#2: David J Phillips - Fondo - Y Combinator Alumni Interviews (YC W18)

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Hello boys and girls welcome to episode number two of entrepreneur gains where I interview Y Combinator alumni. My guest today is my good friend David, a serial entrepreneur who has started multiple startups in the last few years one of the startup's banjo raised 121 million dollars in funding still he ended up resigning to pursue his next venture Hackbright academy which ended up getting acquired for 18 million dollars he then went on to found another startup after called Bloomjoy which ended up getting into YC where I had the pleasure of meeting him uh unfortunately the startup didn't end up working out as the founders didn't manage their runway well the experience with bloom joy though led to pivoting into his most recent startup Fondo which helps startup founders protect and extend their runway so that they don't make the same mistakes he did he's also an angel investor and has invested in over 25 startups so far which brings such an interesting perspective anyways i hope you guys enjoyed the conversation thanks so much for doing this man really appreciate it thanks for coming yeah thanks thanks for having me yeah i have by the way a super random question is my first question for youi checked out your new website and youknow it's soweird uh because same day someoneintroduced memy business partner for my new adventureintroduced me to this graphic designcompany and it's called storytaleuh do you know who they are yeah i'veheard of them yeahso they do web illustrations for likestartups or whateverand i went to yeah yeah yeah yeahand i saw the same animation on yourwebsiteyou know before uhbefore they launched storytale they hada site called craftworkand they like launched on product huntand it was one of those like i love allthese likeyou know uh free or like cheaplicense you know these coolillustrations and i thought they werekind of like an underground illustrationuh shop and so i was like yeah hopefullynobody nobody knows that i justbought these for like 10 bucks but umbut nowyeah now it's obvious no i think it wasan obvious because i was actually i wasactually doing the same thing i wastrying to build my websiteand i and i was like i don't want tospend like you know 200 on illustrationi saw that and my buddy just happened tobe the same they sent me that link tothe website and there was one in therewhich was like this guyor this women with a high and right wavein here yeahthat's guy because that could be me andthen i saw that thingwhich is interesting yeah no it's soawesome i mean i yeahi i love those things i mean it makes itlook they have enough too of a databasethat it looksuh you know you can look original youknow which i like yeahmakes sense i want to know more aboutyour new startup before that i want toknowlike uh about your story like you'vedone multiple startups now rightum what what led you to start thisparticular one like that whole journeyto get into here basically yeah somy current car company is called fondoumand we um you know our mission as acompany is to help founders protect andextend their runwayuh which like especially now with um youknow with covet and everything everybodyis a lot more mindful of their runwayyou know fundraising is taking a littlebit longer umbut you know personally i'm superpassionate about that about just helpingpeopleuh build successful companies i'mpassionate about like bootstrappingcompanies as welland so um you know the way that we helpcompanies is just getting them accuratefinancial information every monthso we do their bookkeeping for them umand then also making sure compliancedoesn't fall through the cracks so we dotheir taxesum and so yeah so we do bookkeepingattacks for startups and ourour mission is to just help them youknow protect and extend their runway sothat comes into play when we think abouthow do we price this for startupsyou know um do we do an annual contractupfront or do we charge them monthlyyou know those kinds of things likewhat's most like founder friendlyum and yeah so we just we're justgetting startedum but yeah all of our customers rightnow are coming through bookface soall right cool still pretty early yeahum i remember when i last saw you whichwas at camp yc you were working on bloomjoyand then when i saw your uh your startupand sorry your new company and i saw thewebsite and everything you said therewasthere's a part there we said that in thethird company and my third startup wefailed becausewe did not manage our expenses well andstuff like that run way wellis that is that how this this idea camealong was from bloom joy basically yeahyeah definitely so it was a it's kind ofa combination before i got into startupslike 10 years ago i was actually anaccountantand so i started my career as anaccountant studied it in schooland so like um in all my startups beforethis i've always been responsible forlikeyou know either outsourcing theaccounting or bringing an accountantin-house building an accounting teamback office teamand uh yeah with with with bloom joyum you know it became a real problembecauseyou know initially we were you know ontop of it andand then we just sort of you know wewere growing andum you know we thought we wereprofitable everything was good and we'relikefor some reason um we decided it wasn'tworth it to invest inuh outsourcing bookkeeping and we werejust so busyum you know trying to run the businesswe didn't hire anybody else and soyeah we just had this gap of nobookkeeping being doneand um and ultimately yeah that thatended up reallyhurting us because um you know bloom joywas basically we were creating editorialcontent for media companiesand um we were doing a rev share on allthe ad revenue that was generatedfrom the content and all the trafficlike most of the traffic was coming fromfacebook and so like um yeah aftercambridge analyticaand you know facebook changing theiralgorithm uh our traffic took like amajor dipand um yeah we had hired all thisfull-time staffum to you know create all this contentand so anywaywe had a lot of fixed overhead and ourrevenue just came crashing downum and we also had um you know thetiming of the revenue we weren't paidfor you know sometimes 90 days and sowe just weren't on top of like matching our expenses with our cash income and you know we just got to thepoint where wehad very little uh cash left and umyou know we didn't have enough left toyou know pivot the company orum you know do things that you can dowhen you when you realizeokay we have six months left of cashlike let's do something that's almosteven too short you knowum but we basically had a couple monthsleft of cash and we're like okaywe're kind of screwed and so uh so wetried to sell the companywe went through that process andactually got a couple of offersand um we're really excited about thatand uhit just ended up falling through aftersix months uh and sothen we had uh you know pretty much nomoney in the bank and umbut i decided to actually pivot bloomjoy into fondoand so uh you know kind of bootstrappingfondo nowright interesting and it's actuallypretty fascinating to me like withsomeone like you whohad first company like raise a fuck loadof moneysecond one you actually had like anawesome decent exit andeven and and that you have account likecrazy account and experience even afterall thatyou know like it's it's such crazy thingto start a world you don't know like nomatterlike it still happens it's funny thoughor it's crazy to think about that rightlikeyeah i mean everything is uh i feel likeas an entrepreneurum you know you you learn so muchlike every time and uh you know certainthingsshould compound right and you shouldlike be better at them uhbut you know sometimes there's newmistakes to be madeum that anybody even an experiencedperson can make andyou know yeah it's it's pretty crazyit kind of humbles you up though doesn'tit it's like the start of something ohyeah that's that's the fun of it rightit's like just liketotally i mean everything is fresh rightlike even if you have a successfulcompanydoesn't mean your next one is going tobe successful right like it's alwaysum you know some things like i wassaying like you know some of thelearnings like sort of build on top ofeach other butum you know you can't control the marketumyou know you can't you know especiallyif you're doing new things every timeyou can'tum you know start being really good atexecuting on a new thingyeah there's definitely a learning curveso um yeah it's always hardwhat made you wanna like as in like yourfirst startup what made you wanna getinto the startup world like what wasthat switch or what happened that youended up going that route because yousaid you were working at deloitte ithink before rightyeah that's right um i actually istarted a uma company when i was in college so wheni was in college uhthere was uh you know i i never knew iwanted to be an entrepreneuruh but while i was in in college towardsthe end of my college days ijoined this entrepreneurship class andwas like oh wow like this is reallyinterestingand so me and a friend umdecided that we wanted to start acompany and you know we wanted to starta company thatum that we could start with like kind ofno funding andwe brainstormed a bunch of ideas andultimately came up with a tutoringcompany and so we would hirecollege students to tutor high schoolstudents and soyou know just learned a ton aboutentrepreneurship by doing that like howto hire peopleum you know how to get customers andstuff like that and soi ended up taking a job as an accountantin san francisco at deloitteum but ultimately wanted to get intostartups i knew that i like wanted to bean entrepreneur at that point andso uh yeah i was like i'm gonna go to ahackathonor um you know how do i break intostartups basicallyand i started signed up for thisnewsletter called startup digest do youremember thatyeah yeah i think it's still around andumyeah there was a um a hackathonthat weekend called startup weekend umand the theme was like mobile apps andso uhyeah i decided to go to that and um myteam ended up winning first place andthen i just stopped showing up to workatdeloitte and then uh and then we endedup raising a seed round and soum yeah i quit my job and uh and theni've been working on startups basicallyever since thenthat was for banjo yeah wowokay interesting yeah and how was thatexperience because you guys like raisedover 100 over 100 million or somethingright how much you guys raisedyeah so most of that has been raisedsince i left the company i was there forthe first year uhthrough our series a and umyeah it was a uh you know it was myfirst sort of like experiencewith like a tech startup and so you knowlearned a lotabout um yeah just the whole like howdid you know silicon valley work youknow how do you raise moneyum how do you build a product how do youlike get users how do you build a teamum all that kind of stuff which was likeyou know it was likei went from like you know reading techcrunch and like aspiring to do thisstuff and thinkingyeah i want to go to a hackathon andlike break into this world and then justlikeyou know got really really lucky andlike actually getting on a trainwith a startup like that and uh and soit was really good learning experiencefor meand then um yeah ever since then i'vejust been doing startupslove it um so actually i got a questionfor you because the next onebecause you did after that so by the waywhy did you leave like why did you uhfor the next one yeah so so uh me myco-founder just you knowultimately decided to go in differentdirections and soum yeah so i ended up leaving thecompany and and then he continued tolead the company as ceoyeah the classic co-founder dispute i'vehad one of those too so i know i knowyeah i feel like co-founders you knowit's always like umi think it's rare when you can reallyhave a greatpartnership last for a really long timeand so it's likei think a lot of founders end upgoing their separate ways with theirco-founders over time you knowsometimes it lasts really long sometimesit's really short but i think it's justa naturalthing sometimes i don't know for me ithas been for every single one of mystartupsso um maybe there's something wrong withme but no i don't thinkit's actually funny though because ihave been thinking about this a lot aswell and even with my new startup now ii did something uh with my co-founderwhere like i was like man last one therewas such a such acrazy we were not on the same pagebecause i had different expectations ihad different goals personallyright like business was one thing butalso my personal goals and i felt thesame thing with theother founders right not that one personwas right or other person was wrong oranything like that i think it was morelikewe just never talked about it i thinkthat's the interesting one so i thinkeven with the new one nowi legit made my co-founder write downevery mistake he has madeeverything that pisses the shit out ofhim in startups i did the same thing andi'm like that's goodright and i'm like we and we made likewe made a company values togetherwhere we were like okay these are thethings that this is you obviously thinkthat pisses me off and we'll keep onwriting this list and if that happens weneed to likelet each other know because it willhappen at some point like some at somepointlike just yeah yeah open communicationis like the numis the number one necessary thing tomake it workfor sure yeah we have we also i alsomade a slack channel whereevery week we have to talk about onething that's bothering us likepersonally like deeplylike kind of like being vulnerable withyour partner because again i think atsome point you are absolutely you'regonna disrupt and you gotta haveresentment for whatever reason souh i know what yeah i totally agree yeahyeah i totally agree that'si feel like a lot of uh you know uhsecond time founders figure that out youknowuh unfortunately it's hard to know thatgoing into itunless you're like really really smartand uh educated abouthow to be a great communicator but likebeing vulnerable like i didn't evenlearnhow important that was until you knowyeah like halfway through my secondstartup and umanyway these are just things i feel likeyou learn on the joband so it's hard to really like preventthese mistakes yeah i learned it in balibroyeah i had to go on a spiritual journeyto figure that outso when i travel every time i talk topeople like who are doing businesses ialways get this question where they'relike you knowwhy like what's the importance of yc andyou know like i have my ownanswers right like the example would belike chatting with someone like youright it's amazing to be able to connectwith great peopleand like you know have theseconversations but for someone like youwhowho had a startup which raised acrapload of moneythen you had an exit which was a greatexit like you didn't necessarily need ycrightuh so why did you wanted to go throughycyeah i mean i think there's a lot ofdifferent benefits to yci mean i think um i feel like as afounder youyou know like we've talked about alittle bit ago like you're alwayslearningright and there's like i feel like youcan never learn too muchum and so being in a community like ycyou know you get surrounded by all thesepeople umwho are who can you know who are reallysmart who can teach you stuff you knowwhether it's the partners or just likepeople in your batch alums like you thatyou meet at likeyou know random events like it's just areally good uhcommunity for founders who want to likegrow as a founderyou know i think um you knowthere's so many different ways to builda startup right like you could bootstrapyou could raiseangel round you could raise a vc roundyou could do an incubator acceleratorand like i feel like doing a programlike ycyou get you just get so much likelifelong valuefrom the community and also to help youknow build your current startupbetter um so for me it's kind of likefor me it's ayeah i think it's it was a no-brainer tolike to to want to do it i think alsoyou know because yc is yc iyou know i think a lot of people havehad this experience where they wanted toget into yc they applied and gotrejectedand um you know just kept on applying sothat you know i applied to yc a fewtimesand i was like you know i still want todo yc umwith this new company and yeah so i wasglad thatthat i got in and got to experience itand nowyeah i think the yc community is amazinglike you said it's just uhyeah it's great would you say would yousay it was more for the at least lookingback now would you say it was more forthe personal growth than the companygrowthum i think it's kind of intertwined iconsider myself likea lifelong entrepreneur i think i'm justlike i think i'm just always going towant to start new thingsand so um yeah i think it was just agreat opportunity to learnpersonally yeah my personal likeentrepreneurial growth and thenum yeah for the company i think it'sit's i think it's definitely superhelpfuluh i think depending on what type ofcompany you're building it can be morehelpfulum you know and so i think for b2bcompanies it's you know you have a youjust have a bunch ofum early users right because yc is acommunity of foundersof companies right so if you're sellingsomething uh tobusinesses like you just have a great uhcommunity of people to talk toright makes complete sense yeah um whathas been your biggest challengein your startup journey so far becauseyou've been doing it for a while now soyou have had a lot of challengesi think it's um yeah that's a reallygood question i don't know there's somanyit's like uh it's just a roller coastereven even if you knowyou know i don't know maybe a rollercoaster is a good analogy because likeeven if you knowwhen the drop is coming like it's stillyou still get thatfeeling from the drop of the rollercoaster right you still get the rush youknowfrom these things even if you knowwhat's coming i think it's the same withstarting a company like you know there'sgoing to be ups and downs um but you'restill affected by themso everything from like you know amarketing campaign that goes bad orgoes really well you know you have thoselike dramatic emotional swingsand so trying to like disconnectyourself personally from thosethings that happen with your company ishard umyou know i yeah i don't know i've trieddifferent ways to try to do that orthink that i can do that but thenyou know you're just inevitably affectedby it and so you just kind ofeither have to learn how to enjoy therideor like proactively try not to likeget too tied up in it yeah make senseyeah does it ever get easier umi don't know i mean it's umyeah no i don't think so i think it getsi think you know more right you just youknow more you're likelike but um it's not it's still hard toget customers right i meanyou know you learn different strategiesand you can try different thingsum you have more tools uh but there'sdefinitely still challenging for sureyeah yeah i i always think that it'sinteresting because i thinkit's like that feeling of like i i don'tknow what the right definition of astartup is butbut the way i like to think about it atleast something which have not beenproven like as compared to a regularbusiness it's been proven and you haveit's someone has done it in the pastlike that particular idea and all you'redoing is you're you're just coming upwith yourexample you're starting a restaurantright it's like the what youcontrollable you have is the food thelocation all that stuff right butbut it's been done in the past likesomeone has made a restaurant peoplewant to eat foodit's the hypothesis is confirmed rightright ofyou don't right and so i i find thatwhole thing of likethe rush with the startup it's such acrazy one because it's like somethingwhich is a challenge is thisproblem-solving where i thinkonly a certain kind of people couldenjoy this like as in that kind of rushof like uhyou know like going at it and it's a lotof failure obviously it's it's hard it'slonelyand as you said unless you enjoy theride umlike in the first one when i did myfirst one like my our my mindset wasonly to go chase the money and it wassuch a bad ride in that senseit was a lot of good came out of it butand there's a lot of growth butlike it was such a hard time because ofthat whole thing umso i'm sure like now the example the oneyou're building right now for examplelike you reallybuild it you're building it because yousaw that pain point yourself while inyour own startup and you're rightit's gonna be fun to build this yeahtotally i mean i feel likeif you can experience you know whateverproblem you're solving the the closer itis to homethe better i feel like because umyou know it is so unpredictablesometimes and it's reallytempting to just say you know screw iti'm going to move on you know maybe i'lltry a different idea or maybe i'll takea breakum and so if you really are connected tothe problemyou'll you'll be more likely to um youknow perseverewhich is you know sort of thenumber one i think contributing factorto success with startups is just likekind of not giving upum and so yeah i think that i thinkthat's helpful toto be really connected to it that wasjustin khan'sfirst line when we when we were in nycwe actually basically saidif you survive you'll thrive that washis first lifethat's really good um like that's that'sa tattoomaterial right there uh someone couldget it yeah umuh so actually a good question would youif you were to go back like you knowstarting your first startup againand going back uh how would you do itdifferentlyoh good question uhlike would it be the idea which was thebiggest thing for you biggest it's likestart like you know now that you know somuch right isn't like the experiencewise right soyeah i mean i think nowuh you know i think i definitely thinkaboutyeah the problem like is this somethingi really want to solveum and uh is this something thatyou know umyeah i mean is there a big market hereum is this gonna beuh you know because a lot of a lot ofenergy goes into these rightdo you you know it's gonna take a fewyears umto like really get sometimes you knowsometimes if you getyou know lucky or you're smarter and ithappens fasterbut um you know i think generally takesa few years to really getyou know get growing and buildingsomething umto the scale that maybe you want to andso yeah is this something that you wantto spend a few years working onum those types of things you know ithink but definitely likeespecially um you know as an investortoo thinking about like what is theoutcome opportunity hereyou know like is this you know becauseumyeah you can build so many things thathave that take the same amount of timeto build but have like way differentvalues at the end of that periodso like is this something that isconnect you know is this aligned withlike what value you want to createand and how big is the opportunity soyeah those types of thingsuh what are the assets you know that youhave at the time when you're like gonnastart a company umyou know what do you personally bring tothe table you know does thatis that aligned with what the company isgonna be that kind of thingso just being a little more thoughtfulabout all that and um you knowyeah yeah yeah not being an 18 year oldkid like i'm gonna change the world i'mbeingmore strategic now more responsibilityis moremore like this is my strengths ratherthan but i think i thinkactually funny i actually watched apodcast with andreessen horowitz and andjustin khan actually andthey asked him uh i think it's andrewchen i remember now but they asked himthatuh how why are you doing like atriumwith that like what is the differencebetweenyou doing atrium right now and you'redoing justin tv back in 12 or 14 yearsago whatever that was and he saidwhen i was young my competitiveadvantage was that you know i was a kidi was risk taker i wasyou know i could i could sleep on a likeyou know on like ina bunk bed or whatever like in couch orwhatever right i can be more and i wasthe ki can do stupid shit but now that i amolderright my advantage that i strength thati do have is i have connections i haveyou know i can raise money faster andso now i want to go after a problemwhich islike you know which is more like it'ssomething not necessarily becauseif i if i was a social media companyright now i'll probably get my asskicked by some young kid who's morehungry than me in that thingright rather than you know this kind ofchallenge which i can actuallytake on money and like solve those kindof problemsyeah totally pretty cool yeah which ithink was pretty good i think that makesthat makes total sense yeah i think it'sthe same yeah you justyou know but also when you're youngertoo um and you have less experience youyou i guess it can create more uhoptimismwhich is definitely helpful um you knowto take those big swingsyeah interesting okay one last questionregarding this one okaywould you recommend someone startingtheir first startupuh how should they go about it what dothey need to knowyeah i mean i think definitely umi think it depends on what the goal isyou know i think think about like why doyou want to start a startupand then i think based on that you knowthere's there's a bunch of differentpathsum i think if you want to you know starta startup because you want to buildsomething that solves a problem and youwant to be successful at itum i think you know pick a problem thatyou personally have experience with youknowum something that you can relate tosomething that you have a unique insightonand that you think you can solveuniquely because of your insightum and umyeah i mean that's a that's a goodquestion i don't know man umi think yeah picking picking somethingthat you have a relationship with theproblemand then also um something that you areconfident that you can build the team tobuild or that you can buildlove it cool awesome yeah yeah andyou have been investing now for a whilenowright i i saw your awesome uh linkedinprofile with 20how many investments have you done crazythanks man uhi think like a little over 25. wow yeahumso which one's easier is it investing inother companiesor the city are working on your ownoh man it's really funny i think ittotally depends on youyou know okay and the person right likei found i really likethe uh you know building something andlike solving a problemand being able to like see the resultsgetting a feedback loop on whateveryou're buildingby either seeing people use your productor talking to your customers or users orlikeyou know uh it's a lot more tangibleand it's uh i enjoy it more i enjoy it alot you know personally and i thinkwithinwith investing it's really about umyeah i mean identifying you know findingcompaniesyou know and then like building arelationship with those companiesyou know sort of winning those companiesumover to to want you to invest in themand then likebe in that process like showing yourvalue like how can you be helpfuluh and then actually being helpful youknow so it's just it's likeit's very different and a lot of thetimes it's umit's very compressed you know especiallyarounduh you know with with investing in umcompanies around demo dayyou know there's a lot of fomo involvedand there's a lot of like umum yeah it's it's just a totallydifferentthing it's a totally different thinginvesting in companies than building acompany and it'sharder to sort of see the results ofyour workuh if you could call it you know work ofinvesting in companies because theydon't umyou know in terms of like making areturn on investment as an investoryou don't know um for a long time yeahand so a lot of people i think do it whoenjoy that processof uh you know identifying companies andbeing helpful to themum and uh you knowbut uh yeah to do it to make money isreally difficultand so to be a professional investor youknow i don't know what that's like butumyou know as an angel it's um yeah it'san interesting it's definitely aninteresting experience and i think i ido preferyou know the entrepreneurship um workmore than like investing work it's alsothe control part right you have controlin your own hands compared to somebodyelse totallyyeah and you and it's funny though whenlike i when when welike when i had my startup and it'scrazy to think about now like you knowyou don'trespect the money as much competitivelyrightright uh there's somebody else's moneyit's not like tangible right but now ifeel likeif i was to cut my and i think youprobably could feel that now if you wereto cut your first checkafter you do that you're like okay thisis this is my hard-earned money rightthis is something i worked all right forso longand now i probably you probably makesyou more grateful and respectthe investor money more than anythingrightyeah totally totally it's it's totally aweird uh it's an interestingjob for sure um and uhbut you can learn a lot through doingthat too which is niceawesome any any final wordsum yeah i think well thanks for havingme on your podcast i'm excited to seethisuh grow and um yeah i thinkum you know i think starting a companyis a really greatopportunity for people to uh you knowcreate the life that they want createthethe product they want in the world andit's a lotum more achievable than i think a lot ofpeople think i think a lot of people aremore capableat doing it and i think uh yeah i wisheverybody luckthanks so much man where can people findyou and your companyum so uh yeah i'm on twitter at dav jand then my website is trifondo.comawesome okay well thanks so muchEnglish