Clay's Moat 🦄

The Signal

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Hey y’all,

It’s been a wild few days as President Trump takes the reigns (again). AI gets half a trillion dollars in investment. Elon and Sam bicker about it. And the world spins on.

In the go-to-market corner of the world, the big news is Clay’s latest round of funding, valuing them at $1.25B.

I’ve had the idea to do a deep dive on Clay’s go-to-market motion for a while. I want to interview Kareem and Varun about this at some point. I’ve heard them mention it in podcasts. But, I figured I’d take a first crack at what I see from the outside, and then maybe I’ll do a part two with their “insider knowledge.”

By the way, this is not sponsored. I’m just a user and fan of the product. It’s one of only ~3 products in sales tech that I’ve found truly novel in the last few years.

But, I’m not writing about why I think Clay is cool as a product (and the many use cases—here are three of my favorites).

Today’s post is about their moat.

It’s about their go-to-market motion that they stumbled into — selling to agencies who create content on their behalf, creating a magical, organic flywheel for Clay.

Let’s get into it.

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I started hearing about Clay a few years ago. It was a light chatter here and there. But from smart people. Hackers. Tinkerers. Builders. People doing interesting things.

I didn’t “get it” right away.

But, I kept hearing about Clay. And so, I eventually decided to look into it. I played around with it some. And, admittedly, still didn’t have a lightbulb moment.

It wasn't until I started working more closely with Andreas Wernicke (a Clay power user and runs the Clay Club in the US) who showed me—after a couple of months—the power of Clay. It took that slow trickle of seeing Clay in action for me to realize that Clay is a spreadsheet with 100+ data providers built-in + you can point it at any LLM + you can build AI agents within columns of its “spreadsheet” UI. Using that data to score/tier leads, enrich your CRM, automate outreach, and 99 other things (truly, your creativity is the limit—for better, or for worse). It’s a classic horizontal product. A “platform.”

But it's really difficult to get that lightbulb moment right out of the gates.

I think that's why so many people are Clay-curious, but they don't understand what Clay actually does. It's the reason people think they need to “buy Clay.” Then they do, and they don’t have someone to use it, so they don’t get any benefits from it. The learning curve for Clay is incredibly steep and you can't just learn it in a weekend if you're an ops person, or a growth person, or an SDR. You need a dedicated resource who has been living and breathing in Clay tables all day, every day for months on end.

Companies first need to understand what Clay can do and where it can fit into their go-to-market stack. Companies need education about how to use Clay.

This is where the flywheel comes into play. And, what I believe is Clay’s real moat: leveraging their early users (agencies) as an organic marketing flywheel.

This week, Clay raised a round that gave them the coveted “unicorn” status.

They grew 6x last year (word on the street is, from $5 to $30M in ARR this past year) and 10x the two prior years (according to Kareem in their fundraise announcement this week). I think they have a real shot to grow another 100x from here (let’s check back, in a decade).

What got them there is: the community around their product. And, specifically their early go-to-market motion of getting agencies to use their product and talk about how they use Clay.

The magic of agencies using their product as their early users is that they would create content about Clay. Let me say that again, their users shill Clay on their behalf. For free.

It's this subtle way of being able to brag by posting a video on LinkedIn sharing “this cool Clay workflow I built and oh by the way, I'm doing this for a customer and I can do it for you too.” The thing that is beautiful for Clay is they then have dozens or even hundreds of people out there building content for them every single day. Organic content getting real reach.

And these are smart people, at the bleeding edge of modern go-to-market. These are the people who are in the trenches right now, sending millions of emails a month. Building AI workflows. And pushing the limits on automation. All things that the market, broadly, is hungry for education around. Clay fits in here perfectly.

So the moat for Clay is not data. In fact, they’re mostly just an aggregation tool of 100 other data providers. The moat for them is not the UI. It’s literally just a spreadsheet (actually, brilliantly elegant, but that’s another rabbit hole I don’t have time to go down today). The moat for them is their go-to-market of having their users talk about their product publicly.

I've never seen before. People sort of did this with Salesforce and HubSpot in the early days on forums. But it was more support+. We didn’t see this with SalesLoft or Outreach much. We never saw this with data tools like ZoomInfo or Apollo.

Again, the major unlock (imho) is that a Clay customer can publicly “brag” about how they’re using the product.

It works really well if you're selling to agencies because the incentives are perfectly aligned. These people want to put out content consistently to generate top-of-funnel for their own businesses, but the way that they do it is literally by showing you how to use Clay.

So, I think it's smart for a sales tech company to think about this as an intentional strategy. Obviously, you need to have a product that helps agency owners. But if you do, I think you should double down—no, triple-down—on this motion. Because, in the last few years, I haven't seen a go-to-market motion work so well that it’s a true moat for the business.

And, I believe the compounding value that Clay has/is creating with this motion will only increase in value over the next few years. And people don't realize the moat that Clay has created, yet.

In addition to the free marketing, all of these “Claygencies” and people who are building with Clay right now are going to continue to be champions for Clay and experts in Clay as they move from company to company in the years to come and continue to take this skillset and tool (and, revenue) from one company to the next.

In a time that is increasingly difficult to get attention, it’s important to think about how to crack a go-to-market motion for your company that enables people to create organic content about your product every day that shills your company publicly. And you don't have to pay them a dime.

Congratulations to Clay for truly building something magical that unlocks creativity. Something so cool that many people are happy to brag about how they use the product.

It took me a while to finally understand the beauty and power of Clay, but now that I've seen it, I can’t unsee it.

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Thank you for your attention and trust. I do not take it for granted.

See you next time,
Brendan 🫡