Nirav Tolia & Sarah Leary - Look Before You Leap

 

Secrets from Silicon Valley

 

Lesson Info

Nirav Tolia & Sarah Leary - Look Before You Leap

Well, it's, great to be here, and we really appreciate the opportunity, and I'm not sure that were worthy of the praise that we just received, but we'll try to give you something in the next hour or so. That will be valuable for you, as you think about starting a company, as you think about evaluating an entrepreneurial ideas, so let's get started, and we've called this session look before you leap, evaluating an entrepreneurial idea before taking the plunge. We are entrepreneurs, as you will hear in a few minutes, and we've taken a few plunges, and sometimes we've looked, and sometimes we haven't looked before we leapt, and so this time, we have looked with our current company next door, which will tell you a little bit about, and we want to give you a sense of of what we've learned through our journey is entrepreneurs and what we think people can use when they're thinking about becoming entrepreneurs themselves. So to talk a little bit about the two of us, which sarah will probably t...

ell you is one of my favorite things to do, but I'll actually, sarah let you start, sure. So my name is sarah leary, co founder of next door, and I started my career after graduating from harvard at microsoft during the early nineties, at a time when it was cool to be at microsoft, and so that dates me a little bit, and I was exposed that time to the launch of microsoft office and got really used to the idea of building large products that were used by millions and millions of people, which that happens early in your career. You get addicted to it. I left to go to harvard business school because I knew at that point that I wanted to be a part of something smaller and more entrepreneurial. And after I left harvard business school, I started looking for interesting companies to join, and I was fortunate enough to find a great company, any opinions and that's. When I met near if and as soon as I met near, if there was an instant chemistry that we had and I knew that this was going to be an exciting journey to go on, I'll let him talk a little bit more about about opinions but amazing company that was very early on in the internet boom. I then moved on, and that company eventually became part of a company called shopping dot com, where I was involved in both product and marketing. We're fortunate to see that company go public in in october of two thousand four and eventually acquired by ebay. I then took some time off and joined up. Forces with near of again because at that point, I knew I wanted to not just be an early employees, kenyans, but I want to be a part of starting something from the ground up, and I want to work with someone who had done it before. And since then we've been on this interesting journey with both fan base and next door and it's been an amazing ride, which has mostly been defined by picking the right partner to work with that's very kind of you, so I'll give you a little bit of background on me and and sarah and I have worked together, we were rehearsing this and I said, we've worked together for thirteen years and she said, oh, no it's been fourteen years and she's definitely the brains of the outfit, but we have been lucky to work together for fourteen years while sarah was that microsoft and preparing to go to harvard business school actually was at stanford undergrad, I'm originally from odessa, texas, of all places, so all the people that are watching from odessa, texas, and I hope there are many of them, I hope they give a shout out, but I moved out west to go to stanford, and then I was very, very fortunate out of stanford to join. Yahoo when it was very early and very small is one of the first seventy five employees at yahoo and got to see that company grow from seventy five to over three thousand people over three years and then felt like I wanted to try to create something like yahoo myself. So I joined up with four other people and was a co founder of this company called opinions opinions as the very dot com boom dated name implies elektronik opinions was a website about reviews elektronik opinions it was really one of the first mainstream websites devoted to user generated content something that we take for granted now and we were trying to become a place where anyone would go to get advice before they bought anything and it was an incredible right for me. I started vp of marketing and product after a year I became the ceo and then saw the company through many highs and a couple of lows as well was lucky enough to work with sarah and a very, very talented team and a sarah mentioned we merged with another private company called deal time to become shopping dot com, which went public in two thousand four and then was acquired by ebay in two thousand five. Now after sarah and I both took some time off I was in new york she was still on the west coast, we joined a venture capital firm that had backed opinions benchmark capital, one of the best vc firms in silicon valley and we were able to do this really great role that you only hear about in silicon valley, which is called entrepreneur in residence, and so sara and I were hired by benchmark to essentially come up with a new idea and start a company and ostensibly be backed by benchmark. And so this is when we started to go backto work and began to think about starting a company together and I'd start opinions. Sarah was one of the early employees there but had not been there at the very beginning, and I think that was an itch that she wanted to scratch way left benchmark after six months as entrepreneurs and residents to start a company called fan base, which I'll tell you a little bit about in a second, and ultimately that company didn't work out. It was well funded by benchmark and other venture capitalists, other investors, we had a great team, we thought we had a great idea, but we could never really get fan base to work, even though in the first year fan base had fifteen million users, so it wasn't a website that wasn't visited by anyone, it just wasn't a website that we felt would truly become the kind of company that we wanted to be part of, and so we made the hard decision to pivot this is a silicon valley term when you have a team that's working on something, and it doesn't seem like it's quite working, and you change directions, you pivot in direction, and we decided to pivot to a new idea. We didn't have any new ideas at that time, we took a different process this time around and starting our our next company and that's a lot of the process that you're going to hear about today and many of the lessons that we learned through making mistakes at fan base, and then hopefully correcting those for our next company next door. That's what we want to share with you today, so fan base very quickly was an attempt to build a user generated content resource for the world of sports, sort of a wikipedia for the sports fan that would cover all sports through all time in all countries. I joke that one of the inspirations for the idea was sarah, because she didn't say this in her bio she's, very humble, but when she was at harvard, she was an all american athlete and national champion lacrosse goalie she's actually inducted into the harvard sports hall of fame, she makes me pay a one hundred dollars every time entering that publicly, but it was a very passionate subject for us, but we didn't really transfer that passion into something that was really as a product as an offering as a business next door, which is what we're working on today is a private social network for the neighborhood, so you heard a little bit about it, it's an idea that local community matters, neighborhoods matter, yet over the last couple of decades, we've lost touch with our neighbors. We've lost touch with the ability to easily connect and communicate with the people right outside our front doors. And when we saw the emergence of social networks like facebook, linkedin and twitter and we saw how effective they were at connecting people, we thought, well, if neighborhoods air so important, why can't we use technology as a powerful force to bring back a sense of community to the neighborhood and that's what we've been working on for almost three years now, and we're very excited about where the company is going and the future ahead, and you'll probably hear a little bit about that. So what are we going to talk about today? This is our road map. Sarah likes to talk about what entrepreneurs do as a cz they do on terms of going on a journey and thinking about the steps that you're going to take before you go on that journey and one of them is being prepared before you go in that she likes to call it a road trip. Actually, she wanted to put a road trip, and I thought a road trip road map, you know, it's a little bit more professional, but this is our agenda. Essentially, we're goingto have a short introduction and talk about what entrepreneurship means to us and why we're so excited about being entrepreneurs in some of the things that we believe people should be aware of before they decide to become entrepreneurs themselves. Then we're going to talk about the specific steps that we went through, pivoting from fan base to next door and thinking about how to create success out of failure, and we've separated those into three steps. Why? Who and what? And then we'll hopefully have some time for two a I did wanted to mention that we're happy to take questions in line as well. So if their questions in the audience or from our online audience, we would love to be interrupted at any time and take your questions, but let's get started, and you know, this is sarah says thie entrepreneurial journey, so we'll start with a little introduction on what we believe the entrepreneurial journey is so I think the first thing is to really look at the definition of an entrepreneur and just to read this out, a person who organizes, operates and assumes the risk for a business venture and the key word there is risk and it's the key differentiator between an entrepreneur and just a business person, taking on that individual risk of the venture is something that distinguishes an entrepreneur from really anyone else in the business world, you might be thinking to yourself, well, why do people engage in these types of risk taking activities? Well, a big part of it is because we know that being an entrepreneur can be the ultimate high, and this is actually what you usually hear about in the headlines and in the magazine cover stories, and you hear about the successes and you read that you're like, wow, I want to feel that type of success in that type of high. Unfortunately, that high also comes with it, the risk of there being lows and those don't get as much attention. Those don't hit the headlines nearly as frequently, but they are an essential part of the entire process and certainly something that we have experienced firsthand you've probably read in the news about successful entrepreneurs and and I remember when I was starting opinions. Dreaming about what I'd seen it yahoo and that success and thinking can I do something like that? But I learned pretty quickly and we've learned a couple of times since then that you know the success is something that you hear about the failure of the challenge, the pain that's something that you experience, you definitely spirits. This is actually, quote, I found from a very successful entrepreneur this is elon musk he's, the founder, one of the founders of paypal and then more recently the founder of tesla and also space x I mean, a tremendous entrepreneur, someone that in silicon valley we look to is a real inspiration. And this is what that inspiration says being an entrepreneur is like eating glass and staring into the abyss, abyss of death and he's one of the successful right. And so if it was like this for him, what would it be like for all of us? Now we went hunting for some empirical evidence on startups and how successful they are and what the proportion of successful startups is, and this is what we found. Amazingly, you hear this conventional wisdom nine out of ten start ups fail, ninety percent of them fail is even stuff that has been researched and reported on harvard business school professor went so far as to say, seventy five percent of start ups fail and so overwhelmingly, the evidence says that the majority of folks that go on these journeys that start this journey or going to fail and yet people keep doing it and they keep doing it, and I think about the culture in silicon valley, and it seems like everyone wants to be an entrepreneur, right? And we tend to be pretty data driven in silicon valley, so these statistics aren't things that people don't know, right? And most people who are out there, the facts say that they will not succeed. So most people in silicon valley who are starting companies right now are in the process of not succeeding. So why did they do it right? What, what? What is the thing that makes him do it? I think this is what an entrepreneur thinks, so I will be the one that is going to succeed, right? So the opposite is here? Yeah, the name is that nine out of ten start ups were not successful. This means that one in ten is highly successful, and when we were putting this together, we said to ourselves, well, you know, we've we've been a little better at the odds than nine out of ten, not succeeding, we haven't had one hundred percent success, we would like to try to give you some tools and and some hacks, if you will to make sure that you can increase your odds knowing that the odds are overwhelmingly against you, right? But if you hit things the right way, if you prepare correctly, if you can look before you leap and then leaped correctly, well, then you can be fantastically successful, and we wanted to end this section with, you know, one of the best of those successes. I mean, this is our sort of patron saint of entrepreneurship, mr steve jobs, and you think about steve and what comes to mind, passion, unbelievable passion, passion for creating something that has never existed before in creating beautiful products that people couldn't envision, and and yet he still understands that there's more of a process of figuring this out. We found this quote we thought was really interesting from steve jobs. Um, follow your heart, but listen to your head, and we felt that this really captures the essence of what entrepreneurship is. It's passion, it's, inspiration, it's, emotion, it's feeling its heart, but the really great ones, they can actually add to that the head, the process, the discipline, the rigor, right? And these are some of the things that we've learned, and and I think with fan base we were all in on passion, we're huge sports fans. We thought that there's nothing like the passion of a sports fan or an athlete we'd experienced that ourselves I mentioned that I grew up in odessa, texas that any of you know what odessa texas is notable for football and a book called friday night lights that was written about my high school odessa permian not ten year high school but your time in how it was written about the class that was one year ahead of me and I can tell you that the impact of sports the positive impact of sports that was something that I felt firsthand obviously sarah did as a competitor and avarice successful one and so we got the passion right with fan base but it was the head that we couldn't really figure out and we tried to get that corrected for next door so we'll talk about that a little bit so we're going to move on to the first real section why are there any questions before we move on I just want to give a shout out to not sure what the person's real name because they just need themselves odessa but there is another odessa in the chat room there you go I bet that's one of my marjo that may be one of my parents but that's thank you mom and dad I appreciated you go there you go a lot of pride and no day okay so let's get started and you know, why be an entrepreneur? And sarah can talk about this image because it's an image that she really let s so this is one where there's a lot of things about analyzing markets and a lot of data analysis, this is something very different. This is about self reflection, and before you embark on this journey really taking the time to take stock of yourself and see if you are personally prepared to take this plunge even before you engage other people in the process, so we're going to start with a quote, and this is a wonderful quote from a wonderful person. Reid hoffman is one of the most successful entrepreneurs and and now most successful venture capitalists in silicon valley he's, the founder of linked in as well, loza, partner at greylock, which is one of our investors in one of the best investors in silicon valley. And I was at an event he is presenting tomorrow morning right past, and I was that I was an event with him last week, and they were asking him, you found it linked in and you were doing really well, you were the ceo, and then you brought someone else in to be the ceo of linked in this guy, jeff weiner who's also exceptional, why did you do that? The company was going really well and and you clearly have incredible potential and he said, you know, I just realized that I'm not passionate about being a ceo and I believe that you can only be world class is something for which you have true passion and so this is really where we start on understanding the motivation for being an entrepreneur if you don't have the passion and passion is something you know if you have it and you know if you don't if you don't have the passion you should keep looking you should keep looking for another idea passion is the thing that sustains you when when times are really tough it's a thing that keeps you up late at night thinking about this it's the thing that makes the journey the reward because you're working on something you love and you thought you went out yeah I think the big thing here is that if you sat down in and ran an analysis of doesn't make sense for me to pursue this path is that the best way that I can make money and support myself you would never decide to go off and be an entrepreneur you could never make the numbers work instead you do it because there's this burning desire in you to create something to fulfill a need that is missing in the world and this is something that propels you and it's really just food for the soul and you're going to need it because there will be a lot more dark days especially early on then thin the bright days at the end of the journey so the first thing on the list is passion and that should be checked before you move on before you even think about the quality of the idea before you think about some of these other things that were going to think about and this really is the heart but the head can inform it by saying, am I truly passionate about this? Can I imagine working on this for many, many decades, many decades, right? I mean, these days you hear a lot about companies that are sold after eighteen months after twenty four months opinions went public about five and a half years after it was founded and that was an era sort of, you know, to thousands two thousand I guess so one, two thousand two two thousand three when the average amount of time for a company to go public was five years today some that averages actually lengthened considerably linked in went public ten years after its founding and for a lot of entrepreneurs because they start young, they have not even been working for ten years and so they can't even really think about what I spend ten years on something but it's an important question to ask and the question I ask is if I work on this for ten years and I don't know it's going to be successful along the way I go through ups and downs and things change and I have to make sacrifices will I enjoy what I'm doing well I still have the passion for what I'm trying to achieve and this was the first question we asked of ourselves the second thing I want to talk about this interesting framework john door is a very notable venture capitalists in silicon valley he's a kleiner perkins and he's been a tremendous role model for many, many, many entrepreneurs since I was at yahoo so he's a real legend and he's developed this framework called mercenaries versus missionaries and it's this notion that startup founders and entrepreneurs need to be missionaries, not mercenaries and what is the difference between a mercenary and a missionary? So he's actually filled out the framework it starts with what we just said passion so you know you've heard that only the paranoid survive it's a really famous book written by andy grove, the former ceo of intel that may be the case when you're a large company you're already successful but as a start up you need to start with passion some of the other things that he mentions you need to be strategic, not opportunistic don't look at something and say oh that's a great opportunity say I love it and I think it's a great opportunity for these reasons the next thing mercenaries air talking about what's the pitch and what's the deal. And how am I going to get this thing done? Missionaries? You're talking about what's the vision what's my big idea what's my inspiration how am I going to find partners? I don't just want to pitch this into a transaction I want partners that help me make it great mercenaries are thinking about how quickly can I get return on investment, right? Missionaries were thinking about I'm great with a marathon that's where I'm going to be strong I think this is at the core missionaries have a long term view of what they're trying to dio and therefore they're not in a rush to optimize. As for the short term, some of the other things I'll just go through here, um obsessing on competition versus obsessing about customers this is really important if you listen to folks like jeff bezos, great ceo of amazon, one of the best entrepreneurs of all time, if you hear him talk about amazon and what he stays up it night worrying about its never competition it's always how can we please our customers? How can we create a better experience for our customers? I mean, he is a missionary, right? You sort of is a passionate izzy strategic. Does he think about big ideas? Has he been at this for a long time does he obsess on customers mean you can start to use this framework and you can see great entrepreneurs versus ones that haven't succeeded aristocracy of founders versus a meritocracy aristocracy is I have more experience I'm the ceo I'm the person who came up with the idea right that's not the way that you think about it you think about it is we're all here to accomplish the same thing together and anyone who could step forward and have the best ideas should be the one who has the authority to implement it financial statements for mercenaries and a mission and a value statement for missionaries right wolf packs versus mentors and coaches right will continue to go on entitlement versus contribution this is a really interesting one I mean I'm forty one years old now I mean I've been working in silicon valley my whole career and I remember joining yahoo when I was twenty two or twenty three years old and I didn't feel entitled back that we sometimes hire people these days and because of what they've seen in the successes that they've read about they believe oh isn't it come to silicon valley I have a computer science degree I join a company and it gets bought for a billion I mean I wish we could be part of a story like that but it doesn't it doesn't work like that those are the exceptions the deferred life plan versus the whole life that works this is that notion that I'll just do this for three years and then it will be successful and then I'll get back to doing what I really want to do right um ah whole life is more about I want this to be my life's work there is an interesting I mean that's talked about an entrepreneurial circles the one hundred year company it's something that the ceo of a company called evernote talks about his name is phil living and he thinks about how can I create an entity that's around for one hundred years one hundred years right outlasting even the founders just one thing on the whole life I think that this is something that over time both near of and I have really embraced and it's something that with next door we feel very very strongly about that this is we want this to be our life's work and we're proud of it and we know that every day were motivated by that mission feel great about the hard work and we want to see it be successful not just because we want the venture to be successful but because we want to leave our mark on the world and that's something that I think as we've gone through our lives has become increasingly important to us and and a lot of this you know are you passionate about the idea do you find meaning in what you're doing, those statements make a lot of sense to everyone. What we're going to try to do is give you really frameworks that you can apply your thinking so there's, not an entrepreneur out there who would say, oh, yeah, I don't really I'm not passionate about what I want to do. I don't I don't really care about meeting, right, but once you start thinking about the specifics that's, when you can ask yourself really direct questions finally, you know, we have success versus significance, this is what sara just talked about. We frequently say to ourselves, we want to create something that outlasts us and we don't care if anyone knows that we created it, right? We just want something that that we feel when we leave these bodies behind lives on and that's something that really drives us, and that is really important for us now. We talked about passion. This is really what I would define as meaning, making sure that you have meaning and there's one final step in terms of understanding, motivations and sarah's going to talk about that it's really around timing and really understanding some of the practical issues that you have to consider before you take that leap, and we borrow from professor wasserman's. Framework professor wasserman has studied entrepreneurship in the starting in new ventures at harvard business school for several years, and this is a framework that that he has introduced and that we have really embraced and it's the understanding of the certain circumstances in your life that you have to consider before you take the plunge. The first one is around your career. What stage are you in your career? And is it the right time for you to take off and finally embark on your entrepreneurial journey? If you think about near of is an example, he was that yahoo for three years, and he saw that company go from seventy five employees to over three thousand incredible learnings along that that period of time he also learned the skills of what does it take to build a large scale internet web site that is used by millions and millions of people. He was working with some of the best in the brightest that were in the industry, who went on to found other companies, he had the connections across silicon valley. At that point, it was a good opportunity for him to take those experiences in that expertise and say, I'm ready to break out on my own for me, I was at a point in my career coming out of microsoft I felt like I needed to get more entrepreneurial experience. I wasn't ready to go start something right out of harvard business school, so instead I joined a team that was already up and running with an idea I want to learn. How did they do this? I want to learn about building large scale websites. I want to learn what it's like to be in silicon valley and then later on it made more sense for me to embark on that entrepreneurial step of starting a company from the very beginning. The second circumstances you should think about is the market. Is it the right time in the market? Is there a unique market opportunity? You hear this all the time when you hear the story about bill gates and paul allen standing in harvard square and recognize in the there was a window of time, it was so urgent that bill gates couldn't finish at harvard, he had to go and do this right away. And if there's that window of time, you got to pay attention to that. The third circumstance is personal, and this is perhaps the most important one. When you go on this journey, you're not actually doing it alone, you're obviously hopefully doing it with other people, but it also impacts all the people in your life, all the people at home. The people who are dependent on you and it's super important to sit down with them and have realistic conversations about what this decision means for them and for the family and for your friends and you have to be very clear about whether or not everyone's on board with you taking that journey it's probably going to mean longer hours of work, less pay lots of ups and downs and it's important that the whole team at home is behind you because that support is going to be essential for you to be able to ride that wave and understand the highs and the lows and be able to successfully navigate them on what you're looking for is that point in time and that opportunity for you personally where all three of those lineup and that's the bull's eye that's outlined in the middle of this slide the orange center what you're looking for is when those things line up that's when there is at least the right opportunity for you to consider taking the next step and taking the plunge. But it's an intensely personal decision that berries person by person so one thing I'll say is when it comes to entrepreneurship aa lot of a lot of this analysis you do it never leads you to a perfect solution and so can you reach a point where you're really hitting a bull's eye that's right in the middle and you get all of the alignment of everything that you're looking for, probably not. But working through this and asking yourself the questions helps you understand some of the sacrifices that you may make. I mean, for example, I remember when we were pivoting from fan base to next door's we were winding down fan base, I was getting ready to propose to my now wife and get married, and I remember thinking to myself, she doesn't really know what it's like to be married to a super passionate, committed entrepreneur because we've been winding down this thing called fan base, and so I've been working hard, but there is a different level that you have to work when a startup is going well and that's something that I hope she supports me with. And so we had conversations about that fast forward now, three years later, and we have an eleven month old son, and those of you who have children know that when children are that young, they go to bed early, and those of you who've been entrepreneurs know that entrepreneurs rarely come home early. So from a personal standpoint, when I started the opinions at twenty six or twenty seven years of age single no children, I could stay at the office till midnight. And all three day did frequently did. But today, even if I want to get home at five thirty to spend an hour with my son before he goes to sleep, it's not the right thing for the company, and so I wake up early so I can spend time with him, and I devote significant time over the weekends and so it's not always a perfect fit, but understanding that these air, some of the some of the things that are going toe pull it, you gives you preparation and helps you ask the right questions to make sure that you really are approaching this at the right time. And and, you know, we think of who and we love this image, you know, this is this is choosing I think I'm along with a slingshot, like, really looking aggressive in that one they both s like, yeah, I grew up in texas, so I'm going with the cowboy hat this is really all about what's, the most important thing and on a road trip it's having a great wing man and that's, what makes it fun and more often than not, those of things that you talk about and you remember it's, who you went on that trip with and that's essential toe having having a great journey so first sort of ah, little side trip from our main journey now some people may be saying do I really need a partner? I mean, do I even need a co founder? I mean, is that really is that really something that's mandatory? And I just I wanted to make a point here that one person doing something can be very lonely I mean, as the ceo of next door I frequently tell my ceo friends that haven't started a company with anyone else how do you do this by yourself? How do you put all of this on your shoulders just your shoulders and move on and it's lonely it's really, really lonely it's emotionally trying it's intellectually trying I mean it's trying and pretty much every way I found this quote from paul graham who's, a founder of y combinator and entrepreneur himself and now an early stage investor I'll read it to starting a startup is too hard for one person even if you could do all the work yourself you need colleagues to brainstorm with to talk you out of stupid decisions and to cheer you up when things go wrong and I know that sarah has done all of these things and hopefully I've done some of them to you, you know? You sort of think about when you're low is there someone who can lift you up and when you're too high is there someone who can normalize u there are great entrepreneurs like jeff bezos, who started companies on their own and they've been successful. But I have tremendous respect for him because I know that for me I could never start a company by myself. In fact, the very first question that I would ask myself because I know the why part I know myself well enough to know that I have the passion and the meaning, and if the time is right, the very first question I ask myself is who is my partner going to be? So in our case with fan base and next door, we chose to go with three co founders in this picture you can see ah, near of and myself he also see mayor bloomberg. This is one of the highs. We talked about the high highs and lows. Absolutely. This was last friday when we announced a partnership with mayor bloomberg and the city of new york will be using next door to keep residents informed with issues across the entire city. So this was a very, very proud moment for us personally and professionally, and this thiss photo captures that three co founders with mayor bloomberg s o u near of an eye, you can pick out the other good looking indian guy out front that is prakash gionatha rahman, and he is our vp of engineering. Ah, fantastic guy who we worked with at opinions and shopping dot com before he had a stint at google. And we knew that he was the guy that we want to bring on board because he compliments us so well. But there's something interesting about this picture? I mean, besides the fact that mayor bloomberg's in you see sarah and I looking directly in the camera and somehow prakash has caught something that's that's in a different direction, and so he's looking this way and everyone else is looking forward. So when we started to research the success of companies that were founded by three founders, we found some interesting data. We found that, you know, three founders can actually be challenging. And, you know, if you think about how hard would it be to line two people up to look in the same direction versus when we go to three, all of a sudden one guy's looking apart and this is actually a a graphic representation of something in physics that's known as the three body problem and the three broad body problem this is ah, quote, small differences and where the three body start may produce very great differences and where they finish it's this notion that, you know, people are independent. And they have their own baggage they have their own context they have their own experiences they come to the table with a particular perspective and when you have two people that come to table the perspective you can hash things out and even that can be challenging I know this from marriage, right? I mean it's something that requires constant compromise and mutual respect and and it works because two people are working together sometimes when you have three what we found in our research is that it's just too hard to get everyone on the same page or maybe not too hard but it's harder right? So again, what we're trying to do is give you and ed jj and help you think about how do we maximize for you your likelihood of success. And so even though we chose three founders and sarah will talk about some of the reasons why it really worked for us the data and research shows that three is not optimal. Now if one is lonely and three is not optimal where does that leave us? So you know, two seems ideal at least anecdotally. Now sarah, do you wanna introduce our friends to the audience here? I think most people recognize these photos steve wozniak and steve jobs up in the top left you have ah sir j and larry up on the top right founders of google you have paul allen and bill gates down on bottom left founders of microsoft and ben and jerry founders of ben and jerry's. Little diversity it's not just technology and what's interesting about two. Not only do you hear about two founder companies that are extremely successful, the data actually backs this up. This is something sarah found. Yeah. So ah, professor wasserman and harvard business school has looked at over ten thousand different venture back start ups and he looked at this particularly in the technology sector. And what he found was that the most common founding teams have two members on it. And you see that on this chart, thirty nine percent have two members. If you add on top of that the next largest column there and that is the three co founders, you get sixty percent of the start ups out there have two or three co founders out there. We think that this is the sweet spot there's, a little bit of a skewing towards the two co founders, but certainly the data suggests that two or three are very, very popular. So so we talk about the number of co founders, but how do you choose cofounders? Right? And this is back to polygram. A couple of great quotes cofounders air for a start up what location is for real estate? You can change anything about your house except where it isthe he goes on and says in a start up you can change your idea easily but changing your co founders is hard and the success of a startup is almost always a function of its founders sarah found that found this uh this data point so professor solomon, a professor that I had at harvard business school really did this a seminal research a couple of years ago looking at what were the causes of failure and over sixty five percent of startups failed because of management issues and that all starts with the founding team if you don't get that right, you're not gonna have a successful company founding foundation right it's at the foundation of the entire company so getting that right is really important because if you can eliminate the's self in afflicted issues, you can dramatically increase the odds of success for your venture. You know, going to what sarah said about founder being derived from foundation and if you think about foundation it's it's primarily for a house cement and cement is pretty quick drying right and changing foundation is very, very, very difficult. So, you know, there are now whole companies in silicon valley that are devoted to founder dating and we think that's a great idea I mean, we had worked together for something like nine years, eight years before we were co founders and so sarah is going to go into what to look for or at least how we thought about choosing a co founder. So there are three things that that we think is important, and the first one is looking for complementary skills there's a lot of work to be done in a start up and making sure that you can cover as many of those in the founding team, especially those that are needed in the first six to twelve months of the company, is really, really important, obviously, to cover that work and divide and conquer is really important it's also important because you don't want to be stepping on each other's toes that's where there could be some serious issues where people feel like you're you're micromanaging each other and that's a bad situation that causes friction. And so you want to avoid that as much as possible. The second one is looking for shared experiences together. Ideally, this is in in a working situation where you've had in the line of fire experiences with each other, you'll hear a lot of war metaphor is going on here. The idea is that you've seen how people react. In real live situations where the stress is real and you see how they handle those situations like to talk about would you want to be in a bunker with this person and in many respects near of and I have been in a bunker with each other often on for fourteen years we know how each other teo and we've gone out and pulled each other off the field of battle and brought them back and that's part of where you build that trust and know that that person is going to have your back and you know that where their strengths are where their weaknesses are and you can complement those very very well that is that is really essential and I think one of the challenges if you're going out and trying to find a co founder you haven't worked with before I highly recommend sitting down and working on a project even if it's just the idea of the new company before you embark on it has that work how do you guys resolve conflict that's going to be really important and then the third one is really around shared values we talked a lot about individual and personal motivations you bring those to a start up and you want to make sure that you're in alignment on those motivations with the other people on the founding team that is really critical because if you get into a situation where someone is motivated by duke by different goal that's going to create a real problem in the case of next door, we're not motivated by a quick hit and just a quick return were motivated by building a great company and that's something that precaution ear of and I have talked about explicitly, and it informs every decision that we make in terms of who we hire, how do we fund the company? How do we build it? What's the pace of things we think very long term, because we all have a shared set of values about what we're trying to still last part that's most important, so again, you're not going to get many people who are talking about co founding a company that say, I don't want to build a great company, you know, someone says my values to build a great company, you're not gonna have someone say my values, not to build a great company, right? But the question you ask yourself and you asked, the other person is, what does that mean? What does that mean in terms of the kind of people that we want to hire? What does that mean in terms of wood? We sell the company if we had an opportunity to sell it? What does that mean in terms of do we want to fund this ourselves, or do we want to take on partners? And investors and sell pieces of the company and if so, how will we choose those partners in so far as possible? You need two dimensional eyes, the's high level things and these aren't easy conversations. You know, if you think about people sitting down and saying, ok, so let's say that we're working together and you're not doing a great job and it's clear that the right thing for the companies to hire someone over you. This happens all the time to co founders it happens all the time other things that happened you go to your co founder, you say, ok, let's say that you really want to hire this person and you have some experience with them and you trust them or you like them, they're a friend and and I evaluate them and I decided, you know, it's not quite working with this person. What do I do then? Can I tell you honestly, we said that we were going to hire by consensus, or do we just decide that if you say you want to hire someone, I support you? Regardless, right? There's not a right or wrong, the right is making sure that you're aligned, and if we sort of apply this framework to next door with three co founders prakash vp of engineering, I'm the ceo, sarah's vp of marketing I think about the business overall sarah is solely in charge of marketing precautious solely in charge of technology you've probably heard because it's conventional wisdom in silicon valley or at least it was maybe fifteen twenty years ago that you would have a business person and a technology person starting a company together that's actually changed a lot these days you tend to have a design centric or a product centric person with a technology he's one of the things that sarah talks about is make sure you have the skills around the table that will allow you to build the thing now that you want to build if we had a bunch of business people around the table and not a single technologist how do we actually write the code to create the product if we have a big marketing challenge and we have no experience in marketing what are we going to do all right, so again this is not an ideal thing but if you want to tilt the odds in your favor you think about when I look around the table and I think about all of the problems primarily the short term ones because those the ones you have to get started on do we have people around the table that can solve those things ok? So we're going to move on to the next section unless their questions looking good people still awake yes, we want it um, I know you said your your founding technologist was vp of engineering. Can you talk about sea level versus vp versus director and how you had that convoy? Yeah, you know, it's a great question and it's something that we actually have experience with, and we have sort of a shared vision or shared values on this. So we have grown up in companies that are not considered what we might describe as, like, inflated titles company so it's very difficult to be a vp at yahoo, or at least it was when I was there is very difficult to be a vp and mark, so you had to have many years of experience, you need to have proven yourself, and those companies felt like if you don't over title people, you have the opportunity to promote people or if you have to hire people above them. And so what we said to ourselves, wass we feel that as v p s in the company, we want to bring in folks who've played a similar role in the past, it's something that we actually followed today when we hire peoples we hired director of product, we need that person to have played director of product, roll it some other company, whereas a lot of companies will say, well, if the person has been a manager, I'm going promote them and they could be director in our company, we tend to actually have a shared value of let's, give ourselves the opportunity to promote people up or potentially higher above them if they don't scale. And as a result, we felt like, you know, a cto, I mean, I think you're asking about cto versus vp of engineering, we also feel as as a founding team, that a cto tends to be someone who is maybe a little bit more idea driven and doesn't have people reporting to him or her. And we knew that with prakash, one of his incredible strengths is his emotional intelligence and his ability to manage people. And so it made a lot of sense again in our shared vision and our shared values, that he would be the vp of engineering because we had an idea that we all agreed on on what a vp of engineering would do, and so there wasn't I mean, sort of interesting, you know, you bring up the question, I don't think we had any explicit conversations about it. I mean, if you think about this second bullet point, sarah corrected me were together for fourteen years precautious, someone that we've worked with for over a decade, and so you had three people coming to the table who had over a decade of experience. Working on similar things and being in very close proximity around those decisions, I think the other thing was we wanted to have a team of co founders that would roll up their sleeves and and build things and work on the real problems they weren't going to just direct other people to do things and so sometimes a cto plays that observer role or oversight role precaution wrote the original code for next door he was hands on and built a culture around that in our entire engineering department you know, I was out doing the interviews and talking to founding members and drawing the maps of our original neighborhoods, but we were very, very hands on amir of is out there talking to partners and talking to founding members and getting people excited about the product thiss was not an arm's distance relationship that we had to building it we were knee deep in it, you know, on the title things specifically, I I am a big believer that if you want to scale into greatness, you want to give yourself off a little bit of wiggle room and let people reach for the brass ring a lot of times and we've learned this actually even at next door because you know, we're not perfect we still make mistakes all the time we've hired people in at senior levels and it hasn't worked out and when it doesn't work out you can't actually hire someone above that person you have to replace them and that ends up being a lot more traumatic because we actually spent a lot of time deciding on who to hire and we adore the people that we hire feels more like a family and so it's not like we just want to turn someone out and we feel emotionless about losing an employee it hurts us deeply and it hurts the person deeply but if we've over titled a person to begin with and it doesn't give us a lot of wiggle room now if we if we're a little bit more modest on title at the beginning and then they over performed it's extremely easy for us even after a week or a month or six months or a year to promote them so again, if you're thinking about a long term hundred year company it's okay to tell someone you could start is the vp and if you do a great job you'll get a c level title at some point in the future right? If you're thinking about I need all the value right now it could be a more difficult conversation one of the lebanese creative live as an example we talked about building a business that we're proud of that we could drive forever and I think there's there a couple different mindsets and I know I have some friends that are entrepreneurs that have uh wanted bill this and flip it's like it's really a dangerous word, especially in silicon valley, but there's this sort of the vision on the exit. And so the question is, if you're building a company that you want to change the world, do you miss opportunities when they come along for, uh, yeah, I share the same belief, but I think it would be good to talk. What do you miss opportunities? And if you build a company with your eye on the door, are you really undermining your ability to have a great company? I feel like you do, but I want to know what you think. I think that the best thing that you could do for a company is to create options and business school. They refer to this as ah baton, your best alternative to negotiated alternative. And so if you're going out there saying, we're going to build this to flip and you put yourself in a position where that is the only option, you are putting yourself in a terrible negotiating spot. You're also not driving really value that ultimately the market, whether that's, your standalone company or another an acquirer. Finds valuable and so I recommend at all times you want to be out there trying to build a great company because ultimately that gives you the most options down the road and if someone comes to you and makes you an offer you can't refuse, then you have to consider that but the best way to create those opportunities is too go on this journey trying to build a great company you know we're not actually saying that that it's pure and true to never sell your company I think that's a naive view point and it's not frankly a realistic one if you get a tremendous offer or their reasons that you should sell the company whether it's because you understand that you can't compete there's another competitor coming to the market there's some transition happening in the market you know all of those are good reasons to sell if you feel like someone's offering you way more value than you can a vision that's a good reason to sell as well. What sarah's talking about though, is we believe that the best way to really create long term value as well as have those opportunities is to have a long term mindset. One of our most valuable if not most valuable mentors is a guy named bill campbell we call the coach and he's someone who's a very, very special person even in silicon valley and he's someone who has given us great advice on how to start companies and he is he embodies all the things a great entrepreneurs and body and it always used to tell me you know companies are not sold their bought so if you're creating a company to sell it or to flip it that's almost a guarantee for you will people to do it right if you're building a great company you may be bought because someone else wants you really badly but this is our experience that lines up with lines like we don't even really talk about that because who wanted more than anything build something that last that we can continue to like I had so much value to the world but I hear these conversations that are sort of it seems strange to me in those when it can still work but you are significantly decreasing ads of success right? I mean there's an exception for everything they're significantly decreasing okay let's actually move on to the last section and we call this finding product market fit this is the what and product market fit is a term that has been used increasingly in silicon valley for the last couple of years because we started to realize and wake up to this notion that a lot of companies are being created but are those companies actually serving a market need? And so we found unfortunately that fan base was one of those companies we created it we were passionate about it fifteen million people even visited the website but if the website went away we're not sure that anyone would have really cared it was a product there was a market there was no fit this is the step that we skipped with fan base so let's talk about what we did with next door in we'll start with a definition product market fit means being in a good market with a product that can satisfy that market and I think the interesting takeaway here is that it's two sided it's your product and it's the market you know set a different way it's the thing you create and it's the people that want to consume the thing that you create a cz well some more from mark andris and you can always feel when product market fit isn't happening the customers aren't quite getting value out of the product word of mouth isn't spreading usage isn't growing that fast and you can always feel product market fit when it is happening the customers are buying the product just as fast as you can make it usage is growing just as fast as you can add more servers and so when I tell people about fan base and they say well didn't you have a lot of users and you know I mean it sounds like there were people who visited the website I mean why did you decide that wasn't working, we just knew we could just feel it. The passion wasn't there from people who are coming to the website, we hadn't built something unique and product market fit. While it is one of these things that you can sort of feel in your gut more and more. Over the last few years, there have been experts that have laid down frameworks and processes for how you can actually have a disciplined kind of path to finding product market fit and that's. What sarah is going to talk about so is near have mentioned there's really been a whole new school of thought around this, spearheaded by stephen blank and eric reese, and you'll hear people talk about lean start ups. We've taken ah, some of their findings, and we're going to show you how we did this with with next door and there's really three things that we focused on to systematically make sure that we were finding that product market fit one is identifying the important problem up front sounds like a good thing to dio, too is developed and test the hypothesis and then validate the hypothesis with people who would use the product and so let's talk about the first one, the first one is about identifying a really problem that matters. You're probably looking at this slide and wondering. Well, I didn't think they were in pharmaceuticals. Does anyone know why we have a bunch of pills on the slide? Can anyone guess pills prescription for a problem? That's. Good that's. Good. Placebo effect. That's. Good as well. So we like to think about this is that you can be in the vitamins business or the painkiller business. Which one do you want to be in? Do you want to be in a business that is a nice tohave? Or do you wanna be in a business that is a must have that people will wake up in the middle of the night screaming for your product. You want to be able to be in a place where you are delivering a solution to a really pain point for people? If you think about the way that you behave in your own life, I mean, hopefully people take vitamins. There wasn't new york times story earlier a couple of weeks ago that said, vitamins are placebos, but we'll throw that aside for saying a lot of people take vitamins and they like vitamins. But if you forget to take them one day oh, not a big deal if you run out and it's a week or two before you can buy another supply. No it's, not the end of the world uh if you've ever had a bad back, you're crawling, you know, on your belly like a salamander to get to the pain pills, right? If you feel like you have a high fever and you can't even get out of bed, you're trying as hard as you can to find tylenol or advil or ibuprofen pain killers air the things that people cannot live without. I mean, sara actually mentioned it when we were entrepreneurs and residents of benchmark. One of the things I did was take all the ideas we were coming up with and then talk to other people about them. I would say, what do you think about this idea? We're gonna build a wikipedia for the world of sports and what do you think of this idea? We're going toe try to build a platform where people can get continuing education. What do you think of this idea? We're gonna build this and that and the other and I was talking to a really smart guy in new york on one of my trips when we're benchmark and I pitched him on all of our ideas that we'd come up with and we come up with about ten and I could tell he didn't really like any of them and this is a really smart guy and I was getting a little frustrated saying ok what's going on I mean you don't like any of these ideas but I don't see you starting a company I don't see you coming up with an idea and he said no no no I don't mean to criticize any of your ideas but I want to just give you one really important piece of advice because you're going to devote your life to this and because you're at this very interesting position where you haven't committed yet remember before you commit you actually have a lot of leverage you can choose what you're going to work on you can choose who your partner is you can choose how you're gonna build the business once you start you're in it and correcting some of those things is very difficult so he said right now before you jump into something that could be the thing that you spend the rest of your life on make sure you build something that people really care about and I said, ok, well that doesn't sound I mean that's insightful but it's also obvious what do you mean by build something people really care about? He said we'll think about some of the most successful recent internet companies twitter google used those is his examples when twitter goes down what happens people scream when you can't use google, which is hardly ever right but if you couldn't use google you might claw your own eye eyeballs out right? And these are the kinds of companies that become infrastructure, the's, air, the kinds of companies that are absolutely great. If you're using ebay and you're a seller of merchandise and it doesn't work for some reason, I mean, you are in extreme pain, and so this is actually something that sarah adopted when we were starting next door, she said. Well, let's, look at fan base it's, a nice website it's, interesting to go relives sports memories, but espn is out there and everyone's using espn if espn went away or if my feet of the nfl went away, I might screen, but if families goes away, well, I mean, I might be a little bummed, but I would just go to the next web site. How do we think about this with next door? We wanted to identify a problem that was really that impacted people's lives, and fortunately, I think we found one in that we found that people were disconnected to their local neighborhoods, to their neighbors, and in fact they had real concerns around safety and security, and we found that here was an opportunity for us to use technology as a way to bring back a sense of community and help connect people to their fellow neighbors and keep their community safe, and the response has been incredible with specific statistics. When we started next door where that almost a third of americans don't know a single neighbor by name, we also found a great deal of research from harvard academics primarily a professor named robert putnam has written a great book called bowling alone about the decline of community america that talked about the measurable and tangible benefits of having a social network in a neighborhood lowered crime rates, increased longevity of life right? Ok, so let's just think about those two things is benefits less crime and living longer. Those are two things that if you think about where people spend money where they assess about how they make choices, those are two pretty big benefits. I mean, we think with next door that because the research has shown that the more neighbors you know, the more likely it is for neighbors to look out for each other and now we have partnerships like the one with new york city where the police are getting involved in communicating as well, we believe this is a company that will drive down crime rates. I mean, sure, you could also think of it is I'm running out of sugar, I need to borrow a cup of sugar and you can use it for that as well, but this is a real pain point for a lot of people and as a result, when we look at all of our data we have less than one half of one percent of our members who delete their accounts and these air members these are people who have to come to the website creating account validate their addresses it's a completely different thing early on when we started with next door and we only had a dozen or two websites up and running one day we weren't modern ing things very closely and the site went down and we're actually alerted by one of our members who picked up the phone and called me and said I need the director I need to get in touch with someone in the site is down there screaming they were telling us we rely on this it's part of our infrastructure and it's almost like a utility in their neighborhood okay let's move on to the second piece so the second one is once you have identified a problem and you come up with a potential solution to it you really only have a untested hypothesis and you're sitting around the room talking with your co founders about how you want to bring this to market and it could be like an echo chamber in there and you can convince yourself that you're on to something great and maybe you talk to close friends and they say yeah, that sounds pretty good but the most important thing to do at this point is to recognize that you simply have a high pop isis, you haven't proven anything and that way you need to do is find easy ways to quickly and cheaply get feedback from potential customers. So this is everything from going out and doing a survey or doing interviews, creating paper mock ups showing people exactly how you plan to solve this problem. Um you should develop an elevator pitch that you can share with anyone you come across who might be in your target market and see their reaction and you'll know that you have something when people react to it instantly they're not just being polite but like oh, that sounds interesting we talk about this is getting out of the building or it's referred to his goob g o b and this is the example of going out and actually talking to people before you have built a line of code try and get out and figure out is your hypothesis correct? And I guarantee you that your original hypothesis will change before you get it right. And this is why you have to go through a continuous process of reiterating on the idea and refining the hypothesis before you actually start building anything. And I thought what might be interesting is this is a actual flow chart that was created for the original idea of next door it is dated june thirtieth, two thousand ten and what you see here is that the original idea for next door was actually more focused on issues. This could be like the city lie law in san francisco, prop eight and the whole idea was that we would create pages that people in a neighborhood could take a side for or against our undecided. There was a whole polling feature around it, and we thought all of this is going to be a brilliant idea, way to really drive civic engagement, which is missing and that's a lot of what professor putnam talked about in his book bowling alone. And so, fortunately, before we embarked on building anything, we got off the phone with about two dozen different neighborhood leaders. These were h away leaders, crime watch leaders, folks that ran yahoo groups for their individual neighborhoods, and we would tell them about this approach that we want to take and when some cases, we would even show them some of these flow charts and they'd be like, yeah, that's, nice, but actually, what we really want is we want an easy way to plan our neighborhood barbecue or find a great baby sitter or talk about the suspicious car parked at the end of the street there these everyday things that people are talking about, that really is what people want to use to communicate. Uses a foundation for communicating with their neighbors and that be back we took to heart immediately changed all of these flow charts and changed our blueprints before we started building anything and it was incredibly important for us to do in the early stages and probably saved us months if not years of time of going down the wrong path. More importantly, we knew even at that stage without building anything that people wanted something and that they didn't really want what we thought they wanted and the process air talks about is just one generation we did dozens of them we sent out surveys using surveymonkey you know you just heard from right we interviewed are friends we went down in person and attended a church a way meetings we thought about our own neighborhoods all right we got out of the building where there was the white board and a lot of what we believed was intellectual firepower and we went to the real world to find out how will people respond to this and if you can't convince riel people very quickly put a smile on their faces because they wanted and the best ideas you telling the idea and they start saying well, have you seen that? Is that available? I mean can I buy that right now if you can't do that you know that you have to keep refining you have to keep refining now once you've actually done that. We have the last last little portion here. So here, what you want to do is now that you have a working hypothesis that you work through offline. Now you need to build something very simple, prototype. And this is sometimes referred to as the minimum viable product. In this quote, a minimum viable product is the shortest path from idea to validated learning. Can you build something very, very quickly, put it out on the market and see how people actually use it versus what they tell you they're going to do so. We did this with next door. And what you see here is that you're trying to build something very fast. We actually built this minimum product. That would be just enough for us to get data from the market. We built a very simple prototype of next door and launched it in one neighborhood. We stripped away everything. There were no invitation's. There was no map. There were no events. There were no photos. We simply want to touch a test. If we put this out there, would neighbors come together and talk to each other and did they find that useful? And in six weeks we built a very simple prototype. We rolled it out to one community, and within three weeks we knew we were onto something. We then went out and we rolled it out into four other neighborhoods and we tried to pick them in different parts of the country who's the first one was in menlo park we went to seattle, we're in upstate new york and suburban virginia and through that entire process we saw that neighbors wanted to talk to each other maybe they talked about different things in different places but we had clearly triggered on something and we had an actual product that they could use to do the basic communication we then refined that product until we got to a point we said ok, we know that this works and now we can invest in building the full functionality that we think is needed to launch national you know, failure is very difficult and it does feel like you're eating glass and staring into the abyss and all that all that stuff, but if you take lessons from that, you really can get better. I mean, we were very insecure about starting next door because we'd done a big launch with fan base written about in the new york times lots of other press our reputations were on the line, we were coming off of some success and it just wasn't working and we said to ourselves we are going to make sure that we learned from this failure and make sure it doesn't happen again we ended up doing the mvp process for a year we did not launch next door nationally for an entire year we went from one neighborhood to four neighborhoods to about one hundred seventy five in twenty six states before we felt like we could really launch this nationally we finally launch nationally about a year and a half ago and now they're over fifteen thousand neighborhoods that are using next door in all fifty states and people frequently say well where does this work best is this like a silicon valley thing or is this a suburban thing and we say well it's for anything neighborhood we have next door websites that a very vibrant in every state in cities in suburbs in rural areas in affluent areas and lower income areas where the demographics or young where the demographics or not young and it's because we tested and the product that you see today that you conjoined today is so different in that flow chart that sarah originally showed and it was all about federation and learning okay we're wrapping up and so before we get to q and a I just wanted to quickly recap the things that we've put together in these three categories we talked about in the uae section it's all about understanding motivation and asking yourself what's my level of passion do I see some meaning here and is this the right time in the who area choosing your partner? Do you have complementary skills with your co founders have you had some experiences together and do you have shared values and then finally sarah just spent a lot of time giving you insight into how we found product market fit and this is really for us today were far from a success but we're also far from the failure of fan base with next door so this is what has enabled that particularly the what section for us but we were lucky because even with fan base we had the first two and it still didn't work so what it's taught us is you need to have your head in the game you know steve jobs said at the very beginning you know follow your heart but listen to your head right and we will hopefully continue on this path we still are constantly testing and iterating and trying to learn from the things that we've done and persevere through the mistakes and it continues to be a journey in fact we talked about how to some extent being an entrepreneur if you think about the number of entrepreneurs who fail why do they keep doing it? Why why do they just continue to take on more pain and we know that for us even with fan base it was fun it was fulfilling now it's a lot more fulfilling when it works I will be front honest about that inning spot right winning winning makes everything easier but if you don't enjoy the journey you'll actually never get to the end destination that you're looking for, so we're going to take some q and a thank you very much for this opportunity. Those air our twitter handles if you want to contact us and we've put some of the resource is that we used to put together this methodology before this presentation really, when we were pivoting to next door, these were very, very influential works for us as we went back and said to ourselves, you know, we've been founders, we've been entrepreneurs and we've been successful, but we need to make sure that the failure that happened after the success never happens again. So question a round of applause to learn from your experience is a vast, vast itt's mind lower because not bringing people can come up and a have that experience of failing, and then be the courage to talk about it, how you overcame it and then applying into something that is so, as I said in your introduction, when I think is sort of mind blowing it's that of course there needs to be social networks for your neighborhood, so I know there's a brazilian questions from the internet, I want to take a least a couple from from ken over there because the internet was a fire and you guys have your work cut out for you for the next couple of minutes, and we'll squeak out one or two here if we can, and I've got a couple of myself, so it started out kind of the first of all, people love the way that you guys interact with each other fourteen year old dancer, you guys are great partners, so they've been really appreciating that hard work. I will remember that when I'm particularly frustrating. Excellent. All right, so this one is from sandy, your name, and again, we have a global audience, as you all know, and sandy says, a lot of entrepreneurs have us specific stories. How would you advise someone who is not in silicon valley or is an immigrant with a sword hanging over his or her head to take the same types of risks? I think a lot of what we just talked about actually applies around around the globe, and I think the idea of that personal decision to take that plunge, that's universal, the who it also applies, and the what also applies, I think, understanding where can you start? A company that takes advantage of your unique strengths and so thinking about great companies that are founded in other parts of the country that take it that other parts of the world to take advantage of those local dynamics I think, are really interesting near you and I both love all things italian and have been on a few trips there, and we talk about there's incredible artisans in italy and how can we bring them to the us? And we're not the right people to go do that because we don't live in and italy, although I'd love to at some point, but that is a great opportunity for someone in italy to say I've learned what what works in these international businesses, and I'm going to take the best of italy and bring it to the rest of the world, so play to your strengths wherever you are. The advantage to me of silicon valley is the learning and the resource is and one of the reasons that I even decided to pursue a career and technology is because I believe the internet is all about transcending real geography, right? I mean, if if if I think about where I grew up in odessa, texas, and and what my exposure to things was because where I live is very different when I moved to palo alto to go to stanford, but now in odessa you have access to the internet, you get the same information. That people are getting in silicon valley or if you care about trading stocks the same information that someone on wall street is getting. So I think it's more about finding the right framework and then really having the discipline to be honest with yourself on on whether you can check all the check box and talk about transcending geography, I heard a little murmur that we had more than one hundred countries to me in today, so not just odessa, but but a lot of other places, too, so cool, you know, you got a couple more you want to really and that just winning in chase, but up until I saw earlier, probably an hour ago, it was four am it was one am and all kinds of different parts of the world, which I just I love that people are staying up through the night to for this free content. So another question is from from colorado again, are some people really good at starting companies and giving them a great start, but not so good at running a company that is, do some people do much better work in that sort of environment rather than a rhetorical company environment? And how do you know which type you, our it's? A great question, and frankly, as we think about our company getting bigger, hopefully more successful and having new challenges we openly ask ourselves as a management team will we be able to continue to have the right skills because we've started companies and we were really lucky that we manage one company that made it to an ai po but we have big aspirations for next door and we wanted to go to places that we haven't been so I think the short answer is yes we do believe that you can optimize your skills around what's required to start a company and then there are certain people who are very, very good at scaling a company we sort of think about consumer internet startup companies is having three phases the first is sort of the creation phase or trying to find product market fit the second is scaling so it turns out that taking our product from one hundred seventy six neighborhoods to fifteen thousand that has been a different set of challenges and we have to think about building the product a different set of ways the first hundred seventy six we were on the road we were not not people's doors right we were asking them to adopt our product how do we then build a self service mechanism to get people to adopt it? The third face for us is going to be value capture its finding a business model and we don't have a sales person on our staff today so when we look around the founding team we knew that we were actually deferring that we'd have to bring someone else. And I think in silicon valley there's this interesting thought these days that successful companies have several founding moments. It's a new way of thinking about things that's it's saying, look, the founding is really important, but when you have product market fit and then you have to scale it that's sort of another founding moment when you start to monetize that's another family moment when you are profitable, maybe that's another one when you go public that's another one and all of those actually take different skills, so we're trying to follow in the footsteps of great social networks like facebook and twitter and linkedin, and all of those companies spent a long time making sure that their product market fit was perfect and that they'd scaled the platform to significant scale before they started to monetize. And so what we've thought about from the beginning, we're eighteen months from our national launch, and we've said to ourselves, we'll give this maybe another six to twelve months where we continue to roll this thing out to put into context our growth. Our first year, we were launching one next door neighborhood every other day these days, we're launching between seventy five and one hundred every day. So we're about two hundred times and our rate of growth that we were our first year, so it's coming for us soon in terms of how we think we're going to monetize, we think there's a tremendous opportunity in local advertising, the yellow pages market is one hundred billion dollars market, and yet it's, a medium that fewer and fewer people are using, I just put those right in the recycle bin as soon as they come to my house. I just said that when we, when we think about our member feedback, neighbors say, I want to know about the great carpenter that's in the neighborhood, I want to know about the great dentist I want to know about the great baby sitter, and so we think there will be an opportunity longer term to connect those local businesses with local residents. Yeah, I really miss elinor just flew in from stockholm. I was wondering, do you have any global expansion plans? I mean, was that something where you started with? Is it like, ok, this is going to be used based, or did you have a global perspective when you set off? I think she wants next door in stockholm, if I'm going to cut you, take this survey monkey, right, right? We're going great, one of great question and and so the answer is yes, we we know that there is a global market for this we know that because we've heard it and we well, we've started here in the u s even from the first day that we locked we have been contacted by people all over the globe who are interested in bringing back that sense of community to their neighborhood that is not a u s on ly feeling that is that is something has universal appeal and so that's something that we're actively working on we didn't actually we forgot to say this during the presentation but under identify an important problem to solve one of things that sarah we says is ok find a pain point and then the bigger a market there is for that pain point the larger of company you can build and so if we believe that our benefit or the pain point they were trying to solve this people have lost touch with their neighbors that's something that we see worldwide and so we do believe that that that something's going to be very important for us expanding internationally, we're going to start this year cool. My question is you talked a lot about the importance of your co founders and if you are a company like mine, we've already found it we're already getting a lot of people wanting I'm always getting people wanting to buy in and so how do you have any bruce forces in terms of how selective do you be in that you apply the same criterias choosing a co founder, and how much percentage do you give them was just seem like huge, overwhelming decisions, and we're face, I think so. I think we believe philosophically, that when we bring on investors for our business, they are cofounders, they are partners, are investors, are from benchmark capital and greylock, and believe it or not, we've worked with them for over a decade, so we applied a lot of the same methodologies to choosing them that we did to choosing each other here. In many ways, you're hiring a boss and thinking about giving someone the opportunity to invest into your company is giving them a real seat at the table. And so you should follow a lot of the same rigor that you think about with co founders. Fantastic advice. We're so grateful. Round of applause with

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