Lessons Learned from Founding Udemy & Maven with Gagan Biyani

Hey everybody, welcome to this Founder Institute webinar. I'm Jonathan Gritchen, co-founder and CEO of the Founder Institute, and we have an amazing session today with one of the top graduates of the Founder Institute, somebody I admire, somebody I wish wrote more, by the way, Gagan. I would love for you to write more. It's kind of an affliction that I have as well. I love to write, but I know it just takes time and But when he does write, it's also, it's usually very, very impactful. And we're going to talk about some of those writings today. So before we jump into that, I just want to welcome everybody. We do have, I believe we had about 750 people or so registered to this event from all over the world. So if you are joining in, this is a live event. All right. There's a lot of prerecorded webinars and stuff. But we try to make this live, we try to make this interactive, and we definitely do want you to ask any questions that you have. If you are live in the chat, let us know where you're joining in from. Typically these events are pretty international audience. I'm seeing here, well, I know Aihan on our team getting us started. Thank you, Aihan, in Dubai. And we have Gabriela from Johannesburg, Camilo from Miami, Brandon, Texas, Emeryville.

Emeryville, right next to me.

Yeah, Lagos, Jordan, Palestine, Pinehurst, North Carolina. All right, amazing. So a lot of a huge international audience, which is what we always love to see. So just a quick run of show, we're going to go through a chat with our esteemed guests here, going to leave some time in the end for audience questions. So at any time, please do enter any questions that you have. Into the chat here. We have a team of people that'll be feeding the questions to me, uh, and we'll relay those. And then after we go through, uh, this chat and Q&A, then you guys will also have a chance to network with other entrepreneurs in attendance. So we'll shut down this screen and then we'll go back into that sort of online poker room looking interface where you can jump into different tables and network with other entrepreneurs from around the world. All right. So with that being said, I want to introduce Gagan. And Gagan is one of the most, honestly, I'd say creative in just some of the scrappy ways that you have built some of these businesses that you have built. Honest as well, which is why I kind of started off by saying, honestly, I wish you wrote more because you're clearly— did you go to school for writing or journalism or?

No, but, um, I did speech and debate in high school, um, and I also was the opinion editor for my school newspaper, and so I wrote for that. Um, right.

And then after you wrote for TechCrunch for a while, right?

And I wrote for TechCrunch for a while. So, um, I have done a fair amount of like casual business journalistic writing over the years.

Yeah. And, and when he does it, he tells it to you straight, and he's kind of not afraid to put some of his own vulnerabilities out there and put some of his own hard lessons learned. So, so yeah, if you, you know, I don't want to introduce you for it and probably get it wrong, so why don't you introduce yourself to the audience here?

Sure. Hi everyone, thanks for listening in. I'm Gagan Bihani, co-founder, CEO at Maven, which is a platform for career learning. So basically we have hundreds now of courses that help you get up to speed on AI product management. And they're taught by real experts who actually have been in the field for like a decade or two. So it's sort of the next generation of Udemy, which was my first venture, first startup, which I did through the Founder Institute. And we'll talk about that, I'm sure. And so yeah, I've been an entrepreneur for about 15 years now. I took a couple years off during that time, so you could argue 12 years or something. But yeah, it's been a fun ride and I'm happy to be here. Thanks, Jonathan.

So when you first kind of made that leap, right, I believe were you, you were working at Accenture, I believe?

I was.

Is that what you were doing?

Yeah. That's right.

So what, what was kind of the trigger there for you to kind of make that jump into saying, all right, well, I'm working at Accenture, I'm doing consulting on some businesses, and now I want to start my own thing?

A combination of fear and boredom.

I was, uh, I think that's a good combination. Those are two things that can—

yeah. Um, well, you know, I, I joined Accenture during the 2008 financial crisis, so I was concerned that I might lose my job, and there were certain signals at work making it sound like not directly to me because I was new. There was no performance review at that point, but it was just more like, hey, we might go through layoffs and the first-year analysts might get fired. So I was concerned about that. Never happened, but it was a fear I had. And then I was bored at Accenture as well. As a result of the crisis, I got moved to a different team that was a lot less interesting than the team I got recruited for. and so I was desperately looking for a way out. And honestly, I didn't know anything about technology or startups other than what I had, like, other than the fact that, like, I knew about Microsoft and Google, you know what I mean? Like, that was my knowledge.

Okay.

Um, I grew up in Silicon Valley. My dad worked for Sun Microsystems. Arguably, I should have known about startups, but I didn't. And you know, you don't always know what your parents are doing. And so I grew up somewhat ignorant to that. And at some point I realized, hey, I really want to get into this. And a friend of mine turned me on to TechCrunch and that's how I found out about the Founder Institute. That's how I found out. That's how I got the job. I never got paid. So it was like a job. But like I wrote for TechCrunch for many years and wrote I probably over 100, maybe 200 articles, something like that. So, um, yeah, that's how I did all of those things. Um, and it all started from fear and boredom.

All right. And then you— did you come into Founder Institute? Forgive me, I should probably know this, but, you know, I know Udemy was— you met Aaron, uh, the other co-founder, uh, in, in the FI program. But did you come in with, with the kind of this attractedness to the online education space?

I did, yeah. I had started an online, uh, company— uh, sorry, not an offline education company— in high school. Um, and like, it was barely a company, but it, you know, it did tens of thousands of dollars of revenue, so it wasn't bad as a high school student. And I, um, so I always had an affinity for education and education businesses. And then when I got to the founder— to FI, I had this idea for building like an SAT, video-based SAT courses, essentially. And it was like a pretty good idea. But as I started to marketize it and try to build a team, I both failed at building the team and at seeing like a big enough market opportunity. And so I was like, like, I think I'd gone dark for like a month. And Adeo, like, had a really good CRM, which I'm sure you guys have just built more of. And he messaged me out of the blue and was like, look, man, what's going on? I think in the early part of the FI program, I was pretty involved and active. And so I think he was just nervous that I was likely to not succeed. Adeo cares a lot about the people he works with. And he's also extremely direct. So he was like, what the fuck is going on? Like you need to like figure this out. And I think you should meet some other team members in FI and other teams in FI. And I didn't really want to meet Aaron and Octay when I first heard about them, but Adeo insisted. And, you know, I didn't have much to lose, so we got on a Skype call. And then Aaron and Octay had already named the company Udemy. They had already built some of the initial product, although the product that we eventually went to market with was completely different. So they ended up having to rebuild it. But the original product was, was built. And I joined them sort of part-time, like didn't get paid, didn't have a title, nothing for like 6 months, almost. And then sometime, maybe 5 months, sometime into that 6-month period, they like offered me the the job of being the co-founder.

Interesting. And I think it speaks to— it's like kind of like flexibility too, right? Because it was— you have this massive sphere of like what could be considered online education. You were thinking about doing something all the way over here. You, you, I think, have more— you're more of like a sales— that's your, your realm, right? And then you had these other guys doing like kind of a technical side of things, maybe thinking more about, oh, let's build this, this platform. Right, and just sort of being open to, okay, maybe it's not— it's the same realm, but it's not exactly what I was thinking.

Yeah, I would say, by the way, I'm more marketing than sales, but probably like fairly, fairly good at both. Um, uh, and that's important because Udemy was a consumer business, so you don't really need a salesperson. Um, you need like a half salesperson to sell the supply side of the marketplace, um, and then you need a marketing person to do the demand side of the marketplace. Place. So I did a little bit of both and then fundraising as well and business development, that kind of stuff. So yeah, I agree. I think flexibility is one of my, like, one of the things I look back on was how many of the teams in that FI class were fairly like, like, I would say stubborn about the decisions and ideas that they had to begin with. And that was really interesting because it's obvious today, if you look at that class of 70 teams, Udemy was definitely the most successful outcome. When IPO, it's multiple billions of dollars. And that outcome was sitting there for anyone to get involved with because Aaron and Akta were in the class and did not have another co-founder until month 3 of the 3-month program. So, you know, anyone could have worked with them. And of course they were diligent, and of course I do believe that they picked me because they, they saw something in me. Um, but I was like a 21-year-old, like, you know, with no experience. Like, there were plenty of people there who had the opportunity, but nobody really even paid attention to them. I didn't even see people talk about them. Like, people did not realize how smart their idea was. And I think it's because people were just living in their own world, right? People were just like working on whatever they were working on. And some of those people had great ideas. I don't think that they should always give up their idea for another one. I don't think that's the right way to look at the world. But it was a huge advantage to me that I was so willing to switch ideas and adopt an idea and a business that I like, you know, never came up with and had very little involvement in until that moment.

Yeah, and I think it's— and we're going to— uh, Gagan has some really interesting insights on coming up with startup ideas, and I definitely want to dive into that in a couple of minutes as well, because I think this, this really speaks to a lot of that, right? Where it's like, hey, you— I think a lot of people, when they think of startup ideation, they go like 10 steps too far, right? They literally think of, okay, what is this app going to look like and which features is it going to have on my phone? right? When in reality you kind of want to just start casting a little bit of a wider net in the beginning of like, okay, I think this market's interesting, what are all these different things that we can do within this market? And kind of just being a lot more flexible there. And, um, and I think that's— yeah, it's just in seeing your ideation philosophy, you can kind of really put the pieces together on how it was built, you know, through Udemy and then through Spring and then now through Maven as well.

Yeah, I think you said it extremely well. You have to go broad because in any given market, only a couple of models and often only like, often only one model, honestly, in a lot of cases actually ends up making the vast majority of the revenue in that market. So if you're building a startup that is intended to raise venture capital, which is a winner-take-all game, then you can't be too precious about your idea because what if your idea is to tackle the business with a SaaS product and actually the winning business in this space is gonna be a marketplace or vice versa? Well, you're screwed if you pick a SaaS product. You basically, it doesn't even matter how good you are at everything else you do for the next decade. You are basically dead in the water or at the very least you're going to have have, you know, 1/10 the outcome. Because the difference between first, the best model and the second best model is usually like, I think in online learning, it was like 7 to 8x, right? So like the best model when Udemy was built was Coursera, Udacity, Udemy, right? Like these 3 companies, Udacity ended up not working out, but Coursera and Udemy, and there was a couple other competitors, LinkedIn Learning, Pluralsight, etc. And it was like, take video, video content of existing, of like people who know what they're talking about teaching courses, record those courses and share them online via some sort of marketplace where you're aggregating supply and then delivering it to lots of demand. And no company that reached over a billion dollars in that era did not have that model. That's insane. There were hundreds of other companies with all sorts of models. And the second best model during that time was this this like bootcamp model, right? And the bootcamp model actually came about about 4 or 5 years later. But so that tells you, even like over the course of 5 years, there were only 2 winning ideas in that form of online education, which I would say professional online learning, okay? And the number 1 idea resulted in multiple public billion-dollar companies, and the number 2 idea had exits in the few hundred million dollars range. And then no other idea in professional learning reached that level of scale, pretty much. I can't even think of one right now. And then of course there's casual learning, there's Duolingo, and that's a whole different world. And then there's like university education, which is a different world. But in the professional development world, that was it. And trust me, there were thousands of people, there were thousands of startup ideas at that time, certainly like dozens or hundreds that got funded. And none of them amounted to the level of success that we had or other companies had just because we picked the right model.

Right. And you guys were flexible. It wasn't just like you were geniuses that picked the right model from the beginning, right? And I think it's one of the really, like, I love a lot of the stories in the beginning days of Udemy because it wasn't, it's just the opposite that I see a lot of entrepreneurs take, right? It's like, okay, you wanna build a whole marketplace. Of courses and stuff. Like, oh, we need like 100 courses. No, like you guys like started with basically just like one course. Yeah. Right. And I think, I mean, I'd rather you tell the story, but I think literally it was like, yeah, it's just a perfect personification of kind of like, hey, do things that don't scale. Like, hey, it's not gonna be super glamorous. Like we're trying to sell courses. Let's just come up with one course that we think will sell. Test it, learn from there, and then we'll start to bring on other courses, right?

Yeah, I think it's important to put the context that it took over 6 months for us to come up with that brilliant idea that in that soundbite sounds like we had it from the beginning and just knew we should do one course and it would be great. No, we, we did try, uh, lots of different things. We imported videos from YouTube and turned them into courses.

Um, I remember that.

Yeah, yeah, we, we literally— Aaron created a script and he was like, look, I can just take all these YouTube playlists. And so we would have a team just finding YouTube playlists and jumping them into Udemy. Um, and it actually got us like some users, but the users weren't sticky. They weren't really using the product. They just like showed up. Maybe some people were watching videos, but not enough. Then we tried going wide and we talked to people about poker and online dating and like not online dating, offline dating, but online courses that were for dating. We— and honestly, those two were only as a result of the fact we would have loved to have art courses or science courses or whatever, but none of them stuck. So those were the two markets that seemed like they had some money in them and those didn't work out either and we just couldn't get them off the ground. And then finally we ended up with this idea of like Well, I just was like, so I was pissed off, honestly. I was like, this is not working and it's frustrating. I want to like, I want to like win, you know, like that was the deal. And so that energy, I sort of came up with this idea of like, well, I know that there's a bunch of people who are in Silicon Valley just like me who want to learn like how to raise money. And we just decided to create a course on that. And when I— and I— and like, we had, you know, we had raised $1 million at that point from all-star investors. Now remember, $1 million back then was like the equivalent of $2.5 million today, right?

Like, it's a lot of money back then.

Yeah, it was a big deal.

Pre-product, really? Yeah, company is a lot of money.

Totally. I mean, and— but it also wasn't that much money, right? It was like— it was like, well, it's a good start. So we had $1 million from a bunch of great investors and we could not convince the investors that online learning was worth their time. So even though they invested in the company and they wanted to see it succeed, they didn't believe that if they recorded a video of themselves and put it online, that it was an impactful decision to make, right? Like that wasn't worth their time. Instead, they were going in person and they were teaching people or they were doing talks And like 30 to 60 people would attend these talks. And I was like, this is nuts. I'm going to get you like a few hundred views of your talk online, but you are only willing to do it in person. So we actually created an in-person event. And that in-person event is what we used to create the first course, which was literally just like a camera in the back of the room of like me interviewing these different investors. About the subject of building, you know, raising capital. And luckily enough, like, that went very well. And that's how we built the first stage of Udemy.

Right. And by doing that, you release that product. Now you start bringing users onto the system, right? With liquidity, basically, in a marketplace. And then you can go back out to potential instructors and say, hey, well, we just released this course and it made this much money. We have an audience, right? So it sort of, it kind of starts to figure out that chicken and egg problem that we see a lot of marketplaces have. And I think with Maven, you guys have basically followed the same playbook, right?

Yeah, we have followed a similar playbook for sure. We started with only 4 courses essentially in the first 6 months, and then we slowly grew from there. But you know what's interesting about both Udemy and Maven is the original idea we had in both cases was wrong, and we had to make a massive change in the mid— middle of this. So Udemy, remember I said that Aaron and Octay had a product built? Well, their product was just like this product we're using right now. It was a live streaming product, essentially like a live conferencing product for online learning. And we thought that Udemy was going to be entirely live online learning. This was 2008. '09, roughly. And that's what Aaron and Octay thought. They had spent years building this product. They had built it in university. So it was built before they even joined the Founder Institute. And we ended up realizing that no one was gonna make that, like no one was gonna show up online for a live class and pay for it. And there was a huge liquidity challenge of not just getting people interested in buying the course, but also making sure that they were available at the time the course was available. That's a, that's a super hard thing to do. So, um, it's very, very, very interesting that we ended up, um, ditching that idea, I think, and switching to this recorded video thing. Um, and then of course everyone here probably has heard of Udemy, and it's all recorded content now, and there's no live component at all, even though that's what we started with. Maven was similar. Maven, we started with these 4 courses We were up to $4 million of run rate. We did like $1 million in a quarter in the second quarter of our existence. Okay. We were doing a lot of revenue and that wasn't revenue, that was GMB. We took 25% back then, but that's a huge start and we pushed the gas on it for a year and we kept growing. It kept growing and we got it up to like 6 million run rate. So it didn't grow that fast after that initial bump. And we realized like this market isn't working. And so actually, like, we haven't talked about this publicly because I don't want to talk about it until Maven is like baked and it works. And it's probably around time now. Like Maven's looking like it's working pretty well. And so it might be time now to talk about it. But we made a major pivot. We went entirely away from the creator economy, which was our major market and we basically ditched a business that was doing like, you know, $3 to $5 million in GMV. And we just said, look, we're going to kill all the headcount in this business. And we let go of like 10 to 15 people who were working on that business over the course of 6 months. We gave them a chance. We tried to integrate some of them into the team and some of them worked, but most of them didn't. And we just let them go. They had skills for other jobs, but not for the jobs we needed. And we then pivoted into being more of a self-serve marketplace. And when we switched from working with like big name creators into a self-serve marketplace, Maven became a much more successful business. And that's like, that's part of the grind. You have to be willing to be flexible and change.

And just to dive into that a little bit. So just for anyone who doesn't know, it's maven.com, amazing domain name. By the way, but maven.com, and it's essentially, it's, yeah, it's just moving towards this new paradigm. And you're kind of speaking to the choir here in terms of just the, the much higher effectiveness of cohort-based programs, right? Founder Institute has always been a cohort-based program. It's just the number of, I mean, I mean, there's statistics backing this up too, right? It's like the 70 to 90% or so of people will complete a cohort-based program versus like 10 or 15% of like a self-serve, right? And it's— people can argue as to why. I mean, there's peer pressure, there's community, there's all these things, right? And so you guys are building that side of it. And I would guess, I mean, in terms of— you guys were first focused on the creator economy. I think now you're shifting more towards just practitioners.

Correct.

People that are actually— yeah, okay. So it's like instead of the world's greatest influencer on, you know, growth hacking or whatever, it's like, no, I'm somebody who's actually in charge of increasing these metrics at this large company and I'm going to show you exactly how I do it. Kind of.

That's right. Yeah, that's exactly right. Maven started with this idea that there's all these LinkedIn— and what we thought with Twitter was going to be the big thing, Twitter influencers with like 500,000 followers, 250,000 followers who have gotten big on the internet and we will empower them to monetize their audience. And it turns out that market didn't really work out. Those creators had other types of opportunities that they were more excited about and they didn't like the idea of teaching live. And so it worked on the student side, but it didn't work on the supply side of the marketplace. So we made a major pivot and we switched to, we found some traction with these, like they still have an audience. A lot of our instructors have a few thousand followers or something on LinkedIn. They've started to post their content, but their primary job is that they've spent like over a decade or two at Meta, at Google, at Stripe, at Airbnb, you name it, major company. And they are are really experts in their field because of the time they've spent. And now they teach live courses to people who want to learn from them who are like 5 to 10 years behind them in their career. So like usually our classic customer is probably listening in, right? You've got a job, you've been in the industry or you've been an entrepreneur for like 3 to 5 to 10 years and you want to level up in the new generation of skills. But your time is more valuable than just your money. So as, whereas with Udemy, it's super time intensive. It's very hard to get through a Udemy course, but it's cheap, $20, $10. Well, you know, Jonathan, like you don't give a crap about $10 or $20 because you're way too experienced now. You're probably even, you're probably maybe even past the point of taking the type of core base course on Maven, but I don't think it would be that crazy. There are courses that you would take that are on—

No, I'll take a how to use ChatGPT course. GPT core. I'll take a lot of— I mean, I think that's the beauty of that market is that it's constantly evolving. Um, and I could see too, just if you look at the, you know, the supply side, right, at the cust— the, uh, the instructors, it makes total sense that these instructors that you're targeting now are probably— there's others that are out there being influencers, right? And that takes a lot of time to be an influencer. And here it's probably a lot of people that don't really want to turn take the time to be an influencer, but instead they do want to try to monetize some of this expertise that they have. This is a much more controlled way to do it. That all makes a lot of sense to me. Just with Maven, and let me throw a link in here as well. I'll throw it in here. Again, these are the kinds of posts that I'd love for you to write more, and I would love to write more too. And it just, it takes a lot of time, right? But, but he wrote a great post in here about kind of ideation, and it goes through, it's this 5-step process that you've kind of honed now over time, right? And maybe in kind of describing this, we could go back to your second company, which is a company called Sprig. And I was one of your power users, by the way. I believe I told you that back then, right? As somebody who lived in San Francisco, was commuting down to Palo Alto every day, wanted a healthy kind of quick meal when I got home, didn't have a lot of time to cook and all that kind of stuff. Like, Sprig was a godsend to me. And I think you, I'd love to, if you could share, first of all, just, you know, be how you tested out some of the key assumptions that you were making in this business, right? So as part of your ideation process, it's, you know, there's kind of coming up with ideas, and then there's validating the kind of the riskiest assumptions. And I think with back then, this was food delivery really quickly, right? So what was this, 2012 or so? '11? Something like that?

Or 2013?

'13? Okay. Um, so this was, you know, and just for everybody here for context, this was pre-Uber Eats, this was pre-DoorDash, pre, you know, kind of this—

DoorDash was already around. DoorDash was about a year, a year. DoorDash and Postmates were about a year, year and a half into their businesses. I think they started, okay, either '11 or '12, 2011 or '12.

Okay, so still very early in the whole food, the quick food delivery space. Correct. Definitely pre-cloud kitchens and all those concepts that have now—

Absolutely.

You know, Yeah, um, but, but yeah, I think you identified that the biggest risk of that was operational, right? And I think you designed a really interesting, uh, test, kind of, uh, test that assumption before you kind of went out and spent, you know, your, your all your waking hours kind of build that, building that business.

Yeah, the idea is like, you know, building a company is a very, very risky endeavor, and it takes a long time to know whether you're right or not. So even after doing all these tests, you're still going to take 2 to 4 years until you know whether you're right. So you want to give yourself the best chance to actually like to know that you should, that it's worth the risk to go and do it. I think a lot of people think about this in reverse. They're like, I have this great idea. I really want to make it work. And like, let me tell the whole world about the idea. I'm like, my attitude is, I have this interesting concept. I don't really know if it's going to work. Let me go figure out whether it has a chance of success. And if it has a chance of success, then I'm going to take it to the next level. And I'm going to go spend time on it because my next couple years is valuable. And I don't want to spend it if I'm not highly confident that has a chance. Now, you know, it's still a 50/50 shot or a 30/70 shot. But Normally when you start a startup, it's like a 10% or less shot. So I want to take that number up. I'm not able to— I don't know how to get above 50%, honestly. But like, I think getting up to 20, 30, 40% is very doable with what I call minimum viable tests. And the idea is you go out there and you, within a matter of weeks or months, you attempt to— and often days— you attempt to test your concepts, your key assumptions of your business idea. So let's say, you know, in the case of Sprig, our idea was that we would deliver food in $15 in 15 minutes. We deliver healthy food for $15 in 15 minutes. That was just the basic assumption. The idea was that because—

You guys delivered on that too, by the way. Maybe it was 20 minutes, 25, but like I remember it was that fast.

That's exactly what ended up happening. Ended up being like 20 to 25 minutes. And about $20 instead of $15. And we could get into that if you wanted to. But our goal was $15, $15, right? Sounded sweet. It was a great, it was a great, like, pitch to the public. And we were pretty, we were pretty close on that, I think. And so, but the problem with this was that, like, we didn't know whether it was possible that we could actually deliver that value proposition and what the cost would be and what the operational complexity was going to be, etc. And so instead of saying, hey, I'm gonna like rent a kitchen space, I'm gonna go and, you know, hire a chef full-time, and we're gonna go and like build out this brand and spend money on branding and an agency or whatever— like, that's actually what a lot of companies still do to this day, and a lot of them fail. It's like the classic, I raised $50 million and then shut down the company sort of move that happens all the time. And that move happens because of this mistake, I think. And so in a minimum viable tested scenario, you say, all right, I have this idea, but I think there's a good chance that I could be wrong. If I was wrong, what is the riskiest thing that I need to test to figure out what, you know, that would make it, make this company fail? And in most companies, the riskiest thing is whether people will want your product. Right? So for a SaaS business, you might have this great idea, but when you go out into market and actually sell it to people, they may not want it. So the first most likely thing is people won't want your product. The second most likely thing is that you will not be able to deliver the product that people actually want. So people want a— they want to go into a website and just find a restaurant recommendation and they want to be able to just, you know, that's something anyone would love. Like, if I went on a website and you told me exactly where to eat tonight, fantastic. The problem is that the execution is very difficult. And it's very rare that someone who wants a— who someone is going to be able to trust the app to give them a recommendation. It's very difficult to give a good recommendation, etc. So the second risk is execution risk. And then the third risk is like operational risk. Like, I will be able to execute on this at a small scale, but when I scale it, it's going to totally blow up. It's not going to work. So we identified that Sprig was actually one of those unique ideas where the biggest risk was actually number 3 and not number 1 or number 2. And so we spent a lot of time validating whether or not number 3 would work. And when I say a lot of time, I mean like 3 weeks. Okay, so that's a lot of time to me in this stage. And we decided on like, you know, on a Monday or whatever that we were going to test this out. And two Thursdays from then, we had a test live in the marketplace. And the way we did it was we said, all right, well, we don't need to build a restaurant. We don't even need to build a website. We can use Eventbrite to take the orders because Eventbrite is just like an easy payments platform. So, you know, we use it.

And I remember even instead of the ticket types, right, you would have VIP ticket or whatever, you guys had, oh no, this is the chicken dish, right? This is the fish dish. This is the veggie dish. Yeah.

That's right. We just hacked Eventbrite and turned it into a restaurant app.

Yeah.

And because like it didn't really matter, right? It wasn't an important part. The ordering process did not need to be beautiful for the first, you know, few hundred customers. They're buying food. $15 in 15 minutes is good enough. We didn't have to go to the next step. That's one of the things we did. The next thing we did was we realized that we didn't need to hire a full-time chef of any sort. There are all these personal chefs who make food for celebrities or rich people in the Bay Area, and we could just hire one of those for a night. We hired a chef who actually was George Lucas's chef once upon a time. He had worked at George Lucas's house for a long— or his ranch in the North Bay for a while. And so we hired this guy to be our chef for a night and he made a night's worth of food. And then we needed to figure out how to do dispatch. So I was like very— I'm like a nerd about cities. So we printed out this map of San Francisco. And by the way, this map didn't even have streets on it, right? It was just like neighborhoods basically, like with, with like the lines for streets, but that was it. So we printed out this like pretty janky map of San Francisco, put it on my coffee table. We took pieces of Settlers Catan pieces because I was like, what do I have? That's like we had 6 drivers go out, so I needed 6 like, like different like things that I could just use as my dispatch system. And so the first dispatch system of Spring wasn't building any technology. It was literally just me taking the orders, Googling their address, putting it into an Excel, into a Google spreadsheet, incrementing the orders, like knowing how much each van had and making sure that we were tracking that. And then going on the board and being like, where's this van right now? Oh, it's like roughly in the marina. Oh, this order came into the Presidio. That's close by. Like, let me, you know, let me send this van. And then I had a text message system on my computer. I just text messaged it to the van, the order. I text messaged the customer the order, like, hey, it's confirmed. This is like my estimate of an ETA using Google Maps. And then boom, within, I think within 30 seconds or 60 seconds of an order, I was able to give the customer an ETA and dispatch the order. I mean, it was a thrilling day. It was like intense, but that's 60 seconds.

I'm picturing like a boiler room, like, you know, just, yeah, on the phone. And, but the beauty of this, right, is, okay, so no tech involved, off-the-shelf ordering system event, right? Map on our kitchen table, whatever. But even in building that, like, and in doing that, you're almost like now you're also in practice visualizing, okay, if this were to actually become an app, and an algorithm, right? What are all the factors that it needs to take into account? You're almost sort of building the visual conceptual spec for the tech, right? If the MBT is proven.

That's right.

This minimum viable test. And just one thing here I want to point out. So an MBT, right, and minimum viable test, and I threw a link here, a great article that that you wrote in, in the first round in their kind of resource catalog, which is, which is amazing, by the way. I definitely recommend people check out their catalog of resources, was that MVPs, a minimum viable test, typically would come before a minimum viable product, right? Because in this case, if somebody were thinking in this mindset, oh, I need to build a minimum viable product, then they might have gone out there and actually built an app. Right. But your test literally was Eventbrite, kitchen table, printed map, a bunch of guys on a spreadsheet and cell phones.

Yeah. A test, a test is something you do one time and you have to throw it away afterwards. It doesn't have lasting value really. And then a product is something that is like the kernel of the first version or V1 of a product and you keep growing it from there. You might build on top of it. So in the case of a minimum viable product, That would be if we were regularly running food service, which we did 6 months later, regularly running food service, you know, 4 nights a week, right? So we did a minimum viable product 6 months after the minimum viable test. We did multiple minimum viable tests before we ever got to a product and it took off right away. And the reason it took off right away, we grew to like $1 million revenue run rate in about 4 or 5 months. Okay. And that was just a capacity problem. We were just growing like a weed. Why did we grow like a weed like that? Because we had tested it. We had figured out what type of food people would want. We had some sense that like of how the operations would look and how we would be delivering this food. We knew that hot food was going to be better than cold food and that that was a big complaint of the people we were delivering for. We knew what type of delivery system could work because we had tested 2 or 3 different types. And we had high confidence. Most importantly, we had high confidence that this was a business that had a very significant potential. And if you don't have high confidence that it has significant potential, you can't take on venture capital. Because as soon as you take on venture capital, they're gonna force you to either succeed or die. And like most companies don't need to become $1 billion to become profitable. They can be profitable at $100,000 revenue. 50,000 revenue, 500,000 revenue, whatever is your goal. But once you take venture capital, you cannot stop until you get to $100 million in revenue and you have to die trying. And so you have to know with great deal of confidence that you actually want to take on that capital. And we knew and we ended up getting to, I forget the number, $22 million run rate, I think, at the top of Sprig. So even though Sprig, we eventually shut it down, it still was a very meaningful business that had a very good shot at becoming a billion-dollar company. And that's in large part because we tested it a lot.

Right. And I think, at least from my perspective, Sprig was— it's one of those things where you can do a lot of things right and the timing's off, right? Sprig came up at a time when the gig economy was really growing, right? And you had the Ubers and the Lyfts, and then a lot of them started to move into the space, cloud kitchens, just a lot lot of just subsidized VC subsidized things essentially, I believe, right, is, is what kind of drove you guys to realize that, hey, this probably isn't going to work. What was kind of the, the straw that broke the camel's back? I mean, I believe you guys shut it down preemptively, right, and returned some investor money.

Yeah, we returned $8 million out of, out of, uh, $60 million. So, you know, it was a pretty low return, but, um, when you have $8 million in the bank, you can do a lot with that. You know, I think there's like multiple phases, like multiple levels to like our, you know, returning the capital. One is we gave up, right? We got tired. It was a brutal experience. We went up to $22 million. We had 1,300 total employees, including our, you know, 1,000 delivery drivers, probably like I never broke it down. So I'm just giving an estimate here. But 1,000 delivery drivers.

You are multiple. You expanded beyond San Francisco.

Correct. San Francisco, Palo Alto, and Chicago. We had like 250, you know, kitchen employees and then 50 to 60 headquarters staff at our peak. And over the next year and a half, and that our peak, the week of our peak, when the business went from going up to going down, literally that moment was the week Uber Eats launched. And it was crazy because our customers were not telling us they were going to Uber Eats. It was not a thing. We had no idea that that would be the proximate cause. We put it on the list, but we didn't think it was super likely because a common refrain in startups is don't pay attention to your competition. So we had some sense that they were a really interesting competing product, but we thought it was very different. Turns out we were wrong. We were totally blown away. So over the next year and a half, our business dwindled. We shut some parts down, but our business also dwindled. We were doing $16 million in San Francisco, roughly $16, $17 million, and we ended up at a like $4.5 million run rate before we shut it down. And some of that was us closing certain services, but a lot of that was just demand loss. Like people didn't want the product anymore. So I think the secondary cause right underneath us giving up because we could have then tried a cloud kitchen or another business, we had $8 million. But the secondary thing was that we had a competitor that came into the market that was basically, basically beating our value proposition for, you know, they were offering something. They were like 30 minutes, $25 and unlimited selection. Like you get selection from all these restaurants. We were 20 minutes, $20. And at some point customers were just like, look, these are fungible. Like I like Sprig for certain moments of the week. But now I'm going to try Uber Eats for another set of moments during the week.

Sounds like the definition of a race to the bottom there. Correct. We have a couple of customer questions here that I want to get to in a second. But part of this too, and I do want to get into Maven for a moment. One concept that you talk about a lot, in your ideation process. And I'm just going to share my screen here because it kind of, you know, talks a little bit about here too, right? At some point you guys were thinking, you know what, is this really at Sprig, right? Do we really want to, do we have the passion, do we have the drive, do we have the wherewithal, all these different factors to keep kind of participating in this drive to the bottom, right, to keep it going. And this concept here, uh, is it ikigai? Is that how you pronounce it? I'm not even sure.

I don't know. I'm not— I don't speak Japanese, so I've heard it. Yeah, ikigai.

But it's— yeah, it's a pretty— it's something that we, we push our founders to do as well, right? When you're thinking about, you know, not just, oh, is this a billion-dollar opportunity, right? You have to think of it as a Venn diagram. Is this something that you're good at? Is this something that you want to do? You can be good at a lot of things and hate doing it. And maybe that's not the best combination for you to build a business. Is this something the world needs? That is something that they will pay for. And I think a lot of that comes down to timing, because they would pay for Spring. But as you were seeing, it was sort of a race to the bottom. Clearly customers were kind of lazy at that point because they were already using Uber. So if there was a button there to order their food on Uber, maybe they would just do that too. Right. But I think you use this process throughout a couple of years to, to come up with the high-level concept and to start testing Maven, right?

Yeah. Yeah. I think that— so there's actually someone who asked the question. Danielle, thanks for asking. About first-time founders and how they overcome the skills, the gap in skills and knowledge if they don't have the money to hire an expert. Such an interesting— I'll combine these two questions together. And what I would say is, first of all, if you don't have the skills and knowledge to do the business that you want to do, then maybe you don't— that isn't in your ikigai. And so there's two ways to go here. Either one, you find a partner who has complementary skills. So you have to still have significant skills in the business that you want to start. And then you have another person who also has skills and you work together. That can work. That's what Aaron and Octay and I did, right? Aaron and Octay were the engineers and the product people. And I was a business person, the salesperson with the US passport who could like pitch investors and speak clearly. So we had a very important combination. That's okay. But I didn't hire an expert to start Udemy. We didn't hire an expert to start Spring. You have to be able to figure it out yourself. So you have to have the meta skill of being able to figure it out in the space you're in. And not every space is going to be intuitive to you. So you can't— just being smart doesn't mean you can understand every industry in the world. Okay? You might be able to understand it well enough to be a good investor in it, but being a good operator requires a much greater precision decision on what you are good at and what this business needs. In the case of Spring and the food business, it's the hospitality industry. It requires a real understanding of art, and I am a numbers-driven, operational, like marketing-driven, you know, uh, operator. So that my skills were really good for Udemy because Udemy is a marketing-driven business. You can— you sell to the supply and you market to the demand, right? So I had a natural aptitude for both of those things and Udemy fit that. And Sprig, I did not have a natural aptitude for keeping quality at scale. The operational detail that was required at Sprig was not something I enjoy. I don't even really always do quarterly goal setting for like my teams in companies because I just hate operations, right?

I'm like, yeah, now you have to worry about if a meal gets there and it's cold.

I mean, exactly. Yeah. So I just didn't have the natural skills for it. So I would say that if there is a skills gap, you have to ask yourself, can you like figure it out or not? Um, and if you can't figure it out, you shouldn't be doing that business. You just have to find a business that you do figure out, right? And maybe it means that you don't have the skills to be the, the founder of a startup. Maybe you have the skills to be a founder of a small business. Maybe you have the skills to be a consultant. Maybe you have the skills to be the 5th employee. I don't know, like, you have to figure that out for yourself. But I thought that was a really interesting question and tied into this EKI concept.

For sure. And to dovetail off that, so let's talk about how you've taken that to the— your founding team now with Maven, right? So clearly, it's taken you some time. You start to realize, okay, what are my strengths? What are my weaknesses? Like, how have you filled those gaps? With the team at Maven and kind of, you know, it's, it's never one-to-one, right? This is an art more than a science. So it's like, with this specific business, like, what were the sort of these meta skills that you felt that you needed to round out this team with in order to give Maven the best chance of success?

Yeah, I mean, we started with the team that was focused on the influencer market, right? So we had like two main things we felt like I needed that I didn't have the talent We look for engineering and product co-founder. This is a common thing that business co-founders need. It is definitely something that a lot— I know business co-founders who learned, but for the most part, if you're not naturally an engineer, you're not going to learn enough to build the product probably. And there are enough roles outside of engineering in a startup. So I recruited co-founders, for engineering. And then I also recruited a co-founder for delivering good courses. I'm not, I'm naturally a fairly good teacher, but there's a level of detail orientation and craft that is necessary to build a good course, especially for an influencer. And I happen to know someone who is just a total expert in the space, Wes Kao. And Wes was just like so good at this skill and So I partnered with Strayhorn, who was formerly VP of engineering at Venmo and had started a company and sold it to Google as the CTO. And then Wes, who knew how to do the craft of building great online experiences, which is something I wasn't that great at. And I knew that I wasn't that great at it because I did a minimum viable test 4 months earlier where I had actually taught a course live with a partner, and that partner got significantly better reviews than I did as a, as a teacher. I was getting like 7s and 8s out of 10, and he was getting 9s out of 10. And we realized during that partnership that like I didn't have the talent for being specific enough. And I'm a— I like thinking about the theory and the philosophy while teaching. And personally, I think that students should care more about the philosophy. I think they don't care enough. They just latch, but in courses, they want tangible examples. That's just like what they want, right? If you look at my screen today, the biggest upvotes have always been when I've given an example. And like, I, like, that's fine. Like, I know that's what you guys want. Like, I can give hundreds of anecdotes. But I also think that the philosophy is important. I get interested by the philosophy. So I knew I wasn't as good of a teacher as Wes was going to be, who loves giving like this gritty detailed example and also knows how to craft beautiful experiences that people love. And then when we ended up changing businesses, I think that changed the team dynamic a lot. And we have since hired a bunch of different people for different roles. You know, we have someone who's really good at sales for, uh, supply because we needed to build a supply organization that could scale the practitioner's market because our practitioner's market requires a lot more sales and it's a different type of sales than the creator market. Um, and then on the demand side, we just hired a head of marketing who I think really understands the consumer and is more psychologically in tune with the consumer than is a growth hacker, for example, because I believe that Maven is very much a business where there's not as much data to modify it, sorry, to analyze and optimize. And so we're always thinking about, okay, what is the type of business this is and what is the type of person that can be the right person for that business? So if you're starting a company, you need to think about whether you're the right person to start this business or not.

Makes sense. So we got a couple minutes here. I want to get to a question from Karthika from Ontario. So she was asking, because I know we've talked about MBTs here more in a B2C sense, right? So her question is, is it suitable also, you know, in a B2B sense? And I think I know the answer, but I'd love to hear your take on it.

You know, I get questions like this all the time, right? It's like, Hey, what worked for you in America may not work in India, right? There's a lot of international people. I'll say, you know, this is a question I get all the time, like, and, uh, the answer is, um, absolutely it works. It just works slightly like you have to modify it a little bit if you're doing something that's an adjacency, and you have to modify it a lot in order to do something that's totally different. So not only could minimum viable tests work in a B2B contexts. Like, it's probably better in a B2B context than it is—

I would argue it's better. It's better because it's more analog— it's more analogous to like consulting, right? Which is more accepted. Yeah.

Um, it's better in a B2B context than a B2C context, like almost for sure. However, yeah, um, you could start a logistics business via MBT process. You could start like a, like a real-world logistics business, not a tech business. You could start a restaurant. You could start a consulting business. You can start all sorts of businesses via this process. This process will work in Greece. It'll work in Japan. It'll work anywhere. And it's a philosophy that has so many different applications. It works in careers, right? I think people should be much more willing to spend 1 to 2 months in a job just to test out whether or not they like it or not. Instead of— and, and that's almost entirely driven by the employee. Employers would love, especially at startups, would love to do a trial period. The reason people don't do it is because employees hate it. And I get it. If you're, if you're, if you design your entire financial system around getting paid every month, then you're, you're not gonna go do this. But if you can save a lot more and be able to be choosy about what you do in your career, you're going to be much more likely to succeed. So the minimum viable test framework and these philosophies have many wide-reaching values. And it's important to not always think— and so the lesson that I'll leave you all with is like, the biggest challenge as an entrepreneur is getting over the mental hurdles and the challenges that prevent you from making good decisions. And that one of the common ones is this sort of thing of like, I'm unique, My situation's different. I don't have the skills, but like, you know, I'm still gonna figure it out. I like, you know, is this gonna work in B2B or B2C? Is it gonna work in, you know, AI? Is AI gonna change everything? It's like, no, like these things are timeless. Like clear your mind, think clearly, and remember that you are not that special. You can follow the formula and your use case is special. So you have to figure out What is the unique aspect of the use case that you're doing? And then what is not unique? What is just the same across the board? And so I would say that that's like one of the big lessons that I have for a lot of entrepreneurs is just taking lessons from other places, applying them clearly, and remembering not to get muddled in all of these things. Like building an AI B2B product is gonna be the same as building a SaaS B2B product over the 10 years. Like, there's gonna be a lot of similarities. You can learn a lot from that, and then you have to make some small tweaks, um, instead of changing everything just because you're in a different market.

100%, man. And I think that's where you— I definitely encourage everybody, it's— we have it pinned here, this, this first round article on the minimum viable test. We have this embedded into our curriculum, by the way, um, just so you know, because, uh, for, for founders, especially the ones, uh, at the very beginning that are just testing out tech or just testing out ideas, right? Before you go out there and actually start building a product, you can literally just fire up a couple of tools and just do, you know, we call it sort of like the, I don't know, is it the concierge MVP sort of in some cases, but it's even without a product, right? It's just, just do it in the background. They think it's some amazing algorithm, but it's you on a hamster wheel just doing it manually, right? Thank you so much for your time today. I know you're busy. Please, people, do check out Maven. Especially, and I think I would imagine that the AI tools and the AI courses are probably some of your fastest growing. Is that a reasonable assumption?

Yeah, they're doing well. There are a lot of courses on product management, on marketing, in technology and engineering is starting to become quite successful as well that are in AI, but also that are not in AI that are pretty amazing. We've really curated who teaches on Maven. Very well, and the programs are extremely in-depth, and you won't have someone like me who just philosophizes the whole time. You're gonna have like case studies and examples and projects, and it's very hands-on.

Templates and that kind of stuff, yeah. And it's— I personally feel things like that with how fast technology is moving, how fast the strategies and tactics are changing, you know, to have that kind of education is super important as we move into the future. But thank you so much again for your time, man. We'll have to talk again soon. And yeah, thanks everybody for joining. We are going to go into a networking session, so please do stick around. You can chat with other people around the world, maybe share some of your challenges, maybe share some of your ideas as well. The more you share your idea, the more feedback you'll get, the more you can avoid some of the mistakes that we've been talking about here today. in, uh, in, in building something that users don't want.

Love it. Awesome. Thanks everybody for having me, Jonathan. Take care.

Bye everybody. Bye.