Adora Chung, co-founder of Homejoy, discusses her experience starting a startup and applying to YC in 2010. She had onboarded service providers but had no demand side users and generated no revenue. She emphasizes the importance of being scrappy and keeping personal burn low when unable to raise money. Chung also talks about the decision to walk away from a startup and the need for constant evaluation and seeking outside perspective. She mentions the multiple pivots Homejoy went through before finding success in the marketplace for home services.

- The speaker reflects on their lack of interest in gaming and how it wouldn't have worked out for them.
- They discuss entering the Canadian market and how there were some differences in terms of finding jobs and acquiring customers.
- They mention launching in Europe and the unique challenges of different markets and languages.
- The speaker advises identifying market opportunities and finding someone experienced to launch in new cities.
- They discuss the importance of finding the right co-founders and how it sets the company culture.
- The speaker emphasizes the importance of prioritizing unique economics in a marketplace.
- They mention the satisfaction of creating a platform that provides work and a service for people.
- The speaker reflects on what they would have done differently in hindsight, prioritizing unique economics earlier in the company's growth.
- They mention the importance of user experience and growth, but emphasize the need for strong economics in the cleaning space.
- The speaker discusses advising YC companies and the importance of unique economics and user experience over growth.

The speaker discusses challenges faced at Homejoy, including creating prediction models for demand, analyzing customer lifetime value, and scheduling. They also talk about the importance of learning from failure and giving personalized advice to startups. The speaker mentions their experience doing a PhD and their current side project involving building a DApp on Ethereum. They also mention the challenge of pricing and the potential negative impact of discounting.

- The speaker discusses their experience with text-based audio editing and their preference for using Premiere.
- They express a desire for transcripts and discuss the benefits of having transcripts for SEO, sharing, and searching purposes.
- The conversation then shifts to podcasting and the experience of listening to podcasts at 2x speed.
- The speaker offers advice on reaching out to investors, emphasizing the importance of keeping the message short and asking specific questions.
- The topic of "Uber for X" businesses is brought up, with the speaker noting that while there may be less overall investment in these types of startups, there is still potential for success.
- The discussion then turns to cryptocurrency and blockchain startups, with the speaker expressing excitement about the possibilities and potential benefits, particularly in countries with bad currencies or financial infrastructure.

- The speaker believes that the current developments in crypto and blockchain are necessary to address security issues and improve usability.
- They mention investing in companies that are building AI to enhance security and stability in the crypto ecosystem.
- The speaker emphasizes the need for better user experience and product development in order for crypto and blockchain to go mainstream.
- They mention the importance of education and branding to help people understand the technology without using complex terms like "blockchain".
- YC is seeing an increase in applications related to crypto, blockchain, AI, and biotech.
- The speaker discusses their personal opinions on longevity and health practices.
- They mention that the best marketing strategy for a B2C startup is to build a product that people love and to focus on content marketing.

- The speaker suggests focusing on what works for you in content marketing rather than just going through the motions.
- Writing well in a niche and engaging with a channel like Hacker News can generate a lot of traffic.
- Podcasts and videos have a high drop-off rate, while articles are easier to consume.
- Companies like Y Combinator, 37 Signal, Basecamp, and Intercom are examples of those who do content marketing well.
- YouTube is a powerful platform for traffic and consumption.
- Founders from third world countries can start by building their own product and getting users, then poach talent from big corporations.
- Sales aptitude can help convince people to pay for a product before it exists.
- Investors interested in startup funding can watch online resources, hang out in online communities, and contact founders directly.
- Price should not be an issue in early stage investing, as the exit is what counts.
- Despite negative news, the speaker has become more optimistic about startups and the world due to the potential for positive change through technology.

- Initially, people made fun of scooters, bikes, Uber, and AV in San Francisco
- Critics started riding scooters and realized their potential
- Companies need to make people feel included and give them agency
- It is important to be thoughtful about what is put out into the world
- Technology is bigger than just an app on your phone

- Adora Chung, co-founder of Homejoy, reflects on her experience starting a startup and applying to YC in 2010.
- She emphasizes the importance of being scrappy and keeping personal burn low when unable to raise money.
- Chung discusses the decision to walk away from a startup and the need for constant evaluation and seeking outside perspective.
- Homejoy went through multiple pivots before finding success in the marketplace for home services.
- Chung advises identifying market opportunities and finding someone experienced to launch in new cities.
- The importance of finding the right co-founders and prioritizing unique economics in a marketplace is emphasized.
- Challenges faced at Homejoy include creating prediction models for demand, analyzing customer lifetime value, and scheduling.
- Learning from failure and giving personalized advice to startups is important.
- The speaker mentions their experience with a PhD and their current side project involving building a DApp on Ethereum.
- The importance of pricing and the potential negative impact of discounting is discussed.
- The benefits of having transcripts for SEO, sharing, and searching purposes are mentioned.
- The speaker offers advice on reaching out to investors and emphasizes the importance of keeping the message short and asking specific questions.
- The potential for success in "Uber for X" businesses is noted.
- The speaker expresses excitement about the possibilities and potential benefits of cryptocurrency and blockchain startups.
- Better user experience and product development are needed for crypto and blockchain to go mainstream.
- Education and branding are important for helping people understand the technology.
- YC is seeing an increase in applications related to crypto, blockchain, AI, and biotech.
- The speaker discusses their personal opinions on longevity and health practices.
- Building a product that people love and focusing on content marketing are important for B2C startups.
- Engaging with channels like Hacker News and utilizing YouTube can generate traffic.
- Founders from third world countries can start by building their own product and getting users, then poach talent from big corporations.
- Sales aptitude can help convince people to pay for a product before it exists.
- Investors interested in startup funding can watch online resources, hang out in online communities, and contact founders directly.
- Price should not be an issue in early stage investing, as the exit is what counts.
- The speaker has become more optimistic about startups and the world due to the potential for positive change through technology.
- Companies need to make people feel included and give them agency.
- It is important to be thoughtful about what is put out into the world.
- Technology is bigger than just an app on your phone.

Adora Cheung - https://twitter.com/nolimits - is a partner at YC and she also cofounded Homejoy, which went through YC in the Summer 2010 batch.

For this episode we took questions from the internet. If you have questions for a future office hours episode, just tweet them our way.

Questions:

0:18 - topherPedersen asks - How many users did you have when you applied to YC? Also, how much revenue had you generated?

2:32 - Hatlii asks - How do you keep going if you can’t raise any money?

4:31 - Alejandro Ruperti asks - When/how do you decide to walk away from something you started?

10:18 - Chris Melnick-MacDonald asks - What advice and lessons did you learn in entering the #Canadian market?

13:16 - Yahya Elamrani asks - Do I have to work on culture in the very early stage?

15:17 - Adam Sanders asks - What was the best decision you made for Homejoy?

16:30 - Ujjawal Chauhan asks - Would love to know what’s the one thing she’d do differently in hindsight if she were to start over again?

20:12 - Nikita Butakov asks - What are some unique data science / machine learning challenges faced by Homejoy?

21:44 - Alejandro Ruperti asks - From @tferriss : how has a failure or apparent failure set you up for a later success?

32:14 - Siamak Freydoonnejad asks - What are the best practices when doing a cold reach out to an investor?

33:51 - 😎rliesaurus @ ✈️ 🇪🇺asks - Is Uber for X still a thing people would invest in, in the US?

36:58 - Fedor Paretsky asks - How have YC's views on cryptocurrency/blockchain-related startups changed since Coinbase?

42:33 - Manav asks - What type of companies is YC seeing more of this time around?

46:23 - Yahya Elamrani - What are the best marketing strategies for year one for a b2c startup?

53:32 - Yahya Elamrani asks - What would you say to a founder from a third world country where there is a big lack in tech talents (and you can't compete with big corps due to lack of resources) in term of hiring?

55:27 - Aspiring Angel asks - What’s the best way for investors interested in startup seed/angel funding get started? How does location affect the process?

She's a YC partner and co-founder of Homejoy.

We're going to do some office hours questions from the internet, so let's go.

First question is from Topher Peterson, and he asks, how many users did you have when you applied to YC, and also how much revenue had you generated?

So when we applied to YC back in 2010, we were a company called at that time, PathJoy, not HomeJoy, and we were a marketplace for online services.

So we're trying to bring on typically offline services like tutoring, life coaching, therapy, and all these legal services online.

And our thesis was this was the time to put it to video and we would be the ones to do it.

And so when we applied, if I remember correctly, we had onboarded a lot of people for the supply side of stuff, so service providers, but had onboarded absolutely no 1 yet on the demand side.

So we had obviously generated no revenue yet, but that's what we had when we applied.

No, I had previously worked at a company called Slide, and I ran product there and we built Facebook apps.

I started in 2007 when the Facebook platform just launched.

And what made you want to start a startup?

I think I always knew that I wanted to create stuff, make stuff for the world, and it just was a matter of finding the right idea.

And so after a couple years at Slide, I decided, it was the right time also because my brother, who would be my co-founder, had just graduated college.

And I said, hey, you should just come out here.

Did you did you have any like, I don't know, apprehension about starting a company with your brother?

Not really, I think it's funny because my brother and I grew up kind of in separate worlds.

So it's not like we were together all the time or knew each other's if we were compatible working together.

So it was a little of a trial and error in the beginning.

But having a sibling, working with a sibling, you know you can trust them and they're not going to do anything horrible to you.

And so I think there was just that initial layer of trust that

Yeah, and also I guess you were out here for only a couple years so you didn't totally have a network either.

Hotly asks, how do you keep going if you can't raise any money?

So, you just have to keep your personal burn really low.

And I would say just from experience where my brother and I weren't able to raise much money for 2 and a half, almost 3 years.

And we were just able to just keep going in terms of trying to find users and stuff like that.

You just got to be incredibly scrappy because obviously you can't afford to acquire any users.

So which means, which is actually a good thing because it forces you to get out of your chair and you have to go talk to users because it's the only way that you can get them to use your product.

I think going through a period of not having enough cash to work in your startup helps you develop a lean mentality, which is good to keep moving forward if and when you raise money.

Okay, and then you raised like a hundred?

Yeah, we raised a hundred K around demo day.

then use that for the next 2 and a half years.

It was your own employees, just the 2 of you?

It was cheap to live in Mountain View at that point.

Around that time it was about 900 bucks a month for like a 1 bedroom, 1 bath apartment.

So you took the Y, How much was YC money at the time?

And then we raised 100K from someone else.

There's another question that's like further down the list, but somewhat related to, you know, keeping going or quitting.

So Alejandro Ruperti asks, how or when do you decide to walk away from something that you started?

I think when you, I'm assuming he means the startup or an idea that you're working on.

I think this is 1 of the things you actually have to think about before you start, which is, OK, great.

Maybe you've got some users, so and so forth.

Before you even think about raising money, or especially hiring people, you should really think about, is this something you want to do for the next 5, 6, 7, 10 years?

And I think if you can't imagine yourself doing that, then that's not something you should jump into.

But if it is, then certainly you should go for it.

And then I think during your journey, your startup journey, if you ever start questioning yourself, am I in the, I'm gonna call it, right game or not, then yeah, I think it's important to always zoom out and reevaluate.

But I wouldn't be doing it in the corner by yourself.

I would always find a set of friends in the startup world, but also outside of the startup world to give you some of that perspective.

And if that doesn't help, you can always find a coach to help you talk through that.

And then if you do have, if you have raised money or you have employees, you do have responsibility to them or to your investors as well as to your employees, Which is not to say keep going because of that, but it's just to say you need to find a transitionary role or period in which you take care of all those duties.

I think there were times where we were like, are we working on the right idea or not?

Aaron and I, my brother, who's my co-founder, we pivoted a dozen times before we got to Homejoy.

The fact that we pivoted that much was helpful in the sense that we learned how to push product out very, very fast, which was helpful when we finally got to the right idea.

But certainly, each time you pivot, you sort of just think, maybe 2 more weeks, maybe there's 1 more feature.

Maybe if I just got 1 more user and things will take off.

And so you just have to step back and always reevaluate that.

How did you pivot 12, because where you ended up from the initial application isn't that far.

So we started with marketplace for online services and it was just marketplace for an offline service.

Starting with cleaning and then eventually some other home services.

Yeah, I don't know if, I'm not sure if that pathway could have been shortened or not.

I do think we learned a lot along the way in terms of working with each other that really helped us To make that take off at the time that we came to it

Do you remember what you did in between like was there anything that was just like objectively crazy or time?

I mean, I think we also built, at least I built, over engineered a lot of things because I thought it was cool to build some stuff.

So after, I'm not going to remember all of them, but Path to Away, it was trying to connect service providers with clients.

When that didn't start working out, when we couldn't find enough clients for the service providers, we had all these service providers.

So we started, we're like, what can we do with all these service providers?

Well, they still needed clients and we thought, okay what if we just made it into Q&A site.

After a while I think a lot of the service providers got a little tired of just creating essentially free content.

The pitch was if you write all this content then it will help you develop your brand and then here's a profile.

And then it rolled into a bunch of content sites and then it turned into basically a demand media type play.

I think by the time we rolled into that we were just like, this is not going to be huge and we're not really into this.

Oh, to go back to your other ideas, you said you applied with a Twitch type idea as well, right?

I applied with the marketplace for online services, but there's a question on there which says your other ideas, And my other idea literally is Twitch, which is not to say that I made a mistake to not build it, because I'm not quite sure I would have made that a huge thing.

It's just that it was just kind of funny for me to see that.

You literally just wrote video game streaming?

No, it was just watching people play games and checking in and commenting and doing all these things.

Kind of like ESPN for games, essentially.

And the reason how I came up with the idea was because I was always watching my brother play games.

And he would also then go on YouTube and watch other people play games.

I'm just like, that's so weird to me, but he was doing it and a bunch of other people were doing it and I was like, okay, there's something here.

But the thing is, I think I'm not really into games that much, and so I'm not quite sure that would have, I'm pretty confident it wouldn't have worked out.

All right, let's go to the next question.

Chris Melnick McDonald asks, what advice and lessons did you learn in entering the Canadian market?

So with the Canadian market, just like any other international market, From the customer perspective, there wasn't that much of a difference.

You have a dirty home and you need to get it cleaned, so on and so forth.

From the cleaning professional side, the service provider side, there are some differences there in terms of where do people find jobs.

In other places, in other markets, it's something else.

So there are those kind of differences that we had to learn about.

But I wouldn't say they were super major.

So there was how to acquire service providers.

There are maybe unique channels to acquire customers in each 1 of the local markets.

There was things just like weather, traffic, like where are the traffic jams, public transit, how are people actually going to go from house to house and that had to be all baked into the scheduling stuff.

So anyway, going back to the Canadian point, it's not that there was nothing super special about Canada itself.

It's just the fact that it's another market that we went into.

And then we also launched in the Europe as well, Berlin, Paris, and London.

And similar to that, there are some locale differences and obviously language differences as well.

Like if I'm expanding to, I think Canada's like very close to the US.

But if I'm expanding to Europe, what are your pro tips?

For that is, I'd go to the market and identify the opportunity first.

For us, we're a marketplace, so it had to be both sides of the users.

And there were some markets where we looked at, I can't recall exactly the right cities, but that We decided just not to enter because we didn't think there was enough demand or supply there for us to make an impact.

But once you do that, then the other thing is if you're launching a ton of these cities is to find somebody who's hopefully done this before.

And we call them, what we call them was the city launcher.

And so this person would go into the market, find the first few service providers, first few cleaning professionals.

And then we would match them with the customers.

And there was kind of like a manual back and forth going on to get the supply and demand running.

And then they would find and then if it worked out then we would find a city manager.

We would hire a full time city manager to run the operations and be in charge of the P&L there.

And I think sort of that playbook that's been played out now.

And so a lot of startups have I think executed on this well.

So I think that's a pretty good framework.

So another question related to kind of like getting started when you're small.

Yaha Elamrani asks, how do I work on culture or do I even work on culture in the very early stage when I'm just building a team and a product?

So the number 1 thing about working on a startup is finding the right co-founders.

And finding your co-founder is pretty much setting the culture because it is how you work with that person is going to parlay into probably how you work with other people.

So I don't think it's like you need a handbook and write out your core values and all these things right away.

I think it's much more important to know if your startup is going to survive or not.

I do think once you start hiring your first few employees, then that is an important time to try to figure out, to try to articulate that thing so that 1, you're hiring the right people.

But 2, there are some like the people coming in have some expectation of how things are going to be run.

Cause there's like, there's so much unspoken with siblings.

Like how do you determine what, what's part of the company culture and what's just like you guys?

We wrote out our core values at some point.

And that's the way we, that's the framework we chose and which a lot of companies choose I think.

But in the beginning both of us would interview everybody and then we would actively talk about it like is this the right person would they work with us well and so on and so forth and then go from there.

So kind of just like seeing if the person's a good fit, rather than like explicitly writing all the values down.

But I think in the beginning, we were just looking for smart people who were going to work hard, who wanted to help cleaning professionals get work.

And we're into the mission of the company.

Adam Sanders asks, what was the best decision you made for Homejoy?

So I think starting the company, obviously.

We were able to bring on a great crew of people to work together.

And so what I am most happy about and was most passionate about was the fact that we created a platform that created work for people who needed the work, as well as did a service for people who were busy and having a clean home is 1 of those things that it's hard to say, it's hard to articulate why, but when you have a clean home you're just happier and you're more relaxed.

And so after a busy day at work it's nice to be able to go home and just not have to clean it.

So starting that company, I'm proud of that.

And yeah, like I said, I think our team was a great group of people who really cared and I would take nothing back for that.

Ujwal Chahan asks, I would love to know what's the 1 thing you would do differently in hindsight if you were to start over again?

And I think that's like home joy and life context.

So, oof, okay, so with home joy, there are so many things that I could have done a lot better.

But if I had to aggregate a lot of them into kind of like 1 concept,

a bucket, it would be, I would have prioritized, I would have prioritized unique economics much earlier in our company.

So by that I mean, when you're building a marketplace, you're always in this constant battle of trying to figure out how to allocate resources between growth, user experience, and uni economics.

And so what we did was, we obviously, we heavily worked on all 3 of those things, but if you had to make me stack rank those 3, user experience and growth came before Unieconomics.

So this makes sense if, and only really if, there is 1 ample funding available and what I would think 3 other things.

So 1 is there are strong network effects, really strong network effects.

Or 2, there are strong economies of scale.

Or 3, there is a clear first mover advantage.

So 1 of those and ample funding or a combination of those last 3 that I said.

Strong net-growth effects, economies of scale, and first mover advantage.

But in any case, in the cleaning space, it turns out that there are some of those there, but not to the extent of Uber or Airbnb.

And which meant that we did have an opportunity in hindsight to have a much slower growth model and still maybe came out at top, winning in the long term.

And so, like I said, in hindsight, had I known about, had I foreseen what the dynamics, the funding dynamics would have been when we needed to raise money.

I would have certainly made the decision to at least equalize and put equal effort into you know those 3 things growth user experience and economics if not had prioritized that much even higher.

When you're advising YC companies, do you kind of have a rule of thumb?

I mean, every company is different, but say there was a company similar to Homejoy saying like, you should be operating at like a whatever, like x percent margin to be in a good spot?

Finding a particular, there's no constant margin you should be at.

It's really dependent on the local market, I think, and the prices you can actually bear.

But I do emphasize unique economics and user experience above growth, I think.

Unless in some very odd scenario, which there are very few that, like I said, there are really strong network effects and that I think you can potentially raise a lot of money to just drive through some not so great in economics.

But in general, I don't think that's really the case.

Yeah, those are usually the catastrophic failures.

Nikita Budakov asks, what are some unique data science and machine learning challenges you faced at Homejoy?

So I think some of the cool things we worked on, well there are a lot of things but maybe I'll list 3.

1 is we had to create a lot of prediction models for demand so that we knew how much supply to onboard so that supply and demand weren't out of whack.

They're always, almost always, out of equilibrium, out of whack.

But you don't want it to be too much imbalanced.

Another 1 we worked on is we did a lot of analysis on customers and finding out which kind of customers were the best for us in terms of lifetime value.

And so we figured out things like we should be targeting pet owners for example.

They were like 2 to 3 X more valuable than regular, all things equal, than regular customers.

And then finally, 1 of the more difficult challenges was scheduling when you have thousands and thousands of cleaning a day and you have preferences on both sides of the market place as well as things like transit issues and you don't want people traveling too far from 1 house to another and so on and so forth.

Alejandro Ruperti asks, from Tim Ferriss, How has a failure or apparent failure set you up for a later success?

I hope people mostly take failure to as a learning experience.

And not to let it get you down, but You should be honest with yourself and know what you learned from it.

And so, I mean, today I advise, I help a lot of startups out.

And so I think the previous things that didn't work out for me, it provides a really strong foundation and a basis of how I can help people.

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Office Hours with Adora Cheung