Richard White - If I Was Starting Today Transcript
7:30PM Dec 13, 2021
It's just kind of crazy looking back like it's one of those like sliding doors moments. Do people in the same room as us in that office in Cambridge were the founders of Reddit. So it was like Reddit and Kiko were started in the same room. And I would never seen that if I'd not kind of sent this borderline aggressive email to them.
I'm Jim Hoffman. And this is if I was starting today, a collection of conversations about half baked startup ideas, growth tactics, and stories from founders, including my own journey as a business owner. All of the content is centered around one question, what would you do if you're starting today?
In this episode, I speak with Richard White. Now Richard has over a decade of entrepreneurship experience from founding user voice to fathom, he takes us through his journey from being a part of the very first Y Combinator batch in Cambridge way back in 2005. He was actually in the same group as founders from Reddit, Dropbox, and Twitch, then we get to his latest startup, which is Fathom it's a zoom app, which essentially is like having a personal note taker on every call with you. And this traction is really impressive. We talked about his journey, fundraising, how to build a SAS, and how to actually onboard people the right way. And then how one cold email to Justin Kahn from Twitch, changed everything and got him into startups. So if you're at all interested in how to build a SAS, or startup or advice on fundraising, when you don't know anybody, you'll really enjoy today's episode.
All right, today, I have Richard White on the podcast. And his background is extremely impressive from being a part of Y Combinator two times now. And then also with with a startup that he has raised $9 million for and then has exited as CEO, but as most current product that he has is something that is near and dear to my heart, which is making zoom meetings much more bearable and efficient, in addition to other online modes of communication. But Richard, excited to have you on today. Jim, thanks for having me. Of course. So I was going through your bio. And there's some interesting stuff in there. And I wanted to start with one kind of question because it caught my attention. Can you talk to him by talk to me about how one cold email to Justin Kahn, potentially changed your professional career? Sure, yeah. So I'm originally from North Carolina. I was originally kind of computer science grad. But I really wanted to break into product design. And, you know, I remember working at a small software company in North Carolina. And, you know, it's my ideas for projects I want to work on. And my buddy brought me like a TechCrunch post of someone delivering this product I want to build, ah, I really wanted to, you know, game it, someone beat me to it, right. And I went and played with the product. And it was actually technically like, really ahead of its time. But its design was actually pretty bad. And that was the thing I was trying to get better at. And so I literally just kind of I remember how I got the email, I think it was like link to from the website or somewhere I dug through and found the founders who were Justin comm them and cheer who went on to Twitch is their startup Kiko before that and just cold emailed them. And that was literally soymeal email, like, your products, technically really impressive. Put your your design and your UX is a dumpster fire. And then I and then I like basically finished with like, but I finished like, I would love to help you solve that. And it's funny because years, yeah, so that actually led to me working on that team. But you know, it was funny to me. Years later, they told me, We didn't really know what to make of this, but we were just kind of Sure, why don't you know, we're in this kind of like, yes, and kind of mentality. So honestly, yeah, you're right, that kind of like completely changed the trajectory of my career. You know, I don't know, I ended up like, you know, working out of the Y Combinator office with those guys who had gone through the this isn't the first batch of Y Combinator. So there's an office in Cambridge, Massachusetts, the company that we are working on with Justin that's working with Justin and Emmett. So they're kind of a first employee. We weren't super successful. We did decently well. And we end up selling that company on eBay for a quarter million dollars, not to eBay, but on eBay. But you know, it got me connected with I think most folks I know today, you have in San Francisco, but 15 years all came through that experience. I had it's just kind of crazy looking back, like it's one of those like sliding doors moments. You know, the people, you know, in the same room as us in that office in Cambridge, were the founders of Reddit. So it was like Reddit and Kiko were started in the same room, and I would never seen that if I'd not kind of sent this borderline like aggressive email to them, but then kind of helped him out really for free for a number of months and then for almost near free after that. There's a lot to learn from that one. It's, you have this idea and you see someone else doing it. It's not like oh, crap, Okay, on to the next thing. You're like, no, let me let me jump in on this. But then you're scrappy enough to find the email address. I like not to nerd out on like cold email outreach too much.
But did you say dumpster fire in the email? Because I feel like that's a trigger word that I love.
I don't think six This was 15 years ago. I don't think it was that invoked. But I said something was like, it's not very good. It's very bad. I definitely told them that it was like bad. And I don't remember the words I use, but they were aggressive.
That's awesome. And I think if I'm in their shoes, when you're a founder trying to grow something, you, you just need help you want to build this rockstar team. So if somebody's proactively reaching out to you wanting to help, it's like, alright, let's give them a shot. So that was enough to crack the door open for you to get that opportunity. But yeah, there's a lot to learn from that. Do you remember the subject line? And then I'll stop asking cold email questions.
I actually don't I wish I did. That's a great question. I've got the screenshot somewhere like old slide deck, I should look it up. But yeah, I think most of you know one of my I think top lessons learned of my career is just like to try to join, like when you find someone who's like minded, try to either join what they're doing, or fold them into what you're doing. After Kiko. I did this like open source project for a while. It was like one of the top five open source projects for Ruby on Rails for a while and all I did was the reverse ride. Just listen on the internet for anyone complaining about my the open source stance working on and I'd reached out, Sanjay, do you want to come like, work on it, you know, address the problems you mentioned. And like, I think I can look at a lot of my successes of failure, my career, and most of my successes are when I joined something, or was inclusive. Most of my like struggles were when I was like, no, no, I'm going to go this alone.
And that's a lot to learn there. I think the fact that you also worked on for free is a big tell. But that's really good advice on finding people that are like minded, because it's funny, when you start a company, you're like, oh, I need to design or you like, say these certain slots and roles that you need. But the truth is, for the long term, you need people that have that same vision and mission that you're going down the same path, which sounds very, like woowoo, and warm and fuzzy. But man, it is so important when you're trying to like create something out of nothing.
Yeah, if I need if I need someone else's passionate near was passionate about that same problem. Space is probably one of the hardest things about finding co founders. Right?
For sure that Yeah, that could be a whole podcast in itself. So you know, one thing so for real? No, no, Y Combinator startup accelerator starting Boston then went to San Francisco. I mean, the reputation is just insane. The alumni that have come out of there from Airbnb and stripe to read it is really impressive. And so you've been a part of it two times now, like, can you talk through any stories that speak to the impact or value you get from being a part of yc?
I mean, it's interesting. I think Y Combinator, originally, in some ways was solving for this problem. The problem was, you'd have a lot of typically like younger folks or not, right, but that a lot of domain experience in there, where they're trying to build a product, right? But a big part of surviving as a startup was fundraising. And this fundraising thing is almost like a, almost like a mini game instead of a video game, right? It's like this side quest you have to do or not have to do. But if you do it, then that's a completely different mechanics than actually building the company. And so I think what Y Combinator kind of originally sussed out was like, there's a lot of smart folks that know how to build good products, and have no idea how to like hack or play this fundraising game. Partially because the fundraising game historically was a little bit of one of these classic, like social problems, where you almost seem to, like, do a bunch of stuff to get the to get the clout or the reputation to go raise money, right. And so originally, I think it was pretty successful in that it taught a lot of people how to raise money effectively taught them how to play the money game. And then over time, now it's almost become, you know, you're, you're like a cohort of people going through college, right? It's like you're, you're all going through something same time. So I think today, the two biggest guys it has is like your one point like when you're looking for co founders, you know, people that are in the arena that want to do what they're passionate your project be also just need people to kind of compete with and learn from that are building companies at same time with Fathom Iris risk committee, we started last year, even though you know, I first went was working with Y Combinator folks like 15 years ago, I know lots of them, partners, and we joined Y Combinator this past fall, because most of my peer cohort has like gone on now to be like VCs are running really large companies. And I thought it'd be super valuable to me to have peers that are kind of in the arena at same time, because the tactics and strategies used to get sort of off the ground, are constantly changing, evolve, right? And it's nice to have a collection of some of the smartest people doing startups kind of as your peers. And the other part of the value is in some ways, Y Combinator acts like a union, where they kind of can kind of collectively bargain for things, for example, you know, there's a whole database of investors and it says which investors are good with festers or bad, and who investors kind of like Yank everyone's chain, they get rated as such, and then people kind of move away from them. So it's shifted the power dynamic quite a bit, in terms of, you know, used to be 1015 years, you'd walk into investor office, and they'd be like, Who the hell are you and you gave me time of day. It's kind of rude. And now you have this investment. That's super friendly to founders. And I think Part of it is because we've, you know, kind of figured out this reputational systems for Silicon Valley or for startups. So there's a bunch of other reasons, I think if you're, if you're first time they teach you all the other skills, you don't have writing as a founder, you need to be very multi dimensional, you really need to know a little bit about every discipline in your company, you need to be an expert in but you really need to understand a little bit. And it does a good job of kind of bootstrapping your knowledge of like, here's what marketing is like, Here's what a sales is like, here's what go to market looks like. Here's what product building looks like. Right? So, you know, no matter what your background is, you can go at least get the one on one to 401 classes, and what is all the other disciplines look like? Because you need to know those decently well to go to hire for them.
That's really good insight. And I mean, you're we're getting to fathom and which is a part of yc. What advice would you give to people that are trying to get in? How do you get noticed? Because it's got to be so competitive to be one of those startups that gets selected?
I mean, I think, yeah, I think they get, I don't know, their numbers, they get 1000s and 1000s of applicants every year. And you know, they've increased their the class sizes pretty significantly. Now, I think, in our bachelor's 350 companies, which is huge in the first bachelor's like eight, right. But I think it I think their admissions rate is still the same, and it's like low single digit percentages. You know, honestly, I think that the biggest thing is, you really need to, you don't necessarily have to have a built product, right, that that's helpful. They're really looking at like, team, do you have the team? Do you have enough of the right people to go do the thing, that really you exhibit that you really understand the problem space? Do you really understand the problem, you're solving who you're solving it for? And so I think, you know, the best advice I could have would be I do a decent amount of customer development. Before applying to Y Combinator, you know, ideally, you're applying we apply with Fathom with a prototype and a lot of market research, right, we did market research, a fancy way of saying I like talk to hundreds of people on Zoom, that we're going to be our target buyer, right? Yeah. And that allowed us to, I think, speak very credibly, during our interview process, and yeah, not get rattled by them trying to like knock you off course be like, no, no, I've talked to 200 people about this. I'm reasonably confident the answer is this. But it could change. But as it stands today, this is probably the answer.
That's really helpful. And actually, let's get into fathom. So for people that don't know, how would you pitch it to someone like me that lives on zoom all day? What is phantom
thumb, it's basically a free app for zoom that is trying to make sure you don't have to talk to someone and take notes at the same time. I've found Yeah, going back to that customer research that I did, was actually doing customer research for different products and doing a bunch of zoom meetings. That is one of the most painful things, stressful things about being on Zoom, is I'm talking to someone, I only have 30 minutes with them. And then they kind of potentially disappear forever, right? It's hard to get him back on the line. And so like, I have to be very, very present. And I'm also trying to talk to him. And I'm also trying to like bang out notes or handwrite notes while I'm going. And so we're a free app that records transcribes and highlights the key moments in your call, so that you can kind of swing back and have a conversation. And we'll either auto generate notes, or you can kind of like time shift and write your notes after the call.
Okay, that sounds magical. Will you go a step further like so I have a growth marketing agency we do. We'll say it's like a very important strategy call for the holiday season with an E commerce client. How could I use? Uh, should I be thinking of this as Oh, my team, they could be using this tool. And afterwards, it's minimizing what they have to do for note taking, it's just using Fathom to get the transcript or get those highlights, and then they're kind of editing it or is it like, emailed to you afterwards? How do you find those key highlights from a meeting? Yes. So
one of the things we realize is that no one wants to dig through a recording afterwards and like, edit it out, right? Like I've done the meeting, I don't want to do it again. And so one things we do is to give you kind of what looks like a like a almost like a soundboard right, or like a DJ, you know, the DJs have their little buttons that you push, right show what a TJ, I'm here. And so what we do is we give you kind of a little interface when you're on the call, and it has specific things on it like insight, or positive moment or, you know, product feedback, or, you know, Objection, whatnot. And when you hear something important, you just click on one of those buttons, and then the Fathom system figures out like when did that part of the conversation start, when does it end, and then kind of tags that whole section with that kind of label. And what we've kind of found that's nice is that people are only like, marking about 15% of their calls was noteworthy. Right and so that's why none of us want to go back afterwards and like read T through a call that's 30 minutes or an hour, an hour and a half and find all the moments that mattered. And so what you get you get after the call, and unlike a lot of other like even zoom cloud recording, it takes six minutes 30 minutes to an hour to get the recording without and we give you the recording instantly, within about five seconds the call ending you got access to that recording. You can jump directly to the highlight moments you can review them you could type a note why should give you like a little Share link for each highlight. So if you if you had a two minute discussion about something and with the client, you're like, hey, we want to share this internally with someone or Share with the client, you could send the entire recording, you could send them just individual snippets of the call. But our entire goal is like, it's crazy to me that we do this process where we heard we take notes were on the call, we tried to clean them afterwards. And then two weeks later, no one really remembers the important nuance, right. And certainly people that weren't on the call, don't get that nuance, right, I use a lot. I think one of our best use cases is like sales calls, research calls, anything of that customer, right. And you're trying to communicate internally what this person said, here's their technical challenge, or here was their, like, really interesting insight. Hearing that person, say it, like sharing that with, you know, the colleague, or, you know, you know, putting that in your YC interview or sharing that with investor just carries so much more weight than your notes that say, This person was excited about this, this person does struggle with this, right. And so that's, that's what we're trying to enable.
I love the idea of being able to take those snippets or clips from a call, because for us, it's like, we have this really great strategy session on how to like, update the design of a site. But then like, as we maybe go back to a designer that wasn't on the call. I feel like I'm a caveman sometimes trying to, like translate that. And it'd be so much easier if you're like, here's this, because we can give zoom recordings, but it's like, Alright, let me find the exact moment. And there's a lot of steps in that process.
Yeah, the game, the game of telephone is a terrible game, right? Like trying to. And it's kind of fun. We because we use real time we're also doing, we're also doing sharing in real time. So we actually like I have a button on mine. This is tech question. And so if I'm on a customer Korea tech question, I click that button. And actually, within about 15 seconds of the customer asking the question, the video of them asking the questions in my engineering Slack channel. And my engineers can watch that question actually, message me and answer before I get off the call. So we're actually trying to do not always not only kill the game of telephone, but also make this like real time collaboration with people that aren't necessarily on the Zoom call. Because everyone hates putting all their technical resources, right on every single call when they're only needed for two minutes of it or none. Oh, it's
so it's such a waste of our time. We've been guilty of that. And it's like, sorry, you're on that 60 minute call where we need to do for the last two minutes.
Yeah, exactly. Yeah, turns out technical resources, love that.
I do like that flex, as far as you know, a technical question during the call, it automatically goes to Slack, you can have a response immediately. Because for us, we're always trying to have like a white glove service. So that's pretty magical. Can you speak to the size of fathom, like how old you are just so people can understand where you're at in your company? lifecycle?
Yeah, so we we've been doing Fathom for about a year, though, we kind of, you know, user voice, I started the company Previous to this, you know, it was like me and a few folks scrapping around, right. And so we, you know, Fabin started with five of us, my like four top engineers from us, Royce myself. So, you know, we've been doing this for a year, but it's been a very high output year, there's nine of us now, in total, there's six engineers, myself, and then two folks, and kind of sales and CS. And yeah, we just launched literally about, let's see, end of July. So it's been about four months, almost exactly. On the new zoom app marketplace. But we're already you know, already have pretty good traction, we've got that at I think now that 85,000 people on the waitlist, and we're kind of carefully curating who gets access to the the app. And obviously, we want make sure everyone gets a good experience. So we don't want to dump 80,000 people on us, our team of nine to support it. So yeah, and we just I think tomorrow is the cutoff date, but looks like we're familiar with like G to the review site, we're going to be a high performing the high performer category. It's our first quarter in existence, which is pretty awesome. So not only do we have a lot of users, we have, I think a very passionate group of users that are advocates and colleagues almost as much as users at this point.
If people don't know G to crowd is like the Amazon reviews for software and b2b. So having a good brand there. And one that with a lot of volume of reviews is very important. So there's like for me, as someone looking at the outside, I see two really exciting things. Like I love companies that jump on this wave of an industry that's just going to get bigger and bigger. So it's like remote work is not going anywhere, it's gonna get bigger and bigger. And zoom is a big part of that. So you're part of the like, kind of remote work movement. The second is I do love businesses that can bolt on to a platform or marketplace that is also going up into the right like an equivalent is like being a Shopify app. And the early days, those things are doing really well. Right. And so as zooms, really pushing their marketplace, like you're able to be one of like the top players there. They also have invested in you all correct. They have like a fund that they invest in, is that correct? Correct. Yes. And can you talk through like, where are you guys at with fundraising right now?
Well, it's funny you mentioned that because we haven't announced anything yet. So I can't necessarily my PR person probably kill me if I like we're I think we're pitching press on it right now. I always care. But we've you know, I can tell you kind of the high level we've fundraising has changed a lot over the last 10 15 years to write, you know, with user voice we did like a, you know, we went on 800k seed round. And we most of that was was basically all one firm, right. And you know, that one firm can sat on our board, and it was a multi week process, right, probably a six day a week process to diligence and paperwork and stuff, for fathom, you know, now, the state of the art for fundraising as you just basically, you have this thing called Safe notes. It's actually one of things that YC innovated and created as a standard way to basically take investor money. Four kinds of promise of adding them to your cap table, once you do a proper like, price round is what they call it. Again, this is like a fundraising mini game, kind of inside baseball. But what's nice about this, it allows you to not have to use big heavyweight process, you can do a 30 minute call with someone and take down a 50k Check 25 paycheck from an angel and stuff like that. So everything you need for them as we've been almost consistently fundraising throughout our throughout the last year. And basically at every little inflection point, every milestone we we kind of use that as a as a opportunity to raise more money, right. And, obviously, you mentioned we want, we want to have an alpha, right I go, you can kind of go to friends and family. We got into Y Combinator, that's a milestone, let's go right raise money ahead of that. We got the demo days, Y Combinator and got included and built up a partnership with Zoom, that got us into this, you know, zoom at marketplace, that's a milestone, raise money on that we've launched in our in the app store, I think run up on the App Store, great, we can wait, raise money on that. So it's kind of an interesting strategy where, you know, I think it's, if you're a first time person, there, there are some benefits to going and saying, Look, I'm going to get me to have 20 conversations, I'm going to get one lead investor, and then be done with it for the year, right or for the next 18 to 24 months. And that one investor will be very hands on with me and teach me a lot of things from for me, you know, given that I've done this before, I was less interested in having that singular voice from one investor. And I really want us to build a big coalition of people like a diversity of perspectives and, and network and stuff like that. And so it's been very helpful for us to kind of like an inflection point, like, Okay, what types of folks could we use on the team, quote, unquote, now, right. And so, you know, I actually think a lot of people really don't, you know, again, it's like this mini game. And I think a lot of founders don't really like the fundraising mini game. I love it. Because it's one of the rare times you can get smart people to give you honest feedback, right? Because it most like, the biggest problem, I think early stage is, your friends aren't gonna be like, Yeah, your friends aren't there to basically take a big dump on your idea, right? You know, they're there to just to kind of build you up and you need that support network. But you do need people that will poke holes in your plan. That's part of the value of joining a thing like Y Combinator, right? Like, even if you don't get in, you generally get some they would give, they give everyone some feedback and poke holes in your plan. And you're even telling the interviewer where they're poking holes. And so like, getting the attention of smart people to poke holes in your plan in your product in your business, is I think one of the most important things you can do. And so fundraising is a great process for that. There's always a phrase that said, like, ask for money, get advice, ask for advice, get money. And so I never lead with like, we're looking, you know, I ever go into investing conversation saying, I'm looking for your money. I'm always going to say like, I'm curious what you think of what we're doing. And genuinely, that's honest, like I am, right, like some people, you know, they have issues, you're there. But authentic, I think what you're doing is great. Here's some money, right? So it's an interesting unintuitive way to think about that.
That that is really good advice and getting the people that will shoot you straight, especially in the early days as you're looking to get traction and product market fit that is so valuable. So the product in its current state is free. Can you talk about like what is the goal going forward to potentially monetize and like, what that looks like like WhatsApp, there's so many it's like a freemium model. Do you make li put up a paid version? Is it price based off of features or usage? What are y'all thinking through right now as you like, go to the world of profitability?
Yeah, I think, you know, it's interesting user is a similar playbook to the one I ran it user voice, which is also a b2b company, where we, for the first year were completely free user voice, and we had really good growth and interesting stories. As soon as we put up a pricing page on our website, even though we sought a free plan. This is on user voice. As soon as you put up a pricing page, we lost I think 50% of our signups overnight. And so I think there's a, especially when you're getting going, right I like to kind of decouple the what's proof that people will use this and continue to use this and rave about it and share it with the let's continue. Let's prove that people will pay money for it. Now, this is this is counter to what like YC advice would be whites, the standard advice would be no, no, you should be charging for immediate like early on, because you need to figure out, you know, because I think there are things people use it, for, they never pay you money for it. And so you'll get this like, false positive. But we're going into a space where we're compete, there's kind of incumbents at the more mid market enterprise level, where they've set a very high price point for tools like ours. So we don't feel like there's a risk that people won't pay for this, right. In fact, we actually get a lot of people being like, When can I start paying you for this, right, like, which is a good sign. But I do think it's very viable in the beginning to have this like, yet monetization is hard, right? And you should think about early on, but to try to, like grow and monetize at the same time. Like we've, it's hard not just to grow, we've probably spent a third of our engineering cycles over the last year, not just post launch with the last year on onboarding, right, like constantly improving our onboarding process. And think about the Yeah, that's hard enough as it is, imagine the friction of choose a pricing plan, figure out the pricing model is, I think doing that before we have a bunch of users is counterproductive. And it's also like one of these things where if you look at the total addressable market, you know, we have 1000s of users today. How many? How many people could we have achieved, we can eventually have like, hundreds of 1000s of users? So am I worried about like not monetizing the first? Point 1.3% of the market? Not at all? Right? I think it's also a good trade for those users, right? You're, you want to get an early base of advocates, and no better way to do that than by giving someone something that's very valuable to them for free. So we are thinking about monetization? There's a lot of ways we're thinking about it. I mean, it is a challenging question. But I think we're thinking about it for something, once we do once we've kind of figured out the Yeah, once we get growth in the direction we want to go. I also would say from an investing perspective, this is a bit of a hack to, because monetization always slows down growth. Right? And so I felt like, often early on, I see people monetize and try to grow. And then they come to investors, and they've got mediocre growth, mediocre monetization, I'd much rather have like, high growth, and no monetization. And when they ask about monetization, you say like, well, we're gonna do it later. Right? Rather than, you know. Yeah, I've got data, but the day is not very good. Ignore it. Right. And so these are hard problems, you should do them in serial, not necessarily in parallel.
That is really good advice. Okay. I've got to ask a question around fundraising. Because I, you mentioned something you like, and you seem very good at it. What advice would you give to founders that have a product they have some traction in in three months? Or whatever timeframe? They're gonna raise money? Like, what are the things they should be thinking about to raise money the right way? Because you've clearly, like done this well, from past companies to this current one.
I mean, it really depends. I mean, the hardest problem in the fundraising process is not telling your story, right? You should know your story, you should know your product, you should know your metrics, right? That's, and that's all stuff really, within your locus of control. The hardest thing about it is, how do I get in front of the right people? Right? How do I get in front of people that are doing this? And how do we overcome the cold start problem of like, how do I get the first money in? Right? Because it gets easier. It gets, you know, once you're two thirds committed, it gets super easy, compared to when you're like, we're raising a million and we've got zero. And, again, you know, I think that this is the number one use case, especially for first time founders, right? Who haven't raised money before, for why you go join a Y Combinator, or some other kind of, you know, incubator program is, that program gives you some of that social proof you don't have on your own. Right, you know, and so that's, that's one of the and that's super valuable, because it's really hard to do, right? This time around a little bit easier. I've done a company I've done, you know, I worked with Justin and Chico, I did user voice for about 10 years went from like zero to close to 10 million revenue. So it's much easier for me now to just raise on reputation that most folks won't have that your first time around your first rodeo, right. So, but I think you really have to lean on your patient. There are people like, you know, even if you haven't done startups, you certainly done something. Right. And you go back to your network. And again, you're looking for advice, right? Not necessarily money, you go back to the people that have been your biggest advocates in your career, and you tell them what you're doing. And you Yeah, do you know anyone I should be talking to you. Right? And who knows, that might turn into investor leads, right? That may turn into them saying like, I really believe in you, I want to put some money in right sort of thing. Again, some of this is like depends on how fortunate you are to have rich people in your in your career orbit. But again, I think, you know, it's a tough challenge, right? So if you don't have the network, you've got to go find a way to like glom on to someone else's network. And so good news is, there's more money chasing companies today now than ever. There's, you know, lots of opportunities out there. So, yeah, don't fret
Yeah, and I think that's good advice on whether it's YC or TechStars, or any accelerator, just, it could be binary, this is gonna work or not. So set yourself up for success, get those signals to investors that, you know, this could be something special. And it's really interesting. You talk about maybe don't split between monetization and growth, choose one and go big on it, because you want to show that narrative for growth. And that kind of leads to my question, you talked about how onboarding is so important, because I think we're all guilty of like, you want to make this amazing, perfect product. But the truth is, you need to really focus on onboarding or the that first impression, because that can make or break, even getting people into the product, if that's optimizing for a magic moment, or optimizing for this use case that whilst people like holy crap, I can take these clips and send it to my dev team automatically, like, can you talk about any advice or things you've worked through is you've been trying to perfect onboarding for something that isn't maybe the easiest thing, because it's got a hook into zoom, and it's in this marketplace? And what are some things that are working or not working as you're trying to make onboarding flawless?
Yeah, you know, it's there's just interesting trade off, as you know, you generally, hopefully, are like one of the power users for your own product, right, at least in my case, I have been in all these cases. And, you know, the problem is, you start with a very simple product, and then you build it up. And that's perfect for you. But that's because it's been kind of slowly, you know, boiling the frog, it's been slowly adding features to you. But now there's this big chasm that new users have to jump over to get to this power user phase. And I think, I think onboarding is like one of the top areas I see people under invest in. It's hilarious. One of the things, they're, you know, there's a number of times, I always get asked, you know, how do you think about Fathom versus your competitors? A lot of investors like, yeah, there's a lot of people seem like you're doing something similar to this? And I'd be like, yes, if you tried this products, you know, and actually surprised a lot of times people are like, No, I haven't, I haven't signed up for any of these. So as it goes, go take the half an hour and sign up for all of them. And then come back to me and tell me, you're so worried about this problem. Because what, you know, a ton of folks just don't invest enough in onboarding. And really, you know, you've got to get someone to an aha moment, a magic moment very quickly. I think one of the one of things we had to do was because you use our call in zoom, we found early on, it's everyone like gets the fountain app. And then the first thing I tried to do is do a test call, try to grab a colleague and try to say, can you like how do I, I want to play around with this, right? But stuff because you're supposed to use this on a call with your customers. But no one wants to use a product for the first time, right on some call important called their customers. So we actually did a lot of engineering to basically be able, you can start a test call where you join a meeting. And then we actually send like a bot that has a pre recorded video. And like, so you go to a meeting, it's like you're having a meeting, but you're having meeting with like, vert person from our teams pre recorded, but then you can kind of feel out what the Fathom experience is like. And that took a lot of engineering. But it actually was a massive difference people, oh my gosh, now I don't have to find a colleague to have this call with, right. And it like greatly increased our like onboarding conversion rate. The last thing I'll say about that, though, is that like, one of the other biases I have in building product, is building for things that are magical. Rather than things that require diligence. There's a lot of products you can build, where, like the user gets out what roughly what they put in, right, and you know, task management software is a great example of this, there's 1000 of these project products, right? Because your Task Managers only as good as the diligence and that you put into that product. And I think that also makes onboarding very difficult. Because you're asking the user to, to do a bunch of work, to put stuff in, individualize the future to get some benefit. So I always think about what are like the things you can do in your product that humans can't do, you're not just enforcing a workflow on a human. With some like software, you're actually fundamentally doing something that only software can do, right? Like you, as a human cannot record your zoom call and transcribe in real time. I guess you could try to I've seen some people try to like actually, literally try to write down every word that said, you could try that, but you're just not going to, right. And so like, being able to like show, you jump on a call, click a button. Within five seconds after the call, you've got this huge, like basically, you know, recording transcript highlights. Yeah, that to people like holy cow, like that blows people's mind. So optimize your onboarding that, like, you know, and realize it's going to be an ongoing investment, you're almost never going to be done with it. Because every time you change the product, you have to rethink, okay, what is the most important stuff I have to teach people in the onboarding process? And then generally onboarding ends after they're set up? Right. So for our app we've been we keep shifting. Here's like the three things I need you to do while I have your attention before I give you access to the app, because that's the one the leverage you have over users is, you know, they want to get access to your app. Now how much leverage you have may variable how excited they are. So but if you put a bunch of stuff recently, we had way too many things on board process resulting field drop off, or way too many steps, we took a bunch of stuff out, that doesn't mean it's not part of onboarding means it's part of like setup. Now we're moving into follow up emails in app prompts. We have a gamification system to encourage you to like, set up more of the app. So we really try to figure out the line of like, what is what you absolutely need to know and have to use this product? And then what are they like nice to haves? And how do we like kind of like nurture you on the nice to have path, so that you become a power user over a week to two weeks?
Wow, that that should be like an onboarding call. And itself, that was really helpful, because I've heard this idea of a magic moment, but I love how you laid it out. Because that is annoying. Like you get out what you put in, you want to be able to effortlessly have people just be amazed with the experience. And that's a really good call out on. You see people struggling, like hey, we jump on the zoom with me. So I can test this. The fact you guys that were that proactive to create that onboarding experience, it shows you're just relentless with the product. But that's, that's pretty pretty sharp. Well, nice. So you know, you could probably talk for days to not just on fathom, but on user voice. But I mean, you've done user voice for so long, I won't make you go down that path. But I'm interested to see if you could tell people what user voices. And then if you could think through one experience or story over the that long run that other founders to learn because it's pretty impressive what you've built there, and you've successfully had another CEO run it. But I would love to hear more about that experience.
User Voice was it's funny, every I realized recently that every company I have I've sorted is he solved the problem with the previous company. So UserVoice solved a problem that I had working with Justin M and Y Combinator, which was we had a bunch of users. And we like, very quickly overwhelmed by with him like feedback emails, it should do this, it should do that. Right? Like, and we spent a couple hours a day just sifting through those to go back to the team and be like, Hey, here's the top things I'm hearing from from our users. Right. And I remember, we're doing an online calendar product. And I remember, you know, at one point, we had this like hour long argument about like, timezone support in the calendar. And at one point, Emmet, now the CEO of Twitch was like, why don't we just ask those users, if this is the top thing you hear, say we're hearing, supposedly, hundreds people go back and ask them to they want solution A or B. That's the end that that is genius idea. But I spent three hours a day just to tell you, this is the top thing on a spreadsheet of like everyone that wants it. And so it's funny, because usually we're at the time, remember, I told you we're in Boston, we're working out of the office with Reddit. And so us it was really it was like Reddit for product feedback, you basically could set up this whole forum, people would submit their feedback and vote other people's feedback. And so we're probably most famous early doing that. But usually no feedback tabs on the side of websites, versus like feedback or read, like we invented that. Basically, we and that was an onboarding problem we saw, right, we that was one of our onboarding problems, people set up this UserVoice website to collect feedback. And then they never promote it to their users, that they're looking for feedback. It's like, you know what we'll do we'll give them a widget put on their homepage, it says in red, give us your feedback. And that actually worked really well. See, I ran that company for 12 years, from, like I said, from, from nothing too close to 10 million revenue. And you know, the first year of user voice couldn't look more different than the first user, you're fathom, right? First year user voice, like, we've got, yeah. It's the team is whoever I could trick into working with me. Right? It wasn't like a bunch of, you know, my best engineers, fundraising was painful. Like the number of times we get rug pulled on, someone's gonna put the money in, and then they don't, they look completely different. I mean, it was basically like, I think the quintessential User Voice first year moment was, there's three co founders, we are all living in this like compound on like the west side of Santa Cruz, one guy with his wife, his two kids in the front, and me on the other single, like, founder within like the in law unit in the back. And it was literally one of those moments, right? We fell asleep with our computers on our laps, and then we woke up and we kept going, right. And I remember distinctly pleased to ride the bus, we had an office, we got downtown Santa Cruz, we chose Santa Cruz, because those living in San Francisco, Santa Cruz was way less distracting. Right? I think this is also something that founders don't optimize for, is you really need to put yourself into like an isolation chamber and work on your company. Now, don't don't isolate yourself from like your target users and buyers. But I saved yourself from like, you know, the cocktail parties and the, you know, whatever, baby showers or whatnot. So Santos is great for that. There's nothing else to do. And so I remember we would ride the bus. You know, every day we were bus like 20 minutes or office downtown. And I remember, I don't know probably a couple months after he left one of the cofounders like, I miss seeing the beach on the way to the office. That's like when we see the beach on the way the office is like, well from the bottom of it. beach. What do you mean by the beach? Because the whole time I was on my laptop, the entire bus ride, I'd never even noticed that we went by the beach. So like, yeah, that was a very different like, you know, that was a very, you know, typical early stage like, first time out. Hustling. You know, I think one point I was like with couchsurfing, I didn't have a house that's like lived out of my car, like, very different experience that the Fathom experience. So
one question around, being in the early days of YC, being in the same office with the red guys that there's a lot of impressive leaders that you're surrounded with from Paul Graham to Justin Khan to Alexa Hannon. What are some things, any stories or things you're learning from the people in those rooms?
I mean, what's the what's that phrase? It's like, you're the you're the average of your friends or something like that. I don't know that. butchering that. But yeah, I think it's very fortunate and that, you know, really got to know well, Justin Emmett, who are both incredible thinkers. I mean, Justin is an amazing marketer. Also interesting, like, you know, I know, your audience, maybe is not I don't know what percent your audience is technical, but what I thought was also impressive about Justin was for the first company for Kiko. Right. He he learned how to program. He's not a program, he did not get a comp degree, like Mr. Knight did. But he learned how to program and I think that's also something it's a huge testament to like, early stage, you've got to, you can't expect someone to come in a white knight and figure stuff out. But yeah, I mean, there is a there's a phase, you know, I met those guys, Steve Hoffman, from Reddit and all those guys up in Boston, and then moved out to California, you know, around 2006, with a lot of these folks. And, you know, looking back now, it's hilarious. We were, everyone was basically in one apartment building in like North Beach in San Francisco. And it was like, the founders of Twitch, the founders of Reddit, the founders of Dropbox, the founders of Weebly, the founders of like, and I could do this for another, they're like, there's literally like, multi billions of dollars of feature value in that startup. And, you know, it's been fantastic. I'm still friends with all those folks. It's my closest network. And in some ways, it's really again, it's really nice to have people, you all came up together, you've got good quality, good war stories, but they're also people you can just trust. Because I think that's also a challenge I hear from people is like, I don't know, especially as you become more successful, who I can trust, right, who I can really lean on to give me honest feedback, right? When I'm not fundraising, if you will, right. So, yeah, that's that that goes back to the power of being inclusive, finding a ways to like, build a community around you or join a community.
Totally agree, especially when you're starting something having other people you can confide in, not just when times are good, but when it's tough.
It's also very humbling. And also, like, these companies that all seem now like wild success stories, did not always seem like wild success stories, like like Twitch was written on Justin TV. And if you ever my buddy, Justin has a podcast called The quest. And it's actually been great because like, I there's some stories in there, I don't even know and I was like, they're doing so many things. But like, Twitch is a huge success. At some point. It was like it had I think, couple months to live Justin tv and it was like it almost died multiple years in. He was million dollars revenue. Reddit, right? Reddit for you know, they sold Reddit early. There was a while where Reddit was many, many years were red. It was Steve, a few other engineers, and working out of Conde Nast office and it's like little corner office. They like shunted them into and until like, yeah, dig fell on and disord randomly one day and all of a sudden, great red. It's no, no, no, no, like, you know, there's a lot of other stuff that happened. But it really gives you a lot of humility, that there's a lot of things we thought were stupid ideas, right? Like, honestly, I think even you know, even Justin tv ideas seemed like a stupid idea. I I actually got invited to join them as design co founders. Like there's not a design problem here. Also, I think this is kind of a dumb idea. It just goes to show you don't know, right? Because some of the things that seemed like the dumbest ideas had really strong teams, and they eventually figured out something that was a smart idea. So I think that's also the it's that level of humility, and honestly, like, you know, still gives you some hope that like, okay, like, I am not the average of my friends. I'm actually the least successful person, my friend group. But you know, who knows, right? I've seen fortunes change very, very quickly.
That's really good context. Yeah. Because it's easy to look as a back as a Monday morning quarterback, like, Oh, they're always gonna be a success story. But when you're in the thick of it, it's cloudy. And who knows? I mean,
things that looked like a slam dunk in the early stage, died, things that look like, yeah, it's like, it's like, I think I'd be a terrible VC. I don't know how to write certainly. Like it's hard.
Yeah, I agree. I would not be strong at that either. And so so two more questions that I have for you. One is you have your finger on the polls being a part of so many founders that are doing interesting things. What are obviously you're very focused on fathom, what are some other half baked startup ideas you have or you wish would exist, that you're like I in the back of your mind, you're waiting for that thing to happen. You're like, Okay, this would be my next thing.
Oh, gosh, I Okay, I can tell you the one that pops to mind. I thought, sure it's a good business. Like, I'm even not sure I even pull it off. But I know it's something that like I talked about with other people all the time, which is a real reputational system. Because LinkedIn is not a real reputational system. And what I mean by that is one of the hardest things done early stage, but kind of at the mid stage of the company is bringing in managers and executives and whatnot. And it's really hard to tell with anyone that's not in a creative role, right? Like, if I have a designer of an engineer, I can look at their code I can look at, like their portfolio. But when you get people in marketing, and sales, and whatever, and you pull them out of companies, they're generally those folks don't generally come in at the ground floor. They come in large companies, it's really hard to tease out, did this person have this person that reasons thing was successful? Or is this person kind of like, off the ride? Was this person a good manager was this person a tyrant like, this is one of the hardest, like mid level skills is figuring out how to like reference check in suss out these things. And I just saw partially from that problem, and partially because if you're familiar with and you hit the INIA Graham, I'm number one, which means I'm like a perfectionist, slash kind of like justice person. And there's the one thing I have seen 15 years ago, combat is like, there's some things that like people get away with that I don't, I don't want them to get away. So I really wish someone could build an actual reputational system where you could give feedback on people positive and negative, you can't do the latter on LinkedIn at all. So that you could actually try to figure out, you know, okay, here's, yeah, this person is great hire this person's done. There are so many issues with that, like somebody like legal liability and live wishes, I don't even know how you get around it. But like, if you could, if you just did it for a narrow segment of the audience, if you said, this is an invite only tool for like executive search, like you could make, you know, a recruiter on executive hire often makes like 25 to 100k per hire. So just think about, and most of what they're trying to do is find you the person that has a good reputation, right that is doing. So if you could disrupt that market, and do it for half the price. Hell, if you did it, well, you probably actually charge two 3x Right. Yeah, we are. We actually have the right data. Right. And that's, I think, you know, a lot of what's instructors are doing kind of organically as they have that data, but that's the one thing that's like stuck in my craw is like, I wish i i hope this launches. Like I hope this comes out of nowhere. It surprised me and somebody launches this next week I would I would be so overjoyed.
I love that for two reasons. One, I love any idea where you can find a line item of an income statement that there's already money allotted for this like we're advisors, advisors, one can be we did the CEO search. And what these SEO executive headhunters charge I was about to like switch careers, I was like, This is insane. And having a tool like that one will let them do their job better or you disrupted and you could do that. The other thing that's nice is I love ideas that trawl the solve a real problem, like even right now we're about to make this hire, and we're doing reference checks, and it's all virtual. And we're like, we think this person seems like a delightful human being. But we'll find out in three months if this worked out or not. But no, that's a good one. Yeah, maybe hold that can be after you sell a Fathom or at IPOs. That can be the next one. So there you go.
Hopefully, I hope someone else listening to this solves it before that might be a while. I hope you get to.
Yes, it will let you be a beta user. I like the idea of having it for a specific segment. Probably going more premium with executives or something is a smart move.
I want to get into like, Dude, I don't think you want to get into doing this problem at scale. Right? Yeah. There's also some real dystopian ways you could go at scale. Right, like,
nice. And one question I always like to end with is, what is the nicest thing anyone's done for you in your professional career?
I mean, it probably comes back to full circle that first story, right? That probably the nicest thing was was Justin Eamon, I'm not sure who, who read there's really no not being like, eff off. Right? You know, I think it'd be really easy. So when someone cold emailed you and it's like, your product sucks. You know it, bro, I don't know that I would have read to the end of that, right to see where that email was going. So like, you know, I am really forever grateful to those two for for giving me that opportunity. And I you know, honestly, I think that is the ethos of I gonna say Silicon Valley. But I mean that not it's not a place really in my mind. It's a mentality, the ethos of startup land, which is I feel like people trip over themselves to help be helpful to other people, which as I talked to more people in other other like, industries, I realized how unique and special that is, right? Even like, you know, I have people all the time, even back in the day who would, you know, they probably got nothing out of taking a call with me, but they would take a call with me cuz someone took a call with them, right and so I, I think there's like this very like Pay It Forward type mentality. But yeah, Justin and I think yeah, gave me this really changed the trajectory of my career and also my life and so that is easily the nicest thing anyone's ever done for me. Career wise.
Yeah, that's a great story. I'm very nice. I didn't mark you as spam or anything. So very, very cool. Well, we're just have been super fun man. Where can we point people learn more about you? Or Fathom or try and get free access to
if you want to get Fathom go to fathom dot video slash pod. So I mentioned there's like a big waitlist. But if you go to that link, you will skip the waitlist. And then, you know, check it out. I mean, I think I'm not much of a Twitter person. So I'm on LinkedIn. Feel free to connect me on LinkedIn mentioned, you hear me on the podcast. I'd love any feedback you have. Let me know what you think of the onboarding process. It always could be better or we think of the product. I love. I have any and all feedback. So looking forward to hearing from you.
Awesome. Well, this was a blast. And thank you so much for coming on. Thank you. Today's episode is brought to you by no one. Yep, we have zero sponsors. I haven't reached out to any companies. Nor would I expect a reputable brand to give me money. But I'll give a few plugs. First, I send a weekly newsletter each Thursday featuring five articles or tools that have helped me you can sign up for these weekly updates at Jim w huffman.com. Second for anyone running a startup. If you need help growing your business, check out growth, growth, it serves as your external growth team. After working with over 100 startups and generating a quarter billion in sales for clients growth, it has perfected a growth process that's hell bent on driving ROI through rapid experiments. Plus, you'll get to work with yours truly. So if you want to work with a team that's worked with startups have been funded by Andreessen Horowitz are featured on Shark Tank then check out growth hid.com And finally, I wrote a book called The growth marketers playbook that takes everything I've learned as a growth mentor for venture backed startups and I've distilled it down to 140 pages. So instead of hiring a growth team, save yourself some money, get the book and you can just do it yourself. Hope you enjoyed this episode, and I'd love to hear your feedback. I'm on Twitter at Jim W. Hussman.