"Lessons Learned in My Startup Journey" at Founders Embassy's Borderless Summit 2018

Hi everyone. Thanks for joining us today. So I'm Jess from Sequoia, but before this I did my eight and a half year tour of duty as a founder for Polyvore. And like many of you, I'm also an international transplant. I moved here from Hong Kong. But we're here today to talk about ritu's journey, which is a pretty amazing one. Ritu's the founder and CEO of Zoom, which gives rides to kids. So they transport parents most precious cargo their children to and from school activities, all of that. So my understanding though, and I'm lucky to be a little bit of a spend some time with RITU as a board observer, because we're an investor, a very happy investor in Zoom. But I know that it didn't quite start out that way. Zoom was originally a much larger smorgasbord of different ideas. Can you tell us a little bit about the origin story and how it's changed over over the years?

Yeah, sure. So Zoom actually started out a very personal need of mine. Five years back I was working at ebay and at that time I have two children and my younger one transitioned to preschool and I didn't need anybody dedicated at home. And this whole logistics of picking your children from school, taking them to various activities, taking care of them, became the center of my life. Like I was like, how do I thrive in my career while finding somebody trustworthy and reliable for my children? And as I was thinking about it, the whole idea became like, there is a need for this on demand family logistics. There are things that you need to do with trust, safety and care and how do you find somebody to do that? So you're right, original idea, we had a bunch of different things. What would a mom do? Or what would somebody at home do with trust, safety and care? Of course you would need to transport your children, but then those children need snacks in between. So maybe you can pick the snacks and children would need care around the ride, so maybe you can give babysitting around the ride, pick the laundry in the daytime and pick the groceries and keep it in the fridge and all of these things, wonderful things, which of course were need and we were thinking we could solve it. But interesting thing was we incubated the company at Stanford and using design thinking, we interviewed hundreds of parents and. And early on we realized two things. First thing is that the transportation was the longest hole in the whole thing, which people found hardest to outsource to somebody. And second thing, as we started thinking about the startup and making it operational, we realized that Focus was not a choice, but it was purely needed for existence. Like, it was something that we absolutely had to do and pick one thing that we could do really, really well and which was most resonating with the customers. So we decided to hone in on the transportation with small pockets of care around it, and it reduced the operational complexity. It helped us to become an expert in an area and scale very fast.

Yeah, I'm a definite, big believer in the importance of focus. And I think you picked a really great segment. Maybe let's rewind further back. And you are an international transplant as well. Can you tell us a little bit about your background, how it was growing up, and maybe how that shaped or helped and hindered perhaps your journey as a founder and as an entrepreneur?

That's actually my favorite topic. It deals a lot with human psychology and something that all of you can relate with. I grew up in India and my parents were actually the first people in the family who migrated from a small town to a big city and established themselves. So as a family and also as an oldest girl child of four siblings, we all had to break a lot of barriers in the process. Interesting thing, growing up was like, my parents always encouraged me to dream big, all of us to dream big, regardless of what the odds were for the success. And just to give you an example, like, when I was in high school, I got very fascinated by maths and in physics, and I had this thing about becoming an astronaut. And at that time in India, in a country of 1 billion people, there was only one astronaut. So you can imagine the chances of being actually an astronaut.

Aim high.

But nobody in my family ever discouraged me or told me, you cannot do it. And it's that ethos of dreaming big and not worrying about the failure actually led me to be the first engineer in my family. In my class of 300 students, there were just six engineers in the college, which probably you also faced as an engineering student. And all of this actually led me to be very relentless right from the beginning about the process, to be very humble and find innovative ways, look around the corner and find new ways of solving the problem. And I think all of that has helped a lot. Definitely. Being a founder is a very irrational thing, the most irrational thing you can do. You have to be relentless. It has helped through the journey.

I 100% agree. I think grit is one of the most important traits because, yeah, startups are just so incredibly hard, right? Like, everything that could possibly go wrong goes wrong at some point. And you really do need, like, the relentlessness to just get through and just not give up. So I do think that's incredibly important. So family has not stayed too far from home. Tell us about your co founders.

Yes. So I mean, the interesting thing is this nature of leaving the world a better place is just. Or leaving the world better for next generation is just second nature being like constantly migrating from place to place. So as I was looking for co founders, I didn't have to look too far. I founded Zoom with two of my brothers who have very complementary skill and bring this similar ethos of relentlessness and humble nature that I was describing to you.

Yeah. Maybe tell the audience a little about how you break down the responsibilities.

Yeah. So my background has been mainly in product marketing and strategy. So I was the one who was thinking, constantly thinking about how to create a solution that people would love. And the other co founder, who's the CEO, he comes with deep background in logistics and supply chain area. And this particular solution is not just a technology product. It's so much goes on behind the scene in actually delivering the solution. So it just came right up the alley. And as soon as Vivek, my other co founder, joined, that was the first day we started giving rides. Before that, it was all design and product and app. And my third co founder, who's my youngest brother, he is PhD in computer science and he loves building large scale platforms. So he came in and actually helped us take this to reality and build the whole platform from the gamza.

Yeah. If I remember correctly, Vivek was your COO now was in the Indian army, right?

That's right.

And so the logistics and like the chain of command and trust, operationalization, it's like it's a really good fit. So we talked a little bit already about how startups are really hard. Maybe. I think now, I think when you look at Zoom from the outside, it seems very successful. It's launched in multiple Cities, you're growing 300% year over year. But there have definitely been, there must have been bumps in the road. Can you talk a little bit about some of the biggest struggles you faced, maybe some of the lessons you've learned? I think all founders appreciate hearing a little bit about what that journey is like and how you get through the really hard times.

Yeah. So for us, the mission, the product was there, but the interesting thing is when we were just bootstrapping, we had not even raised money. There were two other companies with a similar idea who had raised 14 to 20 million dollars in Series A already.

And how much had you raised?

At that point we were bootstrapped. We had no money at all. Like pretty much 100k, 100 to 200k, that kind of money. And we were slowly raising our first seed round and interesting. We had to actually show ourselves to be a bigger brand in the market and come up with creative ways to show our differentiators. So right from the beginning that was there. So there. I think I can talk about three distinct areas here. So one of our other competitor who no longer exists, they actually died two years back after raising a lot of money. They were doing a lot of paid acquisition channels for marketing. They would have vehicles wrapped up in their names and things and we didn't have any money. So we had to come up with very creative ways of customer acquisition. And early on we thought about who else could pay for our service and we went and partnered with schools. And over the time, interesting thing is that channel not only gave us like free acquisition of the customers, they became paid channels and current now most of our revenue comes from that channel. So that agility really helped us. Just because we didn't have money, we had to think about those ways of doing things. Second thing was we never thought ourselves as fitting in the business model to something that's hot in the market like Uber for X or something. Right from the beginning we were thinking about how could we solve this problem? This problem has not been solved for generations and there is a reason for it. How could we solve it holistically? So everything in a solution, right from providing care around the transportation, having familiarity to of the drivers, to the people was designed that way into the solution and that really helped us.

Yeah, I do think all those things when we were doing our due diligence on Zoom and we write up our sort of investment memo on why we should do the investment, both of those things made it into the memo. Like being very scrappy and capital efficient I think is huge. I think personally, like raising money is like, it's important because you need to obviously make the company survive. But in and of itself, like that valuation number, that amount that you raised doesn't really mean anything. Like the only valuation, the only one that actually matters is time of exit when it's real math, not like funny VC math. So I remember that like you were very scrappy, done so much with so little compared to many of the others who had raised over raised and then actually ended up, one of them ended up dying and the other. The other thing I remember was like, it felt so. It was so clear that you were your user Right. It wasn't like, how can I build a cool, sexy business and be a founder? It's like, how do I solve my own problem? I am the chief transportation officer at home, and it's a such sucks, and I want out of it. How do I make this easy but have someone who I really trust because kids are really important. And then the third thing I remember was we actually did a lot of due diligence. We called all the. We called a bunch of your drivers, and they were. They raved positively about you. And one thing I remember was they would say, oh, you know, like, the team works so hard, and they knew the names of all the people in the office. And, like, they were just so pro Zoom and just, you know, coming from a culture of where I think a lot of other driving companies have drivers that feel like they're being taken advantage of. Like, this was so interesting. Especially talk a little bit about that. Like, what's the culture you've created inside of Zoom that makes, like, not just parents trust you, but also even drivers, like, want to work. You can talk a little bit about the culture.

Yeah, sure. So driver is a very important part of a product. They are actually our first ambassadors, brand ambassadors. Like, people don't see me. They don't. Probably don't even know my name, but they meet the first driver, and that's what makes them at ease about the solution. So interesting thing, first thing is that we were right in the beginning. I knew why I was not able to hire for myself anybody who could do this reliably. One of the things was the drivers who are care providers, they are looking for more hours of jobs, while parents are looking for just the amount of work that they want. So one of the things right from the beginning was how could we solve the problem for the drivers themselves? How could we give them more work, provide them more work, and in a way that gives them flexibility and yet predictable schedule? So those were very important things for us. Second thing, majority of our drivers are female drivers. So we want that empathy to be there with them. Like, what is more important to them? They are on the road. They are facing the situation. So we created this customer, customer support, what we call live operations. And our ethos was like, as soon as the call happens, somebody will pick up the call, will help the driver. So almost like a 911 kind of a thing. And yet experience, which is like a Virgin America type of experience, like, really superior experience. And that's one of the reasons you probably saw drivers being so raving about Internal employees. Because one of the things for us, core values for us, is building better communities for our driver.

Cool. Cool. So you mentioned how one of your competitors sort of went under and I remember you once told me a story about how you guys responded quickly to that which I thought was sort of the definition of scrappy. So maybe you can share that story with audience.

Well, okay, so in I think March or April of 20, 2016, we had a competitor called Shadow and they on Thursday announced that by tomorrow, Friday at 3pm they would no longer be providing service to their customers. So it was very shocking to the drivers as well as the customers, especially because outwardly they were still doing radio ad and Facebook ads. Everybody thought things were going really well. So drivers were very disappointed. Like what would they do about it? So our team, which was at that time hardly less than six people, just quickly put together a plan and we did a marketing campaign, reached out to all the drivers. We found a way to reach to their Facebook groups and other and we told them join us and by Monday you're back in job. So you will be driving by Monday. Over the weekend we just went in different areas of Bay Area and we, we did offline events to interview them and recruit them. And we had more than 80% of their drivers by Monday driving back with us. So it's like without any cost. We just acquired a whole bunch of drivers. And not only that, some of them are actually most of them are still with us. They pick my daughter in the morning. They describe the story of what happened when other people ask. And they have been very loyal zoomers for us.

That's incredible. Cool. So you've talked about hiring drivers. Let's talk a little about hiring your team. What do you look for in people that you want to bring along with you in the journey? Like what are the key things you screen for with your team?

Yeah. So interesting thing about us is it's such a mission oriented company like solving, providing families with peace of mind more time, providing school, schools with more money and more time to be able to do what they need to do is something that really draws a very unique kind of people to us. So first number one thing that we look for is how excited they are about a mission. We have people from all range. For many of the people or employees it's a first job. But still they are so excited about the mission. Oh, my mom left the job or my mom was not able to pick me up at the time. I had to wait till 6 o'.

Clock.

Whatever that student people are very excited about the mission and that's what keeps them thinking about the solution one step ahead. The second thing which is very important for us is the proactiveness. Like can this person actually put in more weight that's needed? Can they be agile? Can they be humble to iterate and learn from other people in the team? And I think those attributes together really make a fantastic employee for us.

The other important group that you bring along the journey with you is your investors. And I always think about someone who does, who's now who's been on the founder side and on the investor side now. I always think about it as like this is not just this is someone who's going with you on this like 10 year journey because it takes on average 10 years to build an amazing company. You're getting married to someone, right? It's like a. But you can't really get divorced easily from your, from your investment investors. So you know, take us through your fundraising process if you have any tips to share with the audience. I know it was you've had your ups and downs and you, you know, you worked with us in the series A and then Spark in the series B. But take us through some of those decisions. How you just sort of chose to marry Sequoia inspired with very little time to date. Right. And to get to know each other and talk us through. I think one of the. Some of the drama from behind the scenes and any tips you can share.

Yeah, I think in a way you nailed it. Maybe some founders should think like that. Like it's almost the commitment like a marriage. So that is one of the decisions I would say we made really, really well. Even though there were many interesting things in the journey and now I have started believing that it's. It's not about small investor, a big investor, but it's about, about the right investor who will actually help you build a company the way you want to help you stay true to your purpose building and during company and something that will leave a lasting impact in the, in this world. That thing is very important. So we met a lot of investors in our pre series A when we were raising a series A and faced all kinds of situation from people not understanding the problem that we were solving. Are having different kind of biases about us being like sibling founders or anything like that. Or they were just, they just didn't have courage. They thought that the market is very similar to Uber and Lyft market. So we had all range of investors thinking about it and I distinctly remember that moment when we had a series A term sheet in hand and our investor who were giving us term sheet, they wanted us to take it and go quickly live in five different cities. And we were hardly with 15 days of money left in the bank and we were still in the final stages of process with Sikoa. We had not finished the process there and all R and D investors were saying, hey, you better take bird in hand and two in the bush. You should just take this term sheet and run 15 days of renting. So but somehow in the process we thought that we had found a tribe with Sequoia because of all the questions that were asked during the process. You guys were not asking us to run fast. You were encouraging us to market, actually master the playbook and really make it well and build a product that customers cannot live without. So as a founder, that was totally a music to our ears and rest is history. So it all came. We are very excited about the decision and it has come along really well.

So look for investors who challenge you and ask you the right questions.

Yes, exactly. And who are thinking like you or they challenge you where you're not there. But at least in the bigger biggest mission, they can think as big as you of how far you can go.

Yeah, I do think that it is a common mistake to scale too quickly sometimes and like especially when you, when you are able to raise a big round like I think people back to being capital efficient. I think people sometimes just like I have it, I'm going to start spending it and kind of make, don't think about like the retention and how important it is to build a truly delightful product that sticks, especially the consumer space. So it looks like we have 50 seconds left on that clock. So really quickly, last question is any advice you have for this group like if you go back in time and tell your younger self or your pre series A self like what to do, how to be a better founder, what would you say?

Okay, 30 seconds left. So two quick advice that I can think of. First thing is to just take a leap. There's so much of ambiguity out there, but just taking that step helps, helps take, I mean solve the problem or help you create something of value to the people and you get very high marks for just taking the leap. That's very, very important. Second thing I would say is find a tribe which is your tribe with smart people who are humble and who also aspire to do something big. Magic happens when you're with people like that.

Cool. Thank you, Ritu.

Thanks Jess.

You're very inspiring. And it's been a pleasure working together.

Thank you.