Promise, had witnessed technology’s impact on the work communities in which she’d been a part &#8212; and not always for good. In the labor force and the environment sector, she’d seen technology replace jobs, relegating janitors and receptionists to contract work. In the music industry, she’d seen artists’ content devalued with advances in digital innovation. “I went into tech to understand it,” she said.</p>\n<p>Ellis-Lamkins decided to be a force for good within the tech world, narrowing her lens on helping underserved communities through govtech.</p>\n<p>Meeting through CNN commentator Van Jones, Ellis-Lamkins worked with her co-founder Diana Frappier at multiple companies and organizations previously &#8212; like Green For All and Honor &#8212; before deciding to start Promise in 2017, joining the YC Winter 2018 batch. “When we went to YC, we didn’t know what we were going to do,” Ellis-Lamkins says. “We didn’t have an engineer; we just kind of had a vision of the system we wanted to change.”</p>\n<p>Promise was born of their mission to serve communities who need more tech-enabled resources, helping people easily and effectively navigate government payments like utilities, child support, and parking tickets. The platform enables users to adopt customizable plans and digital payment options. Ellis-Lamkins and Frappier just closed <a href=https://www.ycombinator.com/"https://techcrunch.com/2021/02/19/with-20m-a-round-promise-brings-financial-flexibility-to-outdated-government-and-utility-payment-systems//">Promise’s $20M Series A</a>, which is one of the largest funding rounds for a Black, women-led startup with investors like Kapor Capital, Bronze, First Round, and Y Combinator.</p>\n<p><strong>Iterating on YC</strong></p>\n<p>Ellis-Lamkins and Frappier had long career paths &#8212; in social justice reform and criminal defense respectively &#8212; trailing behind them. They felt their backgrounds were not typical of a Y Combinator applicant. “We were so different [compared to our peers],” Ellis-Lamkins recalls. “The first time I went to YC, I felt 100 years old, because I came in a minivan and had to go pick up my kids after my YC interview.”</p>\n<p>Ellis-Lamkins says she was surrounded by a lot of people who had already developed a prototype for their tech company; she tried to convince Frappier to leave the day of the interview. “Of course, I gave the wrong phone number, so I never got a call from Michael [Seibel] to tell me we got into YC; I thought we didn’t get in, and they were so rude they didn’t even call to let us know,” she says with a laugh.</p>\n<p>After those initial bumps, Ellis-Lamkins made the Y Combinator experience work for her. It was less about meetups with her batchmates, and more about the structure YC provided for building the fledgling Promise. “It just put us on a timeline of when we needed to achieve things,” she says. “Office hours were also really helpful, because it was coaching; I probably met with Gustaf [Alströmer] and Michael 10 times, right before getting ready for fundraising. We went, we acted as though they were a staff, went through every deck, had them give us feedback, and iterated.”</p>\n<p>The approach worked for them. The Promise founders launched out of the program with $3.9M in seed funding.</p>\n<p><strong>Succeeding and Failing</strong></p>\n<p>Failure and success often run in tandem, with one following the other. It’s a throughline in Promise’s story; Ellis-Lamkins and Frappier are interested in helping people who are financially struggling to succeed in managing government payments &#8212; whether it’s a family struggling to pay rent, a young worker laid off during Covid-19, or even a parking ticket someone simply can’t afford to pay off in one fell swoop. Over the past several years, the pair has managed to build a sustainable business while keeping a mission-focused core. Ellis-Lamkins believes there’s a myth of “people believing in social mission or believing in revenue, and not realizing you need both.”</p>\n<p>She wants to succeed, become profitable and scale, because the more effective Promise is as a business, the more people the company can impact. Ellis-Lamkins says revenue is a strategy for change. In [Promise’s] case, we can control how the capital is made.” Ellis-Lamkins does this through making sure Promise’s clients have aligned incentives. She and Frappier work with people who are focused on “reducing debt, reducing harm so that people don&#8217;t end up in trouble and that&#8217;s an earlier intervention,” she explains. “We had to work with treasurers who wanted to have money, or mayors who wanted their cities to perform better, instead of people who are inclined to incarcerate people.”</p>\n<p>All the while, Promise is growing, learning and making mistakes in order to succeed. In fact, Ellis-Lamkins thinks all entrepreneurs should be allowed the space to fail, which is a lesson she’s learned in Silicon Valley. “But I think we should acknowledge that for a lot of working people, and people of color, failure has different consequences,” Ellis-Lamkins says.</p>\n<p>At YC, Ellis-Lamkins heard, “Pay yourself $50,000 a year.” But she couldn’t support herself and her kids on that salary. In this, she is an advocate for cushions for innovators and risk-takers, which will vary from entrepreneur to entrepreneur &#8212; especially those who don’t have privileged backgrounds. “We have to think about, ‘How do we create some safety nets for entrepreneurs so that people can afford the luxury of failure? Which most people can&#8217;t afford,” Ellis-Lamkins says. “I think the real thing I would say, which I say to our investors and to others, is we have to create the conditions for people who do not [fit] the pattern recognition to succeed.”</p>\n<p>Certainly, she’s leading the charge with Promise, embodying how equipping an entrepreneur with the right tools can be a catalyst for success.</p>\n<p><img src=https://www.ycombinator.com/"/blog/content/images/wordpress/2021/03/Promise.png/" alt=\"Promise co-founders Diana Frappier and Pheadra Ellis-Lamkins\" /></p>\n<!--kg-card-end: html-->","comment_id":"1104771","feature_image":"/blog/content/images/2022/02/Promise.png","featured":false,"visibility":"public","email_recipient_filter":"none","created_at":"2021-03-25T23:53:54.000-07:00","updated_at":"2022-02-01T15:38:22.000-08:00","published_at":"2021-03-25T23:53:54.000-07:00","custom_excerpt":null,"codeinjection_head":null,"codeinjection_foot":null,"custom_template":null,"canonical_url":null,"authors":[{"id":"61fe29e3c7139e0001a710a7","name":"Lindsay Amos","slug":"lindsay-amos","profile_image":"/blog/content/images/2022/02/Lindsay.jpg","cover_image":null,"bio":"Lindsay Amos is the Senior Director of Communications at Y Combinator. In 2010, she was one of the first 30 employees at Square and the company’s first comms hire.","website":null,"location":null,"facebook":null,"twitter":null,"meta_title":null,"meta_description":null,"url":"https://ghost.prod.ycinside.com/author/lindsay-amos/"}],"tags":[{"id":"61fe29efc7139e0001a7116f","name":"Female Founders","slug":"female-founders","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/female-founders/"},{"id":"61fe29efc7139e0001a71152","name":"Founder Stories","slug":"founder-stories","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/founder-stories/"},{"id":"61fe29efc7139e0001a711ba","name":"#1769","slug":"hash-1769","description":null,"feature_image":null,"visibility":"internal","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/404/"}],"primary_author":{"id":"61fe29e3c7139e0001a710a7","name":"Lindsay Amos","slug":"lindsay-amos","profile_image":"https://ghost.prod.ycinside.com/content/images/2022/02/Lindsay.jpg","cover_image":null,"bio":"Lindsay Amos is the Senior Director of Communications at Y Combinator. In 2010, she was one of the first 30 employees at Square and the company’s first comms hire.","website":null,"location":null,"facebook":null,"twitter":null,"meta_title":null,"meta_description":null,"url":"https://ghost.prod.ycinside.com/author/lindsay-amos/"},"primary_tag":{"id":"61fe29efc7139e0001a7116f","name":"Female Founders","slug":"female-founders","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/female-founders/"},"url":"https://ghost.prod.ycinside.com/promise/","excerpt":"Pheadra Ellis-Lamkins, Co-Founder and CEO of Promise [https://promise-pay.com/],\nhad witnessed technology’s impact on the work communities in which she’d been a\npart — and not always for good. In the labor force and the environment sector,\nshe’d seen technology replace jobs, relegating janitors and receptionists to\ncontract work. In the music industry, she’d seen artists’ content devalued with\nadvances in digital innovation. “I went into tech to understand it,” she said.\n\nEllis-Lamkins decided t","reading_time":4,"access":true,"og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"email_subject":null,"frontmatter":null,"feature_image_alt":null,"feature_image_caption":null},"mentions":[{"id":1769,"slug":"promise","name":"Promise","batch_name":"W18","small_logo_url":"https://bookface-images.s3.amazonaws.com/small_logos/1f469f29205bdaeb83cbefb97085b4a311f3f670.png","one_liner":"A modern payment processing platform focused on government agencies.","website":"http://promise-pay.com","long_description":"Promise modernizes and humanizes government payments. We are a comprehensive payments platform that increases revenue and efficiency for government agencies. We help residents navigate payments with dignity and ease to avoid the negative consequences of non-payment. Promise’s win-win services strengthen the bond between government agencies and the communities which they serve.","tags":["Fintech","GovTech"],"ycdc_status":"Active","logo_url":"https://bookface-images.s3.amazonaws.com/logos/e1953578e12f9621409e039950a16c03b8cf04a7.png","year_founded":2017,"team_size":40,"location":"Oakland, CA","linkedin_url":"https://www.linkedin.com/company/joinpromise","twitter_url":"","fb_url":"","cb_url":"https://www.crunchbase.com/organization/promise","is_hiring":false,"active_job_count":0}],"related_posts":[{"id":"6348578e2184dc0001eebf80","uuid":"e6a0a134-b255-40e8-b7be-01494afbabe8","title":"Learnings of a CEO: Matt Schulman, Pave, on Hiring","slug":"learnings-of-a-ceo-matt-schulman-pave","html":"<p>Welcome to the third edition of Learnings of a CEO. You can read previous editions <a href=https://www.ycombinator.com/"https://www.ycombinator.com/blog?query=learnings%20of%20a%20CEO\%22>here.

Pave helps companies plan, communicate, and benchmark employee compensation. Today, the company has 160 employees, more than 3,500 customers, and is valued at $1.6B. Founder and CEO <a href=https://www.ycombinator.com/"https://twitter.com/matthewschulman?lang=en\%22>Matt Schulman</a> has created one of the most comprehensive and thorough recruiting processes, which has made him one of the most successful recruiters in the YC community. We sat down with Matt to hear his insight on <a href=https://www.ycombinator.com/"https://www.workatastartup.com/companies/pave-2/">building a team</a> in the early stages of his company and today as a CEO of a growth-stage company. </p><p><strong>Many of the first Pave employees were hired as a contractor before converting to a full-time employee. Would you recommend this strategy to founders? </strong></p><p>I strongly recommend the contract-to-hire setup in the early days of a startup, as it led me to have a 100% close rate with the candidates we wanted to convert to full-time. This strategy worked for two reasons: </p><p>1) By the end of the contract, the contractors had poured weeks of energy into the work – learning the code base and investing their time – and getting to know potential coworkers. This escalated their sense of commitment.</p><p>2) I was flexible on working hours – open to them working nights or weekends. This made it easier for the candidates who were busy with full-time employment to say yes to working with Pave and earn extra income on the side. </p><p>To convince people who were employed to work for Pave as a contractor on top of their current job, I framed the process as a mutual evaluation. This is an opportunity to evaluate the company and come to a mutual decision at the end of 2, 4, or 6 weeks together – no pressure. We paid them a fair market rate, and as mentioned, we were flexible on working hours. One contractor worked their day job until 5:00pm and then on Pave from 6:00pm-2:00am, for example. They were excited to be able to build something from the ground up and work closely with me at the earliest stage of the company – which is another strategy I used to encourage people to work with us. </p><p>Before Pave, I was an engineer at Facebook and regularly worked on side projects. These projects were my fun, guilty pleasures because when I built something from the ground up, I felt an emotional attachment to the work. Usually engineers at large companies feel part of a machine, but when they build something full-stack from the ground up, there’s a magical allure to that work. I gave those contractors ownership over the work and often jammed out with them – working side by side at all hours. (One note: I did not have the contractors touch customer PII.) Within weeks, we’d both know whether Pave would be a good fit, and if so, we were already committed to each other.</p><p><strong>What were you looking for in early employees? </strong></p><p>When starting to build out the team, I was given a tip that the first 10 hires would set the tone for the next 100. Because of this, I personally recruited 100% of the early Pave employees. I sourced people, took phone screens, went to dinner, coffee, and on walks with candidates, and spoke with them for hours on Zoom and Facetime. It was an all-encompassing process. But I found that early advice to be accurate: The first 10 employees are the most important aspect in the company’s life cycle – other than finding product-market fit – and recruiting has to be the founder’s priority.</p><p>When recruiting for the first ten employees, I wasn’t looking for experts in specific areas but generalists with rapid career growth, passion for our mission, and a hunger to work. Those early employees readily tackled whatever fire we were facing that day from engineering work and sales to back office and HR. I also had a deep level of trust with those first ten hires, as they were all in my network. </p><p>Today, I still look for mission alignment and hunger but there are times I need to hire a specialist. I identify the tightest set of criteria for the role and only talk to people who fit that criteria. This is very different from the early days when I was solely looking for generalists who could fill multiple roles.</p><p><strong>How did you convince those early employees to join Pave? </strong></p><p>I always found ways to continue our conversation even when I could sense the candidate wanted to turn down the offer. I would do this by scheduling future conversations – saying that I needed to share something new with them – and then I would get to work writing a Google Doc that showed how I planned to invest in their career. We still use this strategy at Pave today, but it has evolved and is now affectionately called the collaborative Google Doc.</p><p>The collaborative Google Doc is shared with the candidate and used throughout the entire interview process. The document outlines expectations for the role and frames the interview process in stages, communicating which stage the candidate is in at any given time to ensure we are working within their ideal timeline. We encourage the candidate to comment and add their thoughts to the document, including feedback for me and their thoughts on the interview process.</p><p>As we get further into the interview process, I get more specific about what I’m looking for in a candidate. And when we get even deeper, I write multiple pages on what I’ve learned about their career aspirations through our conversations and backchanneling, and how I’m going to support them. </p><p>When it comes to backchanneling for potential executive hires, I try to talk with at least 10 people and ask, “If I have the privilege to be this person's manager, I want to set them up for the utmost success. What are your specific recommendations about the best ways to set this person up for success and unleash their full potential?” This 360 review is shared with the candidate right before I deliver the compensation package. I outline what I learned about their strengths and weaknesses, and specific ways that I’ll push them and support them.</p><p>When I communicate compensation, I lay out all the facts, including cash amount, equity (shares and dollar amount), and the benefits package. In addition, we also share:</p><ul><li>The salary band for the role (and implicitly their position in it).</li><li>The level that the employee will be in the organization, along with more information on our leveling framework and what each level means.</li><li>The methodology for determining the compensation, like the market data we use (75th percentile for similar stage companies).</li><li>Broader information on compensation philosophy, including how someone moves through the band, gets promoted, etc.</li><li>Additional info on equity: current preferred price, current post money valuation, details on vesting, PTE window, 409A price, and more – essentially everything they need to determine the actual value of the grant.</li></ul><p>We’re ultra transparent about compensation because compensation should not be a guessing game; people deserve to understand every aspect of their compensation package and how it was derived. I then offer to meet live to answer any questions or discuss feedback – or ask them to leave their comments in the Google Doc. Most candidates will ask questions in the document, as it can be more approachable.</p><p><strong>For every open role at Pave, a Slack channel is created to drive urgency and ensure no detail goes missed. Tell me about this process. </strong></p><p>As a seed-stage company, I was creating Slack channels for every role. Today, Slack channels are created for roles that I’m involved with – like hiring a head of finance or VP of engineering. The process still looks the same, however. </p><p>I create a Slack channel for that role and add relevant stakeholders. Every morning I ask for an update. What’s the movement? Have we sourced any more candidates? Have we talked with candidates X, Y, and Z? I do this to keep the process moving forward every day. I also post updates – sharing with the team when I spoke with a reference, for example. When we extend an offer, I use this Slack channel to encourage stakeholders to reach out to the candidate through text messages or Loom videos. </p><p>Loom videos are an interesting medium. If you’re a candidate and receive six Loom videos from different people at the company, it may feel bizarre and a bit overwhelming. But the videos show we are excited about the candidate and also gives insight into our energetic culture. </p><p><strong>You also review email copy and do drip campaigns for candidate outreach. Tell me about this. </strong></p><p>We have a pre-written email sequence that is sent from me or the hiring manager depending on the context, and then we use <a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/gem/">Gem to automate this. The response rates for these campaigns are much higher than if the emails were coming from a recruiter. Before the emails are sent out, I’ll spend 30 minutes personalizing 30 emails (one to two sentences at the onset of the email) that will be sent to target profiles. And then it’s important you do a drip. If you only send one email, most of the time the candidate won’t respond. I find sending a third email with a short message like, “Hey, any thoughts?” leads to the most responses. </p><p><strong>How do you think about where your job ends and your team begins when it comes to recruiting?</strong></p><p>Today, if I’m not the hiring manager, I delegate and come in only at the end of the process for a sell call. The process looks vastly different if I’m the hiring manager. I spend a lot of time reviewing resumes and identifying the top 25 profiles in the space. Every outreach to them is very personalized, and I have time to do this because I focus on quality over quantity of candidates. Quality over quantity was a big lesson for me, actually. At first, I would look at all inbound resumes and thousands of applicants. But I have come to realize that I have more success when I map out the market and find the top 25 candidates in the space. Then I'll find a way to get one of them in the door.</p><p><strong>Describe the ideal candidate for senior-level positions when Pave was a smaller company. </strong></p><p>As a company of 35 people, we didn’t need managers who delegated – which has merit at a later-stage company. We needed people who would personally take on the hard work. Often, first-time founders hire someone senior for optics reasons. Instead, you should look for someone earlier in their career who has grown at a crazy high slope – often referred to in the tech industry as a high-slope candidate versus a Y-intercept candidate. There is a time and place for both types of hires, but as a 35-person startup, almost always go for the slope, not the high Y-intercept. And in some cases, you may meet exceptional candidates with both high slope and high Y-intercept. This is the dream case!</p><p>Another mistake first-time founders can make is rushing hires by trying to squeeze them in before a term sheet. Don’t try to meet some arbitrary deadline or cliff date. If it takes six months or a year to hire an executive, that’s ok – wait for the right person.*<br><br><em>*This answer has been updated to clarify the founder’s intention behind the statement.</em></p>","comment_id":"6348578e2184dc0001eebf80","feature_image":"/blog/content/images/2022/10/BlogTwitter-Image-Template--8-.jpg","featured":true,"visibility":"public","email_recipient_filter":"none","created_at":"2022-10-13T11:23:10.000-07:00","updated_at":"2022-10-26T08:44:29.000-07:00","published_at":"2022-10-17T09:00:11.000-07:00","custom_excerpt":"Pave Founder and CEO Matt Schulman has created one of the most comprehensive and thorough recruiting processes, which has made him one of the most successful recruiters in the YC community.","codeinjection_head":null,"codeinjection_foot":null,"custom_template":null,"canonical_url":null,"authors":[{"id":"61fe29e3c7139e0001a710a7","name":"Lindsay Amos","slug":"lindsay-amos","profile_image":"/blog/content/images/2022/02/Lindsay.jpg","cover_image":null,"bio":"Lindsay Amos is the Senior Director of Communications at Y Combinator. In 2010, she was one of the first 30 employees at Square and the company’s first comms hire.","website":null,"location":null,"facebook":null,"twitter":null,"meta_title":null,"meta_description":null,"url":"https://ghost.prod.ycinside.com/author/lindsay-amos/"}],"tags":[{"id":"61fe29efc7139e0001a71181","name":"YC Continuity","slug":"yc-continuity","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/yc-continuity/"},{"id":"61fe29efc7139e0001a71174","name":"Advice","slug":"advice","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/advice/"},{"id":"61fe29efc7139e0001a71152","name":"Founder Stories","slug":"founder-stories","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/founder-stories/"},{"id":"61fe29efc7139e0001a71158","name":"Leadership","slug":"leadership","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/leadership/"},{"id":"61fe29efc7139e0001a71170","name":"Startups","slug":"startups","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/startups/"},{"id":"634d76fe3f2ab90001338eb9","name":"#21831","slug":"hash-21831","description":null,"feature_image":null,"visibility":"internal","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/404/"},{"id":"61fe29efc7139e0001a71155","name":"Growth","slug":"growth","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/growth/"}],"primary_author":{"id":"61fe29e3c7139e0001a710a7","name":"Lindsay Amos","slug":"lindsay-amos","profile_image":"https://ghost.prod.ycinside.com/content/images/2022/02/Lindsay.jpg","cover_image":null,"bio":"Lindsay Amos is the Senior Director of Communications at Y Combinator. In 2010, she was one of the first 30 employees at Square and the company’s first comms hire.","website":null,"location":null,"facebook":null,"twitter":null,"meta_title":null,"meta_description":null,"url":"https://ghost.prod.ycinside.com/author/lindsay-amos/"},"primary_tag":{"id":"61fe29efc7139e0001a71181","name":"YC Continuity","slug":"yc-continuity","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/yc-continuity/"},"url":"https://ghost.prod.ycinside.com/learnings-of-a-ceo-matt-schulman-pave/","excerpt":"Pave Founder and CEO Matt Schulman has created one of the most comprehensive and thorough recruiting processes, which has made him one of the most successful recruiters in the YC community.","reading_time":7,"access":true,"og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"email_subject":null,"frontmatter":null,"feature_image_alt":null,"feature_image_caption":null},{"id":"62c640aadb59f2000159e618","uuid":"062e4f3f-c2e8-4f21-8a15-eb02adb47efe","title":"Same, Same but Different with Vanta and Zapier","slug":"same-same-but-different-with-vanta-and-zapier","html":"<p>Both <a href=https://www.ycombinator.com/"https://www.vanta.com//">Vanta CEO <a href=https://www.ycombinator.com/"https://twitter.com/christinacaci/">Christina Cacioppo</a> and <a href=https://www.ycombinator.com/"https://zapier.com//">Zapier CEO <a href=https://www.ycombinator.com/"https://twitter.com/wadefoster/">Wade Foster</a> made the decision to take a disciplined approach to fundraising. They flipped the equation of a typical startup founder: instead of raising money to enable a certain amount of growth, they eliminated the assumption of fundraising, controlled their spend, and evaluated how to ramp up spending based on what the business was bringing in. <br></p><p>YC’s <a href=https://www.ycombinator.com/"https://twitter.com/anuhariharan/">Anu Hariharan</a> sat down with Christina and Wade to talk about their unique funding history in our first episode of <a href=https://www.ycombinator.com/"https://www.ycombinator.com/blog/new-yc-audio-series-same-same-but-different/">Same, Same but Different.</a> </p><div class=\"kg-card kg-audio-card\"><img src=https://www.ycombinator.com/"https://ghost.prod.ycinside.com/content/media/2022/07/SSBD_Final_1_thumb.jpg?v&#x3D;1657216763245\" alt=\"audio-thumbnail\" class=\"kg-audio-thumbnail\"><div class=\"kg-audio-thumbnail placeholder kg-audio-hide\"><svg width=\"24\" height=\"24\" fill=\"none\" xmlns=\"http://www.w3.org/2000/svg\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M7.5 15.33a.75.75 0 1 0 0 1.5.75.75 0 0 0 0-1.5Zm-2.25.75a2.25 2.25 0 1 1 4.5 0 2.25 2.25 0 0 1-4.5 0ZM15 13.83a.75.75 0 1 0 0 1.5.75.75 0 0 0 0-1.5Zm-2.25.75a2.25 2.25 0 1 1 4.5 0 2.25 2.25 0 0 1-4.5 0Z\"/><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M14.486 6.81A2.25 2.25 0 0 1 17.25 9v5.579a.75.75 0 0 1-1.5 0v-5.58a.75.75 0 0 0-.932-.727.755.755 0 0 1-.059.013l-4.465.744a.75.75 0 0 0-.544.72v6.33a.75.75 0 0 1-1.5 0v-6.33a2.25 2.25 0 0 1 1.763-2.194l4.473-.746Z\"/><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M3 1.5a.75.75 0 0 0-.75.75v19.5a.75.75 0 0 0 .75.75h18a.75.75 0 0 0 .75-.75V5.133a.75.75 0 0 0-.225-.535l-.002-.002-3-2.883A.75.75 0 0 0 18 1.5H3ZM1.409.659A2.25 2.25 0 0 1 3 0h15a2.25 2.25 0 0 1 1.568.637l.003.002 3 2.883a2.25 2.25 0 0 1 .679 1.61V21.75A2.25 2.25 0 0 1 21 24H3a2.25 2.25 0 0 1-2.25-2.25V2.25c0-.597.237-1.169.659-1.591Z\"/></svg></div><div class=\"kg-audio-player-container\"><audio src=https://www.ycombinator.com/"https://ghost.prod.ycinside.com/content/media/2022/07/SSBD_Final_1.mp3/" preload=\"metadata\"></audio><div class=\"kg-audio-title\">Same, Same but Different with Vanta and Zapier</div><div class=\"kg-audio-player\"><button class=\"kg-audio-play-icon\"><svg xmlns=\"http://www.w3.org/2000/svg\" viewBox=\"0 0 24 24\"><path d=\"M23.14 10.608 2.253.164A1.559 1.559 0 0 0 0 1.557v20.887a1.558 1.558 0 0 0 2.253 1.392L23.14 13.393a1.557 1.557 0 0 0 0-2.785Z\"/></svg></button><button class=\"kg-audio-pause-icon kg-audio-hide\"><svg xmlns=\"http://www.w3.org/2000/svg\" viewBox=\"0 0 24 24\"><rect x=\"3\" y=\"1\" width=\"7\" height=\"22\" rx=\"1.5\" ry=\"1.5\"/><rect x=\"14\" y=\"1\" width=\"7\" height=\"22\" rx=\"1.5\" ry=\"1.5\"/></svg></button><span class=\"kg-audio-current-time\">0:00</span><div class=\"kg-audio-time\">/<span class=\"kg-audio-duration\">59:28</span></div><input type=\"range\" class=\"kg-audio-seek-slider\" max=\"100\" value=\"0\"><button class=\"kg-audio-playback-rate\">1&#215;</button><button class=\"kg-audio-unmute-icon\"><svg xmlns=\"http://www.w3.org/2000/svg\" viewBox=\"0 0 24 24\"><path d=\"M15.189 2.021a9.728 9.728 0 0 0-7.924 4.85.249.249 0 0 1-.221.133H5.25a3 3 0 0 0-3 3v2a3 3 0 0 0 3 3h1.794a.249.249 0 0 1 .221.133 9.73 9.73 0 0 0 7.924 4.85h.06a1 1 0 0 0 1-1V3.02a1 1 0 0 0-1.06-.998Z\"/></svg></button><button class=\"kg-audio-mute-icon kg-audio-hide\"><svg xmlns=\"http://www.w3.org/2000/svg\" viewBox=\"0 0 24 24\"><path d=\"M16.177 4.3a.248.248 0 0 0 .073-.176v-1.1a1 1 0 0 0-1.061-1 9.728 9.728 0 0 0-7.924 4.85.249.249 0 0 1-.221.133H5.25a3 3 0 0 0-3 3v2a3 3 0 0 0 3 3h.114a.251.251 0 0 0 .177-.073ZM23.707 1.706A1 1 0 0 0 22.293.292l-22 22a1 1 0 0 0 0 1.414l.009.009a1 1 0 0 0 1.405-.009l6.63-6.631A.251.251 0 0 1 8.515 17a.245.245 0 0 1 .177.075 10.081 10.081 0 0 0 6.5 2.92 1 1 0 0 0 1.061-1V9.266a.247.247 0 0 1 .073-.176Z\"/></svg></button><input type=\"range\" class=\"kg-audio-volume-slider\" max=\"100\" value=\"100\"></div></div></div><p><strong>You can also listen on <a href=https://www.ycombinator.com/"https://open.spotify.com/episode/3c1CmZtpzCqMa2MxXK845H?si=Ay6GBKIuT4OPfZePwUO4bQ\%22>Spotify, <a href=https://www.ycombinator.com/"https://podcasts.apple.com/us/podcast/158-same-same-but-different-with-vanta-and-zapier/id1236907421?i=1000569160335\%22>Apple Podcasts</a>, or <a href=https://www.ycombinator.com/"https://twitter.com/i/spaces/1vAxRkrNwoXKl/">Twitter. </strong><br></p><p><strong>3:20 </strong>- Christina, why did you wait so long before raising your first round?<br></p><p><em>Vanta was bootstrapped until raising a Series A round that ended up looking more like a traditional Series C. The company has surpassed 3,000 customers and is valued at $1.6B.</em><br></p><ul><li>Investors want to fund businesses that don't actually need funding.</li><li>Christina talks about ensuring they were truly building something that people wanted and finding product-market fit.<br></li></ul><p><strong>7:10 </strong>- Christina, what was the scale of Vanta when you decided to raise? Why did you decide to raise if you were cash-flow positive? <br></p><ul><li>Vanta had true signs of product-market fit, as shown by the impact of sales and marketing.</li><li>Christina talks about raising to ensure they didn’t lose the market they created. <br></li></ul><p><strong>10:50</strong> - Christina, how did you say no to the investors wanting to fund Vanta? What was your mental model? <br></p><ul><li>Be pragmatic with how you plan to spend funds; ensure the dilution from fundraising is worth it.</li><li>Christina talks about already hiring as quickly as possible and funds not helping with this challenge.<br></li></ul><p><strong>14:15 </strong>- Wade, tell us about your experience raising a seed and why you decided not to raise again. <br></p><p><em>Zapier raised only a $1.3M seed round in 2012 and has been profitable since 2014. The company is valued at $5B. </em><br></p><ul><li>Treat each funding round like it will be the last money you ever get.</li><li>Wade talks about his personal experience working for a quickly-growing, bootstrapped company, growing Zapier in a cost-effective way, and addressing constraints without fundraising. <br></li></ul><p><strong>20:00</strong> - Wade, did you always want to build a bootstrap company? When did you know Zapier had product-market fit and that it was a business model predisposed to being bootstrapped? <br></p><ul><li>When you make something people care about, it’s easy to sell to customers.</li><li>Don’t hire until it hurts.</li><li>Wade talks about finding product-market fit, their repeatable go-to market strategy to grow their base without a ton of capital, and their philosophy around hiring and building a remote company. <br></li></ul><p><strong>24:30</strong> - Wade, how did you attract talent without big headlines about fundraising news?<br></p><ul><li>Wade talks about hiring in a distributed way, writing about their learnings, and unique hiring tactics to raise the profile of Zapier as an employer. <br></li></ul><p><strong>27:00</strong> - Wade, what was the hardest part about hiring for a bootstrapped company? <br></p><ul><li>Wade talks about this not being an issue when hiring outside of Silicon Valley and already being profitable. <br></li></ul><p><strong>29:15</strong> - Christina, can you highlight Vanta’s journey to product-market fit?<br></p><ul><li>You can’t raise your way into the right product.</li><li>Christina shares insight into her first customers and advice on testing the value proposition with early users. <br></li></ul><p><strong>35:45 </strong>- Christina, when did you know you had product-market fit and what were the signs? <br></p><ul><li>The path to product-market fit isn’t linear.</li><li>Christina speaks to the mistake of focusing solely on hiring versus selling in the early days. <br></li></ul><p><strong>38:45 </strong>- Christina, how did you attract talent without big headlines about fundraising news?<br></p><ul><li>Christina shares how her pitch to candidates changed throughout Vanta’s journey. <br></li></ul><p><strong>44:10 </strong>- Wade, how has hiring changed since the pandemic? <br></p><ul><li>Wade speaks to more companies competing in this remote environment and how this is shifting again given today’s economic climate. <br></li></ul><p><strong>46:45</strong> - Wade, what is your advice for founders whether to fundraise or not? <br></p><ul><li>Determine the constraints in your business and figure out how to address those.</li><li>Wade shares their biggest challenges and his mental model to determine whether to raise or not raise. <br></li></ul><p><strong>49:00 </strong>- Wade, talk about your early days and how you were able to reach product-market fit as a remote company. <br></p><ul><li>When building a company, pick a lane: all remote or all in-office; the hybrid approach is the most challenging.</li><li>Wade talks about how this played out for Zapier, including working in-person with his co-founders the first few years and reaching product-market fit during this time. <br></li></ul><p><strong>51:15</strong> - Christina, do you recommend in-person, remote, or hybrid? <br></p><ul><li>Christina talks about the importance of documentation for remote and hybrid companies.<br></li></ul><p><strong>53:30 </strong>- Christina, how long in Vanta’s experience was in-person important? <br></p><ul><li>Christina shares the challenges of shifting from in-person to remote. <br></li></ul><p><strong>55:30 </strong>- Christina, how are you thinking about fundraising today in this funding environment and what advice do you have for founders? <br></p><ul><li>If you can, push your fundraising out — and if you can’t, it’s all about unit economics.</li><li>Christina talks about her recent experience fundraising (<a href=https://www.ycombinator.com/"https://www.vanta.com/blog/vanta-announces-series-b/">$110M Series B</a>) and the importance of metrics.<br></li></ul><p><strong>58:00 </strong>- Wade, what advice do you have for founders in this funding environment? <br></p><ul><li>Running a good business never goes out of style. Focus less on what investors care about and a lot more on what your customers care about.</li></ul>","comment_id":"62c640aadb59f2000159e618","feature_image":"/blog/content/images/2022/07/Same_Same_1600x900_72DPI.png","featured":false,"visibility":"public","email_recipient_filter":"none","created_at":"2022-07-06T19:10:50.000-07:00","updated_at":"2022-07-07T10:59:27.000-07:00","published_at":"2022-07-07T08:55:00.000-07:00","custom_excerpt":null,"codeinjection_head":null,"codeinjection_foot":null,"custom_template":null,"canonical_url":null,"authors":[{"id":"61fe29e3c7139e0001a7106f","name":"Y 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fundraising.","reading_time":4,"access":true,"og_image":null,"og_title":null,"og_description":null,"twitter_image":"https://ghost.prod.ycinside.com/content/images/2022/07/Same_Same_1600x900_72DPI-1.png","twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"email_subject":null,"frontmatter":null,"feature_image_alt":null,"feature_image_caption":null},{"id":"62f15573ab52db0001d3b642","uuid":"e8dc2872-d758-4a06-ae83-b071c12240b3","title":"Learnings of a CEO: Wade Foster, Zapier","slug":"learnings-of-a-ceo-wade-foster-zapier","html":"<p>Welcome to the second edition of Learnings of a CEO. You can read the first edition <a href=https://www.ycombinator.com/"https://www.ycombinator.com/blog/learnings-of-a-ceo-max-rhodes-faire/">here. </p><p><a href=https://www.ycombinator.com/"https://zapier.com//">Zapier was founded in 2012 by <a href=https://www.ycombinator.com/"https://twitter.com/wadefoster/">Wade Foster</a>, <a href=https://www.ycombinator.com/"https://twitter.com/bryanhelmig?lang=en\%22>Bryan Helmig</a>, and <a href=https://www.ycombinator.com/"https://twitter.com/mikeknoop/">Mike Knoop</a>. The founders went through YC’s <a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/zapier/">Summer 2012 batch</a> and <a href=https://www.ycombinator.com/"https://www.ycombinator.com/growth-program/">S18 Growth Program</a>, and today, Zapier automates work by connecting with over 5,000 apps. The company has been profitable since 2014 and is valued at $5B – with 700 employees working remotely. Wade, Zapier CEO, shared his learnings growing into the role of a growth-stage CEO. </p><p><strong>How has your job as a CEO changed from leading a 3-person company in 2012 to a 700-person organization today? </strong></p><p>In the early days, you’re in the trenches with your co-founders and early employees splitting up tasks and touching nearly every part of the business. Often you’re writing code, selling products, recruiting, and helping with HR and finance functions. Today, Zapier is almost a team of 700 – and as we’ve grown, people have taken more and more duties from me to help the company grow and scale.</p><p>Now, one place I feel I am most needed is the vague concept of setting the vision and communicating that vision — and then ensuring everyone understands what we are doing, why it’s important, and their role in getting that done. This came naturally to me when we were small and I was in the trenches with everyone and communicating constantly. But as we hired more folks, I realized leaders were interpreting the vision to their team somewhat differently. I learned that if you are not communicating the vision well, you'll have teams that seem to be working on random projects. In isolation this isn’t bad, but as a collective set of tasks, you discover their work doesn’t fit into the vision. </p><p>We now repeat the vision over and over again in many formats. We put the vision in writing and it's constantly referenced; it's communicated at our all-hands; we bring in customers to talk about Zapier’s impact; we show data, so charts and figures can help tell the story; we have a company podcast. </p><p>When people inside the company start to turn the vision into a meme or Slack emoji, I know they really get the vision. Diagnostic tools, like employee engagement surveys, also help me understand how well employees understand why their role is important. It’s also evident when reviewing roadmaps. If a team’s tasks are tight and cohesive, I can tell they’ve been making tough decisions to align to the vision; if there are a bunch of random tasks, I can tell the vision hasn’t been communicated clearly. As a CEO, you have to ask, “Tell me how this is aligned,” and force those conversations to occur. Over time, people will get more comfortable with these types of assertive exercises. </p><p><strong>As you've grown, what changes have you had to make to keep everyone at your company aligned?</strong></p><p>We host weekly all hands, bring customers in to talk at those all hands, are transparent with metrics, and make sure those metrics are reflective of the good and the bad. Ultra transparency with metrics has served us well, as they are motivating and help people get aligned. People start to ask, \"How do we get these bad metrics to the good category?\" and then work towards change.</p><p>Being candid has also served us well. Whether at all hands, on a podcast, or solely talking with one of our leaders, we have candid conversations about why we didn’t hit a goal, why we were off schedule, why a deal didn’t close – and then immediately dive into what we think needs to happen next. The goal is to give awareness to the organization, so that in various meetings and forums people can try to figure out how to improve those areas.</p><p><strong>What's your advice to other founders on how to hire executives?</strong></p><p>Hiring executives is one of the hardest things you’ll do as a CEO. It's hard to determine when to start hiring executives, exactly what you’re looking for in an executive, and then find that person. </p><p>The best way to figure out when to start hiring executives is to meet with people who are unquestionably good executives at companies a stage or two further along. With no intention to hire them, meet with the VP of Engineering, VP of Marketing, and VP of People and ask, \"What are the things you do? What makes you great at this job? What do people in your job disagree on?”. Get as smart as you can on this topic and then compare and contrast what that set of leaders is telling you with how your company operates. If these executives wouldn’t bring anything new to the table, you may not be ready for that type of leader. This starts to help you answer the when part of the equation – and also the what, because you start to see what these folks are capable of and what they are not. </p><p>Part of determining what you should look for in an executive is understanding your own strengths and weaknesses. This requires honesty with yourself and internalizing feedback you have received. (I encourage folks to work with executive coaches and get 360 performance reviews.) Figuring this out helps you start to realize, \"Okay, within my executive team, I need people who will compliment me in these ways.\" Otherwise, you risk hiring a team that is quite capable and competent at their function, but actually may not work well with each other or with you.</p><p><strong>What is Zapier’s culture? What do you do to cultivate it as a remote company?</strong></p><p>We have a strong set of values that we align around. One is default to action. We hire folks who are action-oriented – and we have to as a distributed company; folks aren’t in situations where they notice someone next to them is stuck on something. So, they need to be curious, self-starters, and (figuratively) scratch and itch when they see something that doesn’t satisfy their innate drive. </p><p>Next, we value defaulting to transparency because folks who are action-oriented should be equipped with a ton of context. The mission, strategy, metrics, goals, systems and processes – all of it – is well documented and organized so people can find them and take action.</p><p>We also have a feedback-oriented culture. I teach a course on feedback to all the new folks to ensure they understand how to ensure they understand how to give and receive feedback effectively because it helps us grow. </p><p>The rest of our values are outlined <a href=https://www.ycombinator.com/"https://zapier.com/jobs/culture-and-values-at-zapier/">here, but these are some of the things that drive Zapier’s culture – and as you scale, it’s crucial to create different forums to communicate these values. We have an internal tool we named Async, which is email meets Reddit. The platform is public by default, anyone can post, and information can be targeted at different groups or people. We find this is great for long-form substantive topics that have a longer shelf life (1-2 weeks) versus Slack channels (1-2 days). We also hold all hands and have a company podcast, where we capture evergreen content. For example, when we have key moments in the company history, we’ll break it down: Why we did this thing, what led to that decision, the outcomes, why it is an important moment, etc. We have found podcasts to be helpful when onboarding new folks. </p><p><strong>Why did you decide to not raise any additional funding since your seed round?</strong></p><p>The only funding we took in the history of the company was a $1.3M seed round in 2012. This was partially philosophical and partially about the business. </p><p>The three of us co-founders had worked at a fast-growing, bootstrapped company owned 50/50 by two brothers. When we came out to the Valley (we were from Missouri), we started to hear this line of thinking, “No great company has ever done X.\" Some of these statements would center around the impact of venture funding, and I was dismissive in part because I had this counterexample from my time in Missouri. So, when we raised the seed round, we decided to treat it like the last round we’d ever raise.</p><p>Our second reason for not raising multiple rounds: Across the founding team, we had all the skill sets to do every job inside the company. That meant we didn't have to hire to make progress in the early days. We even had rules in place around hiring like, “Don’t hire until it hurts.” </p><p>Then there was the third, rational component: We were able to grow quickly without external funding because of Zapier’s network effect on our developer platform side. We're able to have low customer acquisition costs (mostly through organic channels), and this is intrinsic to how Zapier works. </p><p>Along the way, some of the philosophical thinking fell by the wayside by observing other companies and realizing fundraising is a tool like anything else. There are moments when it can help you, and there are moments when it can hinder you. You should strive to understand when external funding is a good tool to use versus when it is not – and then apply it if it makes sense for you.</p>","comment_id":"62f15573ab52db0001d3b642","feature_image":"/blog/content/images/2022/08/BlogTwitter-Image-Template.jpg","featured":false,"visibility":"public","email_recipient_filter":"none","created_at":"2022-08-08T11:26:59.000-07:00","updated_at":"2022-08-15T12:08:14.000-07:00","published_at":"2022-08-09T08:55:00.000-07:00","custom_excerpt":"Today, Zapier automates work by connecting with over 5,000 apps. 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