Female Founders Conference - New York

[Applause] [Applause] [Applause] [Applause] [Applause] [Music] [Applause] Okay, let's see here. Hi, hi everyone! Good afternoon! I think we'll get started. You're nice and cool inside, thank goodness. I lived in New York more than 20 years ago at this point, and this is bringing back like the summers in New York on the subway. I'll kind of never forget it so hot! But thank you all for braving this heat wave and coming here on a Saturday afternoon. We're really excited. This is actually the fifth year we've done the Female Founders Conference, and our first time in New York, so I'm very happy to be here and have you all here.

So I'm Jessica Livingston. I co-founded Y Combinator, which was the first accelerator. Today, there are thousands all over the world, at least hundreds all over the world. But in 2005, what we were doing was so unusual that people in Silicon Valley just regarded us as very irrelevant. Y Combinator began the same way as most other startups, with a hypothesis about something we thought people wanted, and it turns out they did want it and we grew and grew. Now we've funded more than 1,800 startups with a total value of over a hundred billion dollars.

So having myself been through the kind of startup journey that many of you are hoping to, I wanted to tell you my own story. Now, if you only know me through the media, you might get the impression that my contribution to Y Combinator is that I'm Paul Graham's wife. And while I love being his wife, there's a little bit more to the story than that.

So I was born in Minneapolis in 1971. Later that year, my mother left home, leaving my father alone with a small baby. So he took me back to Boston where my grandmother lived, and I lived with my grandmother during the week while my dad worked. I lived with my dad on weekends. My grandmother was the most important female role model in my life. She was a very independent person, and the term anyone who knew her would use to describe her is free-spirited.

For example, in the wintertime, after putting me to bed, she'd go out and work till late in the evening on these giant ice sculptures that she built in our front yard. She did what she wanted and she didn't care if people thought she was unconventional. So despite growing up without a mother, my childhood was really happy. My dad made a lot of sacrifices so I could get a great education, and he constantly encouraged me.

I played soccer when I was younger, and when I was in the ninth grade, we had an away game at a school called Phillips Academy in Andover, Mass., and the place seemed so unbelievably fabulous that I decided right there on the spot that I was going to go to school there. Little did I know though that this decision would have bittersweet consequences.

In my old school, I'd been a big fish in a small pond. I was a straight-A student and good at sports, and when I got to Andover in the fall of 1986, it seemed like everyone was straight-A students and good at sports. So I got really discouraged and basically gave up. I defaulted to being a mediocre student and did nothing impressive or noteworthy for the next decade. It was like my own personal Dark Ages, and it's a bit embarrassing to reflect on to be honest with you, but I think it's important to mention because when journalists and biographers write about successful founders, they often focus on early predictors of success in people's formative years, and for me, you know, I didn't have these things.

I didn't at least have any of the conventional kind of predictors and no one would have voted me most likely to succeed. But while I had no achievements, I did have three defining characteristics when I was younger that were critical in making Y Combinator work. The first was the quality that caused my Y Combinator co-founders to nickname me the social radar. I was one of those kids you just couldn't get anything past. If something seemed off or out of character, I noticed and made inquiries. I was always trying to figure things out based on subtle social cues.

The second was that I never liked being at the mercy of anyone else. I hated anyone telling me what to do or not to do—parents, teachers, bosses, people I had to collaborate with but disagreed with. Anyone. And the third distinctive thing about me was that I've pretty much always been a straight shooter. My grandmother and my father were both like that, but I'll come back to those in a minute.

The day after I graduated from college, my beloved grandmother died. It was a really sad and lonely time in my life, and now I was supposed to find a job with a degree in English and absolutely no clue what I wanted to do. I wound up getting a job at Fidelity Investments in our customer service group, answering calls from 3:30 till midnight every day, physically talking to retail investors about why their Magellan account was down that day. It was awful! I didn't love the job, but I did love having a job, working hard, and getting paid for it, and not having homework hanging over my head. It was great!

After Fidelity, I worked in investor relations in New York City, then at Food & Wine magazine, and at an automotive consulting firm, and I even worked briefly for a wedding planner. In 2003, I was working in the marketing department at an investment bank in Boston when I first met Paul Graham at a party at his house. One night, we started dating, and I felt like I finally had met Mr. Right. Despite having quite different backgrounds, we were really similar. If I thought I never wanted to be at the mercy of someone else, Paul was that dialed up to 11.

He'd moved back to Cambridge after selling his startup Viaweb to Yahoo, and he was at the time writing essays, working on programming languages, publishing a book, and curing his debilitating fear of flying by learning to hang glide, of all things. Paul is the best problem solver I've ever met. He's also a genius at expanding ideas and making radical improvements to things. One of his defining characteristics is telling people, "You know what you should do?" If you know me, you find that very funny, I'm sure.

I'd say it to you! Paul and his circle of friends exposed me to this new world of startups and it felt much more exciting than the later stage of publicly traded companies that I was involved with at the investment bank. I read the book "Startup" by Jerry Kaplan, about his pen computing company called GO, and I was just immediately hooked! It was like some light shining down from the heavens and I wanted to hear more stories about the early days of startups.

So I started working on a book of interviews with startup founders, and the book was called "Founders at Work" and it was published in 2007. At the same time, I was becoming more interested in startups. I was becoming less interested in my job. The bubble had burst a few years back and the investment bank was making some pretty drastic cutbacks, and, you know, working there just had become boring and unpleasant. So I applied for a job at a venture capital firm where I felt like I might be one step closer to this exciting world of startups.

While I was interviewing at the VC firm, Paul would, you know, say, "You know what you should do?" me each night at dinner, telling me how I should change the VC business once I got into it. We talked for hours about how broken early-stage funding was and most importantly how more people would start startups if it could be made easier for them. So as the VC firm took longer and longer to decide to hire me, the ideas grew more and more compelling until one night, Paul just said, "Let's just start our own!"

The next day, we convinced Paul's co-founders from Viaweb, Robert and Trevor, to join us part-time. The initial plan was that they would pick and advise the startups and I would do everything else. Instead of giving large amounts of money to small numbers of established companies like traditional VCs did, we'd give small amounts of money to large numbers of earlier stage startups and then we'd give them a lot of help.

Our initial target audience was programmers, who we felt could handle the technical aspects of startup but were clueless about everything else, just like Paul, Robert, and Trevor had been. We also had more faith in young founders than most investors did back then. I mean, this was back in the days when Google's VCs insisted that the founders hire an outside CEO as a condition of their Series A round. So none of us had any experienced angel investing, and that's where the idea of funding startups in batches came from.

We decided to fund a whole bunch of startups at once during the summer so that we could learn how to be investors. In March 2005, we launched Y Combinator's website and invited people to apply for what we called the Summer Founders Program. We funded eight startups that summer, and we recognized almost immediately the power of investing in batches. It was so much better for the founders! They had colleagues to help them during, you know, a time that had previously been a very lonely process. But it was also a much more efficient way for us to help the startups because we could do things for them all at once.

Every Tuesday night, Paul cooked dinner for them, and at each dinner we brought in a guest speaker to teach the founders about startups. Paul talked to all the startups about what they were building, and I helped get them all incorporated as C Corporations. This was a really big deal in those days actually because back then, to become a C Corp, you had to pay a lawyer like fifteen thousand dollars to do this for you.

The first summer, we gave the startups $6,000 per founder, which was based on the stipend that MIT gave their grad students during the summer. At the end of the summer, we hosted Demo Day for an audience of about 15 investors, which we were very excited about. Reddit was in that first batch, and the founders of Twitch, although they were working on a different idea, and Sam Altman's geolocation startup.

We only had tried funding a batch of startups as a way to learn how to be investors. We realized within a couple of weeks that we were onto something promising, so we decided to do all of our investing in batches. We also decided that we'd fund the next batch in Silicon Valley. We knew that a lot of people would copy us, and we didn't want someone else to be the Y Combinator of Silicon Valley. We wanted to be that ourselves.

So despite the fact that we've grown significantly over the past 13 years and we've expanded in a lot of different ways, YC's core program is remarkably similar to what it was in 2005. So the question I always used to get over the years from people was "So what is your role at YC?" and it used to really bug me because no one ever asked Paul, Robert, or Trevor that question but now I think it's kind of an interesting question to think about. What was my role as the only non-technical founder of Y Combinator?

Well, at the beginning there were tons of errands like with any startup that just had to get done and there was no one else to do them. Paul and I divided up responsibilities perfectly, which I think is very important if you happen to start a startup with your spouse or your partner. He made our website and application and I got all the other stuff set up. For the first summer, I worked with the lawyers to set up Y Combinator, the entity, and to help create all kinds of template legal paperwork for our standard investments and everything that the founders would need to set up their companies and assign stock properly.

If you've ever done that, you know it's a lot of paperwork to do, and I had to learn quickly about how to advise them on filling everything out so that they wouldn't have to pay the legal fees. I had to set up Paul's small office building in Cambridge to be our weekly dinner gathering space for 25 people. I set up our bank account and I contacted people to speak at our dinners every week. I bought the groceries that Paul cooked for the dinners. I even delivered air conditioners that I bought at Home Depot to the founders. I mean, I was really the only one of us organized enough to make all this kind of stuff happen!

When it came to investing, I had something that my co-founders didn't have. I was a social radar! I couldn't judge our applicants' technical ability or even most of their ideas; my co-founders were experts at those things. I looked at qualities of the applicants that my co-founders couldn't see. Did they seem earnest? Did they seem determined? Were they flexible-minded? And most importantly, what was the relationship between the co-founders like?

While my partners discussed the idea with the applicants, I usually sat observing silently, and afterward they turned to me and asked, "Should we fund them?" From the beginning, I was very careful about only funding earnest people. Back then, I never envisioned that the people we funded would grow into this community of thousands of YC alumni, but I always tried to create a culture of humility. If I could tell someone was conceited, we did not fund them. I'm sure we've since funded some conceited people but early on, I was pretty rigid about this and I think that's the basis of the culture of our alumni community.

So far, the stuff might sound a bit different than you'd expect in a successful investor, but when you get to an extreme in something, things get qualitatively different. Y Combinator was a new extreme in the venture funding business. So what made someone a good investor was different. VCs relied on growth figures and estimates of market sizes, but those didn't exist at the stage that we were investing. What YC needed was deeply technical people to judge the potential of an idea and then someone like me to understand the founders' characters and the relationships between them.

To do that well, you needed abilities that had previously not been considered important as an investor. It was doubly hard too because some of the applicants were so young. We had to judge the founders not by what they were but what they could turn into. I mean, imagine Mark Zuckerberg back in his dorm room in 2004 with his website that let college students see what other students at the school were doing—not super impressive-seeming to traditional investors.

Another secret weapon of mine that was strangely well-suited to Y Combinator was that I was a very experienced event planner. Events are a crucial part of what YC does. When you fund startups in batches, everything's an event. Interviews are an event. Each dinner is an event. Demo Day is an event. As the alumni network grew, we started doing events for alumni too, and from the very first year, we did big events like Startup School.

I'd been doing events for years in my marketing jobs, so I could plan these things with one hand behind my back. Probably the thing that was most different about YC as an investment firm, though, was that it felt like a family, and I was its mom. I was soft and sensitive at a time when investors tended to be hardened and aggressive, and I’ll throw in ruthless—for a couple of them that I know. I cared about how founders were feeling, if they were overwhelmed, if they were eating properly.

I'd counsel them on relationships that were under strain due to the pressure of a startup, and I'd listen at length and help them with their co-founder disputes and break-ups. Starting a startup is emotionally draining for founders, especially in the beginning. Sometimes, they just needed someone to listen, and luckily my entire college career had trained me on listening to people's social problems. I tried to always be a straight shooter with my advice. In fact, we all were! Paul is the straightest shooter I know, which is why his advice is so valuable. He doesn't bury it; he doesn't hold back the truth in order to preserve people's feelings and as tough as they might find his advice at the time, founders always thanked him for his candor.

One thing Paul and I had in common was that we were not driven by money. We were interested in startups, and we wanted to help people start more of them. That was the basis for everything we did at YC, and it was what allowed us to do something as weird as YC in the first place. Because YC didn't have any LPs at the time, we weren't even constrained by a vague fiduciary responsibility to anyone, and that allowed us to take more risks with who we chose to fund.

It also allowed us to be benevolent to failing startups, and that often brought us into conflict with investors who had different priorities. Early on, we had funded a husband-and-wife team who had a baby, and they worked hard on their startup, but it was clearly failing. One of their investors tried to get them acquired by a big company in the Valley, who ultimately passed. Paul talked to the founders and learned that they just wanted the security of jobs so they could take a break from the constant stress of a startup, so we talked to the big company and got one of them hired there, and the founders were delighted. The investor, on the other hand, was livid.

He ripped into Paul harder than almost anyone I've ever seen before Twitter, saying that Paul had blown any chance of an aqua-hire and you know, to this day, I still don't get why investors squeeze founders over small outcomes like this. I also never cared much about fame or my own personal brand. I just wanted Y Combinator to succeed. One thing I've learned from Y Combinator is that the most successful startups grow organically out of the founders' lives, and this is true in my case too. I was almost uncannily well-suited for the kind of work that it took to make YC successful.

But the things that made me well-suited for it were so far from the qualities that most people associate with startup founders. I'll list them—oh my gosh, have I not been—have I been turning that? Okay, sorry! I got so into my talk. Oh, you're doing it! Thank you! Okay, I'm gonna list the qualities—pardon that little—okay, wait. Back, okay! I'm gonna list them so you can see for yourself.

I was a social radar, a good event planner, maternal, empathetic, a straight shooter, and not driven by money or fame. Think how far that is from the profile of the typical startup founder you read in the press! I mean, maternal? Since when was that an important quality in a startup founder, let alone the founder of an investment firm? Yet it was critical in making YC what it is!

And by the way, this photo was taken just about the same time that I wrote Airbnb their first investment check. So that's why I wanted to share with you my story. It's not true that every person can start every startup, but a lot more people have what it takes to start some startup than realize it. And a lot of people, perhaps all people, have some unique combination of abilities and interests, and a lot of these combinations match some startup idea.

So if you want to start a startup, I recommend you try asking yourself what's distinct about you? What unique combination of abilities and interests do you have? And don't edit your answers because, as you can see from my example, the most unlikely ingredients can often be the key to the recipe. In fact, it may even be that the strangest combination of qualities are the most valuable. I had a weird combination of qualities, but they matched YC because it was such a weird company, and the most successful startups do tend to be weird. They're usually such outliers that they seem preposterous at first to everyone except the founders because the company has grown out of their own experiences.

Okay, so what can you learn from my story? Here are nine things—I'm gonna try to do this smoothly! Okay, nine things. There's no one successful mold for a successful founder. Just because you might only see a certain type in the news, that doesn't mean you need to turn yourself into that. Do what you're genuinely interested in and try to play to your natural strengths. A startup is so much work that you'll give up if you're not genuinely interested in it.

Don't pay attention to the mainstream's opinion of what you're doing, whether it's your skills, your idea, whatever! Unless they are your users, their opinion does not matter. Although do pay attention to the opinion of your users; they're important! In like YC, we agreed on the big questions, and we each deferred to each other's expertise on the small ones. Focus on making something people want! Everything follows from that.

In 2005, people needed a way to get a small amount of funding easily. Don’t let rejection distract you or hold you back. You'll get rejected in so many different ways, but you must just keep moving forward. Start small so you can be nimble and open to change. We never could have pulled off moving our operations out to Silicon Valley in a matter of months if we had hired people in Cambridge, for example.

And to this day, YC has a tradition of trying things out on a small scale before expanding them. It's okay not to have gone to an elite college. I grew up thinking that this was the be-all end-all. You've been trained to believe that you'll be judged by your credentials, but in a startup, it's the users who judge you, and they don't care about your credentials; they care about your product. Lastly, be intrepid. There’s room for lots of different types of people to be startup founders, but you do need a certain amount of boldness to work on ideas that most people would consider stupid and to keep going when you're ridiculed or ignored.

Okay, let's see where am I? Here we go, last slide! You are a jigsaw puzzle piece of a certain shape! You could change your shape to fit an existing hole in the world—a traditional plan—but there's another way that can often be better for you and for the world. Grow a new puzzle around you! That's what I did, and I was a pretty weird-shaped piece. So if I can do it, there's more hope for you than you realize! Thank you very much!

So thank you! So that's coming up. Hi everyone! I'm Kat Mahalik. I'm one of the partners at Y Combinator and I'm really excited to be taking on this fireside with Kathryn Minshew and Alex Kabbalah, co-founders of The Muse. The Muse was a company that went through Y Combinator in winter 2012 and they're based out of New York. So before we get started and each of you give us a quick introduction on yourselves and The Muse.

Yeah, sure! So I'm Kathryn Minshew, co-founder of The Muse and CEO. I'm Alex Kabbalah, co-founder and president. When we describe The Muse, it's a company that's all about helping people navigate their careers and connect with companies more effectively to find the right fit. So today, we have 50 million people every year—actually quite a bit more than that, but more than 50 million people who use themuse.com and hundreds of the best companies around the world from Facebook, Dropbox, Slack, to Johnson & Johnson, Capital One, Goldman Sachs, that are really all about telling a more authentic story and using that to hire people who genuinely want what they're offering.

But we have about 120 employees, now based here in New York City. So both with our clients and with The Muse itself, we've gone through a lot of good, bad, and ugly of hiring, so today we're going to focus on people. It's all about the people! So let's talk about hiring as a force for culture. So at a high level, why is this important?

This is really important both for individuals and for companies. So for companies, if you have the right people, that is what makes or breaks whether you're going to be successful, particularly in a startup where you only have so many bodies to do the things that you need to do. But for an individual, you are spending more hours at work than you ever did in the past. It's such a huge part of your identity, especially here in New York or the West Coast. The first question you're gonna get when you meet someone is "What do you do?" And whether that is something that resonates with you, that aligns with what you want to be doing or not, it's actually hugely important.

So the industry has not caught up with the changes of the future of work and we believe that it really needs to. We also think a lot about finding the right fit for you and that's particularly important for startups because every startup is so different, right? They have different cultures than each other, they have different cultures than a large company for sure. And I think that we live in a culture of these days that's obsessed with the you know, the best places to work list or sort of ranking companies, rating them from one to five stars, but one of our really deep beliefs is it's all about alignment, not ratings.

It's about what is the right thing for you. And so we'll talk more about this but I think when you're a startup founder, one of the most important things you can do early on is really identify what is the culture you're trying to build, what are the characteristics of the company that you want to create, and how do you kind of broadcast that, you know, loud and proud so that people who want that will be drawn to your company, and people who don't want that will say no thanks and they'll go find somewhere else to work.

So let's start with hiring. So many in the audience... or how many of you have already started a startup? All right, oh yeah! So many of you might be thinking about hiring your first employee or your first few employees. So how do you know who the right person or, you know, the first few people to bring on? Any kind of the biggest things when you're hiring is you have to know what you're looking for and that's a mix of skills and values.

And so you might be like, okay I need a salesperson, they need to get close deals, great! But what are the values that are core to your company as well, and then how is your process allowing you to actually figure that out? Especially early stage, especially if you haven't really interviewed a ton prior to starting a company, a lot of people just jump into it and they're like they go with their gut feeling and they're like "I think the person can do the job." But you really actually need to set up a process, and it can be a lot less arduous in the early days than it is if you get bigger—but what are you gonna ask for every single person going through the process? How are you going to compare them head-to-head? How are you gonna check their skills? Are you doing reference checks? You should be doing reference checks—all of those things!

And actually just thinking through the process at the beginning and identifying what you want! Because there are many types of salespeople, many types of marketers, many types of engineers. You don't just want an engineer or a salesperson. You want one with a particular skill set to make your company successful. So would you be willing to share some stories and mistakes you made at The Muse and early on when it comes to hiring?

Yeah, so first of all, like, we made so many mistakes in the early days when it comes to hiring. And I think one of the sort of ever-present truths of startups is that everyone makes mistakes. You too will make mistakes! And what separates the mistakes that are painful but survivable from the mistakes that kill you is how quickly you identify them and how quickly you move to remedy them.

So I'll give you code two examples of early Muse hires. During those days, what was sort of not doing what Alex just talked about? Vetting for values of mission alignment when you’re hiring. So when we started The Muse, I mean we were like nobody wanted to join the company. Nobody wanted to fund us. I think we've got to pay—I said this is a picture from after our YC interview in November 2011—and we were beaming ear to ear because it was actually the first VC pitch in months at which people hadn't basically just laughed us out of the room.

And so as you know, we were kind of very used to the only few people that were interested in working at The Muse were people that were deeply passionate about the mission and deeply aligned with the values that we had. All of a sudden we get into YC, that news becomes public, and we had all these people wanting to work for us—we didn't realize a lot of them actually just wanted to work for a YC startup. They wanted to work for a company they perceived as sexy; they didn't actually want to work for us!

So one of our first hires was an engineer. I'll call him Bruce because we've never hired a Bruce. And you know, he said all the right things, he seemed so passionate. He was also in San Francisco where we had just moved to do Y Combinator. He was ready to start the next day. He seemed to check all the boxes! We hired him! We jumped right in! At the time Alex now codes and has been really good for the first six years of the business, but at the time obviously we were incredibly technical so we thought this is a great solution.

And it was great for exactly seven weeks until he shows up one morning after I will say I had sold $25,000 of the Muse's first product to our early customers, and he says, "Hey, I want to talk. I want to be a co-founder. I want more money. I want more equity." I want to be the one that they talked about in TechCrunch, and I'm not writing a single line of code until you give me these things! Now we’re pretty low-drama—we don’t have a lot taller and certain people bring a job that it's also only a few weeks before demo day. So in terms of overhead we were really meeting between a rock and a hard place, and you know, without going into all the gory details, we had a couple of quick conversations, and then we were pretty much like, "Great! Well, it sounds like you should work somewhere else and we should find another person to partner with," because obviously that's not an example of shared values.

And you know, the thing is again, like you're gonna do a lot of crazy things from startups—I think we were lucky that we had the YC community who was able to hook us up with somebody else. We paid more than $25,000 of that revenue to build that early product, but we did get to a place where we were able to launch with demo day with these customers with a working product. But it was a really big lesson for us because I think there were a lot of signs early on that this person was just attracted by the shininess of a startup.

That said, you can make the opposite mistake, which we did about a year later, which is get people who are so into your mission and so into what you're doing that they don't actually want to do the job that you're hiring for, which again is a real problem. So just a quick version of that story is that I did our early sales, right?, because when you're five people in a room, actually I think three or four people in a room and it's like okay we need to go talk to customers like nose goes it was me! So I sold our first probably about 35 or 40 companies who were hired a partner at The Muse.

And when we needed to then hire for salespeople, we found people who loved what we were doing. They were so passionate. They wanted to be part of The Muse. They did not actually want to do sales! They did not want to do sales cold! They did not want to do cold outreach! And unfortunately, you've got to do that in sales—and so that was another painful lesson. And now I think we have just a much more thoughtful structure and hiring process where we try and assess to the extent that it's possible to do so, you know, how quickly can this person get up to speed, how much do they have the skills and the desire to do the role, how much would they value salon mission align, etc.

The last thing I'll say is nobody is perfect! So unfortunately, it's kind of a harsh rule of thumb, but if you don't have sort of for every ten people you've hired if there's not one person that you're either managing out or firing, you probably made too soft on performance. I think maybe more than that—that's like really the baseline—a lot of companies are starting to talk about diversity and inclusion, so what is one thing that founders, this audience can do to improve what they're doing in that space?

Great question! So one of the things I have actively fight against is the notion of sort of culture fit interviewing. I do think there's culture and different ways I think about how culture evolves but culture fit, especially for people who are not skilled interviewers and have not done it for a long time, is an amazing force for bias. Can you talk a little bit about what culture fit interviewing is?

Yeah! So often in an interview process, someone will meet a question and have to say, "Would this person be a good fit for our company?" So they'll go and they'll interview them, they'll talk to them, they'll come out of it and they'll be like, "Yes, this person is or is not a culture fit." And if you have not as a founder identified actually what culture fit means, what you get is "is this someone I'm comfortable around? Would I hang out with them the way that are right?" And so that is not only find bias against, I found both in terms of introverted people oftentimes interview less well than culture fit but also any sort of community of color if you are white team and sort of women if you are a male team. Whatever you are you look and you are more comfortable with people who are like you, who have your background, who joke about the same movies, who travel to the same places, whatever that might be.

And so when people interview at The Muse, and I hear someone, usually someone who's newer to the company interviewing maybe one of their first rounds of interviews, and says this person's not a culture fit, I get to ask, "Great! Which of the values were you concerned about?" And if they can point to one of them, absolutely, let's talk about what it was that came up in the interview that made them wonder—but if they can't point to it, then that actually—I don't care! The fact that you didn't click with that is not a prerequisite! The fact that you're not good friends and want a buddy-buddy up with them is not a prerequisite to work here.

I often have to tell very extroverted people being extroverted is not a prerequisite to work here, because that's often a place where you will find bias! The other thing I would say is starting day one and really valuing that and putting that into your process, because the larger the company gets, the harder it is to change the culture, the harder it is to become inclusive if you're not. The harder it is to become more diverse!

I have a more diverse team which breeds success—there's so much research on it! If you are truly committed to it from the beginning, that's actually a competitive advantage.

So you've both talked a lot about how important culture and values alignment is for the people who work within your company, but what about the people that you work with who are external to your company—investors that you might bring on or partners? Talk to me a little bit about that.

Yeah, I think shared values is just as important for the people outside your company than in it, and it's always been really important to Alex and I because you know we started a company together before The Muse that failed really painfully like in a ball of flames because of co-founder issues and because of a total lack of shared sort of values and ethics!

And I love when Jessica said, you know, find someone who has a similar moral compass because you might think like we can make it work but like oh my god no you cannot make it work! Exactly! I mean, we've even held the shared values test to clients! We actually, yeah, we've had a couple of clients and one in particular I think of right now that we ended up firing as a client for just not treating people well and sort of did what you would do is have a conversation, give the feedback, say this is acceptable, you get the absolute totally understand, won't do it again.

They did it again, we returned their money and decided not to work with them! It's a hard thing to do but I think it's values are only so important and only are real if they're difficult choices.

And on top of that, I think one of the most challenging things for early-stage founders is to think about how that applies to your investors, because you know, I wish that the early Muse company had lived in a world where we got to pick and choose all of our investors. We're actually very lucky in our Series A and our Series B, we had multiple term sheets, we had a lot of different options, and so for those I did eight different reference checks on all of the investors that I was seriously considering to lead both of those rounds, and I was really happy with the people we were able to pick.

But for our seed round, I was basically like walking around New York and Silicon Valley like Oliver Twist, being like, "Please, so can I have some more?" And I mean, really, it was, "Doesn't matter how small the check is, we'll take it!" Yeah! I mean, we raised our first 1.2 million dollars—it took over a year. It took about 13 or 14 months. We had one 300k check, two 100k checks, and the remaining, what is that, like $700,000 was basically made of like 50k, 25k, 10k. It was brutally hard!

And we actually faced a real interesting situation which some people might know about where we had an investor who actually was a seed investor in 2012 who came back in 2013 and offered to write us a huge check, and right at the end of the process basically propositioned me for sex. So we had to, you know, sit there, and the way that process had gone, the other fund had drawn it out so that we were actually down to about two months left of cash when we got the term sheet! We had plenty of five, six months left of cash. We had multiple options—we had signed a term sheet—we were down at the kind of, we thought the money was to be wired into our account any day!

And we ultimately made the decision to walk away from that entirely! Through literally a miracle, I raised $750,000 in five weeks from scratch! Honestly, I don’t think I could do that again. We don't recommend it! Yeah, thank you! It was surreal! But I think that that also made me a really even more passionate advocate for shared values, with everyone I work with! And actually, it was really powerful in gosh, earlier this year, like March or so to be able to talk about it in Fortune.

And the guy ended up stepping down from his post because it turns out he was literally doing it with someone six months before the article came out! Same old thing! I think, you know, that's why it's also not only important to make those decisions and who you work with, but I actually think when people really cross the line, it's also important to stand up and tell others because you know that's the only way that we're gonna change the industry!

Thank you for sharing that story! I mean, I think it is really important! And so many stories have come out in the past year! And I'm so grateful to all the women—included—that have been brave enough to do that! Because I'm sure there are so many more stories out there and hopefully you're helping bring forth the future where this doesn't happen to anyone!

So we are almost wrapped, almost out of time! We have a couple minutes left, but to wrap it up, let's talk about one blind spot that you think every early-stage founder should be aware of as their company grows!

Yeah, so I think one of the things that has been most fascinating to me because we're now a hundred and twenty people, six years old, is in the early days it—you sort of understand that your culture is kind of an average of your personalities and values sort of as founders, how much of an influence you have, and then as our company grew, I think we genuinely believed like, now there are so many more people that influence it!

And then as we got even bigger, we realized nope, it's still—that's still true! For better and for worse! The things that I'm proud of about us I think are such a huge part of our culture to draw and people can identify just walking into the room, but also the things that we've had to work on as founders, things that are our own personal weak spots are things that are also weak spots for the company!

And so, as you not just hire but think about how you grow as a company, take those into account because you will be such a huge influence on your company, not just when it's small, but throughout the entire lifetime! Yeah, and I'll give you an example of that which is, you know, I think that when Alex and I started The Muse, we really wanted to build a company that treated people with respect.

We have a very strong no-culture that we hire, fire, and promote against, but personally, I struggled in the early days The Muse a lot with giving candid direct feedback! And I've worked on that! I've gotten a lot better! What is it—radical candor, great book if you suffer this affliction! But it is really humbling and also really painful to all of a sudden look around and realize you have a 90-person company that is collectively bad at giving direct, honest feedback because you personally are bad at it!

And somehow that's just replicated more so to self across an organization! And it's much harder to change 90 people than it is to change yourself! And so I can't tell you how many things you can look at The Muse right now and you can trace a lot of the good things but you can also trace a lot of the challenges to things that, you know, maybe we weren't as good at personally!

And I think that the more you're aware of that, the easier it is to actively have other people say, "You know, look, this is something I'm good at, can you help me counteract this in our culture? Can you help me make sure that we don’t build a team that suffers the same flaw at scale?"

The one other thing I’d say in terms of a blind spot—and you know, seeing rooms like this and having so many more female founders than there were when we started The Muse will hopefully change this—but know that you can start a company that is the reflection of what you want to build and it doesn’t have to be what everyone else is building.

In terms of what you do, how you do it, how you approach it, there’s such a range and there are companies in New York that we know well who’ve grown really quickly, like wow, I have no idea how they’re growing so fast and then I get to learn more about the inside of them, or I would never run that company; and you know what? You do you but the way that you want to do it, I think is okay, right?

And sing true to who you are, there are people who are going to want to work as part of that and be a part of that culture, and that’s going to be refreshing compared to a lot of other environments! So don’t let the sort of model that you know be the one that you think you have to fit into!

Yeah, the rejection that Jessica was talking about, it’s not only people rejecting sometimes your idea or telling you no for funding but it's also people saying "Oh, if you try and build your company like that, it’ll never work!" And you know, we made decisions early on.

We have a baby-at-work policy! In fact, Alex’s daughter is somewhere in the backpack, yeah she’s probably asleep! She’s watching! But, you know, I think we just—we were told over and over again like, you can’t do that! You can’t build a company that does that and make it work! And it does sometimes mean it’s harder but I think that if it’s something really important to you—of course, like learn as many lessons!

We learned so much from other founders about the mistakes to avoid, how to build faster, but I also think that there’s not one right way, especially when that one right way is often, you know, a bunch of dudes basically deciding what they think like the best possible company is! And there’s real power in just owning what you believe is right and then just doing it!

That is awesome! Thank you so much to both of you! Thanks, Kat! [Applause] I’m going to do a bit of furniture moving. You’re gonna have the back of my face but hopefully then you’ll be able to see our speaker’s actual face.

Okay. Hi everybody! I’m Kirsty Nathu, I’m one of the partners at Y Combinator, and it is my great honor to introduce Shang Lin Ma, who’s the CEO of Zola and Zola has reinvented the wedding gift registry, and they’ve now worked with hundreds of thousands of different couples and has latest reported valuations for the company of over six hundred million dollars. So welcome!

So I gave a brief description there of what you do, but I’m sure you do it a hundred times better than me, so why don’t you say a little bit more about what it is and what brought you to that point.

Sure! Maybe I can start by getting a show of hands of who here has used Zola, either as someone getting married or someone going to a wedding? Great, well thank you to you all! And for those of you who aren’t as familiar, Zola is the fastest growing wedding registry and also one of the fastest growing wedding companies and e-commerce sites in the country!

We use design and technology to really reimagine what it's like for couples getting married today to plan their entire wedding and we look to serve couples from the day they get engaged through that first year of marriage. People getting married today, the millennial generation, and they're unlike any other generation!

They want different things! And so we are really the only place where couples can register for things they truly want, no matter who they are, where they live, or whatever device they live on.

And so, what drew you to weddings?

Well, like many successful startups, we started Zola really out of personal need. So in 2013, which was the year that I started out with my co-founder, that was also the year that all my best friends were getting married at exactly the same time!

Yeah, so I was like many of us have had that year here, and you're going to a lot of weddings and you're buying a lot of gifts from really painful wedding registries often. So I was doing that in 2013 and I was so frustrated because my friends were registered at the traditional department store registries, and I had worked in e-commerce for a long time, and I thought that buying from their registries was the most painful e-commerce shopping experience I had ever seen!

I started talking to my co-founder, Nobu, who was the head of the user experience design team at Gilt, and we had worked together at Gilt for a very long time, and he's married and he started complaining about how bad it was from the couple's side where he really wanted to register for not just products but experiences and cash; he couldn't do that! He wanted to enable group gifting; he couldn't do that! He wanted to personalize his registry; he couldn't do that!

And so the more we talked about it, the more we realized this was an opportunity and we were the best possible people to solve it.

And so what was this about it that made you jump into being a founder from, you know, a relatively stable job and everything else to make you take that leap into the unknown?

Well, my background and my co-founder's background is really in product management, so we went through a very traditional product development process before we decided we really wanted to commit to doing this 24/7, and the process was we would started to talk to any engaged person that we could find—any friend or friend of a friend. We would meet them, understand their experience, their pain points, and then go away and try to design and innovate on how we could improve their wedding registry experience.

So in 2013, there were really three things that kept coming up again and again. Couples really do want to register for products and experiences and cash—all in the one registry; couldn't do that anywhere else. Couples, secondly, really do want to fully personalize their registry; couldn't do that anywhere else and in a world where on average in the country people spend thirty-five thousand dollars on one wedding day—which is the average yearly income—they really care what it looks like and they want the registry to reflect that!

And in third, we heard again and again the worst part about registry from couples was they wanted to control when their gifts were sent to them, and they didn't want to receive anything before they were ready and for most couples, this actually means they don't want anything until after their wedding date! So we started designing this concept for Zola based on these three differentiators. We would put prototypes in front of users, we would ask them to walk us through the designs, and over the course of a few months, we would wait and try not to sell them or lead them—we would wait for the brides to be to ask us the magic question—which is in the product world, it is when can I use this product?

And it's really hard because you really want to pitch them on how great your product is but we tried not to and we did it here that for a few months, and it was only after we started to hear brides who were getting married the following year say to us, "Will this be ready in time for my own wedding? Can I use this any time soon? Or can you email me when I can sign up?" That's when we knew we had a winning product, and that's when we committed to doing it 100%.

Wow, that's exciting! That's like the full-on process before taking the jump!

So, you know, we see a lot of wedding startups applying to us; there's lots out there! We're in an age where retailers generally are struggling, so what do you think it is about Zola that’s made it so successful?

So when we were thinking about Zola as an idea, we thought that we could produce a product that was different and that users really loved, but just as important to that was it was important to me that we have a business model that works!

And I think that has been our biggest competitive advantage, and that's the reason why we've been able to survive and thrive where most other wedding startups have closed in the years that we've been around. And this was really based from my experience at Gilt. So I worked at Gilt during the first four years of the business in product and saw a lot about what worked really well to drive that huge growth from zero dollars in revenue to over six hundred million dollars in revenue in four years, and I also saw what ultimately did not work, which led to the decline and meant that it could never really be a profitable sustainable company.

And we've looked at what those problems that Gilt—which are typical e-commerce problems—and how can we solve them at Zola. So for example, the way the things we learned were one, in e-commerce returns are the silent killer! You hear laugh from anyone who's worked in an e-commerce business; you don't quite realize that when you're first starting until you're halfway into the business! You're like, "Oh, these returns are brutal to the business model!"

And the way that we were able to address that at Zola is through this feature where we don't actually send anything until people tell us they actually want to receive it! And through the registry, people can do virtual returns! So they exchange things through our app or through our site before they ever get it shipped out to them, and that has meant we have virtually no returns!

One of the other killers in e-commerce is inventory and we were able to address that by building our backend technology that enables us to drop-ship products from our partner warehouses directly to our couples! By not taking in product into our warehouse and then shipping it out again, that meant that we were able to be much more capital efficient and just ultimately about a more sustainable business than the normal e-commerce business!

And then the last thing I’ll say around e-commerce businesses is that they’re very hard to forecast and project and to drive people down that checkout conversion funnel! At Gilt, actually, one of the things that worked really well to drive demand and drive people to check out was that we saw when you're selling designer brands that people love at 80% off for 24 hours only in limited inventory, that really drives demand!

But the flip side of that is it's very hard to predict and forecast! So at Zola, we were thinking about, how do we still drive demand intent but have a more forecastable business? And when it's more forecastable, it's more manageable, and the reason actually why we were excited about the wedding registry business and the model we were adopting is that for the most part when people get married, you kind of set up—you have to pick a wedding registry!

And when you go to a wedding, you kind of have to buy off the registry. That is part of a ready demand that is going to happen by a certain deadline which is your wedding date! And so that demand intent was built into the idea of a wedding registry, and that was something that was one of the reasons we wanted to do this!

The other thing that was important to us was because people sign up for a wedding registry seven months before their wedding date and they start adding things to their registry, we can very clearly predict and forecast what we’re going to sell seven months to one year in advance! And then we can manage our business to make sure we have those items in stock available for couples when they want to ship them, and in doing so, have a better user experience but also a better business model!

And I think that solving the user experience and the business model together is what has allowed us to be successful in the wedding space! Amazing! So I’m going to take you back in time, back to the very early days of the company, and I love asking this question because practically every founder I speak to has some kind of crazy story around this. So asking you about your first seed round and how that came about and what are your crazy stories on there?

Oh, I have some crazy stories! So I speak to a lot of founders and have really learned every seed round is unique, and ours is no different! So our seed round was a bit different because I had worked at Gilt Groupe for four years before Zola and had worked very closely with the founder of Gilt. His name is Kevin Ryan and he is a serial entrepreneur in New York. He founded Gilt, Business Insider, and co-founded MongoDB, and he was excited to work with myself and my co-founder, Nobu, again.

So when we talked about starting this wedding company, he said, "I would love to work with you, I will give you the seed funding, and we can just get started." And while many people are like, "Oh, that sounds like a really good seed round situation," I will have to agree and say it was great, but it wasn't as easy as it sounds because it wasn't like it was just handed on a silver platter! The reason I had that opportunity to have that offer was because I had worked with Kevin for four long years—for very intense startup years—and I had basically slugged my guts out for him for four long years, and that was the reason I got that seed offer!

So while many people are like, "Oh, you didn't even raise a seed round!" I'm like, I was raising it for four years! So that was our seed round! But the funny story is, when I was negotiating the seed round with Kevin, I was actually in Ireland because I had to go and get my visa because I'm from Australia! So I was in Ireland, I was on a hike, and for those of you who are Game of Thrones fans, it's like I was basically at Winterfell hiking. It was pouring with rain; there was no cover anywhere, and I was on the phone trying to negotiate terms with him.

And we got there but it was, yeah, it was interesting! And what was it like working with him as an investor and somebody that you were working with? It's fantastic! Because I've worked with him now for close to 10 years, he has been essentially like a coach and a mentor and in many ways, a very active investor and co-founder in the business!

And so it's great to have someone who is operated at this point in New York for decades, who has seen many businesses, who can give me a reality check and do so from the operator entrepreneur perspective, which is very different from the VC investor perspective! Okay, so… So now, coming back up to present day where you've gone from negotiating seed rounds in the rain to raising 140 million dollars, how's the pitch changed?

How has it changed how you talk to investors? What mistakes have you made along the way? Any advice for these ladies? Yes! I wish someone had told me in the early rounds what I'm about to share here, which is in some of the later rounds when I would pitch in partner meetings, which were inevitably at that time all dudes and maybe one woman in the room—like 20 dudes, one woman—I would always ask, "Do you see differences between the way I pitch and the way male founders pitch?"

And every time I hear a very consistent response, which is guys coming to the pitch, they bang their fists on the table and they swear that this is gonna be a billion-dollar business! They have no doubt that it’s gonna be a billion-dollar business which is funny because every single guy has no doubt it’s going to be a billion-dollar business, and women just don’t really do that! And certainly, I didn’t!

So my pitch—you know, I've had investors tell me you’re just more modest and more factual and not really as aggressive as a lot of the male founders pitching. I've been thinking about this a lot over the years, and what I've tried to do is really verbalize externally during the pitch the conviction that I feel internally. But in the early rounds, I never had enough confidence or enough guts, I would say, to really be banging my fists on the table because the thought in my mind at that point was always, you know, there’s a small chance that may not be a billion-dollar business, so I don’t know if I want to say this is a good one!

But it turns out that actually I feel very strongly about it, so I should just say that! The funny anecdote here is more recently I had a guy pitching to me that he was building a trillion-dollar business! Alright, wait! Are we there now? I guess so, right? I have to upgrade my pitch!

So you mentioned your co-founder a couple of times! How does the relationship work between the two of you? How has that changed over time? What/how do you complement each other?

Yeah, Nobu, who is my co-founder, is the best! And we love working together because part of it is we have worked together for many years before starting Zola and the reason we wanted to start Zola together was because we knew from our past work, we were able to create great, award-winning products together! And there was something so rewarding and fulfilling about that that we wanted to do that again!

So he is, I think, the best design thinker in the world! He is our chief design officer and leads product and user experience design—and in the early days, when it was just me and him, he would focus on product and design and creative and I would focus on everything else! Over the years, he has continued to really manage our design vision and product rollout and I've tried to replace myself more and more in each function that I was initially responsible for!

But having someone that you trust fully, who knows you really well, who knows your weaknesses and strengths, has made all the difference in the world! Amazing!

Okay, so we just have a couple more minutes! So to wrap up, what's the one biggest piece of advice that you wish you'd known when you started that you can share with the audience today?

My advice to founders is always a piece of advice that I got when I was first starting Zola and I think it's the most valuable piece of advice, which is before you really decide to commit to an idea for your startup to think about how you’re gonna spend at least the next 10 years of your life focused on this one thing! And that's if everything goes well but you're gonna be living, breathing, working pretty much 24/7 on this one thing and your most valuable asset is your time!

So, is this the best way that you want to be investing your time for the next decade? Because if it's not the best investment of your time, maybe you should think about another idea and another team or something else! But to really have a commitment to yourself before you bring anyone else on your journey, and once you're able to think about that and commit it to yourself that this is the only thing you want to be doing, then you're ready to go!

Alright gents, thank you very much! This has been excellent! [Applause] Alright, hello everyone! My name is Adora, I'm one of the partners at Y Combinator. I have Roham from App Deef, Alana from Bulletin, and Tiffany from The Human Utility. Today we're going to talk about sketchy or essential startup advice. So I think there's a lot of actually good advice in books, articles, and even on Twitter sometimes, but they tend to be, I think, very generic and abstract and attempt to try to make it apply to everybody as much as possible.

So today, I want to go over some of that common advice you probably see and dive deep one level deeper into how it applies to these three folks and their startups and go from there. So, the most common advice I hear all the time, and I give all the time, is "Make something people want." It's so common, it’s almost the motto of Y Combinator! So maybe you guys can start off with introducing yourselves and what's the one-liner for what you're building and how did you know, why did you think it was something people wanted?

Hi everyone! I’m Rehan Figuri, co-founder and CEO of Ab Deco. We are a marketplace for buying and selling furniture based here in New York City! So, if you’re selling furniture definitely check out Ab Deco! I have to plug the site all the time! So the reason why I started Ab Deco was actually out of my own frustration trying to sell furniture on Craigslist.

I had a really bad experience and realized that something has to be done to make it better and more efficient! So we are a one-stop solution; we take care of the pickup and delivery. We handle payments online; we verify everything before pickup. And that was the reason why we started it because it was out of my own frustration!

Right? Hi guys! I’m Alana Branston, co-founder and CEO of Bulletin. Bulletin is WeWork for retail space! So we build physical retail stores where direct-to-consumer brands can sell their products for a monthly membership fee. So we have two stores here in New York, and the stores are actually filled with all female-led brands.

So yeah, it's completely for women, by women! And when we started the business, we actually did not build something that people wanted at all; it was like a disaster! We started off with—it was basically a bit like an Etsy competitor. It was like a cool curated Etsy was the idea! We literally didn’t sell anything! It didn’t work!

And then we started talking to those users and basically asked them "Okay, like, what can we do that is helpful? Because this clearly is not!" and figured out that they wanted access to retail space! And how hard it was for them to get into stores, so yeah, we eventually built something people wanted; it just took a while! Hey, everybody! I’m Tiffany Ashley Bell!

I am the founder and executive director of a not-for-profit organization called The Human Utility, where we essentially pay water bills for people that can’t afford their own! We’ve done that for like a thousand families in Detroit and Baltimore and a bunch of surrounding cities since July 2014. Thank you! Thank you!

It’s not really we either, it’s all you guys have donated! But you know we’ve done that for a thousand families since we started in July 2014, and it was more of "Make something people need!" We essentially crowdfund the money to help people, and I just read one day—I’m not from Detroit or anything like that! I just read about what was happening in Detroit because I was actually working in City Hall Atlanta and I was just thinking to myself, like, what kinds of failures had to happen in City Hall where somebody just decided that if you're poor, we'll turn your water off? And I thought that was pretty crappy.

So friends and I got together and just decided to like, you know, well, throw away a hundred bucks a weekend on some shirt we don’t need in a bad restaurant—so why not give that to, you know, people to help with their water bills? But it's through like the whole internet wanting to do that, so I've been doing that ever since! Awesome!

Okay, so another piece of advice is "Do things that don't scale." So give us one example of something that you did that wasn't really scalable you had to do anyway, and maybe it's related to how you got your first user.

I have a lot, but when we first started, I don't know how many people are doing marketplaces, but the big problem with marketplaces is they call it the chicken and egg problem. Do you need to get, you know, content and also buyers? And so how do we convince people to actually transact on our platform? So how do I get furniture platforms where nobody will trust that I actually am a real legitimate business was the question that we were trying to tackle.

So we were going on Craigslist; the reason why I actually built the platform is because of Craigslist! But we were going on Craigslist just telling people, "Hey, you should try Ab Deco! You know, we are gonna take care of delivery!" Except tech sector! Some people, you know, were convinced enough to list!

But the part that actually came out of one of my partner meetings at YC was instead of having people email them and have them go list on your website, why don’t you just list it for them? And so that was like, oh wow! Is that even kosher? I mean, I don’t think it is!

But, so we just started just going on Craigslist and literally copying content from Craigslist to our site and then there’s a whole other story of, like, once something's sold, how did we get it to the customer? That's a whole different story!

Yeah! For us, we basically—when we were pivoting from this like Etsy competitor idea to the retail space idea, we really didn’t have any money. I think we had $20k that we had gotten from YC fellowship, and we’re like okay, how are we gonna test like a retail space concept?

And so my co-founder and I, it was just the two of us at the time, started doing these outdoor weekend flea markets as a way to test the concept! So we literally rented out this overgrown vacant parking lot in Williamsburg—it was like a toxic wasteland. And we had all these brands come, we’d had like 40 brands come every weekend and they would come and like set up their product and sell!

And like it actually went really well! We were like they were making a lot of money! We were making money! Finally! And we used that to basically prove that, like, okay, brands will show up and pay for space! And like, there’s definitely better ways to do this!

And yeah, it was completely unscalable but it did like prove our point, which is good! So, we have kind of a two-sided thing where we have donors and the people that actually need to help. And so if you follow me on Twitter, I’m sorry, but that’s like the way that we got the initial donors!

But we had all this money that kind of piled up as far as pledges go, and since we've done everything on social media, we didn’t know how to access or like get to the people that needed the actual money! But what ended up happening is just like we got really low-tech and we just designed some postcards and sent them to people!

And so like if you—the USPS has like a way where you can just like target certain blocks and just kind of like say you want to send, you know, 500 postcards to this street! It’s like kind of gerrymander the way it looks like! But like we ended up just kind of doing that and just kind of going from our database and just saying we have a lot of people from Detroit in this zip code that are applying, so why not just target that entire zip code?

We just started doing that kind of thing! So, these people were not on social media, so we couldn't just keep tweeting for them! And actually, maybe I'll talk about it later but the city wasn't helping us either because they were kind of like, "Who the hell are you?" So they were just, you know, we didn’t get help in that way, so we kind of had to hack it in that way! And it turned out to be a really interesting sort of thing to send out postcards!

So the next one is "Find 10 to 100 customers that really love your product!" So how did you determine that people are loving your product, like how did you define that either qualitatively or quantitatively?

I’ll continue along the same story! So for us, once we started, you know, listing these products from Craigslist and trying to—we got our first sale and we’re like, wow, okay, what are we going to do to actually fulfill this sale because these sellers don’t even know that we’ve listed their product!

So we were trying to figure out how to fulfill that order! You know, the first time I tried, I emailed, "How I am to see about Dekho? You know, we sold your product on App Deco and, you know, we're gonna pay you!" And it just didn't work! Nobody responded!

So then we just realized like, "Hey! Like why don’t we just actually just pretend like we're Craigslist shoppers, go on their app, laugh, and just email them like, 'Hey! I'm gonna buy!'" And we just pay them in cash! And that was what we did!

The most amazing thing that happened out of that is because we were actually visiting every person's home, we were talking to our customers and we realized once we told them why we started the business, because once we got to their home, we would tell them, "Hey, this is by the way, Ab Deco, and this is what we do, etc.," they were like, "Wow! This is amazing!" They actually started telling all their friends!

So every time we went and we were doing something very unscalable, five, ten people signed up as a result of it! So that was the genesis of sort of getting from, you know, ten to a hundred customers! Referrals, basically, were pretty great!

And, yeah, I feel like we have like a pretty similar experience where once we started getting referrals from brands, we felt like, "Okay! We're doing something good enough that people are recommending their friends!"

I think we got lucky because our users, they're in this tight-knit community of brands, and so they all would talk to each other! And, yeah, I think it was like when we opened the third store and we were able to like book it out immediately and we like couldn’t believe that people were paying like pretty healthy rates to sell in the store and, yeah, it was just like finally getting to a point where we were doing something right for the users!

Yeah, I mean, so the first—but again, from donors versus people that we're helping, so the donor side was again just social media, and it turned into like the news finding out about us and the people signing it from there!

And that became like me getting stuck in my apartment for like two weeks talking to press over and over again about what we were doing because it was kind of weird if you think about it to pay somebody else's water bill! So people were kind of fascinated with that aspect!

But then as far as the people we helped, again it's the postcards but then like, you know, Facebook groups and stuff like that! So let’s talk a little bit about competitors! So the common advice is just ignore it; your growing your startup! You know, startups are going to die because of suicide, not murder.

So how do you guys think about competitors?

It's definitely easier said than done to ignore them for sure! But, you know, I've learned through time now—this is our fifth year in business—that is really the best advice—to try to ignore them!

And what I've learned over time is, you know, just focus on the things you can control and you can control making delighting your customers. You can control making, you know, a product that people want and things like that. So I think we had competitors that have raised tons more money than we have to date even, and they've shut down! So it really doesn't matter at the end!

It's all about the execution and just focus on the things that will make you compete in the market!

Yeah, I think we try and ignore them as much as possible! I definitely have like my Google Alerts set to say—like when they announce certain things! And I think, you know, we'll look to see how they're positioning their product in the market or when they're raising money. But yeah, I think the more you can just keep your blinders on and look at your metrics and look at your milestones and keep your team looking at that and not be like, "Oh my god, they just raised twenty-three million dollars! What are we gonna do?"

It’s distractive and it doesn’t really help you in any way!

Yes, and the not-for-profit sector is a little different because they're still totally competition! Like it's not just this like oh, everybody's like trying to help the world or whatever because it's actually surprisingly cutthroat, which I learned kind of on-the-job!

Maybe if you pull me afterward I’ll tell you about certain mafia phone calls I got from other organizations! I’m not even kidding! But like just for us has been like learning how to communicate the work that we're doing really well and also just kind of pulling at people's heartstrings and like learning how to do the storytelling!

And then also eventually you butted heads with the city a little bit, can you—?

So we bought—we butted heads with the city a little bit or they weren't a couple at all. No, so I think when we launched, we embarrassed Detroit, which wasn't the goal! We just helped people when they didn't!

And so they didn't—I mean, it's true! It's true! So they told people not to come to us for help because they're like, "Well, you know, if you need help, come to us!" But they weren't helping people! They were turning off cancer patients for crying out loud! And this is kind of stuff that was going on!

But we got a call from a certain very big nonprofit, so a national organization, and they saw us as competition, which was funny because I was still like operating this out of my bedroom basically as a fundraising thing!

But it's just a principle that you know we got more press! People were—this what we were doing was resonating with people more, and we could show actual like success stories, and we weren't like building six houses with hundreds of millions of dollars and that kind of thing!

So I think that's the nonprofit sector has competition still! But I think if you like show that you operate better, you're actually using the money for what you say you are, and you're like putting those success stories out!

And then you're talking about like the systemic change that you're trying to actually kick off, that actually resonates with people. That's the question I get all the time too: like "How are you gonna do this? What’s the long-term sort of plan?" And for us, it's actually not to keep raising money!

But it's actually to like have laws passed around water affordability and just kind of use like a lot of startup principles to do that!

So cool! So it's often said that you shouldn't start scaling, as in hiring lots of people until you find product-market fit. So maybe Kirsty, you might go over, and we talked about referrals and stuff like that, but maybe go over when did you know you should hire your first person? Who was your first important hire and why did you hire that person