This Week in Startups - The hard lessons from building three startups with Maven’s Gagan Biyani | E1840

Episode Date: November 3, 2023

This Week in Startups is brought to you by… Vanta. Compliance and security shouldn't be a deal-breaker for startups to win new business. Vanta makes it easy for companies to get a SOC 2 report fast. TWiST listeners can get $1,000 off for a limited time at www.vanta.com/twist The Embroker Startup Program helps startups secure the most important lines of insurance, at a lower cost, and with less hassle. For guaranteed 10% off on premiums (& up to 20% depending on quote) go to www.embroker.com/twist. Brave is an internet privacy company on a mission to protect your personal info online. Try the Brave Search API at http://www.brave.com/jason Today’s show: Maven Co-Founder and CEO Gagan Biyani joins Jason to break down his startup's live, cohort-based education model (2:28). Then, Gagan dives into his past journeys at Udemy, where he was eventually fired but wound up revolutionizing online learning and going public (35:08), and Sprig, a food-delivery startup that went on to raise $60M and scale to $20M in revenue, but ultimately failed (47:36). * Time stamps: (0:00) Gagan Biyani, CEO of Maven, joins Jason to discuss the future of online learning. (2:24) Maven: the evolution of online learning. (3:23) Exploring Maven's elite courses offered by a diverse pool of passionate professionals. (6:57) Analyzing who is leveraging Maven for education and the cost dynamics of online learning. (10:30) Vanta - Get $1000 off your SOC 2 at https://www.vanta.com/twist (11:36) How Maven's live cohort-based learning emphasizes accountability and interactivity for higher success rates. (13:15) Comparing the outdated cost structures of traditional education with modern alternatives. (23:10) Embroker - Use code TWIST to get an extra 10% off insurance at https://www.Embroker.com/twist (26:31) Unveiling the potential earnings for educators in the online learning marketplace. 28:27) The online educational landscape featuring insights on Coursera, Udemy, and others. (30:56) Brave - Try the Brave Search API at http://www.brave.com/jason (33:40) Jason built the “pit” at TechCrunch50, where he and Gagan first met. (35:08) How Udemy's early days were shaped by the Founder Institute and Adeo Ressi. (41:28) Gagan shares his personal story of being fired from Udemy and his lessons learned. (47:33) The trials, tribulations, and ultimate closure of the food delivery startup, Sprig. (53:39) Discussing the most effective methods for scaling and growing a product. (55:02) The world of fundraising and understanding the power law in venture capital. Check out Maven: https://www.maven.com Follow Gagan: https://twitter.com/gaganbiyani https://www.linkedin.com/in/gaganbiyani * Read LAUNCH Fund 4 Deal Memo: https://www.launch.co/fourApply for Funding: https://www.launch.co/applyBuy ANGEL: https://www.angelthebook.com Great 2023 interviews: Steve Huffman, Brian Chesky, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland Check out Jason’s suite of newsletters: https://substack.com/@calacanis * Follow Jason: Twitter: https://twitter.com/jason Instagram: https://www.instagram.com/jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis * Follow TWiST: Substack: https://twistartups.substack.com Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin * Subscribe to the Founder University Podcast: https://www.founder.university/podcast

How much money is the top instructor making right now per year? We have multiple people who are in the high six figures or crossing seven figures range. You have instructors who have broken a million dollars a year. Yeah, we have multiple. Really? That's unbelievable. This weekend startups is brought to you by Vanta. Compliance and security shouldn't be a deal breaker for startups to win new business. Vanta makes it easy for companies to get a SOC2 report fast.

Twist listeners can get $1,000 off for a limited time at Vanta.com slash twist. Embroker's startup insurance program helps startup secure the most important types of insurance at a lower cost and with less hassle. Save up to 20% off of traditional insurance today at Embroker.com slash twist. While you're there, get an extra 10% off using, offer code twist. And Brave is an internet privacy company on a mission to protect your personal info online. Try the Brave search API at brave.com slash Jason. All right, everybody, we all know being a founder. It's a wild ride. Especially if you want to pick certain categories, you're going to get a

certain amount of pain. Education, food delivery, brutal. These are two of the hardest categories to crack. But our next guest has founded startups in both fields. and has had some great success in a couple of them. And he's got some great war stories that he is going to share with us today. Gagan founded Udeme. If you don't know Udeme, it's the education platform. I think it came out of Founders Institute, Atteo's program. He left Udeme in 2012 when he was fired by the CEO.

We'll talk about that. Then he started a healthy food delivery startup called Sprig. They went on to race 60 million and they hit 20 million before it crashed and burned. And now Gagin is back and he has a very cool educational product called Maven. Which he co-founded back in 2020.

I'm a tiny angel investor. I got to sneak into the over-subscribed round. Gaggin, welcome to the program. Thanks for having me, Jason. We heard my intro. You've been at the start-up game for quite a while. You've kicked ass and gotten your ass kicked. Let's start with Maven.

What a great domain name, by the way. Congrats on getting Maven.com. What is it? And why did you build it? Maven is the evolution in online learning. Our belief is the first generation of online learning was about asynchronous, do it on your own, watch on your own time, sort of courses. And Maven is about helping people learn via cohort-based learning. So we have experts who have worked at Google, Meta, Airbnb, and smaller companies as well,

like Notion, Augusto, Brex, who go on Maven and teach courses. help people level up in their careers, both for founders and also for busy professionals who are trying to get ahead in their job. Got it. And what's the number one course? What works here? Because, you know, there's a lot of courses and coaches. I get a little worried in that space that some of them feel, you know, like their charlatans or a little bit like, uh, smarmy. And so how do you keep it, you know, elite? And what are the top courses there? Well, we curate the courses. to make sure that they're really experts.

One of the big things about Maven is that pretty much everyone on the platform has a big logo behind them. And if they don't, they've done a lot of entrepreneurial stuff. So those are the two criteria. And our top courses are courses like nailing your product management career from Shreosha. He's probably one of our top instructors. Generative AI courses are doing really well right now. So we have a ton of courses on AI for marketing or prompt engineering for LLMs. or Generative AI boot camp.

We also have courses on design and marketing, product, engineering, pretty much every major technology category at this point. And what does it cost typically? Do you set the pricing? Do the teacher set the pricing? Because it's not like this is a platform where anybody can go and just put up a course. You to meet your original startup. Anybody could just put up any course.

So if you did a search for SEO or product management, you got blasted with dozens and dozens of courses. who knows which one is the best. And so yours is going to be, you know, Maven is just one of one, right? There's one product or can anybody put up a course? It's a little bit of both. We allow anyone to use the platform,

but on our marketplace, we curate what we showed the user. So our end customer, if they're buying from Maven, they're definitely getting something that's curated. However, anyone can try and use our product and build a course. And if they do it and it's successful, then we might add it into the market.

marketplace. Got it. And when people build their course on Maven, is it sort of, that's just a SaaS fee they pay. They pay some SaaS fee plus maybe a percentage of the revenue. What's the business model? We take 10% of all sales on the platform. Great. So it's just a take rate and it's a pretty modest one. Do people feel like you're charging too a little, too much? What's the feeling? We get both. Yeah. We get both. Yeah. I mean, you know, you're always going to get people who feel either way depending on what value they get from the platform. So, you know, if 50% or more of your sales are coming from Maven, you're probably getting a sweet deal at 10%. But if more like 10 or 15% of your sales are coming from Maven, then it's not as, it's still

powerful. It's still a win. We have really good retention for that reason, but it may be a fair price. So our goal is to increase the amount of sales that we're bringing from our own marketing, And as we do that, we may end up having different take rates for different types of users. But for now, it's just universal 10% across the board. How much are people charging for the categories you mentioned, you know, product design, engineering, marketing, AI? What's the average number of weeks, of course, takes place and how many people are in the cohort and what are they charge?

Two to three weeks. Cohorts range from about 15 people to 300, depending on how successful the course is. but 15 to 25 is quite typical for us. And the courses cost about $500 to $1,500. That's sort of the sweet spot. I'd say, you know, 7,800 is kind of the average. Yeah, which seems like a number. If somebody came to me and said, hey, boss, I want to spend $500 on a course.

I'd be like, yeah, go for it. If they said $1,500, I'd be like, what are we going to get out of it? Can you get the information somewhere else? So it makes sense. Like 7, 700 feels like that would be the breaking point where I'd be like, uh, maybe. But 500, no brand or $1,500.

consider purchase. And so is it mostly companies paying to have their employees level up? It's actually 40% company pay. So 60% of the courses, at least this is self-reported, of course. Yes. But 60% of the courses are bought by employees who are ambitious enough that they want to do this on their own regardless. And then 40% are paid for it or reimbursed by the employer. What's the experience like when you're doing a live session? You know, the instructor chooses what the experience is. So it is a Zoom. It is a Zoom. It is a Zoom-based. We highly encourage and we teach all of our instructors to use a discussion and interactive format. And we just launched a hybrid model where courses have pre-recorded content

and the live sessions are even more focused on the flip-class classroom approach, where they're mostly just interacting with students answering questions, doing discussion prompts, and potentially going over projects or live screen sharing a demo. So the discussions are really interactive in most courses, there are some that are more lecture-based, the bigger ones, you know, two, three-three-hundred people. Yeah. And do these tend to be people who are building like a startup and therefore they want to come and show their work and kind of get mentoring on it from an expert? Is that the 60% typically? Are they using this as opposed to going to college? I would say they're using it in lieu of like an MBA, right? But they're the type of people who are

doing their MBA over 10 years in their 20s and 30s by learning stuff from all sorts of platforms listening to your podcast, watching YouTube videos, and also occasionally buying courses. So it's more people who are professionals. Our target market is like mid-career professionals, five to 15 years of experience, someone who might work on your team or at the team of any of your, you know, colleagues or companies you invest in. Explain to me this customer base. Is it Gen Xers?

is it Gen Z? And then are they kind of looking at their college degree with like some frustration and being like, huh, or disillusionment to like, oh, I spent $100,000 on that $200,000, I'm a 50K in debt. And now I can go take a couple of AI courses for, you know, I don't know, if I took five courses for $800,

for $4,000 instead of the $150,000, all of a sudden I look really good to potential employers. Tell me about how people look at education now, and this would fall under continuing education, I guess. Yeah, I think it's obvious that more and more people are getting disillusioned with the traditional education system. I myself was disillusioned back in 2005 when I graduated from high school and I've been sort of pissed off ever since about it. But slowly but surely over the last 15, 20 years, we've seen more and more people get disillusioned. At the same time, that's not the

direct decision that's happening when they're making a decision to buy a Maven course or do their own learning. They're just naturally the type of people who believe that learning is going to help them in their careers and in their life. And so, yes, they are disillusioned as in the background. That's something they think about maybe when they're talking with friends about their college experience. But they're not saying, hey, I'm pissed off about college. I'm going to go buy a course. They're saying, you know, they're talking about being pissed off at college and Thanksgiving. And then they're by a course whenever they have a need to learn, let's say, Figma. They want to get better at figmore, they want to learn design systems, or they want to get better in their app product management.

They want to become more data driven as a product manager. That's when they buy a course. Listen, selling software is hard enough right now, man. It's hand-to-hand combat out there in B2 land. The last thing you need to do is slow your sales team down because you don't have your SOC2 dialed in. So if you're SaaS or a services company and you store consumer data in the cloud, you know what you need to do. You need to check out Vanta. They're going to get your SOC2 compliant easier and faster. And Vanta makes it so easy to get and renew your SOC2. On average, Vanta customers are SOC2 compliant in just two to four weeks. Compare that to three to five months without Vanta. They're going to save you hundreds of hours of work and up to 85% on compliance costs. And Vanta

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So there's a lot of modalities for learning. One of them is you could buy a book. Another one is you could just watch YouTube videos. The companies that make Figma or any great product, notion, Coda, Airtable. They produce their own courseware. They have their own, you know, playlist. So that's another way to do it on your own.

But there's something unique and special about having a calendar item and accountability. So is that the secret to Maven that there's like an accountability to showing up each week? And that's what the live and maybe it's arguably a little more exciting. What is unique about this format versus the other two modalities that I mentioned? You nailed it. And you know, because you run courses and run workshops all the time, there's an accountability and an interactivity component. Learning is hard. By definition, you are trying to do something that you don't already know how to do. And so there are both emotional and logical, like just intellectual challenges that you come across. And it's very, very difficult

to push through them. Even myself, I'm a total autodidact. I'm constantly learning different things. and yet sometimes if I want to take something super seriously or even somewhat seriously, I'm going to sign up for a course because it holds me accountable. And someone is doing the thinking for me of what should I learn now, next, and how should I learn it? And that's really important as well. Yeah, and I love the idea of a 20-person class. It makes it even more dynamic and the accountability and the dynamism of that. And, you know, this podcast became because I was just saying, my God, I had done a tweet,

I'd seen something about, what do you call the degrees? Humanities degrees. Humanities. Yeah, and they're just like so overpriced and they're so out of sync. And I just said, you know, this is a cost issue. The cost of these is so ridiculous. Maybe you could talk about cost structure of college right now. You went to Berkeley, right?

I went to Berkeley. Yeah. So maybe you could talk about the experience there and how expensive it is versus the reality of what you're doing at Maven and the sort of the distance and compare and contrast the two. Yeah, I mean, you know, average college degree costs $200,000, $300,000. You go entirely into debt.

So you make no money prior to it. So it's a lot of money for someone who's just right out of high school. And, you know, increasingly, it's showing that the ROI is going down. And honestly, the only real ROI is the signal that you've got in in the first place. My college experience at Berkeley was candidly very disappointing, particularly the business classes, honestly. I also, I thought the economics classes. Explain in detail why they were so disappointing. You're in a 300 person lecture hall.

The teacher is mostly teaching off of a book. You could just read most of it in the book. There's no engagement with the professor. The material is fairly basic. Honestly, I thought that that especially the undergraduate Haas business classes were super easy. I mostly didn't attend class. My college experience was I realized that I could hack

college. And so within a matter of the first year or two, I was attending less than 50% of all my classes and still getting A's. And the reason was because you could learn everything they were teaching in a matter of a week or two if you just just before the midterm or just before the final. You have professors who are not incentivized to teach well. You know, they are mostly tenure track, mostly based on their research, not based on their teaching capabilities. And so they just simply don't care about the students. And then you have a financial system that's propping up the college system. So it has a total monopoly, right? So you can't actually build an alternative to a university without getting regulated by the very people who are forcing you to sort of

shoehorn yourself into the existing university system. And then it just repeats itself. And that's the regulatory capture of all this. I never even thought about the fact that the teachers are so disincented or just, you know, asleep at the wheel. They're there because of their research. They're not there because of the student ratings or how they get rated by students or and there's a disconnect between what the students pay and, you know, what they get out of it. And so I guess my question to you is as you've started to build this, have you thought about bundling, you know, I don't know, 20 of these courses,

putting them together, having people pay a certain fee, and then getting some kind of degree at the end that employers would look at, because you're connected to Silicon Valley, if you said, hey, listen, if you got this Maven degree, this Maven degree, you know, has these 40 courses, these 30 courses, whatever it is,

and this is what the person's capable of above. And then here's a portfolio of their work, because you have all of it online, I guess, or you could. And then you kind of connect the person to the companies that we all know so well in the departments, have you started to think about or start thinking that way, or are you just think, hey, just have the best course on each of these topics? How do you think about the big picture here?

Well, the long-term vision is to replace graduate school and then eventually universities. The question is, how do you get there? And I think what you're describing is an extremely high cost and high-risk way of accomplishing the goal. because the level of effort to put together 20 to 50 courses that all connect, that then get you job placement, as well as have a filtering process to come in, requires a significant amount of capital, but also it requires time. You know, most of these universities have been built over hundreds of years of brand development and exclusivity. You know, Berkeley was not nearly as exclusive in the 50s as it is today.

and even when I got in in the 2000s, it was a lot easier to get in than today. So these things take decades, and startups don't work on multi-decade timelines. They work on three to five years realistically to get to your first set of, you know, first real product market fit, and then 10 years to get to, you know, an IPO and exit. So I don't think it's very practical.

There have been people who've tried to do what you're talking about, and the best way they've come up with are these boot camps, which have worked quite well. Boot camps have been a great success. Why are Code Boot Camp so successful in your mind? They took a skill, first of all, from a venture perspective, they haven't been wildly successful, right? Because they're very hard to scale.

So it's very easy to build a good school. It's hard to build a school that has venture returns, which is why the real venture returns have come from the Udemean Cours of the world and not from most boot camps. However, the boot camps are incredibly successful. successful for students, and therefore they're a valuable part of the sort of anti-college or college alternative ecosystem. And the reason they work is because this is a hard skill that is teachable. You can actually learn it. And within six to 12 months, you can actually get a job.

That is a very rare thing. There are not that many jobs for which a transformation like that can occur. But when that transformation is possible, there is a real value in it. The flip side challenges that you're always competing with people who spent four years, and maybe over that four years in college, they didn't learn as much, but they were the crem de la crem of their high school group, the top 1% of high school students go to the top universities, and then they spent four years learning the same skill,

even though they learned it in a less effective way, it was subsidized by the government. They had 200 years, 300 years of brand equity into that school. And so boot camps of how to seal it. in what they could get to because they're carving off the edges of whatever's left over, whoever's not taken up by the majority system or the monopoly system, which is the universities. Yeah, and they charge, you know, if you're going to one of these great universities, you know, if you're at a state, call it a 150, 250K, just for the tuition.

And you take about 40 courses, about $4,000 or $5,000 per course. You're charging 800 per course. you're like 5% of the cost is 95% cheaper. But there is something about being in person as well that makes things really dynamic. So you have this online thing, but have you considered doing things that are alive or in locations or, you know, intensive days? Because it would seem to me that people would love to fly out and you could rent a space at any hotel.

You could do it at a, you know, SFO has got this new really cool hotel in the airport where you do it at a Vegas hotel or something. People come for a week. they do like a boot camp, they take four or five Maven courses. Have you started to think about the interactivity and the networking that happens in person and maybe testing some of these in person? I mean, I do love in person. I do agree that there are benefits to in person learning.

At the same time, I think there are a lot of costs, both financial and also in terms of scalability that you lose when you do that. So, you know, you might, so let's talk about it two different ways. One, let's first talk about it from a business standpoint. From a business standpoint, the operational scale, you know, Maven's 15 people right now. Yeah. And we service, you know, tens of thousands of students a year. Okay.

That's insane leverage. And so from a business standpoint, we could probably grow 10x and only grow our team 2x, right? That's an incredible amount of leverage. Yeah, you got 3,000 students per employee maybe or something crazy. Yeah. When you think about it. Yeah. Or like 100 million in GMV for the level.

30 to 40 employees feels like very doable. That's from the business standpoint. From the student's perspective, you know, and I think people listening to this, it is very hard to find a good course that's in person because there's no density of people and of the instructor talent and the student talent that's as good as it is on the internet. The internet is the perfect liquidity machine. Sure. And so the average, like, if you're an amazing instructor,

and you live in Canada, you know, you live in, you live in Austin, Texas, you live in St. Louis or whatever, you're only going to have a small percentage of your total market as in person in the city that you live in. And so instead, what we do at Maven is we say, okay, well, you know, you master, master instructor in St. Louis, you can teach everyone in the world or everyone in the United States and, you know, the English-speaking world. Yeah. And so all of a sudden, the students get much better instructors. So they do lose something. I'll admit they lose something on the quality of the in-person value.

But what they lose in that, they gain five or six-fold in the quality of the instructor. Yeah. And that's really the most interesting part of this is that you can skim the cream of instructors. And they get better and better. I mean, by the 10th or 20th or 30th time you've taught one of these courses, which I'm guessing some people are on their 30th or 40th cohort now. My lord, you must be great at it. I mean, it could get boring too, I guess, for the instructor, but this seems like it's incredibly profitable for them. If they get 20 students, you know, and that means $15,000 or something, my God,

that, you know, that's, that's real money. All right, listen, we work with startups, and they are all over the map. Most of them, very early stage. Pre-seed, seed, you know, going on to their series A. But some of our investments have gone on to raise those late-stage funding rounds. They've gotten acquired. Hey, and a number of them have gone public. And there is one thing that unites them all. They need to have their business insurance tight if they want to succeed. This is obvious.

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We love in Broker. Thank you for all the amazing support over the years, both on this program and the love and care you give to our startups. We have over 100 instructors. This is our third year in business. And our first year, we had no product. And we didn't have a name for half the years. So to be clear, we're in our third year, but it's almost like we're in our second or first and a half year.

And yet we have over 100 instructors who will clear that 10K threshold, which is kind of similar to your 15K that you mentioned. Yeah. And you got that guy, Nick St. Pierre. I saw that, the creative director guy. He's really popular on Twitter. And he's teaching mid-journey. that's kind of an interesting move. Do you look for like, I don't know if I would consider him non-traditional, a teacher.

He's not like a teacher who's taught at Harvard or Parsons, right? He's a creative who worked at Ogilvy and he's now teaching mid-journey. That's kind of interesting. Yeah, it's pretty common. I mean, that's what we're looking for. We don't want the Parsons or Harvard professor. There are some that are really good. By the way, I don't think all university professors are bad.

I just think 80% of them are bad. And 20% are great. Eventually, I'd love to have them on Maven. But for now, we've been focused on industry experts. So people actually use the tool. In the case of Mid Journey, it's one of those tools that you don't have to use in an actual job. You can use it via creating as Nick does. Most of our instructors are people who use it on the job.

So if they're teaching product strategy, Gibson Biddle was VP. product at Netflix. That's like a classic Maven instructor. And Nick is, Nick is more of a unique instructor in that he teaches a subject that you actually can teach as just a creator. Yeah, it's super interesting. I want to teach a course on podcasting. I just decided, do you have a podcasting course? We don't. We'd love to have that. Wouldn't that be an interesting course? Me teaching a podcasting course and just like these are the best practices. Here's what you need to do. I've done 2,000 episodes. I got two of the top podcasts in the world. Here's like how to do podcasting. and because I teach my Angel University course

and I donate all the proceeds to charity and that's been pretty fantastic over time and I'm just, I'm wondering how much money does the top, without saying the name of the person, how much money is the top instructor making right now per year? We have multiple people who are in the high six figures or crossing seven figures range. You have instructors who have broken a million dollars a year.

Yeah, we have multiple. Really? That's unbelievable. And how many hours a week of work is it for them? They're working full time on it, I guess, those people with the million? Some of them are working like 20 to 30 hours a week on it, I'd say. But that includes creating. So they're just natural, you know, they're publishing newsletters and blog posts and stuff.

Their actual coursework is probably like 10, 15 hours a week tops, I would say. And it abs and flows, right? There's sprints leading up to a cohort or during a cohort, and then there's a lot of time in between where you're almost doing nothing. How do you get the students? Are you, when you have somebody like Nick, he's obviously got a following, so he can tweet it once in a while, he brings his own. But how do you get people to it?

Are you doing a lot of advertising? We don't do much paid advertising. Our paid budget is really small and just experimental right now. Our primary way of getting students is through our instructors. So we have now built up a large audience of students who come to Maven and say, hey, I'm interested in learning X, Y, or Z, and they search or they read our emails, and they find out about a course. So roughly about 25% of the sales on Maven.com happen through Maven's marketing,

and we have really intense tracking on this. And then 75% still come through our instructors. And as we've grown, we've increased that number. It was 4% when we started. And now it's, you know, 25. So it's grown a lot over the last three years. And we expected to get to our goal is to eventually be like, you know, 50 to 80% are coming from Aven. Yeah, that makes sense.

Talk to me about Coursera, edX, you know, all that stuff that MIT was doing. Once in a while, I'll just go on those. I'll go on to YouTube. I'll watch an MIT course, macroeconomics, whatever. I'll watch like a Stanford course. They put their courses up there. It's just interesting to listen to. I just do it like kind of passively, sort of like listening to a good audio book or something.

But I find it kind of compelling. Those were cohort based. Those, those, what they call the MOOCs, massively online courses in the back in the day. Why have those, have they fizzled? We don't hear about them anymore. Were they a success at X and Coursera? Well, both Coursera and Udeme are public companies, along with LinkedIn learning, which would be public if it wasn't owned by LinkedIn, which is owned by Microsoft.

And there's a couple other companies, ProSight and Skillsoft. I would say that the markets aren't super kind to. these companies right now. They aren't kind to many people, many companies, but these companies aren't killing it, but there's multiple multi-billion dollar companies in there. So, Coursera is two billion. It's a real success. Yeah, Coursera is about two and a half and a half. Yeah. You still got a bunch of Udeme stock? I have some. Enough to, enough to be freaking out that the stock price has been going, you know, haywire, but not enough that I'm entirely focused just on Udeme.

Yeah, I mean, Udeme, yeah, they eat at 30 and now it's at 8, yeah. Yeah, it's tough when that happens. So how did that happen with Uber going from 60 to 15 and then, you know, back up to 45 and then they got profitable. So, you know, it's hard to hold public equities at this time. But if you love the company, you love management, and you know it's strong, you know, you always have that opportunity to buy more since you're so close to the company and you understand the business model. You know, it's one of the nice things about it. I find.

I bought a bunch of Uber at, I think, $28 a share. or something, and I wrote it back up. So, you know, you can always double or triple down. So in terms of success for the company, I remember when you were doing the round, you were like, hey, Jay Cal, I want you on the cap table, super over-subscribed, we got this little tiny amount. I was like, sure, you know, I'll take it. But you were the last of the ZERP. The last of the ZERP start.

She raised like 20, 30 million, I remember, from Indreson in 2021. That's right. Am I right, ballpark? Yeah, we raised 25 million total, 20 million, $20 million. from our Series A and 5 million during the round that you invested in. All right. So I did okay. I'm up a couple of X.

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with paid plans that cost as little as $3. CPM. So if you're building a NextGen AI app or chatbots, you've got to try the Brave Search API and you can get started today. Brave.com slash Jason, B, Ravevevee, dot com. slash Jason. You have kept the company relatively small. I don't know if you're profitable or not, but it sounds like you're crushing it.

The company must have had a great valuation if you raised 20. You're an amazing salesperson, marketer, yourself, and incredible at raising money. So you raise at the peak, you raised 20. You probably raised it for 10 or 15% of the company. People can do their own math for the valuation. But now you've got this down market. So how are you approaching that? Do you still have the war chest?

You said you only got 15 people. It sounds like you're close to profitable. So talk to me about how you're thinking strategically as the pilot of the company with a lot of fuel, you know, in a great big jet. We've been very intentional about, I mean, we did have more people at one point to be clear, but we never got over our skis from a cost perspective. And we listened to the advice early on that the market was going to change. And I had this, you know, childhood memory of being around when my parents were in the dot-com bubble. and I think I've been through a few pretty bad recessions that affected myself personally, like my family really.

I mean, I've been, in my adult life, I've been quite lucky. As you know, I started in that golden period 2008, 2009. What time to come into the workforce and when I started Angel investing. Wow. Yeah, we met during that time, if you remember, in a few different ways. Yeah. Well, you guys were, I think, TechCrunch 50. If I remember correctly, you either.

We were in the pit. You were in the demo pit. I remember in Adaio, yeah, had introduced me to you guys. And then I got a check from you to me. At some point, Adio had this crazy thing. Shout out to Adioresi. He did something called Founders Institute. And he would pull your shares.

So he would get 1% of a company or something, 2% of a company that went through the program. Three and a half. Oh, three and a half. So he got, it was like a mini accelerator. And then he gave like half of a percentage, half of those three and a half points, like 50 basis points to the. mentors. I was the first mentor. Literally on the first night, I was the first mentor. I gave a big speech to everybody. I broke a clipboard. I was telling everybody this fucking hard. You have no idea how hard it is. Your company's going to fucking fail. You've got to be more serious. And I tried to get people to take it seriously. I did it for a day. I wanted to have be a good speaker for him. And then like, whatever, seven years later, I get like a 25k check. And I'm like, or 15K,000. 25K.K. It was, it was over $10,000. And I was like, Adel, what is this? He's like, you signed the agreement. I'm like, I don't remember. It was a speaker.

release. He's like, the speaker release, it was a speaker release and you get a pool and you were the second highest rated speaker. I think Aaron from Mint actually was better than me. I came in second. So Aaron got like whatever, you know, 20 percent. I got like 10 percent and everybody else got 5 percent. So he literally even stack ranked us as the speakers and the mentors for the equity. Who's nuts? Tell me about Founder Institute and the journey at Udeme. All of our start was because of the founder and student Nadeo because I found out about the Founder Institute and applied cold via TechCrunch, via TechCrunch posts. Yeah.

And I had no technical background, no founders, no co-founders to speak of. And I applied, I got in. And then my co-founders, Aaron and Octi, who I had never met at this time and we had no connections whatsoever, also applied separately as a fully technical team. And we went through about two-thirds of the Founder Institute and had never met each other. And about two-thirds of the way through, a day of really. because he has this automated system for keeping up with his companies, I'm sure other accelerators do this too.

He realized that my products were not really coming to market. So I wasn't able to find technical co-founders for one of them. The other one just wasn't really working out. And he was like, Gagin, you know, he had seen me at the events. He saw that I had some, you know, minor social skills at that time. And so he was like, you need to meet other founders and potentially join up with them. And so, and then he was telling Aaron and Octide the exact. opposite thing. He was saying, look, I can't understand what you guys are saying. You

guys need a, you know, you need a business co-founder to sort of translate. Somebody more polished to present this to the world. Yeah. So he introduced us, uh, and we met over Skype. Uh, and that dates the conversation. Yeah, I know. Skype. Right now people are like typing in. S K-I-P-E-I-E-E-S-K-I-E-E-S-K. What is it, skip? Skype was like Zoom, but it didn't work as well. well, but it was kind of cool, a cool logo. Yeah. Yeah.

Eventually sold to Microsoft. It was pretty powerful back in the day, especially for international calling. It was like a VoIP caller. If you had an international, you know, a relationship, it was a godsend. Yeah, totally. Because it was basically free, yeah. Or no, you had to, remember you had to also pay for Skype in the beginning? Yeah, you had to pay for your minutes, right?

You paid for international calling. So you could do, you could do computer to computer, uh, without paying, but if you wanted to dial somebody's phone number, it went through a gateway you had to pay. That was what it was. Yeah, people would use it. Think about how crazy that was. People would make phone calls from their desktop to phone numbers as opposed,

because the other person wasn't on their computer and it was just easier to click. Yeah, I did it all the time. Yeah. I used it until 2014 or 15 or something because when I'm traveling, it's easier to call over Skype and call it international number. number or something. So, yeah. So we met over Skype and I fell in love with the product that they had built. And at that time, it was actually interestingly enough, it was a live learning platform. So they had built an alternative to Zoom or a predecessor to Zoom that was live and

allowed you to do live online courses. And we met, we decided we would work together. I was interning at TechCrunch. I don't know if you know this, but that's how I got into TechCrunch 50. Because we didn't have money. So like, and we didn't have connections. No, Mike and I would give people the demo pit things. I think we charged 500 bucks.

When I did it, we charged, we gave it away for free, the demo pit. The demo pit, we will know. Mike Arrington and I had a conference together called TechCrunch 50. He went off to do disrupt. I went off to do launch festival. We broke up. But when we did it, I created this concept of a demo pit.

And I said, you have all the space at this crazy San Francisco Design Center. We'll take both sides of the space. and said, Mike, Mike said, why would you take the other half? We don't need it. I was like, I want to put up 50 cocktail tables, like high tops. He's like, what are high tops? I'm like, it's like little round tables.

You know, like when you're at a party and you put your cocktail on it. I said, I want to do like people can just open their laptop and show their products. So during the things, instead of just talking to people, you can go see demos as a startup. It'll be helpful for startups. And he's like, that's going to cost a lot of money. I was like, well, this is a non-union place. It costs $10 to rent the table. And I think electricity and internet will be like a hundred,

100, 200, so we'll just charge people 500, and it will, like, break even, and we'll give them, like, a ticket or two. And so we did that. And then now, disrupt, I think charges $5,000 or $10,000, and the Web Summit guy,

who's a bit of a scumbag, he started charging, like, $20,000 for that, and then he would give people a discount. He stole the idea for me, but he just decided to just charge tens of thousands of dollars for it, which I never liked about that guy. I never liked the guy, Patty. I've always appreciated your,

I think, you know, I can say, because I've seen you operate since 2008, that you've had a lot of authenticity about this pro-startup thing. And I think the demo pit is a great example. And us at Udeme, you know, this was one of the few opportunities to go and just start pitching our business. And one of the things I think a lot of founders forget is that one of the best ways

to perfect your pitch is just to do it a hell of a lot of times. Yes. And the demo pit is a perfect opportunity for that because I was literally, I remember coming back, J-Cal, I don't know if you heard stories like this, but I remember coming back from the demo pit and my feet were sore. And I couldn't, like, after two or three days of doing the demo pit, I had to stay, I had to stay seated for like, well, I was basically on bed rest for like multiple days. And the reason I had sores on my feet, or I think I had some bleeding.

And I remember, and it was partly because I just honestly didn't afford, I didn't have good shoes. And like, I was just for, you know, right out of college sort of kid. But the other reason was because I was nonstop talking to people, nonstop for 12 to 14 hours. Love it. From the day it opened until that night, just pitching you to me and getting it better and better. Yeah, it's such a cool moment in time when like there was no entitlement. Anybody who was in startup was just super hardcore.

And, you know, somewhere around 2014, 2015, you know, the industry made too much money, ZERP, whatever. And now it's getting hardcore again, right? And I kind of like this moment in time. It reminds me of the time when you and I met, it was like a smaller group of people. The funding rounds were tiny, but it was just more authentic, right? And then people were grinding it out. I love the demo pit. Man, I miss doing the demo pit.

That was like one of my favorite things to do was just walk around the demo pit and just take pitches from founders. It was like magic. Then you got fired. Why did you get fired? I was young, man. I was like, I was 23 years old. I was kind of an ass to some of my employees.

I think I was still, I think that if we had better investors who could advise Aaron, my co-founder, a little more, and give me a little more rope. Like if I had six more months, I would have figured out how to manage people with enough grace that we'd keep going. But I was a hard ass. And the challenge was my co-founder, Aaron, wasn't. He wasn't like that. He was more likable and more chill.

And so our styles came into conflict. And at some point, I think he, felt like there was a chance that if he didn't make this decision now, it would be tough to do it after a series B. By the time the series B happened, we lost 80, 90% of the company. So there was sort of this window in time. There's a bit of time pressure. And I think the time pressure plus the fact that, you know, I was having some challenges with managing people. Challenges that I think are super normal for founders. Honestly, but also are real. You just couldn't take people not being accountable or not keeping up with your pace. You were a 12 hour a day guy.

and just people didn't match your intensity? Yeah, exactly. I think I got frustrated when I didn't see the output I was looking for. And instead of, I think the thing I've learned is, and I'm still working on this, I mean, I don't know about you, Jason, but I feel like management is a lifelong endeavor. And I have learned to become more factual about, hey, this is what's going on, this is what I'm expecting, and letting the person succeed or fail. instead of trying to make it work.

And I think the thing I used to do is I tried to make it work so hard. And my way of making it work, because my internal voice in my head and the way I want to be treated is to be yelled at. And I get that that's like not what other people want. But I grew up as an Indian kid with Indian immigrant parents. Yeah. You had an intensity. You know, in my dad's restaurant, if I screwed up, my dad would like, what the F are you doing? These customers are here.

They're paying us money. It was intense, you know? And he was not going to deal with any BS. So then, yeah, sure, you go into the workforce and people don't perform. You could be intense with them. What you have to realize and what you did realize is, it's not your job to change them, and nor will you succeed. It's almost never can you, I mean, I literally think it's been one out of 50 people in my career

that I've tried to change their work ethic and it actually worked. Maybe one out of 100. I just don't think it's worth doing. You don't have the time to do it. You can't change their childhood. You can't change their operating principles, their motivation. And so you're better after saying, hey, here's what's expected. Do you think you can hit it?

And if you don't, maybe we should talk about, you know, you moving on to your next adventure. We'll give you nice severance and we'll give you a recommendation. It can be your choice. I just say that frankly to people. If you can't keep – and I just tell people now, my trick, I'll give you this one, now that I'm 50. At some point when I got out of my maniacal 20s and got into my 30s, I just started saying to people, here, all I expect is for you to keep up with me. And if you can run as fast as me. You can run a little faster if you want.

You can run ahead of me. But I'm going to run fast. if you want to be here, just keep up with me, you know, plus or minus 10 hours a week. If you don't totally understand, there's another place for you to work, post office, Starbucks, Walmart, some chill startup that works four days a week, whatever it is. Yeah, to be clear, I don't think this was just about work ethics. Sometimes it's about style and output and other things, but I definitely think ethic as part of it. And yeah, I mean, we were young and scrappy and we were working hard.

And sometimes it got intense. Honestly, in retrospect, I find it to be. both a good learning experience for me, but also kind of a reality check for me that I look at back on it and say, I had a lot more shame about it than I do today. Because I think today I look at it and I'm like, dude, you know, intensity is a good thing too. And there's a lot of positive that comes from it. And I think that it just needs to be softened, but not eliminated. And that's what I've been- You can have intensity without destroying people or breaking them, right? And, you know, a lot of times when you have that intensity, I've had it myself, it comes.

because the founder has some fear of failure, or they're scared about not getting their next round closed. And so then that's just how they operate the business. They're operating from a point of fear as opposed to, hey, we can, we can solve this problem. And as you get older and you get your ass kicked ass, you can kind of come to it with a different thing. Will you displacing your fear and your anger or your frustrations on the team?

Because that's kind of the classic. Yeah, I think that was definitely part of it. I also think, though, that my natural way of communicating was just different. I came from a culture where it was normal to say, like, that doesn't make sense or that's stupid, you know? And that is an offensive thing to a set of people. And so I just had to learn to learn to translate. To be clear, my management, if I look back, I don't think my management challenges were as bad as they sound in this conversation. But they were, because I would say that that was also a translation issue when the

employees went to Aaron and said, hey, Aaron, like, can you help Goggin work on this? I think Aaron interpreted this as, oh, fuck, we got a real big problem here. And so I think it kind of got out of control faster. I've had a really good relationship with almost everyone I've ever managed. Oh, great. But not everybody. And there are times where I go a little too far for sure, no question. And that is me putting my stress on other people for sure.

Yeah. And I think if you work at a startup and you work for a founder, you could also understand that if they're freaking out a little bit, probably because, you know, they're just under stress and they're trying to make this thing work. And it's hard, you know, like, listen, you chose to go out on this crazy pirate ship, try to go across the world. And yeah, you might run out of provisions. You get attacked by another ship, you know, it's hard. You can get lost at sea. People go mad. It's nuts. Take me through Sprig. I remember Sprig and social capital had invested. I had a small investment in a company, Bento, that did the same concept. This is during the on-demand economy.

Tell me what was Sprigg. I'll tell the audience. I know what it is. Tell the audience what was Sprig. I know you had gotten to tens of million in revenue, but why did it ultimately fail? Because it was such a good idea on delivery, on-demand meals. It was great. Yeah, it was an on-demand restaurant.

So essentially, like, we were a ghost kitchen before ghost kitchens happened, where we had a central location in the center of San Francisco and Chicago, where we would make food in large quantities. We'd have three or four options a day. relatively healthy meals that you could order, you'd order it from your phone. And because we were so well located, because we made the meals in advance and just heated them up, or we had them in the car ready if there were salads or something like that, we could deliver them within 10 or 15 minutes.

And our costs per delivery was significantly less than DoorDash or Uber Eats. And so Sprigg became what we've known for, healthy meals, $20, 20 minutes. And the reason it succeeded is because that value proposition was like so easy to explain to a customer. And so it spread like wildfire. And a large percentage of San Francisco honestly was using Spray. I mean, we were the largest restaurant in the city at one point based on what we think. You would open an app. You'd have like five dishes each night.

Yeah. You know, one would be protein, whatever. One would be vegan or vegetarian. had a lot of different options, but they came, they would already be in the cars. The cars would be running around like Uber's. And so when you ordered it, the wait time sometimes with five minutes, 20 minutes, you got your food fast. Yeah. Why didn't it work? When we started the company, the competitive landscape was us against DoorDash and Postmates. So we saw DoorDash and Postmates, and at that time, you know, they were unit economically responsible. I wouldn't say they were

profitable, but they were responsible. And so it cost about $15 to $20 to get your delivery, and it took over an hour. And the food would come all jumbled. And so we had this assumption that our vertically integrated model was going to be much more powerful than them. And that worked. Fast forward about two years, two and a half years. And we were at $20 million run rate, had 1,300 total people because we employed our

drivers. And Uber Eats launches. and the day Uber Eads launches, which was basically a copy of DoorDash or Postmates, the day Uber Eids launches, our growth rate went from like 1 to 2% weekly to negative 1 to 2% weekly. And from then on, we just couldn't recover. We could never compete. And the real reason was because Uber Eats decided to subsidize the market so heavily that they were doing 30-minute deliveries, which cut our advantage dramatically.

Because Doordash and Postmates at that point was about 45. minutes, 50-minute deliveries. And maybe, sorry, Sprig, a little slip there. Sprig was 20 minutes. So we had creeped up from our original 10, 15-minute promise up to 20. Uber Eats caught us right in the middle, got to 30. So that was one part of it. And then on price, Uber Eats also subsidized the market and dramatically cut the price down

by taking money from the restaurants. And so pretty soon, we were dealing with a product that was not that distinguishable from us from a price and time perspective. And then from a selection perspective, they killed us because Uber Eats was delivering from any restaurant, you know, from a large number of restaurants in the city. And so the selection of Uber Eats eventually trumped our quality and convenience. Yeah. It's interesting.

Like you really were a pioneer in both education and in that food delivery space. One of them becomes a public company. The other one becomes roadkill. That's kind of how it's pretty good track record. I got to tell you. And now you're crushing it with Maven. When you look back on products and building products that matter, what's your philosophy at this point in terms of building great products? Do you have a playbook or some insights for people who are, you've got a lot of founders obviously listen to the show. And they're triangulating on product market fit. They're trying to come up with a great idea. They're trying to refine it. They're trying to get it to grow. What's your playbook for product market fit? Yeah, I wrote a post that went kind of viral about this called the minimum viable test framework. And so it's just slightly more advanced. It's just an evolution. of minimal viable product. MVP, you know, the idea is you have this vision for a company,

you boil it down to the most simple form and then you build it and you launch it and you iterate upon it. I think the challenge with that is that oftentimes you start going in a direction before you actually know what direction you should go in. And so I invented a step just before that I call minimum viable testing, where before you even build up something that could be a product, you start running one-off tests that actually test very specific assumptions within your overall business idea. What's an example? So in the Sprigg case, right, a minimum viable product would be a restaurant that served

meals three or four days a week that might be, you know, open, you know, four hours a night. That was what we eventually launched when we launched our MVP and started making revenue. But for the six months prior to that, we were running a bunch of little tests. And our tests would be more varied than that. So we ran a test where we worked with a chef to deliver meals that were free heat. You had to, they were pre-cooked or par cooked, and then you had to heat them at your house. I remember this. Yeah, you might have been on the email list for this, actually.

And then eventually a company called Muntry actually turned this into a business. Yeah. And then we had another test where we tried to run three days in a row. And so we were doing these little tests that would help us, understand what the operations, what the user behavior was like. And that helped us refine the MVP. And then we built an MVP. And the MVP was like our go live date.

And then we built on top of the MVP and kept building more and more from there. Got it. Yeah. And what do you think is the right way to grow a product? You know, when you start thinking about beachhead markets, paid, social, how do you get, you know, people into a product? Do you have any thoughts on that? now that you've done it three times?

Yeah, I think the biggest thing that people miss, growth hacking, growth marketing now, everyone's always looking for some sort of breakthrough channel, like, oh, TikTok, YouTube, whatever. Whatever's new and hot. I actually think you have to start with the user. You have to ask the user, and I have a whole series of questions that I ask the users,

and I interview the potential of the users, and I find the market that needs my product the most, and I ask them, what is it that you do right now to solve this problem? Where do you look for information on this problem? What do you listen to a podcast? Do you watch YouTube videos? Do you, you know, go on TikTok?

And I start to get a demographic and psychographic understanding of why the user buys, the products that are current alternatives to my product, and where they look for or find out information about this. And then I derive marketing ideas from that. And so I consider it a kind of bottoms up approach to marketing where I'm really user driven in what the channels are. And I find that to be pretty successful, especially for the first few thousand, you know,

10, 20,000 users. What about fundraising? We'll end on fundraising. We're now at basically the fundraising market that you and I came into it, me as an angel, you as a founder. It's 2009 to 2012 all over again. 5 million dollar seed round, five million dollar valuations at the seed round or pre-seed seed hitting 10,

15, you know, it's a series. A, you know, maybe you've got to have two or three million in revenue now. It's kind of crazy. So how do you think about fundraising? Why do VCs invest in certain companies and not others? I think like the more you understand the power law of VC, the more successful you're going to be as a fundraiser. VCs only make money on, well, angels only make money on like 2% or 5% of their investments. VCs only make money on 10 or 20% of their investments. And they make even more money off of the one investment that they made that really went big. You know, Jason, you know this.

Yeah. Go Uber, Robin Hood Com. Yeah. It's, uh, yeah. So because it's so hits driven, you have to pitch, you have to, first of all, want to build a hit. Okay. That is like, that is like a critical thing. Most people don't actually want to build a hit.

They don't. No, it's too hard. It's hard to build a billion dollar business. It's not just that it's hard. It's that it's not. always the right combination of risk reward for the person. You know, building a bootstrap business is also hard. But it's a different type of hard.

And certain people think that the raising capital world is easier than the bootstrap world. And I think that there's a continuum here. You can raise $1 million. You can raise $5 million or you can raise $100 or $200 or long your journey to be coming to get to an exit. And you can raise $0. dollars. And I think people often don't evaluate for themselves how happy they would be with various versions of risk reward and whether their company is actually the type of company for which that

calculation is the same as what the investor wants. And so you have to be aligned with the investor in your goals. And ideally it's like, hey, I'm actually building something that could be a multi-billion dollar business. Yeah, that is the key. If you're not in the power law sweepstakes and the and the investor doesn't think you can get there. Why would they, they get 30 swings at bat per fund or something like that? You know, the average fund probably does 30 or 40 investments.

If you're not going to build the next Uber or Robin Hood or Udeme, why? And I think that's what you got right with Sprague too, right? Like, uh, it feels like, you know, Sprig could have been,

you know, DoorDash or something similar. And it feels like Maven could be like Udeme, Coursera or, I think even bigger. So continued success. If people want to check it out, maven.com.

That's like a, million dollar demand name. Thanks. Yeah, we worked hard on that one. You got it for less, I hope. I would pay a million for it. Yeah. I mean, I think literally, if you think about building,

if you're trying to build a billion dollar company, if you did pay a million for it, if you told me I have $25 million in my bank account, should I pay a million for this? I would say yes. Only because even if the company didn't work out, you had to sell it, you could sell it for $500K. Like the next person would pay $250,500 for it.

It's like a killer, killer domain. Thank you. All right. Listen, it's been a great hour. I appreciate me on the program, and we'll see you all next time on this week and start us. Bye-bye.