What Shutting Down Your Startup Feels Like - Avni Patel Thompson of Poppy with Kat Manalac

Cat, you haven't been on the podcast in a while. Why don't you introduce yourself before we talk about Omni for an hour?

Well, so I'm Captain Alec. I'm one of the partners at YC. I work a lot on outreach to applicants, so everything we do with an external focus at Y Combinator, and I help a lot of companies in the batch with their launches. I had the pleasure of interviewing Omni at least once. Yes, one of the times she applied to YC, I sent her the rejection email. But you know, since then I've gotten to see her go through YC and go through the process that we'll talk about today, so I'm excited to be here.

Thanks for coming on the show, Avni. You've been on the podcast before, but for people who haven't heard of you, what do you do? What's your deal?

My name is Omni Patel Thompson. I suppose I was the founder and CEO of Poppy. What we did with Poppy, the mission was to build the modern village. How I envisioned that was to find and vet really amazing childcare providers and then connect them to families when they had gaps in childcare. We started that in my neighborhood in Seattle about three and a half years ago, grew it, and continued to build it out as a kind of testing ground for something that could help the millions of families across the country. Recently, I decided that, looking at all of the things—the economics and everything—that it wasn't a viable, scalable proposition, and so I made the hard decision to shut it down in December. I'm kind of going through the process of all that last month, this month, and just I think that's something interesting to think about.

Yeah, absolutely. So there are a million things to talk about.

Yeah, yeah, but maybe we can talk about the economics in the beginning. I can shift towards the emotions—how you felt, how it went down.

Yeah, so at what point did it become clear to you that this couldn't scale? Because I think many people would say, "Like that's a YC, maybe even watch the interview question." Like, how do you grow this thing to a massive scale? Why did it take three years for you to realize that?

Yeah, so I think it's a multi-layered kind of question for me, at least in this space. Even from the beginning, I knew that parts of it were against the odds. What I mean by that is, if you know the category that I'm working within is childcare, it's already an inherently margin-challenged kind of category. So what I mean by that is, like, what parents are willing and able to pay for this kind of work, and then what caregivers need to make—the ones that are, like, highly skilled and everything like that. So, and then can you make some kind of margin in between as a company that then facilitates this stuff?

Even from the beginning, I really kind of built this company and looked at this company as kind of this series of experiments. Kind of like a mad scientist. In that vein, I knew that we were up against kind of challenging economics, but I always thought about it knowing that we then took a look at pricing from, like, a membership model and transaction revenue. I can certainly go into the details of that, but it was always understanding that it was going to be a challenging kind of category. It's not where things like travel—maybe the frequency isn't there, but there's a high ticket, there's high average value that you can make some good margin. This one had a higher frequency, but you had to then believe that you could also make decent margin on that frequency.

So, that was all what the hypotheses were based on. One other thing that I think is important to note is that what it looks like at a certain scale is very different than what it looks like even at the next level. What I mean by that is, when you're doing 10 bookings a week, it looks like something with, like, maybe three caregivers and maybe, you know, 50 families, or whatever. It looks very different at the next level when you're starting to do a hundred bookings a week, and it looks different yet again when you're doing 500 bookings a week.

So, you know, why did it take the three years or whatever to really understand that? It's because every single time you kind of go through those kind of step changes, it changes. To dig into that a little bit further, when we started doing something like 500 bookings a week, now you're talking about working with hundreds of caregivers and thousands of families. Well, that is a very different thing than when I started as, like, a mom in the neighborhood that knew every caregiver and had personal conversations with every parent. You have to look at everything as a variable that you're experimenting with, but by necessity, when we were smaller, we did feel like that mom-and-pop shop. It doesn't matter that we were building the software, but it felt like that.

It felt like, you know, we were an SMS-based kind of platform. From the interface, it felt like people knew who were they on the other side. But again, if you're going to look at scaling, you have to think about that differently. Right, so now you have to have a team that is going to be behind the SMS, you have to not necessarily know every single caregiver personally. Those have implications because that changes the value proposition where that caregiver might have, you know, felt like, "Oh, I have an in with knowing exactly who the team is," and all this kind of stuff. It changes my work. At a bigger scale, it turns into yet another kind of gig economy job, which isn't good or bad, but it just, you know, has an implication.

What when we're looking at is that—what that labor pool wants to do is yet another kind of gig job. And so, that just changed the economics.

Can you talk a little bit about some of the experiments you tried that made you optimistic about the space and the work?

Absolutely, so lots of different things. First of all, there's tremendously talented people that live within our neighborhoods, and I don't think I should need to say that. But folks who are teachers or students or stay-at-home parents, all these folks, my hypothesis was always they do exist in our communities, and it is our job to not only find them, qualify them, kind of say that they've been vetted, and then do the connecting part. We weren't creating them. They did exist in the community.

Anyways, that was a big hypothesis at the beginning that we did prove was in fact true because if it started to become that actually they don't exist, then that would have been a bigger problem earlier on. But no, they were there. And we created a mechanism for folks who were otherwise working at Trader Joe's and just had recently graduated. We had more than a few who were pursuing, like, dance careers, but they were working at Trader Joe's to make ends meet. They then started popping and then quit their Trader Joe's job because it worked within their construct of, like, dance was their first career and their first priority. But then they got to, you know, live their second passion, which is working with kids.

Well, this is supply that isn't on other, you know, like care.com or any other kind of marketplace. So we were unearthing supply that wasn't otherwise in the category. I thought that was tremendously powerful because otherwise we were giving access to people that weren't working in the space. So that was a really positive and encouraging dynamic.

And then other things were, for example, we started running experiments towards the end where we did a thing that was started as a marketing kind of community thing called "Bring Back Brunch." We partnered with a really great restaurant that had a kids area, and we would have poppies there for a couple of hours in the morning on Sundays. Parents would come, and they could enjoy brunch while the kids enjoyed themselves under, you know, supervision.

Well, the hypothesis there was just, you know, can you know—we're trying to enable this modern village where people can like—parents can enable connection and everything and kids can just still enjoy themselves. Some of these things were, like, really successful kind of experiments. But, you know, again when it comes down to the core of what we are trying to do, which is connect a large number of caregivers with a large number of kind of families against a number of different dimensions, that started to get complicated.

One of the other things that started to get complicated was that has a good and a bad side, which is people were very skeptical that parents would be okay with a range of different people for their kids. Right? So, you know, you don't really care who your Uber driver is as long as they get you from point A to point B. And people were highly skeptical that we would be able to solve that because their thesis was that, you know, you really only want the one or two people.

Well, we were able to successfully get parents to a great range of people. I think the average towards the end was, like, you know, six to eight folks. And the reason was because we had—my counter-thesis was that, you know, if you have standardization and you have a great range of people, actually it’s amazing to have your kids interact with a range of different folks. This person is a drama teacher, and this person is a nurse. But, you know, and that came to bear. But in so much as this population also is somewhat transient in the sense that, you know, they’re doing this for some period of time in between grad school or while they’re, you know, in the early days of their dance career, they eventually move on, as most parents kind of know that.

It proved to then be a little bit kind of tricky because once you then have them all moving on, and then you have, like, the number of folks that parents want, you know, eventually again over time, you start to see how that gets complicated. Where in the beginning, it’s like, "Oh no, this is actually working quite well." Over time, you start to see different economics and dynamics.

So, was that just a growing sense that you had, or was there one particular moment where you’re like, “You know what, I think we might have to shut it down?"

No, I think I would say probably about a year ago. It's always something I've tried to be mindful of. Yeah, I do, and I can speak to this a little bit later because I think it's really important, but I've always done monthly investor updates. Mostly because I think it's important to have that discipline against myself as a CEO to, you know, have to read out to somebody else, like, the results that we're seeing, and all that kind of stuff. But also to be able to understand, like, what are the dynamics that are going on.

And then if other people are seeing, is that successful? Is it not? Is it growing fast enough? And that's all a relative kind of thing. Throughout, you know, the growth of Poppy, we've always been solid. Like, we've always been solid and growing. But to the point of like maybe five to ten percent, and that's not bad. I mean, in fact, like for some of these kind of marketplaces, that’s really good. It wasn't though taking off in the ways of like fifteen or twenty percent. Like, you know, just like as earmarks on that.

So, it is something that was in the back of my mind, you know, for the last, like, maybe year, you know, of just like trying to understand what are the dynamics going on. And that just made me want to experiment more and more boldly. Now, the other thing I think is super important is even from the beginning, I had the mind towards revenue. So we certainly weren't profitable, but we were always making revenue, and I think that's also important because it was able—I was able to then take the little bit over two million that we raised and have that last over, I think, like three years.

I think that's just important because that bought us the time then if we weren't growing necessarily as fast, that bought us the time for more experiments. Yeah, and so that’s the way I thought about that. The writing was starting to be written on the wall, and for me, I wasn't done with the experiments. Right, so I still thought there was, you know, maybe we could do Poppy Pool, which is, you know, pair parents or pair of kids together and get a little bit of leverage out there and make it cheaper.

I thought we could use stay-at-home parents as another tier because there are people that live within the community. And so maybe you won't see the same amount of churn. Hmm, so while I still had kind of these experiments and, like, hypotheses in my head, I wanted to live to fight another day and run those experiments. And so it wasn't until the last probably six to eight months where we started to experiment a lot more boldly because it was quite—it was becoming quite apparent then with the scale that we were at that that vehicle wasn't going to necessarily work.

And so we started experimenting with some of these other things, but at some point, and that’s also where runways is necessarily a good forcing factor. But, where as we started to dwindle down now to, like, six or eight months of runway, that's when it really—I will say that that was a forcing function of having to make some important decisions. But I will say it was always—it had been for some time consideration.

Yeah, and we can get into it, but it was at that point that I was like, “Okay, no. Now we have to really look at what's in front of us and what are the different options.” But it's not like it was a one day I'm like, “Oh, this is completely different.” It was a slow build. It said, you know, as a founder you can read data in multiple different ways, right? Anybody can. And it was more as the evidence started to stack itself up in not what it is today, but will it get better or will it improve with even further scale, further investment, all that kind of stuff. That's the real question that I had to ask myself.

And as it became apparent that it wouldn't, that's when it really was, "Let's evaluate this." Can you talk about that moment? What was the final moment where you decided, “This is how I have to move forward. We have to shut it down?”

I don't know that there was, there was a moment and it's probably sometime in November where it was more the realization of, “I don't think this is working the way it is, and so some change has to happen.” And so for me, I looked at it with sort of three options. One is because we were still burning the money that we were burning, we could pivot.

I think that’s a hugely popular—whatever, like that’s a very popular option. But what that would have necessitated is cutting probably 75% of our team, bringing that burn really down low and essentially starting again. To make that happen, though, I would have also had to shut down the service. So Poppy wouldn’t have had to stop, but the service would have had to stop, and I would have had to act like 75% of our team. Truth be completely told, that was my ingoing assumption that that's what we were going to do. But that was like sort of like option number one.

Option number two was get ourselves acquired. And as you guys know, like, it’s a very lofty, and a very optimistic kind of view that somebody's going to ride in and, like, you know, I don't know, throw us like some money for, like, the things that we've built and then also our formidable team. But it was an option, and so I wanted to explore that with folks that I thought would be good partners that would enable us to continue our mission just in a different way with different resources.

So I thought that was an admirable kind of option to pursue, and then the last one was truly shut it down, call it and do all that. And so for me, I pursued all of those. I had conversations with folks that I thought were interested in acquisition or good partners. I will say this is an interesting learning through that process, is that these CEOs were very willing to get on the phone. They also showed me a kindness in the fact that they knew what this call was about.

Without having to, like, play games around it, very quickly in the beginning of the conversation, because you're also like, “How do you go into a conversation like this?” I was talking to my team, like, "What are you gonna say?" I was like, "I have no idea." But as you go into these conversations, they kind of know what this conversation is about. A lot of them were towards the beginning was like, “Listen, this is really great to connect. Let me just get it off, like, right off the bat. We're not in a position to acquire.”

So, you know, if you want to do partnerships or think about some of these things, but now for me was a kindness because if we could just not beat around the bush and you could really know what it is that I'm kind of looking at and kind of say it, then that definitively removes that option for me. And that is, I think, the biggest—this thing for founders is that you're always trying to assess all the information you have in front of you, and there are very few paths that get definitively kind of shut down.

And so, as much as you’re able to kind of do that, that actually helps you to go figure out what the path is. Now, that isn't to say that there couldn't have been someone out there that eventually, you know, could have done. But also, as I was evaluating that, that would have meant you're having to continue to operate your thing. Because if you're trying to go for acquisition, you're trying to go from a position of strength.

And what would it take to actually continue with the team to continue to grow and all that kind of investment as you're ticking down the clock? Because again, runway—and did I believe that we were going to be in that ultimate position of strength to be able to negotiate from? And again, take off, like, the rose-colored glasses and truly, truly, what is the probability of that thing actually coming through when the most likely acquirers had already kind of said bowed out?

It was at that point where I was like, if that chance is going to be like less than, like, two or three percent, then let me understand that, but keep it over here. But that's not going to be my go-to. I'm not going to be unduly optimistic and run my company into the ground. So then, I’m gonna have to go from a position of like, I don't have very many options.

Then it was the option of like, are we gonna pivot or are we just gonna call this one? And I think that’s a much harder question because I don't think that there's a right answer. I think it was just what was the right answer for us. I think the truth of the matter is if we had wanted to pivot, we probably would have done that, you know, six months prior. If I was going to cut the team and leave a good chunk of money in the bank to be able to do that, I probably needed more time.

As I started to evaluate that, like which part of the team would I be cutting, and like what would it be enabling? More importantly, pivots, as a lot of people know, aren’t these magical things that just happen. Right? You actually have to have a compelling idea that you're going to then be putting forth almost again from the beginning. You have to be pivoting from something. Right?

As I was looking at the probability of success to do that successfully with the team and with the amount of money that I had left, it was interesting. Fred Wilson actually wrote a post, I want to say maybe the same week after I decided, I think it's called something like "Pivot or Die." In his point there was, you know, a lot of people want the pivot to work. With pivots, sometimes if they do work, they are still painful because investors more likely than not didn't invest in that idea.

Sometimes consumer companies turn into like B2B companies and things like that. It’s certainly not what the employees came on to sign up for, and it just gets messy. It isn't to say that it isn't a compelling kind of option, and it can work for a lot of folks. But as I was thinking about that before even having read that, a pivot was unlikely. It also didn't do—if it didn't do right by the mission of what we set out to do, what we raised that sum of money for, what we got this team assembled for, then for me, that's ultimately when I started to consider, is it better to cleanly call it?

I’m not saying that any part of that was easy, but that's when it wasn't like a morning that I said, "I think we need to call it." It was more that I started to live with the idea of, "Oh, actually, what if we called it?" Because even through this whole process, I still assumed Poppy would kind of continue even if we shut down this business line or kind of product. Most of me was like, "Okay, no, it's going to be okay because I'm still going to be a CEO of Poppy, and we're still going to figure it out."

There was a day, though, right around Thanksgiving that it became clear that actually I think the right thing to do is call it because we set out with a hypothesis and we raised money on it, and we built a team on it. And if that hypothesis wasn't going to pan out the way that we thought it was, then let's shut it down as well as we could and start afresh.

Yeah, so what were you communicating this all with your team? Or were you talking to your partner, your investors? Because I think, you know, leadership—a lot of it is, you know, being optimistic and excited about the future. You talked about it in your article—founders living in the present and in the future. Right? So you have to be excited, but then when you're facing this reality of like maybe running out of money, it’s not going to work out. How do you go about having those conversations, and who did you talk to?

Yeah, I think that's a really great question. So for me, even towards the later months, I think it's a hard thing when you have—when you start to have a team that has striations and like, you know, some folks are junior, some folks are like your lead team. I learned the lesson. I generally, as a leader, try to be as transparent as possible. Even towards the end, our investor update went to everybody from the most junior folks to my CEO.

I believe in transparency. I believe in educating people on what do the numbers mean. So even that very last investor update, every single person saw exactly how much we had in the bank balance and the default debt. You know, the headline—it isn't comfortable, but I don't think we’re not in the business of, you know, being afraid of uncomfortable. Right? I wanted everyone to understand the place that we're at.

The difference, though, was I had to have a lot of these conversations with just a couple of the folks that I—on my lead team—that I deeply trusted with not only the hard conversation, but I think in the beginning, when we were only like three or four people, we would have conversations in the open with everything. What I soon realized as we started to grow towards 8-10 people is that I can talk about these super ambiguous things, but I also have the power to do something about it.

For more junior folks, you have to be—you know, what's the kinder thing? Because you can certainly talk about transparency and kind of tell everyone everything. But if they don't have the power, the tools to do anything about that, that is just—that's in Zion evoking. Right? Like you're not giving them the tools to do anything about it; you're just giving them information, and then there’s nothing else there.

And so I tried to toe the line also to keep in mind. Like, if I made the decision maybe the Wednesday before Thanksgiving, and we made the final announcement on December 3rd, there wasn't a lot of time. And I can certainly go through that because I also thought that that was important because I didn't want to operate in a space where part of the team knew something, and then, you know, we’re also not that big.

Part of that decision was—or the decision-making process was there were some folks that I trusted immensely—everything from some investors, some mentors, all that kind of stuff, folks for whom I talked, and I told them, "Where I'm, you know, this is what I see. What are my options?" And you know, even after like only five or six kind of conversations, it really came down to these things. One, what do I want to do? Because the reality is, is that anything is possible. There’s a massive variety of things that are possible. But it has to be led by, what do I want to have happen?

So while that wasn't helpful hearing it, it was tremendously powerful in the doing of it. The reason is, is because what I ultimately realized is there's power in choosing how this went down. So even though all of this is painful, nobody made us do it. Nobody—there was nothing—no outside forces driving us to do it.

Folks that have gone through this will understand what I'm saying, but you know, when you can control the narrative, when you can control how this happens, there's tremendous power there. But just to come back to your question about like who did you talk to and how did you do that, there was a short period of time where I tried to collect information from people I respected, had been through it, all that kind of stuff to understand the range of possibilities.

Then, understanding that, you know, what did I want to do, and it was becoming more clear that I think it was better to shut it down. I did have conversations with our investors because I think that was important from any sense of the, you know, my duty, you know, just doing right by their investment. And then I at the same around the same time, I was also talking to the rest of our team.

It was through that process that it became increasingly clear that I had made a decision, and then I was communicating it. There was a smaller number of people that I was taking data from, but once the decision was made, then it was about like let’s communicate it.

So you got a bunch of questions from Twitter, and I think this one could have been related to a few things, but Oscar asked what was the biggest hurdle you had to overcome from investors? And so on the topic of investors, I’m curious about like how does that interaction actually go down? Because that's definitely not talked about. You hear the right medium posts about like, you know, I'm winding down my company; it didn’t work out. But they don't talk about—this is how I, you know, dealt with my investors after I raised millions of dollars.

Yeah, so I think, I mean, obviously, I can only speak from my experience and from what we did. I think it actually part of it stems from how I ran the company, I believe anyways. So as I mentioned, I've always done monthly investor updates. I think that in retrospect was tremendously helpful in doing this because I was completely transparent about what was going on, how we were doing it, how we were thinking about things, and the state of, you know, how much money was left in the bank and what their capital was being deployed towards.

So, if at any point there was disagreement on what that was being deployed towards, like I was open for that conversation. So, super, super importantly, when I started to have the conversations, I shot out that email. I picked up the phone to talk to them. It wasn't a surprise, right? Like people knew that this was coming, it was within the realm of possibility.

I think where it gets complicated is when this is the same thing that I've always believed in. Feedback to folks that report to you should never be a surprise, right? So if you’re trying to deliver, you know, hard feedback, if it's a surprise, that's a failure on you, that's not a failure on them. Something similar here, that wasn’t a surprise, right?? Because people had seen the economics that we were battling, the challenge is that the status of the bank account.

So that was one piece that was, in retrospect, really, really helpful for that hard conversation. But that was an investment that I'd made over the process. Then when it came down to actually having that communication, I think that here's the other piece. I also, I'm gonna say I'm tremendously lucky or grateful for the people that I have on my cap table. But that was also work—that was also a decision made very early that we were only going to have the folks that really believed in the mission.

And I can say that that's really nice and easy to say now, but I would like scrapped to get that money together. So I don't say that lightly. But it is in times like this where it becomes so, so evident that they were and are a part of the team that I was then reporting back and saying, "Hey guys, like this is what's happening. This is what I've decided to do, and I'm sorry that this is where the story ends, but you know this is where it's at."

I will say I was frankly surprised, but pleasantly surprised, almost 201 everyone is like I’m sorry, because that sucks. But it's quite clear that you did everything possible to, you know, take this to where it needed to be and what's next. And I think that was also heading into probably the hardest week—that was tremendously powerful to know that you had the backing of the people whose money you took, and you were like, “I think I—I think, you know, I have stored a stewardship and duty to that, but they gave me the gift of saying, 'No, I understand; there's times that this doesn't work, and you did what you were supposed to do.'”

I think that's a really important point is that we, as founders, have these really amazing ideas of how we're going to change the world with these concrete kind of plans, and then we raise money or capital, and we bring these teams together to go do that. Well, I did what I was supposed to do, right? Like, I did all of those things in a very transparent way. And the fact that it didn't work out the way that I had necessarily thought—that isn’t failure necessarily; that's just, you know, just a different way that it ended up going.

And so that's my experience. You know, I think being, I think it's rarer than, you know, having founders who keep their investors so closely tied and doing those monthly updates. I think that is so helpful throughout the process. And I think that's probably what, in the end, made all the difference.

I agree with that, and I’ll say it’s like it’s painful; it's hard. When it’s going well, it’s super easy. Like, I’ve got all the emojis and the expansion marks and the bolding and that's all really fun. And when it's not going well, it's embarrassing. It is like I feel like I'm failing in my micro kind of failures. But because I held myself to the standard that like, you know, by the fifth of every month, there had to be a new update going out, that in many ways saved me from the harder conversations at the end because there was transparency.

So, like, if there’s one thing that, like, you know, there’s other founders out there that just start doing that—if you don't do that right now—mostly because even during the time, it wasn't for the eventualities like this. It was because it held me accountable for what I thought was, like, super important.

So, yeah, know for me from the investor side, I think doing right by what you said off to do was the ultimately the thing that people wanted to see, right? Of course, everyone wants to see like the 10X or whatever X return. Sure. But understanding that that's not going to happen for a great percentage of the portfolio, I believe that they’d rather have the transparency, the honesty, and like, you know, visibility.

And absolutely. Most of your investors, I assume, invest in more than just Poppy, you know, like they’re all over the place. So I've heard it talked about many times at YC that when those updates start to get a little bit slower, a little infrequent, they're just assumed to be dead. So they kind of know the deal anyway, right?

Right, right. And so better that—because here's the other thing. I should hope that the vast majority of founders that did a thing that didn’t work out, you take all that learning and then you put it towards the next thing.

Exactly. Well, when there's the next thing, you want to then work with the best folks, and you want to work with the folks that you enjoyed working with the last time. Well, for me to have a chance at salvaging that, I have to do right by it right now. Right? So again, this is not like perfect, and it’s like that’s the way that I just believed was the way to move forward. It’s also a way that I—there’s so much stuff coming at you in that it’s like a very much like a swirl, right?

So I think as I was thinking about how to make this decision, I tried to break it down into, well, who are my constituents, right? So I have a duty to investors, obviously. And however, do I think about that? I have a duty to my employees and my team, and I deeply felt that because those are the people that you’re interacting with every day. A duty to my users, right? Like what does right by them?

And then I think one thing that gets underlooked as well, but duty to myself and my family, right? So like how do I kind of—what is right for me and my family and kind of going forward? And all of those things are really important in making that ultimate decision because the decision to have Poppy go forward in like some different form, or to be able to call it in, in some ways, had to do right by kind of all of those folks.

So I actually wanted to ask, how are you? So many founders, their identity gets wrapped up in their company. And so now that you know, you’ve shut down Poppy, how is that making you feel? How are you doing right now?

Yeah, I think if you had asked me three weeks ago, it would be a different conversation. I think that’s absolutely right. I started Poppy when my second daughter was four months old. So for me, Poppy isn't even just like a part of me, but it was a part of, like, my family, right? So we had so much of it—it takes up like a presence within your life.

And so, you know, part of it, my identity is very much a part of Poppy in the last kind of couple of years. I think the more important thing for me is that my passion for the space doesn’t go away; even if Poppy it isn’t kind of carrying forward. It took me some time. I think the thing for me was that there is a—the heat of the moment—which is that you have to make the decision, you have to act.

So there was those like months or like weeks that was necessary, and in that, I didn’t really think a lot about my identity and myself because I don’t think you can. And this is just me speaking from my experience, but I actually didn’t talk to any of my friends. I couldn’t. I had lots of friends that were reaching out, because I knew if I started talking to them, I would break down. And then I wasn’t useful for all the things that had to happen, for our users, for our team.

There, I think people also don't know all the things that you have to do, right? So, when you send out the little newsletter that says we are no longer going to be doing this, there’s still a tremendous amount of things that have to get done. Also, that’s your choice, right? But for me to do that, we announced and then we made a decision to do a number of things to help our users so that they could still connect with caregivers on their own and, kind of, vice versa, to do right by that.

There’s our team, so you have to make sure that they are landing in good places and try to see how you can help to make sure that they have, like, good jobs. That’s excruciating, let me tell you. Like, you work so hard to find these amazing people, and then it breaks your heart, like a thousand times, to hear how you're gonna have to go give them up to other people. So that's painful. And then there's all the legal, the accounting, the stuff—all that litany of things that you have to go through.

And so for a period of time, I didn’t think about me because I couldn’t because I just had to, like, be sort of a robot and just go through the motions of doing the things. But there’s also a reason why I wanted to do this at the beginning of December because there was the decision of like, if we’re going to make the decision to do it, we can either kind of go forward for a couple more weeks, and we can be labor, and do it into January.

I thought using the holidays was actually a really helpful thing for everyone involved because then it would be almost forced time for folks to be able to take time, process all that kind of stuff, and figure out their next path—myself included. And also, if you’re thinking about in terms of runway, right? Every month that you continue to kind of persist, you’re burning money. Right? And for me, it didn’t feel responsible to continue to do that.

Instead, could I repurpose that and say, “Hey, we’re going to call it as quickly as possible? Conserve a little bit of that capital that might go towards, like, severance or doing this as brightly as possible for your employees." Not a ton but a little bit of breathing room. And so in doing that, then, you know, set the team up as best as you know possible and users as best as possible.

Then for my part, I literally just said I had to get to December 17th— that was my date in my mind—where I would then, I would be able to take a break. We announced on December 3rd. December 17th gave like two whole weeks to kind of deal with all—a lot of things. And then December 17th was, you know, "Okay, like, let’s take stock."

And I think everyone processes things in different ways. I think part of the realization—and I wrote even a post because like for me, I write to process things—that it almost serves as, like, personal therapy. I think for me there’s a grieving process. I don’t want to liken it to like, you know, to people, but there is a—there is—for me, anyways, like Poppy was an entity. It was like almost like a living, breathing thing that was with me for four years—longer than any other person was, right?

And so there’s a grieving process that I had to be okay with, and that’s what other founders—I will say this—the notes that other founders sent me on that day was by far the most meaningful. It doesn’t mean that like, you know, so many people—you realize how well you’re loved and all that kind of stuff with all the notes that you get.

But the other founders really understand the complexity of the emotion that you’re feeling. So for me, a lot of them were saying, you know, give yourself the time and the space to grieve it, to appreciate what it is, and then kind of give yourself just the time to, like, not consider anything. And so that’s for me, what the magic of, like, the three weeks over the holidays were because I could take time. There was nothing I could be doing on email or a Slack, or like nobody asked me for anything, none of that kind of stuff.

And so to spend time with my family over the holidays—that was the best healing I guess I could kind of give myself. And then there’s a lot of folks that will reach out and say, “Hey, we think we should go grab coffee,” and like what’s next and all that stuff. I also set myself a goal to say like I’m not going to have any of those conversations until, like, January 4th.

And so, like, doing those little things gives you, then, it's the same way that I loved about YC. When you're in batch, you’re able to just tell everyone, “I’m sorry, I’m doing YC, so like I’ll see you in 12 weeks.” Right? And it’s a beautiful kind of space that you give yourself to then do nothing but this one thing. In that same way, I kind of gave myself two, three weeks to say, “I am doing nothing.” Nothing that is going to be of anything, but it’s that that thing is just me kind of healing.

And so, I will say, I feel—I still grieve Poppy. Like, it’s more than, like, jabs now, right? So if I see, like, if I walk into our offices which are still trying to like, you know, wrap things up, that hurts, right? Because you like all the memories that I kind of associate with that. If I see something that’s Poppy-branded or something, or if someone talks about it in good ways—because we had tremendous impact in Seattle—so now, you know, people talking about, like, in the past tense, but like the role that it had, it’s nice, but it’s like turning into nostalgia. But it's still there because you can't take for granted spinning up a company and getting it to be a thing, right?

None of us do or can. And so part of me—there's like the doubts of like, can I ever do that again? Or will I ever do it again? And you sort of have to, like, live with those things. Also, in so much as our—a society, but like our—you know we have—we try our accomplishments with our being and our worth, like, you know, so tightly. You know, for me going to networking things or like, you know, just those things, it's complicated.

It's just like, “Oh, so what do you do?” And that was my next question. It’s like, because I know it’s unfortunate in many cases that people just identify their job, like, "This is my thing." And people who start companies even more so, right? They’re like, “I’m the founder.” When it comes to your family, do you find that they care at all?

No, also, like, it's so interesting. I was talking to a friend. They were saying, like, "Your daughters kind of get it?" Yeah, you know, they’re four and six, so no, they only know that I, so it’s funny, they’re like, “But you’re the boss, right?” What does the boss do? Okay, like, so that’s kind of cute. They don’t really get it.

Yeah, here’s the thing: My friends, my husband, like all the people close to me, my parents, my brothers, like they know I’m not done, right? So, like for me, like—and I think that's the bigger thing. That’s the conversation I want to have more broadly is that again it’s a total choice if some people are like, "This was my thing, I’m tired, I want to go back and do a different thing."

But for me personally, I found the place I’m supposed to be working in, and that is in like the frontiers of trying crazy ideas out and spinning up teams and doing that. And so for me, I’m not done. So that’s why also for me the way that I think about this is that this is what trying looks like. This is what this whole endeavor looks like.

It's a little bit more messy and public, because I think a lot of folks go through these processes of pivots and things like that within the like private confines of—I raised a bridge round and I pivoted to this product and I had to go through layoffs. Like, if you listen, you're actually hearing this narrative everywhere. Like, people are going through these processes.

For me, I'm choosing to do it, you know, in this kind of way where I had this hypothesis, I raised a thing, and went to do it. And now, who knows like what’s the next thing? So I think for the folks who are closest to me, they want to make sure that I’m personally okay, like mentally and like emotionally, and I appreciate that. But I think because I still see so much work to be done, like for me, actually, surprisingly, I’m good.

Like, you know, like after three weeks of taking some time, and that isn’t to say I’m rushing into what the next thing is. I don’t know what the next thing is, but I’m not done, right? And so what I hope also this conversation or for other folks who are in similar situations—one thing over the last six months was I don’t know if I can shut you, it feels like a dead end. It feels like failure. It feels like, you know, investors are going to be super angry, users will never like love you again, you know, all that kind of stuff.

And so I think it’s an important conversation to have that it is an outcome. It isn’t the desirable outcome, not by anybody. But it needs to be an OK outcome because the more that we can have this conversation, the more that we can be okay with it, the more we can get like through it and do it in as right away as possible. If there is that, because there are considerations as I’ve realized.

There is a right away to—you know, if you think about your team and what's next for them—like they're not getting any kind of financial thing. I’m like none of us are, but if you think about setting themselves up for the best next chapter, there’s a right way; there’s a better way to do that. If you think about investors and if you kind of know that you're not going to be doing that—if there's a possibility of like, you know, returning capital—maybe again, not the outcome and not why they deployed the capital, but if that's the thing, then yeah, sure, let's go do that.

Let's be responsible with that, and that goes with even, like, you know, even for myself. Like, I didn’t want to go through a belabored process under like on a Hail Mary kind of belief that we could either get acquired or do some kind of pivot because that would have drawn into all of our emotional stores as well in a way that I wasn't comfortable with. If this was what the call is, again, it’s very different for different people in different situations, but that was sort of how.

Yeah, yeah. So I mean side note, I love the philosophy, but not stopping because of people that make me most angry are the people that do one thing and quit forever.

Even if that means do one thing and make money, and then they quit, right? That's like, “Oh, you had so much potential and you stopped forever.”

The thing is like, I don't know what the arc of the timeline is, but it’s certainly for me—I don’t look at what we built for three and a half years was—I mean, it was meaningful; it was valuable. But more than that, it was learning.

So again, this is like the way that I think about things almost academically is that my job was to have a question, put forth a test plan, and then, you know, push forward the knowledge and the learnings in this space. Like, what are the mechanics? What are the economics? Like all that kind of stuff?

Well, I just spent three and a half years learning a thing—like in all the different ins and outs—to not continue with another hypothesis is almost like—it's not irresponsible, but like it’s incomplete, right?

And so for me—and I'm not gonna judge any other founder because I get exactly how hard these years are, and you know, with different sacrifices and things like that. But for me, it’s that if we can have these conversations with more fluidity between this like effort and like the next, then maybe the hurdle between one and the next isn’t quite so bad.

Yeah, I just don't know why the myth is so pervasive because like if you look at people, you know, like Michael Seibel or Justin Kahn or a bunch of these people, they didn't start one thing. But yet people think you just try once and it works out—and I mean, I think it’s also it’s also narrative on, you know, how we think about.

I mean, a lot of other folks did try the first thing—the Airbnb and Amazon and Apple, right? So again, I don’t think that there’s any kind of one way to do this. I think the other problem is how much money we raise, and I think it's an important point and kind of think about. We raised a significant amount so I’m not gonna have a great gratitude for like the amount that we did raise, but a little bit over two million dollars, there weren't massive checks from any one of our kind of investors.

And so therefore the theatrics or the gymnastics I had to do to like do right by that capital was different, right? Then if I had raised like maybe 15 million from like, you know, a couple of different folks. I think it just changes how people have to think about of what they need to get back, right? Or like, what promises were made?

And so again, for me, I tried to be very careful about which promises were made and then how transparent I was on how I’m doing against them. So I think that allows certain leeway on some of these things, and I’m not saying like it is hard. Like different people have different businesses, right? Like, I didn’t have like capex and I didn’t have like these assets, or I didn’t take people’s like users’ money or things like that because of the type of software we were building.

So, different things are different, but I think, you know, as cleanly as we can keep each try and then just say, “Okay, well, that one didn’t work. Let’s get on to the next thing.” I think that’s where you do see the building, right? Like if you look at the folks like Blake’s Slack or Twitter, they are like this notion of serial entrepreneurship.

It’s not that they just magically turned into—or even Pinterest, right? Like, it isn’t magically that they started on this thing. It’s that they collected knowledge in disparate kinds of things and tries and that they finally put it together in a way that really unlocked the big thing, right? I’m still hopeful that that’s what I’m gonna do. I have faith.

So, I mean, yeah, how are you thinking about what’s next? I know you don’t have a thing. You're not here to announce like a venture fund, but you know, you’ve learned a lot with Poppy. Obviously, you like the space. How do you start thinking about what you want to do next?

Yeah, so I think even a part of, you know, sort of like the three weeks to kind of assess things, I still want to understand like what am I deeply still passionate about? What am I deeply still curious about? What do I want the work to be? And I let gave myself the space to say it like it could be like anything, right?

I'm deeply interested in books and travel, and like it really could be anything. Because I think that’s the nice thing about this moment, but I think what it ultimately comes down to— I am still so passionate about the problems of parents and moreover the problems of working mothers like me. If I had to pick one person, I picked myself, right?

Like I picked the problems that I—and the friction that I still like experience in the world, and in that, I think like millions of other people are. And again, Poppy was one hypothesis—let's build the modern village to provide safety nets for these parents because my parents don’t live in the same town or like whatever else it is that doesn’t go away.

So I think for me, I’m still thinking about what do those problems look like? How might I want to tackle it? Which piece of that do I want to do? But I think ultimately, like, I feel that my life’s work is in this space. I don’t know what it looks like specifically. Does it start another? Sure. Do I go work with someone for some period of time to like again learn?

I think the other thing that needs to be understood is that startups are like ultimately creative endeavors, right? And so if you think about like artists or things like that, like you need to have space and time to actually have collected some kind of inspiration to go off and do that. Right? And so for me, I’m also trying to do disparate things.

Like I’m actually finally learning—trying to learn how to code, and so like I’m like doing cooking classes, I’m doing art classes because—and I’m having like just conversations with other parents and things like that. I’m trying to observe, like go back into the space of like observing and noticing, like retail spaces? How are they concocted? How do people come together?

Like those are all things I’m super interested in, and without terrible judgment of like what’s it for, I’m just trying to like let it all sit and kind of see where it goes. Because I think that was the beauty of Poppy that I learned, which was it came from an ultimate curiosity that it was like a thread that I just had to—I felt compelled to keep on going and then solving the next problem next.

I want to get back into that space. And until I get to that bar of things, I don't think—I think it's actually irresponsible to try to say I'm gonna start another company. What it’s going to be, I don’t know. So that's kind of how I'm thinking about it.

I personally can't see myself going back to a big company. I’ve done that for a good chunk of my life. I loved that experience—it’s formed kind of like who I am and how I do it. But I love this idea of, you know, imagining a future, this whole idea of like, imagine the future and build what’s missing. I think that’s hugely compelling.

Yeah, I mean, but we talked about this on the last podcast—like before Poppy, you were pretty tracked person, right? Like you had your fit, you got your fancy MBA, you had your fancy job, you know, you got—you get married, you have kids, you do all that stuff, right? And so now you’re just like—I know you got to say, “I’m very uncomfortable. I don’t have to sit on my hands.”

Anything! It’s funny because my husband was alive. So when I said like I’m doing the coding and all this kind of stuff, I actually realized I’m not someone that can just do unstructured nothing. Like unstructured, like sitting on the couch and watching Netflix? And that’s okay? I can be someone that needs to check off a box and said, “Did I do my hour of like coding today? And did I do my hour of whatever?” because that for me tames the like monster that says, “You're doing nothing” with you, but still allows me to continue to explore in a kind of a productive way along some kind of timelines.

So I have my like little things like that. It’s also to be, again, like if there's an overall lesson in all this, it’s gonna sound really silly, but it's kindness. Because it's kindness to myself to say I’m sure I didn’t get this all right, but it's that it'll be okay. It's kindness to say, "Give me space."

And like, get yourself this space to go figure out what’s next. It’s kindness in saying what is the kindest thing—even though it doesn’t look like it—for your team, to your users, to not labor under false pretenses, to call it, have super hard conversations, but then kind of move forward.

And so it’s really, really weird, but I mean, maybe that’s why I’m like as whole as I feel for right now. But it's just that, you know, leading with that point of view of kindness kind of gives you space to kind of do these interesting things.

So yeah, I don’t know. I miss terribly my—can't believe I'm saying this—but like my 9:30 a.m. stand-ups, right? Like there was purpose, there was like, you know, everyone has to fire to like 9:30. And now at 9:30, I still—I have to shut off the Slack notification. But like it’s just that—it's just little reminders—but now it's getting to a place of like, “No, no, no, I know I'm gonna get back to that, but there isn’t a rush to get there.”

And so I think that’s—I hope that’s what other folks are just kind of like in similar areas. I hope the thing for me is that the one challenge is that yes, I think you could take a look and say Poppy was a failure. I think in some lenses, like that’s the narrative. But I sort of push back on that because I don't think Poppy was a failure.

Poppy set out to do and did the thing especially for thousands of parents and like, you know, hundreds of different caregivers. It did exactly what it was supposed to do, and it did tremendously well. The fact that it doesn’t go on to then scale—and scale was what I was interested in—there was also an option to say let’s just make this a nice high-end tech enabled agency.

And folks were like, “Why didn’t you just raise prices and do all that?” I could have. A hundred percent could have and turned it into a nice kind of like side business or whatever else it is—that wasn't my mission. That wasn't my intent, and that still isn’t what I want to do is go find the solutions that work for the millions of people.

And I never was like two ways about that, right? And because, and so some people have a hard time understanding that—especially users—which is unfortunate because, you know, Poppy could be still existing if, you know, I had chosen that path. But that isn’t what was true to me and true to what I thought like our mission is. And so I think that’s the thing that I think we need to have more conversations around is that as long as you're true to that, I think you have lots of leeway to make some of those decisions because, yeah, they're hard, and there’s no one right answer.

But as long as you can kind of articulate that, I think it gives you some space. Cool. Well, this has been great. Thank you, Avni.

Thank you!