Parker Conrad's hard-won billion dollar startup lessons: Do unscalable things, but then actually scale it (Part 1)

New Vlog this morning! It was a real treat to sit down with Parker. 

Transcript below

Today we're going to hang out with Parker Conrad. He created Rippling. He's one of the best product-focused CEO's I've ever met. Today he's going to share some of the most hard-won startup lessons that I've ever heard. And he hasn't talked about it anywhere else.

Let's go check it out. This is part one.


Garry: Thank you so much for hanging out.

Parker: Yeah, no, thanks for coming by.

Garry: So Parker, what is Rippling?

Parker: If you're a founder or CEO, one of the things you probably noticed at your company is that there's a lot of just irreducible admin work involved in running a business. Could be getting hired, it could be getting a raise, a promotion, getting married, having a kid, moving to a new address, eventually leaving the company, and each of those life cycle events for an employee create, have this set of implications across all or some subset of your different business systems that today, you need to handle manually and by hand, but with Rippling, we automate that end-to-end.

So, we get people added to all the right email lists, the right Slack channels, we get them a computer, all the right softwares installed, they're enrolled in the right insurance benefits, get 'em paid correctly.

Storytelling for your Series A, with Initialized Partner Andrew Lee

Hi everyone. The vlog today is a little different, since I asked my friend and colleague Andrew Lee to sit down with me and talk through some of the advice we give very frequently to our founders. This isn't intended to be a comprehensive guide, but most everything we discuss here is stuff that comes up as a part of our experience working with hundreds of startups at Initialized.


Transcript below

The advice that I'm going to give is just a truism that you already know, but it reminds me of the good Buddhist mantra: 

When the student is ready, the teacher will appear.

Hi, my name is Andrew Lee. I'm a partner at Initialized Capital. I'm going to talk to you about follow on fundraising. That means you've already raised, for example a seed round and you're going to raise your next round. Let me go ahead and dive into some of the things that we've seen that are very helpful to those who are working on their next follow on funding round. 

Nikola Tesla predicted the smartphone: Now the world is forming into a global brain

Today, we're gonna talk about the global brain.

Imagine every single person on the planet, all seven and a half billion people. In the past 10 years, something remarkable has happened. Five billion of those people now have phones. Suddenly nearly every person on the planet can talk to everyone else instantly. 

Let's put this into perspective. In 1860, it took 10 days for mail to travel from St. Louis to Sacramento by Pony Express, two times faster than the next best alternative. As awesome as the Pony Express was, it was put out of business in two days, by the advent of the intercontinental telegraph, October 24th, 1861. There were a lot of sad horses and riders that day. Ponies have difficulty keeping up with the speed of light. 

The world used to be a really huge place, and now, we've brought it together, it's much smaller. 

Working for Microsoft cost me $200 million

Hey everyone, new vlog for this morning. I was in Seattle last week and it made me nostalgic. When I lived there, I made a career decision that cost me a lot, so I wanted to share it with you with the hope you can make different mistakes than me. 

Watch on YouTube—

Transcript below

My name's Garry Tan, I'm a Venture Capitalist. I started off as an engineer, a designer, a product manager. If you're new to this channel, I'm here to teach you all the things that I learned the hard way, starting with the most painful lesson, which cost me $200 million. 

I'd just graduated in 2003, and my friends were starting a company with Peter Thiel. They flew me down to have dinner with Peter. 

It was about the time Peter wrote the $500,000 check to Facebook that made him a billionaire. He was a known great entrepreneur. He just wasn't the billionaire that you know him as today. 

He looked at me and said, "Garry, "what are you doing at Microsoft? "You're wasting your time." Keep in mind, I was 23 years old, I didn't know anything about startups, I didn't know anything about finance, and I definitely didn't know how these things got started. 

He said, "Garry, I'm so sure this is the right thing for you, "you need to quit your job right now." 

He asked, "How much a year do you make at Microsoft?"

It was $72,000 a year, really the lowest of the low coming right out of college. He got out his checkbook and wrote me that check. 

"Cash this check, quit your job. This is a zero risk opportunity for you." 

I said, "Thank you very much, Mr. Thiel, but I might get promoted to Level 60 next year." 

Big mistake. This mistake cost me $200 million in equity, at least. Palantir is now worth $20 billion or more. 

Later, I did end up joining as employee number 10. I got to build one of their major product teams from scratch. I learned a lot, and it still worked out, but this is a story that you should keep in mind as you think about where you want to work. 

How to double profit margins for the most competitive industry in the world with software

Meet Ram Jayaraman. He is co-founder of Plate IQ. He’s helping restaurants actually understand how much money they’re spending on their food bills. This is an $860 billion market that has no pricing transparency until now. Plate IQ is used by 3% of restaurants in major cities today, and just getting started. 

A lot of companies claim to use AI to automate manual tasks, but Plate IQ has done it. They process now over 1M invoices per month. They took an unprofitable process and scaled it with pure software, and in the process are building something that gives pricing transparency that never existed before. 

You can watch the full video here: 

Here's the transcript of our conversation

Think of a business that's the hardest business in the world. Restaurants. It's only a three to 5% profit margin. What would happen if you could double that profit margin, just using software? That's exactly where Plate IQ plays. They're helping restaurants like Eleven Madison Park, all the way down to your neighborhood Jamba Juice, actually understand how much they're spending on food. It's an $860 billion market, every single year. And using software, they're able to let restaurants that you and I love stay in business, in the most competitive industry in the world. 

Garry: Ram, thank you so much for hanging out with me, man.

Ram: Yep, same here.

Garry: You've built something that is actually remaking every restaurant. And the crazy thing is, everyone eats.

Ram: Well, we started four years ago, really trying to help restaurants understand the money they are spending. And that information is kind of hidden in their invoices. On paper, and PDF, and so on, to kind of, really help them get all of the data that is there, the invoices.

Avoiding the cofounder trap: The #1 thing that can help a startup is also the #1 thing that could destroy it

Cofounders are the #1 thing that can make your startup. Having a true partner means you will overcome a lot more than you might when doing it all alone. But cofounder conflict is also the #1 reason why startups fail! How do you overcome this trap? 

I cofounded Initialized with Alexis Ohanian, creator of Reddit. Cofounders need to spend time getting on the same page so that’s what we did in New York City this episode. 

My newest YouTube video: Meet Jake Klamka who made Insight Fellows, the world's next applied graduate school for data and engineering

Today we’ll meet with Jake Klamka of Insight Fellows program, a free fellowship that has brought together the world's best scientists and then helps them get to the top of their fields at the best tech firms in the world. This program started with just 8 fellows 8 years ago and has now grown to a program that graduates 1,000 alumni per year in 6 cities and 8 different disciplines— not just data science but data engineering, AI, DevOps, Health Data, Data Product Management, Crypto and Security fields too. This free fellowship is an incredible community of smart people who keep paying it forward, and along the way, cross-pollinate ideas and methods for new technical fields that didn’t even exist 10 years ago! It truly is a new type of highly applied post-doctorate graduate school.

Please like this video and subscribe to my channel if you want to see more videos like this!

How did Sid Viswanathan get started with Truepill? Watch my new YouTube channel

I’ve decided to take more time to help tell the stories of people who I admire, both within the Initialized community and the world of startups at large. This is my first stab at it. I shot and edited everything myself and know there are a thousand more things I need to get right next time. 

Of course if you liked this video and want to see more, please click the Like button which helps a lot on the YouTube algo.

Please subscribe to my channel at https://YouTube.com/garrytan and stay tuned! 

My resolution: Write more.

“The sole purpose of human existence is to kindle a light in the darkness of mere being.” —Carl Jung

My one professional resolution for the year is to actually write more. The written word is the one way we can leave something behind - it’s a signpost for others, in distilled form. Edited. Reduced. Great writing lets you skip ahead, to absorb that which others had to learn the hard way. 

Two things kept me from writing more in the past years, and I figured the best way to unblock the blockers is to name them directly in my first post of the year. 

Vulnerability

Writing is about writing the truth, or at least the truth as you see it. These days it’s clear sharing that truth makes you incredibly vulnerable. 

“I, myself, have found that if I examine something, it’s less scary. We always had this theory that theory that if you kept a snake in your eye-line, the snake wasn’t going to bite you. That’s kind of the way I feel about confronting pain. I want to know where it is.” —Joan Didion

Vulnerability is about saying the things left unsaid. The loss. The mistakes. The tragedies. The unheralded wins. Let’s talk about the snake, because if we don’t, how are we ever going to keep people from being bitten? Let’s keep it in our eye line. 

Novelty

One counterintuitive truth I’ve found is that you sometimes find yourself writing the obvious. What is obvious to you, and your direct community, is often not what is obvious to the people out there. One thing I know I need to do is acknowledge that I am in a community of incredibly smart people, but I cannot begin to hope to write things that are that novel. I think it’s easy to fall into a trap where you think you have to be the Velvet Underground: the new vanguard. 

There is more to write than just that which will be impressive to the insiders. In fact, properly accessible writing may well involve a good amount of review for those insiders, and help place that which might be novel in the right context.

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I’m looking forward to this year. Bring it on 2019. I will try to write my truth, and I welcome your advice, feedback, and hearty discussion in the months to come. 

I invite you to read my writing by following me on Twitter or clicking the Subscribe link below to join my Posthaven email list.