Y Combinator Startup Podcast
00:12:44 · Chaz Englander, Arnie Englander, Gustaf Alstromer
[00:12:44] S0: I would say you've definitely got to enjoy it. You've got to enjoy building companies is my overarching thought. What about you? [00:12:52] S1: I think you've just got to be prepared for the worst. You've to be prepared for the worst and the most ridiculous roller coaster experience. I think all star fans will say the same. I think it's going to be a lot of ups and downs, a lot of the time downs, and you've just gotta be prepared for that and know it's coming. And as Chad says, just enjoy it because it's fun. [00:13:13] S2: And is there a sense that when you start the third company that you've you've gone through that before, so you've gotten used to the ups and downs and you can just kinda like be calmer about it? [00:13:24] S0: You can definitely be [00:13:25] S1: calmer. Definitely.
00:13:25 · Arnie Englander, Chaz Englander
[00:13:25] S1: calmer. Definitely. [00:13:25] S0: Definitely calmer. But there is certain things that you just cannot prepare yourself for. You know, I think, like, you know, like, it just in general, no matter how much you've said to yourself, this is normal, you're going up and down, that'll be the odd thing. It will be employee related or product related, whatever. That will still surprise you. The fundamental thing that I think we realize that we've at least brought into this company is this concept of perseverance. Not blind perseverance, but perseverance. And I think there's a clear difference where if something logically makes sense, like if in an unemotional way you're approaching a problem and it logically makes sense, then you should probably continue doing that thing and not let anything stop you. And I think the consistency that we've noticed of founders invested in or worked with is like the ones that kind of do that and really persevere tend to win. So I think that's probably the biggest learning for us, just persevere at all costs.
00:14:26 · Arnie Englander
[00:14:26] S1: Yeah, for sure. I mean, one of the big ones for me in particular is definitely hiring. I think when I was CEO of Fancy, I was 22, 23. So hiring was new to me, I think, to be honest, I didn't really have a clue what I was doing. We still don't. Yeah, then hiring is always tricky. I think one of the biggest things right now, and we say a lot, probably the biggest thing that comes up in an interview is how much do you think you'll enjoy working with that person? Think, you know, a fancy, again, being sort of inexperienced and maybe naive, was all about where have they worked before, what's on their CV. And you kind of ignored the little things that maybe you shouldn't. And now it's kind of the main thing that we look for. You know, we're going be spending a lot of time with these people. We work a lot, and everyone on the team does. And you've got to want to work with this person. So we often meet in person multiple times and make sure they're the right cultural fit, and it really makes a difference. I think right now we hire very slowly, and we try and make sure we hire the right people, And it feels like we've got better at that as time's gone on.
00:15:34 · Chaz Englander, Gustaf Alstromer
[00:15:34] S0: And humans are just so much more impactful now as well. So I think it's just even more important than it has been before. And yeah, the other aspect, Dara said, is work ethic. I think we're known for it. I mean, right now, we're still working seven days a week, as we said, and we have done for about eighteen months. And I think certainly in that initial period that you've got to do that. And I think our team works six days a week at the moment. Look, that may change, I'm sure, as time goes on. But I think part of that point about enjoying working with the person is they've also got to really enjoy what they do. So we started to ask more questions around, Look, all the other sort of standard stuff that has to be done, I think it's important to have the kind of standard interview type structure. But are they going to enjoy their day to day? The question that we ask people is like, what have they been building? Regardless of whether they're in engineering, right? And as soon as they start to mention things like, oh, they've been doing a bit of vibe coding or this, that, and the other, we're like, okay, they're going to enjoy what they're doing, right? And I think that's really important. [00:16:38] S2: It feels like there's a moment in a company's lifetime where it's suddenly... It's working, but you haven't won the market yet. It sounds like that... At that time, it really matters to work hard. Yeah. Because, like, they're they're... You're not the only one trying to go after this market. [00:16:52] S0: Yeah. Yeah. We just don't like losing.
00:16:52 · Chaz Englander, Gustaf Alstromer
[00:16:52] S0: Yeah. Yeah. We just don't like losing. [00:16:56] S2: Maybe go back to winter 'seventeen, Fat Lama. Tell us about Fat Lama. [00:17:02] S0: So Fat Lama was a marketplace that allowed people to rent items from people nearby. With the main differences you were insured. So if you're my neighbor and I lent you a camera, a $10,000 camera, I'm insured. If I lent you a drill, the same thing. That was what we did differently with the model. That model had been tried a lot of times before, But it still took us three years to find product market fit. I sort of defined product market fit loosely as the unit economics add up. People want what you have in terms of product in a sort of relatively large addressable market, right? But it took us three years to get there. And I think that was, you know, we learned so much during that period. And so, yeah, that was Fat Lama, and I can talk more about that in a second. But what about Fancy?
00:17:46 · Arnie Englander, Gustaf Alstromer, Chaz Englander
[00:17:46] S1: Yeah, so Fancy, again, consumer business. So we were a last mile grocery delivery business, which now everyone's probably bored of speaking about them. But back then, so this was end of twenty nineteen, start of twenty twenty. So our model was a little bit different to a DoorDash or an Instacart. So we were what's called a vertically integrated model, which means we had our own warehouses, we held the stock ourselves, and this was relatively new in Europe. I think there was one other player doing it out of Turkey, but in The U. K. In particular, we were the first ones. And really, it started it as a delivery app for students. I was a student at the time, and it really came about the need. I was really sitting there one day thinking, God, I could do with some Pringles or some beer, to be honest, and I didn't want to walk to the corner shop. Was, five minutes away. [00:18:34] S2: And this was during COVID? [00:18:35] S0: So this was just before COVID. This was, [00:18:37] S1: like, three months before COVID, and we kind of built the app MVP in sort of four to six weeks. I studied computer science at uni. And so it was just before COVID, and really, almost instantly, as opposed to Fat Loma, we kind of found product market fit almost overnight, which sounds obvious, right? It's like you're delivering sort of beer, ice cream to students at [00:18:57] S0: the same cost as they would get it