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Interviews with world-class startup founders about their unique paths to uncover tactical insights they've learned about how to fundraise, grow, validate, hire, scale, and lead teams while building your startup.
Get full access to detailed takeaways on each episode, additional case studies, and more at join.foundingjourney.com
When James Evans got into Y Combinator, he brought his contrarian way of seeing the world with him.
James Evans:The advice, don't do things that don't scale, like, has probably created, like, billions of equity value, but I think it's slightly wrong.
Michael Houck:He must know something though because his startup Command AI has raised $25,000,000 and has reached 20,000,000 users in just 4 years while modernizing an old industry. Don't constantly think of your thing
James Evans:as a new mouse trap. It's okay. Like, it's not lame to see a big industry and, like, go after it.
Michael Houck:And his advice for other founders is super practical.
James Evans:People spend way too much time, like, deciding what to work on in a really early stage startup land and too little time, like, just working on it.
Michael Houck:It. He told me why founders should be okay looking dumb and what they should do instead of things that don't scale and why they shouldn't try to create new categories. This is James Evans' founding journey.
Michael Houck:Alright, James. What's up, man? How you doing?
James Evans:Yo. Good. Thanks for having me.
Michael Houck:Yeah. Thanks for coming on. So wanna start going way, way, way, way back, right, to your sort of, like, origin story here as an entrepreneur, as a founder. Both your parents are business school professors. Right?
James Evans:Yes. Correct.
Michael Houck:Did you sort of plan to start a company and become an entrepreneur from those early days? Did they inspire you to do that? Or is it more of something that you found later in life?
James Evans:So yes. And I, like, was very exposed to the concept of, like, being a entrepreneur or founder. Like, there's this very embarrassing story. I remember I went to, like, a soccer camp when I was, like, 5. And we're going around in the circle saying, like, what we wanna be when we grow up.
James Evans:This is a true story. It's very embarrassing. And everyone's like, oh, I wanna be like, I don't know, like, an astronaut. You know, like, cool 5 year old stuff. And I'm like, I wanna be an entrepreneur.
James Evans:And everyone's like, what the is that? Like, just heinously heinously embarrassing and I also grew up like in the I mean I grew up in Silicon Valley kind of a cool time I grew up in Silicon Valley though like my conscious childhood is like 2,000 to 2012 when you know it was kind of it was post you know, .compre, like, SaaS Perma Bull Market setup. So I kind of, like, I always had that idea. And then I sort of I always had the back of my mind I wanted to start something, but then I, like, went to college and, like, got a job. And I I was one of those people who, like, I wanted to start something meaningful.
James Evans:I my new take on, like, founders who have the itch to start something is, like, just start something. It doesn't really matter what it is. And, like, you'll find your way to something cool. But I definitely did not have that perspective. I wanted to, like, wait for, like, the idea.
James Evans:So I got a job in investing, joined a startup, and then it was only when that startup shut down that I was, like, sufficiently unburdened to, like, actually start working on startup ideas.
Michael Houck:Building an audience is a full time job or at least it can feel like that when you're busy running your startup. But with AI making software easier to build, getting distribution is more important than ever. I can help. After growing my LinkedIn to over 40,000 followers and having a 100,000 across all platforms as well as a 60,000 subscriber newsletter, I know how impactful having an audience can be when you're building a startup these days. So I started Megaphone Studios, a ghostwriting agency specifically built for founders and their startups.
Michael Houck:Think of us like your startup's chief content officer. We turn your LinkedIn x or newsletter into a machine for lead generation, follower growth, and building your influence as a thought leader in your space. Our process is super lightweight for you while still delivering content that only you uniquely could write. And our plans are flexible with no long term lock in because we know how fast things can change at startups. Oh, and I brought my buddy, Blake Emal, along to help me run the business.
Michael Houck:He has even more followers than I do. So email me at hauk@megaphone.network and mention the pod for a 1st month discount.
Michael Houck:You were working on, something called CodePost earlier. Right? How how did that go? What was code post? Why did you sort of move on from it?
Michael Houck:I think when I was looking into this, what I saw was that you built a ton of features into it, and it became super hard to use because there's so many features built into it. So did you take lessons from that for for Command Bar? Like, what was that experience like?
James Evans:Yeah. It was basically like the it's the origin story of Command Bar. So we my 2 cofounders of Command Bar, Richard and Monet, we were both working at this crypto startup called Basis. And so when it shut down, we were all 3 of us, like, no job ready to work on startup ideas. And frankly, that was part of, like, the appeal of going to work on a startup together was like, oh, okay.
James Evans:Well, we can eventually, like, still see where this goes, but if it doesn't go well, we can start a company together. So Co Post was a project that we actually built in college along with my, adviser was a tool for, like, providing feedback on computer science coursework. It's a tool for teaching computer science, basically. Or like a student project. And it was used at Princeton and a few other schools.
James Evans:And so when we when this company shut down, we were looking to work on startup ideas. We kind of were like, oh, let's just take this one we've already built and, like, turn it into a business because it was a cool product, and, like, we've been working on it for years. And in some ways, I think, like, we had so little, like, experience in the world that we didn't, like, have many problems to solve other than, like, the problems of being a student. You know? Like, I think this is why so many young founders do, like, ed tech and, like, restaurant tech because, like, that's all you know.
James Evans:So we worked on that for, like, a year, and the way we got from that to command bar, it seems like they're, like, totally unrelated, was it was just the 3 of us. We were, like, jamming on this ed tech thing. We had, like, no competitive advantage other than, like, speed and, like, opinions. And so people would write to us in intercom, be like, yo. You know, why doesn't this work this way, or can you support x?
James Evans:And we provided, like, the most amazing service of all time. Like, yes, that afternoon, like, done. Just feature after feature after feature. And, eventually, it just made it really complicated, like you said. And we didn't really have a way of making it less complicated.
James Evans:And we built this so as a result, we built this search bar thing into our UI inspired by some other products, and that was our solution. Like, users could just search for what they were trying to do, and then that was the UI. Basically, that was on top of the UI. And we just got so obsessed with this idea. We were like, oh, maybe this should be the company we work on instead of Kopa.
James Evans:So we applied to YC with that idea.
Michael Houck:How should the founder know when that moment happens? So I feel like it reminds me
James Evans:of the Slack story. Right?
Michael Houck:They're building this team. Yo. And then This game
James Evans:during fundraising, I remember some people were like, oh, it's like Slack. And I was like, yeah, it's exactly like Slack. Yeah. Keep going.
Michael Houck:Always a good comparison to make to a billion founding story. How can a founder sort of recognize when that moment is happening? And
James Evans:I think it's kind of a vibes thing, ultimately. I think that it's easier when you haven't had, like, that much success. And so I think if it's, like, if you're still, like, pre product market fit and things aren't, like, working, then I think just, like, kinda follow your nose. And I like the explore exploit framework. Like, you're either exploring and you're thinking about ideas and you're assessing which is more exciting or you're exploiting.
James Evans:And there's, like, heads down working on something. And I think my advice when people, like, are feeling like, oh, I'm at a crossroads between these two things. I'm like, oh, just it's not really a trapdoor. Like, go work on this other thing for a quarter. Heads down.
James Evans:Don't think about whether the other thing might be more interesting and then surface up and you have way more data. I think people spend way too much time, like, deciding what to work on in really early stage startup land and too little time, like, just working on it. I think it's just a lot of founders are, like, smart creative people, and they don't wanna waste their time, and they have a high opportunity cost. And so, the way this surfaces a lot is people be like, oh, I have this cool job, but I wanna start a company. I'm not sure if I have enough conviction.
James Evans:And I'm like, you just gotta decide if you wanna start a company. Like, you're not gonna build sufficient conviction, like, from 5 to 9 PM after your day job to, like, no, this is the idea. You just gotta, like, get in the arena and, like, you'll see if you like, you know, doing the startup thing. You'll see if the idea works. If it doesn't work, like, because you got gotta take that risk.
Michael Houck:Yeah. It reminds me of what we were talking about last year when we wrote so I did the whole newsletter piece on on you guys at at Commandbar and your story. And he talked a lot about why creating a new category is overrated. And I thought that is antithetical to, I think, some of the advice Peter Thiel gives where he's like, oh, you know, competition is for losers. Your take is, hey, just start moving.
Michael Houck:Just start doing things. Talk to me more about that.
James Evans:Yeah. Doesn't feel great to be on the other side of the debate, panel to Peter Till. But I'll do my best. Yeah. I think, I would say, like, I agree with him that the best businesses are monopolies and, like, are are so I mean, I think it's hard to disagree with.
James Evans:I think where we disagree is how to, like, reach the conditions to create one of those businesses. I think from the early stage, it's really hard. The team at First Round Capital actually has a good analogy I like for this. They talk about getting to base camp, which is like you've got an you've got a real company. It's working.
James Evans:You've got customers. You've got a team. Call it early product market fit. It kinda roughly correlates with, like, series a. And my take is, like, I think it's a lot harder to get to base camp with a totally novel doohickey that no one knows whether it's something they should buy.
James Evans:No one knows how to justify the value. You're constantly having to invent playbooks for, like, how do we talk about this thing? How do we sell this thing versus having a clear opinion on how you can make something that people are already buying better. And then I think from that position, you can decide, do we continue on the disruption path? Is there kind of enough to squeeze there?
James Evans:Are we excited about that path? Or are we gonna try to use, like, suddenly people know about us? Suddenly, like, we have revenue. Do we use that position to try to, like, move the market, bend the market towards, like, the thing we really wanna build that we think is gonna create value for the world or, like, be ultimately, like, that great, you know, monopolistic business? So I just think I just what pains me and what I felt is, like, I just think so many early stage founders get lost in the sauce on creating the category, and they never make it.
James Evans:And they just waste so much effort. And that this I I just don't think they know that, like, the thing is just do disruption. Don't constantly think of your thing as a new mousetrap. It's okay. Like, it's not lame to see a big industry and, like, go after it.
James Evans:And for some reason, I there's this meme among early stage founders, like, that your thing has to be truly novel. You have to, like, breathe life into this crazy new thing to be, like, worth it. And I just, I felt that, certainly. And I just don't want other founders to be like that.
Michael Houck:Yeah. No. I've I felt that too. Where where do you think that comes from? Because I I agree.
Michael Houck:I see that everywhere and, you know, the less education you need to do, the sales founder, the better. So where does that come from?
James Evans:I don't know. I think I mean, maybe there's some selection bias. Like, founders are, like, smart, opinionated, like, wanna be creative. I think there's maybe, interesting, like, analogy, maybe, like, the cop the copycat startups, like, Grab I would love to be the founder of that copycat startup you know like remember at the time being like oh I would never want to start one of those businesses like how lame and now I'm like that's so stupid like those are amazing businesses there's a lot of opinions there a lot of intelligence and creativity to, like, make those businesses work in those regions. And so I think maybe there's an element of that.
James Evans:Like, it's it's hard to say, I think, how much of it is, like, American startup culture versus international startup culture too. I feel like there's a lot of, like, individualism and, like, you know, just Steve Jobs in your way to, like, creating these transformational companies. Yeah. I don't know. It's weird.
Michael Houck:Everyone wants to be a genius.
James Evans:Yeah. I think so. It's a lot of, like, people go into startups is because they see, like, I they think they're amazing, and they don't want anyone to, like, stand in their way if they're and that's awesome. Like, I love that. I think that's a great reason to do a startup.
James Evans:It's just, like, don't hold yourself back by packaging your amazing insight and, like, this weird package that people are never have never seen before. So it's hard for the market to appreciate. Yeah.
Michael Houck:Don't make it hard on yourself. What are some signals that founders can look for to know that the market actually does exist and does want a better mousetrap rather than a whole new mousetrap?
James Evans:I just it's super rare for a software all I know is software. For a software market to have large incumbents that are not even universally hated, like, universally, like, meh, and that not to be an opportunity. Like, just I think there's so many markets like that where you look at the market leader and you're like, yeah, that's not like a formidable company. Like, I don't know. I've now seen some companies competing with Stripe, and I'm like, okay.
James Evans:That's like a pretty formidable, like, market leader. Like, I don't know if I would, but I'm I don't know payments that well. Like, maybe there's chinks in the armor or whatever, like, certain areas where it actually does make sense to compete with Stripe. But there are so many markets where, like, that extremely, yeah, formidable giant, like, doesn't really exist. I think the problem is less, like, identifying the market.
James Evans:I think what's not obvious is how you go from that that observation of, like, this is a market I should try to disrupt to, like, doing it. Because I think what's cool about the the new mousetrap category creation thing is it's very, like, build it and they will come. It's very, like, It's like, oh, go build the thing. I can do that. Because most founders 1st time founders focus on products, 2nd time founders focus on distribution.
James Evans:Like, that's what most I think people wanna do. But as the disruption playbook is very, like, 2nd time foundry. It's very, like, oh, I'm gonna go through sales, and I'm gonna, like, get people aware of my brand, and I'm just gonna build a shitty MVP. I'm, like, I'm gonna iterate. Like, I still think people know how to do that or it and I don't know why they would.
James Evans:Like, you kind of have to have worked, I think, in the industry to know how you'd go about building a company like that. And so that's why, like, I've tried to write about it. It's like, no. You this is how you do it. Like, you have an opinion.
James Evans:You build an MVP around that opinion. You don't try to get to feature parity. You talk about how you talk about your, you know, status quo us message and, like and then you run. I think that's the part that people have trouble intuiting.
Michael Houck:Yeah. I think a market where the leader is where where customers are indifferent about the leader is way more easy to attack than one where they hate the the leader that still have to use it. Right? Because it's like bill bill.com classic example that's everyone hates using bill.com, but they still use it because they have great network effects for invoicing
James Evans:and maintenance. Network effect. That's a great reason to look at that market and be like, oh, it's gonna be hard for me to compete with that. But there's just so many markets where, like, the network there's no network effect, and the mode is, like, good software. Like, I don't think good software should be something that detracts people from competing.
Michael Houck:Yeah. Another early stage sort of, you know, truism or common thing that that you talk a lot about is doing things the difference between doing things that don't scale and doing the things that probably don't scale. Right? So what is that difference?
James Evans:Yeah. I've the advice, do do things that don't scale, like, has probably created, like, billions of equity value. Like, it's just such amazing advice, but I think it's slightly wrong because of the don't part. Like, I think people have this a lot of really stage founders, this is more like an approaching PMF question. Like, it shouldn't it shouldn't if if you if you don't think you're a PMF, then you shouldn't be thinking about doing anything that scales.
James Evans:Like, a lot of people kinda get lost in the sauce and being like, oh, okay. We're doing this today, but because this thing doesn't scale, like, what am I gonna do in the future? And it's like, oh, just lazy load that. Like, get to the earn the right to care about that problem. I don't think it's do things that don't scale.
James Evans:I think it's do things that might not scale because don't implies there's, like, a clear phase transition where it's like, oh, you know, we got some million of ARR. Like, we raised our series a or series b or something. And, like, now it's time to switch to, like, scale mode. And I think and I think this is kind of the spirit of the advice. I think the better pattern is, like, just do it until it really breaks.
James Evans:And I think it falls with this general pattern of advice where especially, like, VC in in VC back land or founders raise a lot of money. I think there's this temptation to, like, think about company building as, I'm at this stage. What do companies at this stage do? Like, what who should I go hire? I were asking this, to our investors after our race or series a, like, who should I hire now?
James Evans:Like, what's what does a series a company look like? And, you know, there's some roles that, like, oh, I didn't know that existed. I didn't know I could hire someone to write docs or something, and and that's useful advice. But in general, I think the much better advice, which is an ultimate that I got is, like, don't hire people because you feel like you've had the capacity. Hire people because you've got, like, a burning need.
James Evans:And I'd say the same thing about doing things that don't scale. Like, just stop doing it when it's, like, really painful and not working. Like, we try to one of the things we do is we just spend, like, so much time with our customers, which is kind of, like, antithetical to the support mindset of, like, be efficient and, like, support is a cog. So, like, minimize it. You know?
James Evans:But I would just get so much value from, like, we have Slideshow with every customer. We, like, swarm. We're always offering to get on the phone. We'll do, like, weekly meetings with our customers if they'll do it. If not, we'll do biweekly meetings.
James Evans:And sometimes we just shoot the and, like, could we reduce headcount and, like, be more efficient? Like, absolutely. And that would be, like, the thing that scales. Like, eventually, we'll probably have to do that. But, like, for now, it's great.
James Evans:And, like, it's messy and more work, but, like, we just learned so much. We built these great relationships that I think is worth it. And I think if that's the kind of thing that if we had this mindset of, like, oh, what is this part of the company? Like, has it earned scale yet? Let's architect it to be ready for scale.
James Evans:We would have stopped doing that and that would have been the wrong decision.
Michael Houck:I like that. When you're you know, and I've seen that firsthand actually because when we started with command bar for for Megaphone, you literally got in the chat with me right away and helped me set it up and all that stuff. It was super easy. So,
James Evans:it's the only way. It's, like, one of the only thing, especially going back to, like, just competing. Like, that's this is what she says. Like, that's one of the only things you have as a start up. I just think it's also one of the only things you have as, like, a growth ish.
James Evans:You know, like, just just keep it going.
Michael Houck:When you're spending all that time with customers or also when you're hiring the people to maybe do these roles too, I always find that open ended questions are super important. And I you've talked about this too. What's your take on, like, the importance and, you know, this open ended question for founders specifically?
James Evans:Everything. Open ended questions are everything. Shout out Chris Voss, Never Split the Difference. Great book. I what is an open ended question?
James Evans:An open ended question is one that doesn't make you sound smart for asking it. I think a lot of founders, like, have this or probably people who are like me who, like, grew up, you know, doing well in school and, like, that being a part of your identity. And I think when you're like that and you're in a high leverage conversation in any context, that could be an investor conversation. That could be a prospect. It could be your team.
James Evans:Every question is, like, kind of an opportunity to sound smart and, like, show you did your research. And I'm not saying there's, like, no, you know, a well researched question isn't, like, a good idea. I just think so so much of startup of doing a startup is, like, extracting how other people are thinking. How is your team, you know, on the same page as you about what matters? Does the investor you're talking to, like, at all understand what your company does?
James Evans:Does the prospect are they comparing you to another company? What how do they feel about your product? Like, that's what you're trying to get. And I think the open ended question, how's the trial going? You know, how are you feeling about the product?
James Evans:I could ask that with zero research, but it gets people talking and it it starts a conversation. And so I I now look for every opportunity to add. And what's great about the other questions, they also require less research. So it's like a win win. You get better results, and you don't have to do as much time prepping.
James Evans:So, yeah, it's it's one of my it's one of my life hacks.
Michael Houck:Okay. So let's, share the life hacks a little bit. What are some impactful sort of open ended questions that founders can use at different scenarios that you like to use?
James Evans:Honestly, it's a lot of variations of how's it going. So, like, with the team, it'd be like, what are you most focused on right now? I kinda know what they're most focused on right now. Sometimes I think they're like, why why are you asking me that question? Don't you know?
James Evans:But it starts a conversation. Same with a could be a customer, like, yeah, what what are your what are your big goals for the year? Stuff like that. You can open a open a sales call with that. People are gonna be like, oh, but then they're gonna talk because it's awkward if they don't talk.
James Evans:That's, I think, the key to the open ended question is it's like it kind of tees up the other person to, like, just share what's on their mind without providing too much leading. Something else I like is is things that get at emotions, like, steer the conversation towards emotions. Like, you're in the middle of a trial. What's your favorite feature so far? Like, again, I could've gone in.
James Evans:I could've been like, oh, it seems like you're using x, y, and z. Like, have you thought about using it for this new use I was poking around your product, and it felt like this flow was kinda hard. Like, have you thought about using this feature for this use case? That seems potentially more well researched. It might steer them in a better direction because you want them to but it's influencing.
James Evans:It's not extracting information. So I try to, you know, spend more time extracting information than I do influencing.
Michael Houck:Yeah. It's it's comes off more authentic because if you're doing the other way, the more leading question, they can usually tell that you're you're sort of trying to sell them a bit. Right? So I think we've talked a little bit about some of your, maybe, you know, not necessarily contrarian, but your unique viewpoints on a couple of of these stuff.
James Evans:To be contrarian by design. I hate those people. You know who are, like, always the people who disagree with the status quo just because
Michael Houck:Yeah. Yeah. No. I I I wouldn't put you in that bucket. But I think you have a lot of what most founders are lacking in terms of being skeptical of some of those things and kind of approaching it from first principles.
Michael Houck:And that is a super important quality the founder should have. So my question to you is, do you think that everyone can develop that and should become a founder? Or should you are there people who are founders and and are not?
James Evans:I guess I'd break it down in I think, everyone has the capacity for first principles thinking. I think, is that a required input to being a founder? I think, like, it kinda goes back to the how do you how do you decide to disrupt the space or take on competition. And I think the core loop is just, like, see problem, validate if real problem, and then have the, like, kind of childlike response of, like, well, why couldn't this be better? Like, in our space, for example, I think it's, like, pop ups are bad or chat bots.
James Evans:We just recently launched a chatbot product. Chatbots are bad. Like, are they actually bad? Like, does like, people there's kind of a meme around this. Right?
James Evans:Like, no one likes to talk to the chatbot that just kicks you to the documentation or says, like, please wait for the team. But, like, is that a
Michael Houck:real problem?
James Evans:And then you go you just talk to people and you're like, oh, yeah. Okay. People acknowledge this seems to be a problem. Like, seems like if users engage with the chatbot more, we could create a lot more value. And then ask yourself, like, okay.
James Evans:Let's just, like, if I were using the chatbot, like, what I wanted to do, that's basically, like, the loop we run. I think it also embedded in that is, like, a bit of kind of having a view, like, being opinion. This is, I think, key to doing the disruption approach. Like, the I'm gonna play catch up on features and just, like, truly, like, compete with incrementalism, like, doesn't really work, I think. So you've got some opinion, but you're also willing to, like, be the grinder and, like, lazy load features that customers want to, like, do sales.
James Evans:And I think those are kind of both required ingredients. So I'd say, yeah, as for ornery people who are, like, able to find problems and just, like, believe they can be there can be solutions to them. And and I think there's an element of this document too, like you pointed out earlier with the bill.com example. Like, just being able to separate, like, oh, there's a real reason for this, like, structural discontent with the status quo that's, like, hard for me to overcome. I actually think this was a people put on business school or, like, jobs like consulting.
James Evans:But my first job is in investing. I think it was super useful to, like, develop that skill of, like, what's a good business? Go go find a space with an incumbent that's not one of those and compete. You know?
Michael Houck:Yeah. Because unless they have velocity to being a good business, then there's opportunity for you to just out accelerate them, go go faster, and capture them.
James Evans:Totally. And, like, that's it. That's the 80 20.
Michael Houck:Okay. So is that something that you felt from when you first started command bar? Like, how early in that process did you know that this was a space that you could come in and disrupt to create something big? And was that related to getting into YC and going through that experience, or was it something you just kind of had on your own even before then?
James Evans:Definitely not before YC. I mean, we started as a new mousetrap company, so we did zero validation of market before, like, starting the company. It was literally just, like, because we thought it was a cool idea. And there was some, like, basic, you know we we modeled the original command case search idea we modeled off of, for our exemplar was chat. Ironically, now we're doing chat.
James Evans:We were like chat 10 years ago, there was no website chat. Now every bottom right has website chat. That's a new building block. We're gonna build the next building block. That was the that was the logic of the company.
James Evans:I think the thing that gave us conviction was for you know, we worked on that for, like, 2, two and a half years. That's still part of the product. It's not like we abandoned it. But throughout, we just had so many conversations where people would be like, oh, can you replace, you know, these digital adoption tools, these chatbot products? And we'd always be like, shut up.
James Evans:Like, what are you talking about? Like, we don't do that. You clearly do. You're an idiot. You clearly don't understand our business.
James Evans:Like, we are doing something totally new. Pains me to, like, think back to those conversations when it's like, if we'd all and we just said yes. I think just a lot of hearing that a lot, just to serve general kind of discontent. And then the other thing was, there was a lot of, like I mean, I think we were able to have a lot of success with that initial product because there was a it emotionally resonated with this problem of, like, the status quo of helping users is bad and kind of annoying, like, that people were really excited to, like, find something new. I don't think there was enough of those people for us to, like, build the company around.
James Evans:But just seeing that, like, emotional resonance to, like, oh, thank god. This is, like, a new take on helping users. We really need something new. I think those two observations made it so that when we made the decision to stop trying to create a new category, it was, like, very clear in our minds. Like, this is a category that's very these 2 actually, which are kind of separate, but both relate to helping users are, like, really ripe for disruption.
James Evans:It kind of gets the idea of, like, a why now happens. It's a question people ask a lot in fundraising. Like, why is this the time for your company?
Michael Houck:I think
James Evans:it's kind of a lazy question, honestly, because it's kind of like looking to derisk the, like, oh, if there's no way now, then, like, maybe this is a bad idea because maybe other people have tried this and it hasn't worked. But if there's some way now, then, like, you know, I'm not gonna up in that way by, you know, betting this team to do this that's already been tried.
Michael Houck:Yeah. It's it's WebVista's Instacart. Right? It's the mobile app making possible.
James Evans:And we didn't initially, we didn't really have that. And then I think we didn't need this to decide to stop creating a category and, you know, repackage the product. But we also had the why now of AI. And I think that was like, oh, wow. We've really uncovered this problem.
James Evans:No one is really trying to compete differently in this space, and we have this new tool that we can use to make everything better. And, like, literally, the tagline of our company is the natural language interface for software. Like, wow. Like, we got really lucky because we can now use LMS to achieve that. So I think it was those ingredients.
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Michael Houck:Do you
James Evans:think that it would have been
Michael Houck:as beneficial to go through YC after you'd figured all that stuff out?
James Evans:I think it probably would have been more helpful. Yeah. I think we spent a lot of YC, like, building and reaching spending a lot of time with, like, people in our batch trying to get them to use our product. And this is this is the one thing I give as advice to who are doing YC is, like, yo, everyone's gonna be really nice. And if you ask someone, like, do you wanna consider using my product?
James Evans:Everyone's gonna say yes. And month month 1, everyone will say yes. You will then spend, like, 2 weeks trying to schedule with them. They will, like, be nice and give you feedback, and, ultimately, they will not use your product. Also, by the way, like, you probably shouldn't be trying to sell to, like, 5 person YC companies.
James Evans:Huge. So we spend a lot of, like, wasted time on that. I think if I were to do YC again, I'd I'd be much more in, like, go to market goblin mode and just, like, you know, do outreach and, like, get my partner's feedback on the outreach and, like, try to work the network and, like, just, use it as an opportunity to turbocharge, like, go to market as opposed to for me, it was, like, the first time I've been around other founders. It was also good COVID. So it was just, like, a weird time.
James Evans:And I got a lot out of it, but I think the the YC playbook that I would run as a second time founder would be much more tactical.
Michael Houck:Yeah. You you did the summer 2020 batch. Right?
James Evans:Yeah. First intentionally remote batch.
Michael Houck:Obviously, since then, the deal has changed. Right? What are your what are your thoughts on the new the new deal? Would you prefer that?
James Evans:I know a lot of founders who love like, I I think the the old model, like, the spirit of it was, like, let's allow, like, a small cofounding team to, like, pay themselves for, like, a small period of time. And I think that had, like, become not what the upfront 125 k was, like, able to do, really, especially if you're, like, in the Bay Area, which I think everyone now comes to Bay Area, at least for YC to do again, which is great. So I think it's I think in that sense, it's, like, probably a good thing. I think it's also a good thing that it kind of signals that, like, if you're gonna give people all much more money, then, you know, you probably aren't gonna fund, like, a 1,000 startups. I think there's this great debate around, like, whether YC can can scale.
James Evans:I I would love to see them be able to scale it, but I I love to see, like, the conviction in the small number of startups as well. And the only other thing I'll say is I do remember, there was a bit of weirdness around, like, who is YC going to back, like, participate who's gonna YC gonna do pro rata for? Which is, like, it was just kinda weird. Like, YC did pro rata in our seed. It was great.
James Evans:But it was just, like, weird that, like, immediately, there was sort of some kind of, like, value judgment passed. And so I kinda I like that that's that's deferred. Like, they're they're making a higher conviction bet on the people they're letting in.
Michael Houck:Yeah. I like that too. I guess, how has it helped with fundraising later on? Not necessarily errata, just like with the signaling maybe to other other investors.
James Evans:I think for other investors, it is extremely helpful for the founder who doesn't have who's not in, like and in the kind of investing world in group while you're, like, NYC and raising your your seed. I think it's tremendously helpful. It just, like, puts people on the map. And I think it it totally did that for us, and I think it does that for a lot of founders every batch. I think it ceases to be a signal after, like, series a just because, you know, at that point, people are looking for more concrete.
James Evans:I mean, maybe there are investors, series a out investors out there, or series b investors who, like, who do use this as a signal. But I guess I would I would question whether you should take money from investors who use that as a signal at Series A or B.
Michael Houck:Yeah. Always good to always good to to have a little bit of a filter on your side too.
James Evans:Yeah. Yeah. For sure.
Michael Houck:Okay. So I guess more on fundraising for you guys. You know, you did something which I love, and I think more founders should do it. You sent out a ton of Loom videos along with your, like, outreach to investors in the early days. Why did you do that instead of a deck?
Michael Houck:And like, what are sort of the pros and cons of that?
James Evans:We had a deck. It was just very I think, TechCrunch actually wrote a great article about our seed deck. Like, we published an article about it, and they, like, published a great article tearing it down. Our basic conclusion was, like, this sucks. It was, like, really bare bones.
James Evans:And I was like, I don't think it sucked. Anyway, we can get into that. I just think a lot of our like, our company was the product. Like, we were 3 months in. We had, like, a handful of customers.
James Evans:The best thing about us was that we had this cool idea, and we made a lot of progress on it in 3 months. And so I think that started doing that because in our first few VC conversations, we found that the best ones, we just would screen share in the beginning and then just, like, stay on the screen share the whole time. And anytime someone asked a question about, like, how the product work, we would just, like, show them. Nikita Beyer had a good tweet recently about, like, fundraising for a social product where he was, like, just give them the phone, like, up and play with it. Like, don't explain, just, like, show.
James Evans:And I think that's kinda what we were trying to do. But, frankly, the other thing was, like, we would we did a couple of conversations early on where we would get to the end of, like, our pitch, and the person on the other side would be like, oh, so this is, like like, Alfred for Mac. We were like, no. Like, what's like, did you not just hear, like, b to b, like, widget chat? Like, what do you like, no.
James Evans:And then we're like 20 minutes in, like, it just it was a disaster. And so it was honestly just like crap. It was like, yo, like, I just really want you to, you know, get the basic physics of the product before we chat.
Michael Houck:How many investors actually went through and watched those? Because you get notifications when people watch your list.
James Evans:A lot. I think it just started getting around, like, someone forwarded it. I I think we had a password, but, like, probably, like, about enough 30 per seed. I mean, what I what I
Michael Houck:love is that, you know, if you send an investor a deck, they might spend under 30 seconds quickly flipping through the slides, reading the top line. When you put them in a Loom, you know, they're captive attention. Right? They're actually watching actually seeing what's going on.
James Evans:It's still an arbitrage. I think Loom is still, like, a hack for so much of company building, fundraising, communicating with the team, communicating with customers, communicating with prospects. Like, we we love Yep. Loom. We use it in so many series.
Michael Houck:Yeah. Same here. I'll use Loom for a Loom and Slack voice notes for just about everything.
James Evans:You're a voice to this guy. Got it.
Michael Houck:I'm I'm a voice note giver, not a receiver. Okay. So yeah. I mean, you said the deck was sort of let's call it bare bones. I have found a correlation, you know, very loose correlation between decks that are designed really well and maybe not being so full of substance, and then decks that are not find that well, it sort of implies that the founder is heads down, doesn't have time to build a great deck, and, no, that's a thing.
Michael Houck:So is does that hold true for you too?
James Evans:I definitely think it's not. There I strongly agree, violently agree with the correlation. Like, I've read a lot of very I've read many more pretty decks than I've read ugly decks. I think it's not causal. Like, if you're good at design, by all means, like, make it good.
James Evans:I think a few things. One is I think if you're not in the industry, there's just an assumption that, like, oh, this is important. I'm raising 1,000,000 of dollars. Of course, like, my slides need to look at. And so I think people waste a lot of time that they should be spending on the substance doing the design.
James Evans:Number 2, I think people make the mistake of not making the slide self contained. They think, like, oh, it's again, the Steve Jobs thing. Like, I'm gonna it's like the keynote, like, very, like, sparse design, like, and I'll voice over it mistake because a lot of times, people are just gonna read the slide and not listen to you, you know, even if you're presenting it live. Make the slide self contained. That makes them uglier because there's more text, but I think it's it's better.
James Evans:And then I think the third thing is, like, I think people think that there's a difference between convincing an investor that your idea and business is good and you're a good founder and, like, convincing yourself of those things. This is something my cofounder, Vinay, talks a lot about. Alright. It was a huge influence on me when we were doing our seed. It was just like, yo, these are the same thing.
James Evans:Like, let's just take let's just decide why we are excited and then put that into some slides. So if you look at our deck, it's like there's basically, like, one slide, which is just text, and it's like, this is why. This is why we're excited about the business. It was, like, 4 or 5 things. And that was why we were excited about the business, and we had conviction of that.
James Evans:And, like, I think if you if you aren't able or if if if you aren't able to come with that, like, that's obviously bad. I think most founders would be able to come up with that. If you feel like you can't share that, like, something is off. Like, you know, if you if you're able to convince yourself and your those words don't you won't you you think of no chance of convincing, like, an investor to give you money. Like, something is off.
James Evans:Like, either maybe the idea is not good or, like, you need to get advice from someone else. I'm like, why it's not it's just I've I've very rarely looked at a deck where I've been I I understood why the founder has conviction. And, of course, I may disagree, but it's like I just think that's what fundraising at the earliest stage
Michael Houck:is. You always have to make sure as a founder not to sort of drink your own Kool Aid too much.
James Evans:And, again, I think it's a status quo thing, though. I think people don't know that they don't have to Like, people think like, oh, yeah. It's like Shark Tank. I don't know. Like, if you just haven't been there, I think it's super reasonable to think that.
James Evans:And that's why we wrote the article about our seed deck. It was just like, we wanted I I just whenever I just send it to founders to be like, yeah. This is all you this is all you need to do. Like, trust me. Like, it's okay.
Michael Houck:You've made some investments now too. Right?
James Evans:Yeah. I started Angel Investing.
Michael Houck:Yeah. How's how's that been? Like, what have you sort of learned on the other side of the aisle that, you wish you would know
James Evans:when you first went out to raise? I don't know if I've picked up anything. I think what's fun about angel investing for me is, first of all, I think there's this kind of weird, like, I think some people view angel investing as, like, something you do when you've, like, made it. And I actually think it's like and I think people are there's a lot of people who are not unique in this. People are catching on.
James Evans:But, like, it's such a great way to meet other founders and, like, also just, like, step into their businesses and, like, learn stuff. Like, I learn stuff in a lot of investor updates I received from, like, really early stage investments because, like, now I have this group of smart people who, like, know me, and I'm incentivized to help them. And it's been great from that perspective. But, yeah, it is kinda like, it is kinda like startup therapy in a way to, like you just you get so in your head about your own company. It's just really nice to step into another one and, like, think about it deeply and and get the perspective of the founder.
James Evans:From a fundraising perspective, I think, I think, honestly, I've just I've what has maybe frustrated me about angel investing is you just you encounter a lot of people who are such great people and have such great ideas and just have, like, no they'll do the thing when they, like, create a 30 page deck. And just because, like, no one told them they didn't have to do that. And so that's, like, kind of how I frame my value prop as an investor. I'm like, yo. Whenever you're, like, spending time on something and you're, like, not sure if it's you know, a classic example is, like, deciding on your first CRM.
James Evans:Like, that's not something you should spend any time thinking about. You should just ask someone who's done that and just do it. You know, that's, like, not a company that's not gonna somebody answer a teaching decision. And so I try to just be like that. Like, I try to just ask founders I invest in, like, questions to tease out, like, what they're spending time on.
James Evans:And if it's, like, preproduct market fit, and I'm hearing things like, oh, we're choosing tools and, like, we're figuring out our employee agreement. I'm just like, yo. Like, I'm gonna send you ours, and, like, please just use them unless you have, like, some really good reason as to why you should spend time on x. Just kinda, like, focus people and tell them it's okay. Like, I'm kinda, like, with the deck thing.
James Evans:Like, it's okay not to spend time on this. Like, conserve your creativity, conserve your, like, innovation for the thing that really matters.
Michael Houck:Well, first of all, you're you're about to get a ton of, like, 8 slide decks sent to you after this. Dude, dude,
James Evans:dude, dude. But
Michael Houck:second, yeah, I know. I totally agree because at the end of the day, when you're at early stage, you have to limit the amount of time you're spending on basically anything that's not consequent. And so, you know, you're gonna have a ton of weaknesses at that stage. Like, I think a lot of founders struggle with prioritizing the right things, and that thing gets them into trouble with investors too.
James Evans:There's so many hard, like, decisions to make. Like, I remember one thing I spent way too much time on was figuring out health benefits, like, what health benefits are we gonna offer? And do there's even super easily create a narrative in your head that's, like, hiring is important. That, I agree. Benefits help with hiring.
James Evans:That, I agree. We should design the best benefits. I kind of agree, but, like, you don't have to design no one the the the odds that someone great joins your company because you have, like, a different type of you offer this health thing that just it's so unlikely that you should just find someone who offers, you know, top 90th percentile benefits and just copy those. It's really hard to know, like, what matters and what doesn't if you've never done it before. So that's why I think, like, I think every founder should try to find another founder who's, like, they can text, who's, like, a stage ahead, who they can just, like, you know, multiple times a week paying with, like, someone just or Sam's call.
James Evans:Someone just sent me a message being like, yo, do you have a a one pager? Or a lot of our customers are asking for, like, 1 pagers. Amazing. Yes. I'm gonna forward you my 1 pager, and then I want you to rip it off.
James Evans:Like, don't spend any time designing the 1 pager. Stuff like that. I think it's a huge unlock as a first time founder.
Michael Houck:Yeah. I agree. You don't wanna spend your time on anything else besides what actually drives growth.
James Evans:Which YC tells you, like, just ship and talk to customers, but it's so hard. Like, you get in there and you don't know what's important. And there's also this element of, like, everyone likes to cosplay big company. Like, it's really hard to avoid the, like, the pull to be like, oh, no. I'm a founder.
James Evans:I'm, like, building my business. I'm, like, investing the logo, you know, all that stuff. And, yeah, just having that person who's, like, a text away keeps you focused eyes on the prize.
Michael Houck:Yeah. There needs to be some sort of, like, advisor matchmaking, one step ahead product because I think a lot of founders would benefit it. Because once you know what the best practices are, it's a good founder will logically just implement them and do them. Okay. So another thing you guys did had done really well was, you managed to get some really good logos super early.
Michael Houck:And I think that you mentioned to me that helped with fundraising. A lot of the time people will shy away from going after big logos early because it's like Moby Dick. Right? It's like, oh, long sales, all out of your control. How do you guys navigate that?
James Evans:Luck, honestly. Like, if we just had people come inbound and then it snowballed a bit from there. This comes up actually a lot. People ask us in in fundraising, and I was just kinda like, yeah. Like, I mean, I think it is a good sign.
James Evans:I I think it's one of those things where, like, people talk about going upmarket. And I think if there's something, like, clearly from a top I think I'll say this. From a top of funnel perspective, I think it's rare that there are discrete activities that you can take to, like, unlock bigger companies. Like, it's kinda the same activities. Unless you're doing something really bespoke, like, I don't know, sponsoring hackathons for startups.
James Evans:Like, okay. If that's all you're doing for top funnel, like, okay. Yeah. And you're not getting enterprise logos? Okay.
James Evans:Like, makes sense. Like, start posting on LinkedIn. Start you know, just do, like, the basics. But I think the point there is, like, if you're doing, like, marketing and it's not super specific, and you're not seeing, like, any interest from big companies. Like, I don't think that's a you can't like, you're not gonna figure out some for the most part, I think there's niche industries where the sales apply or there's, like, trade groups, like, really specific things you need to do to be noticed.
James Evans:But I think in most, like, again, all I know is software. In most, like, software markets, that's not true. And so if you're not seeing the pull, it's probably because your messaging just, like, doesn't it so the value is not there. And it's not gonna come from, like, I you see this all the time. The the SOC 2 so and so.
James Evans:We're now a SOC 2 compliant, like, huge milestone in company history. Like, doing that, sure. Do the message, get the 100 LinkedIn likes or whatever, but, like, that's not gonna, like, unlock do it when someone asks you, hey. You need to be SOC 2 compliant for me to work with you. Don't do it as a top of funnel thing.
James Evans:So here's what I'm trying to say is, like, the in most markets, I think enterprise is fine to you. I don't to begin with. And then you discover, okay. We don't have these features. That's what we need to build to unlock the enterprise.
James Evans:But I think if you're sitting around being like, we need more growth. Let's, like, go after the enterprise. And you look in your sign ups channel on Slack, and you don't see any companies above a 100 people. Like, I just question whether your product creates value for companies above a 100 people.
Michael Houck:That's the raw truth right there, I think. After a lot of books. You need
James Evans:to build a new product. Like, it doesn't mean it doesn't mean you're like that that could be a strategy. Like, go build a new product that's more targeted at the enterprise. But I just don't think it's something that you can it's not like you're gonna find I I know because I've tried. It's not like you're gonna find, like, the newsletter where all the, you know, fortune 500 buyers hang out.
James Evans:Like, it just doesn't it doesn't exist.
Michael Houck:Yeah. That's true. That's true. Okay. Cool.
Michael Houck:Well, hey, couple of quick fires to wrap up here. First one, name and talk about an investor who you think the other founders should work with, maybe personal experience work with them.
James Evans:I love all of our investors. Maybe one who I think flies under the radar is, Ittai Sedone. He was, one of the cofounders of Lytrix. And what I so he he co led our. And what I love about Ittai is he kind of plays that, like, that text away founder, should I spend time on x role that, like, I try to play for people I invest in.
James Evans:And what I also really appreciate about Ittai. I think this is also true. Our all of our investors. I think, honestly, one of the most harmful things that I've seen, again, not in ours, but I've seen this in other companies' investors is, like, the overconfident nonoperator investor who, like, pretends like they understand something that they don't. And then you run with that advice and, like, it hurts to be bad advice.
James Evans:What is true of, like, all of our investors, I really appreciate, is the, like, hey. I don't know the answer to that question. I'm gonna go find you someone who does. So helpful. Like, I think it saves so many painful cycles of acting on that information.
James Evans:So shout out, Itay.
Michael Houck:Okay. Another one. Pretend that I'm a first time founder. I've never raised money before, but I'm about to go start a process for the first time. What is the one piece of advice I need to know?
James Evans:Ask open ended questions. Treat treat the pitch not like a pitch, like a conversation. Do attention checks, like, pull how the investor is thinking, and then have a conversation about those thoughts. Your goal is not to, like, deliver information. If you do think you need to deliver information, put it in an email or put it in a loop.
Michael Houck:And another one, what's, you mentioned a couple of tools that you think people should just sort of start out, don't make too many decisions about what tools you need to use, just pick and go. What's one tool do you recommend, you know, SaaS companies use?
James Evans:What a setup for self promotion.
Michael Houck:No, no, you can't say command,
James Evans:but you can't say command. Besides, you know, your user assistance stack. I mean, Loom is amazing for so many use cases. I've, yeah, I I ask myself daily, like, should this be a Loom? In terms of SaaS oh, another another great one is, cap table management.
James Evans:I've seen so many founders, like, stress, like, do, like, you know, multiple demos with, like, multiple cap table management software. We use Pulley. Works great. Simple. You know, a lot of wise companies that use it.
Michael Houck:Yeah. Poly is great.
James Evans:Just do it. Your company is not gonna be any different if you, you know, spend an extra week researching other cap table management solutions that just using Poly.
Michael Houck:Cool. And then last one, what is one thing you would change about the startup world?
James Evans:Okay. So I was talking with my wife about this. I think a lot of being a founder or of taking the leap to be a founder is just knowing other founders because I think people don't realize that it's, like, not that scary of a thing to do. Again, assuming you have, like, the financial means to support yourself for, like, a certain period of time, it's not you don't have to be you don't have to have, like, certain properties to, like, try to do a startup. Like, it's just there's a lot.
James Evans:A lot of it is just deciding to do it. And I think that's so much easier. When you can point to someone you know, be like, I I know this person. Like, I think of myself as better you know, I'm better at these things and maybe worse than the at these things and this person, but, like, I understand them. They decided to be a founder.
James Evans:I can do it too. And I think that perpetuates a lot of there holds a lot of people back in communities that don't create a lot of founders. It's a kind of self perpetuating, like, it's limiting in a self perpetuating way for groups of people. Like, I think just, for example, you know, I was telling my wife about this. Like, I think there's obviously way more male founders, and I think a lot of that is is pattern matching.
James Evans:And so I don't know the solution. Like, if you just start spending time with people who wanna be founders and, like, never really just like, I'm not that special. I'm like, it's okay to, you know, if he can do it, like, other people can do it. But that really frustrates me because there's just so many, like, latent founders out there. Like, if only they had, like, a friend who had taken the leap, like, they would also take the leap.
James Evans:And that's, like, probably bad for society.
Michael Houck:I mean, at the end of the day, you know, entrepreneurship drives society forward, new businesses drive society forward. You have to but as as the founder, as the individual, you have to be able to go out there and and make those connections. It's sort of like the first test. Right? Can you go out there and jump into that world?
James Evans:Totally. And if what's frustrating to me is is there's there's 2 sides of it too. Like, I see, you know, now that doing a startup is more popular, I see that a lot of people in my social group are kind of fair kinda like fair weather founders. Like, some people will do I call it, like, YC Summer Camp. Like, people will do it, and they'd be like, yeah.
James Evans:This isn't really for me. But the fact that they feel comfortable doing it, I think, comes to the fact they have so many people in their social group who've done it. And I look at other communities where there's so few founders and only, like, the people with the utmost conviction end up taking the leap, but that's just, yeah, that first reason. Maybe it's some sort of, like again, maybe it's a a megaphone kinda like cofounder speed dating build conviction that, you know, I'm special enough to start a company service.
Michael Houck:Yeah. I mean, it's a net positive for sure that that is happening more and those people do feel feel comfortable do that. So yeah.
James Evans:I love that. Cool, man.
Michael Houck:Well, hey, thanks for the time. This has been great.
James Evans:Great, Jam. Thanks for having me.
Michael Houck:Yeah. Where can people find
James Evans:you? Manbar.com, or LinkedIn is the is the hot new social network these days, I hear. So there.
Michael Houck:Twitter. You heard it here first, guys. You'll follow James. I'll talk to him.
James Evans:Gotta be cringe. If you're gonna be the founder, you gotta be willing to be cringe.
Michael Houck:That is the truth.
Michael Houck:Thanks for listening. I write up my main takeaways from every conversation and make them available to all of our members at foundingjourney.com, along with a bunch of other perks and more content. If you found this conversation valuable, subscribe to Founding Journey on Spotify, YouTube, Apple Podcasts, or whatever your favorite podcast app is. I post a new episode every Thursday. Also, consider leaving us a rating or a review.
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