history, can you manage the files that they’re uploading as well?’” Abraham says.

So the co-founders built a simple solution — they would upload the docs, parse them using an external parsing solution, and then chunk the information for you. The response was immediate and overwhelming. “We started getting replies, ‘This is better than what I’m getting from Textract. Is this a hosted API? Where’s the Stripe link?’” he says.

The MVP

Today, Reducto has six different vision models to ensure accurate outputs with any document, but they started with just one. They trained the first model for layouts, breaking down a document into sub-regions.

They launched just two weeks after their initial post on YC’s internal forum despite hesitation, saying, “People already had PDF processing solutions, Reducto needed to be decidedly better.”

The first customers

To sidestep the enthusiast problem they had faced previously, the co-founders focused on industries where accuracy was imperative — like finance, legal, or insurance. The onboarding experience was white-glove, and even today, Reducto does not have fully self-service onboarding.

Enterprise comes calling

It didn’t take long before enterprises took notice of Reducto. After some exploratory calls, they eventually signed a Fortune 10 customer, which showed a commitment to their needs.

Founder-led sales: Relationships matter

Reducto opened up a search for the first sales hire only after Abraham closed millions in ARR as a one-man GTM band, stating, “It felt almost deadly for the company to lose that pulse with customers.”

Abraham emphasizes the significance of strength in relationships when pursuing deals, emphasizing that “The best answer you can get in sales is a yes, the second-best answer is no.”

The Benchmark: Show, don’t tell

In an effort to differentiate from the competition, Reducto needed to close the education gap for customers. Abraham and the team built a comprehensive benchmark employing human labelers who manually annotated complex table images and then open-sourced the benchmark.

Growing fast, hiring slow

Reducto has intentionally kept the team small, crossing $1M in ARR with just a team of four. Abraham believes this allows for each person to be exceptionally close to customers.

The roadmap

While Reducto toyed with a more verticalized approach, they valued the ability to handle multiple industries. “If someone comes to us from healthcare and says X type of document needs to work, the limitation might be our table parsing. Improving that will benefit all sectors,” he says.

The path forward

Originally, Abraham and Chowdhuri planned to stick with Reducto for two years. “If you asked us two years ago if we would be excited to work on PDF processing, the gut reaction would probably be no. But as we’ve gone deeper, we’ve found a love for what we’re doing. The moments of pride...that’s enough for us to want to work on this for who knows how long.”