Y Combinator Startup Podcast
00:23:20 · Gustaf Alstromer, Chaz Englander, Arnie Englander
[00:23:20] S2: Both outcomes seems really great, though. It's set you up well for this company. [00:23:24] S0: Absolutely. Arnes did, what, the first 1,200 deliveries, I think. [00:23:29] S1: Yeah, I think with Fantasia, from the outside, it looks like a very fairy tale story. Everything I put, like, after the fact. Exactly, exactly. And they're like, Wow, it's like, I should start a startup. And I'm always like, You should. But really, it doesn't really it's not all what it seems. With FANCIE, we had so many disasters and so many times where we were like, God, is this really going to work? Even when COVID happened, we had stopped delivering for a couple of weeks. There was a point I remember, I actually remember this sort of maybe two, three months into the company. So we were working with Stripe as our payment provider, and one day they just shut us off because apparently there was a breach in their terms of service, which later it was a misunderstanding. But anyway, they shut us off for probably three or four days. Bear in mind, we couldn't take any payments, right? And at this point, I can't remember how many orders we were doing. Maybe not massive, but maybe 500 orders [00:24:25] S0: a week. [00:24:25] S2: Had an inventory, so there wasn't a problem with that, at least.
00:24:25 · Gustaf Alstromer, Arnie Englander, Chaz Englander
[00:24:25] S2: Had an inventory, so there wasn't a problem with that, at least. [00:24:27] S1: Yeah, exactly. And so at this point, what do we do? We've orders coming in. We can't take payments. So we ended up just taking payments over the phone, taking payments with cash, taking payments with PayPal. And there were so many of these stories, and if you think of our business, you know, the amount of issues we had with delivery drivers, with warehouses, It really was an intense situation, but that's really what made it fun, right? I think building a start up, you just become so thick skinned and problems come about on a daily, hourly basis and kind of your mood is like this all the time, but it's epic, right? [00:25:04] S0: On the payments one, we emailed Patrick directly, and he responded. Like, within an hour, he sorted us out. [00:25:09] S1: Yeah, was awesome.
00:25:09 · Arnie Englander, Chaz Englander, Gustaf Alstromer
[00:25:09] S1: Yeah, was awesome. [00:25:09] S0: So, if Patrick listens and says, Thank you, Patrick, he sorted us out. But I think on both of those, the general story is, and Arne's, the team delivered the first 1,500 orders, right? So, ourselves. So it was very much a case of, hear, but rather than coding at night, we're coding during the day, because really most of our orders were kind of in the evening, right? But what that meant was we were speaking to a customer for every single order, right? And so the customer feedback wasn't just like real time that you hear about. It was that every order, we knew what was working and what wasn't working, right? Which meant that when we started to implement drivers, we always say that you knew exactly how long it was going to take from the warehouse to that house, because you'd done the route about 50 times before. And I think across all three businesses, if you set up and maintain the foundations of being incredibly customer centric, things tend to go okay. [00:26:06] S2: Yeah. There is a pattern, though, with startups. As they grow, they move the builders further and further away from customers. And there's a bunch of other roles in between. Eventually, you kind of have to interpret the information you learn from customers. [00:26:17] S0: How are you [00:26:17] S2: going to avoid that?
00:26:17 · Gustaf Alstromer, Chaz Englander, Arnie Englander
[00:26:17] S2: going to avoid that? [00:26:19] S0: Well, you speak to everyone. You can talk about it on the product side. I think on the sell side, particularly, because also we have a proof of concept phase still, right? So we still have a trial phase, which is this nice blend between a sales stage, but also a pure customer feedback stage. So naturally, and I'm 100% involved with that, and it's also what I enjoy as well, right? Spending time... I don't like demoing on a screen. I like sitting with a user with a laptop, how they're going to work and working on the product together. And that also is the best way we found to sell. But you're also doing customer feedback calls constantly, right? [00:27:00] S1: Yeah. I mean, it's always a YC mantra. Think you've got to speak and listen to customers, and that's really what we try and do on a daily basis. Really figure out what are their pain points with using ModelML, what does their day look like, and then think internally, how can we then productise that and get that into their hands for them to try. And it's that constant iteration, right? We always say, the quicker we can ship things, the quicker we can learn. And really, we want to try and stay as lean as possible. You know, we always have this theory we want to be the... Maybe not the first, but, you know, one of the first, you know, 10 person billion dollar company, and it's just about staying so close to the customer and in in the details.
00:27:00 · Arnie Englander, S3, Gustaf Alstromer
[00:27:00] S1: Yeah. I mean, it's always a YC mantra. Think you've got to speak and listen to customers, and that's really what we try and do on a daily basis. Really figure out what are their pain points with using ModelML, what does their day look like, and then think internally, how can we then productise that and get that into their hands for them to try. And it's that constant iteration, right? We always say, the quicker we can ship things, the quicker we can learn. And really, we want to try and stay as lean as possible. You know, we always have this theory we want to be the... Maybe not the first, but, you know, one of the first, you know, 10 person billion dollar company, and it's just about staying so close to the customer and in in the details. [00:27:39] S3: YC's next batch is now taking applications. Got a startup in you? Apply at ycombinator.com/apply. It's never too early, and filling out the app will level up your idea. Okay. Back to the video. [00:27:52] S2: So during YC, we have this group office hour topic where we talk about the... What motivates you to build a company. And it's mostly to surface sort of the motivations for founders and their cofounders. So when things are really tough, you know why you're there. Do you guys remember what was your initial motivation when you started the first two companies and then maybe what it is today?
00:27:52 · Gustaf Alstromer, Chaz Englander
[00:27:52] S2: So during YC, we have this group office hour topic where we talk about the... What motivates you to build a company. And it's mostly to surface sort of the motivations for founders and their cofounders. So when things are really tough, you know why you're there. Do you guys remember what was your initial motivation when you started the first two companies and then maybe what it is today? [00:28:13] S0: When we have our one to ones, we're not brainstorming how to raise money. We're brainstorming actually how we can do this for the rest of our lives because it is so rewarding. Building something for individuals, making money, I think, it just gets boring so quickly, right? It's not really that motivating. Whereas building something that makes people smile, that's very impactful and a lot of people are using it, that's just so motivating to us. And I think that really has been the story across all the companies. And I think what's been nice about this and surprising about this is we questioned ourselves going from a two consumer brand heavy type businesses into a B2B, but actually, particularly in the world of AI, the most important element is the B2C element, and that is, to us, the most rewarding element. When you do a demo to someone or they click Run and they do something, and it is just... There's no money that can buy those moments. [00:29:10] S2: Because they've never seen that before. [00:29:11] S0: And they've never seen it before. They've never seen it. It's like with