If you want to see what the next generation of Asian leaders looks like–look no further than Beacons.ai co-founder and CEO, Neal Jean. Backed by Y Combinator, a16z, and even our former guest Bryant Chou, Beacons is an up-and-coming Operating System for creators. A one-stop shop for creators to do email marketing, make their online store, their link in bio, etc. Despite still being early in his entrepreneurial journey, Neal has already accumulated an incredible amount of insights and experiences, and I hope you enjoy learning about them as much as I did. Without further ado:

BEFORE STARTUPS

Neal’s background before startups is quite unorthodox. A few years after graduating from Duke undergrad, he went back to college and got a second bachelor’s degree, then went on to get a PhD from Stanford. I asked Neal to connect the dots for me:

I grew up in Ohio and when I was 18, I didn’t really know what I wanted to do with my life. I wasn’t ready to make big decisions like that. I wasn’t aware of many different career paths. When I got to Duke, I didn’t really know what I wanted to do. I ended up studying economics and math there. I started my career as an options trader working in finance. I fell into that because I was studying economics and was somewhat good at math. It became clear to me very quickly that I didn’t want to do that my whole life. Around 2010 or 2011, I was living in Chicago working in trading and I’d be sitting at my trading desk reading essays by Paul Graham about startups. At the time, I thought it would be cool to build a company and make a difference, but I wasn’t confident that I could do it myself. I wasn’t technical and I wasn’t very familiar with it. Now I know that it doesn’t really matter if you’re technical, you learn everything by doing it anyway.

I mentioned that as a non-technical person, being unconfident in my ability to start a startup resonated with me.

Definitely. I majored in economics, so maybe you can relate to some of this [I also majored in economics]. One of the only things I remembered from my economics classes at Duke was this idea that advances in technology are the only thing that really moves the world forward over long periods of time. I think that idea really stuck with me. It was one thing that drew me to tech. I started my career in finance. I actually got fired from that first job. I made a bad trade, lost a decent amount of money, and got fired the next day. Looking back, I feel really lucky because it gave me a chance to reset and be more intentional about what I wanted to do with my life. 

So my younger brother, Joel, was Stanford class of 2011. He then went to MIT and did a PhD there, researching solar cells. It just felt like the stuff he was working on, he was trying to save the world since he was working on climate change you know. He was working on developing new types of solar materials. It just felt very meaningful compared to what I was doing. He actually now has a solar startup called Swift Solar. So I decided to go back to school, went to Georgia Tech for two years, did a second bachelor’s in EE, and I thought I also wanted to work in solar, but the summer before I went to Stanford, I took Andrew Ng’s machine learning class on Coursera and found it really interesting. I did a rotation in a machine learning group at Stanford and decided to switch to CS basically. My PhD was mostly on using computer vision and satellite imagery to map out poverty in Africa, which was the kind of meaningful project I wanted to work on coming out of finance. But even coming into Stanford, I had the idea that I wanted to build something eventually. Near the end of my PhD, I started working with a couple of friends on some projects. That led to applying to YC, pivoting a couple of times, and eventually getting to what we’re working on at Beacons today. 

PIVOTING IDEAS

Most startups have co-founders. I asked Neal how he met his and if he had any advice for other people looking for co-founders:

I have three co-founders. Two of them were in my PhD program. We met when we were visiting Stanford, deciding what grad school to go to. I met our fourth co-founder at Georgia Tech when I was doing my second undergrad there, so I’ve known him for over 10 years. I think I got lucky and ended up being able to work with my friends. If you get lucky and you have friends who have similar interests and you work well together, that can be a great path. One of the things that surprised me about startups is that it’s very random. Before you do a startup, you read about startups in TechCrunch and you think they all follow a standard path. It’s like you raise a pre-seed, you raise a seed round, you raise a series A and then whatever. But people do all kinds of crazy things, and the same goes for finding a co-founder. There are lots of ways to do it. If you don’t have friends to do it with, one thing I would suggest is to develop your own interests. Follow things that you’re interested in and try to go deep in those areas. You’ll naturally start doing more interesting things and meet more people. If you’re doing that intentionally, I think you’ll create a lot of luck surface area for yourself.

Earlier in the interview, Neal mentioned that his team pivoted a few times, so I asked him what the original idea for Beacons was:

I used to live in Rains [graduate apartments at Stanford], and the first project that we built was a face recognition smart lock for my apartment. We tried to get it to recognize all of our friends’ faces and unlock my apartment when they showed up. It worked sometimes. We made a portable version of it to bring to our YC interview. That’s what we got into YC with.

We quickly pivoted away from our original idea after our YC interview. We realized that all of our backgrounds were in software, and to build the kind of company we initially envisioned would require more of a consumer hardware focus. So, we started exploring new ideas and different things. We entered YC without a clear idea and spent the first month building productivity software, which I think is a common trap for founders who don’t have any better ideas.  

About a month into YC, I attended a friend’s wedding in Singapore and met a woman who was running an e-commerce company and doing all of her marketing through influencers on Instagram. She heard about my background in machine learning and asked if I could build a system to help her find influencers to work with. She showed me spreadsheets where she was tracking people’s follower counts and the number of likes and comments they were getting on their posts. She would then compute their engagement ratios and try to figure out how much she would be willing to pay them. It seemed like a good problem to automate and potentially improve with machine learning. I returned to SF, discussed it with my co-founders, and we invited her to come from Singapore to SF so we could start building this system for her. She actually came over the next Monday and moved into our apartment. I gave up my bed for her and moved into my co-founder’s bed. We spent the rest of YC building with her, and that was how we got into the creator space. Eventually, we realized that we were more excited to build products for the creator side of the market than the brand side.

We first started building something that’s similar to Cameo. We were trying to build a Cameo for creators. However, we soon realized that Cameo was already doing a good job at catering to creators. But that’s how we started talking to lots of creators. We saw Linktree taking off around that time. Their product looked pretty basic and we weren’t that good at building software at the time. So we thought we could probably compete with them. That’s how we started down the path we’ve been on for the last couple of years.

GETTING CUSTOMERS

I’m always curious how startups get their first customers, and I was especially curious about Beacons since they sell to influencers. Here’s what Neal had to say:

It is harder today because I think there are more people trying to reach out and get in touch with these creators. We just used cold email in the beginning, this was when we were still building the Cameo for creators. 

We put together a list of 50 creators who were based in the Bay Area and I emailed all of them. The email was basically like, “Hey, whatever your name is, your biggest fan, Jesse, who is my co-founder, wants to pay you $20 for this video. So you have $20 waiting for you. Just reply to my email and we’ll tell you how you can get this money.” We thought it could work. We got one reply out of the 50. Her name is Suki. Her Instagram is @sukiluser, if you want to look her up. She had just moved to the Bay Area from Toronto. She didn’t have many friends yet. She asked if Jesse was my co-founder. I confirmed, she was really nice about it. We met up the next day in Hayes Valley. She was our first user. She’s an advisor to the company today and still a friend. 

Although I thought this idea was genius, it sounded like it wasn’t too effective, so I asked Neal if he switched up his tactics to get customers 2-10:

No, we kept doing the cold email. After we pivoted to the link in bio, we started a new cold email strategy. We would find creators who are using Linktree. Then, we would rebuild their website in Beacons. We would send them a screenshot of the website we built for them that was nicer than their existing Linktree website and then ask them to sign up. That’s how we got our first couple hundred users. 

PHD FOUNDERS

Because I know some folks who have or are pursuing a PhD and are looking to get into startups afterwards, I figured I’d ask Neal to reflect on the advantages and disadvantages of being a founder with a PhD:

I think we have more challenges than strengths. One challenge was that we didn’t have any experience working. My other co-founders had never worked before. I had only worked in finance. So I had never worked in tech. I had no idea how tech companies actually operate. So we just had to learn a lot of things from scratch and probably made a lot of rookie mistakes along the way. We also weren’t native to our space. None of us were content creators. And I think early on, there were some challenges that came with that. One, we didn’t have the most empathy for our users. So we were trying to build for them, but we didn’t really know what it was like. We’ve worked on that and improved over time. However, we probably made some decisions and mistakes that others wouldn’t have. From investors, there was a perception that we were mercenaries. We were machine learning PhDs, but we were building things for TikTok creators. They wondered if we were just capitalizing on a hot space. In terms of advantages: now that AI is so popular, I think our backgrounds are going to be more helpful. That’s maybe a more obvious one. A less obvious one that I think has been important is that we’re not necessarily smarter than people who don’t have PhDs. But one thing you do learn during your PhD is not to be intimidated by problems that you don’t know the answer to initially. As a founder, you often don’t know how to do anything going into it. You’re constantly figuring out new things. When you do a PhD, one of the challenges is that you have to bring new knowledge into the world. You’re always trying to figure out things that haven’t been figured out before. You’re not sure if you can figure it out, or at least not sure if you can figure it out in this way. So there’s a certain amount of intellectual resilience or courage that you develop. I think that’s actually been pretty helpful for building a company. To clarify, resilience or intellectual courage isn’t exclusive to PhDs, but it was helpful that we had developed that over time.

Naturally, I had to ask Neal how they managed to convince investors to bet on them:

It depends on the investor. Different investors care about different things and respond to different things. We’ve always been honest about who we are and who we’re not. We didn’t misrepresent ourselves as creator experts. We’ve always been earnest and curious, and over time, dedicated to solving problems in this space. For investors who cared more about that than domain expertise, our approach resonated with them. It’s probably a good thing because if you get money from an investor that doesn’t really match with you, it’s likely to cause problems later on.

BEING NON-TECHNICAL

Backtracking, I asked Neal to expand on an earlier point he made about how non-technical people can dive into a startup and pick things up along the way:

It was definitely beneficial for our team to have experience in software. But none of us had built any consumer software before; we were all research people. We knew Python, but we didn’t know JavaScript. I had imagined that to work and contribute to an early-stage startup, you have to be able to code things up yourself and build products yourself. It depends on the type of company you’re building. If you’re building a dev tools startup, maybe that’s more accurate. But there are many companies where it’s very helpful to have a non-technical person who’s willing to do a lot of different things to make the company work. At Beacons, I’ve done very little coding in the five years that we’ve been working together. Even though I have a PhD in CS, most of the work I’ve done at Beacons to help the company is not writing code. 

We’re a product-led company. Our go-to-market motion is mostly people using the product, and then other people seeing them use the product and adopting it for themselves. We haven’t done a lot of sales or even a lot of marketing up to this point. My role was mostly leading product, especially early on. Now we have other people on the product team. But early on, I was the main product person. Doing product is really about understanding your users or customers and then understanding their problems and then trying to figure out how you can solve them. Because we’re building a software product, it was about understanding how to solve them with software for the most part. The hard part is really understanding the problem and being creative in thinking about how you can provide a solution. That cycle of understanding the problem and then figuring out how to solve it actually creates a lot of leverage within the company.

One thing I took away from previous interviews is that you can’t just go and add all the features that your users ask you to. Users will ask you for this and that, but maybe you’ll end up with a really hodgepodge product if you do that. I wanted to get Neal’s thoughts on how to cut through the noise and identify what it is users actually need:

You do your best. If you look at our product, we definitely added a bunch of features that people asked for that didn’t end up being very useful. I definitely can’t claim that we’ve always done a good job of this. Understanding the problem is not a simple thing, there are lots of different problems and ways to think about them. It’s about fitting them together into one cohesive model of who the customer is and which problems are important enough to solve. It’s also about understanding which problems your company is well-positioned to solve or where you have a right to win as a company. It’s a high dimensional thing that requires a complex model of how the world works, how your customer fits into that world, how you fit into that world, and where you think things are going in the future. Then, it’s about trying to align all those things and build for that future while being constrained on the money, time, and people that you have to deliver that stuff. 

I asked Neal if he wrote out his models explicitly:

Yes, I really like to whiteboard stuff out. We have whiteboards in our office. That was a skill I picked up during my PhD. I also do a lot of writing internally. I believe that writing is thinking. There’s this quote, “Writing is nature’s way of showing you how sloppy your thinking is.” I believe that. 

BEING AN ASIAN FOUNDER

As per newsletter tradition, I asked Neal how being Asian has qualified his experience as a founder:

It’s definitely something I’ve thought about, but I wouldn’t say I spend a ton of time thinking about it. I think I’m relatively lucky in a lot of ways. As a founder, I’m a man, and women often have it harder as founders. I’m Asian, but as far as being a minority goes, being an Asian man is not the worst thing as a founder. I think because of other characteristics that I have, like having a PhD in machine learning from Stanford, I don’t not fit the mold that people are expecting. I think Asians are still pretty underrepresented in leadership roles.

I mentioned that although there are some very successful Asian founders, it seemed that Asian founders were especially lacking in terms of CEO representation. 

I share your impression that there aren’t many visible Asian CEOs. Jensen Huang, for example, has recently been in the media a lot. We’re still an early company, so I hope to help change that someday. However, it’s not always top of mind. Most days, I’m focused on what needs to get done at work.  

A fair answer, given that Neal is really in the thick of things having just launched Beacons 2.0 (a big expansion of their product suite featuring AI-powered tools) several months ago. 

SHOUTOUTS

The only thing Neal wanted to shoutout was Beacon’s mission:

For us, we always saw these creators as a new class of online entrepreneurs. They didn’t have a lot of tooling or support for them yet. That’s always been a big part of our mission at Beacons. This is actually related to the research I did at Stanford, where I got really excited about using software to create better economic opportunities for people around the world. I was doing that research on poverty in Africa. That’s a part of our mission at Beacons that I’m still pretty excited about, even though I never would have guessed that I would be working with TikTokers. It’s a cool space to be in. We’re starting to build one of the better, more comprehensive platforms out there to support online entrepreneurs, at least ones where content is pretty important for their business. We’re starting to build in a lot more AI and machine learning stuff to help them run their business more easily and make better decisions across the business. 

Given the rapid and accelerating growth of the creator economy, I suspect that Neal and his team will be in for some very busy and fun years. I’m excited to see how Neal grows during his time leading Beacons, and I hope that he’ll come back and grant us another interview once he’s made it!

Thank you Neal for speaking with us!

On November 10th, I had the honor of chatting with Bryant Chou. Bryant is the co-founder of Webflow, one of the leading website-building platforms in the world with a valuation of $4 billion. Within startup-land, Webflow is especially notable for being mostly bootstrapped, waiting five years before raising an additional round after their seed round in 2014.

In our conversation, we touched on a variety of topics ranging from being Asian American to working at startups vs. big tech. 

Note: Quotes were lightly edited for brevity and clarity.

EARLY CAREER

I started our conversation by asking Bryant if he had any entrepreneurial endeavors before his first official company. While he never directly started a business, Bryant did display early signs of his scrappiness.

My mom gave me twenty dollars a week for all of my lunches and whatever discretionary income. So, of course I spent most of it on food, but that essentially meant that I had nothing really left over. But I also really wanted to be a normal high school student and go to prom and go to dances and stuff like that. So I made money in high school by entering Counter-Strike tournaments. I would earn, I don’t know, a few hundred bucks in these local LAN parties. And that’s how I paid for dances. So I always kind of adapted and tried to apply myself in different ways, with whatever skill sets I had.

He continued on to talk about his motivation for getting into startups:

To be honest, I don’t know if I would have done startups if I was at Facebook or Google. You know, I didn’t land those jobs coming out of school. I wasn’t smart enough. Didn’t pass those interviews… I think because I was at a mid-tier tech company, it kind of gave me more hunger to do something on my own. I wanted a change and believed software startups were the future. I took the plunge in 2011, driven by the belief that startups would be significant, 

However, he also cautioned about rushing into startups: 

You need to think about the things that really need to be true in order to be a founder and do it successfully. One of those things is working in a space that you really want to affect and make a difference in. You just want to make sure that you’re working on something that’s worthy of 16 hour days, you know?

BRYANT’S ROLE AT WEBFLOW

Although Bryant is perhaps best known as being the co-founder and CTO of Webflow, I saw that Bryant had recently shifted his focus away from technology to growth and marketing for Webflow, so I asked him about that:

Because we were bootstrapped, we never really invested in growth and marketing. So what started as an impatient maneuver on my end, like, ‘hey, I think we need to start doing these things’ turned into, ‘hey, this is actually something that is ROI positive.’ Who would have thunk? I suppose even though I’m an engineer and builder and product person at heart, I’m also a company builder in that sense. So I’ve–for example, started our marketing, started sales, started data, started security, so all these things are just things that are just like, ‘hey, we need to do these things. Let’s figure out how to do it.’ And I think that’s something that most entrepreneurs are going to have to do. I don’t think you’d necessarily have an option to not do it.

Coincidentally, I had talked to the new CTO of Webflow, Allan, a few months prior. Alan was super nice and very sharp–a great backfill for Bryant.

NAVIGATING ASIAN IDENTITY

As the Asian Hustle Network, I naturally had to ask Bryant about how he felt being Asian qualified his experience as a founder, he started out by acknowledging the position of Asian men:

It’s a well-known fact that Asian men in Western societies have a different bar to hurdle than other people. One of the reasons why I was so keen to help produce the 38 in the Garden movie with Jeremy Lin is because he articulated this so well. Have you seen that documentary? 

I had not, in fact, seen the documentary. Oops. I watched it after the interview on his recommendation and it was very, very good. Please give it a watch! Bryant continued:

It’s my one and only film and probably the last one that I’ll ever be involved in. I’m totally okay with this because I believe this cause is important. Part of the reason why I agreed to chat with you is because we obviously have a chip on our shoulder. We are seen differently in society. I’ve dealt with it in various ways myself. I’ve taken a colorblind approach to business interactions and never thought about my race or ethnicity in certain environments. I think that’s ultimately what you have to do. As Asian people in Western society, you’re supposed to be heads down, let your actions speak for themselves. I still very much have that approach. Who knows if it’s the most optimal thing to do.

Despite his colorblind approach, Bryant was clearly very cognizant of the fact that people perceive Asians differently, and had a suggestion for our readers:

To just walk amongst people of the same race and they speak your language, I think that’s like a worthy thing to do and to dive into. I identify as Taiwanese, at least as much as I identify as an American. When I go there, I literally feel different. I feel like I’m one of the same, like I’m among my people, I’m not viewed as a minority, I’m just viewed as a normal person. I think every Asian-American should have that sensation at some point in their life that they feel like they’re seen as someone just like everyone else, and the only place where I felt that has been Taiwan.

I knew Bryant grew up in the Bay where there were a lot of Asians, so I asked him if he felt the same sensation in those areas, he suggested:

The broader construct of society that we live in is still the US, which is still 85% non-Asian. I think Asian Americans make up about 12% of the population, maybe even less. I don’t think it’s so much about not being in the majority. It’s more about the sensation that you get that you are biologically or ethnically more similar to the people that you’re walking around with in Asia.

NAVIGATING ENTREPRENEURIAL CHALLENGES

Moving onto the next topic, I asked Bryant about his emotional experience as I had heard a lot of founders talk about how difficult this aspect of running a startup was:

I thought it would be harder technically than it would be emotionally. But I would say the social emotional components of building a company are 100 times harder than the technology itself.

I followed up by asking if there were any specific experiences that stood out to him:

They’ll come up in different forms. In 2020, there were a lot of social justice issues that made running a company very challenging. Ultimately, when you’re at a company, you need to be hyper-rational. You’re faced with a conundrum between being a good steward of the company’s mission and vision and maybe what people inside your company believe, and sometimes those things clash.

It was clear that this level of situation took an emotional toll on Bryant, so I asked him how he copes with it and prevents it from seeping into his personal life:

You compartmentalize most of it. It helps to have a supporting spouse and partner. It’s great to have kids that can distract you from this.

ADVICE FOR YOUNG PROFESSIONALS

Adding on his comments about entrepreneurial pain, Bryant offered:

I think like if you’re in your 20s, I would actually be chasing that kind of pain. It’s the best time to chase pain and suffering. If it means that will lead to a certain level of intellectual expansion, social emotional awareness. There’s no better time to find the limits of what you’re capable of than when you’ve graduated, when you’ve got a whole life in front of you. Like, it’s time to see what you’re made of. So I’d be a huge proponent of young folks going to startups that are hectic and crazy, working in environments where they can learn, dedicating time and energy to perfecting a craft. Those are things that you don’t learn in school. And those are only things that you can chase on your own accord.

This made me think about how I have a lot of friends who go into Big Tech. A good number of them say that they want to pursue their own company eventually, but want to get their start at a big company to build up their skills. I asked Bryant what he thought about this approach:

There’s two kinds of learning that you can do at a big tech company. One is technology related. So you can go and immerse yourself in a technology, and be surrounded by technologists that can help you. That’s something very valuable for sure, but learning how to do things the way Meta or Google does things is not transferable at all to startups. None of their processes matter. None of their ways of thinking about building products matter. It’s just a whole ‘nother ball game. There are maybe some professional skills that you get to pick up. Communication, the ergonomics around the work–such as just documenting your work, making your work transparent, and just picking up good habits–that’s for sure. But there’s nothing like working in an early stage startup where you’re building something from nothing. You know, you’re almost never doing that at a big company.

I was somewhat surprised that Bryant felt that the Meta or Google way of thinking about products was applicable, so I pressed him to elaborate:

So actually, that’s a great example of something that I did retain. It’s more so the principles at which you approach building a product, right? Developing customer empathy, ensuring you’re not over-engineering things really matters. Facebook and Meta have an abundance of resources. Engineers at large companies are very good at building incredible things that are well-defined in a narrow spectrum. However, in a startup, you’re trying to go as wide as possible with what an engineer could potentially contribute to and build 60 to 80% of it. It doesn’t need to be perfect.

Bryant’s comment about over-resourced companies made me think about the opposite, under-resourced companies, and how I often hear about employees at those companies working weekends and long nights. I asked Bryant if he thought that was necessary in a startup:

There’s a time and place for it. I don’t believe nights and weekends are required. It’s important for people in their 20s to find their limits professionally and personally. This means making time for personal things like dating, hanging out with friends, and attending events. It’s about striking the right balance. For instance, I encourage my team members to take vacations when needed. It’s crucial for startup leaders to have a good pulse on their employees, understanding their strengths and weaknesses, and checking in on their well-being. I don’t believe anyone at SpaceX or elsewhere can stare at a problem for 100 hours a week and feel productive. It’s important to step out of your zone, draw inspiration from different things, and take breaks. To live a balanced life. When I say that people should find their limits professionally and personally, it’s like that limit is different for each person. But you have to feel like you’re able to stretch, build the muscle for your mental and physical strength to stretch when you need it. I think that’s really important to do.

SHOUTOUTS  

Webflow is hiring across multiple functions! Please visit this link to find and apply for open roles, or feel free to get in touch with Bryant at bryant@webflow.com if you would like to reach out personally for opportunities.

38 at the Garden, the short film about Jeremey Lin which Bryant helped produce is available to watch on HBO Max. The film is 38 minutes short and is a must-watch for all Asian Americans.

Thank you Bryant for speaking with us!

On January 3rd, I had the honor to chat with Eddie Kim. Like myself–Eddie happens to be a Stanford alumni. Unlike me–Eddie is the CTO and co-founder of a $9.6 billion company named Gusto: a payroll, benefits, and HR solution for businesses in the US. It’s already hard to find Asian unicorn founders, finding Asian near-decacorn founders is an order of magnitude rarer, making Eddie a certified legend. Despite his success, Eddie remains a very down to earth and genuine person, and I greatly enjoyed chatting with him. Without further ado:

PARENTAL PRESSURES

A common trope with some truth to it, is that many Asian parents pressure their children to pursue more stable, high-prestige careers, such as being a doctor or lawyer. I asked Eddie if he had experienced this:

I got pressure from my dad. My dad was a doctor and, like many Asian parents who are doctors, wanted their kids to be doctors. I think there was a fair bit of pressure from my dad, and then from my mom through my dad, to become a doctor and do pre-med and all that stuff. Of the STEM subjects, which I really liked and was good at, I was good at math, chemistry, and physics. The one that I didn’t like was biology. For me, it always felt like it was about memorizing things as opposed to actually using your brain. It seemed like being a doctor would require more of this, where I have to memorize all these different body parts and so on. I never really considered becoming a doctor, even though my parents really wanted me to. For them, it was the safe path, a prestigious occupation. There’s a lot of good to like about it, you’re saving lives and things like that, and you make a decent amount of money. 

However, once I was in college, my parents encouraged me to be in control of my destiny, which meant potentially starting my own business. They were supportive when I talked about it. Part of it was also that my dad is a doctor who started his own private practice, so he was an entrepreneur himself. When I was really young, my dad was just starting out. He immigrated from Korea and they didn’t have a lot of money. Once he became a doctor and had his own private practice, we were comfortable. We weren’t super rich, but money was not a huge worry. We’d always have food and basic necessities. We couldn’t buy super luxurious things and go on vacations, but it was enough that I could take risks early on. I think a lot of the reason why they were supportive of me starting my own business or doing something more risky was because even if it failed, it wouldn’t be devastating. I’d still have a home to go to and could fall back on my parents. It wouldn’t be a huge burden. So, I think I maybe had a little bit of a different experience than a lot of Asians once I was in college.

I asked Eddie if he thought that his parents were more understanding because they themselves were business owners:

Absolutely. My dad was a doctor and my mom was the one doing all the back office work. She was the receptionist, the insurance biller, the payroll runner. It was a small venture, just my dad and my mom, and they had one employee for 30 years. My dad never worked for a salary, he never joined Kaiser or anything like that. So, he definitely had a more entrepreneurial mindset.

My own mom is a small business owner, and Eddie’s parent’s attitudes paralleled my own parents’ so far. Since I sometimes ask my mom for advice when it comes to business, I wanted to see if Eddie did the same:

Not really. The whole tech world was so different from what they knew. Even questions about how to raise money or what is pre-money post-money valuation, all this sort of tech stuff, they had no idea. They weren’t practically helpful in that sense. But my mom was always super encouraging. She was very supportive, even though she didn’t really have a lot to contribute. It was more moral support more than anything.

SCARCITY MINDSET

Another common immigrant trope is having a scarcity mindset. This often persists even once families establish themselves in America. The traditional wisdom in startups is to build as lean as possible, and at first glance, having a scarcity mindset should help with this. I asked Eddie if he had this mindset and how it was expressed in his startup.

I remember, even though my parents’ practices were doing well, it wasn’t always like that. It started from nothing. We would rarely go out to eat, and when we did, it was at some chain like Sizzlers or maybe Red Lobster. Nothing super fancy. The thought of ordering an appetizer or a drink that wasn’t water felt wrong, like we were getting ripped off. There was definitely this mindset of being very frugal and not treating yourself to unnecessary luxuries. 

As I got older, I was influenced by some of my friends, who had less of a scarcity mindset. They would go out to nicer restaurants. We all had jobs post-college. We weren’t making tons of money, but while I was always about saving everything, they were not. At my first job at Volkswagen, I would pack lunch and figure out how to save about 60-70% of my salary. The rest was for rent, food, and gas. I was able to save, not a ton of money, but I had this mindset of frugality and saving as much money as possible. I’m not sure for what, but it was just the thing you do for a rainy day. My friends, on the other hand, were not saving money at all. They would go out to bars and fancier restaurants. That’s how I got exposed to it. Even though I was always a bit more on the frugal side, I started to see the value in treating yourself a little bit more. I learned from my friends that there’s no point in money if you’re not going to use it for something. What are you saving it for? I think the combination of how I grew up and my friends’ influence helped me find a balance.

I think it wasn’t until my second startup, Gusto, where we had the fortune of raising a lot more money than my first startup. Often, we had this mindset that you could spend a little more money and get higher quality stuff. For instance, instead of buying an Ikea desk, we bought from a company called Room and Board. It was a couple hundred more dollars per desk, but they were much nicer than an Ikea desk. Or like our first hires that we made, right? You can go for super cheap, outsource offshore to build your first product, or you can hire someone that’s really good, pay a little more, and be more generous with equity to get really top talent. 

So, I think it was at Gusto where I learned that if you have the resources to do so, it’s better to spend a little more. Don’t go super cheap on every single thing, don’t go frivolous and pay top dollar for everything either. But there’s a range, I would say, if it’s a range of one to a hundred, I would say a range of 70 to 80, or maybe 80 actually, where I think it’s worth spending that much because you just get so much more for it. Long term, it pays itself. 

There’s a moment where once you have the means, I think your mindset should shift a little bit. Not to go extravagant, but to not have so much of that scarcity mindset that we grew up with. 

BEING ASIAN AND BEING A LEADER

As I always do, I asked Eddie how he felt being Asian qualified his experience as a founder, and if it was something he thought about a lot:

I think to a certain extent, but not a ton. It’s not something that is always top of mind and something that I’m very self-conscious about or have imposter syndrome of. But also at the same time, it is something that’s kind of in the back of my mind. I sometimes ask myself, do I have what it takes to be a leader of hundreds of people in the organization? Will people not respect me as much because I’m Asian and Asians tend to be perceived as less of a leader than say, a white person. And so you definitely have a little bit of that, but also at the same time, I feel like whenever I have those thoughts, I tell myself that, no, why can’t you break the mold, right? Why can’t you be one of the first Asians that have done X or Y, right? Or one of the few Asian co-founders of a unicorn company, right? And so then I start to get excited about the concept of, “Hey, I can actually show people that it can be different.” And then, so it kind of turns into more of a motivating factor for me.

Eddie’s answer seemed to be focused on being a leader. From the research I did, it seemed like Eddie struggled in the transition from being an individual contributor to more of a manager role (or people empowerment at Gusto). I asked Eddie how he approached crafting his leadership skills.

One was, I had people that I could talk to that had more experience in it than I did that were very generous with their time and giving me advice and mentorship. Some of this came through investors that were early in the company. Our first seed round was basically a horde of angel investors that were entrepreneurs, right? It was people like Aditya, who was the head of engineering at Dropbox at the time. It was Jeremy Stoppelman, who’s CEO of Yelp. Drew Houston of Dropbox was among the founders of tech companies we wanted to invest in as some of the first investors. Through that, either directly or through people they knew, I got connected and would meet with some of these people regularly to get their advice on whatever issue I was facing. I remember actually talking to Aditya, at South Park in Soma, discussing how to structure comp bands. 

Having people around to ask was really helpful. I read a lot of books. I have this shelf full of business books. Things like High Output Management from Andy Grove, The Score Takes Care of Itself by Bill Walsh, and Mindset by Carol Dweck. Those are my three favorite business books that I read and they really helped me learn the tactics as well as the characteristics that are helpful in becoming more of a people manager. A lot of it is just experience. You do, then you fail and you learn. Like anything else that you spend time on, the more time you spend on it, the better you get at it. It’s really a question of how fast you progress. You will progress the more time you do something. Some people progress really fast, some people progress more slowly. But the point is that as long as you do something for a long period of time, you stick with it, you do get better at it. And then you like it even more. So it’s those three things: people, literature, and your own experience.

CUSTOMERS VS. FEATURES

When I spoke with Siqi, one of the things we talked about was how different potential customer segments can want completely different types of products and features, and how to think about where to prioritize. I asked Eddie for how he navigates this with Gusto:

In an unrealistic scenario where you have unlimited resources, it’s always better to have more features than less. However, the reality is that you have constraints in your resources and can’t do everything all at once. You have to decide how to invest your limited resources. You could build new features, improve the quality and scalability of what you have, or create new front doors into the product and focus more on acquisition and growth type efforts. 

At Gusto, we often have larger companies asking us for additional features for their businesses. At the same time, we have many small businesses that don’t know about us yet. So, we have to decide whether to focus more of our resources on creating more features for these large companies or creating more awareness of Gusto for all the small businesses that haven’t used any of our features. 

It really comes down to what you want to prioritize. For different companies, the answer will be different. It’s important to stay disciplined about who your customer is, who your target demographic is. It’s easy to just answer feature requests and get pulled into a direction that some of your customers want in the short term. This might help you get more money in the short term, but over time, you might find yourself not really focused on who your product is serving. 

Many companies have to be aware of this danger. If you start to prioritize too much of the short term feature requests and chase revenue short term, then you can miss the bigger picture. This company is building a product that works really well for this customer demographic. 

At Gusto, we always think about who our customer is. For us, it’s really the small businesses. It’s very enticing to try to go upmarket and land companies that are in the 100 or 500 employee range or a few thousand because they pay you so much more money than small businesses. Every once in a while, an opportunity comes along where a larger company says, “if you do this, then we’ll sign up”. This could be a huge deal for the company. It’s really hard to say no to those things, but you have to, because you really want to stay focused on who you’re serving. 

I asked Eddie to go a little deeper on the dangers of chasing the short term requests of the larger companies:

I think the danger is that there are two risks to this. One is you are diverting resources from something else. That could be a global maxima versus a local maxima. So that’s an opportunity cost that you could be missing. The second risk is that you lose focus on what makes your product or company so special. If we, for example, went and built a bunch of enterprise type features in Gusto that allowed any company to customize it to their heart’s content, that would be a very confusing experience for the 99% of our customers who are very small, who don’t want a customized solution because they have no idea how they want to do things and they want Gusto to guide them on how to do things.

GOALS FOR LARGER COMPANIES

Since Eddie is one of the few at the helm of a $500M ARR startup, I wanted to ask him what startups at that size prioritize, and if rapid growth was still the goal:

I think as you get more mature as a company, you start to think less about just growth at all costs. You start to think about growth at a reasonable price. There’s actually a non-standard technical term for this called GARP – Growth At a Reasonable Price. The rule of thumb for a later-stage company is that you want a GARP of 40 or above. GARP is essentially your growth rate minus your operating margins. So if you have a growth rate of 40% year on year, you’re growing your revenue 40%, then you should be breaking even because your operating margin is going to be zero. So 40 minus zero is 40. If your operating margin is 10%, then it’s 40 plus 10, which is 50. So that’s awesome. You’re going to get a really good response from your investors and the public.

Markets will be very happy if you could accomplish 40% year on year growth and 10% operating margins, right? You’re putting out 10% of profit cash flow every single year. If you’re growing at like, say 60% year on year, which is incredible growth, you can actually be negative 20% operating margin, and still have a GARP of 40%. You’re still going to be in a really good spot. So this formula really balances your growth with your profitability, your operating margins and using this rule of 40 is a pretty good rule of thumb for the markets when you’re a later stage company. When you’re early stage, it doesn’t really make any sense to use. 

Eddie’s comment on how “the markets would be happy” suggests to me that mature startups at this stage are looking at the numbers more at an IPO angle, and determining what public investors want to see.

BENEFITS OF DEI

At this point in the interview we ran out of time, but there was still one question I had for Eddie that I really wanted to ask. At the time of writing, the daily Twitter discourse was about DEI, so I wanted to get Eddie’s opinion on DEI. I emailed him the question after our interview and he graciously responded:

Gusto clearly takes DEI seriously given the RISE report. Do you feel that DEI is important at every stage of a startup or does it start gaining importance once a company is a certain size?

In my opinion, DEI is actually the most important in the early stages because there really is a vicious or virtuous cycle when it comes to building diverse teams. If you start early with a diverse team, you’ll attract more candidates from diverse backgrounds. The opposite is true too. 

I actually wrote about it a couple of times: 

https://engineering.gusto.com/growing-our-engineering-team-in-denver-diversity-begets-diversity/

https://engineering.gusto.com/staying-ambitious-on-diversity-new-goals-for-gusto-engineering/

SHOUTOUTS

If you are looking to start a business and/or hire your first employee or contractor, please consider using Gusto, the #1 payroll software in 2023!

Additionally, Gusto is hiring across technical and non-technical roles. You can find their job postings at https://gusto.com/about/careers

Thank you Eddie for speaking with us!