Live Office Hours with Yuri Sagalov and Sam Altman Video Lecture | Startup School Online by Y Combinator - Entrepreneurship

Good afternoon, so today we're
going to do something different.
One of the things that we've learned at
Y Combinator, is that one of the best ways
to learn about startups is to
watch other startups get advice.
And so we're going to do live office hours
which we've done a few times before,
in this class, three of four times.
We'll try to do three companies each time.
This is Yuri, also works at Y Combinator
and going to do this with me.
And we're going to just give
advice to three startups.
You have to be very brave to do this.
So I'm very thankful for
the startups that have agreed to do this.
These are some of the people that
are taking the course online.
And we'll just get going.
So do you want to tell us, well first
do you want to introduce yourselves.
Does this work?
So I'm Sarah and
this is my co-founder Andrew.
We're building Canny.
Canny helps teams collect and
manage feedback from their users.
Essentially, what it is is teams can
integrate our product into their
website or mobile app and
that allows their users to post feedback.
>> Is it live?
>> Yes.
>> How many websites have integrated?
>> We launched our a month
ago on Product Hunt.
That was pretty good traffic.
We have 25 paying customers.
So those are people,
who have either integrated or
are using us in a certain way.
But yeah, we got maybe around 500
companies from the project launch.
>> That's great.
>> Yeah.
>> How much are you charging?
>> It's a range.
So on the low end we have a $2 plan
which was our alternative to freemium.
GPM [LAUGH] and it goes from 19.49,
129 from there.
It's really early and we're trying to
iterate on this and figure out what our
best price point is which is probably one
of our main challenges right now I think.
>> Go ahead.
No, no.
>> How did even arrive at
the first set of numbers to test?
>> Yeah, so
I think the $2 one was kind of special.
We were flip-flopping between Freemium and
and Cheapium.
And I think that was
a good decision because
it narrowed down our
potential customers by a lot.
And we figured that people who
were not going to pay us anything
were never going to pay us anything.
>> How many of the 25
customers are on the $2 plan?
>> Maybe,
>> Seven.
>> Yeah.
>> Really, that's great.
And what's the other most popular plan,
is it 19?
>> 19,
we limited our $2 plan very heavily.
So it's really people who are a solo
founder, probably no revenue.
>> What do you get with the pricing?
I think I looked at your website,
it's how many users do you have?
>> Right, so right now we're charging
by how many end users you have.
That was kind of our proxy to how much
value the company was going to get from
our product.
This is kind of a challenge, especially
because we can't particularly tell
how many users they have, so
we're iterating on this as well.
>> What do people really love about this?
Why do they use your product and
not one of the many other services
to accomplish the same goal?
Yeah, I mean there's a lot of different
values that you get out of posting and
voting on features.
One of them is you have there's
a lot of transparencies so
you keep your users in the loop.
A lot of current feedback
solutions is email or
live chat where the user sends an email,
and
then the company says, we'll pass it on
to the team, is what inevitably happens.
And then the user doesn't really know,
like did my voice get heard?
And so we've heard both from teams and
users that this is a great experience.
Their users are happy, they know what
feedback their users are giving.
Versus email and live chat,
which takes just a ton of time to
process all these conversations.
>> Of the people that are using it,
what's the average number of questions
that have been posted on it so far?
>> Average number of questions,
what do you mean by that?
>> Yeah, so people put request or
something else that they're voting on.
Do you know of the 25 paying customers how
many on average have had questions posted?
>> Well it really depends on how
many end users they have, and
also how well they've
implemented our tools.
Like if it's less discoverable
they're going to less feedback and so
we've been trying to help that
by giving them design advice.
But like our top team
probably has 300 posts.
And the thing about this versus
email is that you might get.
If a post has 100 votes you
might get 100 different emails.
And so we help you save time by responding
to all those 100 people at once,
instead of sending individual
emails back and forth.
>> Do you feel like you've gotten to
the point where you have a product that
some people really love?
And at this point, if so, I guess,
do you think you're at that point first?
>> Yeah, I feel like we have a sliver
of product market fit where some people
are extremely happy with our product.
And we kind of know the next steps we need
to do to expand that by ten x to address
a larger portion of the market.
>> What are the steps?
>> Integrations with other
SaaS services like Intercom,
Slack, Zapier, and
then a better answer on mobile.
Is the biggest challenge you face now
just trying to figure out how to grow and
scale this, do you think?
Or is there still a lot of product work,
other than sort of like integrations
that are meant to drive growth?
Is there still a lot of product
work before you want to scale?
>> There's some product work, for sure.
I think the core product is pretty good,
but it takes a while for our leads to get
stuck on our product, because they
have to integrate into their product.
So it's a pretty big investment.
>> How easy is it to integrate it?
>> It's pretty easy.
It's really easy.
It takes half an hour, to an hour, is
what we see developers spending time on.
But it's just I think we need better
onboarding to convince them that this is
worth doing.
And so I think right now
our funnel is pretty leaky,
so that's what we're onboarding.
>> What's the biggest value of that?
So your biggest user has 300 questions or
a couple hundred questions?
>> Several hundred.
>> [INAUDIBLE]
>> Right, and so
what's the biggest value
that they see out of it?
What do they tell you.
>> Yeah, it's hard because our
value add is very diverse.
Like one thing is customer satisfaction.
Another thing is product management,
what you want to work on.
Another thing is having a transparent road
map, so keeping your users in the loop.
And there's just all these
different kind of values.
There isn't one core value,
which is also why it's kind of hard to.
>> That sounds like a mistake, a mistake.
Almost everyone who says,
we have all these different values.
There are all these different
reasons people like it.
It's really nice, if you can figure out
how that all abstracts into one message.
And then build all the companies sales and
marketing PR around [CROSSTALK]
>> One message.
>> This is what it's about,
rather than saying, there's six
different reasons to use the product.
I think one of the things that like, so
when you say you have a problem
with people integrating you.
It's not that hard, it's just not
high enough on their priority list.
And there's a few ways to solve this.
One way that works is to send
people around and say like hey,
we're going to send an engineer
to come help integrate with you.
And it's not that the company can't do it.
It's just that you'd otherwise you'd
always be at the bottom of their backlog.
And that's one way.
The other is if it's like their
CEO tells them to go do it.
Or they themselves decide,
I gotta go do this.
It's really important.
And that almost never comes
from a bunch of disparate
messages that are a bunch
of nice-to-haves.
It's one thing which is,
maybe in this case, I mean,
it's some version of user feedback.
And how if you don't have this,
you will be iterating more
slowly than your competitors.
>> Or that your users will feel
like you're more engaged with them,
listening to the features
that they want built.
>> I have two big questions.
One, I think back of the envelope
math is always really important.
And I think,
I worry that this is the kind of
business where if you're
mostly selling to start ups.
And you're selling it a hundred bucks,
is it a month or a year?
>> A month.
>> A month, like how big can this
business actually get off of this model?
Have you thought about that?
>> We have thought about it.
I mean I think,
like just doing napkin math.
I think with a startup you usually want
to arrive somewhere around 100 million
annual revenue.
And so for us Like right now it's
looking like we'd be going for
10,000 people paying us $100 a month.
>> And does that feel doable?
>> Maybe it was 100,000, yeah.
>> Okay, there's a difference there.
>> Yeah.
>> [LAUGH]
>> I mean I think the number-
>> I think it is 100,000 for a $100-
>> Yeah, 100,000, sorry.
Sorry, I think the number of
companies that need feedback in
the number of websites and
mobile apps is increasing and-
>> But
do you feel there's a 100,000 steps?
So, part of it, it's like, do you feel
like you're going to have to own like 50 %
of the startup market to get there?
Or do you think that there's enough demand
out there that you can actually get to
the market without
dominating the entire thing?
>> Right.
>> Right, I think as an aside to this,
we've been getting a lot of feedback
that we can actually charge a lot more.
And so I think there's a few features that
we can build out that will help a lot and-
>> Do you use your own product?
Do you have a-
>> Yeah, [LAUGH] definitely.
That's a good way to figure
out if it's providing value.
>> Again, maybe the answer
is to charge a lot more, and
maybe the answer is that there
are a 100,000 start ups.
Maybe the answer is that you need to tweak
the product in a way that you can appeal
to a lot of people outside of start ups.
But I think start ups almost never
just do the swag on this early enough.
And it really informs product strategy
which also gets to my next big question.
This feels like the kind of service
that is interchangeable, and
that a lot of people can
build a similar service.
And if one company uses product A and
another company uses product B,
there's no reason for
a third company to prefer A or B.
There's no network effect,
there's no monopoly.
Now I can imagine ways that you could
build one of those into the product,
where there are sort of cross
company incentives to use yours.
But what is your plan to be a monopoly and
not another SaaS business that just
gets competed down to zero margins?
>> That's a good question.
I think-
>> And if you don't have an answer yet,
it's also fine [INAUDIBLE]
>> I mean I think, our strategy so
far is to go after influencers, and
these are including people who have
users that would also use our product.
So, for example,
we go after open source projects and
tools like Optimizer, for example.
>> Do you give it free
to open source projects?
>> Open source projects are free, yeah.
As an alternative to GitHub and
GitHub issues, and
they're bringing in us a lot of people,
I think that's a good move for us.
But so far, I think our strategy is really
to put our product in front of the public.
It's powered by Canny and
that's kind of where we're at with that.
>> So,
do you have any thoughts about this?
>> One little thought.
I think one thing that we've found so
far is that,
there are other products
on the market that do this.
And during our Product Hunt launch,
we got people coming from those
products wanting to use us.
And the thing that they mentioned liking
about us more is design and simplicity.
And I honestly feel like our
product out of all the products in
the market right now is the best
designed and the simplest.
[CROSSTALK] For exactly what we do.
>> I believe you that that's true,
but here is the problem.
I'd say like one out of three start ups
I meet with says, we're like this other
thing, except we're better designed, we're
more beautiful, and we're simpler to use.
And it may be true that you are,
I believe that it is.
But someone else can come
do that same thing to you.
>> More importantly, or
not necessarily more importantly, but
oftentimes you start off very simple and
then you start having to build features,
because you see that they're missing.
And then somebody else comes in and
says, we're now the simplest.
>> But in any case, it's really good.
You've built a product that people love,
you've got them to pay for it.
And you have a growth channel
that you believe will work.
That puts you in the top of few percent
of all startups, so that's great.
But this is the time where your biggest
problem now, part of that and the one
thing you should be thinking about is what
can I do early to build a product that a,
can eventually address
of very large market.
And b,
how can I build some sort of monopoly?
How can I build something where
because this company uses my product,
this other company is going to be
more likely to use it, as well?
And design in simplicity, although
everyone says it and it's kind of true,
is usually not a long
term win at some point.
And it may just be that once
you're integrated into a company,
you're impossible to rip out, and then
you're going to win the mind share war.
>> Right.
>> That could be it.
>> That's what we're seeing, actually.
>> Yeah.
>> A better answer, though,
would be if there's some way that
you can use aggregated data,
or learnings, across all companies,
or aggregate or share.
The kind of users that leave feedback
on products tend to do it across all
the products they build, they use.
So there's probably like a very small
percentage of users that give feedback,
and they do it across all the products.
So my sense is that somewhere in there,
there is the strategy to build a monopoly.
>> But you want to figure
out what that core is and
build that into the core of the product.
So that you have a long-term,
the principle strategy.
>> Yeah, this is actually very interesting
because we probably started at more of
an aggregate level, where everyone
could post feedback about anything.
And that was hard, because companies
weren't on board first and so.
>> Yeah, that doesn't feel right either.
>> Yeah, so right now we've decided
to go this other way for now.
But there is a possibility that
there one day we're connecting
all the users if they post on
multiple products that use Canny.
We can connect all those people,
so maybe they're some potential
there eventually, yeah.
>> And why is it named Canny?
>> [LAUGH] Canny was really hard to find.
We went through many different names, but
a core part of our
product is the subdomain.
And we didn't want to use something that
was like get this or try this, use this.
>> Short and sweet.
>> Yeah so something short and sweet.
We got canny.io so it's not the worst,
but it's not the best.
>> You can still change,
it's not too late.
>> We can still change [CROSSTALK]
>> I thought it was a play on uncanny
>> Yeah, [LAUGH] actually they're kind of
different but yeah.
It means to make good judgment, and so
I think that kind of plays in as well,
but yeah.
>> Okay, if it's working, if people
remember it, if they spell it right,
that's all good.
Anything else you'd like to talk about?
>> Yeah, I mean in general I think
to your point about broad use cases.
After our Product Hunt launch it came
out with a lot of people using Canny for
different reasons.
And so I think-
>> Is there one reason that's surfacing?
>> Like focusing on, yeah so
I mean the top one is feature requests,
which is what we expected.
But also I think pricing
is one of the big ones,
like figuring out what our main value is.
And that's what we're trying to do,
we're trying to isolate that one thing.
To especially market it on our homepage,
how do we pull people in
with that one value, yeah.
>> Feature requests don't
sound quite as good as like,
>> User I don't know.
I would be willing to, this is the place
where I believe in A B testing.
I don't believe in it for everything, but
in terms of messaging and communication,
and what are those four words you put big
on your website when people come there for
the first time.
This is the place I
believe in A B testing.
And if feature requests are really
what people want, then great.
>> [CROSSTALK] put it right up front.
>> If that's the thing that's
working you should at least,
that's at least the candidate for
the right answer.
All right,
we should move on to the next group.
Thank you so much.
>> Thank you.
[APPLAUSE]
>> How's it going.
Chris.
>> Hey.
>> Chris.
>> How's it going?
By the way, I don't know what any of
these companies do ahead of time.
>> [LAUGH]
>> Get a live reaction from me, so.
Do you want to introduce yourself?
>> Hi everybody, my name is Chris Beltran.
I'm the CEO and Founder of.
What we do is connect home owners,
private property owners, and
all sorts of parking
lot owners to our app.
And which our app does is it aggregates,
essentially, their parking spaces.
Let's them lease it out.
The owners are able to make some passive
income and the parkers are able to
just go to that parking spot whenever
they want to, easily and quickly.
So this tool was meant for
specifically San Francisco,
highly industrialized cities in
which people need to park easier and
faster rather than circling around-
>> It's like Airbnb for parking.
>> Essentially, yes it is.
>> Yeah, I've wanted to see
something like this happen for
a long time, because it feels like
in urban cities, like San Francisco,
there's just not enough street parking.
>> That is, but right now more
of the issue is this is a perceptive
problem or is this an actual problem?
>> So are you live in the city right now?
We are not live in the city.
We are currently building
out the MVP right now.
>> Got it.
>> Unfortunately my
co-founder is not here.
She's actually taking
a vacation through Mexico.
>> [LAUGH]
>> I think she's doing some traveling.
So, mind you, I'm not a solo founder,
I do have a co-founder.
>> That's all right.
Have you been talking to
homeowners in the meantime?
Are they willing to rent
out their parking spots?
>> You know what, the funny thing is I'm
actually hitting the ground running.
And I'm physically going out to these
homes and or private parking lots, and
pitching to them my idea and
say hey why don't you use our platform?
This is what it's going to look like and
I'm representing our mock ups
to essentially say this is the platform
that you would essentially be using.
>> And what do they tell you?
>> More often than not,
they say this is awesome,
why haven't anybody else created this?
>> Are they willing to say hey,
I'm ready to pay?
Or would they pay you?
No, you would pay them, you would
do a rough share with them, right?
>> Correct.
>> Yeah.
>> So essentially a percentage of
sales that occur when the commuter
parks in their parking space,
we'll collect 15%, they collect 85%.
>> So can you sign them up.
I mean part of the thing for
you is that when you launch in a city,
you're going to want as much critical
mass as you want for parking spots.
So are they willing to sign up and
say hey,
my parking spot is yours
the moment you're ready?
>> Currently what we're doing
is we're creating lists and
we're pitching the idea to them.
So essentially what we're trying to do
is we're trying to curate all these
homeowners and private property owners
throughout San Francisco that play with
San Francisco standards,
because you cannot park or
impede over onto the sidewalk.
So obviously,
there's some things that we have to do
to double-check to make sure
that they're completely legal.
>> Sure.
>> But otherwise, what we're doing
is we're collecting data from them.
And yes, they are more than
willing to sign up with us.
>> When do you think you'll launch?
>> I pretty much project it
to launch within six months,
and-
>> Why so long?
>> Why so long?
>> How about six days?
>> I would love to build this out in six
days, but currently I'm not a technical
founder, so that was, or a technical-
>> Is your co-founder?
>> My co-founder is technical,
so she has the tools and
resources and
clout to build this essentially.
But she's on vacation,
I wish she was here.
>> When is she back?
She should be back within the week.
>> A full six days after that.
>> I know, I would love to push this.
>> One of the things
that's really hard is,
Like your putting this product of yourself
out there when you launch a startup and
no one wants to do it until they
feel like it's really good.
But in six months,
the world will look entirely different.
And every good idea you have,
someone else has.
And now a lot of people are going to hear
about this because we're talking about it.
>> [LAUGH]
>> Don't steal my idea.
All of you, don't steal it.
>> I mean stealing the idea is not,
so it's like-
>> MBA's for all of you.
>> Speed and execution really matter and
actually you could 10
million people the idea.
And probably all of them would
be busy with their own things.
But a few of them will be
interested at least and
there's this issue of speed and
how quickly you can build and iterate.
And especially in the marketplace,
there is a big first mover advantage.
So even if it's not the version you want,
my most important piece of advice to you
would be to get this launched really
quickly in an ugly first version.
And then you'll learn so
much about how to build a better
version that you can go from there.
It's great that you're
talking to customers,
that is clearly the number
one thing to go do.
And getting people signed up so
that you have inventory.
But I would think about how
you bring the launch in,
even if it's a soft launch that
you're embarrassed about by a lot.
>> Yeah,
especially if the problem is acute enough,
if it's something that people really
struggle with, finding parking spots.
They won't care how pretty the app is or
how ugly the app is as long as
they can find the parking spots.
So having something live, even if it's
just a website wrapped in a little icon.
>> That's literally what we're doing is
we're targeting certain neighborhoods.
So for instance,
there's neighborhoods that,
I'm sure you've been to
San Francisco multiple times.
>> I live there.
>> You live there, obviously.
Haight District is one of them which is
severely impacted nine times out of ten,
even during the week.
>> How do you know?
>> I've been there physically and
had a check board out.
And checking the times and
stand there for eight hours a day.
But there are times where it does free
up a little bit, but for the most part.
>> So I understand how you're going
to get the parking places on board
which is I think the harder
half of the marketplace.
But you still need people
that want to park,
how are you going to get those people?
>> So what we're going to do
is we're going to reach out
to people during festivals.
There's tons of festivals,
there's outside lands.
There's some that go on on Treasure Island
even though as everyone knows that's out
of our reach.
But there's many that happen
around Golden Gate park.
There's Bay to Breakers,
there's tons of festivals we're
going to be pitching this around.
Or some type of theme, or some type
of festival, some type of ball game.
>> I worry that those A,
don't happen frequently enough.
And B,
those are people who are not looking for
parking super-regularly in the city.
It would be interesting if you could
figure out a way to find people for
who this is truly a hair on fire problem.
That drive to the city every day and
have to park, or live in the city and
don't have a parking place.
That does not strike me as
the most urgent need, or
the best way to find people who are really
feeling this problem every day.
Which there are a lot of,
this is a great problem to be solving.
I would think about how you find,
I would think about other
strategies to find a lot of people.
The festival thing, I just worry
there aren't enough festivals and
there aren't enough people at those that
have this as a regular ongoing problem.
You want the people who
are going to be daily, or
at least weekly users of this, and
I bet you can come up with better ways.
Well I think if you have feet on the
ground and actually surveying the place,
I would actually ask the people
who are parking, why are you here?
>> That's exactly what I'm doing.
>> And see, so what's the feedback?
Are they working there?
>> So nine times out of ten,
people are either coming into the city, so
there are people that are not
living in the city, obviously.
because a lot of people who live in
the city don't necessarily own a car,
so-
>> But they're commuting for
what, are they commuting for work?
>> They're commuting for work and
sometimes they're just commuting
to do some contract work.
They've gotta come into the city every so
often,
there's people that come in for meetings.
A whole host of reasons that they come in.
>> I mean these people are driving
today and parking today,
maybe they'll do it more if it's easier.
But can you put signs in the parking lot,
in the parking spaces,
that say to park here, download this?
>> Yeah, essentially, just- [LAUGH]
>> That'll work.
>> So when that time comes, and
which we do have a product launch.
I'm going to create maybe
little signs at first,
something cheap just to get started.
Maybe laminated or whatnot,
to put it on those places where it needs
to be [CROSSTALK]
>> You need something,
in a lot of cases it is an impulse buy,
right.
They are going to be looking for parking,
they didn't find the street parking and
now they're ready to buy whatever
it is you're giving them.
>> I have a general thought for
you about this kind of marketplace.
Airbnb is a really good business
because if you own a space and
you're renting it out you can only
put it on basically one platform,
if you're going to use
the instant book feature.
And if you're a guest, you really care
if you get this particular house or
this particular house.
They're not interchangeable.
Ride sharing, if you're a driver
you can drive from any service.
You turn the apps on and off.
But if you're a passenger you don't
care much which car you get in.
And it's really nice if you can somehow
have the former kind of marketplace,
where there's not just
perfect substitution and
everyone is switching between
each service depending on price.
And so if you can do something with, I
think this is like actually a very big and
important insight about
marketplaces that most people miss.
And if you can do something where people
can only list their space on your
marketplace because you're going to
have around the clock Instant booking or
something, that would be really
important to figure out early.
And a very valuable tweak that
doesn't sound that big but
it's actually a huge difference to
the long-term liability of the business.
>> I think that's a good take on it.
So right now as far as the 24-hour booking
and what not, I want to give the property
owners or homeowners the ability
to set their own times.
>> Sure.
>> So sometimes maybe some owners, or
property owners,
say we'll just say Wells Fargo.
They probably set theirs a little bit
later after business hours are closed.
>> But do you think that you'll be able
to get businesses to give up their
parking spots as well?
>> I would love to reach out to businesses
to give out their parking spots as well.
>> Interesting, because I was thinking
that this is more around homeowners or
people who have extra spaces on their own.
But businesses could
be really interesting.
It's a very different sale now
because now you really have to go and
convince whoever the property manager
is or somebody else to actually do it.
>> Correct, correct.
>> Go ahead.
>> Sorry, just one thought here, which is
I would pick one of them in the beginning,
because you won't be able to sell to both.
>> Yeah, so I especially wanted
focus on possibly residential and
private lots first, and
then start slowly building out.
>> Do you have any sense yet for pricing?
>> Yes, so
[LAUGH] I pretty much wanted to model
this after the meters in San Francisco.
And right now the meters are all timed.
SFpark actually did a survey in
which they increased meter pricing.
So similar to variable-based pricing, so
that's what we're going to
pretty much mimic.
Essentially we want to be competing with
the meters themselves for residential.
For private lots obviously we're going to
be competing with private lot prices.
So we're just going to base our model
off of the model that San Francisco has
already done.
>> And people would be able to park,
I assume, as long as they want and
the property owner is [INAUDIBLE].
>> As long as the property owners set
their times to say, eight to five,
they can park eight to five and
it'll be on an hourly rate.
>> What's the legal situation of this?
I assume it's okay if
it's private property.
>> It is legal, it is completely legal.
>> Okay.
>> I looked into it, I talked to an SF law
attorney, specifically for San Francisco
themselves, and I've asked them, can I?
It's kind of a funny question.
[LAUGH]
>> Yeah.
>> The story goes is I called them up,
I said, hey my my dad is bedridden but
he's not able to work, he doesn't
get enough from social security, and
essentially he needs to
make some passive income.
Is it okay if we could rent
this space out to our neighbor?
And they said, as long as it's his
house we don't see any issue with it.
>> Chris.
>> That's great.
>> Again this is a really good idea,
if you don't move fast, it won't work.
So I think it's always important as
a startup to know what the number one
biggest problem in front of you is,
for you it's not shipping quickly.
And so just get this working in
one neighborhood as quickly as you
possibly can.
>> Even if it's hacked up and
doesn't look that great.
>> Okay.
>> Any other questions you
want to discuss?
>> I think that's it.
>> Great.
>> I'm pretty good.
>> I'm excited to try it out.
>> Awesome, thank you.
>> Thank you.
Email us when you want.
>> [APPLAUSE]
How's it going?
I'm Yuri.
>> Phillip.
>> Nice to meet you.
>> I'm Sam.
>> Hi, I'm Emma.
>> Yuri, nice to meet you.
>> Hi.
>> Nice to meet you.
>> What do you guys do?
>> So, I'm Phillip.
>> I'm Emma and we're MoonlightWork.
So we're building a marketplace for
software engineers and
designers to match up with companies
who need them ten hours at a time.
>> So specifically ten hours at the time?
>> Yeah, I think we'll start
with ten hours at a time but
some companies want more than that and
some people want more work.
So if they want more time,
they can have more time.
>> Is this launched, up and running?
>> We have a prototype up and running,
we haven't had anybody else use it.
But both of us have both-
>> Built projects for other people?
That's a great way to start, that's good.
>> Yes, so we started it because
we have this need ourselves.
>> How do companies find you?
>> There's been a variety of them,
some of them have been like friends
of friends that heard that we
were doing contract work, and
would come in and
assign jobs through there.
Another thing is when we
shut down our last company,
we open-sourced all the code and
so we had people coming in and
paying us to deploy that code for
them on their own servers.
They found us through GitHub basically.
>> What kind of projects are people
having you build so far?
>> So far it's a lot of people
who have a very specific need.
So they're like I need
an expert in this language, or
an expert that knows how to
build this thing really well.
And so they're looking for someone who
there's not going to be much on boarding.
They'll just going to be able
to jump in and do a project.
>> Why did they choose you instead of
something like Upwork or Top Pal or
one of the other kind of
outsourcing houses?
>> Yeah, I think the biggest
reason is because we're
promoting it as something
that experts are working on.
So these aren't just anyone in the world
who wants to make $15 an hour.
This is someone who maybe works at
a Google or an Uber and they want to make
a bunch of extra money on the side, but
they're really good at what they do.
>> So you're going to have to
actually curate these people then.
Is that something you're already doing?
>> Yeah,
that's what we're starting to do and
I think that's going to be
the biggest barrier for us,
is being able to make sure that these
people are really quality workers.
>> How much are you charging for
a ten hour project?
>> So the contractors set their own rates
and then we're handling the invoicing and
charging 15% on top of that.
>> So but true marketplace.
>> Correct, yeah.
>> Yeah.
Other than quality, given that
this is clearly a good business so
a lot of people want in it and
a lot of people are already in it.
How will you become the marketplace
where everyone goes for
contracted engineering help?
>> I think we can speak from our
own experience and say, like,
there have been times in the past
when we have, like, student loans and
would have worked extra time
every week to pay them off.
And there's not really marketplaces out
there where people who want over 50 or
$70 per hour can find short-term
projects that they can do on the side.
>> So that's true on the developer side,
but how do you get the companies to come
to you and say, when we need an expert,
we go to you guys?
>> We're working on a couple
different ways of matching.
But I think the short of it is that there
are very specialized needs that some
companies have.
And it doesn't even have
to be core to the product.
Sometimes it's like, I need to set up
a development environment, or I want
a landing page and our design team is
focused on an app, or something like that.
>> I wonder if you want to become
known as the place to go to for
a particular set of skills.
Not for every expertise, but in the
beginning just a particular set where they
just go to you and then you open
up additional verticals as you go.
>> And for that,
we're looking at open-sourced projects.
So an open source project is something
where it takes a lot of knowledge,
a lot of experience to kind of
understand the ins and the outs.
And so we tested that with our
own open source projects and
got projects coming through there and
people signing up.
And I think that matching people based
on very specific, open source projects.
Not saying a Ruby programming language but
something like the Mongo DB bindings for
Chef, for
something very specific like that.
>> I think the insight of going
after high-end work and also for
people who are just looking for
smaller pieces is really good.
I wonder if you could pick projects
that particularly need that.
Like projects that are harder to build and
take less time, sort of need specialized
skills and are not the normal, like,
I just need people to grind through this.
That would strike me as
a good initial focus.
>> Mm-hm.
>> What's the biggest problem in
front of the company right now?
>> I think it's making sure that matching,
I mean obviously every
marketplace has that issue.
But making sure that the people we have
are worth what they're trying to get
charged for.
because we want to set a limit on how
much people can charge per hour so
we don't have a higher.
Well not people that are,
yeah, minimum, sorry.
So we want people who are making more
money per hour because that's going to
bump up the quality of the work.
>> Right,
how much do you two charge per hour?
We're both trying to charge about
150 an hour, and we're finding, so
we've had about 300 people sign up so far,
and we asked them what their hourly rate
is, and it's Usually from
about 70 to 200 per hour.
>> The interesting thing is that it's not
so much how much the people are charging,
it's more of the perceived value
on the other companies, right?
So if the company's saying these
developers are worth $150 or
$200 an hour, they are happy to pay that,
but you need to convince them that
they're worth that money, regardless of
what the developers think they're worth.
And how do you do that?
How do you a convince a company that
your developers are worth $200 an hour
if they can go somewhere for $25 an hour?
>> Yeah, and I think right now for
the MVP what we're trying to say is we
are personally experts in these fields and
we are making sure that the quality
of talent we have is up to that par.
I think that we need to figure out
how we're going to scale that.
>> I also think, in addition to
figuring out how to scale it,
you need to figure out how you're going to
communicate it, like the website really
has to give across the impression with
testimonials from well known customers or
whatever that like,
these are the best people.
In terms of setting the prices,
one thing we have consistently seen is
when you ask a user to set their
price limit in the marketplace.
If you give them guidance, if you say like
based on what you've said here's what we
recommend or here's the range we
recommend, 85, 90% of users will do that.
And so if you want to set,
if you want to sort of move people
towards a specific range because you
want people that are at that quality
level, you can probably do that.
>> So we did that, our sign up form
says the average hourly rate is
$70 per hour and it also says,
if you have your annual salary,
that's about what your hourly rate is.
So $100,000 per year
is about $50 per hour.
>> When do you think you'll have
the first external developer live, right?
So that's not the two of you.
>> So we're working basically on
building out invoicing right now.
And so that'll be the next week or
two probably.
>> Do you need, like can you do it
more manually in the beginning?
Just so
that you can see someone who's not you,
because you obviously don't
have invoicing, right?
>> So we've been doing this ourselves and
there's just a lot of moving parts.
There's sending contracts back and forth.
There's like setting up bank accounts,
there's getting companies to pay.
And when we talk to the potential
contractors who want to be on
the platform,
some of their biggest concerns are if
I'm only working 10 hours per week how
much time does it take to ramp up?
Do I need to talk with the customer and
how long does it take until I get paid?
>> Yeah.
I would try and
hack all of that in a way and
do it behind the scenes manually right now
just to get the developers developing.
Take all the pressure away from them, so
that they can just start interacting with
the customer and if you need to
manually process it do that.
But like it's so
important that someone who's not you
starts doing this on your platform.
>> And then when they do, for
the first ones especially,
I would be super involved just
to learn what the issues are.
It may be that people aren't sure
they're allowed to do this and
they need help looking at their
current employment contracts.
It may be that people need training to
know how to engage with a customer.
And like how much they should communicate.
There are all of these things,
many of which will surprise you and
your guesses on many will be wrong.
And the way you find this out is to just,
like for the first let’s say like 20 users
like go sit with them or
at least go talk to them all the time.
>> I would almost think about it
like become their agent, right?
Like if they were a talent and
you are an agent for them and
you take care of everything for
them, and answer all their questions.
>> And then you're going to just
start building that into the product.
But in our experience almost every
time when the people think they know,
like where the break
points are going to be, or
what they need to teach their users,
they're almost always wrong.
But you find it out really quickly.
It's like, you don't need a giant
sample set to start hearing the common
concerns people have at
every stage in the process.
And then you just knock
those off one at a time.
And that is a way I think you
can differentiate from other
coding talent marketplaces
that don't do this.
And if you can figure out, like if you
can be the person that makes it so
that people who want
a little extra income, but
don't know how to go be a freelancer
learn, and if that becomes your
reputation, that'll be a great way
to get the top talent in the field.
>> One of the other, just an idea,
which you may or may not want to pursue.
But if you want to be known
as the experts in the field,
see if you can get any experts to
actually use your platform, right?
Through your network or somewhere else or
get someone who's well known on
a particular Niche area, and
have them sign up on your platform and
do projects on your platform,
if they're willing to.
>> Yeah.
>> So
what's your biggest problem right now?
>> Us personally?
>> The company.
>> [LAUGH]
>> In this stage it's often one and
the same.
>> Yeah.
>> I think it's more like just
getting the machinery up.
Like if we were to manually take payments,
my biggest concern would be that
10 months down the line, I'm going to
have to manually calculate 1099s.
>> But you're not going to
be 10 months down the line.
You need to get to the next two months.
Yeah.
>> Right?
>> Yeah.
>> Yeah.
>> I would say to go along with that,
the reason we feel like we have to
have some sort of payment thing
set up is because there's so
many laws around how you can pay people,
and
like kind of the logistics of all that and
paperwork that needs to be gone through.
So I think you are right we need to do
those first couple ones to know what
those are.
But I think we're both like-
>> Is there not just some other startup
that you can use that handles
invoicing really well?
>> Well when you-
>> It is complicated, your-
>> We're using-
>> Or just like
an accountant that can help you.
>> Yeah, do you want to answer it?
>> Yeah, so we're using Stripe Connect
which handles everything including
like the 1099s.
But there's no turn key invoicing
system built on top of that right now.
>> Yeah, I get that.
I really do get that but I still feel like
it's so, I get that feeling as a developer
all the time where it's like, if only I
have this built, I would be ready to go.
But it's so much more important to
actually find out if you can, like even if
you have the platform built, there is
a chance that people won't start using it.
And you'll only know that when
you do the nonscalable things.
That's one of the things we drive home
almost every single office hour session,
which is just do the nonscalable things,
do it manually.
Don't worry about 10 months down the road.
The 10 months down the road
it's a new company.
It will look very
different than it is today.
But today it's so
important to do the nonscalable things.
>> And we're just talking about
a small handful of users.
Like you don't have to bring on,
everyone's like well
my problem is if I do this nonscalable
thing, 2000 users will sign up tomorrow.
>> You should be so lucky.
>> And I'll have to deal with them and
that is not what's going to happen.
The, It's a slightly worn instinct to say
that my biggest problem is that I haven't
built this one piece of the software yet.
Not that my biggest problem is how
I'm going to get those 2000 users.
>> So what we're focusing on
basically is the invoicing right now.
It's not people logging in or
anything like that.
It's just like being able to take a credit
card or contact details right now.
>> Well again, if that's the one thing
you want to do, I would get that.
[CROSSTALK]
>> My
answer to that question about your biggest
problem, I'm not worried about the fact
that you'll be able to get people that
need developers to build something.
There's a lot of people that
have an idea for an app.
The thing that I worry about is every
once, so often witnessing the idea of
I'm going to get these great developer
to sort of build stuff for other people.
And it has been so hard to actually do
that because the reasons the people
have thought they're going to get the
developers, or the sort of assumptions and
developers know how to do this
well have just been so wrong.
And so you still like,
you won't notice your own problems
because you've thought about this a lot.
And I think like, you may find out that
invoicing doesn't even need to be built
the way you think it needs to be built,
because there's something fundamental
about the model that's going to change.
But getting people you don't know or
you don't know well,
to sort of build projects on a platform,
I think that's a really important step.
>> I agree with that, I would just
add in that the idea came from
a prior company where we didn't have-
>> That's great.
>> The time to go hire people and
we started hiring part time people,
people who were like friends of friends,
things like that.
And so we started to do a lot
of firsthand research like that.
>> No, I think that's great.
That's actually super important.
Because it means you have the pain and
you understand the pain.
But it's still like, Sam and I are just
kind of driving to the same thing.
Which is just it's so
critical to get someone who has nothing
to do with your previous business or
your current kind of core business
that wants to start using it.
>> That makes sense.
>> Any other issues you'd
like to talk about?
Any other questions?
>> I don't think so.
I think that's our main thing that
we know we need to do right now.
>> Great, that's super exciting.
>> And how did you decide about
15% is the amount to charge?
>> I think that's another thing we need to
test out but we feel like that's a number
that's not crazy for
businesses to pay on top of something.
Like my roommate's a recruiter and
she gets 30% off the top of all of their
salaries, but it's also enough for us to
not have too many people to start with and
be able to start testing things out.
>> Is that a price that you're going
to charge on top of the hourly rate, or
is that just going to be
blended in to the hourly rate?
>> Yeah, so if somebody's $70 an hour,
we'll add $15 to that.
Sorry, $100 an hour we'll add $15 to that.
>> Right.
>> And this is a good problem
to have in the future.
What will prevent people from,
once they work with someone they like,
just hiring them off the platform and
not paying you?
>> I think that's another thing
that a lot of developers and
designers have pointed out to us.
And I think we want to make sure that the
tools inside of the platform are keeping
people there, so
it's so easy for them to get working, keep
work and they can do this on the side.
So building internal tools that
allow people to work remotely and
us, contract workers?
>> Yeah.
>> Will be another thing.
>> That's another thing that works
well about the short term projects.
>> Yeah.
>> All right.
Great, thank you very much.
>> Thank you.
>> Thank you.
>> [APPLAUSE]
>> Nice to meet you.
>> Thank you.
>> You too.
Yeah.
>> So format wise, that was an experiment.
Is that something you'd like
us to more of in the class?
Was that useful?
More regular lectures, yes, yes?
Some middle, okay.
We'll do some more about them.
Great, thank you very much.
Thank you, Eric.
>> Yeah.
>> [APPLAUSE]