Female Founders Conference - New York
These notes were generated by AI and may contain inaccuracies.
[Applause at 15:14, 15:31, 16:01]. Hi everyone, good afternoon. Nice and cool inside, thank goodness. Lived in New York more than 20 years ago; this brings back summers on the subway, so hot. Thank you for braving the heatwave on a Saturday afternoon. Excited; fifth year of Female Founders Conference, first time in New York.
I'm Jessica Livingston, co-founded Y Combinator (YC), the first accelerator. In 2005, unusual; regarded as irrelevant in Silicon Valley. YC began with hypothesis people wanted; they did, grew. Funded more than 1,800 startups, total value over $100 billion.
Having been through startup journey, wanted to tell my story. Media impression: contribution is being Paul Graham's wife; love being his wife, but more to the story.
Born Minneapolis 1971; mother left home later that year. Father took me to Boston to live with grandmother during week while he worked, with dad on weekends. Grandmother most important female role model: independent, free spirit. Built giant ice sculptures in front yard after putting me to bed; did what she wanted, didn't care if unconventional.
Despite no mother, happy childhood. Dad sacrificed for great education, constantly encouraged. Played soccer young; 9th grade away game at Philips Academy Andover, decided to go there.
At old school, big fish in small pond: straight A student, good at sports. At Andover fall 1986, everyone straight A and good at sports; discouraged, gave up. Mediocre student, nothing impressive for next decade: personal Dark Ages, embarrassing but important to mention.
Journalists/biographers focus on early predictors of success; I had none conventional, no one voted me most likely to succeed.
Three defining characteristics critical to YC success:
- Social radar: co-founders' nickname; noticed if something off, made inquiries, figured out via subtle social cues.
- Hated being at mercy of anyone; disliked anyone telling what to do/not do (parents, teachers, bosses, collaborators).
- Straight shooter, like grandmother and father.
Day after college graduation, grandmother died; sad, lonely time. English degree, no clue what to do.
Job at Fidelity Investments customer service: calls 3:30-midnight from retail investors about Mellon account down. Awful job, but loved working hard, getting paid, no homework.
Then investor relations NYC, Food and Wine magazine, automotive consulting firm, briefly wedding planner.
2003, marketing at investment bank Boston; met Paul Graham at party at his house. Started dating; felt met Mr. Right. Similar despite different backgrounds.
Paul: independence dialed to 11. Back in Cambridge after selling Viaweb to Yahoo. Writing essays, programming languages, publishing book, curing fear of flying via hang gliding. Best problem solver; genius at expanding ideas, radical improvements. Tells people "you know what you should do."
Paul's circle exposed me to startups: more exciting than late-stage public companies at investment bank. Read Startups by Jerry Kaplan about Go pen computing; hooked, wanted more early startup stories.
Worked on Founders at Work (2007), interviews with founders.
Less interested in job; bubble burst, cutbacks, boring/unpleasant. Applied to VC firm for closer to startups.
Paul nightly: "you know what you should do," talks on broken early-stage funding; more startups if easier.
Ideas compelling; one night Paul: "let's just start our own." Next day convinced Robert and Trevor (Viaweb co-founders) to join part-time.
Initial plan: they pick/advise startups, I do everything else. Small money to many early-stage vs. large to few established. Lots of help. Target: programmers clueless on non-technical.
Faith in young founders; e.g., Google's VCs insisted on outside CEO for Series A.
No angel investing experience; fund batches to learn. March 2005 launched YC website, Summer Founders Program.
Funded 8 startups summer 2005: $6,000 per founder (MIT grad student stipend). Reddit, Twitch founders (different idea), Sam Altman's geolocation startup.
Power of batches: better for founders (colleagues, less lonely), efficient for us (group help). Tuesday dinners: Paul cooked, guest speaker. Paul talked progress; I incorporated as C Corps ($115k lawyer fee then). Demo Day for 15 investors.
Realized promising; all investing in batches, next in Silicon Valley (didn't want copycats). Grown significantly 13 years, but core program similar to 2005.
Question: "What is your role at YC?" Bugging as only asked me, not Paul/Robert/Trevor.
Early: errands. Paul/I divided perfectly (important for startup with spouse/partner). He: website/application. I: entity setup, template legal paperwork (investments, company setup, stock assignment). Advised on filling to avoid fees.
Set up office for dinners (25 people), bank account, speakers, groceries, delivered Home Depot ACs to founders. Only organized one.
Investing: social radar. Couldn't judge tech/ideas (co-founders experts). Judged earnestness, determination, flexibility, co-founder relationships. Observed silently; they asked "should we fund?"
Careful: only earnest people. Avoided conceited (basis of alumni culture).
Extreme in venture: different investor qualities. VCs: growth figures/market sizes (nonexistent early). YC: technical for ideas, me for founder character/relationships. Abilities not previously investor-important. Hard: judge young founders by potential (e.g., Mark Zuckerberg 2004 dorm room site).
Event planner: events crucial (interviews, dinners, Demo Day, alumni events, Startup School).
YC like family; I was mom: soft/sensitive vs. hardened/aggressive/ruthless investors. Cared if overwhelmed, eating; counseled relationships, co-founder disputes/breakups. Listened (college trained). Straight shooter advice; Paul straightest.
Not driven by money/fame; interested in startups, help more start. Basis for weird YC; no LPs, no fiduciary constraints. Took risks, benevolent to failing.
Example: funded husband-wife team, had baby, failing startup. Wanted job security. Got one hired at big Valley company; delighted. Investor livid, ripped Paul (pre-Twitter); don't get squeezing over small outcomes.
Didn't care about fame/brand; wanted YC success.
Successful startups grow from founders' lives; mine uncanny fit for YC, but far from typical founder qualities:
- Social radar
- Good event planner
- Maternal
- Empathetic
- Straight shooter
- Not driven by money/fame
Far from press profile. Maternal critical for YC.
Photo: ~time wrote Airbnb first check.
Not every person every startup, but more have what it takes than realize. Unique abilities/interests match some startup. Ask: distinctive about you? Unique combination? Don't edit; unlikely ingredients key (strangest most valuable). Weird qualities matched weird YC (outliers seem preposterous).
9 lessons:
- No one successful mold; ignore news type, do what genuinely interested, play to natural strengths (give up if not interested).
- Ignore mainstream opinion (skills/idea) unless users.
- Agree on big questions, defer expertise on small.
- Focus on making something people want; everything follows.
- 2005: needed small funding easily.
- Don't let rejection distract; keep moving.
- Start small: nimble, open to change (e.g., quick Silicon Valley move).
- OK not elite college; users judge product, not credentials.
- Be intrepid: boldness for stupid ideas, persist ridicule/ignore.
You are jigsaw puzzle piece: change shape for existing hole (traditional) or grow new puzzle around you (better). Weird shape worked; hope for you.
Thank you.
Cat Manik, YC partner, kicking off fireside with Katherine McHale and Alex Kavalis, co-founders The Muse (YC Winter 2012, New York-based).
Katherine McHale, co-founder/CEO. Alex Kavalis, co-founder/President.
The Muse: helps navigate careers, connect authentically with companies for right fit. 50+ million users/year on themuse.com. Hundreds companies: Facebook, Dropbox, Slack, Johnson & Johnson, Capital One, Goldman Sachs. ~120 employees NYC.
Gone through good/bad/ugly hiring with clients/Muse.
Important for individuals/companies. Companies: right people make/break success (esp. startups, limited bodies). Individuals: more hours at work, huge identity (NYC/West Coast: first question "what do you do?").
Industry not caught up to future of work. Finding right fit key for startups (different cultures).
Culture obsessed with best places lists, 1-5 stars. Deep belief: alignment, not ratings; right thing for you.
One deep belief is that it's all about alignment, not ratings—doing what's right for you. As a startup founder, early on identify the culture you're trying to build, its key characteristics, and broadcast it loudly so the right people are attracted and others self-select out.
Many in the audience are starting startups or thinking about hiring first employees. Know what you're looking for: a mix of skills and values core to your company. Set up a process, especially early stage:
- What questions will you ask every candidate?
- How will you compare them head-to-head?
- Check skills via reference checks (always do them). There are many types of salespeople, marketers, engineers—specify the skill set needed for your success.
Everyone makes hiring mistakes; what matters is identifying them quickly and acting to make them survivable, not fatal.
Mistake 1: Not Vetting for Values and Mission Alignment
After YC interview in November 2011 (first VC pitch in months without being laughed out), news spread. Suddenly many wanted to join a 'sexy' YC startup, not necessarily The Muse. Hired 'Bruce' (engineer in San Francisco, ready next day, said right things). Worked for 7 weeks. After selling $25,000 of first product, he demanded co-founder status, more money/equity, TechCrunch fame, refused to code. Weeks before demo day, they parted ways (low drama tolerance). YC community helped find replacement; spent over $225,000 of revenue but launched on time with working product and customers.
Mistake 2: Hiring Mission-Passionate People Who Don't Want the Job
Hired first salespeople who loved the mission but hated sales calls and cold outreach. Founders did early sales (nose goes: Kathryn sold to first 35-40 hiring partners).
Now use structured process assessing:
- How quickly they ramp up.
- Skills and desire for the role.
- Values/mission alignment. Harsh rule: For every 10 hires, expect 1 managed out or fired; otherwise too soft on performance.
Fight culture fit interviewing—it's a bias magnet, especially for unskilled interviewers. 'Culture fit' often means 'someone I'm comfortable with' (same background, jokes, travels), biasing against introverts, communities of color (on white teams), women (on male teams).
At The Muse:
- When interviewer says 'not culture fit', ask: Which value concerned you? If none, it doesn't count.
- Extroversion not a prerequisite. Start valuing diversity/inclusion from day one—harder later. Diverse teams breed success (research supports). Competitive advantage if committed early.
Shared values as crucial for externals (investors, partners, clients) as internals.
- Co-founders: Previous company failed painfully due to lack of shared values/ethics. Similar moral compass essential.
- Clients: Fired one for not treating people well after feedback ignored; returned money.
- Investors: Seed round brutal (1.2M over 13-14 months: 1x 300K, 2x 200K, rest 50K/25K/10K checks). Did 8 reference checks per Series A/B lead (multiple term sheets). Seed: took any check.
Investor Horror Story
2012 seed investor returned in 2013 with huge check; at end, propositioned Kathryn for sex. Had signed term sheet, down to 2 months cash—walked away. Miracle: raised $750K in 5 weeks from scratch. Shared publicly in Fortune (March this year); he stepped down (did it again 6 months prior). Stand up and tell to change the industry.
Founders' personalities/values heavily influence culture at all scales (The Muse now 120 people, 6 years old)—positives and weaknesses replicate. Example: Kathryn bad at candid feedback early (struggled personally); company of 9 became collectively bad at it. Easier to fix yourself than 90 people. Actively counter personal flaws by hiring help.
Build the company you want, not copying others. Some fast-growing NYC companies horrifying inside. Stay true—right people will join. Rejection includes 'that won't work' (e.g., baby-at-work policy; Alex's daughter in back). Harder but powerful to own your beliefs vs. 'dudes deciding best company model.'
Kirsty Nathu (YC partner) introduces Shan-Lyn Burna, CEO of Zola (reinvented wedding gift registry; hundreds of thousands couples; $600M+ valuation).
Fastest-growing wedding registry, wedding company, e-commerce site. Uses design/technology to reimagine wedding planning for millennials (serve from engagement to first year marriage). Only place to register for anything (products, experiences, cash), personalized, any device/location.
Started 2013 out of personal need. Shan-Lyn's best friends all marrying; painful buying from traditional department store registries (worst e-commerce). Co-founder Noah Kagan (ex-Gilt UX head) complained from couple side: wanted experiences/cash, group gifting, personalization—impossible.
Product management backgrounds. Traditional process:
- Talked to engaged people (friends/friends-of) on pain points.
- Designed prototypes. Key needs:
- Register products/experiences/cash in one place.
- Fully personalize (avg. wedding $35K = avg. yearly income).
- Control gift delivery (most want post-wedding). Put prototypes in front of users; iterated months without selling. Magic moment: Brides asked, 'When can I use this?' (e.g., for next year's wedding). Committed full-time.
Retailers are struggling, yet Zola has thrived among many wedding startups. Zola's key competitive advantage is a business model that works alongside a product users love. This enabled survival while most wedding startups closed.
Drew inspiration from experience at Gilt (first four years in product): grew from $0 to over $600 million revenue in four years, but later declined due to unsustainable model. Solved typical e-commerce problems:
- Returns (silent killer): Zola feature delays shipping until couples confirm they want items; virtual returns/exchanges via app/site before shipment result in virtually no returns.
- Inventory: Backend technology enables drop-shipping from partner warehouses directly to couples, avoiding warehousing for capital efficiency and sustainability.
- Forecasting/predictability: At Gilt, 24-hour 80% off designer sales drove demand but were unpredictable. Weddings provide built-in demand—couples must pick a registry ~7 months before wedding; guests buy off it by wedding date. Predict sales 7 months to 1 year ahead, ensure stock availability for better UX and business model.
Solving UX and business model together drove success.
Every seed round is unique. Zola's was atypical: Worked 4 years at Gilt with founder Kevin Ryan (serial entrepreneur, founded Gilt, Business Insider, co-founded others). He offered seed funding to work with her and co-founder Nouu. Not handed easily—earned through 4 intense startup years "slugging guts out." "I was raising it for 4 years."
Negotiated terms while in Ireland for visa (Australian founder), hiking at Winterfell (Game of Thrones reference) in pouring rain, no cover.
Working with Kevin as investor: Fantastic coach/mentor/active investor/co-founder-like. Operated in NY for decades, provides reality checks from operator perspective vs. VC.
Pitch has changed; key lesson for early rounds: Verbalize internal conviction externally. In later partner meetings (20 dudes, 1 woman), asked if they saw differences vs. male founders. Consistent response: Males bang fists, swear it's a billion-dollar business with no doubt. Females more modest/factual/less aggressive.
Adjusted to express strong belief despite small risks. Recent anecdote: Male pitching trillion-dollar business—"I have to upgrade my pitch."
Nouu (Chief Design Officer) is best co-founder; worked together years before Zola, created award-winning products. Motivated to repeat rewarding experience. He leads product/UX/design/creative; she handled everything else initially, now replacing herself in functions. Full trust in strengths/weaknesses makes all the difference.
Before committing to startup idea, consider spending next 10 years living/breathing/working 24/7 on it. Time is most valuable asset—is this best investment? If not, consider another idea/team. Commit to self first, then bring others.
Adora (partner at Y Combinator) moderates with Raham Ferri (CEO App Deco), Alana Branson (CEO Bulletin), Tiffany Ashley Bell (founder/exec director Human Utility). Advice often generic/abstract; dive deeper into applications.
Make Something People Want
- App Deco: NYC marketplace for buying/selling furniture; handles pickup, delivery, online payments, verification. Started from personal frustration selling on Craigslist.
- Bulletin: Physical retail stores for DTC brands (monthly membership); 2 stores in NYC, all female-led brands (for women by women). Pivoted from failed Etsy competitor (sold nothing) by talking to users—needed retail space access.
- Human Utility (non-profit): Pays water bills for those who can't; helped 1,000 families in Detroit, Baltimore, surrounding cities since July 2014 via crowdfunding. Inspired by Detroit water shutoffs for poor (read while in Atlanta City Hall); friends threw $100 at it, internet joined.
Do Things That Don't Scale
- App Deco: Marketplace chicken-and-egg. Scoured Craigslist, copied listings to their site (per YC advice: list for them). Fulfilled first sales by pretending to be Craigslist buyer, paying cash.
- Bulletin: Post-pivot, $20K from YC Fellowship. Tested with outdoor weekend flea markets in overgrown Williamsburg parking lot (toxic wasteland); 40 brands/weekend made money, proved concept.
- Human Utility: Pledged money via Twitter/social, but needed low-tech access to recipients (not on social). Designed postcards via USPS targeting ZIP codes/blocks (e.g., Detroit-heavy areas). City not helpful (embarrassed by them, told people not to use Human Utility).
Find 10-100 Customers Who Love Product
- App Deco: After first sale, visited sellers' homes (as "Craigslist buyer"), explained business—5-10 referrals each time.
- Bulletin: Referrals in tight-knit brand community; third store booked immediately at healthy rates.
- Human Utility: Donors via social/news/press (stuck in apartment 2 weeks explaining concept); recipients via postcards/Facebook groups.
Competitors
- App Deco: Ignore (easier said than done, year 5). Focus on controllables: delight customers, build product people want. Competitors raised more, shut down—execution matters.
- Bulletin: Ignore mostly; Google alerts for positioning/raises. Avoid distraction (e.g., "they raised $23M").
- Human Utility: Competitive non-profit sector ("mafia calls" from others). Focus: communicate work, storytelling, pull heartstrings. Butted heads with cities (embarrassed Detroit; they discouraged use, weren't helping—turning off cancer patients
They were turning off cancer patients. A national nonprofit saw them as competition despite operating out of a bedroom. Their success stories resonated more than building six houses with hundreds of millions. Show operating better, use money as promised, share success stories, and discuss systemic change like water affordability laws using startup principles. Long-term plan is passing laws, not endless fundraising.
Don't scale hiring until product-market fit. For furniture delivery business, product-market fit came when taking delivery in-house. Initially used third-party movers with poor quality and cancellations. Hired guys off Craigslist, rented a van, got incredible feedback. Now have over 10 trucks. Referrals skyrocketed, quality improved, branding strengthened, metrics understood. First hire: customer service to delight customers. Needs change over time—later head of operations, engineers.
Took a year and a half to reach product-market fit after many pivots, learning from each version. Opened retail stores that worked, brands happy. First important hire: director of product Maggie Brain from J. Crew. Transformed curated stores from mismatched products (Fitbit competitors next to blankets) to right brands, products, price points. Stores took off, enabling scaling.
For nonprofit, product-market fit is ongoing support via recurring giving program. First hire: customer service as founder couldn't handle all applicants alone. Founder acted as social worker/therapist, talking 30 minutes per applicant. People in poverty feel overlooked; listening helped. Kate from YC nonprofits advised hiring. Spring 2016, founder (engineer) built case management system in a month off, enabling hire. First hire: Marie for customer service.
YC advice: get sleep and exercise. One founder gyms more, travels; productivity > hours (6 productive hours > 15). Work in progress.
Ebbs and flows; insane weeks opening stores feel unhealthy. Use downtime: skip office weekends. Running helps mental state.
On vacation: therapy, executive coach for organization/prioritization, acupuncture for energy and sitting still during day.
Engineer co-founder with marketing/sales background. Role delegation: product decisions by engineer, marketing by co-founder. Butt heads but final say avoids consensus delays. Example: co-founder pushed Subway campaigns despite objections; worked well. Structure for fast decisions; conflict okay if managed healthily.
Lucky with co-founder Ally: complementary skills/personalities (introvert vs. extroverted salesperson/press expert). Stayed in lanes from apartment days.
Original co-founder couldn't do YC but advises/donates. Long-term: Marie (customer service). Handles people/finessing (calling city officials patiently); founder impatient on bureaucracy.
Carolyn Levy (YC partner) introduces Maria Nurislamova, founder of Sunbird (fragrance subscription service: date fragrances before marrying them).
Past 4.5 years building Sunbird; hardest but rewarding, YC community instrumental. Chapter 1: Year of Misery. Read every MVP book but didn't talk to customers. Fragrance junkie hated store shopping (thousand scents, pushy spritzing, coffee beans don't work). Dream: discover fragrances from couch. Missing: good scent recommendation system.
Michel and Maria built one. First landing page quick; Maria originally recommended. Built six discovery methods, e.g., smart search (fragrance for workout smelling like oranges). Quit jobs. Problem: can't monetize recommender.
Took 6 months to realize. First model: discovery kit—6 samples for $9, upsell full bottles. Customers bought kit, not bottles; $9 from 100 people.
Hack: got free Sephora samples (3 per visit, hit 12 Manhattan stores multiple times daily, friends helped), sold for $9. Sales clerks recognized; not sustainable.
Next: try before you buy—ship 3 full-size bottles + samples free (algorithm-recommended), 5 days to try/return. 30% fraud rate (boxes not returned, couldn't charge).
Got into NY accelerator Erho ($40K); wasted $20K on this, went red.
Wanted to quit, called Michael Seibel (now YC CEO, then Autodesk-acquired founder). Wanted to pivot to makeup; he said spend another year failing at makeup? Backed Sunbird to make fragrances work.
Shift: people change fragrances like clothing? Pivoted to fragrance rental/subscription: 30-day supply of designer fragrance for <$15. Build collection incrementally.
One-pager site (ugly picture). Magic: 105 orders in a week. Founders fulfilled after 9-5 jobs: spritzed big bottles to small ones until 2 a.m., packed 105, Maria took to post office.
Scaling early (100 customers not scaling). Pitched NY accelerator demo day; no money. $5K left of $40K; e-commerce needs working capital.
Dashboard: 10 orders/day (huge for them), but investors saw ugly product, doubted (e.g., "my wife doesn't use fragrance").
Pitched ~40; all no's. Crappy yeses worse: angel couple after 8 meetings/due diligence/financial model offered $25K (not $250K promised) at 3x lower valuation + 5% advisory shares (doubted qualification). Real estate investor: 10% for 1-year free office for 3 founders.
Turned down both (nearly accepted). Went to mentor John (e-commerce angel). Pitched $100K round: growing crazy, YC in 3 weeks (valuation 3x). He invested $100K.
Applied YC second time; rejected (wrong model anyway). Called John: no YC but +500 customers, rocket ship.
Rule of scarcity: pitched $150K round with $100K already in, $50K left—got 5/6 yeses from funds.
Lesson: aim for 1/4 of million goal, oversubscribe to reach it.
YC alums/mentors/friends pushed third application despite fears. Got in; changed company DNA. Hyperfocus on week-over-week growth.
Every company's growing faster than you and everybody's smarter than you but you walk out with the best peers and the best friends. YC taught true user interviews to understand what people think.
Anecdote: First user interview in Palo Alto area coffee shop with a lady who wasn't a user. She asked, "Are you dying? Is Seer going out of business? That's why you're talking to me? Oh I bet you're don't die please don't die I'm going to buy 10 subscriptions." She clearly cared. First time realizing they might make it because people willing to pay 10x just don't die means building something people want.
For most companies that make it, bigger chunk of life is post-YC.
Lessons wished knew or need reminding:
- Surround yourself with 10x people. In traditional industries, top person 2x better than average. In startups, top people 10x better due to out-of-box thinking, creativity. Wish knew when hiring: always went for cheapest hardworking person. Could have hired 3x less people, gone further.
- Have an audacious dream and communicate it. Tell the world. Makes you helpable, world gets on board. Women tend to be shy, hard to pronounce "billion." Heard pitches: "50% of industry in 3 years" – won't happen. Women prefer get there first then say wanted that target. Reverse: set audacious goal, communicate to team/partners, then hit it.
- Don't take advice from people who don't have what you want. Everyone gives advice: mom, friends, family. Successful friend with hedge fund (very rich) discouraged: "Have you worked for fragrance company?" No, but might make it. Almost applied to L'Oreal for 10 years at $60k miserable. Happy didn't listen. Only take advice from those with what you want.
Sber: team of 100, shipping fragrances to 250,000 people in US, expanding international, raised $25 million (not people). Much accomplished thanks to YC. If running companies, haven't applied, strongly encourage – changes your life. Thank you. [Applause]
Stephanie runs admissions at YC. Thanks Maria for YC plug. Accepting applications for Winter 2019.
Announcements:
- Workatastartup.com: browse hundreds of jobs at YC companies. Live hiring event July 28th.
- Submit questions for YC partner Q&A: slido.com/FFC.
- Winter 2019 applications: deadline October 2nd, runs January-March. Apply.ycombinator.com.
Find at break (20 minutes), walking around, or email [email protected].
Rushma (Rashma?) machete of Ginkgo Bioworks, YC summer 2014. First female-founded YC company to be unicorn.
Co-founder Ginkgo Bioworks, Boston, 200 people in Seaport district. Design organisms to spec.
Picture of desk tech: most advanced is the plant – self-replicates, self-repairs, self-assembles at subnanometer precision. Engineering traits biology does routinely. Fell in love with biological engineering to harness biology's power.
Biology at core digital: every organism made of A's, T's, G's, C's. Sequence dictates behavior. Learn to program DNA, synthesize right sequence, program biology to do what want. Ginkgo figures out how to program/design biology.
Wired Magazine article compared Ginkgo organism designers to Johnny Ive.
At FFC couple years ago talked starting companies. Today: scaling companies.
Jessica's challenge 2 years ago: female-founded unicorn from room. All YC unicorns had exclusively male founders then. Ginkgo became YC unicorn December (first female-founded). If asked 10 years ago, hell no. Life unexpected. As biological engineer, excited to put resources toward engineering biology.
Ginkgo unicorn has shot at making a unicorn (profitable?). Maybe back in 10 years to talk.
Think about scaling every day as CEO.
Advice in news: don't raise too much money. Makes laugh – founders lucky to raise too much. Dig in: be smart how spend. Advice: raise lots of money (if little more makes difference between success/failure, extra dilution worth it). But don't spend it all.
Hard after raising: "holy cow" moment – smart people handed several million for life's mission. Are they crazy? What now? "Oh no" – how pull off?
Team goes through it: see money, want do all new stuff. Unconscious pressure to spend, throw out frugality/scrappiness/leanness.
Manifests: too much to do → hire more; team conflict → beef up HR; annoying tasks → admin support. All somewhat true, but too far → bloat in headcount/spend = kiss of death. Bar for next raise/revenue higher.
Raise money, keep discipline/scrappiness/frugality = winning when scaling.
Need Scrooge McDuck focused on key metrics for growing business, most efficient way (headcount/spending).
Hard post-raise, pressure to spend out of problems. Scrooge pushes back for efficiency/scrappiness.
Female founder as Scrooge harder: stereotypes – battle ax, tough unsympathetic. Weigh personal risk vs organizational risk of no efficiency pressure.
Startup success hinges on efficiency pressure: longer runway, more optionality.
Goal: scale revenues/customers without growing headcount/spend too much. Decouple commercial growth from spend/headcount growth = huge competitive advantage.
Problems scale with people: recruiting harder (hire 2x as many); interpersonal conflicts n².
Grow business (revenue/customers/eyeballs/GMOs) without scaling = stronger long-term business.
Not easy, working on years, haven't cracked fully.
Best so far: conversation with Ali Rogan (YC partner, growth program). After series C: mission to metrics.
- Mission: purpose (Ginkgo: make biology easier to engineer – figured before name).
- Strategy: commercial – how make money, sustainable to deliver mission. Changes over time, ok. Hypothesis needed.
- Metrics: quantitatively measure succeeding at strategy. Hard, refine continuously.
Map/explain to entire team: connect daily work to metrics/strategy/mission = powerful alignment.
Add: include efficiency metric (output per person, revenue per salesperson). Forces optimize denominator (people/dollars for goals). Encodes efficiency value.
Need Scrooge pushing daily.
At Ginkgo: mission make biology easier to engineer; strategy aggregate genetic engineering R&D at Ginkgo; metric genetic engineering per person (drive efficiency).
Thank you. [Applause]
Holly Lou, visiting YC partner. Submit/upvote questions slido.com/FFC for partner AMA.
Unique: onstage pitch panel. Holly pretends investor, founder Naira of Frontier 7 pitches. Then Adora (YC partner) repitches as Naira.
Frontier 7: virtual data scientist platform enables non-statisticians understand data, make data-driven decisions without statistics background. Uses automation of deep statistics: machine learning, traditional statistics, NLP.
Access: web/phone. B2B, selling to companies. Virtual data scientist platform, software login.
Not virtual assistant with real person – technology-enabled. Engage: collect data, backend analyzes up to 200,000 data points in <10s, results in email in 1 min.
Ideal customer: head of insights teams. Live, launched. Used in concept testing, CPG multiple brands (e.g. Unilever), entertainment to understand consumers/why.
Unilever question: who potential customers not purchasing/using product, why using you vs others. Economy of interest: many options, need why consumers use.
Focus: consumer space (early experimented industries, tech works general). Who/what/why – different questions/variables per company.
Like BI dashboard? Team configures? Username/password, onboarding/tutorial, clicks get answers.
Compared to Tableau? Data ingestion: survey + SPSS + Mathematica + Tableau + interpretation, no data science expertise.
Problem: massive market segmentation, tools don't analyze/visualize well, need stats background. Data manageable before, not now.
Customer segmentation automated click.
Progress: MVP last year, paid pilots this year, fully launched, 10 paying B2B clients (hopefully 12 soon).
Insight: customers assume segmentation, tool does unsupervised learning, reveals behavior. Eye-opening, reduces fear/defensiveness.
Software does automated customer segmentation analysis.
Send data: clean/organize/analyze/output insights. E.g. highest LTV customers to target marketing; pet owners highest retaining → focus product features.
Example: cleaning company acquiring customers. Average customer view insufficient – segment by LTV/CAC. Output: pet owners higher retaining/better, find more.
Automated: thousands segmentations, tells what choose (e.g. highlighted hair, NASCAR fans likelihood buy).
Historically: outsource consulting (slow/expensive) or hire in-house ML data science (slow, not core).
Data scientist in a box.
Impact: cost savings + lift in revenue (target right → higher conversions/revenue).
Suggests product features, not builds/executes.
Progress: 100 enterprise customers, avg $25k MRR, ARR $25k? Selling enterprise.
Growth: traditional enterprise sales, emails/intros convert.
Best customers: companies with data science team, serious, early adopters, big startups.
Market: data science huge. Bottom-up: $100k ARR avg, 10,000 startups = $1B revenue just data cleaning/organizing (data scientists spend 60-80% time). Layers analysis/insights.
Special: team – founder professor, 15 years experience, consulted manually, teaches at NYU/Columbia, wrote books. Frontier 7 scales founder.
Raising $1M, raised half, close next week. Focused real data.
[Applause]
Partners: Kat, Manik, Kirsty, Matthew, Adora, Holly, Jessica, Carolyn.
Questions via slido.com/FFC.
Will YC open NYC office? Kirsty (CFO): Never say never, experiment. No immediate plans. Caroline: Founders worldwide still helpful spend 3 months Bay Area for network/investors, then move to customers.
How build network of 10x people/mentors/peers? Jessica: 13 years ago no SV network. Work on interesting thing, good people interested. Genuinely want talk/get advice, SV open.
Holly: Pebble founder Eric Migicovsky from Canada, followed nerdy blog of early Apple designers, emailed → coffee. Paying forward culture in SV, investors prefer face-to-face. Reach out to admired in field with specific questions (shows busy aware). Can give back too (e.g. domain expertise).
Work at admired startup for meaty founder time.
Find co-founder? Adora: Don't hunt – organic from network (college/work friends/close people) best.
Startups YC wants more? Request for startups page: ycombinator.com/rfs (diversity, million jobs, voice). Not on list ok, fund ideas we wouldn't think (Airbnb seemed crazy).
No idea too crazy.
Stage YC looks at? Kirsty: Up to series A. Idea to revenue/profitable/$1-2M seed. Tailored help. Apply – let us decide if too early.
50% batch applied before. Sber 3rd try. Apply again.
Diversity efforts? Kat: Summer 2018 27% companies female founder (applied 23%). Female Founders Conference connects/inspires. Office hours female/black/Latino founders. Batch: connect women to female investors pre-raise. Funded 358 women.
When raise (seed/series A)? Kirsty: Raise when don't need (not 3-4 months runway – disaster).
Kirsty: Depends who. First: individuals (space interest/know you). Idea ok.
Institutional seed+: show people want (growth users/revenue, manageable churn). Paint billion-dollar story.
Don't raise too much early (lower valuation, more dilution). Raise to next milestone for higher next valuation/less dilution.
Traction for B2C? Adora (gaming): Hits-driven, top 10. Early: prove onto something (105 orders like Sber). YC: 10% week-over-week growth good (10x batch end). Inflection to product-market fit.
Holly: User/revenue growth. Pair with retention/engagement – avoid bad users (turn, waste).
Engineer/designer: launch prototype/beta before raise? Always launch ASAP. Never know polishing turd – launch reveals issues (signup, want?). Talk customers, waitlist pre-launch.
Confidence + higher raise/valuation with users/revenue vs nothing. Use Shopify if fastest.
Motherhood + startup ambitions? Jessica: Never planned, plowed through YC growth/had son, minimal maternity leave. Wish more planful, don't put off long.
Kirsty: Sad stories lawyers no kids for partner. Life goes on. YC example: female founder breastfed newborn in car during interview, accepted/great.
Startup = baby. Examples women doing both.
Adora: Married, told husband starting startup 5 months later. Personal/tough. Biological clock reality (took longer, extra steps). Impacts from ~28. Science helps (e.g. Carrot Fertility). Geriatric pregnancy >35.
Startup like kid without husband – always first. Surround help. YC founders do at all stages (Rushma post).
Tactical: plan leave communication, options vest on maternity (don't suspend – illegal/shocking).
Things don't scale early: convince investors will? Product plan. Repetitive → software replaces. Show some automated. Explain stages: now X, next Y, future plan.
Sharon Pope, head marketing programs YC.
Reception Malt House 5:30-7:30.
Thanks: Dominique (events), Sharon, Stephen, Adele, team.
Google Cloud/AWS free hosting credits – email coming.
Digital Ocean hosted office hours yesterday.
Thank you. [Applause]
Keep Y Combinator in your library
Save the videos and channels worth coming back to, and find them again in one place.
