YC SUS: Eric Migicovsky hosts founder office hours

Cool! I think so, yeah. Hi everyone, my name is Eric Michalski. Whoops! I just got a gift from Zune. My name is Eric Michalski. I'm a partner here at Y Combinator, and I'm the course facilitator for Startup School. Welcome to a new experiment that we're going to try to do. We're gonna do live office hours with as many companies as we can from Startup School in the next hour at YC.

One of the things that we do with our companies is usually have around 10 to 15 minutes every week or two, where we talk through problems that founders are having and try to apply the kind of common YC wisdom to the specific problem that they may be encountering.

So without any further ado, there are a couple of people on this call, and we're just going to start doing office hours.

So the first person will be JC from Boxscore. Let's let him in.

Hey JC, can you hear me?

JC: Hello?

Okay, maybe he's not there. Let me figure out how to move. We'll move on to the next person. Next is Korkare. Nope! Helen, you're up next! Hi Helen.

Oh, it's great to meet you!

Helen: You too, thank you so much for this time. Let's dive right in. Why don't you start by telling me what you're working on?

Oh, well, Joel Vo actually rescues software developers from pointless sales calls by vetting potential projects and clients.

Okay, let me try to parse that and make sure I understand. So you offer leads to salespeople?

Helen: Pretty much! At the end of the day, we're providing like their own business development.

So, it's like a contract or outsource salesperson? Like I'm an engineer, I built some software; I don't really want to do the sales myself, so I hire you to do the sales or hire your company to help software development consultants who are already in the old business?

Helen: Well, so they code too, but they want to really be more efficient with their time. So they use Jovial to kind of start those conversations with potential companies and projects. And they're really qualified both the customer and the client.

And would you say that your service is your product or a service or is it software?

Helen: Okay, also it's a service as an add-on.

So cool! I think I get it. What stage are you at right now? Have you launched your product? Do you have any customers?

Helen: Actually, we have customers in a pilot. So we are testing out some theories and learning along the way and improving along the way.

So cool! No one built yes! I'm just fingers crossed. How can I help? What's on your mind?

Helen: Yeah, I was on the spiritual couple. I was wondering if you could provide any insight and advice on managing and balancing customer expectations, order fulfillment, wow, and also without skipping a beat for sales.

So I'm trying to do those. So it's like how to organize your time, how to plan what you work on next, right? I have to manage those customer expectations and then make sure I deliver all the value from right at the end of the day.

Absolutely! At the same time, I also need to contain myself. You know, I need to nurture those incoming [ __ ] [ __ ] also just delivering on the value box; that's the order fulfillment.

Yes, so my general recommendation, like companies like this, is a totally normal problem. Like as a founder, are you a solo founder or do you have other people?

Helen: Yeah, so you're doing everything! You're like coding, you're building the site, you're doing the sales, you're helping the customers.

The heuristic that I use generally is to try to get as many sales as possible, to get as many customers who are paying money in exchange for using your product or service, and then switch into how do I fulfill this.

The error here usually is to try to build too much process and too much product before you actually have a customer who's paying to use it.

So if you set your first goal to be to get a paying customer for something and then you flip into, okay, now that I have this customer, how do I make them as happy as possible? How do I, you know, build the service? How do I deliver the service to them so they're happy? How do I make sure that they tell their friends?

As long as you're doing that, as long as you're bringing in a paying customer first, you always will be working on the right thing because generally, the customer knows what they want. You can assume that they're gonna lead you in a direction where other customers are as well.

Yeah, okay, so let me ask you this. How are you gonna get, when are you gonna get your first customer, paying customers?

Helen: Oh, you do? Sorry, I misunderstood.

Okay, so how much does each customer pay you? Is it a monthly fee?

Helen: Okay, so one of my recommendations here is to be as transparent as possible with those first customers on what success looks like during the pilot. Do you have some metrics that the customer has outlined to say, you know, here's what a really good successful pilot will look like?

A [Music] question yeah for you: have you talked about that with your customers?

Helen: So it's more like we made them agree when we get by our metrics and feels for me to go out and do that right. So with that, I started seeing that certain expectations they had wasn't really a reality.

Yeah, so okay! So I would bring that up with the customers soon to make sure that they can expect kind of the reality that's going to happen, that you're gonna deliver for them because the next step after that is once you're aligned, once their expectations and your ability to deliver are aligned, you want to work through that pilot as quickly as possible so that they turn – like they're happy!

Presumably, if their expectations are close or exceeded by what you're delivering, they're gonna be happy, right?

And then you say you're happy; we hit all of these things that you really expected of this pilot. Now we gotta flip this over into a paid monthly recurring service because that's your goal, right? You don't want to have just a bunch of pilots; you want to have like all these customers that just every month they pay you, you know, or they...

Yeah, cool! And one of the tricks that I've seen some companies use is they actually put that language, the success criterion in the pilot contract so that it's very clear on both sides what success looks like.

Then when you hit those metrics, when you dazzle them with, you know, how good your product is, it's a very easy conversation to say like, "Hey, remember? You know we talked about what success looks like, and I blew it away!"

So it makes sense that we should do this as a full-time contract, and they're like, "Sure! Yeah, okay, like let’s do that. Everything’s working, like let’s sign the full contract."

What's your goal for the next two weeks?

Helen: It’s really to hopefully get the customers I have my palette to close or be close with those potential projects or at least be a little bit farther along in the discussion.

How many people do you want to close in the next two weeks?

Helen: Let’s get two.

Okay! In two weeks, I’ll email you or you only email me and let’s hear about those two new deals.

Hello Helen! Thanks very much. I'm really glad to get the chance to chat with you!

Helen: You too!

Okay, thank you very much, Helen. Next up is CogMe. Let's look for Drow. Any ideas which one is... oh, there we go!

Hello! Oops! I think you've got the YouTubes on, Drow. Do you mind closing that?

Oh, okay cool! Hi! Welcome! It's great to meet you! Let's jump right in! Why don't you tell me what's the name of your company and what is your one-liner? What are you working on?

We have a tool for cognitive psychology. It connects patients with therapists using a technique called distortion of thought records, where the patient records their emotions and their thoughts, and then their therapist can understand the pattern of their thoughts, deal with this during the sessions.

Okay, so that was quite a long one-liner! I'm gonna try my best to kind of repeat back to you the key things that I heard, and it's not meant to be like an evaluation of your company. This is just a good chance for someone else who just heard the pitch to repeat back to you what I think I heard.

So I heard that it's an app that connects patients to therapists. It sounds like it's also got some journaling component or logging that they then may use during their sessions that they have. Is that it?

Okay, cool! What I was missing from this, usually during that kind of explanation, is like what is the problem and how do you solve it? So you were very descriptive! Like I certainly was able to tell you what the app kind of does, but I didn't get a sense like is this for the therapist or is this for the patient?

Tell me who it’s for.

Therapist: It's for the patients who are already joining the beginning of their treatments. It's called distortion of thought records; this is done usually in paper. We made the tool for digitalize.

Okay, so you're taking something that therapists and patients already do, and you're making it digital.

Okay, cool! What stage is your company at right now?

Five years ago, as a project, we grew organically with a free version up to 160,000 signups, and we have around 7,000 new signups every month.

Okay, so signups – whenever I hear the word signups, it’s not usually a good sign because signups – like nobody makes money from signups. They make money from active users. So how many active users do you have on the Breno version of a dashboard for the Turkish where they can track the cost of their pieces?

We got around two hundred subscriptions, monthly subscriptions from therapists, and we have 45 [ __ ] subscribers today.

Okay, what about on that? What about on the free app? How many da users or ma users do you have on the free app?

How many people is that?

Okay, so that's pretty cool! The reason why I wanted to get specific about that is oftentimes, as I'm hearing from a new company, I kind of want to get a sense for what stage and what kind of scale they're working with because the advice that I would give will kind of be tuned specifically for where you're at.

So it sounds like you've got 30,000 ma users on this app, but then you also have a second app which is the one that you're starting to charge a subscription for, is that correct?

I get it! So the therapist uses the app and then it talks or it connects to the app that – cool! I'm on board!

Well, how much do you charge per month?

The therapists try to change the monthly subscriptions to an annual subscription. We started to do things like two to three weeks ago for new subscribers or for people who've already subscribed.

How can I help? What's on your mind?

Therapist: Over again, we never tried to achieve [Li] sell anything. We just started to focus full-time in the budget some months ago and I don't know exactly how all this attention that we have with the app and convert them into paying...

So you just to make sure I understand, you're trying to think how can I take the large number of free users you have on your plan and start to begin the conversion to paid? Is that...?

Okay, so it's a good problem to have! It sounds like, you know, many people would love to have 30,000 MAU, so congratulations on getting it to the spot that you're in! I think one of the things – do you have analytics like Mixpanel or Amplitude set up in your app?

Yeah!

So I would begin to make sure that you've put the correct instrumentation and analytics into the app so you have an idea of how the users are using the app. One of the things that I would look for is how many people, based on the usage that they have – like the number of notes that they take or the pattern, maybe they take notes every week or every two weeks.

I would start to begin to see how many of the people already had therapists.

How many are using it as if they have a therapist already?

Sorry, 30%?

How do you know that?

Okay, how many emails of therapists do you have? Have you collected 30,000?

These are from patients whose therapists for you? And then we ask them if they are end users or therapists or psychiatrists or students of psychology with who?

So have you begun to start eating now that you have launched the subscription and you have two hundred people or something on the subscription?

Have you begun to contact the people on that list, phone numbers?

So we have to contact them through email and ask for the phone numbers?

Yeah, to be able to track them. We have like the phone numbers.

How many emails have you sent out in an email marketing campaign?

Yeah, I was gonna ask! What's the conversion rate right now?

500 only opened a minute.

So thinking that there’s something wrong with the configuration.

Yes! So are you – and like I would begin to start trying personal reach out to these.

Like there’s basically two ways to think to kind of ways to talk to customers. One is talking to them at scale, like talking to 15,000 people at once, and then the other way is to talk to them almost by hand.

And this means like YC always talks about this thing doing things that don’t scale, and the reason why we talk about it all so often is it’s like a secret advantage that startup founders have that big companies just couldn’t have.

Because we’re startup founders, we’re willing to pick up the phone to make a $13 per month sale. Now, it doesn’t make sense to do that at scale when you have tens and hundreds of thousands of customers, but when you have 20 or 30 or 200 customers, you can pick up the phone and sometimes close a deal in a 10-minute call.

So have you begun trying that? You have the phone numbers. Have you started phoning some of these customers and what’s your conversion rate when you talk to someone on the phone?

No, I don’t mean people who are already subscribed. I mean like someone that you just phoned up and...

Okay, so that’s what my recommendation would be! You have phone numbers! I’m sure you have a couple hundred phone numbers!

I would try to start with this segment of the populate, the segment of therapists that already have clients who are using it, the app – you mentioned that you’re collecting the information from some of the clients to say here’s what my psychiatrists or therapists phone number is.

I would start by contacting those people and I would say, “Hey, we’ve already seen that there are several of your patients who are using our free app. Did you know that they’re using it?”

You can ask them. Like maybe they didn’t know. Maybe they didn’t, then you could walk them through and explain all of the benefits that the therapist would get if they just paid $13 to kind of aggregate the customer that their clients that are already using the app.

Yeah, I mean again, a lot of these things are just very like you can hopefully do this today!

Like I don’t know what time zone you’re in but it looks like there’s still light outside!

Yeah, you got time, so you can make a couple calls and see if – like what I would start doing on these calls is taking notes and saying what are the words, what are the sentences that I use that actually land that resonate with the person that I’m talking to?

And then every call that I do, I improve my pitch because I’m getting feedback kind of in real time.

Like I can talk to the person. I can ask him, “Does that make sense? Is that a feature that you would use? Is this a benefit?”

And then like every call you just get better and better, and by the 10th or 20th or 30th or 100th call, you’re like really good because you’ve done this a hundred times.

And at that point, you can actually use the data that you’ve collected during these one-on-one calls to then improve your emails.

So like right now, you don’t get any feedback. 500 people open the email; 17,000 people don’t.

Once you do in a couple of these phone calls, you’ll get the feedback that you need to actually make the emails better.

What’s your goal for the next two weeks? What do you want to accomplish into it?

How many annual subscriptions do you want to sell in the next two weeks?

No, I think you can sell more than that! You have hundreds of phone numbers! How many did you sell in the last two weeks?

Okay, well, you gotta sell more than you did in the last two weeks!

Let’s say ten! Can you do ten in the next two weeks?

Okay, send me a tweet when you hit ten!

Cool! Thanks very much! Good to meet you!

Okay, next up is – let’s look for Flip Philippe from Hotspot. There’s a company named Mean Party?

Okay, we’ll get to that, Philippe!

Okay, Philippe, can you hear me?

Great to meet you! Let’s dive in! What's the name of your company and what are you working on?

Yes, we help hotels promote their business by matching them with vetted travel influencers.

Okay, match hotels with vetted travel influencers?

Yeah, okay! So it’s a – no, no! I got it! You’re an influencer marketplace for travel for like influencers who want to stay at hotels.

Okay, cool! And I think I can visualize that. Like hotels go on, they say, “Hey, we’re this beautiful hotel in Portugal! Who wants to come stay for like half off or something?”

Start with the barter deal, which is a complimentary stay? Or it can be the media discounts as you mentioned, what are some paid collaborations as well, of course!

What stage are you at?

Yes, so we have summer of last year, and then we started with a list of hotels and travel influencers that we kind of see that our MVP. The hotels were for free in order to test our product and to, you know, get feedback at what we do.

And since then, we’ve gotten about 200 hotels and out of them, 20-25 at the moment are...

And how do you make money?

Yeah, so we make money by...

Okay, that’s actually the one – and the percent of our revenue comes from the moment. But you know, you don’t take a percentage of the deal, so most of the collaborations actually did happen.

Our barter deal, so there’s no payment. There’s not really a lot of opportunities at the moment for us to make money at that channel, but I assume down the way as the community grows, there’ll be more of those opportunities as well.

Okay, how can I help? What’s on your mind?

Yes, my question was actually because we are focused right now on hotels, and there is quite a lot of interest, and we do have some leads as well in other companies in the travel sector such as, you know, airlines, tourism boards.

It can be also like travel products or accessories, and we do have some leads. But the question now is, do we start chasing those opportunities already?

Well, we don’t really have product market fit yet! Or do we focus on hotels and try...

Well, let me try to see if you have a product market fit! So what is your growth like? What is your primary metric that you’re tracking right now? Is it revenue?

Yeah!

How fast is your revenue growing month-over-month?

It’s kind of a small amount at the moment, so it varies a lot, but I would say it’s about five to ten percent, which is not...

Okay, have you tried making your weekly goal to grow revenue in one specific domain?

You mean type of hotels?

Exactly! Yes.

Right now that you know, sign up for a platform and use it! It’s also adding due to our current sales strategy, which is cold outreach. It’s mostly small properties that sign up; those are also properties that don’t necessarily have any access to travel...

Yeah, because they just...

And you’re talking about like, is this like mid-boutique level?

Kind of! Not basically, you know, owner-owns, so it’s not like the computer organization behind it. Most of times, even if you email the into ads address, you’re gonna get the owner of...

And do you have like, do you offer them a free trial? How do they know that this is gonna work for them?

We offer a free trial! We offer a free trial and right now it's a 14-day free trial with no strings attached, and afterwards if they find value if they got some connections and collaboration requests, they can choose to...

And you work your ass off to make sure that they get one during that 14-day period?

Of course! Try to promote it once they join in, in case you can! You can basically make sure that they’re happy!

Like, you can engineer it so it's not like random. You like poke the influencer until they check out that new hotel, right?

We try! We try! But, of course, there is also value and not only quantity, but the idea here is also to have high quality... Well, what if it becomes – what if... what if you...

So what I'm thinking of is a segmentation strategy here that honestly, like not all hotels are good for you, right?

There’s a ton of crappy hotels. Like you want to get the right hotel that’s gonna be the right match for your influencers. And when you find that hotel, there’s a great blog post by the founder of Superhuman. You might have read it, and it talks about diving deep into segmentation and understanding that your product is not meant for everybody.

Not everyone can get a great benefit.

So I would think hard about like setting up a strategy to run experiments on a two-week basis that allow you to say, “I think that Latin America, like how we’re really doing well in Latin America, and it’s really doing well with owner-operated places that are at beaches that are less than an hour away from airports, etc., that have like one-stop flights to the US,” etc.

And then you say, “Can I test the hypothesis that conversion rates in my calls will be higher for this group of customers?”

And then once I close the customer to the two-week trial, I actually know that this is a good match with influencers as well.

And then could you like create a list of influencers that you have on WhatsApp and you’re just like, “Hey, this hot new property came up! You got to check this out! Like it’s guaranteed to be a great ride! Like they’re gonna hook you up!”

And then you just kind of like send the right people almost like manually running the marketplace for a while.

Like, what is like this kind of...

I do segments! Like for example we have quite a lot of properties from Indonesia, especially like Bali!

Well, like South Africa is... I mean good boy is also... there’s also like the decrease in the value that L can get as more properties from the same region join.

So, I don’t necessarily mean the same region. I remember the same type because here’s what my next recommendation would be.

Once you’ve identified that segment, I would spend two weeks going hard, and when I mean hard, I mean like how many calls did you make last week?

Every hotel has a phone number! That’s the beauty of a hotel! You could be phoning up people like...

I talked about this just a second on the last... on glass offs are dead! The beauty of doing a phone call over email is that you get real-time feedback on how your words and messaging are letting...

Now it’s a bit tough in a foreign language, like I don’t know how good your Indonesian is, but getting onto the... getting onto a call or like you could add them on WhatsApp; you could do a video call; there’s a lot of things that you could text them.

All I'm trying to do is encourage the amount of outreach, like to boost that number.

Like you did five! I want to see like... hundred!

And I think with that, you’ll like you run the experiment, you say my hypothesis is there’s the small segment that’s gonna be really good for me, and then you create a spreadsheet with like a hundred properties, and you phone them all out and then you test your hypothesis.

And then maybe you’re wrong. Maybe, maybe like none of these are interested, and like you strike out twenty-four twenty calls, like people just constantly hang up. At least you know the answer!

Like, you will know the answer after twenty calls. It’s either gonna be going really good or you got to find a new market because that’s the trick that closes the loop.

So you have the hypothesis and you test the hypothesis, and then you plug that back into your process and you say, okay, next week this went great, I talked to 20 people, 15 of them signed up for the free twenty-two-week period and then I like, I got all these influencers on, they’re having a great time and then the next week you’re like, okay, I’m gonna do 200 calls and see if the same conversion rate holds.

Yeah, all right! Okay! What’s the hypothesis on which segment you’re gonna go after?

So like is it Southeast Asian interests?

As I mentioned, South Africa and I think it is indeed like it’s mostly smaller properties that don’t necessarily also have like the big budgets to hire.

Like and you could be their first, like their first spend?

Do they spend on Facebook already?

Yeah, they’re the ones that you’re going after! Pretty much the biggest channel or sales marketing channel for lots of the hotels is just...

[ __ ] those comments!

Oh, you could take a lot of spend if you start bringing in more traffic for them!

That’s great!

Yeah, cool! Well send me a tweet in like two weeks with how many calls you did and how many converted!

Hey, thanks very much! No worries! Good to meet you!

Okay, we’re gonna look for Joan from Clinic Clinic Price Check!

Joan, hopefully has a phone number!

Sure, Seabrook! I think I saw that!

Yeah, JC! I don’t think it’s JK!

Okay, next up is Diana from Dream List!

Diana, there we go! Hi Diana! Can you hear me?

Diana: Hi!

Hi! This is great to meet you! Let’s dive right in! Why don’t you tell me what’s the name of your company and what are you working on?

Diana: That lets them add not just any item from the web but also larger things they’re pursuing from classes to bigger purchases to a bigger pursuits. Special occasions, friends and family could put a small amount towards their bigger dreams instead of wondering what trinket to get.

So it’s like a wedding registry but for like actually useful things?

Okay, it started – the beachhead was the wish list and registry, but we’re seeing more and more very interesting use cases and it was turning into a collaborative app, where multiple people can manage your list.

So parents can manage the list for a child, or you could see! We’re seeing teams manage shopping lists for entire companies, and more importantly, we’re seeing foundations for now shopping for special giving campaigns for families that have lost their house in a fire – so kind of like a Wii U funder or...

Are we fund?

No, I understand; I was just like the same kind of use case. Like you need to rebuild!

There is this foundation called a Spark Foundation that funds single moms but Christmas for single moms in the Bay Area that are nominated by the community.

So they nominate 70 families last year; before that, it was 50; before it was 30.

Okay, we’re getting a bit deep into that one. Why don’t I ask, what stage—what stage you at?

But the company, have you launched? What’s the business model? How do you make money?

That’s the fun part. So right now, we’re using affiliate purpose because I’m a parent. I created it after I became a mom, and I did it because advertising is the main consumer business model of today.

The problem is very corrosive and it’s really bad for kids, so I wanted to build a company that can supplement from... replace advertising with a better model that aligns with user’s business model that they can buy to...

By the time they get to that stage, they can use it for their online community.

Okay! This is all like really interesting but it’s a lot of information, and I'm just reacting, like I’m trying my best to kind of put it all together.

And while I really appreciate that, like it’s clear that you’ve thought so much about it, it’s a little bit – just telling you kind of frankly, it’s a bit overwhelming as someone hearing it for the first time.

Like I’m trying to think is this an app that I should like consider using with me and my friends or is this like something for foundations and I should introduce you to like other people?

So just FYI, like my initial reaction is like try to keep it a little bit more focused, especially if you're talking to someone who's never heard about this, you know, at all!

And I’m just like really quickly trying to come up to speed.

So let me ask you, so is it like a website? Could I – can I go to... I will creamlists.com?

Okay! The meaningful wish list and registry, achiever creams!

Okay, funded dreams!

I don’t know if you can see it, but I’m just browsing through your website right now.

No, no! I mean I meant like to his own car. I’m sorry.

So my initial thought from looking at your webpage is that this is for individuals who just want to do it for themselves, like for the birthday Christmas wedding baby shower.

Yeah! So you’re saying you were getting into like how you make money. Do you make money from if I started a wish list?

How would you make money?

So you take the affiliate; if someone buys you the item, we make a small affiliate sale from the retailer.

Okay! One dictate which items are bought with on influence your purchasing choices?

We... Yeah, just... cool!

So what’s the problem? What are you what are you working on? What’s...?

The first one is consumer start up like ours who want to not do advertising. What would you recommend for them?

Have you seen successful alternative business models?

There is affiliate. Affiliate seems to be kind of a subject of ridicule by some investors. Maybe it’s not been scalable in the past.

Honestly, like as an investor, I would say screw investors! You should be building your company to build a fantastic company! Like that's the real goal here!

And I love your vision! Like I love the mission that you're trying to pursue, especially like the intention.

So I wouldn’t like worry about what investors think; I would worry are you building something that your customers want?

And I think I agree! Like there’s a great – there’s a great website called Wirecutter which has a very similar model. They make 5% of, you know, the recommendation.

I think it’s true, like it aligns your goals very clearly with the user, so that's great!

How much money are you making?

Okay! Do you have a good sense for what a successful – like for you, success is someone comes on, they build a wish list, they get other people to sponsor the wish list, and then they eventually click a link to buy something, right?

That’s a success!

Have you experimented with like walking backwards through the data to figure out who are the best for you?

The people who like, who click that link walking backwards?

Like can you can you tell me who are the ones that become perfect users for you and result in revenue?

We obviously have a lot of families. Grandparents are actually joining Dream List and inviting all over their friends and families! Those are power users!

Let me let me be very clear!

So like what I’m specifically interested in is not the power users from like just usage. I’m talking about like people that produce real revenue for you!

So I’m here – ten thousand dollars! What percentage came from foundations?

Can you track backwards? Like, you know which you know which link was clicked?

Because you get the affiliate money! Can't you figure out backwards, like, who which campaign that came from or which list it came from?

So that’s really interesting and like looking at your website, I don’t see anything about foundations.

So I’m kind of that they’re using it for more interesting question!

Yeah, I wanted to dig into your specific experience as someone who’s manufactured a product on the other side of it, see affiliate bread.

Now if we dig into that industry, because of the ad blockers, partially a lot of affiliate networks that are not Amazon have been mis-tracking.

So yeah! Delicious! I get to see who bought what and I get to see what the affiliate network...

Yeah! And there’s a huge discrepancy between what Amazon tells me is, who’s got an idea, which is great, that’s been actually fairly accurate versus any other affiliate network that has a different domain.

So cross the main affiliate does not seem to be working anymore.

And so you, as a manufacturer of a product, have you used the period when you were making a product? What margins were you able to give to retailers?

Oh my... Unfortunately, I don’t have much personal experience from my companies, but I do have experience from companies that I’ve worked with.

So I see like affiliate as a real business model. I think like there have been some companies that have proven to create like fun functional profitable businesses based off of that.

But they really rely on like closing the loop on the data cycle, so understanding where like eventually, like it's kind of like what I was talking about before, which are the types of lists that result in clickable revenue for you?

And then figuring out how do I engineer it so the top of the funnel is pretty...

Is like more and more of those really profitable projects are coming and starting lists on Katrine List.

I get an email every single time a user joins and shows me their email address.

And for example, yesterday the YMCA joined and they’re trying to do more!

So I reach out directly to the people, to the users as soon as I see something interesting or in general to get their input, and especially foundations to get features that they need to be specific be.

And I will do add on to those.

I started to do a lot of SEO on that; SEO is kind of our cream of the crop marketing strategy!

But there’s a lot of... but the tracking because we’re trying to do privacy, we’re not sending data to any retailer or we’re not sending...

That’s okay! I mean, but I would just make sure that you yourself are tracking this because you can’t – like, unfortunately, your business cannot be built without data!

You need to be able to segment and understand! So what’s interesting is that on your website, you don’t have a landing page that specifically talks about the benefits for safe foundations!

Yeah!

So I would – I see that now! And maybe that’s like something you’re doing for SEO.

Oh cool! So you do have landing pages built here! The issue that I see just briefly is like it’s very similar to the other stuff, and you have a lot of text here at the bottom of the gift drive page.

Help me visually! You actually have a lot of text all over your webpage!

So I would try to switch to some images or maybe like a flow that says, “You’re a foundation! You run a gift drive every fall or every Christmas for kids!”

Here’s the three-step process to use Dream Lists to run out to run a gift drive!

Then I can understand the benefits without having to read through a pile of text, which as a lazy person, I will not do always!

It's fine to have the text for an SEO, but once I click on it and once I get there, I don’t want to read a bunch of text!

Yeah!

Yeah, but you gotta get the person onto the inside!

Okay! Cool! Well, it's great to meet you, Diana! Congratulations on the success!

What’s your goal for the next two weeks? What’s your revenue goal, or like what’s your goal that’s closely linked to your revenue?

So baby registry is a very, very big category that’s going to break into that with SEO!

And what’s your... that’s how I’m trying to...

Well, I understand the revenue may be delayed!

Has it... you know, once someone said!

So what’s your new mitt? Like how many new baby registries do you want to get in the next two weeks? What’s your goal?

A high percentage of what I’m looking for, a number!

How many registries?

How many did you get in the last two weeks?

A lot less, like zero!

Well, babies aren’t seasonal like you said!

Yeah, again looking at your website! I don’t – I don’t get that! Like I really loved your, you know, your vision and you have this like intensive, you say this like at the bottom of your web page, it says Dreamless is the first free, privacy free, ad-free online wish list!

That's like totally cool, and it’s buried basically in the footer of your website!

I don’t believe that the front page is all about people who sign up!

Right!

Like and you don’t even say your primary feature!

Like above the fold?

I think you should experiment with putting it up there!

Yeah, okay! 10 new baby registries in the next two weeks!

Will you send me a tweet when that comes through?

Okay! Tweet! Twitter’s a little bit better for this, and it keeps you honest!

Everyone’s gonna see it!

Cool! Dynamic! It’s great to meet you! Thanks very much!

Okay, let's do Verlox!

Verlox Bill! I think I see you right there! Bill, can you hear me?

Are you with Verlox?

Yeah, I got the right Bill! Cool! Well, it’s good to meet you!

Do you want to start by telling me what is Verlox?

Helps you set and hit your goals! We’ve helped people lose weight, get jobs and make money to pay!

Wow, that’s a lot of different things! So it’s like a habit something to help you get better habits?

It’s a framework to help you hit your goals.

Okay, so it’s a goal-setting website or is there actually like something that like I just type my goals in there or do I does it help me actually hit them once I type it in?

Yeah, sure! So I talked to each user every week to set goals and make progress and, you know, keep them accountable.

It’s a big part! So it’s like a personal trainer to hit the goal!

Cool! So that didn’t come across complete! Like you spent a lot of the time in your one-liner talking about the types of goals that people can set when the actual interesting thing is that you’re working direct!

Like do you just like text them or message them?

Call them?

Yeah, you’re like you’re getting into their life! You’re helping them change! That’s pretty cool! What stage are you at right now?

Cool! Congratulations! That’s that’s pretty cool! And I’m guessing that these users they’re pretty sticky!

Once they...

So our product is two things, right? I'm one part of the cardigan, and our website is another part! But to me, they’re very sticky to the website! They’re a little bit less picky!

What do you mean by that?

So for me, they come to the call every week to set goals, and I also like XM to check on their progress!

But we want to make the website the place where they come to set their goals, track progress!

Cool! So what are you working on? What stuff? What can I help with?

Yeah! So for the last six months, we did things that don’t scale!

So I would again call each user every week to set goals!

And make sure that they are accountable to make progress! So again, we hit 15 users, 220 m.

And we figure out we couldn’t scale past that!

Right! They don’t like take off more calls!

What do you mean?

You know, did you try? Did you take like 16 and it broke?

The average phone call lasts 30 minutes! And we set calls!

We have you tried doing calls on other days besides Sunday?

So tell me!

Were you not able to find more customers beyond 15?

Or when you found the 16th customer, things started to not work?

I think for one person for me it was...

Have you tried hiring someone to help you do the calls?

Like just a friend to help you calls on the weekend?

That’s our question! Like how to scale?

Well, the tough part is like thinking about the metric, the economics here! You’re charging around $20 per month!

Yeah!

And if you do four half-hour long calls, that’s 2 hours of face time every month! And that’s if you know if you pay someone $10 an hour, that means your company's not making any money, right?

So...

And 10 owes an hour’s not that much!

So how are you gonna do it?

How are you gonna fix this?

Like this is a pretty major problem, right?

So we once we hit that, we tried a few things that didn’t work to scale, they didn’t work, but now we have talked to the users, we got their feedback, and essentially if we want to try to meet models,

One is the coach model where we would connect the user who have the problem to someone who can help themself off!

So someone looking for a job, we would connect them to a job recruiter! They would work together and make progress! We would take a cut from that.

Or two, we would...

It’s called the family and friends model!

So you know, family friends are awesome because there is already like eight pre-existing!

And so you have a network who also want to help you!

So we're thinking we could like leverage that!

We could like connect them every week!

Have them talk, and then set goals!

And they come to the website, they enter their goals on the website, they track their progress throughout the week, things each other!

So that’s a pretty different product!

It's more like a social goal sharing!

Like keep me accountable! Hold me accountable to this!

Have you launched that yet?

How long is it gonna take to build first?

Watch! Okay! That’s like another week!

So are you using like are you gonna market this to the existing customers?

Are you gonna stop doing the manual process and just try to get customers on the new product?

Yeah!

So I talked to users again! And then we’re thinking of running like for a few weeks! For four weeks!

And then afterwards they would...

So in that four weeks, we can check goals!

And then after that, they would pair work their friends!

Friends and family!

Yeah!

The thing to consider here is that both of those two businesses, the first business which is the manual, I’m gonna give you a call every week to keep you honest, and the software that lets your friends and family participate in your goal setting are very different!

And I would be wary about like the risk is that if you run both of those businesses, you may do a bad job at doing both of those, whereas if you’ve just picked one of them and you spent all of your time going crazy hard on just making one of them work,

You might be successful!

The risk is if you spend half time working on both, it’s very hard!

It’s like it’s possible that both will not be successful because of that.

So you have to make a decision! You may have to make a decision pretty pretty soon!

Like do I keep charging people 20 bucks per month and doing the calls on the weekend, or do I just say like, “Hey guys, now actually it’s free or it’s like five dollars a month, but you gotta enlist a gang or like a crew that helps you do it.”

Okay! Cool!

So what’s the plan? How are you gonna get a lot of users?

How are you gonna find your first users for this and then?

So it’s 15 now, and then we would pair them! They each would find like a friend or good buddy to do it with!

Both of them would come in!

Why would the buddy pay?

Oh, that’s if they sign up to actually set goals!

If they’re just helping their friend?

Do you have like the first 10 people that you want to send that to?

Have you talked to them?

We yeah!

So we spent a few these last two weeks like just think through the problem!

You to sell them the problem down!

But yeah! We’re voting out now and we are reaching back, but everyone is like it!

It’s a really cool product!

Like I – it you know, it actually like really works well!

So people wait!

So you sorry, you have launched?

But you have not launched the new one?

Or six months?

We launched like me and like yeah...

Okay, so you haven’t launched it!

Okay, cool!

So what’s your goal for the next two weeks?

We wanna watch the new product by March 1st!

Cool!

So and by launch, you mean just like posted on the app store or actually have users using it?

How many users do you want to have?

I mean, yes! Like 20 either 20 now!

But you are gonna move the old people to the new thing like the 15?

Okay! Well, you gotta get some!

You’re gonna get some new users because now it’s much easier to do!

They don’t have to like do the calls!

They don’t have to pay 20 bucks a month!

Or are they going to pay for it as well?

But they wouldn’t!

How much are they gonna pay?

So you have 15 customers today! You think you only want to get five new customers?

That feels low!

Yeah!

I mean ideally it would be 30, right?

It’s 15!

So 15 old and 15 watt!

Okay, cool! Launch the app, 15 new customers sounds like a good goal!

Anything else?

Well, we’ve got a little bit more time, but if there’s one last, any other questions that I can help with?

It's a little bit like a high entry, superior high barrier entry, right?

Where we couldn’t go to sleep at night and then wake up with like a sign up!

They would have to like bring along their friends and both of them would have to play page!

Do you have any advice for that?

Like how to get around that?

How to?

So the biggest thing that you need to consider is like do people – will people understand the value that they’re getting from this?

Like you’re only gonna get people to sign up if they like – if they can begin to like think I can visualize myself using this and I think that with my friend’s help I’m gonna be able to hit my goal!

The worry that I have is there’s a lot of competitors in the space!

Like this feels like something that I can do using say like social, like a friend group with like 10 people on a Facebook group or you know, messenger group!

So I would I would spend most of my time at the beginning talking directly to people, friends and family and people that you know that have problems that they want to hit!

And like manually getting them started to the point of like driving over to their house, taking their phone out, watching them use the app!

Like I’m talking like literally sitting next to them on the couch, like they show you the app and they’re like, “Oh here’s my name! Putting in the thing!”

And just like don’t don’t assume they’re gonna do it by themselves!

Don’t assume that people are just gonna like you can email them and they’ll magically start using the app!

Like you need to make sure it like you just because you’re moving to software doesn’t mean you can avoid doing things that don’t scale!

Like you need to put some of what you've learned doing these manual calls every Sunday to work to kick-start and get the app kind of going.

Right!

So it would just be like doing things that don’t scale, but it's like less, we just solved like the bottlenecks and then it’s like,

Yeah! Like you’re gonna still need to do things that don’t scale to onboard people, but once they’re on the app, that’s when it, you know, the design of the app that you made where your friends and family started helping it that’s when it takes off!

And then eventually you'll learn how to do the in-person setup!

Maybe you do that over the phone!

And then maybe you have a website that helps will set up automatically!

Or maybe there’s a YouTube video!

But at the beginning, you just got to do it yourself!

There’s no way around it!

Cool! 30 users! Launch the app!

Yeah! Thanks, man! Good to meet you!

Cool! So that was a bit of a taste of what it's like to go through office hours, I guess, with a YC partner!

I hope it was useful! I tried to keep the kind of topic, the things that I talked about general so that anyone who’s in the audience who may have a company that has a similar problem could still take some of that advice and consider applying it to your startup!

You know how I kept talking, but this two-week goal thing, that’s because every time we meet with a company that’s going through YC, I always ask them like what’s your goal for the next two weeks?

So that when I talk to them in two weeks, I see did they actually achieve it!

Because even if they didn’t achieve it, it’s possible it’s highly likely that they learned something important about that process!

And that for the next two weeks, they'll make a new improved goal!

Cool! I hope this worked out! We could probably do this again next week!

I’m sorry I didn’t get to every company on the list!

There’s also a lot of companies in all of Startup School that might want to do this!

So yeah, we’ll hopefully do this again next week!

Thanks very much!