Jessica Mah at Female Founders Conference 2014

Key Takeaways

Jessica ma is the founder and CEO of indinero a company that takes care of counting payroll and taxes for businesses Jessica founded her very first company in middle school and started in daero from her UC Berkeley dorm room where she was studying computer science uh Jessica was part of the YC summer 2010 batch welcome Jessica thanks for the great intro Let me just test this clicker out here all right so my name is Jess Kama I am the founder and CEO of indera I went through y commentator in the summer of 2010 and my story starts at UC Berkeley I studied computer science and while I was there I was the president of the computer science undergrad Association and one thing that I really loved doing was was inviting other Founders to come come speak to the students I really wanted to get my CS classmates to think about starting their own startup and the first person I invited was Drew H howston who was the founder and CEO of Dropbox and then I got Sam Alman from Loop he's now the president of Y combinator as you all know and they said I should really consider applying to Y combinator and I hadn't really considered it at the time I thought well I'm not sure if I want to do y comat I don't know if I want to give up all that equity and and they say just apply and worst case you get in and then you decide not to do it it's not such a bad worst case scenario and that's what we did my co-founder his name is Andy he was my best friend he's still my best friend and we did all of our computer science projects together we're really close and we knew that we didn't want to get real jobs after college we just wanted to go straight into doing our own startup and we're just friends we're not dating nothing crazy and a lot of people would ask are you like siblings are you like married what's the deal and I'd say we're just friends and so we we did uh we we put in our application for this idea called the mint.com for businesses and a lot of people would say why accounting that sounds like such a boring idea why not like Facebook apps for something more exciting and I said and I thought well I'd run my own small business before and accounting was just really hard to do how about we do something that could actually make a difference for others so that was our idea and we went through by commor and we were really excited we were we weren't scared at all we were on the top of the world we thought we're going to get lots of PR we're going to raise all this money everything's going to be great and that's what we did we got lots of PR uh this is Fast Company interviewing me at our our home office and we thought we'll get PR we'll get users and we'll use that to get even more PR are and that's what we did here's Fox at our office and and after that we raised a lot of funding we raised 1.2 million in funding and the first thing we did with all of this new money was of course get a fancy office there's the hot tub in the back and I remember feeling like we're going to be the next into it and we told people I remember at demo day one of my slides it said we're going to be the next into it we were that confident and I was able to get one employee who worked at Google he was getting paid something like a quarter million dollars a year and I got him to quit Google work at indinero for minimum wage and 1% equity and we both thought this was a great idea but in hindsight that was a terrible deal uh needless to say he didn't stay there very long and the biggest problem we all talk about is hiring hiring hiring but there's one investor I was meeting with his name's Anton he was the VP of Business Development at mint and we become really good friends over the years and he asked me you're you're you're talking about hiring but have you ever fired anyone before and I thought no i' I've never had to fire anyone before and he had this evil grin on his face Jessica you're telling me that you have all a players you don't have any B players your team is amazing and I'm thinking no that's not what I'm saying at all I didn't fire anyone not because I didn't have B players but because I just didn't really have the courage to fire anyone and he gave me he gave me that courage so the next week I I fired my first employee and little did I know that a year from that moment none of my employees would still be working for me anymore uh the debauchery continued here is US throwing a YC reunion hot tub party at our office and all of our vanity metrics were going up we had a lot more users we were Tracking not just millions of dollars in Assets Now we had billions of dollars and we thought these are numbers that investors are going to love and we thought wow we're millionaires Andy what kind of car should we buy and all this other stuff and it was just it was just too much and my mom thought you're being really arrogant you you got to calm down and I had one friend who just sold his money for his company for a lot of money and he said how much money are you making and I said well making $80,000 $80,000 time 12 so you guys are making like a million dollars a year that's not bad I said no you got that wrong it's not $80,000 a month it's $80,000 a year and after a few seconds of really awkward silence he said holy smokes you guys are failing you need to fix this you need to fix this you guys are like a scam you're you're you're ripping off your investors and and this is just not good Jessica you got to fix this and I I knew that we had to look into our numbers and figure out why weren't we converting more of our users into paying us money and and it really came down to us forgetting what we were here for we were so obsessed with fundraising and getting PR that we forgot to focus on making something that people really wanted I mean how many businesses actually need a mint.com for businesses they need their accounting done they need their taxes done and this is my one of my my favorite Mentor Steve blank he's a retired serial entrepreneur and he teaches at Berkeley and Stanford and I invited him over to my office to hang out get some advice and he saw the hot tub and he shook his head a little bit and and uh he knew things weren't going well and and then at the end of the night his final question for me was or his final comment was Jessica don't be scared to Pivot it's not too late and in my head I was thinking why would I want to Pivot I love making accounting software but we all knew that that was simply it it was not working out so I I wrote a letter to my parents uh two months later I want to read it to you because it's actually true dear Mom Dear Dad this is 6:00 in the morning I couldn't sleep all night I feel like I'm burning maid off rich on the outside but completely broken on the inside there's just a lot of pressure right now because the company is running dry on money in the next 9 months or so and we really need to produce this summer or else we're royally screwed anyway I'm want to start seeing a therapist or something because this is just no way to live I have no idea how you handle this entrepreneur job Jess it it was really bad uh and my dad replied I don't know if I was looking for sympathy or advice thankfully I got both he said I I am sorry you are feeling kind of sad it is normal to feel bad every now and then but you need to get over it although you may not be able to change the situation or other people you can change the way you perceive them you can look at a glass half full or half empty and a positive outlook can better help you achieve your goals take pleasure in many of your accomplishments and feel good that you have supportive friends and family and I felt a little better after that but really he was just kicking me in the butt and the point that really made difference for me was it is normal to feel bad every now and then but you need to get over it because startups are really hard and all this was just self-imposed pain if I was just failing all along it wouldn't be so bad but I made myself feel successful and then I went down so that's why it felt really bad and um as I I told another YC friend of mine everything that was going on I was very honest and he said what's your worst case scenario and I hadn't really thought about this before and then just thinking out loud I said well I could get rid of the the office get rid of that stupid hot tub office I could tell all the employees to find a new job and then I could ask for a loan for my parents and wait a sec that that's actually a really good idea why don't we do that and he's like no I I didn't mean that far but I slept on that for a few nights and I decided that this is actually what we need to do this this is the only way for us to survive so I emailed my office broker I told him let's pack up the office here are our airon chairs being packed up and I told all the employees one by one this isn't going anywhere I want you to have a job start looking and I'll give you like 60 days to find something new and the biggest surprise for me was that actually felt a sense of relief from all of this I I no longer felt like I was you know scamming anyone I was coming to truth to reality it's like I was it's like when you're an alcoholic the first thing to do is to admit that you're an alcoholic well here I'm admitting that I'm failing and I'm coming to terms with that that truth and that's why I actually felt felt a lot better and a lot more relieved after we made that decision and here's us playing Starcraft uh we we decided to take a break from all of this we took a lot of time off to go to Monteray Santa Cruz spent a week in New York a week in Orlando for Disney World uh went to Lake Tahoe we we really goofed around and the reason why I say that is because I feel like a lot of Founders when things aren't going well they try to work themselves out of their paper box they think if I work harder I'm going to figure out a way to get around this and as CEO of my company I knew that wasn't right for us we had to do something completely different we had to take a break and then hope that we'd come up with some aha moment uh here's Us in Disney World uh another big thing that surprised me was that my co-founder Andy and I we never talked about about failure we never talked about what if scenarios like what if this doesn't work out what if we have to return our money to the investors and what if we have to just get real jobs none of that ever came up not once I think we just kind of understood that somehow we get through all of this so it's back to the drawing board after we got back from our trips we wanted to figure out how to get ourselves out of this rut and the question was what will businesses pay real money for because businesses were only paying us like $ 20 $30 a month and if you do the math on that you need in order to be the next into it in order to have a billion doll business you would need 4 million businesses paying us $20 a month and that was unreasonable because only 10% of our users were converting which means that you need something like 40 million free users on the platform problem is there aren't even 4 40 million businesses in America America so we screwed from day one anyway and no wonder why no wonder why like Ron Conway never invested us like this was just a terrible idea to begin with and we we said let's take a step back how about we charge a few hundred a month and then we'll find the solution from there so work backwards from the solution and Uber was taking off at the time and our idea was let's be Uber but for accountants let's take a 20% cut out of all referrals to we sent to accountants and then that way we'll actually make some real money uh and then that idea led to us deciding let's just do the accounting ourselves let's just do the taxes ourselves and that's the idea today in an nrow we do accounting we do taxes we do payroll and we're a One-Stop shop pay us a few hundred doar a month and we'll just take care of all this for you and and that felt like a much better idea much crisper idea and I scrambled to put together a sales stck I I thought this this would be a hit I called up all of my friends and I said we got to meet up for lunch I've got this great accounting solution for you and I found one friend who would meet up with me the next day I took her out to pizza and she said this is perfect this is exactly what I need sign me up and I came prepared I knew she'd say that so I printed out a credit card payment authorization form and I had a fancy pen and I pushed it over the table I paid for I said pizza's on me don't worry and she filled this out and I ran back home and I said Andy guess what we got our first customer you could stop playing Starcraft now and on to building the next piece of her our business and and through all this we we realized we actually didn't know how to do accounting and now we actually had to file tax returns for these customers who offered to pay us money even though we never figured out how to actually serve service them um and and I decided if I'm going to hire people to do tax returns then I need to learn how to do it myself so we would code during the day and then at night like after 9:00 p.m. I would study and eventually I got my IRS enrolled agent license so now you could actually prepare all of your tax returns so after that we decided to stay really Frugal this is our apartment office and we hired a few employees again and I would take calls out of my my uh bedroom and then I would come out here and work on that sofa and uh the the real reason why we had to work out of our living room wasn't because we were Frugal it's just because we didn't have any money this time and we were still living off my mom's uh loan money and my co-founder's loan money from his parents too uh and then we had to upgrade we had to get a even bigger office this was still a living room I lived on the top floor and we lived in another bedroom and we bit about a dozen employees here and we stopped caring about about billions of dollars under management and all those terrible metrics now it was just real Revenue how much money are we actually bringing in and it felt a lot better but the biggest development that I had was that after going through all of this I just stopped caring about what other people thought about me because uh when you're failing you don't want to go to conferences like this and all your friends say hey how in da doing and you're like H we're doing great even though you know you're failing and you just lead off all your employees it's feels really bad so you don't show your face anywhere you just stop showing up to places and now I could actually finally like get out of my apartment again so it felt great and I had one prominent VC I met with for coffee and uh she you would all know her name so but she told me Jessica you have to be really careful because I spoke with some other guy BCS and you have a really strong personality and no I'm not saying it's a bad thing but you have to be really careful because guys in our industry they're just not used to women with really strong personalities like like what you have and I didn't know if I was supposed to feel insulted or what but I was taking a back a little bit but you don't want to shoot the messenger she was just trying to be nice and give me some advice and and after a while thinking about that I realized you know even they might call me someone with a really strong personality but I'm going to say that I just have Unapologetic confidence and I'm I'm happy to say that's who I am and now we're we're really we're really happy because uh this week now we have 50 employees full-time uh we had our first profitable month in in January [Applause] thanks and we're taking nothing for granted like I don't take my employees my customers my funding for granted any of that and in a way I'm actually kind of thankful that the first version of indinero didn't work out because back then I was just really cocky I was just really arrogant and I walked around with a lot of swagger and it was just no good I had a hot tub in my office like you don't want that but now I'm I'm like really grounded I'm really paranoid maybe a little too much so but I'm just not taking anything for granted anymore I'm just happy that I'm still alive and I'm still in business so to close I want to just ask all of you what kind of founder do you want to be what kind of founder do you want to be when things aren't going well what kind of founder are you going to be when you have lots of PR when you're on on the Forbes 30 under 30 list and you closed all this funding at some mythical High valuation and what kind of founder do you want to be one you have this BC telling you that you have a really strong personality but whatever you decide stick with that definition with absolute and Unapologetic confidence thank you so [Applause] much