- The speaker emphasizes the importance of knowing your "why" when starting a company and solving a problem.
- Having an authentic and meaningful reason for starting a company attracts like-minded co-founders and helps in finding innovative solutions.
- The "why" also helps in persevering through difficult times and attracting passionate employees and customers.
- The speaker shares examples of successful projects funded through Indiegogo that align with their mission.
- The 5 why exercise is suggested as a way to gain clarity on your "why" and ensure it is a strong and irrational belief.

Danae Ringelmann, founder of Indiegogo, shares advice at the 2014 Female Founders Conference.

And what I mean by this is, why are you starting this company?

What problem are you trying to solve and why do you care so much?

If it's not, if your reason for being is not authentic to your core, chances of you failing will actually go way up.

And the reason why is, for me, my why was I wanted to democratize access to capital.

I was aware of this problem, it affected my parents, it was now affecting me because I couldn't help the people I wanted to help.

And so my why became I want to democratize access to the capital.

And the reason it was so important and the reason why it was so helpful is actually my why found me my co-founders.

It's a hard, that's a hard journey to figure out who should you partner with.

But when you're clear with why you're doing this and you spew it to the world, the people who care about that too join you.

And because I was spewing it over and over again, I was actually able to find my co-founders in business school.

The second thing is that your why gets you out of your way.

So my original idea was a complete offline fund with a democratic twist.

And when I met my co-founders and they were asking me what my real goals are here, and that was to democratize access to capital, Slava, my co-founders, turned to me and said, well, if you really wanna do that, why aren't you using the internet?

It is the most democratic tool out there.

You can't invest online, but that actually led us to coming up with the Perks-based model, innovating, pivoting, and because of that, we were able to launch Indiegogo.

And I say that because if I was more obsessed with the solution of my original idea of the product and the solve that I had in mind, I would have been stuck on that.

But because I was more obsessed with my why and actually solving a bigger problem, I didn't care how I solved it.

And that allowed me to see a better way to solve it.

Another reason to focus on your why is it gets you through those dark periods, which there will be dark periods.

I like to show this graph because on top was our plan.

We'd launched January 2008, raise our first venture round fall of 2008, and then be off to the races.

We all know what happened in the fall of 2008.

Fast forward 3 and a half years, we finally raised that first round of capital.

So that was 3 years longer than we actually anticipated.

I had planned to not take a salary for 1 year.

It's just the reality, but if your why is not totally you, If it's not totally powerful and meaningful to you, you won't stick it out.

Our first employee, Erica, turned to us when we hired her in 2011, after we raised our round of capital, first round.

She kind of looked at our numbers and she saw that we were always growing, but we didn't really have that hockey stick growth until the prior couple months, right before we raised our round.

And she looked at her numbers, she's like, wow, you guys really did stick it out, why?

And my co-founder Eric said, well, we were passionate about what we were doing despite reason.

You have to be passionate about what you're doing despite reason.

Your why also informs your whole strategy.

It gives you bumper lanes for how you're gonna execute.

We're an open platform because we want to empower the world and allow everybody to find what matters to them.

To actually empower the world, we can't be a gatekeeper ourselves.

So that's why we've been an open system since the very beginning, and that's continuing to be the reason why people use this every day.

It also made us be global from the get-go, which is another reason people use this every day.

If we want to truly empower the world, we have to be everywhere in the world, and that forces us to do the hard work to create the back-end infrastructure so that we could serve every customer in every country across the world.

So we realized that we were doing something completely new.

We were reinventing a whole new industry called funding and a new way to actually raise money.

And so because of that, this was a new experience for most people in the world.

That allowed us to focus on actual customer happiness being a key driver of our business and now a key differentiator.

People use this every day because we help you the most.

Because Oftentimes when people raise money this way, it's the first time they've ever done it.

And the why also continues to inform your strategy and how you actually build your product.

So again, we wanna empower everybody to fund what matters to them and everybody to raise money.

That's what democratization of capital means to us.

And so with that, we need to have all kinds of funding options.

You can't just do it 1 way and say it's our way or the highway.

You have to give people options so they can maximize their experience and optimize it for their specific needs.

So we have fixed funding, flex funding, forever funding, all kinds of different kind of funding structures so that people can be successful.

And 1 day, we were actually part of the Jobs Act happening 1 day we'll be able to offer equity crowdfunding when the laws change, which we actually helped change as well.

And the coolest thing about having a really good why though is it attracts amazing people.

The best talent out there can go anywhere.

They're not looking for jobs, they're happy where they are, but what will make them change their situation is if there's a company that actually allows them to do what they believe is right and do what's important to them.

And because of that, we've had an amazing experience attracting the most amazing people who are not just, their skills aren't just out of control good, but their hearts are as well.

And they're so motivated for this mission of democratizing access to capital, they continue to innovate every single day to help us achieve our mission.

And lastly, and this is the coolest part, is your why actually attracts your customers.

So we've had customers like young engineers out of Idaho, not connected to any university or anything, but they're just passionate about saving the world by creating solar-powered streets and roads across the world.

They used Indiegogo, ended up raising over $2 million to bring their idea to life.

And then this is 1 of my favorite ones, Ubiome.

This is an awesome team of folks who are micro or crowd sourcing your genome or your biome, excuse me.

They got started because they were able to validate their market, gauge interest on Indiegogo by raising $350,000.

They then got into Y Combinator and now because of all of this traction and success, they just closed their series, $4.5 million series C.

So what's happening is we're giving all kinds of cool opportunities to all kinds of ideas, ideas that maybe the world would have passed over had they not had a chance to actually see them bubble up and thrive.

So the question is, how do you guys get clarity on your why?

Well, not to be meta here, but there's a very simple exercise I learned in business school, which is the 5 why exercise, which is Start with the statement, why are you doing the company that you want to start?

And explain that to yourself, and then ask yourself, like a two-year-old would, why again?

And keep going until you get to a place where you're totally irrational, where you're just explaining the reason you're doing this is because of a belief.

And when you get to that kind of irrational place, that means you have something really real there.

And for us, my why was I wanted to democratize funding.

Well, it's because finance is broken and inefficient, and it's due to this reliance on gatekeepers.

Well, why is the reliance on gatekeepers not good?

Well, because it doesn't allow for equal opportunity.

And that was so core to me that that was the reason why I knew I was on to something and that I need to stick with it.


Speaker 0: Know your why. And what I mean by this is, why are you starting this company? What problem are you trying to solve and why do you care so much? If it's not, if your reason for being is not authentic to your core, chances of you failing will actually go way up. And the reason why is, for me, my why was I wanted to democratize access to capital.

I was aware of this problem, it affected my parents, it was now affecting me because I couldn't help the people I wanted to help. And so my why became I want to democratize access to the capital. And the reason it was so important and the reason why it was so helpful is actually my why found me my co-founders. It's a hard, that's a hard journey to figure out who should you partner with. But when you're clear with why you're doing this and you spew it to the world, the people who care about that too join you.

And because I was spewing it over and over again, I was actually able to find my co-founders in business school. The second thing is that your why gets you out of your way. So my original idea was a complete offline fund with a democratic twist. Not at all what Indiegogo is today. And when I met my co-founders and they were asking me what my real goals are here, and that was to democratize access to capital, Slava, my co-founders, turned to me and said, well, if you really wanna do that, why aren't you using the internet?

And I said that is an amazing point. It is the most democratic tool out there. You can't invest online, but that actually led us to coming up with the Perks-based model, innovating, pivoting, and because of that, we were able to launch Indiegogo. And I say that because if I was more obsessed with the solution of my original idea of the product and the solve that I had in mind, I would have been stuck on that. But because I was more obsessed with my why and actually solving a bigger problem, I didn't care how I solved it.

I just wanted to solve it. And that allowed me to see a better way to solve it. Another reason to focus on your why is it gets you through those dark periods, which there will be dark periods. I like to show this graph because on top was our plan. We'd launched January 2008, raise our first venture round fall of 2008, and then be off to the races.

We all know what happened in the fall of 2008. Things did not go according to plan. Fast forward 3 and a half years, we finally raised that first round of capital. So that was 3 years longer than we actually anticipated. I had planned to not take a salary for 1 year.

I ended up having to survive for 4. It's just the reality, but if your why is not totally you, If it's not totally powerful and meaningful to you, you won't stick it out. Entrepreneurship is just too hard. Our first employee, Erica, turned to us when we hired her in 2011, after we raised our round of capital, first round. She kind of looked at our numbers and she saw that we were always growing, but we didn't really have that hockey stick growth until the prior couple months, right before we raised our round.

And she looked at her numbers, she's like, wow, you guys really did stick it out, why? And my co-founder Eric said, well, we were passionate about what we were doing despite reason. And that just sums it up. You have to be passionate about what you're doing despite reason. Your why also informs your whole strategy.

So it's actually a very practical thing. It gives you bumper lanes for how you're gonna execute. We're an open platform because we want to empower the world and allow everybody to find what matters to them. To actually empower the world, we can't be a gatekeeper ourselves. We can't have an application system.

So that's why we've been an open system since the very beginning, and that's continuing to be the reason why people use this every day. It also made us be global from the get-go, which is another reason people use this every day. If we want to truly empower the world, we have to be everywhere in the world, and that forces us to do the hard work to create the back-end infrastructure so that we could serve every customer in every country across the world. It also informs your strategy. So we realized that we were doing something completely new.

We were reinventing a whole new industry called funding and a new way to actually raise money. And so because of that, this was a new experience for most people in the world. That allowed us to focus on actual customer happiness being a key driver of our business and now a key differentiator. People use this every day because we help you the most. Because Oftentimes when people raise money this way, it's the first time they've ever done it.

And the why also continues to inform your strategy and how you actually build your product. So again, we wanna empower everybody to fund what matters to them and everybody to raise money. That's what democratization of capital means to us. And so with that, we need to have all kinds of funding options. You can't just do it 1 way and say it's our way or the highway.

You have to give people options so they can maximize their experience and optimize it for their specific needs. So we have fixed funding, flex funding, forever funding, all kinds of different kind of funding structures so that people can be successful. And 1 day, we were actually part of the Jobs Act happening 1 day we'll be able to offer equity crowdfunding when the laws change, which we actually helped change as well. And the coolest thing about having a really good why though is it attracts amazing people. The best talent out there can go anywhere.

They're not looking for jobs, they're happy where they are, but what will make them change their situation is if there's a company that actually allows them to do what they believe is right and do what's important to them. And because of that, we've had an amazing experience attracting the most amazing people who are not just, their skills aren't just out of control good, but their hearts are as well. And they're so motivated for this mission of democratizing access to capital, they continue to innovate every single day to help us achieve our mission. And lastly, and this is the coolest part, is your why actually attracts your customers. Amazing customers.

So we've had customers like young engineers out of Idaho, not connected to any university or anything, but they're just passionate about saving the world by creating solar-powered streets and roads across the world. They used Indiegogo, ended up raising over $2 million to bring their idea to life. And then this is 1 of my favorite ones, Ubiome. This is an awesome team of folks who are micro or crowd sourcing your genome or your biome, excuse me. They got started because they were able to validate their market, gauge interest on Indiegogo by raising $350,000.

They then got into Y Combinator and now because of all of this traction and success, they just closed their series, $4.5 million series C. So what's happening is we're giving all kinds of cool opportunities to all kinds of ideas, ideas that maybe the world would have passed over had they not had a chance to actually see them bubble up and thrive. So the question is, how do you guys get clarity on your why? Well, not to be meta here, but there's a very simple exercise I learned in business school, which is the 5 why exercise, which is Start with the statement, why are you doing the company that you want to start? And explain that to yourself, and then ask yourself, like a two-year-old would, why again?

And then why again? And keep going until you get to a place where you're totally irrational, where you're just explaining the reason you're doing this is because of a belief. And when you get to that kind of irrational place, that means you have something really real there. And for us, my why was I wanted to democratize funding. Well, why do I care about that?

Well, it's because finance is broken and inefficient, and it's due to this reliance on gatekeepers. Well, why is the reliance on gatekeepers not good? Well, because it doesn't allow for equal opportunity. So why is equal opportunity important? Because I feel like life should be fair.

So why should life be fair? I just believe it. It's just what I believe. It's irrational. It's just what I believe.

And that was so core to me that that was the reason why I knew I was on to something and that I need to stick with it. You you

See all Y Combinator transcripts on Youtube

Know Why You're Starting a Company - Danae Ringelmann of Indiegogo