Mar 17 • 45M

David Phillips from Fondo (YC W18) | Hard Pivot Podcast

Pivoting, Working with Family, Solo vs Co-founders, Angel Investing

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Appears in this episode

jeff tang
Pivoting a startup. Founder of Athens Research (YC W21). Medical tourist
Episode details

Introduction for David Philips

  • LinkedIn, Twitter, Fondo

  • CEO and founder of Fondo, which just announced a $3M pre-seed round

  • CEO and co-founder of Hackbright, a coding academy for gender equality, acquired by the public company Capella University

  • Co-founder of safeXai, which went on to raise $220M from Softbank and others.

  • Previously an accountant at Deloitte!

  • Angel investor in dozens of companies, notably Rippling, Flexport, Liquid Death, and Career Karma.


Key Insights & Takeaways By ✨ GPT-4 ✨

Thank you Marie Schneegans for the idea!

  • Pivoting a company can be a better option than shutting down and starting from scratch, especially if there are valuable assets in the current company, such as being a part of the YC community.

  • Building relationships with investors and keeping them informed of the company's progress is important, even if they don't always respond.

  • Being honest with team members about the company's struggles can lead to better collaboration and problem-solving.

  • Having a long-term commitment to a startup is crucial in navigating the ups and downs of entrepreneurship, as persistence will pay off.

  • Talking to users and understanding their needs is essential in building the right product or service.

  • Worst advice: Disregard advice from investors who claim to know whether an idea will work or not, as nobody can predict the success of a startup.

  • David and his friend Ali attempted to become landlords in San Francisco, subleasing apartments on Airbnb, but had to stop when the city started cracking down on Airbnb properties.

  • David's brother Dylan had a Facebook page with 700,000 followers called "nights that end up being a crazy story to tell the next day," which they turned into a meme page called Pizza Bottle.

  • David created a WordPress blog for Pizza Bottle, which eventually grew to 100 million page views a month.

  • The idea for Bloom Joy, David's current venture, came from his experience with Pizza Bottle.

  • David felt burnt out while working on Hack Bright, a coding bootcamp, due to the pressure of helping people change their lives and careers.

  • For founders pivoting right now, David advises focusing on getting customers and solving problems for them, even if it means doing it for free initially.

Pivot Party

If you are in the Bay Area and are pivoting, have pivoted, or want to cheer on the startups in the current batch pivoting, join the pivot party we are having on Tuesday 3/21 with David and Yin Wu from Pulley. DM me for the invite!


Jeff: [00:00:00] So this is episode one of Jeff Tang's Hard Pivot podcast. I'm here with my friend David Phillips, the founder and CEO of Fondo. You guys just announced a 3 million pre-seed rounds. Super exciting. Thank you. So let me just give a brief introduction on David's, as I said, CEO and founder of Fondo.

Also CEO and co-founder of Hack Bright, a coding academy. for gender equality, which was acquired by the public company, Capella University, also the co-founder of Safe Xai, which went on to raise 220 million from SoftBank and others. Previously, an accountant at Deloitte and also an angel investor in dozens of companies such as Rippling Flexport, liquid Death, and Career Karma.

Is that a good back intro?

David: Yeah. Thanks for the intro. Thanks for having me. Cool.

Jeff: Awesome. Yeah. So let's just get. My newsletter is called Hard Pivot. So let's start with that. Your current company, Fondo, pivoted from the startup. You got into YC [00:01:00] with a few years back. You were previously called Bloom Joy.

So can you tell us more

David: about that decision? Yeah, I think e every company I've ever done has always been a ton of pivots. So I think when things weren't working for Bloom joy, That was the first inclination is let's pivot and make something work versus, shutting it down and, going back to the drawing board.

Because I think when it comes down to doing a pivot, you gotta look at or we're doing any idea, right? You look at what are my assets? What do I have going for me in this? towards whatever thing I want to build. And when you do that and we're in that situation where the idea wasn't working, we were running outta money.

One of the big assets that I thought we had was just being a part of the YC community. When you're part of the YC community, you're just surrounded by early adopters that that would be, that are open [00:02:00] minded about becoming your customer or trying. your app. So that was a really big asset I thought, and I thought, let's, rather than shut it down, raise money again, start from scratch.

Let's continue the path as a YC company and try a new idea. Yeah. .

Jeff: And when you got into yc, you had a co-founder, correct? . And did that person want to go with the pivot or not?

David: So when I initially got into yc I got in as a solo founder. . Okay. And in my first meeting with at the first like kickoff, like Dalton, basically scared the shit outta me and also my group partner Gustav.

And they're like, just like reminding me how much work is ahead. And I was like, shit, I can't do this alone. I need a co-founder or co-founders. And ended up convincing some good friends to. as co-founders and then start building bloom joy. Gotcha.

Jeff: So you recruited two co-founders.

, once you got into yc. . . And then once you decided to pivot, did they stay on or what? [00:03:00]

David: So they stayed on through the first iteration of Bloom Joy. And then we basically, I think, that shitty thing happens where like the idea stops working. I'm running out of money and it's we all just have to be like, what do we all want to do at this point?

It's kinda like a big inflection point for the company and big inflection point for all of our lives. And we just decided that I would just, take the reins of the company and try to pivot and they decided to move on and do something else. But they're both, really good friends and and went on to do really cool.

what was the original idea for Bloomy? So the original idea for Bloomy was to build a marketing platform that helped influencers like monetize their following. So if you're an influencer back in 2018, like an influencer was, now that creators same kind of thing is like they have a big audience.

and, you invest all [00:04:00] this time and energy to building a big audience and then, you wanna turn into a business, how do you monetize it? And people sell things. Yeah. That there's been really successful creators that create their own brands and sell things.

And then there's like a sh just a shit ton of other ways to monetize, pay per post sponsored posts. .

Jeff: So you got into YC with that idea? Yeah. And at what point did you change?

David: We had to change quickly because Facebook, which was the place where all of our influencers that we were working with, had their audiences changed their terms of service so that you couldn't get paid to share links.

And so we had to. Yeah. Like soft pivot. Yeah. What we were building so we did that in the middle of yc ultimately, yeah. Took that direction, ran that for two years, and it was like going well, we were basically, what we had pivoted to was we would make content sites for influencers.

We had a big writing team. We would write viral editorial content for their sites, and then we [00:05:00] would rev share on all the ad. From that. So you're like a marketing agency for Yeah we became more of an agency. Yeah. And it grew, it grew, the, like customer base was getting over a hundred million page views a month.

It like was really, going great. And then Facebook changed their platform again and link sharing on Facebook in general. would just get way less traffic. And that just started a snowball effect of like less traffic, less revenue, less rev share for us. But meanwhile we had built out this whole team to support that business model as like full-time people.

And we just wouldn't, we couldn't, we were running outta money so we couldn't do it anymore.

Jeff: Gotcha. So you did that for two years. Two years, yeah. And you raised how much money for.

David: During that time we raised a little bit of money after yc. But we really didn't have a, we didn't have a ton of success raising money for that anyway but we, but it was generating good revenue and so when we were running out of money, it was just like [00:06:00] we had already pivoted once in that same space and, got screwed over.

by the decisions that we made on the platform we wanted to build on. So we're like, yeah, we didn't wanna pivot within the same thing anymore. And that's when we were, that's when I was like, okay, what, what do I have that would be, give me the most probability of success with a pivot. So

Jeff: then you let go of everyone, or everyone left, like the co-founders left and. , tell me about that. Did you just say, oh, I have a mar, I have a accounting background. Yeah. And then did you just write a post and bookface and just try to pitch all the YC

David: startups? was like a whole process.

We had to at the time I wasn't CEO of the company anymore and the ceo, my friend Jason, and our CTO Robbie we basically had to tell all our investors like, Hey, we're pivot. David, who's not the ceo, is now the ceo. And and so I basically, had to write this email to all of our investors Hey, we're pivoting, gonna [00:07:00] try.

The goal is to pivot and build a successful company. And step one is I had spent some time thinking about what should the first idea be? And my plan was like, I'm gonna try a new idea for six months and then, See how that goes. And then either, ultimately shut down or it'll work and I'll just keep working on it.

What had happened, like running up to this point was, we knew we were running out of money and we tried to sell the company and we had a buyer, we had a term sheet that we signed and it just it wasn't a, it was an exit, but it wasn't like a great exit. Nobody was gonna really get their money.

And so we're trying to push them to give us, some kind of concrete rev share that would let everyone get their money back and they kept pushing back on it. And it was essentially signing a term sheet for or signing an asset purchase agreement where we get nothing and and our investors get nothing.

And so we were in that negotiation process for three months and then it was just like, yeah, this is just it. You waste so much time thinking like, how do I do this? How do my [00:08:00] investors gonna think about me if I don't do this right? And it was just like, you know what? We were running in circles with these people.

It was just like, fuck it, let's just throw that away. It's not happening anymore. And let's write this email. Hey, we're not selling the company anymore. I'm the CEO now and I'm gonna try a new idea and I'll check in with you in six months and tell you if it worked or not. Basical. And was that first idea like Fondo now?

Yeah, so the first idea was I needed something where I didn't needed an idea where I didn't need to hire people or recruit people because we had no money and it needed to be an idea that could generate revenue so that we could like grow to a point where we had some more options like raising money or hiring.

So it need to be something that I could, that I felt confident that I could do, alone for a little bit. And that there was like some low hanging fruit of like customers. And so thought, of course, every founder I had like a note in my phone of every idea that I've been thinking about [00:09:00] over the past few years.

Every time I have a startup idea, I'll just write it in there and write like a one liner for it. And. and this, the idea for fun was one of these ideas. And it and it checked all the boxes because it was something I could do. Cause I used to be an accountant before I learned how to code and get into startups and and every startup needs to file their taxes.

And so I thought, okay, this is something that I could sell to, fellow YC founders and I could. , I felt confident that I could deliver on whatever I sell without needing to hire people. So it was like a sort of a self-sufficient mvp. There was like, very few blockers to get this out the door.

Gotcha. And

Jeff: if you didn't have that much money anyways, why not just start a new company?

David: So I thought about that and I thought about like I just, I didn't want. , and I think a lot of people have opinions about this, about whether you should pivot or just shut down your company.

Yeah. I had built relationships with the [00:10:00] folks who did invest in Fondo or in Bloom Joy at the time. I had family and friends who had invested and I just didn't want to leave everybody hanging. Like I felt yeah, maybe the BCS wouldn't care. Maybe some of the angels wouldn't care.

But I didn't want to, I personally. Wanted to build a reputation for helping people make money, helping other people be successful. And I didn't want to take the L Yeah. I didn't wanna, lose felt like losing. And so I was like, the amount of dilution that existed because of this was like worth the benefit of not letting people down.

The benefit of still being a YC company and the benefit of not having to go and apply to YC again and try to raise money again. Like it was just like, it was just yeah, it just made sense to just keep going. Gotcha.

Jeff: How long did you grind it out just by yourself before you had enough money to make the next step, which I guess

David: might be hiring [00:11:00] or, yeah, this was in like November of 2019. And I was I was thinking about this idea and I made like a simple landing page and I saw that Sam Par, the founder of the Hustle, had tweeted that he needed help with accounting. And I was like, oh. Awesome. Like my first warm lead, someone who needs this and oh, I'm gonna put this landing page together and I'm gonna DM him and and just see if if he's interested in this idea.

And so I did that and ended up, it forced me into oh shit, I need to put together like a sales deck and pitch him and now his his president at the company. Adam on Fondo and go through that whole like, that whole process of trying to get them as a customer.

And in the meantime I thought yeah, can I find someone to actually help? They were a pretty big company at the time and they needed like a controller level accountant. And I happened to have a close friend that I'd used to work with. had her own bookkeeping company, [00:12:00] Megan. And I was like, Hey, will you take on this customer with me?

And we'll just like Revshare, we'll do like a 70 30 revshare. You get 70% Fondo gets 30% and she was on board and so then it was like, did the sales call. Then she joined on another follow up call and then we close them as a customer. And then and then I sent the email to the investors.

Nice. Cuz it was like we had something. . And how did they receive that? Most of 'em just didn't answer, which is very typical. . Yep. . I think, yeah, I mean I think it's just as a founder, you obsess and worry so much about what other people think sometimes. Some founders do. Yeah, I did and I do.

And so it was just like, it was typical. I had some very supportive investors. Trans media Capital. Capital was one of them that. Just have always been super supportive. And they just, they had my back doing this Pivot and Greg from Interact. Yeah. Chris and Peter from Trans Media, they had my back and were like, kinda yeah, go for it.

And so once I had their buy-in, , [00:13:00] even if no one else res like I had their buying before I sent that email too. And the fact that nobody else really cared or responded, I was like, it's fine. Like I got, I have the wind in my sails from these people and that's that's enough. Yeah. Gotcha.

Jeff: That was really good background. Okay. And so

was it clear? , that first customer you had that this was going to be it. Did you have conviction or was it more of a slow process?

David: I did, at the time I was like, I had to, you have to grind to get your first customer, and it was like the lead was there and like the, he responded to my tweet, my dm and like I got the meeting set up, but then I, they, the hustle had hustle con that.

Or or like the next week or something. And I went, like I, I went and I was back to grinding and like being desperate to get a customer and like going to that conference and just like doing what you have to do. And I was like, shit. What have I gotten myself into?

This is gonna be my life now for a long time. This is gonna be hard. And ultimately they did [00:14:00] sign and it was a big contract for us. It was like, , they're a big company. They were gonna pay us like five grand a month. And I was like, wow, okay, great. Like this is gonna work. Like we, the first goal was like, okay, how do we get to 83 k and so we can have a million dollars in arr?

It's I only need 15 more of these and we're gonna be there. And I thought I have a bunch of startup friends, like I've invested in startups. Like I know I can get at least 15 of them to sign up for fond. And so I sent that email and I think it was like December that I sent the email to the investors and then I started, hitting up my friends and nobody wanted to sign up

Oh wow. , nobody wanted to sign up. And it was because, everybody, all of my relationships at the time were people who had been doing their startup for a couple years or like later stage and like they already had somebody. And if they didn't have somebody or they wanted to switch, like they didn't wanna switch to someone brand new and not, what if I pivoted [00:15:00] again?

Or what if it didn't work out? Now they've put their whole accounting on our system and then we're gone. So it was just like, so December passed, couldn't get any more companies. Then January, and I was like I was like, oh, I'm gonna go hit up. Kirsty at yc yc, C F O and see if YC will just recommend me to all the portfolio because like I know what I'm doing.

We have a customer paying us five grand, like every YC company should be using us. , gotta fake it until you make it. So I met up with her, and did like office hours with her and got some really good advice and, but it was really hard to get that endorsement from yc, even as a YC company.

And it was like, she was like, we really we can make recommendations based on the community. We don't make just blanket recommendations to one vendor or another. I recommend that you build a good reput. Within the YC community. And so I'm like, okay, so that's that's what I need to do.

I need to like work [00:16:00] with more YC companies and and earn that recommendation. And and so that was January. Then still didn't get any customers February and I was like, shit, like this might not work. Like

Jeff: whatever. This is still just you at

David: this point? It's me and Megan. Okay. Yeah. Yeah. And yeah, I was like, this isn't working but what else am I gonna do?

And then one company, one of my friends who who has an investor in public recreation, was a YC company. I think they were in like a, the summer 19 batch. and I was talking to Jennifer, their founder, and she was like this Delaware franchise tax like process is super confusing and annoying and every founder is hates it.

Like that that she was talking to. And I was like, oh, that's really interesting. She's you should do this for people. And I was like, that's a really good idea, . And and . I had never really posted on Bookface before, and so I didn't really realize the benefits of it. And this was like two years after doing yc and I [00:17:00] was like, because I, it's intimidating.

You don't want to like, yeah, you don't want to like get zero up votes and just yeah, fuck. So I was so I was like, all right I'm gonna, I'll post this and ended up posting to that we would do, We would file Delaware franchise tax for free for the first 10 founders who like signed up and made the landing page.

And at the time my brother Dylan was living with me. And so yeah, so we were both at the house and posted on Bookface and and it actually worked out really well and we got a hundred companies that signed. Damn. Yeah. So that was our, that's when I was like, oh shit. This could actually work.

That wasn't for months. No. Yeah. Was like just with one customer for a few months. Yeah, like three months with just one customer. And then from that

Jeff: Delaware thing you got a couple. Yeah.

David: So then, so Dylan started helping me, my brother, and then we called my sister Diane. She came over and we both, and like the three of us, like just camped out and filing Delaware franchise tax returns for [00:18:00] like, all these startups. Wow. And it was a lot of fun. ,

Jeff: did your siblings have a job?

David: So at the time they were both available, so that worked out. And this was right before Covid? This was like February of 2020. Yeah. And yeah. And so we were doing that and.

And I was like, oh shit, this is all we have to do to get customers as opposed to Bookface and . And we got a hundred customers. I They're free customers. And then it was like, oh shit. Like I have these hundred people. We just did their Delaware franchise tax. And it's but I forgot to try to upsell them or convert them to customers.

Yeah. And then I was like, oh shit, I gotta send all these people emails and try to get them to buy bookkeeping from us. Yeah. And emailed everybody and maybe 10 companies were like, okay let's do it. And I'm like, okay, let's do it. So then we got our first like 10 customers. Wow.

Started doing that. And and then the grind just kept going and then Covid happened. Yeah. So then it was like what the fuck else am I gonna do other than grind? [00:19:00] Yeah, for sure.

Jeff: Yeah. So that was like the first little era of Fondo. Yeah. Yeah. Awesome. Very cool. Were there any other challenging periods since then?

David: Yeah, every period every period I think is really challenging. I think I'm really happy that I, that, decided to do this idea because. It's something that I, believe it or not, I love accounting. I love taxes. Yeah. And I love startups, so it's like really exciting. It's a really exciting problem to solve.

I love working with all the customers that we work with. Like it's yin From Pulley says this too. You gotta, it, it helps when you love your customers, right? Yeah. Because you're gonna be, that's who you're working for, right? You want to. You wanna respect them. You want to like, appreciate what they're doing and be able to relate to them and so I'm really glad that this idea has worked out so far because there have been a [00:20:00] lot of challenging periods and it's if I didn't care about this idea or the customers, I would've just been like, yeah, fuck it.

Yeah. Yeah. And also that the market's really big. It's like a really big opportunity. So it doesn't, there's just there's no doubt that this is what I need to be working on. Which helps get through all those shitty times. . Yeah.

Jeff: That was good. That was good. So we touched upon this a little bit, but what's it like working with

David: your family?

It's honestly it's great. It's. I'm a huge fan of working with people that you know. Yeah. And, who do you know better than your family? And so it's I think I, not for everybody, but I really I enjoy it and I think it's really productive.

I think there's a lot of I'm definitely aware of how in the workplace when people , everyone has ideas about what happens at a company and when you have like a CEO and you're working with family members, people can start to say is this person getting special treatment or that [00:21:00] person?

And so I definitely am aware of how people look at that. And I'm definitely super object. I try to be super objective about the people I work with as well. There's the relation, the personal relat. It, which is you gotta compartmentalize the personal relationship with the business relationship and look at the business relationship really objectively and look at what are the important parts about determining whether this business relationship is succeeding or not, and focusing on those things and just being honest with each other about when that's working or when that's not, and, working like you would with any other person that's not your family.

But it's really. Created a good culture at Fondo, we have a lot of people hiring their family members or their spouses. And it's working out. So far and so we have this culture at Fondo of like bringing in your friends, bringing your family to help us build Fondo. Yeah,

Jeff: I know.

My family would just be fighting the whole time. ,

David: oh, we definitely fight. Yeah. . Okay. That's good to know. Good to know.

Jeff: Okay. [00:22:00] So another thing you brought up earlier is that you actually got into YC as a solo founder, and I'm a solo founder too. You've done previous startups where you had co-founders.

What's your perspective now on being a solo founder versus having co-founders it?

David: Yeah. Yeah. I think it's I feel like as a founder, whether you have co-founders or not, it's just about. In the early days, it's it's about, surviving and getting off the ground. And so having a, doing that as a team helps make that happen versus doing it alone.

And I think, it helps when you have co-founders, but it also helps to build a team. If you could build a team and, they don't, you don't need to have co-founders to be able to build something with a. , and, early team members, are ba, are like co-founders.

And I think people, you bring on early team members and give people equity and find like-minded people. It's work with your family. [00:23:00] It's like you have people that are like every, the main, the most important thing is like building something together. Yeah. Versus building something alone.

And you can build something together with people who aren't co-founders. And so if you can, I think building a team is really important, whether that's co-founders or anybody.

Jeff: Yeah. The hardest period for me when I was a solo founder was when it was just me and we didn't have a team yet. Yeah. How did you cope when you, it's just you.

David: Yeah, I think, work, this is where working with family was actually super helpful because, , you can be totally honest and get support. Yeah. From your family. And I think if you feel comfortable doing it, you can do that with other people on your team. I think, yeah. I think because I've done a few startups, I've learned this along the way.

As the ceo, I think as a first time ceo, you want to make, you always want to make sure that you're perceived as right and that you're not making the wrong [00:24:00] decision. And that you like, and that you, when people have questions that you should have the answer. But at some point I realized that's just not true.

And that people actually will connect with you more if you're just honest. Yeah. And you're like and when you're honest with your team, then they can help. , get the company outta trouble. If you're like, I, I'm really down right now because I'm not able to get any customers, this really sucks.

This is really hard. We need to figure out how to get customers to be successful. And like I, I'm running out of things to do, and then you. Your teammates who are gonna be like have we tried this or that? And now you have a collaboration and it's let's solve this together versus being like, yep, we're gonna get customers.

We only have one right now, but we're gonna get more and I'll let you know when that happens. Then you're like suffering internally and like lying people are just like, I think it's [00:25:00] fine, but . And so back to your point, if you don't have co-founders, especially like you can be honest with other people and get that camaraderie.


Jeff: definitely. Being vulnerable builds that relationship and then it gives the people around you a chance to step up. Totally. Which is what they want too. Totally told what to do and everything's gonna be okay when it's not

David: right. Yeah. And I, it's like I. . There's a lot of advice out there.

It's don't freak out your team, but it's like anybody who's at an early stage startup, needs to be like, default freaked out because like it's 99% gonna fail. Yeah. . Yeah.

Jeff: They're not dumb. , you hired them, so

David: Hopefully not, but and, but it's you don't want to trick them into thinking like, this is a sure thing.

Yeah. It's like this is, could fail at any moment. That's definitely

Jeff: like a huge, like mischaracterized mischaracterization of oh, caricature of oh, that means some like big ceo. It's yeah, we're gonna do this, blah, blah, blah,

David: blah. And it's yeah. It's it's just doesn't work for anybody.

It works [00:26:00] when, if the company does miraculously, get customers and work out. Yeah. But it only, you can only do that for so long. You're just gonna burn out. For sure.

Jeff: So what else have you learned? Like what's changed over time on your perspective on entrepreneurship through the three or plus startups that you've done and Yeah.

David: How? Yeah, I think I think, it is just always really hard to get, to grow a company. And you have to accept that it's gonna be hard and.

And have a really long term commitment in order to not get totally beat up by all the ups and downs, like being like

patiently patient with a high sense of urgency basically. I like that. Yeah. Because you need urgency to get stuff. . But you need patience to not to not burn out.


Jeff: advice would you give to yourself when you were doing your first or your second startup?

David: I think that, [00:27:00] yeah, that it's really hard and, persistence obviously is a, is really valuable in this game. And so you gotta be really persistent and not give up. , but that it is really hard and you need to have a really long term view and and focus on solving problems for customers.


Jeff: That's tough though, cuz sometimes like people are pivoting or they're thinking about pivoting, they don't oh, it's supposed to be hard and maybe I'm just, I just need to suck it up. So like, when did you know for your previous companies or previous pivots that like it was time to move?

David: Yeah. I think part of it is knowing it's time to move on because the results aren't there, and part of it is just knowing that you can't go on because it's so miserable. . Yeah. Like you hit a point where you're like, not only is this idea not getting any users, but it just is so miserable trying to get users and it's I just can't do it anymore.

Like I gotta do [00:28:00] something else. And. That, that has always been it for me. And also like you just be real with yourself and they're like, this isn't working. Yeah. And I think it's different. Everybody has a different threshold for that. But I personally like my personality I am a people pleaser.

That's part of my personality. And so by me seeing or like interpreting. I'm, my, what I'm building is not like pleasing anybody. It's not it's not doing anything like, okay, it's time to move on.

Jeff: If you hadn't, gotten the 100 customers from the Delaware thing, like how much longer do you think you would've stuck

David: doing that?

I think I would've gone to the six month mark and wrote the, and then wrote the email to the investors and then. . If it, yeah, if it's still, if I still had one customer at six months, I would probably try something else. Yeah. Because that was the time, like it's all about the expectations and the commitment and I set that commitment and so it would've been a [00:29:00] really, so at that point I would be comfortable with that.

Like binary decision. Yeah. Gotcha.

Jeff: how has your experience as an angel investor affected how you operate

David: as a founder? I think learning about angel investing and doing angel investing, you learned about all the thing, the ways that investors think and because you're forced to think And so it's totally changed the way that I evaluate other startups and my own startup because I start to think about, the market opportunity, the, like markers of success along the way.

And yeah. So it's definitely changed the way I like interpret the game. , but like it's, I haven't really it's really hard to learn from companies that you invest in , like you as an investor, you just see the results. You don't really see [00:30:00] the inputs. , you just you just see the results and so it's really easy to like pattern match on the wrong stuff.

And so it's really difficult to to as a founder, like what have I learned? I've learned things from founders that I've worked with as an investor that like the way they think about things or like the way another investor gave them advice. I'm like, oh, that is good advice. Or oh, that's a good way of thinking.

It, that'll give me more like insight. But yeah, I would say you just learn more. ,

Jeff: what is the best advice you've gotten as a founder?

David: That's a good question. , I think really good advice is to like it's cliche advice like talk to users. Yeah. , you have to talk to the people that you're building something for, or that you want to build something for along the way in order to make sure you're building the right thing.

Otherwise, you're just gonna keep on building the wrong thing and you don't wanna spend too much time building the wrong thing. [00:31:00] What's the worst advice

Jeff: you've gotten?

David: The worst advice is like this. Like this isn't gonna work because X. Yeah. No investor knows whether your idea is gonna work or not. And you just gotta take every advice with a grain of salt.

Jeff: Yeah, definitely. So you have done a lot of random funny side projects over the.

And I feel like I only know a few of them today. I learned that you did a podcast before , and I knew you had a meme page. Yeah. And, but just tell me some of your fun, favorite, funny side projects you've done

David: over the years. Oh man. The funniest, one of the funniest ones is my friend Ali and I we work together at Fondo now too.

We. , we wanted to become landlords in SF and we wanted to like, do the whole like Airbnb arbitrage game. And so we Ali had been doing this and had a few apartments where he rented [00:32:00] them and then sublease them on Airbnb. And through my last company I had met a couple land. Renting office space and stuff that had apartment buildings.

And so we like started setting up these deals with with landlords to with the permission to sublease on Airbnb. And so it was working great and yeah, we were gonna make this much margin on every property and we're like, let's just get a thousand of these and it'll be a great thing. And so we started doing it and we had 12 or 13 properties and and then, This was around the time when, this was like 2016 when the city started to crack down and say no more Airbnb apartments for more than like 30 days of the year.

And and so during this whole process one of our, one of our units ended up getting investigated by the city. And we had created all these like fake email addresses for each listing because you can only have so many listings as like an individual person. And with [00:33:00] some of these email addresses were just so fake Jeff 1, 2, 3, 7, 6, 7,

And and it was just like, it just was catching up to us and. So then I was like being investigated by the city and like I had to meet somebody from the city to come check out the property and it was like, oh man, this is just not worth it anymore. And so had to like, had to stop doing that.

But it was a lot of fun. The idea was awesome and it was like it was gonna be a really it was a real estate business who doesn't want to like dabble in real estate? And anyway, it was. It was fun, but then just totally not worth getting in trouble for . Yeah. That's crazy.

Jeff: I didn't know the city of San Francisco

David: enforced any laws.

Yeah, they had a whole department. Cool. .

Jeff: Tell me about the meme page. I want to know what the mean


David: The meme page is really funny. My, my brother Dylan, who I also work with at Fondo, he had this meme page that had like 700,000 followers on Facebook. [00:34:00] And it was called nights that end up being a crazy story to tell the next day

And it was like, so when the like button came out on Facebook and pages came out, people would come up with these like random page names and create them so that people could like it. And it'd be like Jeff likes nights that end up be being a crazy story to tell the next day. And then they would just go viral because then everybody likes it.

Yeah. And so this page had 700,000 followers or. . And I was like, oh, that's really interesting. Like, how do you, what do you do with that type of following, like how do you turn that into a business somehow? And so at the time, like meme pages were becoming really popular and, I love mean pages.

I think I just, who doesn't like to laugh at funny shit on the. , but I'm not like creative at all to come up with memes, . So I was like, damn it. I was like, oh, and then there started to be these pages of people who would just share other people's content. And so I was like, oh, okay, that's [00:35:00] allowed.

Like we can just share funny stuff that we find on the internet. Yeah. And so I started setting up, this was like when Zapier was new too. I set up these Zaps that like every time certain pages would post like pages that I thought had good content. I would automatically post to this Facebook page.

Wow. And so then it was just like, went from this like dormant, like random page to starting to get engagement and likes. And it had such a huge audience. It was like you could see, I got to experience what it's like to like, put something out there and just get like thousands of likes.

Yeah. you just, it's like a rush. Oh my God. You're like, . Yeah. It's damn, this is crazy. And I was like, okay, I'm gonna, I gotta learn how to, I gotta figure out how to monetize this. So I just kept doing the meme things and ended up talking to some people. My friend Peter at the time, he had built an entire uh, started building the sick media company called Shek.

And it was around the time of like little things and like buzzfeed, all these things were going really popular. And yeah, he was building this like viral media property. [00:36:00] and I was like, oh, that's really interesting. Like how does that, maybe that's how I can monetize this page with so many followers.

And so started, so I created a WordPress blog and I was like, nights end up that, end up nights that end up becoming a crazy storyteller. The next day is not a very catchy name. So like you can change your Facebook page name like once at the time. And I was like, I gotta change this name. And basically gave myself a hard deadline okay, by Tuesday I need to come up with a new.

For this page, and then that's blog's gonna be called, I'm gonna start like putting editorial content out there. And I couldn't come up with a good name. And like at the time the two most popular memes on the page, one was about pizza and one was about like a champagne bottle or something. Yeah.

And I was like, I'm just gonna call it pizza bottle. The name doesn't matter. I just need like a name. Uhhuh . And then I've since definitely regretted calling it that because like you can't do anything with that name, but. Created a blog for it and it ended up, we were able to recruit someone who was a follower of the page to become the editor and yeah.

Had this [00:37:00] little media property and then learned the whole game of like link sharing for media properties and how that works. And then and then ultimately that's where the idea for Bloom Joy came out. Oh, wow. Yeah. So that was. . So That's

Jeff: okay. Simple. . That's, yeah, . Wow. I wasn't expecting that .

David: Yeah, it was crazy.

It was really crazy. Did you,

Jeff: were you doing the meme page while you were still

David: running? No, it was after Hack. So after Hackbright got acquired, I I was no longer there and I was just figuring out what I was gonna do next, and this was like a fun thing to do. Just like a fun media memes and all this stuff.

I was like yeah, let me like figure out what this is about for a little bit. Yeah. And pizza bottle. Got it. It, pizza bottle itself grew to a hundred million page dues a month. At one point. And even when it was called Pizza bar. Yeah. When it was called pizza. Okay. It was through like, [00:38:00] that page is I met, we hired an editor.

I was like, Hey, is anyone out there want to, we're launching a blog. Anybody have experience like being an editor at a blog and wanna write for pizza bottle? And met Alexa, who was our writer, she was the editor and she was like a one person show, like putting out like 12 articles a day of like viral content.

Wow. And then Jason, who was my co-founder he messaged me from the page too, and which was like, Hey, I was CEO of distract fi. I grew that to 10 million in revenue and now I have a consultancy where I help pages like yours monetize and, build a better following. Oh wow, this is like exactly the person I've been looking for.

And so then me and him partnered up and he's the one who like grew pizza bottle to a hundred million page view. . And then did you guys like sell it for anything or No, we still have it. So you can actually still go to pizza Are there,

Jeff: are the memes still

David: running, like fresh? There are still some memes running.

Nobody's really on Facebook anymore. That's true. But I it's, think the site gets like [00:39:00] 800,000 visitors or something every month. Yeah. But it's all through like link swapping and all that fun stuff. What a ride. . ,

Jeff: what did you know it was time to stop working on Hack Bright.

David: I was like really burnt out when I was working on Hack Bright. It was just a really tough, like from a, like operating perspective to make Hack Bryce successful was really hard because it is fully dependent on. Like helping people change their lives and change their careers and people are dropping everything in their life to go learn to code at Hack Bright, to get a job as a software engineer.

Yeah. And I did a bootcamp. You did a bootcamp. Yeah. You know how hard that is. Yeah. And there's all, it's really hard to pull that off as an individual and when you are. The like school that's like providing that, like the pressure's on [00:40:00] cuz if you don't help people succeed, then your company just fails.

So every single individual outcome is so important to I mean it's obviously important on just like a human level. Yeah. These people are, so there's a lot of pressure. And then also, from a. Standpoint, like every misstep is could just be a huge, could just cost the whole business.

And and then, it just rightfully because like people are spending a lot of money on this and nobody wants to be like let down. Yeah. It's hard to, do that . So it was really stressful and. . I also was like, oh, I thought I was a first time CEO and I was like, this is I don't know what I'm doing, and I need to, I felt like I always had to look like I knew what I was doing.

And so it was just a lot of pressure and I just ultimately was burnt out. And I ended up bringing on a new ceo. Who I met on Twitter, Sharon Sharon Wek joined hack Bright as our ceo and then the [00:41:00] company ultimately got acquired. Yeah, got it. . All right.

Jeff: What other startups or founders do you think I should talk to?

Good pivots or epic pivots like you did.

David: I, so I think, thank you for saying that. It was not, yeah. It doesn't feel like an epic big pivot, but I guess it was a big pivot. It was a hard pivot. . It was a hard pivot. It was a hard pivot, I think. Yin from pulley Yeah. Has some really good stories about pivoting.

There's, yeah. Let me see, who else is Dylan Forrest has pivoted to steady. Yeah, I can think of some more. Okay, no worries. I thi Yeah, so

Jeff: sha I was texting two YC founders and the current batch, and they're both freaking out.

David: Yeah. ,

Jeff: it's almost demo day. It's approaching. What advice would you give to founders that are pivoting right

David: now?

I think if you're pivoting right now, like demo day doesn't matter, , there's a lot of emphasis and [00:42:00] pressure to have a successful demo day, but like you don't want to make a decision about your company for demo day. Like you don't want, if you're pivoting and you don't have an idea, you don't wanna force a shitty idea that you don't care about to work for demo day, because then you're gonna feel like shit when you tell your investors that you're pivot.

But then the downside of not doing that is you won't have any investors to tell that you're pivoting. So it's a really tough spot. But I will say that there's so many companies that end up being successful who have a shitty demo day. Or I think now that YC gives you 500 k, like and the market, it's just so tough right now.

I feel like for any founder, cuz the market's bad, SVB just collapsed. like VCs like Yeah. Are gonna be a lot more risk averse. The market of customers are spending less and less money. Yeah. So like revenue metrics are gonna be bad, traction's gonna look bad. And if you're [00:43:00] pivoting idea is probably gonna look bad too.

Okay. So what advice, I don't know. I think I think the advice is really just to fo okay, maybe I said demo day doesn't matter, but you really want to take advantage. Every low hanging fruit you have, right? And demo day is an opportunity to get in front of investors. And don't force an idea that you don't like to work for demo day.

Pick a new idea that maybe you haven't tried yet and run with that. . But ultimately ultimately that doesn't as matter as much as like just focus on, moving towards getting customers. Yeah. Making something that's gonna get you customers, making decisions that's gonna move you towards getting customers. So it's really hard. I don't know, I guess I don't have good advice. . Yeah, it's hard. . Okay. The advice is it's really fucking hard and you just gotta.

I hate to keep saying this. Cliche advice. You gotta talk to users. Yeah. And build something. People want , but that's ultimately really what you have to do. You need to talk [00:44:00] don't obsess over this idea that's not getting any customers. Cuz you put out the landing page and you went on product hunt.

Yeah. No one signed up. It's go do something. Go solve a problem for a customer that you wanna work with and then keep doing that even if you do it for free. Like just find somebody. That you want to work with and solve a problem for them and build your startup around that. Yeah, I think that's,

Jeff: yeah, that's all we can say here,

Yeah. At least thing got 500 K, you're gonna get 5k but yeah, exactly. Enough. That was super great, David, thank you so much. Thanks, Jeff. I, this was good. This was fun, fun.