Podcast: This Is Series A
This Is Series A is a podcast about the builders and businesses that shape tech and internet culture, and the inevitable challenges and lessons that come out of early-stage entrepreneurship. In each episode, Talia Goldberg and Jeremy Levine, partners at Bessemer Venture Partners, talk to founders, CEOs, and internet philosophers about building startups and what keeps them inspired every day.
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In this episode of This Is Series A, Talia Goldberg and Jeremy Levine speak with Adam Dell, American venture capitalist, early investor and board member in OpenTable, and founder and CEO of Clarity Money, a personal financial management tool that helps people bring more transparency to your spending. The company was acquired by Goldman Sachs in 2018. Adam Dell is now a Partner and Head of Product at Marcus by Goldman Sachs.
- Why digital neo-banks are beneficial for consumers: “The internet and its reach will reduce the need for regional and local banks. The notion that you need a traditional branch to walk into is going away in the mind of the consumer. (Somebody has to pay for those marble columns and that burden has been on the consumer.) If a consumer can get a digital experience that allows them to do the things they need to do without having a physical branch, there’s an enormous cost advantage.”
- The future of US banking is seen in APAC: “I look to Asia as an example of what is to come in terms of personal finance trends. Ant Financial demonstrates the power of gamifying finance — Ant Financial offers rewards to their consumers for good financial behavior and also puts incentives in place to drive better habits. It’s a win-win for the company and the consumer. The most direct and important competitors in the personal finance ecosystem will not be traditional incumbent banks, but will be the Googles, the Apples, the Amazons of the world.”
- Financing advice from someone who’s been on both sides of the cap table: “I raised money from people who knew me well and who were essentially making a bet on two things, the market and me. Many venture investors distill their investment thesis to those two things. Is this the right individual and is this the right opportunity within the market? I had some advantages there because the folks who backed me, again, as I said, have known me for a long time and have seen how I operate and how I try to tackle problems. The other thing I would say is that momentum is a very powerful thing when you’re raising money. There’s a fear of missing out on the next big thing and entrepreneurs can leverage that. The other thing is that I priced the Series A in a very reasonable way. (We raised three million at nine-pre.) It was a very modest, appropriate size of capital for the problem I was trying to solve in the first stages of the business. At that stage, I wanted to build a minimum viable product that showed the vision of advocacy, simplicity, and transparency around consumer finance in a way that was different from what Mint had done or what Prosper had done, or BillGuard or anybody else in the market. And so it wasn’t a large ask in the mind of the venture firms that got behind me. They said, okay, well, this is a guy who knows what it is to build a startup, the sum of money he’s raising is not astronomical, and the idea is one that we believe in.”
- Advice on how to bring others along your entrepreneurial journey: “It’s important to not be greedy with equity with your fellow teammates in this endeavor. I was very fortunate to find a VP of engineering, a head of data science, a head of data engineering, a head of mobile engineering. And I was generous with them from an equity standpoint because I knew that I needed them. One of the things that I fully believe is that spreading the equity-wealth gets people to feel as though this is part of their journey as well. And this is not a job, this is a mission. If they feel like an owner, they will give you more than you would get if they are just a salaried employee.”
Episode 4: Melanie Perkins, co-founder and CEO of Canva, and Rachel Carlson, co-founder and CEO of Guild Education
In this special episode of This Is Series A, Talia Goldberg speaks with two visionary founders who have carved out new ways for technology to equalize access—Melanie Perkins, CEO and co-founder of Canva, and Rachel Carlson, CEO and co-founder of Guild Education. Canva empowers the average person with zero design experience to create beautiful graphics. And Guild places adult education within reach for millions of less economically advantaged workers. In this conversation, they share an inside look at what it takes to invent a new billion-dollar category.
- Balancing shifting supply-demand challenges: “How we’ve gone out about the business is having employers pay tuition, having universities pay for Guild’s technology and services, and trying to drive the costs down to zero as much as possible and whenever possible for the student,” Rachel said. “And we’ve pulled that off, but we’ve done it with the same challenges that most marketplaces work through, which is in any given quarter or a year, you’re balancing the supply-demand challenges. The first year of the business was generating the supply side, getting universities to want to join our marketplace. The second year was going to market for the first time to employers and students and figuring out if they wanted what we had on our shelves. Then we had to flip back and do an expansion year on our supply side and add many more universities because we didn’t have enough. This year, we’re thinking about expansion with the next batch of employers and go to market. It’s been a balancing act at every turn.”
- The value of just-in-time learning: “An important lesson that we’ve learned along the way is that [building a business] is hard for everyone,” Melanie said. “I remember when we started out and we were seeing other companies getting funding or other companies getting millions of users and I was like, ‘Oh my gosh, they must be handed to them on a silver platter. It’s working for them. And it’s so damn hard for us.’ I think knowing that it’s hard for absolutely everyone and everyone’s just figuring it out as they go and having to learn on the fly. The concept that I quite like is just-in-time learning, and it feels like every moment you’re learning something just in time, just ahead of knowing it, or in some cases just after you would have liked to have known it.”
- Key differences between tackling early vs. late-stage problems: “The mistakes or the learnings are constant. There’s no lower volume of them later on than in the early days,” Rachel said. “But it’s different. In the early days, they were problems that cropped up in the morning and you try and solve them by the end of the day. You’re in firefighting mode, you’re figuring out all these various component parts. And then those Lego building blocks build you to a place where now you’re solving much larger challenges. And in Guild’s perspective, the early days, what gave us a competitive advantage and let us be successful is that we were willing to take on the complexities of multiple stakeholder groups and the employers and the universities and the students. Today, we have to make sure that we don’t let that complexity get in our own way. We’re at 700 employees, we’ve got big teams overseeing those three stakeholder groups and making sure that we can optimize for all of them while keeping in mind the needs of our fourth stakeholder group, which are our employees.”
- How a shared mission and shared vision of the future helps with recruitment: “I spend a lot of my time making sure that the messages that are going throughout the company are really consistent, that we are all working toward the same thing, that everyone has that context and information to make great decisions,” Melanie said. “I think that actually helps with the recruitment function as well, because if a thousand people in the company can speak to the mission and vision as well as I could and knows the values in our culture and the people that would make a really great contribution to Canva and where we’re trying to go, I think that is a little bit of a quasi-way of helping with our recruitment. Because we have a lot of people who are working in recruitment now, a lot of people who are trying to decide, is this person going to be a great fit for Canva. While I might not be in every single one of those interviews, we need to ensure that culture is spread very, very consistently across the company, and that people know what to expect from Canva and who should be able to join Canva and the sort of environment that they should be able to create.”
- Why you can’t let the mission be a crux for culture: “[Our mission is] to deliver economic opportunity to our students and our workers,” Rachel said. “And so that mission, and really the goal of starting there, is what pulses through every part of Guild. It’s why people join, it’s why people stay, but we really have to think about how to make sure to evolve that. An interesting thing that all mission-driven organizations have to grapple with is you can’t let the mission be a crux for culture. And that’s something we’ve thought long and hard about, probably more than ever during COVID. We also had just done our first acquisition, that we really have to invest in the values and the other component parts that live beyond our mission, and maybe someone’s working at Guild just because they love the technology problem we’re solving, or because it’s the best job for them to achieve their career growth opportunities or because of other things we stand for or work we do in other parts of our business.”
Ankur Nagpal is the founder and CEO of Teachable, the online platform that enables people to sell individual online courses in subjects as varied as programming to cake decorating. A leader in the creator economy, he started the company in 2014, and after raising over $12.5 million in funding, there are now more than 100,000 digital instructors who have reportedly earned over $500 million on his platform.
- How American thrives on global entrepreneurship: “I do not think I could have built what I built in any other country in the world. And to that, I am very grateful to America, very grateful to my parents for whom my dad saw this as the manifestation of his dreams. In an alternate reality, he would have liked to be here and started a company,” shares Ankur. “For now, America is still getting talented immigrants, but for the first time there’s a bit of an existential risk. And I think it’s really important for America to not truly blow this in the next 10 years. The competitive advantage this nation has is that it becomes a magnet for the smartest people everywhere to move here. And I really think that’s something that America should realize is a privilege, and do whatever they can to maintain it. Because I do think the immigrant experience here is deteriorating. In a truly globalized world, I do think countries will compete for talent and thus far it has not, that has not been a factor, but thinking the next 10 years, I do think there’s a very real existential risk that this country could lose that.”
- Advantages to building a company in New York City: “I was 23 years old at the time, and I strongly believe at 23 there was no city in the world more fun than New York. So I graduated college from Cal Berkeley, lived in San Francisco for three years, visited some friends in New York and thought, ‘What am I doing with my life? Why am I in San Francisco?’ I moved to NYC and I built Teachable here,” said Ankur. “There’s two things that New York tech makes easier. One is, you tend to focus on being in actual business a little bit earlier, not throwing shade on any San Francisco companies, but like New York companies, in general, are very much about bottom line EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), like what is your revenue upfront? I also do think it is easier to build a diverse company in New York City. I think New York City is phenomenally diverse and it’s substantially easier to build a diverse company over here.”
- Bundling education with software to provide customer solutions: “Five years ago, we had this insight that no one actually cares about our software—what they want is a solution in a lot of cases,” Ankur shared. “They want not just the tool, they want also the knowledge. So we started bundling education with software. That was one of our first inflection points and our first realizations. Our conversion rate went up before we started selling, not just Teachable, but Teachable plus training on, ‘How do you build an audience? How do you create a course?’ Even now, our most effective marketing funnels all have to do with, ‘Hey, if you buy Teachable, you also get training on how to set up a business, how to build an audience, how to market your course.’ So we’ve definitely done that part of things.”
- The “business of one” in the future: “I’m a huge, huge believer in a rising class of basically every individual sort of being a business, and it doesn’t have to be perfectly one-to-one, where you can recruit the odd person there,” Ankur said. “Historically, sort of everyone got absorbed into the full-time job economy. I do think in the future, there’s going to be a lot more individual businesses, whether you think of them as creators, freelancers, or people with multiple streams of income. I’m a big, big believer in the business of one, and I think Teachable definitely plays into that.”
Daniel Lubetzky is the founder and executive chairman of Kind, the multi-billion-dollar food company that’s become a household name. The Kind brand is known as a healthier snack food with a social cause. In this episode, Jeremy and Talia dive into Daniel’s entrepreneurial journey, the lessons other founders can gain from his experience, and how he built a food empire with a mission.
- How failures of his previous venture (PeaceWorks) led to successes at Kind: “PeaceWorks was a decade, which you could say was the lost decade, but it was a decade of lessons. So many mistakes that I made were two steps forward, two steps back,” Daniel reflects. “I held onto those lessons, some of them very painful. Right now, I can wax poetically about it, but I literally cried in my basement or in my studio apartment many times when I felt that I just had a huge defeat, but eventually, I had the idea for Kind about 10 years later, and I absolutely attribute a lot of the successes of Kind to the early failures of PeaceWorks. A lot of the mistakes that I made in the early years helped me make sure I didn’t make them again with Kind.”
- Dealing with “shiny objects”: “[Entrepreneurs often] don’t think that there is going to be greener pastures somewhere else because everybody sees how something else seems to work, and they only see the opportunity,” Daniel said. “They don’t see all the problems, and then you jump in and you realize that somebody else is already dedicating their life to that particular issue, and they’re going to beat you because you’re spread thin doing so many things. I really had a heartfelt commitment to several other ideas. I had a project to support the homeless through business, and a project to consult people on the PeaceWorks-type concept, as opposed to doing a trading business called METIC, the Middle East Trade and Investment Center.”
- Balancing new ideas with staying focused on one idea: “Had I been more focused and just stuck to PeaceWorks, the business, it probably could have flourished more, but I was too enamored with trying to change the world with so many ideas,” Daniel reflected. “Entrepreneurs’ greatest gift is they can spot opportunities that other people don’t, and that they will go and pursue them. That can also be their greatest undoing because if you’re spying opportunity after opportunity, trying to pursue every one of them, you can lose focus, and grit, and discipline on the particular business. So you need to use that entrepreneurial spirit to be resourceful and assertive, but you need to stay focused. If you try to do too many things, you’re going to dissipate your execution power, and fail.”
- Fundraising for a consumer packaged goods company: “By the time we did our first private equity investment, we kind of skipped the Series A,” Daniel said. “We got the friends and family angel investment, and then we didn’t have an investment until Kind had already $30 to $50 million under its belt, and it was like a very, very exciting company for a lot of investors. All the private equity firms were lining up that they wanted to invest in Kind. So the total that we ever invested in Kind, in the company, in the life of our company was $5.2 million. The $100,000 from my friends, and the $5.1 million from my investor BMG. Ever since then, whenever we brought in investors it’s more to sell our shares to them, but Kind has never needed it.”
- The value of immigration in America: “I would not be alive today were it not because of not just the immigration policies, but the courage of Americans who rescued a continent. My father was liberated by American soldiers, and I immigrated to the United States as a 15-and-a-half, 16-year-old kid. So were it not for that, I would have not been able to provide thousands of jobs to Americans, and my story repeats itself across the board to the point that the number’s stunning of the number of Fortune 500 founders or CEOs that are immigrants or children of immigrants is enormous. [As immigrants], we are an important addition to the makeup of society because we see things. We don’t take democracy for granted. We don’t take freedom for granted. We don’t take rule of law for granted, so those of us who came from countries that had much less perfect democracies, that had no rule of law, really, really appreciate and cherish, and will do everything we can to defend those values. I do think that for all us Americans it’s really important to not take these things for granted.”
Laura Behrens Wu is the co-founder and CEO of Shippo. Talia and Jeremy first met the shipping API company in 2017, and as early investors in Shopify, they observed firsthand the explosion of independent e-commerce companies. Thanks to Shopify, merchants could easily set up their stores online. Thanks to Stripe, merchants could easily accept payments online. Yet shipping remained complex and opaque. After our first meeting with Shippo, Bessemer quickly realized how their solution was the critical missing piece of the new “e-commerce stack,” streamlining and optimizing shipping operations for merchants of all sizes and types. In this episode, Jeremy and Talia talk to Laura about her entrepreneurial journey and Shippo’s evolution.
- Taking steps, not a plunge, to build a business: “There was never a point in time where we realized how much of a plunge we were taking. We took everything one step at a time,” Laura said. “Every step, it felt like it would be ridiculous not to take the next step, because we found something that people liked. When we first came up with a shipping-related idea, we weren’t sure if shipping was something that we’d be so passionate about that we’d spend years working on it. But then as we started talking to customers, and started onboarding customers onto our minimum viable product (MVP), and it was an amazing experience seeing someone use Shippo, and see how much easier it was for them to do their job.”
- Persevering while pitching investors: “Everyone was very friendly as we raised our Series A, but it is still soul-crushing to hear a no after a no. At that time, we knew if we wanted to stay in San Francisco, we’d need to raise a certain amount of money to qualify for a certain visa. So, there was a lot on the line. The main lesson I gleaned was that every no was an opportunity to learn and improve my pitch for the next time. By the time I got to the people who ended up investing, I was very prepared to answer all of these questions. I’ve also iterated on the story so many times that by then, it was very fluent. And in hindsight, all of that practice went to good use.”
- Research partners, not just the VC firm: “I think it’s important to not take an introduction to just any partner at that VC firm. But you want to make sure that you get access to the right partners,” Laura said. “The simple example here is, if you are an enterprise business, you don’t really want to be introduced to the consumer partner, who might not understand your business as well. Once I understood who the right partners were at those firms, I then sat down with the VCs that had done my seed round to figure out what our connections are to potential Series A investors.”
- Re-evaluating Shippo’s early-stage metrics: “I think there is no one-size-fits-all around early-stage metrics. It needs to be something that’s the right fit for your business,” Laura said. “Our product helps them ship packages, so the more packages they ship, that’s a good indicator for us growing, and people being happy and satisfied with our product. So, the seed and Series A round were raised based on shipping volume. [Shortly after Talia and Jeremy got involved] we started realizing that volume and net revenue wasn’t perfectly correlated. So, while we’re growing volume, we weren’t growing net revenue. And what that meant for us was that we were going after customers that were expensive to acquire, because they were larger. Therefore, we were bringing in high shipping volume, but we didn’t have the right pricing, or the right product to command that pricing. At that point, we realized that volume for the sake of volume just didn’t make sense anymore. We’d have to look at how we’re able to monetize that volume, and how we can grow in a more sustainable way.”
- How the COVID-19 pandemic has accelerated the offline-to-online transition: “The global pandemic has really accelerated this transition. And almost overnight, given that all brick and mortar stores, all offline locations were closed, everyone who didn’t have an e-commerce business just yet tried to figure out how to become an online business,” Laura said. “All the other retailers who have both, switched all of their sales to online.”