All Segments
The Challenges a Repeat Founder Faces - Tikhon Bernstam
43 segments available
Tikhon Bernstam cofounded Scribd (YC S06) and Parse (YC S11) - https://twitter.com/tikhon YC's podcast is hosted by Craig Cannon - http://twitter.com/craigcannon
Segments Timeline
Discovering Y Combinator
Tikhon Bernstam shares how he discovered Y Combinator through Reddit while in graduate school. He discusses the impact of Paul Graham's essays on his perception of startups, which inspired him to apply to YC despite feeling it was a long shot.
"hey guys today we have tea con burn stamp multi time YC founder so could you just start by explaining how you first found YC yeah I actually found YC cuz I was on reddit I was I was in graduate school..."
The Birth of Scribd
Tikhon explains the initial pitch for Scribd during Y Combinator, revealing that it was a pivot from other ideas. He discusses the inspiration behind Scribd, likening it to YouTube for documents, and the challenges they faced in gaining traction.
"and so I interviewed in Palo Alto and although the actual program was still back in Boston in Cambridge and I got in so I just dropped out of graduate school what were you studying physics actually th..."
YC Experience: Community and Guidance
Tikhon reflects on his Y Combinator experience, emphasizing the importance of the supportive community and guidance from mentors. He shares how this environment helped them navigate challenges and stay on course during the startup journey.
"reddit was actually a pivot company where like it was actually applied for as something else like just like food delivery stuff really Paul's like oh yeah Paul's like I love you guys Steven Alexis but..."
Funding and Survival Tactics
Discussing the financial aspects of their early days, Tikhon reveals how they managed with limited funding from YC. He shares anecdotes about living on savings and the generosity of friends' families while working on Scribd.
"we'd also noticed this problem where trips dad who's that who's at the Stanford med school was having trouble like basically viewing the documents like online that that like he wanted to read and like..."
Transitioning from Scribd to Parse
Tikhon talks about his transition from Scribd to founding Parse, explaining the decision-making process behind leaving Scribd. He highlights the importance of exploring new opportunities and the collaborative spirit among co-founders.
"companies because without that community of like like-minded people who are highly motivated and working on like the same general like pathways you and also like people who've done it before like Paul..."
Rapid Prototyping for Success
Tikhon discusses their approach to developing Parse, emphasizing the importance of rapid prototyping. He explains how they created multiple landing pages to test ideas quickly and gauge interest before fully committing to a product.
"in Cambridge like and that's like so going on over a decade just because those were the only people I knew doing startups and like they were the people I've talked to and it was great because like one..."
The Landscape of Startup Funding
Reflecting on the startup funding landscape during his time, Tikhon contrasts it with today's environment. He discusses the challenges they faced in securing funding and how the mood around startups was much more pessimistic back then.
"per person so overall we took in eighteen thousand Congrats that's huge we almost sold the company for that lid and so I mean obviously the money lasted what did you do with it like people get way mor..."
Living on the Edge: Startup Life
Tikhon shares personal anecdotes about the struggles of startup life, including living frugally and relying on savings. He paints a vivid picture of the challenges faced by early-stage founders and the sacrifices made for their ventures.
"did not a while back then fund raising was very very different than it is today also just the environment and Cambridge is so much different than the valleys but back then like the mood was so gloomy ..."
The Launch of Parse
Tikhon recounts the launch of Parse, detailing the initial ideas and the collaborative efforts with co-founders. He emphasizes the importance of user feedback and rapid iteration in shaping their product direction.
"and so how long did you work on script yeah so started like like I said summer 2006 I left about five and a half years later I talked to the co-founders I said listen I think like if we're not gonna l..."
From Z-Stack to Parse
Tikhon explains the evolution of their initial concept, Z-Stack, into what became Parse. He discusses the significance of user engagement and the iterative process that led to refining their product offering.
"we launched like what one was an API for companies to send gifts to like their best users because that's Scribd I was like why don't like send gifts to people are uploaded like a hundred documents it'..."
The Birth of Parse
In this segment, Tikhon explains the origins of Parse, detailing how it emerged from the merger of three independent entities. He highlights the initial concept of Parse as a solution for mobile app developers, aiming to simplify backend processes and enhance app development efficiency.
"launch that way two parts launched as a landing page really yeah back then it was called Z stack and we didn't know in the parse com domain which we only got later thanks to the strike founders and st..."
Choosing the Right Idea
Tikhon reflects on the decision-making process behind selecting the Parse idea over others. He emphasizes the importance of user feedback and the need to pivot based on what potential customers truly wanted, showcasing the iterative nature of startup development.
"okay and just stepping back a little bit what made you decide to go with z-stack versus the other eleven yeah it was actually talking to the users so we had talked to the users but be clear there was ..."
Building a Mobile Backend
This segment dives into the technical aspects of Parse, where Tikhon describes how the platform aimed to abstract away the complexities of mobile app development. He explains how Parse allowed developers to focus on creating user interfaces without worrying about backend infrastructure.
"we were actually more in the payments space more so James and I were interested in like recurring subscription billing space where people were I mean people still have trouble like actually getting li..."
The Value of YC for Repeat Founders
Tikhon shares his motivations for returning to Y Combinator (YC) for a second time. He discusses the invaluable support and community provided by YC, which helped him and his co-founders refine their ideas and gain early customers for Parse.
"and I mean I've used the product before but just like to be clear for everyone else who's listening could you just give a quick explanation of what it actually became yeah yeah so parse is a platform ..."
Finding Product-Market Fit
In this segment, Tikhon emphasizes the significance of achieving product-market fit before scaling. He recounts how they focused on creating a product that genuinely satisfied a core group of developers, which ultimately led to Parse's success.
"order to make apps and had you guys decided that like you wanted to go through YC again oh yeah we talked to Paul almost immediately on leaving script yeah and I was like yeah me and James have to hav..."
Customer Feedback and Iteration
Tikhon discusses the iterative process of product development at Parse, highlighting the importance of customer feedback. He explains how they continuously launched new features based on user input, which helped them improve the platform rapidly.
"YC Oh well okay first off the first time we would never have made it without YC and that's likely true the second time as well again it's a largely for the same reasons as the first time I I still don..."
Securing the Parse Domain
This segment covers the story behind acquiring the Parse domain name. Tikhon shares how he learned about the availability of the name and the negotiation process, illustrating the challenges and opportunities in the startup world.
"my talking to the developers and seeing like do we have a product where people are really disappointed if we just like went away which i think is a really good test if you if you can't find some niche..."
The Community Impact of YC
Tikhon reflects on the community aspect of Y Combinator during his second experience. He discusses how being surrounded by other founders provided motivation, accountability, and valuable insights, which were crucial for the success of Parse.
"or something they didn't own it so they had they had written a script to email all the owners of like one word English one syllable domains like stripe parse things like that and asked them like hey w..."
Fundraising Success at Demo Day
Tikhon recounts the fundraising experience during Y Combinator's demo day, noting how their previous success made it easier to attract investors. He shares how they were oversubscribed and the strategic decisions they made regarding their seed round, emphasizing the quality of investors they were able to secure.
"where I could like talk to them having that community because it actually gets quite lonely when you're just sitting there like coding like you know 16 hours a day or like like even if you're with the..."
Hiring Top Talent for Parse
In this segment, Tikhon discusses the strategies used to recruit talented developers for Parse. He highlights the importance of leveraging their network and the value of hiring individuals who were already passionate users of the product, which helped build a strong team culture.
"really it was really awesome yeah and then it was like two years and then Facebook acquired you guys yeah something like that yeah so we started parse in 2011 Facebook acquired the company in 2013 we ..."
The Transition to Open Source
Tikhon explains the eventual shutdown of Parse and its transition to an open-source project. He praises the team's efforts in managing the shutdown gracefully, providing users with migration tools, and how this approach fostered a positive community response.
"amazing developers a lot of people off the Google search team for instance people a lot of developers were passionate about the problem and like like working on their on the tools that solve their own..."
The Future of Backend Services
Discussing the competitive landscape, Tikhon reflects on the emergence of Firebase and other backend services that followed in Parse's footsteps. He notes how these companies have evolved and the ongoing demand for developer-friendly solutions in the tech ecosystem.
"every we asked every single hire like who's the best person you worked with like who would you co found a company with and then we would just go to that person and ask the same ask the same question l..."
Life After Parse: A Journey of Discovery
After the acquisition of Parse by Facebook, Tikhon shares his personal journey of taking a break from the startup grind. He describes his travels in South America and Europe, emphasizing the importance of stepping back to gain perspective and learn about the global startup scene.
"and so that was actually another great strategy hacker news jobs post was a really good one and I guess that alone actually worked really really well and so now parse is like shut down right it is yes..."
Insights from International Conferences
Tikhon discusses his experiences speaking at international conferences and the common questions he encountered about fundraising. He reflects on the evolution of the startup ecosystem and the challenges faced by entrepreneurs outside Silicon Valley.
"I think it was one of the best shutdowns of a company that I've seen so often users are really angry and like but this was a really graceful long like over a year notice that we were going to be shut ..."
Encouraging Global Entrepreneurship
In this segment, Tikhon emphasizes the importance of programs like Y Combinator and Stripe Atlas in supporting international entrepreneurs. He shares how these initiatives are helping to democratize access to startup resources and funding, fostering innovation worldwide.
"actually oh yeah into it okay so you didn't go to Facebook right okay so what happens after parse what do you do yeah so I was like fairly burned out after I had no break between script and parse like..."
The Evolution of Startup Funding
Tikhon Bernstam discusses the significant changes in startup funding dynamics since his early days in Silicon Valley. He contrasts the current higher seed funding amounts with the past, highlighting the lack of capital chasing startups and the challenges faced by international founders in navigating the funding landscape.
"and like terms were not good like I mean nowadays the typical seed ran out of YC is higher than like the series they post money that Sequoia did in Dropbox and an Airbnb so you have to envision like t..."
The Importance of Location for Startups
Bernstam emphasizes the advantages of starting a company in Silicon Valley, despite its high costs. He shares insights on how being in the Valley can facilitate fundraising and the challenges investors face when considering companies outside of the U.S., particularly those not structured as Delaware C Corporations.
"think living and doing a start-up here is very beneficial and it has certain downsides very expensive here but in terms of fundraising that certainly helps now also investors are largely averse to lik..."
Global Entrepreneurship and Support Systems
Tikhon highlights the positive impact of programs like Y Combinator and Stripe Atlas in supporting international entrepreneurs. He reflects on how these initiatives have improved access to resources and opportunities for founders around the world, making it easier to launch successful startups.
"like it to like apply to like Y Combinator or if they can't get into YC apply to like 500 startups whatever but like these these programs are so perfect for people internationally and I love what stri..."
Key Traits of Successful Founders
In this segment, Bernstam shares his investment strategy, focusing on the importance of a large market and a relentless founding team. He discusses how he identifies promising founders and the qualities that signal their potential for success, including their willingness to persevere through challenges.
"so you said like 60 angel investments at this point do you have a particular strategy and area you're focusing on how's it going yeah so I've been um I'm so far too invested in like cruise which just ..."
The Value of Solo Founders
Tikhon discusses his preference for investing in solo founders, citing examples like Dropbox's Drew Houston. He explains how solo founders demonstrate resilience and determination, which are crucial traits for navigating the startup journey.
"or like I actually have this joke question I'll sometimes like kind of I don't actually ask founders this but like I'm like hey you know there's this conference and like you know like in like the UAE ..."
Market Dynamics and Product Development
Bernstam elaborates on the relationship between strong teams, market dynamics, and product development. He believes that a great team in a growing market will eventually create the right product, using examples from successful companies like Docker and Twitch to illustrate his point.
"what are other signals for you you see in people I actually like solo founders I know that's an unconventional thing in the valley but Dru was initially a solo founder with Dropbox and a lot of other ..."
Learning from Investment Mistakes
In this segment, Tikhon reflects on the lessons learned from his early investment experiences. He discusses the common complaints about startup valuations and how he has adapted his investment strategy to focus on long-term potential rather than short-term trends.
"product and like will they'll figure it out like because the market will drag the right product out of them whether they whether it's kicking and screaming like docker came out of DOC cloud you know t..."
Identifying Promising Investment Opportunities
Tikhon shares his approach to finding investment opportunities, emphasizing the importance of addressing real problems with innovative solutions. He discusses his focus on B2B, enterprise tech, and marketplaces, highlighting the potential for growth in these sectors.
"multi-billion dollar company so I don't listen to that anymore I think a lot of the best deals can feel expensive as Gary tan recently said you kind of investors make their money basically on being on..."
The Case for Market Fragmentation
Bernstam argues for the value of investing in fragmented markets where there is room for improvement. He draws parallels between successful startups and the need for tailored solutions, using examples like Courtesy to illustrate how addressing specific market needs can lead to success.
"like on I don't think that there are enough marketplaces for all the different verticals yet hmm like for example okay I'm an investor in courtsey which is actually which is a great startup just did t..."
Navigating Trends in Startup Investment
In this segment, Tikhon discusses the importance of focusing on existing large markets rather than chasing trends. He reflects on how successful companies like Dropbox and Stripe emerged from crowded spaces by offering significantly better products.
"think it was Chris Dixon who like made that graphic a while ago of like breaking Craigslist out into like all these billion-dollar companies is something like that yeah no I think it's true it's there..."
Educating Investors on Startup Potential
Tikhon addresses the challenge of educating investors about the potential of startups in crowded markets. He highlights the role of Y Combinator in identifying relentless founders and the importance of demonstrating traction and product-market fit to attract investment.
"opportunities yeah so I actually really like existing huge markets that are growing this is not not everyone agrees with this some people say look for a small market and like expand it like I think th..."
Finding Startup Ideas in Growing Markets
Bernstam concludes by sharing his strategy for discovering startup ideas through resources like the Inc 500 magazine. He emphasizes the importance of understanding market dynamics and leveraging personal expertise to identify opportunities for innovation.
"like YouTube for X like oh like don't cruise wrecks do that yeah because that that that's rarely how the best companies were formed like when strike started everyone said why another payments company ..."
The Importance of Traction
In this segment, Tikhon emphasizes the necessity of demonstrating traction and product-market fit to succeed in today's competitive startup landscape. He notes that investors are increasingly looking for evidence of success before committing funds, making it crucial for founders to show progress in their ventures.
"need money from them like what do you is it or is it just about education I think YC is actually like done a really admirable job in just picking relentless individuals like the Airbnb got like the Ai..."
Finding Startup Ideas
Tikhon shares insights on how to identify promising startup ideas by analyzing the fastest-growing companies listed in Inc 500. He discusses the concept of 'founder-market fit' and the importance of leveraging personal knowledge in specific markets to create innovative solutions that outperform existing products.
"traction or some product market fit in a large market that's always good but in terms I mean I just think investors or well I think a lot of investors are wrong on this and I think a great way to find..."
Building a 10x Better Product
In this segment, Tikhon explains the significance of creating a product that is ten times better than existing solutions. He encourages founders to pay attention to the software they use daily and identify pain points that can be addressed with superior products, emphasizing that innovation often comes from improving upon what already exists.
"that's so he just sat down and built the 10x better product so I I really like looking at the software that you use every day and seeing which ones annoy you like which ones make you like really cring..."
The Pressure of Repeat Founders
Tikhon reflects on the unique pressures faced by repeat founders, including the expectation to generate groundbreaking ideas. He compares this to the 'sophomore slump' in physics, suggesting that many successful startups are simply about executing existing ideas better rather than inventing something entirely new.
"positively because GM what rate well GM wisely noted that they were gonna either become a software in technology company or kind of become a dinosaur relic because I believe it but this is true of all..."
Navigating Early Fundraising
In this segment, Tikhon warns against the pitfalls of early fundraising for second-time founders. He shares personal experiences and insights on how raising money too soon can lead to challenges in pivoting and finding the right product-market fit, stressing the importance of solidifying a business idea before seeking investment.
"but like Mark just really nailed it he started with colleges he doesn't it awesome that people loved and so I I think often just doing things better is like not a bad strategy but the second time foun..."
Advice for First-Time Founders
Tikhon offers practical advice for first-time founders, emphasizing that the primary focus should be on developing a strong product and achieving product-market fit. He encourages aspiring entrepreneurs to identify growing markets and build significantly better products, reinforcing the idea that success comes from understanding and addressing real market needs.
"winner I think there's room for lots of winners and lots of markets it's really tough to because I know I knew tons of successful people that work on all these little side projects but are embarrassed..."