Casetext started out in 2013 as a crowdsourced law library — a sort of “Wikipedia meets reddit” for the law. Ten years later, Casetext is one of the biggest wins to date in AI, capable of turning weeks of arduous legal work into hours or minutes. Just months ago it was acquired for $650 million dollars. What happened between those two points? For this episode of Main Function, YC President Garry Tan sits down with Casetext co-founder Jake Heller to learn the real story of their 10-year “overnight” success: the 3 a.m. origin story, how the company evolved as fast as tech would allow, and the “magic demo” that helped turn Casetext into a rocket ship. Apply to Y Combinator: https://yc.link/MainFunction-apply Work at a Startup: https://yc.link/MainFunction-jobs Chapters (Powered by https://bit.ly/chapterme-yc) - 00:00 - Intro 00:48 - Part 1 03:09 - Part 2 10:56 - Part 3 17:14 - Outro
Jake Heller is the co-founder & CEO of Casetext, the AI legal startup behind CoCounsel, which was acquired by Thomson Reuters for $650 million. In his talk at AI Startup School on June 17th, 2025, he shared how his team did it—from picking the right idea to building AI products that actually work—and how founders can turn a cool demo into a reliable tool used by real customers. Chapters: 00:00 — How We Built a $650M AI Company 01:00 — Picking the Right Idea in the AI Era 04:45 — Three Types of AI Startups: Assist, Replace, or Do the Unthinkable 09:25 — How to Build Reliable AI Products (Not Just Demos) 16:30 — The Importance of Evals and Testing 24:20 — Why Product Quality Beats Marketing and Hype 26:00 — How to Price and Sell AI Products 27:45 — Building Trust with Customers 29:30 — Product Isn’t Just Pixels, It’s Everything Around It 33:00 — What Founders Should Really Focus On 36:00 — Q&A: Picking Markets, Focus, and Defensibility
As LLM’s become exponentially better it is clear that vertical AI agents are key to the next generation of billion dollar SaaS companies. In this episode of the Lightcone, the hosts sit down with YC alum Jake Heller, the co-founder and CEO of Casetext (which sold to Thomson Reuters for $650 million in cash in 2023) to discuss what it takes to build a successful vertical AI company and overcome resistance from industry veterans and skeptics. Chapters (Powered by https://bit.ly/chapterme-yc) - 00:00 Coming Up 01:40 Building a successful vertical AI company 06:05 The unique challenges of law and AI 09:24 The turning point for lawyers with ChatGPT 11:25 Finding product market fit in legal 15:04 Entering deep founder mode 20:40 Approaching prompt engineering step by step 25:05 Going beyond GPT wrappers 28:10 Aiming for 100% accuracy 30:48 Thoughts on o1’s capabilities 36:42 Outro