SPEAKER_03: Anybody that is a first time fundraiser, there is no golden goose. There is no perfect formula for going about this. Everyone's an N of one, at least in my experience. And I'm then going to speak for my own bias, but every experience is different.
SPEAKER_03: And so there are our best practices, launches, scorecard system for sourcing investors, a really good way to get on the phone with 130 different people.
But the way to go about doing this, there is no right way and it's going to unfold
the way that it's meant to unfold. It's going to be, it's going to be a winding road.
Then once you're on the tracks, if venture backed is the way that the business should be going, if that's right for your business, then various four factors
start to take over a little bit more.
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SPEAKER_02: You guys know I like to have my portfolio founders here on the program from time to time. And I'm really excited to have our next guest on the program because he got an amazing response to his startup when he was in our accelerator that accelerates called the launch accelerator.
I'm joined by Jake Gutstein.
Jake Gutstein, he is the co founder and CEO of a company called zest, which is an app that helps people learn how to cook. You can think of it like Duolingo for cooking. And I thought, what a clever idea. I wonder if that's going to get any traction. And it has gotten traction and people love this app.
SPEAKER_02: And again, Jake went through our accelerators 29th cohort. Jake, welcome to the program.
SPEAKER_03: Thanks for having me on Jason.
SPEAKER_02: So tell everybody a little bit about and you came to the accelerator where you had found a university before that our pre accelerator, or did you come directly to the accelerator? We applied directly into the accelerator.
SPEAKER_02:
Great. So tell everybody about how you came up with this idea. And then how it's been going and what the app helps people do.
SPEAKER_03: Yeah, well, I studied engineering as an undergrad, but I found my passion in entrepreneurship. I started multiple companies. As an undergrad, I ultimately sold one by the end of my senior year.
But graduating school didn't have anything to go into. So was in management consulting was working the hours that it entailed.
And the problem, I guess found me I had the fire department called on me for just like eviscerating a DiGiorno pizza in my oven.
Oh, great.
Which to me was like almost a call for agency. I lacked the agency to really fix that problem. So the way I went about doing that is I got on the phone with one of my close friends from undergrad. He ultimately became my co-founder and was an accomplished comedian and performer. So, you know, not the worst person to be on the phone with for a long time. He was also the best home cook I knew.
And he started coaching me through how to get better at cooking. And in the process, I realized he was a head on the curve for me, but he was experiencing the exact same pain points.
So those bells started to go off.
I asked him if he'd be interested in founding a company.
SPEAKER_02: And what are those pain points? What is the pain point that you don't know how to cook?
SPEAKER_03: Well, yeah, but what we realized is that generally people go about learning how to cook in really one of two ways.
Younger people, you learn from influencers online, your Instagram, TikTok, YouTube, or you will cook from online publications or blogs. So New York Times Cooking, Bon Appetit. And ideally those give you a streamlined, affordable and accessible and easy way to learn how to cook yourself.
But what we found was with influencer content, it's highly entertaining, but it's not educational.
People watch hundreds of hours of this content. They step into their kitchen, they can't apply anything.
And then when it comes to cooking from online publications, these blogs, every recipe is like reading a chapter in a textbook, every different recipe. It's like a different chapter in different textbook, very difficult to inventory your knowledge, very difficult to know what you want to learn next and how to get there.
And so so TikTok is too short, not dense enough.
SPEAKER_02: In the lack detail, I've seen that watching a short on Twitter, they're just like, here's my perfect recipe, bang, bang, bang, bang, bang, bang, bang, bang, and here's something beautiful. And you're like, wait a second. And then online, I had the same experience you have, which is I just want to, you know, sear some salmon here. And I'm reading War and Peace. It's Why are there 1000 words in here on the history of salmon and and I just want to create a salmon?
SPEAKER_03:
What's that?
SPEAKER_03: Why do I need your great aunt's life story to get to the salmon? Exactly. Exactly. Let me cook the salmon.
SPEAKER_04: Yeah.
SPEAKER_02: And so you then decide you want to try to build a better mousetrap, as it were a better solution. And then you decide what it is you do multiple tasks? Did you think about doing YouTube videos, something in between the two?
How did you come up with a format or a product? Because that's you have the problem set, you have an observation about what is available in the market and what's frustrating about it. But now as a founder, you got to conceive of a product. So take us through that product creation story and process.
SPEAKER_03: Right. So we were working full time, but we kind of have a screw loose. And so what we were doing in our free time was basically creating a Google form that we would send out to people.
SPEAKER_03:
And if they wanted to use it, they would pay us.
And then we would create a custom meal plan that would essentially allow you to achieve your goals.
And we did that in Google Slides. So like we would send you your your meals that way. And then we would send you a grocery list over text.
Got it.
SPEAKER_02: So you decided to test this with, tell us what your what you like to eat a form of some kind, and then give them a PowerPoint, basically a Google Slide, and a checklist for shopping. That was your MVP, your minimum viable product. And how do people respond to those two things? I mean, what we got was that there was a willingness to pay or at least we were crazy enough to perceive that there is a signal that there was a willingness to pay.
SPEAKER_03:
And so leaned into that quite a bit more built out the team.
So we actually we did this and I know that this breaks a cardinal rule of founder you and if we were to do it again, we would follow the steps of foundry. We did it without a technical co founder at the time.
SPEAKER_02: Well, so you when you did it, you did a low code, no code version of it, which is just Hey, here's a Google form. But you know what, that doesn't break the rule of founder University. That's actually a good way to just learn in the Eric Reese lean startup concept or for that Steve blank with his startup engine concept of what's the minimum viable product?
And what question do we need to answer? The question you wanted to answer was would people pay for a meal plan and recipes and you got the answer to that, right?
SPEAKER_03: Right. And actually, that's a fantastic way of putting it because we were essentially doing a meal plan at that point. And through these MVPs, what we learned is the we refined that whitespace to learning to actually be on a path learning more about food itself, which we didn't know going in.
SPEAKER_03: And so that was also a critical learning right before we jumped off and actually decided to develop a solution.
SPEAKER_02: And so then somehow you go from, you know, this MVP concept, hey, here's a meal plan. Here's your list of what to buy. You get dozens of people to try doing that or a half dozen people. How many people did this MVP?
SPEAKER_03:
That was I think that it's somewhere in between what you just outlined. So put it in the teens 20s. And yeah, we had a few acquire those customers, you just emailed your friends, emailed the friends and asked them to email their friends took the one extra step where and some people took pity on you and decided to give you 10 bucks or 20 bucks to do this,
SPEAKER_02:
right, which is also the number one thing is, that was the that was the number one waste of time when we were starting off is the people that take pity on you do not give you usable product
SPEAKER_03:
insights, because they're not actually buying the product. This isn't how it would behave in wild. And so we actually throw ourselves on wild goose chase kind of following those pity buys for a while, before we realized that we had to refine
on it. This is why maybe buying some advertising on Facebook, sending those people to a landing page people you don't know, they are going to be savages, they're going to give you super critical product feedback, they're going to say like, why would I pay you $10 for something I can get free on YouTube, but Gordon Ramsay has an omelet video.
SPEAKER_02: Or whatever it is, right? They're going to give you hardcore, brutal candid feedback, where's your friends are gonna be like, Oh, my God, this is amazing and changed my life. Here's 20 bucks, and you're not getting any signal as to should this product exist in the world.
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SPEAKER_03: Yeah, it's kind of so I, I think I like to take inventory every so often on the key skills that I think that I've learned along the journey. And one of the kind of five that I currently have has been this idea of uncovering demand. So if you remove your product, the supply from the market itself, people will behave, they have a late need for something, or otherwise you build something normal by it. And so what we did is we essentially started to look into
Yeah, yes. 10 people if they want to learn how to cook eight or nine of them are going to say yes. But who actually learns how to cook? Like, and when really was the key question, like, when does somebody decide that they want to learn how to cook? And we were doing this all the while, we had brought on the technical co founder, Amrit. And we were building a version of the app itself.
SPEAKER_03:
So you decided, hey, we should figure out when somebody needs to learn to cook. Because when you ask people if they want to cook, it's like, Hey, do you want to learn how to play guitar? Do you want to learn how to be a black belt and take one down? It's like, well, yeah, I would love to be a black belt and take one dough, play guitar, and be able to cook a great meal. But you actually have to take that step. And you got a co founder along the way. So how did you and your other co founder find your technical co founder?
SPEAKER_03: So we're a founding team before. So we have three that were doing this, it almost essentially started as a club. I like it. Like we were meeting once a week on Sunday at the beginning running these things, and then divvy up the work, come back next Sunday, what did you get done?
SPEAKER_02: And you were working your full time jobs at the time. So this was a side hustle.
SPEAKER_03: Right, exactly. Right. And it was like, I think that maybe two as it was heating up, then we started doing Sunday, Thursday. It's like, when fun in the week, can we kind of made it like a fun little club for yourselves? I've never heard of a founder doing this. What a clever idea.
SPEAKER_02: Yeah, it was it was a blast. But ultimately, you do reach a point. In my case, we were, I felt like we were doing a suboptimal job on the startup, we had proved out concept, but then at that point, we're working too slowly. And I'm also doing a suboptimal job at my full time job, because I'm starting to focus way more of my energy on this thing. And so I gave what we did as a team, we give ourselves three months to find how much funding we needed for to survive for 12 months.
SPEAKER_03:
So I first built a financial model essentially projected out what we would need for 12 months to run just really bare bones. Did that and turned up scoured earth for a technical co founder I talked I think that who we ended up hiring honestly illustrates this the best.
I can speak about him for a very, very long time. But who it was to me was he was my co founders, landlords, roommates, boyfriend,
co founders, landlords, roommates, boyfriend. So only like three hops away. Yeah.
SPEAKER_02:
Right, that's how deep in the Rolodex you have to go. And so like just imagining the conversations where I'm humiliating myself with like my family friends. Yeah. Like, you know, a program does anybody know? Right. And what we did is ultimately we had a list of called six qualified and interested candidates from that process. And armor blew him out of the water. Like he was the person. And he wanted to be at a startup, but he had a full time job at that time, or he wanted to be a
SPEAKER_03:
SPEAKER_02: entrepreneur. So when you said, Hey, we want you to come on this adventure. That was exciting to him. Yeah, entirely right. So Amrit's background, he led a product team to exit in the past, and was on the beach, essentially, for the four or five years prior. Now the company built it was a CRM in the funeral home industry. And so I think that's how uplifting. Yes, this is a nice little counterbalance to that. So we have life and death.
SPEAKER_03: So but this is a super important thing for people. It's getting easier to learn to code, it's getting with co pilots, and you know, AI eventually is going to help people make better startups. And then you have the no code movement, which is absolutely fantastic. There are extraordinary no code tools and the no code tools, combined with MVPs made in forms and type form and zapier and all this kind of stuff. Those are all now colliding with co pilots and co pilots, and they're all now
SPEAKER_02:
co pilots and GPTs helping people write code. But you still want to have a technical co founder because now you've got an owner in the business who will drive it and has equity incentives. And I think the mistake people make is they think all developers are just either servants who you know, just you just pay them and it doesn't matter if they're owners. That's not true. Like a great restaurant, if the chef is an owner,
they're going to take a different level of pride, a different level of ownership, as opposed to being a surf and a hired gun. You want the the chef, who has a mission and who really wants this beautiful food to exist in this world, this experience, you want the developer who wants that beautiful product to exist in the world and people underestimate developers, I think, wanting to be entrepreneurial and wanting to be their own bosses and wanting to make decisions because when they're just just quote unquote, developers are just writing code. They
kind of just get told what to do and they get looked at like the person who is like a plumber. Like I you know, I'm just paying you to fix the pipes here. So did you have that experience? I think yeah, and well, number one is I appreciate the the analogy and food that doesn't go unnoticed. And I think that you honestly speak to this brilliantly. When you talk about the team of five that gets done today, what a team of 15 or 20 over a decade ago would have would have had to get done. I always feel like it's speaking directly to me.
SPEAKER_03:
And that only functions if you have an owner who's technical, that can only get done on it leverages these AI tools heavily we all do as however we can within the functions of our team, but it just helps us move better faster. So now you've got the four, four co founders, you're doing your side hustle club, I'll call it the side hustle club, Thursday and Sundays, what an awesome concept you came up with there. It's exciting, it's fun, but of course, it's going to get frustrating. Why aren't we doing this every day?
SPEAKER_02: We're starting to get traction. So you all decide to go all in. But you have to, so to speak, but you have to get some cash because people might have things like rent, or they need food, or they might have student debt. So how do you make that jump from side hustle? Hey, we're all getting great salaries to Oh, we're giving up salaries, we need, you know, whatever it is 5k a month draw 10k a month draw, you know, different people are different stations in life. So how do you make that jump as a team?
SPEAKER_03: Yeah, so for us, again, I that was problem number two to overcome, let's call it opportunity, opportunity to to solve. And it what we looked at was essentially taking those elements that you just mentioned to consideration, plus give us a little bit of leeway to actually be able to invest into the business, not just like into ourselves to sustain the business. How much do we need to get by and that number was around $100,000. And we raised that
SPEAKER_03: 100,000 total just $100,000 to get us through a couple of months or so
SPEAKER_03: correct. You know, it's funny, actually, I was just catching up with a friend about this, because where we are at as a business, everything is always as it always feels like it is existential. It always feels like, you know, you never know what's going to happen next. I truly feel like the number one thing that prevents people from founding a company is not risk aversion, but rather ambiguity aversion. And that lack of
knowledge about their uncertainty, or what's going to be an outcome. It's highly uncertain. You don't have a revenue stream yet. You know, if you're working at Netflix, you got a quarter million subscribers. It's not going down to a million subscribers the next day is even if it has the worst year ever, it's gonna go down 10%. Right. So we're catching up. And what I what really true was true was that was as existential as it ever possibly could be was essentially like, we put it on the line, I
SPEAKER_03:
don't really know, we couldn't really cut back or be more lean. We, you know, you always can, but that was when it was as we are back to as up against the walls as they possibly could be. So you accept that reality as a founder, you have to accept it. It's not even to me, it's you can't live in the past or future. It's you control input. That's it. That really, I think that people become beholden to hitting metrics. But the reality is, it's a time machine, you're
SPEAKER_03:
looking at, you're looking at a time machine, you don't have the luxury to right now. And so what we do is just what can we get done for us, we fix on time in a certain period of time, and then get that done, do your job. And ideally, the right thing happens, but you can't control for whether or not it
SPEAKER_03:
got to your point. So
SPEAKER_02: it's to do your sprints in two week sprints. 10 day sprints, five day sprints, what do you what do you do?
SPEAKER_03:
Yeah, so we actually, this is comes from the 37 signals camp, I that DHH pod, that's awesome. I like DHH is classic. Yeah, he and Jason Fried just like whole real estate. I like fanboy about them.
SPEAKER_03: Great entrepreneurs, and they've done it by bootstrapping in a very authentic way. Right. So there's a lot of lessons there for founders.
SPEAKER_02:
SPEAKER_03: And what they have done in terms of building is, rather than fixing on a product launch, you really have two controls, you can build a product to launch, or you can fix on time, which is another limited resource. So what we do is we do six weeks. And that's long enough that you can build something substantial, short enough that you can see the end of it. And over the course of those six weeks, you have to make trade offs to be able to ship what we commit to at the beginning. And that's kind of how we run. And so it's it's a bit of a longer
sprint cycle. But you we feel like we move faster that way.
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So this is your presentation from the accelerator. We focus on in the accelerator really on mastering your presentation to investors. And hopefully we did a good job of that with you and you met a lot of investors. That's I would hope so is that or something else. But I don't really I can't hard to pin down the other thing very
SPEAKER_03: much. But I think so this is just the product demo. If you prefer to me, no, no product demos. Great. Let's just show people and you can talk a little bit about how you presented to investors along the way. Sure. Awesome. So of course, at this point, you know, but we're building Duolingo for cooking with Zest. And the way that that actually functionally works is people come into the app itself. They take a skill assessment, which places them in a level based on their current level of knowledge. So in this case, this user gets placed in level two, it's all about getting the basics in level two.
SPEAKER_03: So say they want to cook a soup, they might cook our Thai curry soup. And within that they'll learn things like the way that you cut your ingredients actually impacts the way they cook that though may seem counterintuitive, intimidating cleaning as you go is a really important part of the cooking process. And we teach that through digestible slides through tap quizzes. And then you have green in recipe chef tips, which come up, they reinforce those lessons that you just learned and allow you to internalize them for later use. So now flash forward to today for this user, they might be on level six.
SPEAKER_03:
They might be learning things like the complexities of flavor. And within that, if they want to cook a suit, they might cook our beef ramen. In the beef ramen, they'll learn about the science behind flavor extraction and fusion, the idea behind concentrating flavors, the reduction, the idea behind braising a meat in a flavorful liquid.
SPEAKER_03:
Now, that's like the basic skeleton of how people use this using it, their lives around food are totally changing. They cook four times a week, save over $500 a month and get to take care of the people that they care about while doing something that's fairly productive for them.
SPEAKER_03: So that's the short and it's got gamification built into it, you go up levels, and you you've atomized it. So you're you are taking a little bit from the tick tocks, which is bite sized content. Little tips like hey, here's cleaning as you go something I always talk about when I'm teaching my daughters about cooking, hey, look, we put the pasta in the water, we've now got it's capellini we got three, four minutes here to make it all down day, we can wipe the counter down, we can throw away the box of pasta, we could set up the colander to
SPEAKER_02: take care of the food. There's things you can do with that downtime. And as people level up, that's got to be addicting, right? It keeps people engaged. And you mentioned there part of the value proposition in the metrics are tracking there is the money saved. And so that's super interesting. For one person, it might be super motivating to hit level six, right? For another person, saving $500 ordering door dash or Uber Eats or Postmates, that could be very exciting, because they can redeploy that $6,000 a year to something else.
And then finally, you you had the non financial reward, but that incredible feeling of taking care of and building nourishing food for people. What I really love about that slide is you understand that there's a multitude of reasons of why somebody might engage with zest. And you learned that when did you learn that intuitively? How did you learn that that's what people are responding to in your product? And then did one of those become a North Star? Or how do you think about incorporating that
into the product? Those? Yeah. So so it's a great question. It all trickles down from the that when moment that we were talking about earlier. So when we were going to market with that first version of zest, as I'm it was building it, we were conducting a series of interviews. And what we were looking at was people who throughout the pandemic, learned how to cook and did it successfully didn't know how did you find those users to interview? Fantastic website. It's called respondent.io. So respondent. Yep, dot IO. You can
SPEAKER_03: find it. It's a two sided marketplace, researchers come on and offer certain queries, and then people can sign up for user interviews, as long as they meet the criteria. Amazing. So congratulations to respondent.io. Great day for getting a free plug on the show. You earned it. So it's earned media, right? How did you find respondent.io? So I always like to ask founders because you find the right tool, man, it could unlock anything, right? You start using Coda notion.
SPEAKER_02:
You know, some of these tools are just so powerful. You know, they put you on second or third base. And if you don't know about them, oh my god, you know, you're stuck in the dugout. So how did you find out about this tool? Right. So that is through two people were talking about DHH and Jason Fried earlier in the reason I know them is through two people in particular. So Neil Sales Griffin, who was actually on twist a while back, back when you guys were starting off was my entrepreneurship professor.
SPEAKER_03:
And he was the one that turned me on all this essentially kind of unlocked my mind to what I could be doing rather than kind of what the current of undergrad can lead you into. And then Bob Mesta, who has been a fantastic mentor of ours as well. So Bob created the jobs to be done framework for product development alongside Clayton Christensen. And he also he works he's the CEO of a company called rewired group, their consultancy that works with major companies.
And Bob uses them respondent for his interviews, sent them our way and we never looked back. This was like a number one, because sourcing those interviews is really hard. And this just that's why I asked and so you were lucky enough to have great mentors, those great mentors had frameworks or thoughts. So here's the rewired group and Bob's group there to talk about the JT BD jobs to be done framework that helps you understand why and how people buy products really cool.
SPEAKER_02: And so you were able to understand product development in a way that you know, you didn't have to reinvent the wheel here. So you get these folks on a call. And then what do you ask them and how do you learn all this information that becomes the product value proposition, essentially. So this is the fun part with responding is made for the scripted. This is kind of a hack that you have to pull on it. We don't have a script. We go in and we talk about it.
SPEAKER_03:
And then we talk to them about their journey, essentially do our best Cal Canis impression and like, go after just leading them to best understand because this is honestly why I like entrepreneurship in general. Making the abstract concrete is one way to say it. The other seemingly irrational, there's always a rational reason if you talk to the person. And so understanding that journey. And the best way to do that is without a script, you just go in, you you put it around a moment. When I talk about the when. For us, it was like, oh, I'm going to do it.
SPEAKER_03: And then the next thing I want to do is learning how to cook, knowing that there was that successful outcome. So this is one of the use cases where it works. And as long as you ask them what, what did you ask them? Like as your first question or two, getting started, you start broad and then really want to trigger the memory. When did you start learning how to cook? One comes back that? Well, it was during the pandemic. I what's the first thing that you made? bagels? Why did you start making bagels? Right? It's like, Yeah, right. Exactly.
SPEAKER_03:
So you do this naturally. But what I found, I you know, I didn't know anything. I'm like, you see the way you only have to say one word bagels. And if you if it has a question mark at the end, the way I said it, and I say bagels. Well, that actually has a little question mark, but bagels. Say more for tell me more. Why bagels? Right? Or why? Why bagels? Really? And they're like, Oh, no, no, bagels are incredible. You know, like, it's actually not that hard. And I missed my Brooklyn bagels, or something, right? That's so fascinating. You're saying somebody was making bagels from scratch? Right?
SPEAKER_03: Just kidding. First thing that and that's the first thing that they made. Now they're proficient cook who cooks habitual. Wow. But it's a start at bagels. So right. So that's one of the four things that we came to realize are like a trigger and that is providing for going from a heavily socialized environment to a less socialized moving from being around a lot of people to being around very few in wanting to then provide for people. Got it. And so you see, so you found out through the bagel interview and other interviews that
SPEAKER_02:
there was a social component to this, and people wanted to cook for other people. You were thinking, hey, somebody wants to cook for themselves because they burnt their pizza. I've got we sure right experience. But for this person's experience was I want to make bagels and invite people over for Sunday brunch and show off maybe, or give them this great bagel experience. I made homemade bagels, which by the way, when I smoked meats in my smoker, my great joy in life, you can only when I'm smoking a 15 pound brisket, it gets down to 910
I'm only eating a pound of that or two max over the next week. The other eight I'm slicing up and giving to friends and it's my great joy. Hey, here's my brisket. They all went can I get another brisket? Right in the other kind of you start to see contrast in the stories as well as similarities in there. The other version of this that's like the funhouse mirror version is you have people providing for their significant others. That's the one that we call out in that product demo. And what it is is like I'm living on my own. And I eat four day old chicken and rice and it works for me. But I serve that to the person I care about all the
SPEAKER_03: time. And it's like FBI is most wanted like, like you had that partner you're you that's how you provide for the person that you care about the most on a consistent basis. You see like they draw on these similar emotional or emotional elements, but the social element of it is slightly different. So kind of playing with those those components there. Oh, and Neil sales Griffin. He was from code Academy. That's right. Oh, wow. That was a long time ago. That's Episode 230. For those of you counting at home, man, that
SPEAKER_02:
episode is for is 11 years ago. My Lord, I've been doing this for a long time. You know, he remembers you driving around him around in the in the Tesla. Yeah. That is so crazy. To think about how long ago this was. This is the old set. What a walk down memory lane. For those of you who are watching. This is the old set in Santa Monica. And here's Neil. And this is 11 years ago, we got 6000 views on this video back in the day. And what an archive. This week in startup
SPEAKER_02: is turned out to be crazy. Listen, not every business is venture scale. If you're not, you won't be able to raise money from VCs. We all know that. And not everybody has a rich family member to do their friends and family round. So if you want to jumpstart your business with $50,000 let me tell you about
that. And then the paintbrush loan is available at the idea state. In fact, you can apply the moment you incorporate your company. monthly repayment is a flat predictable amount, which makes cash flow planning really simple. So here's your call to action. If you're a founder in the US, go to get paintbrush calm to see if you qualify for a $50,000 startup loan in less than two minutes. That's get paintbrush calm to see if you qualify in less than two minutes. So you get all this product information. And then you start
realizing, hey, there are there are reasons why people are there's a social aspect, taking care of people being the host, saving money. And being healthier, right. And the gamification obviously is kind of built in. Is there one that is working more than others right now? And have you found any other value props that you didn't expect? Yeah, um, I think that the one that honestly what we did is we have a playbook, but we went live with this version of the
SPEAKER_03:
playbook. And when that happened, we just started speaking to kind of these moments that we saw in most of them resonated very well. So we build with these four in mind, we haven't necessarily needed to deprioritize any of the moments, any of the moments to date. Got it. So now you get the product, you launch it, what do you learn at launch? And then how do you start thinking about having a launch product in the market? And then maybe when you came to our accelerator, and maybe talk about that experience, either of
SPEAKER_02: you in whichever direction you like, I'm not sure what happened next in the story here for? Yeah, there's a weird thing, particularly, I think, listen, everybody's experiences have one. So I'm going to speak from my own bias. But he never, we never felt like we were launching, per se, it was just kind of the first of a bunch of rapid iterations that we're still kind of in the middle of spiraling towards. And so it's, I think that it's just kind of a prototyping and nothing's finished mentality that has
SPEAKER_03: been constant. I like to say this is true of the processes through which we run the business, and then the how the business is performing itself is the worst, or the best worst possible version of this product that we have. And it's just kind of getting better from that perspective. On the launch side of things, well, you tweeted in April, I'm investing in I believe it was five companies over the next 30 days apply here. Yep. Oh, great. Those tweets were that's how I acquire
SPEAKER_03:
SPEAKER_02: customers. I'm investing in companies. Would you like money? And you're like, huh? He's an investor. I've watched his podcast, and he has money. Well, this is like, I mean, you talked about the focus thing. But then, you know, launch stands out right away. Because of I we were talking catching up. I was catching up with Nick and john earlier. And it's just the operation is so it's just you get on. First of all, you get on with on this my experience, I hop on with Andre.
SPEAKER_03:
He is extremely associate Andre started as a researcher skipped the analyst phase went right to associate one of the fastest pair of sanctions in our organization.
SPEAKER_02:
Here here. Because he just is he has this unbelievably pleasant demeanor balanced with no nonsense into cutting to exactly what he wants to know with our product. Within 48 hours, I was on with Jackie. And then we had our decision, like, pretty quickly after that. So we started to,
SPEAKER_03:
SPEAKER_03: move, move, move into to translate what you just said, you see a tweet for me. No, I just want to recap it. Because for me, this is now product discovery. I'm now on a client call. So I'm fascinated by how our 21 person organization that invest $1 million a month in startups or so and invest in 100 new companies a year and maybe 50 existing portfolio companies we do a re up with every year, something in that range. You see a tweet from me, then you apply, then you get on the phone with an
SPEAKER_03:
SPEAKER_02:
associate Andre, he is incredibly deaf and no BS and get an understanding your product and you felt heard by him. Right? In let's also and he was positive, he said, it was positive. He's a positive person. But launch has a very specific way you'll people see as they go through the program that you are to present information. Someone who had never been through launch might not present information that way. Right. And Andre was able to essentially steer me into that very
SPEAKER_03:
SPEAKER_03: nicely, such that even by the time I was on with Jackie, I was like, Oh, they probably want more of this and less of that. And I was able to kind of almost, you know, what did you perceive more of what and less of what? I'm curious. concision more concision. Just as as as punchy as I possibly could make it and focus so that more also being concise. And you're really getting to the heart of the matter, not superfluous information. That's interesting. That you got
SPEAKER_02:
that vibe from our first call we for people who don't know, we do what's called an introductory call. And we do an incredibly large number of these a year, thousands of these introductory calls a year. And we try to get to the heart of the matter of the startup. And we really try to understand the vision of founders because one of the pieces of feedback I got early in my career was Jason didn't understand our vision when we started asking people to review us as investors. He didn't get it. You know, I think this is when you don't invest in a company. And we don't invest in
199 out of 200 companies that apply for funding. So the hundred 99 are not going to feel so good about us, because we passed, but we want them to feel at least that we understood their vision. And then we had this negative piece of feedback that kept coming back about me. She didn't understand our vision. And I realized I came across as a bit arrogant, which is not how I want to come across. So I started saying to people founders when I talk to them, and I train my team to just, may I repeat back to you, your vision?
For your company. And if you just do that, you ask permission to repeat back the vision. And we say, Okay, so you're doing this, it's subscription model, right? Okay, and it's Duolingo. Okay, and it's called zest. And it's gamified. And it's $10 a month, and it's $60 a year, and you got four co founders, one technical co founder, they get everything right. Just by doing that, the person feels heard. And the objection, we didn't get it went away.
Overnight, with just that one tweak, and it's a 30 second moment in the call. And you know what, it was good for me, and everybody else in the team to have a device. May I repeat back to you your vision for zest? It gave us added a little humility, but it also confirmed for us that we did actually know it, that we didn't make a mistake.
SPEAKER_03: It's so interesting from a meta meta standpoint, looking at that, because it provides the it provides you also a two piece event, what the founder is able to draw contrast there. So no, because or Yeah, yeah, you nailed it, or No, you didn't get it in here is why in from I assume the launch standpoint, then you can gauge focus. Because if I can answer and if I can tell you in a short way where you were off, or why you're so spot on, then all of a sudden, you're actually I would say the bets might even get better.
And so well, we want to make really thoughtful bets. Our job is to bet on founders. And we bet on teams that make products that delight customers. When we were evaluating you and your team. We're like, four person team. We got one technical person, you're a management consultant. I don't remember exactly what your other two founders did. But it was like a really good team. builders. I remember when they brought you to me, I was like, snap, yes. And then we said product wise, the product looks pretty good. Like even in the early stages, it was a
SPEAKER_02:
well designed product. And I'm a design guy. So I was like, this is designed pretty well. And then we thought, well, the customers really like it. You had some early customer traction, I remember. And so product, a team builds a product delights customers, you had all three, and you had four co founders, and you were builders, and you had a little bit of product velocity, something else we look for. So then you're 48 hours later on the phone with Jackie was a managing director, you basically skip a level go right to the top, she's able to make a decision. Andre is able to make a decision to just needs to get a
approval on it. So he can make a decision, hey, I want to invest in this, we just want to make sure but Jackie could just go for it with 100k check. And so then next thing you know, you're in the program, when we got that done in under a week. So we applied right after you filled the seventh for the April cohort 28. And so we basically we matriculated in but for the net for the summer. Perfect, perfect. That's great to know what that's great. And then so in the process of going through the accelerator, I think it's
SPEAKER_02:
1416 weeks or so I don't know if you did 16 weeks or 14 weeks this time around 14 weeks, 14 weeks, you do 14 weeks, we introduce you a ton of investors, hopefully. And yeah, you did well with investors.
SPEAKER_03: Yeah, I mean, it is. I obtain the way that launch goes about doing it. You're on weekly, you I mean, you put everybody on the spot on those calls. I don't know how much I'm allowed to say.
Yes, everything. Sure.
SPEAKER_02: Okay, right. So like our cohort is presenting to a room full of investors who then give us live candid feedback. One of the really difficult things when it comes to fundraising venture round, so I sold my first business, but it was not venture backed. And the first time you go out to raise money is very difficult to gauge the feedback, launch one provided systems for that. But then to you're getting so much feedback so quickly that you can just so quickly throw out elements that aren't working. So
SPEAKER_03:
SPEAKER_03: elements that are in charge forward. And then the other side is obviously just deal flow, right? Like just getting as many people across the desk as possible. We talked about how many
SPEAKER_02: investors did you need to meet with in order to raise money for your company?
SPEAKER_03: We met with over 130 people. Wow. So I'm gonna be great. Oh, we are. Yeah, we are. I think up there in terms of Listen, when I say consumer subscription app that teaches people how to cook I can say this now because we just closed around like, now we get to speak on our own traction
SPEAKER_03: for the next 12 months. Yeah. But let's just say that a lot of people are on for the hills or ran for the hills.
SPEAKER_03: And so most people are not consumer consumer subscription. Some people don't like some people do we happen to like it. We've seen it. We've had great success with it multiple times. But some people are like the churns too high. We actually had a conversation about this on all in recently and I was trying to explain to the my besties like, hey, you know, Netflix, a hell of a business Disney plus a hell of a business Spotify heck of a business when you get that large amount of search. Yeah, I know there's churn issues with consumers. But overall,
SPEAKER_02:
these are very meaningful businesses, I believe, and I believe there's going to be hundreds of businesses that have millions of subscribers. And, you know, like, I think New York Times is proving this to people by putting a bundle of things together. And you know, it's a jury still out. But I think this is a wonderful business you have. I think there's a million people who will pay you $60 a year for this and you will get to, you know, 60 million in revenue. I think I believe that you and I both and I, that's the beginning. But I
SPEAKER_03:
look at I don't know if you remember the first time that we met in San Francisco, and you and I had the chance to walk, you were hearing founder you pitches. Yeah. So we walked from the launch site to the founder you site, and really broke it down. It's CAC, it's LTV. And it's the payback period. How long does it take for you to get that money back? Yeah. And for me, then, a lot of this is an articulation gap, I think in fundraise. And so I was sitting down and I was speaking French in a room full of people that only speak English. Yeah. And once you're able to kind of articulate both the vision side that you're speaking to, I mean,
SPEAKER_03: you come from this operative background, though. But also, then you're able to articulate kind of the right brain, and you have that left brain going. So you educate investors on why their objections, maybe weren't valid here, or just how the architecture of your business works. I would say even more, I had to de risk the areas that they were their minds were going to jump to, in my mind, I think like that. Because if I if I spent all of my time thinking about not what drug
SPEAKER_03: I live, I live in the in the trees, right? I start speaking to the forest quite a bit more. And I understand what the name of the forest was a bit.
SPEAKER_02:
Well, yeah, I mean, there are and different, there are all kinds of different investors, some investors make the decision on the product, they use the product, they're like, this product is awesome. I'm going to bet on it. Does anybody know who made this product? Right? And literally, they'll work backwards on the product, whoever made this, I'm giving them money, because I love it so much. Other people are saying, I love this team. And it's like, well, this product is a little janky. And it's like, not
SPEAKER_02: very polished. And they're just like, whatever, I really connect with these founders. Other people are like, I heard this customer and this market size, and there's a demand, I'm going to work backwards to find the products that are servicing that market. And then which like Bill girly was looking for somebody in a marketplace that was doing transportation work backwards, found a bunch of different players and made his bet on Uber. So you know, there are different factors or different investors, and you have to qualify such a good anybody that is first a first time fundraiser.
SPEAKER_03:
There is no golden goose, there is no perfect formula for going about this. Everyone's an N of one, at least in my experience, and I'm going to speak for my own bias. But every experience is different. And so there are best practices launches scorecard system for sourcing investors a really good way to get on the phone with 130 different people. But it's the way to go about doing this, there is no right way. And it's going to unfold the way that's meant to unfold. It's going to be it's going to be a winding road. Then once you're on the tracks, if venture backed is the way that the
SPEAKER_03:
SPEAKER_03:
business should be going, if that's right for your business, then various four factors start to take over a little bit more. What do you have to prove now you've you know, you have a year runway or more. You've got, you know, I think, 10s of thousands of dollars a month in revenue, it's clear people want the product, you've got some audience. Over the next year, what are you going to try to accomplish with the money you've been given and the time you've been given? Yeah, really three things. So we're looking at making the game more cohesive. You spoke
SPEAKER_03: to the gamification elements, what's a unifying theory that links this all together and puts us on a track to building something more in depth and greater. The second is building really solid operating system around food, we want to be the end to end resource that people turn to when it comes to how they manage their food in their kitchen, retaining people through like a classic b2b sass strategy, it makes less sense for me to leave than it makes for me to just stay on. And then thirdly, starting to invest in these channels of acquisition. Right now we acquire through an organic, two organic channels and one
SPEAKER_03:
channel that we've tested a little bit, how can we de risk that such that if it comes time if fundraising is the right route for us moving forward as well, which probably will be then are have we de risk the business to the point where people want to either up their bet or bring on some new people who we've been talking to or met along the way. I like it. I like it. And so you mentioned earlier, tick tock, you're matching organic growth channels, which are really good because if you can figure out an organic one,
SPEAKER_02: you're not you know, the cost is your time, but you're not handing a bunch of money over to Facebook or Instagram or Google, which let's face it, there are higher priced products like I think Duolingo I don't know how much they charge, but they might charge more there have been people who are charging a lot of money for their products, which means they have a higher CAC with cooking, maybe you're have a harder time. And you don't have tons of money around to burn is tick tock because tick tock has so many influencers so many views.
SPEAKER_02: And so the content is compelling visually, but doesn't actually deliver on, you know, the value prop that you deliver on. Is there not an arbitrage there to try to maybe hire a couple of these influencers to work for you? Or, you know, you know, send people to the app, hey, if you want to learn more, and have you tried those kind of your ideas of tick tock or YouTube shorts as a funnel? Yeah, I mean, so this is an amazing point. I the zest channel, and I might, you know, I might get sent to jail by my co
SPEAKER_03:
employees for saying this, but essentially, those people that you're speaking to these food influencers, they serve to build a tremendous amount of intent in our future users. And so people are watching this unbelievable cooking content all the time. Our channel does not really speak to that. That's not really what it's about. What it's about is calling out the fact that you're spending all this time watching these amazing things, and you've lost agency over your own life. This is another reason that people joins us another critical moment for them, which is I work a job that is
just not that great. I come home, I watch Love is Blind on Netflix, I'm scrolling through TikTok, looking at brilliant food, and I'm eating my Chipotle burrito. It's like something's weird here. And so our channel right now is it's built to speak to that. If we're going to start partnering with creators, we're going to partner right now, you know, they give me license to change this sort of change. But right now, the idea is partner less with food creators, more with people that speak to the moments in life in life, that would lead somebody to want to learn how to cook.
SPEAKER_03:
To the moments that we've spoken about through the course of right, you're lonely, you want to have more friends. I mean, if you you want to have more laughs, right? Like I love to cook. And I love to have people over and I love to go to dinner because I like to laugh. I like to have a conversation. I like to be amongst people. I'm a major extrovert. And also it became a super weapon for me in terms of my business, the fact that I was, you know, able to have dinner with people and host people for dinner, like it actually became a wonderful superpower and being able to
SPEAKER_02:
cook for people. It's just such a great joy. If you're listening to this, go download zest and pay for it on the app. 60 bucks a year. What is it? 10 bucks a month? Yeah, that's right. Okay, just go pay for it. Buy it. Give us some feedback. And listen, continued success. Thanks for letting us invest in your company. It's great to be on the journey with you. And anything we can do to help at this point as we wrap up the episode. Give us a download. Give us a nice review on the App Store. Write a little nice review after you play around in the app itself. Every Yeah, if you got 10 great
SPEAKER_02:
reviews here with really good feedback we did. We did our job. That would be huge. That would be good. Yeah. 100% Yeah. To you and the team. Do this over food. Yeah, we'll do it over food. Thanks for coming to the program. Thanks for all the candid feedback. And we wish you great success. And our syndicate at the syndicate calm is investing in Jake's company. It's probably going to be oversubscribed. Normally as we have a small allocation. If you are an accredited investor and you would like to join the syndicate, go to the syndicate calm and sign
SPEAKER_02:
up. And then you can email zest zest at the syndicate calm. If you would like an allocation to invest in Jake's company, and it will be oversubscribed. So if you have a little value you can add, go ahead and add some notes to your email about how you think it could be helpful to Jake and his team. And we'll take that into consideration when we give people allocations. We'll see you all next time on the swing service. Bye bye.
Hey, everybody. So I'm Jake, the founder of founder Fridays, and I'm here as an investor, and they tell me the same thing over and over again, they want two things from me more FaceTime and money. They want me to invest in their companies, and they want to spend time together. So we've been working here on a new meetup program. We call it founder Fridays and founder Fridays are an event by founders for founders. This is an event that is hosted in cities by people like you. If you're listening to this week in startups, you're a founder. So what are you going to do at founder Fridays, you're going to get together with other founders in your community. It could be four or five of you. It could be maybe up to 30 of you in a location, pick a cafe, pick a co working space. I like to go to a great Mexican joint or maybe a dim sum restaurant, you know, we can do shared food, have a couple of cocktails, maybe you do it on a Friday, you get together and you host it. Now, why is it important for founders to get together? Shouldn't you be at home just focusing? Shouldn't you be in the office just focusing on your startup? Well, if you get together with other founders, true founders who are in the arena building like you are, you're going to get a lot of value from that because you can trade notes with that other founder about what's working at your startup and what's not working. The truth is, if you're facing a problem, there are hundreds of founders out there who have probably solved it already. And instead of you banging your head against the wall, when you sit there and you talk to three or four founders, you're having some dim sum, you're you're splitting the quesadilla, some pratitas, somebody say, Oh, you know what, I had that same human resources problem. Oh, I had that same technical problem. Oh, I had that same marketing problem. And they might tell you about a tool or a service that will solve that problem for you. This happens over and over and over again, when I do founder Fridays with our portfolio companies. Now we're going to give you that same experience. But here's what I need you to do. I need you to host this in your city. So you're going to go to this week in startups comm slash meetups. That's it. And you'll see a landing page where you can sign up and you can say I want to host in my city. Now your city may already be hosting so you can just join that person. And what if you go to this event, and you learn some go to market strategy that 10 x is your growth, that might unlock funding, or you might be talking to somebody, they say, Hey, I'm a marketplace to I'm not a competitive marketplace, your marketplaces for used cars, my marketplaces for hairstylists, whatever your jam is, whatever you're working on, but they give you some technique that you didn't know about to increase your supply side or get more demand in your marketplace. And you 10 x your business. I see this happen all the time. And founders are like mutants, right? And I'm like Professor X here, I'm trying to put on cerebral and find all the founder mutants in the world, and then have you get together and do your own little meetup. And here's what you're not going to have to deal with. You're not gonna have to deal with a bunch of service providers trying to sell you software or services. And you're not going to have to sit through a bunch of passive speakers, you can listen to this weekend startups and get the greatest speakers in the world on your own time. And you're not going to have to pay for a ticket to a conference or get on a plane or fly somewhere. No, this is about having an intimate experience with 510, maybe two dozen other founders in your city, please go to this week and startups comm slash meetups if you are a founder, this is for founders by founders only. If you are not a founder, this event is not for you, you can start your own meetup for lawyers, accountants, recruiters, this is for founders by founders, we vet everybody to make sure you're a founder. And if you host it, it's a non commercial event. Our first founder Friday will start on February 2. So please mark your calendars and we're going to do these on a rolling basis, you can join an existing meetup if it's already occurring in your city, or you and one or two other founders can start your own. We're using a wonderful piece of software that we've invested in called river, you can sign up for a river account just by going to this week and startups comm slash meetups. We've already got hosts and attendees lined up in San Francisco, New York City, Toronto, Los Angeles, Las Vegas, London, and even in India. So this is your chance to connect. And if you didn't hear your city name, you can start your city go to this week and startups comm slash meetups.
