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Startup fail analysis - Everest - Spring 2012 report

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Everest was a startup app to help people achieve their goals.
This is a 2012 report they did which evaluated their progress to date. They spend two weeks writing it rather than building a startup.

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Startup fail analysis - Everest - Spring 2012 report

  1. 1. Spring 2012 Report January - May Overview Hello! Thanks for reading. For those who don’t have time, here’s the high-level overview. In January we closed our first round through a convertible note. We used it to relocate the team from around the country to a lovely office in the spectacular Presidio of San Francisco, and Victor, Katherine, and Francis found and got settled in new apartments. Juan looked for but was unable to find suitable accommodation for his family of five at this time, so every month or so he has been making trips out for two to three weeks at a time, staying with Francis. We made two hires in March: Michael and Robert. Michael gradually took over back- end development on Rails, allowing Juan to focus on front-end development on iOS. Robert gradually took over brand outreach from Francis, and now manages all our key partner relationships, with the exception of The North Face, which Katherine handles. Our product has come a long way. We’ve learned so much and are grateful to our advisors, investors, and friends for providing feedback. We finalized designs in March and will have a polished and functional app in June. So far, we’ve focused on one business line: partnering with the best action-oriented consumer brands in the world to sponsor challenges (with accompanying steps and rewards) on our app, a la http://brands.evr.st. Even for us, the response to that deck has exceeded expectations; our model is clearly resonating. We’ve become partners with The North Face, Quiksilver, Charity: water, The Lance Armstrong Foundation, Samasource, Acumen, DoSomething, Purpose, The Kauffman Foundation, Hipmunk, Votizen, and Codecademy. Our outreach efforts and follow-up have been systematic, so we’re talking with a dozen or so more, including Nike, Starbucks, LinkedIn, Apple, and Virgin America. To deal with all this demand, we’ve had to push out our launch until July. Launching mobile- first requires very different strategy than web-first. On the web, you can start small and scale organically. On mobile, the App Store ranking algorithm alone can catapult a good app to over a million downloads at launch, based on store-front exposure alone. Add to that the fact that we’ve built in viral growth mechanisms and that we have access to an incredible distribution network and that the press will most certainly cover this launch given who is involved with the company. These factors urge caution. An architecture not built to scale from day-one is simultaneously wasting a huge opportunity and running a significant risk. A new app will continue to get store-front time and rank up as long as downloads and reviews sustain it, but negative reviews from users frustrated by the app crashing or slow performance will result in pulling it from the store-front and down-ranking it on the charts. We’re doing our best to make sure we can handle it and have a successful launch. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 1 11 Funston Avenue, The Presidio of San Francisco, California 94129
  2. 2. Purpose & Framework Why did we write this? Most startups stop after the first page. We chose to keep going because we think there’s value in this exercise. Don’t worry, this isn’t your typical corporate bullshit. We’ve got no interest wasting both your time and ours with meaningless words that tick boxes and cover asses. We invested a week preparing this report for two reasons: First, we’re about to raise more money, and to do so requires us to communicate essential new information to investors, upon which they can evaluate how risks and opportunities are evolving in the business, and ultimately make their decision. Structured, long-form writing allows for uniform distribution and tight, thorough logic. It keeps everyone on the same page. In the pages that follow, we do our best to give them as accurate and forthcoming a perspective as possible, and not to hide, but rather to elucidate, our struggles. After all, in an age of endless opportunity cost, we’re choosing to invest our time alongside their money, so it serves us no purpose to misconstrue anything. However, with that said, we’re not pretending to be objective - we’re not. We’re in the trenches so we have an opinion. Every day at the office the energy is palpable, there’s adrenaline carrying us from task to task, and there’s this powerful shared sense that this is what it feels like to be involved in building a great organization. It’s a humbling privilege. We all think that realizing Everest’s vision for unlocking human potential is, by far, the most incredible opportunity, both in terms of social impact and economic returns, available today. Again, that’s not meant as hyperbole, because setting false expectations is a dangerous game. That’s our sober judgement and sincere belief, and we’re prepared to articulate and defend our reasons why. Although elsewhere, as that’s not the purpose of this document. It is strictly a report. Second, as we approach our first set of milestones with our impending launch, we’re about to enter a new and exciting phase as a company, and so at this point of inflection, it’s fitting to reflect on our short history together, review every aspect of the business, and synthesize key insights that will define our strategy moving forward. Accordingly, we’ve organized this report into six sections: ‘Team’, ‘Product’, ‘Business Development’, ‘Marketing’, ‘Operations’, and ‘Capital’. Within most sections there are three parts: ‘Results’, ‘Lessons’, and ‘Strategy’. The ‘Results’ section answers the question ‘What did we do?’, the ‘Lessons’ section follows with ‘What did we learn from what we did?’, and the ‘Strategy’ section concludes with ‘What are we going to do moving forward, based on what we did?’. In the midst of frantic execution, it’s so easy to lose sight of our story: of where we’ve come, of what we’ve learned, of where we’re going, and of how we’re getting there. We’ve found this framework for inquiry highly instructive in reinforcing that narrative, while emphasizing the formulation of strategy based on breakthrough insights. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 2 11 Funston Avenue, The Presidio of San Francisco, California 94129
  3. 3. Competition & Market Environment Capital markets are heating up. Instagram’s exit has obviously boosted investor confidence in our space, and companies like Everest are well positioned to access smart capital on favorable terms. Even though we’ve been in-between rounds, there has been a steady stream of inbound interest from angel investors and venture firms. The CEO of a VC backed company in a related space even made overtures for an acquisition, which we brushed off. Since our first round closed, there have been two fascinating developments in the competitive environment that we’re pleased to share. Mightybell, backed by prominent VCs and led by the venerable Gina Bianchini, the former CEO of Ning, has pivoted out of our space to become a “Pinterest for groups”. We’re not quite sure what that means yet, but it’s definitely no longer competitive, as one of their institutional investors already contacted us to express interest. Their vision for creating a product to help people “think big, but act incrementally” was compelling, but their product failed because, in practice, that meant helping Oprah and other individuals and organizations with large followings push out a goal organized as a series of steps for people to do. It was a ‘bring-your-own-users’ model, not a social network. It only allowed for one path from point A to point B. Users didn’t interact as peers, so they couldn’t create goals for themselves then leverage their network to help achieve them. We believe that for these and other reasons, their model failed. Also, the biggest unknown, Lift.do, a team of two backed by Twitter co-founders Ev & Biz at The Obvious Corporation, is not as serious a threat as we feared. We received access to their beta, and their product is best described as a Foursquare for habits, making them more competitive with Bud.ge than Everest. Users ‘check-in’ to a pre-set list of habits like “flossing your teeth” to build ‘momentum’. It’s just a feedback mechanism to encourage repeat usage and habituation, and that’s it. When the technology press announced the project last summer, they had already been working on it for quite some time. Even though they’ve had a head start on us of anywhere from six months to a year before we got funding, the scope of their project is markedly less ambitious. Their product development philosophy is purely iterative, whereas ours is deeply grounded in a strong behavioral thesis. Lastly, our brand and design language are remarkably different, and we think, better. So, as far as we know, no other company is building a technology platform and partnership ecosystem like ours to help people live their dreams. This leaves Everest alone to chase endless horizons. Onwards! The Everest Team Francis, Katherine, Victor, Juan, Michael, and Robert p.s. - This report assumes familiarity with Everest’s vision, product, and business plan. If you’re not, before you read any further, we encourage you to review http://investors.evr.st. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 3 11 Funston Avenue, The Presidio of San Francisco, California 94129
  4. 4. 1. Team One of our advisors, Simon Sinek, spent a day with us in March. After several hours reviewing our product and coaching the team as a whole, he let the engineers get back to work, and spent the afternoon talking with Francis, Katherine, and Victor. He asked a very simple question that stepped on a land-mine of tensions that had been building up for a few weeks: “what are your roles?” We learned a lot that day, and especially from that conversation. The most important take-away, by far, was realizing that the team we’ve assembled is by far the company’s most valuable and irreplaceable asset, and that as individuals our first priority should be to support and strengthen it. Even if that makes sense and you agree, there’s that classic disconnect between theoretical knowledge and practice, and that usually has everything to do with emotions and attitudes. Simon says (no pun intended) “I’d kill for your team! And so would most CEOs I meet!” Had we really internalized that? Were we taking each other for granted? To look out for the person sitting next to you as much as you look out for yourself is not natural. Yet the closest collaborations require a level of mutual respect, trust, and care that is almost selfless. We realized we hadn’t been asking each other enough questions, especially this one: ‘What could I do to help you operate at your full potential?’ ... and really listening to the answers that came back. All of this pertains to culture. Culture matters. That’s why below we’ve put it first. That experience - ironing out tensions between the founders - helped us realize that as an early stage company, one of the management challenges is to preemptively avoid conflict by making sure that roles are reasonably well-differentiated. Whether we succeed or fail will be driven by internal dynamics, not external ones. That means that our ability to work together is more important than the competitive landscape or the fundraising climate or any other outside variable. This is particularly true given that the timing is great and these all happen to be favorable! The standard account of conflict is that it arises when people fight about differences, whereas in the mimetic theory of René Girard, one of our investors’ favorite philosophers, conflict arises when people fight about the same thing: the same set of responsibilities, the same role. In our conflict, which was relatively small but could have spiraled in very bad and counterproductive directions, that was certainly the case. We had just relocated to San Francisco from around the country, had been in the same office for less than two weeks, and we were all stepping on each others’ feet, trying to do each others’ jobs. Since then we’ve gotten a much better sense of what healthy relationships look like in a team like ours, when you trust your peers and coach each other in a way that’s constructive without rivalry. Mimetic theory is about our deep, universal desire to imitate, and it has everything to do with good management. Here’s an example. As the CEO, when Francis sees lots of decisions Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 4 11 Funston Avenue, The Presidio of San Francisco, California 94129
  5. 5. being made without his input, he becomes anxious, and wants to interfere by making those decisions himself - to imitate, by taking over their role. Inversely, when the team sees Francis making lots of decisions without their input, they become anxious, and want to interfere - imitating his role. What we’ve all learned is that the most important thing is not for everyone to be involved in making every decision, as that would be both impracticable and bureaucratic, but for everyone on the team to make the decisions which they are closest to, communicate them actively to others, trusting their peers but initiating or inviting discussion if desired. Should discussion not result in consensus and conflict arise, the CEO makes the final decision, but the use of that power should be kept to a minimum. Ordinarily, aside from shaping strategy, the CEO should stay focused on designing processes around which decisions are made, rather than making the decisions themselves. The COO, on the other hand, should have a certain preoccupation with organizational design: making sure information, resources, and work are flowing to the right places. The CPO should own product strategy and design, and be responsible for supervising development. And so on with the other roles... Our segment on recruiting is of more than self-explanatory significance. We would go as far to say that it is perhaps the biggest risk remaining in the business, and that our ability to figure out how to recruit the best people, and particularly the best engineers, possible, will determine the extent of our immediate and long-term successes. And not just the best, but the right ones - ones that believe in our vision as passionately as we do, and will fit into the strong culture we’re cultivating. To deliver on expectations, we need more engineers. We’re currently building our product with just two, and that’s simply not enough horsepower for the phase we’re about to enter into. From now on, as recruiting goes, so goes the company. Given the time and resources, within the first six months of launch we’ll get user growth and engagement - this a product that people want. Even with just our first business line, we’ve already proven enough traction with brands to show that this platform can be well monetized. What remains is the actual effort of building a world-class technology platform, and that, of course, requires great engineers. In February and March we attempted to recruit several, and landed one. From that process we learned important lessons which will inform our second round of hiring, and yield even better results. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 5 11 Funston Avenue, The Presidio of San Francisco, California 94129
  6. 6. A. Culture Just as self-awareness is important for individuals, so too is it for companies. This segment is about how we, as a team, interact with one another, as well as the attitudes and patterns of behavior with which we approach our work. Below we’ll discuss observed factors shaping our morale, values, and work environment. - Results What have we done to build our culture at Everest? Have we seen results? It’s easy to forget how far we’ve come since January, which seems so long ago. Back then, we hardly had a culture. All of our interactions were over the phone or on Skype. Relocating the team here to San Francisco was a challenge, but it has been a huge win. We’ve created an incredible work environment that is a delight to be in. Locating the company in the Presidio has encouraged outdoorsmanship and adventure. We take our calls and meetings on walks. We pass around a football in our front lawn while doing daily SCRUM updates. We organize a weekly rock climbing session nearby at Planet Granite and the group has grown to fifty or so people from the startup community. Being surrounded by so much natural beauty has had an inspirational and calming effect on all of us, and it gives cues to our brand. That subtle influence is spread over a thousand choices, such as our decoration and furnishing. A little thing, at first glance, but the sort that gives color, shape, and character to daily living and working, and ultimately seeps into the product. Morale is high. There’s a growing sense of camaraderie. There’s momentum and excitement. Everyone is moving with alacrity, the pulse of energy is palpable. We all feel like we’re learning and growing, both individually and as a group. We’ve done our best to embody our vision in our individual lifestyles. Despite working extremely long hours, we still make time for ‘balance’. One of our secrets has been to shamelessly mix work and play. Each of us makes living our dreams a priority and we have no inhibition about sharing our journeys with each other all the time - over lunch we often talk about our progress, challenges, and experiences. In just the last few months, members of the team have gone sailing, ran a triathlon, took up guitar, had boxing lessons, become rock climbers, mentored others, gotten back into public speaking, found more intellectual companionship, and hiked in Muir woods - to name a few. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 6 11 Funston Avenue, The Presidio of San Francisco, California 94129
  7. 7. - Lessons What did we learn? Did we do anything wrong? Any leadership insights? We’ve observed some patterns in our behavior. We’re intense and have high standards. Knowing that, in and of itself, will be useful in recruiting the right personality profiles to fit our team. We share a belief that the way you do anything, is the way you do everything. So whether it’s this report, or a pitch deck, or a post on our Facebook wall, we take care to make sure that quality is high. An area where this has been particularly challenging has been social media, simply because of the raw demand for fresh content to feed the beast. We’ve agonized over posting quotes that we don’t fully stand by. That spiraled into a fear of messing up our brand and losing our voice, and for a while we almost stopped posting entirely. We kept talking through it, and eventually turned that tension into a useful counterpoint that keeps us balanced and lets us filter. We’ve kept up a steady stream of stuff, but it’s almost all on message. From this and situations like it, we’ve learned that making time to “talk things out” every once in a while can be very helpful in creating alignment, and that without internal alignment, we’re paralyzed. So we take this seriously. We don’t like missing deadlines, but we do it all the time. For example, there was a development milestone we were hoping to hit in April, but we missed it by two and a half weeks, and we didn’t have “the conversation” until just two weeks before it happened. Instead of laying blame or getting angry, we’re learning that the best response is to take responsibility, learn a lesson, and deal with it. What could have been done to prevent this? How do we make it right and move forward? Our initial reactions, however, were all wrong. Some of us looked for an external scapegoat - ‘so and so said this was a good idea...’. Some of us started to doubt each other’s intentions, work ethic, and capacity to deliver - ‘do you think so and so knows what he’s doing?’. Some of us went for the cop out, chalking it up to ‘the inevitable’ - ‘that’s just the way engineering works, there are too many unknowns and there’s nothing you can do to prevent missing deadlines - it’s inevitable.’ Some of us didn’t want to commit to deadlines any more, because missing them is so unpleasant. All of these reflexes are dangerous and wrong. (We’ll address how we resolved this specific challenge in section 2B - Engineering: Learnings). Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 7 11 Funston Avenue, The Presidio of San Francisco, California 94129
  8. 8. - Strategy What will we do moving forward to strengthen our culture as a team? Overall, our culture has matured tremendously in only a few months, and its trajectory is very healthy and positive. The biggest gains can actually be found elsewhere, by stiffening up our management practices and hiring more great people. We’re currently allocating no budget and scheduling no time for team activities. We go rock climbing every week, which is fantastic, but it’s not enough. As the team grows, doing more things together will be important for fostering cohesion and camaraderie. After we launch, we should celebrate by taking a weekend trip together. Thankfully, with all the events coming up in the Everest Dream Series starting this summer (see 3B - Business Development: Events), this kind of thing should come quite naturally with negligible incremental expense. Towards the end of our January business plan, we published a statement about our values: growth, impact, freedom, relationships, optimism, and beauty. We feel like, in the months ahead, we need to look for more opportunities to incorporate these values into everything we do. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 8 11 Funston Avenue, The Presidio of San Francisco, California 94129
  9. 9. B. Management Who is doing what? How do roles fit together? How did we deploy our forces? What did we do to make sure that information and work are flowing smoothly to the right places and decisions are being made on them in a timely manner? Is our organizational design capable of scaling? - Results What did we do to improve management processes? In March, Francis started out doing half-hour one on one meetings with everyone on the team every Monday. After a couple weeks, we soon realized that wasn’t a good use of time. One of our friends, David Hassell, released a cool product called 15five. It’s a reporting tool. The idea is that everyone spends 15 minutes writing a report that takes five minutes to review. We’ve been using it for a couple months and have found it effective for creating cadence and keeping tabs on each other’s activities. The product team schedules a daily SCRUM to review progress, make decisions, and set goals. The business team informally SCRUMs about twice a week. Because emails and verbal interactions are higher, that’s sufficient. The company has two teams: the product team, with Juan and Michael led by Victor, and the business team, with Robert, Katherine, and Francis. Katherine’s role is pivotal in our management culture. In addition to her role managing budgets and handling all administrative, legal, accounting, and logistics, she is the most active agent of accountability internally. So she’s involved in the making and enforcing of most plans. She makes sure execution happens, on time and on budget. Roles have grown reasonably differentiated and they will only sharpen as the team grows. Getting the team to fully ‘sync’ was important to us, but it took longer than expected to really share the same operational vocabulary, mental models, and sense of priorities. By March, though, we were in full swing. Something we’re getting a lot better at, but we’re still working on, is using the same organizational systems. The business and product teams decided to use different project management tools. The product team is using Sprint.ly, and the business team is using Asana and Google Docs. We’ve begun to use them consistently and it is yielding dividends. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 9 11 Funston Avenue, The Presidio of San Francisco, California 94129
  10. 10. - Lessons What did we learn from what we did? We learned that getting each other to pay attention to a critical piece of information may require some shaking. When you have something important to say, double-check to make sure the other person ‘got it’ - that the message was received and its importance understood. For example, in January Juan had signaled that it was still too early to take on a second engineering hire. So we started looking in February and brought Michael on in March. But what we didn’t realize, is that by April Juan was ready to take on another iOS developer. He may have said something during a SCRUM, but that’s the sort of critical piece of information that can get so easily lost with everything else in a call. It’s the sort of thing that requires some shaking - even calling ‘FIRE!’ - to make sure the rest of the team hears. It would have paid dividends. We’re always passively looking for engineers, but had we been actively hunting in March, we could have made a hire in April, and we’d be ahead of schedule on deliverables (if a bit behind on budget). A related lesson is encouraging everyone in the organization to be super- conscious of how their struggles and needs effect everyone else. If you’re struggling and get behind, or you need something and don’t get it, it puts everyone else and the mission at risk - so speak up and ask for help. - Strategy What are we going to do moving forward, based on what we learned? One of our investors, Brian Oliver, encouraged us to institute monthly staff meetings. We tried the format, but it was too formal and too early. Now that we’ve begun to settle into our roles and there’s more cadence and clarity about where the ship is heading, we’re going to revisit and retry in June. It’s an attractive model for punctuating the passage of time with a checkpoint for reflection, discussion, and decision-making. It lets information flow so that everyone’s on the same page. The formality is actually a plus in an otherwise fast-paced and free-flowing culture. We will also be instituting quarterly performance reviews, starting this month, to provide a formal mechanism to ask questions, assess professional growth, discuss performance, deliver and receive feedback and identify opportunities to improve not just for us as individuals, but for the team as a whole. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 10 11 Funston Avenue, The Presidio of San Francisco, California 94129
  11. 11. Those who exhibit tendencies that show that they are not in line with our mission, we approach with a similar mindset as those whose lives we touch with our app: we aim to inspire and empower them by suggesting steps towards improvement. If a humble and earnest effort isn’t forthcoming, we believe in firing people quickly, without fear for the short-term loss. To support this policy, we’re in the process of building a strong network around the company that continually attracts and engages really incredible people. - Bonus Section: Leveraging Force Multipliers We see our networks, and investors and advisors in particular, as part of our extended ‘team’, and a tremendous source for leverage - a force multiplier. We’re using them, but not nearly as powerfully as we could. Our original thinking was that increasing the mind share of Everest from, say, one percent of their attention to ten would result in solid gains over time for the business. So Francis set up regular calls or meetings with most of our advisors and investors. This resulted in some very fruitful introductions and advice. But as time wore on, that became less practicable - there just wasn’t enough hours in the week, and the sheer effort of making business schedules collide... We decided to change tactics. We’ve asked Dave Blakely at IDEO to chair our advisory board to help us leverage these relationships. Beginning with our June 2nd board meeting, Katherine will work with Dave to send out a regular request, every month, for help in a structured and specific way, along with an invite to participate in a conference call to discuss further. We’re calling these ‘Gamechangers’. It’s an efficient way to harness the tremendous firepower we have access to for a game-changing win. There’s more to come on this front, but we’re thinking hard about how to fully leverage our extended networks. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 11 11 Funston Avenue, The Presidio of San Francisco, California 94129
  12. 12. C. Recruiting - Results What roles did we need to fill, did we fill them, and how? Our immediate hiring priority was to find another engineer to complement Juan’s skill set on the iOS side. We hired Michael Bina, a Berkeley CS graduate who had worked at Garmin for a few years. He was funny, had traveled around the world, was into rock climbing, and humble. Even though his expertise is in front-end web development, he’s been able to handle all of our needs so far on the back-end. We found Michael, and the other four candidates whom we interviewed seriously, through AngelList. Our interview process is rigorous: it includes interviews with Francis, Victor, and Katherine, a coding test with Juan, and at least one with an advisor. If all are in favor, an offer is made. Simultaneously with Michael, we also extended an offer to a more senior engineer, Josh, who had a stellar background and CTO-level credentials, but after accepting the offer he backed out at the last minute. We also had advanced interviews with a senior engineer at OpenTable. Both candidates said that they would have joined Everest had the company raised a substantially larger round - the salary we offered was too low and the risk of failure too high for them to have the courage to jump in at our current stage. Equity belongs with those who appreciate its value. We weren’t planning on taking on another business hire until after our Series A round, but Robert Maylack, our youngest investor, was eager to join at terms that made sense for the company. At first he was in a purely versatile role, doing whatever needed getting done. After helping Francis close the first couple partnerships with brands, he took over existing relationships and has forged new ones. Preparing to ramp up this summer, we’ve interviewed two dozen intern candidates. There was tremendous interest from college juniors and seniors, especially at Stanford, Columbia, USC and UCI - where Francis spoke. But most candidates just didn’t have “the stuff” we were looking for. By far the two most qualified and passionate were from Victor’s network in Boston, and they’re joining us in June. - Lessons What did we learn about recruiting? Where is our process breaking down? We’re learning not to advance candidates that we’re not totally psyched about. If Francis interviews a candidate and isn’t sure, or doesn’t want to be rude, or wants to impress his team with the sheer volume of candidates he’s sending down the funnel, and so passes on the candidate to Katherine, he is Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 12 11 Funston Avenue, The Presidio of San Francisco, California 94129
  13. 13. wasting Katherine’s time. But if Katherine interviews the candidate and also isn’t sure, she may not want to say NO, because after all, Francis passed along the candidate, so he or she must be worth a third opinion. So she passes the buck to Victor. And so on. It becomes an epidemic that is incredibly wasteful of time - our most valuable resource. At first, we put candidates through lots of interviews, just to make sure that there wasn’t something we were overlooking. Ironically, that kind of investment of team, advisor, and investor hours can have the opposite effect, where we almost want to just hurry up, get it over with, and make the hire as a way of justifying the time spent. Looking for ‘red-flags’ is incredibly important. Katherine is remarkably gifted at this. She spots and verbalizes them far faster than Victor or Francis, who are learning to pick up on some of the same things. Better to detect underlying issues in the first interaction than several months in to working with a colleague. Even little things can be symptomatic of big problems. Nobody likes judgmental people, but nobody respects people without judgement. There’s a fine line. We’re ruling out candidates where there’s any doubt if they haven’t fully bought in to our vision, aren’t insanely hard-working or into personal development. Also, if there’s not previous experience and success doing a role very similar to what we’re hiring for, we’re skeptical. Because Robert was a friend, we didn’t put him through the same rigorous interview process as Michael, and while luckily this hasn’t been a problem, moving forward we plan to give even our closest friends the same level of dispassionate, objective scrutiny as outsiders. We learned that hiring is a full-time job. We love AngelList, but there are not enough developers on the platform to make it a scalable recruiting channel. We’ve more or less tapped it out already. For the real game-changer hires, you need to hunt, and be prepared to poach. And you need to have enough cash in the bank to do so with confidence. It’s a game of seduction. You can’t be too direct. You have to go on dates. You have to text. You have to have fun together. Focus on what they want, not just what you want. The hardest part, oddly enough, has not been persuading people to join Everest. Once we’ve engaged someone in a serious conversation, our sincere belief that this is a once-in-a-lifetime company and product, and our passion for the vision are pretty compelling. We were so close to hiring two very senior engineers, and if either had joined the team it would have been seen as a coup - we were irreverently punching above our weight, swinging for the fences, etc - and doing well at it. The hardest part, by far, has been Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 13 11 Funston Avenue, The Presidio of San Francisco, California 94129
  14. 14. identifying the right targets. Generating a prospect list isn’t nearly as easy as it is for, say, investors. Getting the names of these people is hard work. Once you do, it’s also challenging to truly distinguish between who is okay, who is good, who is great, and who is a first-rate genius. We’ve done our best to leverage our technical investors and advisors - Bruno, Siraj, and Andy - but that happens pretty far down the funnel. Francis spoke at Stanford, Columbia, USC and UCI in April, and one of the purposes of his trip was to recruit computer science students. Although he received plenty of interest from business-types, the computer scientists had already accepted offers at large technology companies like Twitter. Two of those C.S. students were both qualified and interested, but joining Everest would have required them to walk away from offers they had already accepted, which they were unwilling to do. At this stage in their career, a big name on the resumé means a lot to them. While that’s mostly for the wrong reasons, if after some explanation someone doesn’t fully appreciate the value of working at Everest, it’s not our role to force the point. Relative to any new-comers, each of us both risked and sacrificed far more to be a part of this company, that it would cheapen our culture if we over-extended ourselves. - Strategy How are we going to recruit for upcoming roles? How could our discovery and interviewing processes improve? With this next round of financing, we’re taking on two more iOS developers, a senior rails developer, a product manager, and two business interns for the summer, one of whom we’ve budgeted to hire full-time afterwards. Roles that we’d like to hire for, but without exceeding our budget (Appendix D) will have to wait until Series A, include a CTO, more engineers, a second designer, VPs of business development and marketing, a community manager, and an office manager. We’ve decided to give recruiters a try. A number of firms have reached out to us, and we’ve negotiated them down from their usual rates to 15% of first year salary, up to $100K, then capped at $15K, and we’ve asked them to send us their two best iOS developer candidates that fit our culture. They see this is an opportunity to win our long-term business, so this may result in some great leads, but we’re not getting our hopes up. Katherine’s time is split a number of ways, but she is devoting more time to hiring. Robert is spending some of his time recruiting as well. After closing this round, it will become Francis’ number one priority. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 14 11 Funston Avenue, The Presidio of San Francisco, California 94129
  15. 15. This time around, we’re taking a different approach. We’re going to start by figuring out who worked on the development teams of the iPhone apps we already love, then figure out how to use our extended networks to get them to join us rock climbing at Planet Granite on a Monday. After getting to know them a bit, if there’s mutual interest, we can invite them to the office and have a hiring discussion. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 15 11 Funston Avenue, The Presidio of San Francisco, California 94129
  16. 16. 2. Product Here’s a sneak peek at a set of screens from the app for your viewing pleasure, and as context for the material in this section: http://bit.ly/JVzaPL. After our round began to come together in January, we abandoned the prototype that we had been working on for investors, and started from scratch to work on the real product. Since then, we’ve built a strong front and back-end architecture, and we’re almost feature- complete. Our focus is now shifting to user-interface polish (it takes a lot of code to make an app look like a design spec) and debugging. Once that’s complete, we’ll spend most of June load-testing and doing our best to make sure the app can still perform at scale. A. Design See appendices B & C for our product roadmap and framework for learning from user behavior. They relate to the material in this section. - Results Victor began the design process last September, when he flew to California and spent a few weeks with Francis and one of our advisors, an accomplished senior user experience designer named Kristina Pifer. He had to wrap his head around the concept, create a brand from scratch, and start designing the product. By January the product had already been through a number of significant iterations and we had basically decided on the basic architecture in our current user interface: four tabs and a universal add button in the center. One tab for the user’s profile which we later ended up calling “My Story” (which includes their list of dreams and the activity from across their various journeys compiled into a single stream), one tab for the users “Steps”, one tab to “Explore” the dreams and journeys of others, and one for supplemental “Challenges” from brands. In January, Kristina walked us through an exercise that began a process which took the product to the next level. We also had numerous product deep-dive sessions in early March with our most active product advisors: Yves Behar, Scott Belsky, Jane McGonigal, and Russ Maschmeyer. After incorporating their feedback, and demo’ing it to various friends whom we invited to visit the office, by early April it had all come together and we had frozen designs. As a result, so many of the details in the app have these people’s fingerprints on them. For example, what is now the ‘Challenges’ tab was originally called the ‘Dare’ tab. But when Simon saw the product, he made an argument against our taxonomy that persuaded us to make the switch. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 16 11 Funston Avenue, The Presidio of San Francisco, California 94129
  17. 17. The most significant leap we’ve taken with our interface has been adopting the grid layout for displaying Journeys. It’s beautiful, sophisticated, intuitive, powerful, and completely original. We hope you like it. - Lessons Perhaps one of the oddest lessons in this report is this one: there’s a paradoxical tension between design and engineering. Design moves faster. It’s far easier to show how something will look than to actually write lines of code-logic and make an actual app look like a finished design and function just as you would expect. So design can’t get too far ahead of engineering. On the other hand, engineers want finished, frozen designs, and fully spec’d out user flows. So design needs to be way ahead of engineering. The problem with this is that design is highly iterative, and with more time you have to play with a configuration, the more you realize its shortcomings, the more you want to change it. To ‘freeze’ a design is very painful unless the designer is sure that it’s not flawed before it is put in the hands of actual users. But to make changes to designs between releases wreaks havoc on engineering and is extremely expensive. We got better at dealing with this dynamic once Victor grasped the engineering constraints he was working with. This allowed him “not to get too far ahead” of engineering in terms of required functionality. Actually, it allowed him to streamline it dramatically. On the flip, it took longer than we anticipated to lay out all the user flows, and it might have sped things up by a few weeks if Victor had somehow descended from the mountain like Moses with them fully formed in mid- February. The engineers wanted to map out exactly what would happen at every possible interaction. It was a good exercise for Victor, and it helped improve some of the designs. Supporting engineering took way more of Victor’s time than anticipated. He has to spend hours slicing and cutting up designs to put on the server for reference in the code. He and Juan have to literally sit side-by-side to make sure that the code is yielding output that conforms correctly to design spec. Launching on mobile works differently than launching on the web, as mentioned earlier. There’s an inherently more complicated technology stack, because using Objective C as a language for front-end development is far harder than HTML/CSS/Javascript. And for reasons aforementioned, the critical role the App Store store-front and ranking algorithms play in the discovery of new apps provides strong disincentives against launching a product that isn’t ready in terms of both the user experience and scaling. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 17 11 Funston Avenue, The Presidio of San Francisco, California 94129
  18. 18. Which, of course, poses a major challenge, because designing great products requires observing user behaviors and extracting actionable learnings and insights from them. Without having a launched product with live users, this feedback loop is, at best, very weak. Arguably, it would be weak anyways, because launching super-early means you release a product that’s probably not only buggy, but has a fragmented user experience, and maybe even the wrong features entirely, and the only user behavior you’ll get to observe is them leaving, which will only tell you what you already know - your app needs work. We hacked our way through as best we could by bringing our advisors into the process regularly, and relying on their collective experience. Victor brought in other well regarded members of the design community. We also took all sorts of guests - from adventurers to entrepreneurs to musicians - through the flows to ask very targeted questions. The team itself simulated using the product by going through the exercise of creating dreams, steps, moments, notes, copying steps, etc - creating lots of dummy content for demo purposes. All of these methods helped us get as close as possible to the user experience before actually having the app in hand. We also devised a strategy for structuring product learnings after we launch (see Appendix B). In waiting longer to launch, there’s actually a number of hidden blessings. First, we know what we don’t know - how users will actually behave - but, we’re prepared to find out. With the process laid out in Appendix B, we’ve got a great starting point for knowing exactly what to look for and how to respond. It’s a simple but powerful framework that we probably wouldn’t have come up with for a long time otherwise. Second, we know what we know. Even though there’s so much that you just need to have users to test and learn through observation, there are some important product decisions on which you can trust your instincts, tastes, intuition, logic, experiences and vision. The process of ‘hacking’ the feedback cycle we described above was a good experience for us, and gives us a qualitative mechanism for synthesizing feedback, instead of being over- reliant on the numbers. Third, putting out a product prematurely could have jeopardized our brand and resulted in unwanted early attention. We would have been interesting enough, and different enough, to warrant downloads and some press, but not sustained use. Almost no consumer would stay with an app for four months, patiently waiting for the developer to ‘figure things out’. There are instances of exactly this sort of pre-mature launch ruining companies. Also, given the composition of our founding team, with two non-technical co- founders, we wanted to play to our strengths in building an organization and making partnerships, rather than our strengths in marketing and public Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 18 11 Funston Avenue, The Presidio of San Francisco, California 94129
  19. 19. relations, which would have brought a lot of one-time traffic into an app that just wasn’t ready for it. You only get one shot at some things. Once a product launches, the only metrics that matter involve users, and with six months of development runway, all that angst and noise would have actually detracted from developing the best possible product, not added to it. (Now that we’re almost ready for the press following a major launch, we’re getting ready for it - see section 4C.) Some struggles we faced will go away - they happen at the beginning, but once you’ve got a foundation and you’ve launched version 1.0, they tend to diminish. Others will only get bigger and require us to hire whole roles - like a product manager - to deal with them. This is normal. - Strategy After Series A, but preferably sooner if there’s budget for it, we want to bring on another designer. Our marketing and business development efforts completely rely on design time that we just can’t get from Victor, because he is so consumed by product. Meanwhile, we may find a freelander he can lean on sometimes. Also, bringing on a product manager will help take most of the project management coordination off of Victor’s plate, allowing him to dedicate more design time to the product. See appendixes B and C for more... B. Engineering - Results Juan focused mostly on Rails architecture in January and February, then when we brought Michael on in March Juan switched to build our iOS architecture. By the end of April we were nearing iOS feature-complete, and May will be spent polishing our UI and debugging. In June, the focus will be on performance and scaling. We had to push back launch from June to July to deal with scaling concerns. We ran into a serious architecture issue in March. The framework we’d chosen didn’t allow for functionality outside of cellular 3G range, but we wanted to support usage in lots of scenarios (e.g. hiking) where no service is available. This set us back three weeks. As a result we had to slash the time we’d budgeted to do a beta-test before launch. Ouch. In addition to building out our Rails code, Michael is also supporting marketing needs for front-end web development by doing the HTML, CSS, Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 19 11 Funston Avenue, The Presidio of San Francisco, California 94129
  20. 20. and Javascript after Victor designed the blog, product website, and Dream Series websites. - Lessons As gut-wrenching as it was to have so much responsibility riding on one engineer, we had to wait to hire a second engineer. Juan strongly urged us not to bring a second person on too soon, because it would have slowed him down to onboard someone, document all his code, and coordinate with someone remotely (we weren’t in the same office yet). The code base was ‘ready’ and there was ‘space’ for a Rails engineer to be brought on in March. We had begun recruiting in February to make sure we had someone. What we did not realize is that by April, Juan was ‘ready’ to have a second iOS engineer as well - there was a communication failure. Now it’s May, and we’re realizing that having two engineers just doesn’t give us the horse power that we’d like to have leading up to launch, and that we’re going to need after it. We already talked about this and other hiring related lessons at length in section 1C, so we won’t push this further, but it is of significant relevance to engineering, so we reiterate it here. Development can be a “black box”, and we felt over-reliant on Juan to understand what was going on. There’s a basic translation problem when it comes to explaining deeply technical nuances to non-technical people, especially when there’s nothing to see. We’ve been furiously writing tests for both iOS and Rails, but we haven’t really been doing pure Test Driven Development (TDD), (i.e. writing a test, seeing it fail, writing code, seeing it pass). This would help us isolate and identify bugs and breakages when they occur. We set up Pivotal Tracker in the beginning, but Juan was generating thousands of lines of code a day, and it would have slowed him down to log and track user stories. By March, when we brought on Michael and had to actually start using a project management system, we abandoned Pivotal in favor of Sprint.ly, which had cleaner design and better functionality. They’ve used it consistently since then. Victor’s learning curve has been steep - this is his first time leading a product team, and he’s a designer, not an engineer. He still has more to learn, but he’s picking it up fast, and coming into his own as a leader and project manager, and getting a much better awareness of what the engineers are actually doing every day. Kristina has been very active as an advisor in helping him grow into this role. Ask more questions! Whomever is leading the product team is responsible for making sure things get done on time. Development time is notoriously Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 20 11 Funston Avenue, The Presidio of San Francisco, California 94129
  21. 21. hard to estimate, but everything else in the business has to plan against it. The single best weapon that person, in this case Victor, has is rigorously and systematically asking questions, then following up doggedly, and wrangling out any incongruities or inconsistencies. And one of the most useful, and most disliked, questions to ask engineers is to break down requirements down into the smallest possible steps, and estimate time on those. Then apply the 4/2 rule rigorously. It’s one of Francis’ friends’, Australian biotech executive Peter Farrell, favorite maxims: “Expect things to take twice as long and cost four times as much, or four times as much and twice as long.” As frustrating as that can be, the reason why engineering can be so infamously delayed is not because they’re not working hard (ours sure are), or because they’re not “rockstar” coding geniuses (ours dress like it, so they must be), but because of the dynamic laid out by Michael Wolfe in his classic response to exactly this question on Quora: http://www.quora.com/ Engineering-Management/Why-are-software-development-task-estimations- regularly-off-by-a-factor-of-2-3. When we realized this, our first response was to screw planning and project management and just code, code, code, as fast as we could, and pray that we’d cross the finish line in reasonable time. It took us less than a week to realize that’s no way to run a business. The mature response is to plan better and manage more tightly. Encourage the engineers to continue to set aggressive deadlines. Don’t stop! And hold them to it - pressure is important, and it makes everyone push harder. But plan for them to miss by padding timelines like crazy. Thankfully, in the future we’ll never have to be so over-reliant on one or two people. We’ll be instituting pair programming teams as soon as possible, and we’ve asked one of our technical advisors, Andy Mutz, to call in a favor by bringing in one of his friends, Dan, a very experienced independent iOS developer from Toronto who has launched five high-quality apps to do an independent code review. And once the product is launched, we’ll be able to move forward in more incremental steps, rather than undertaking such a mammoth single shipment of code - this will improve overall planning accuracy and project manageability. - Strategy We’re going to hire two or three more engineers, and as mentioned before, a product manager to do full-time project management. We’re going to implementing both pair-programming, test-driven development, and regular independent code-reviews by outside experts. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 21 11 Funston Avenue, The Presidio of San Francisco, California 94129
  22. 22. We’re realizing that other platforms - Android, iPad, web, etc. - will probably have to wait eighteen months or more before seeing our product port over. We’re going to rigorously plan and estimate dates and timelines. So that for every milestone, there are a lot of sub-deadlines beneath that. And we’re padding wisely for contingencies. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 22 11 Funston Avenue, The Presidio of San Francisco, California 94129
  23. 23. 3. Business Development A. Challenges If you’d like up-to-date access and an inside look on where we’re at in discussions with all the brands we’re talking to about partnerships, please contact f@evr.st for access to our Asana CRM. - Results So far, we’ve focused on one business line: partnering with the best action- oriented consumer brands in the world to sponsor challenges (with accompanying steps and rewards) on our app, a la http://brands.evr.st. Even for us, the response to that deck has exceeded expectations; our model is clearly resonating. We’ve become partners with The North Face, Quiksilver, Charity: water, The Lance Armstrong Foundation, Samasource, Acumen, DoSomething, Purpose, The Kauffman Foundation, Hipmunk, Votizen, and Codecademy. Our outreach efforts and follow-up have been systematic, so we’re talking to dozens more, including Nike, Starbucks, LinkedIn, Apple, and Virgin America. There are thirteen categories for challenges in the app: Athletics, Adventure, Causes, Character, Creative, Experiences, Financial, Health, Learning, Professional, Relationships, Spiritual, and Travel. We came up with a list of prospects for brands that would be a good fit in each of these categories, and did our best to identify the right people to reach out to within each organization. Either we approached directly through LinkedIn InMail, or we requested introductions through our network. Several of our investors - Joshua Spear, Khalid Itum, and Eric Kroll - made some particularly fruitful connections (thanks guys!). After an initial connection has been made, the next step is usually a phone call to walk through the basic value proposition and discuss what a partnership would entail, which, if it goes well, and it usually does, is normally followed by an in-person meeting at the brand’s offices, where they often invite other relevant stakeholders to join in as well. With larger brands, the stakeholders usually include representatives from their brand management, social media, digital marketing, and e-commerce groups. Once they have demonstrated strong interest, we propose a partnership with terms as follows: 1) for cause partners that this will be free indefinitely, for brand partners that this will be free until September, after which point Everest will require compensation in line with the economic value we’re generating, through both impressions and transactions. (This sets general expectations but postpones the specifics until there’s enough data to design a fair billing model); 2) they promote their challenges on Facebook and Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 23 11 Funston Avenue, The Presidio of San Francisco, California 94129
  24. 24. Twitter, as well as other relevant marketing campaigns; 3) they encourage their brand’s celebrities to promote their challenges, particularly including, in the case of adventure and athletics brands, their sponsored teams; 4) they be open to sponsoring one of the categories of our event series, and work together to build a community not just online, but in the real world as well; 5) be willing to act as a reference to investors as to the long-term value of the platform we’re building for their brand. Once we reach that stage, we collaborate with them to design compelling challenges, steps, and rewards for our users. We’ve been limiting the initial amount to five per brand, and one per cause. Several brands we’ve taken this far are just waiting to use the app for final approval, at which point they’ll proceed to close and finalize their challenges. To close, we generally send out an MOU, which their legal team includes as part of a larger, standard, partnership agreement. Some also require a sort of waiver for users in the app before accepting a challenge. - Lessons Forging partnerships isn’t just about persuasion, it’s about process. Our outreach and follow-up is very systematic and we’re moving prospects through decision checkpoints at a steady pace. Our framework is attention, interest, decision, action. Once they start responding to our emails and taking meetings with us, we have their attention. But that’s harder than it sounds - some of these brands can be like a black box, and our targets go through bouts of unresponsiveness where we lose their attention and we have to get it back. Boomerang for Gmail has been a powerful app for making sure that nothing slips. Once they love our product and understand that it can create value for them, we have their interest. Once they agree to partner with us, they’ve made their decision. Once they’ve made their decision, getting them to follow up and continue to act on it, that’s what counts. We’re realizing that we have different strengths. Some of us are hunters, others are gatherers. Robert does a fantastic job of getting people’s attention and interest. Francis is a closer, he can get them to make a decision and deal with objections really effectively. Katherine has an incredible talent for partner relationship management, and even though Robert is doing most of that right now, she’s helping to oversee that process. The biggest challenge, by far, in all of this, is learning through ‘customer development’ processes that Steve Blank and others have laid out in a body of work on the subject. By talking to partners and prospective partners, we’re testing core assumptions about our business model. Is this platform valuable to brands? Do they see it as a platform? Could it become an Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 24 11 Funston Avenue, The Presidio of San Francisco, California 94129
  25. 25. integral, or even central, part of their social and mobile strategies? How do they think it compares to the range of other advertising and marketing options they have available to them? How long are sales cycles and what does it take them to decide? Who are the decision makers? What are they willing to pay for, and how will they pay, and when? How big are their various budgets and how are they allocated? What data will they want to see after launch? How hard or easy it for them to come up with steps and rewards internally? What rewards structure is most compelling for their marketing objectives, and will we be able to track ROI with it? One of our advisors, Alexander Osterwalder, is a leading thinker about business model generation and validation, having authored a book and an iPad app on the subject. During a recent call with him, we reviewed some of the things we’ve been discovering. Our big bet was that these brands care more about platforms than they do about eyeballs. That they would not ask “how many eyeballs do you have?”, but rather, if “we move eyeballs from point A to point B, do you have an experience for them that is fun and engaging, that elevates our brand, that results in sharing to their networks, and triggers a purchase?” Our answer was “yes”, and there response was “tell me more”. They have the eyeballs. These are billion dollar companies that spend millions of dollars marketing their products, investing in cultivating huge followings on Facebook and Twitter. Once we convinced them that the platform we’re building is of tremendous value to them, they were willing to share it with those followings, and were even drawn to the opportunity to potentially cross-sell users from brands in other categories. Using discounts as rewards has been an issue for some brands, like The North Face and Nike, where it’s against company policy. There are workarounds. This fall, The North Face will introduce their first-ever loyalty program, and we’ll be able to offer points as rewards on Everest. Meanwhile they’ve gotten creative with rewards like offering passes to state parks or making in-name donations to outdoor-participation non-profits. Thankfully, we’re extremely flexible on our end about what we can do for rewards. But alternative models raise questions about how we’ll bill for value-added in the long term. For now, we’re willing to experiment and learn. Most of these brands have three budgets that matter to us. They have a budget for advertising, where they spend money for impressions at different prices across a variety of traditional and digital ad-units. They have a theoretically unlimited e-commerce budget, where they spend money to pay for direct ROI from anything that brings in sales. They have a budget for brand marketing, some of which is experimental, to spend in creative ways on marketing activities that create positive brand impressions - filming epic videos, sponsoring athletes, hosting events, etc. Depending on how they Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 25 11 Funston Avenue, The Presidio of San Francisco, California 94129
  26. 26. chose to use the product, Everest can tap into all three, and even up to two at a time. - Strategy Other than starting relationships with more brands, our next big milestone will be letting these brands use the app. Once they can start using it themselves, it will reinforce all the value we’ve sold them on, and we’ll have lots of leverage to take next steps. Then they’ll onboard their challenges, promote them a little, and test it out. We’ll come back to them with insightful and hopefully encouraging data, and they’ll do more. The goal being, of course, to continuously grow usage and demonstrate value. In the months following launch, an engineering priority to juggle will be building a back-end dashboard for them to log-into and use. For now, we’re going to manually pull data for them from our servers and directly input new challenges and rewards. We’d like them to have a gorgeous interface to log- in to, and grow that with the platform over time. After their ‘trial-periods’ expire, we’re going to start making money, but we haven’t nailed down the exact billing model. Designing that whole system is something we really want to get right. At some point, we’re going to put calls in to people like Tristan Walker, who monetized Foursquare’s platform, has done this stuff before, and would have a keen intuition on exactly what to do, and how to grow it over time. At some point, we’re going to want to bring on a really sophisticated senior business development person, with lots of relevant experience, and hopefully a ready-to-go network in this space, to take this to the next level. He or she would need to strengthen, cultivate, and manage relationships with our existing partners, while continually learning more about how we can grow together and how we can adapt to new information about how they operate. It takes a different kind of talent to take a business line that’s been validated, design a billing model to scale, lead a team that actually scales it and consistently grows revenue over time. This person would be Everest’s equivalent of Google’s Omid Kordestani, who did this for the AdWords business. Also, there’s a reason why we’re calling these brands our ‘partners’ instead of our ‘clients’. These relationships extend way beyond the transactional. We want them to co-create this community and platform with us. After we launch, we’ll be actively soliciting their product feedback and ideas. And this is just the first business line of many they’ll be involved in, so we’re doing everything with a view towards the long-term. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 26 11 Funston Avenue, The Presidio of San Francisco, California 94129
  27. 27. B. Events - Results We’re launching our second business line, the Everest Dream Series, this month (May) at http://events.evr.st. When it comes out, it’s going to sell out, and get a lot of people around here, in the Bay, excited and talking. It’s different, and inviting, and beautiful. Beyond that we won’t say much, you’ll just have to see it when it comes out. That events made sense for Everest was obvious. What wasn’t was how and when to approach it. Here’s an explanation of what it’s all about, as well as a little of the thinking that went into developing it. We looked at all thirteen categories in the app - Adventure, Health, Creative, Travel, etc - and thought long and hard about what sort of dreams people have in these areas of their lives, and about what sorts of challenges they might face in going about them. Then we asked ourselves: “how can we make it easier for them”? The answer was ‘events’. So we decided to do this sooner, rather than later. After all, we believe in building a community that’s not just digital, but all about joining forces to do things together in the real world. It made a lot of sense. For starters, we’re basing this whole events line on a belief that people crave more active and full lives, and that they don’t want more of the same, but that they want to enjoy incredible experiences with amazing people. We call that a belief, because it’s more than a mere assumption - we’re basing the whole company, not just this business line, on that bet. It is core to who we are and what we stand for, so doubling-down doesn’t add incremental risk. And our best explanation for the reason why people aren’t fulfilled and don’t have more of these experiences all ties back into our design thesis for the product itself: there’s too much logistics involved, too many steps, too much hassle, too hard to coordinate getting other people involved, and lastly, too expensive. All of these problems can be solved by the right platforms, and we’re in the business of building them. We think we’ve figured it out, and we’re looking forward to seeing what people think. Our team took its time imagining the possibilities. For a few weeks we generated ideas for each category. There were no limits, just ideas, all accepted. When we laid it all out to make decisions, some of it wasn’t that exciting, some of it was crazy and impractical but awesome - and we put those into a pile for ‘later’, and some were just right - both totally doable and totally thrilling. We picked those and started working on them. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 27 11 Funston Avenue, The Presidio of San Francisco, California 94129
  28. 28. No wonder people struggle to live more of their dreams! It takes a lot of work to plan a kayaking trip for thirty people. Or making arrangements to spend a Saturday morning buying and cooking breakfast with a famous chef. It helped us appreciate, more than ever, just how much goes into it. Some of us are really good at negotiating, but even we weren’t able to make some of these affordable enough for people with ordinary incomes to do on a Saturday, and we wanted them to be within reach. So we called up some of our friends at these brands and asked them if they would help sponsor some. They said yes! To sum it up, imagine a gorgeous Jetsetter-style user experience, offering to take you on unforgettable experiences near you with amazing people at affordable prices, and all you have to do is pay and show up - the rest is taken care of by us. There’s something for everyone - these events span the range of human curiosity and endeavor. A lot of couches are going to feel lonely. - Lessons Doing preparatory research really confirmed to us that there’s a wide-open market for something like this. Here’s why. People are bored. They’re bored of the coffee shops. They’re bored of the shopping. They’re bored of the movies. They’re bored of the video games. They’re bored of social networks. They’re wondering when real life is going to start. They want new, exciting, different, and epic - and they want to share a meaningful experience with other people. They want to go on an adventure, but they can’t book a flight to Kenya just yet. These same people often spend seventy dollars or more a month on gym memberships. We think that in terms of the demand that exists for what we’ve built, we can capture at least that much, and over time, possibly much more. Nobody that we’ve found has ever tried anything quite like it before. The closest thing to it is a company called Side Tour in NYC (see sidetour.com) And that is for a very good reason. It makes less sense as a standalone business than as part of a much larger ecosystem and set of platforms, which we’ve built through our app. For the economics to start to make sense, you’ve got to get the right brands involved and align their investment with the positive marketing externalities involved. Demand isn’t the problem here. Supply is. It’s going to take time to figure out how to scale this. Eventually we will. But until then, we can play this dramatic imbalance to our advantage. When there’s a line of people out the door clamoring to get in, then instead of demand decreasing from frustration, Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 28 11 Funston Avenue, The Presidio of San Francisco, California 94129
  29. 29. demand increases because of social imitation - again, mimetics at play - and some of those in line start tweeting and posting, and they all jump at any opportunity to get access. At that point, most will be willing to work a little for it, and some will even go to great lengths. We can get creative here, but that’s the basic reason why the brands will sponsor these. They want to be sponsoring the thing that everyone wants ‘in’ to. And they want the power to let people in, as long as they share about how cool it, and their brand, is. And when they let them in, they want the people to scream for joy and thank them (preferably on social media so their friends can hear), for being so kind and generous and for sponsoring such a great experience. That dynamic buys us time to figure out the real challenge: creating scalable supply, while conserving a reasonable margin. Obviously, even without the margin, this will be valuable as a marketing initiative for Everest, but we think it has so much more potential than just that. And our users will probably want us to have a margin on these events, because that will let us do more epic and cool things in more places at more times, and expand the circle of awesomeness. - Strategy To do that, we’ve got to figure out a few things after we launch this... How much does it cost, and how much effort does it take to put together epic events? What economies of scale can we use to our advantage, and how much of an advantage do they actually give us? (Even vendor relationships, for example, are an advantage. Not only do we not have to re- create them, over time personal ties strengthen, leverage over pricing and potential competitive entrants increases, and operational flows grow more efficient.) How much will sponsors be willing to pay? Partial costs, costs, or a premium? How many sponsors can we land per event? Can we tap into so much sponsorship demand that we drive the prices up? How many of these sponsors are willing to sponsor all or part of an event series for a whole category, so we don’t have to close one for every event? Once we’ve begun to answer more of these questions and start to piece together what our margins should be, what our logistics look like, what the operational and manpower burden is internally, etc. then we can start to think about scaling: more events, more epic, more variety, more cities. Maybe sometime in 2013. Wouldn’t that be nice? Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 29 11 Funston Avenue, The Presidio of San Francisco, California 94129
  30. 30. C. New Frontiers We’ve got an idea problem. We’re overrun - too many ideas. Our only defense is http://ideas.evr.st, which we have to use all the time. Here’s a taste of what we’ve come up with so far for new business lines, when we expect to deploy them, and any steps we’re taking to incubate them... As for timing, most of these are contingent on development in some way. Appendix C below contains our product roadmap. Social gifting One morning, right before leaving on a business trip, Francis came to the office to say good-bye and pack up his stuff. When he got to his desk, he saw this: http:// instagr.am/p/JdtoUzLnXW/. It made his day. It made him feel loved and appreciated and understood. He hasn’t been given a gift this thoughtful since his seventh birthday. It’s been raining nonstop clothes and gift-cards for years. Who cares about that stuff? But fencing! He’s always wanted to do that. One of our favorite apps for the iPhone is called Karma. We use it all the time. Try it! They’ve done an extraordinary job with the whole user experience, and people are loving it. We think they will enjoy tremendous success. In fact, we’re talking with them about sponsoring challenges and rewards in our Relationships category. Basically, it is casual social gifting done right. It takes two minutes to send someone a wonderful gift with a thoughtful card. They handle all the order fulfillment and the packaging is elegant. Whether we do it on our own, or in partnership with a company like Karma, letting people give the most thoughtful and generous gift of all - helping their friend or loved one live one of their dreams - is going to be incredible. What an amazing opportunity. Sponsored Suggestions One of the more important items on our product roadmap is letting users ask for and receive suggestions from other users on steps they should take towards their dreams. Once we introduce that, it would be easy to tap into the ecosystem of brands we’ve already created and let them pay for “sponsored suggestions” that would occasionally appear in that stream. These wouldn’t be auto-generated but written instance-by-instance by a real human being on the brand side, probably their social media manager. We presume that the most effective of these messages won’t be directly pushing product, but rather authentically helping in order to win favor. Media Our friends in Hollywood have asked us to let them know when we’re ready for them to put feelers out to gauge interest in an American-Idol-meets-The-Buried-Life reality Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 30 11 Funston Avenue, The Presidio of San Francisco, California 94129
  31. 31. TV show about people living their dreams. Once we have a lot of stories happening on the platform, there will be other opportunities in this space as well. Store We’ve been designing posters, socks, shirts, and other swag and at some point will put it all on an online store, as well as use it as rewards for challenges that we want to sponsor ourselves. Heroes We’ve generated a list of over 10,000 sponsored athletes sponsored by various adventure and athletics brands. It is mind-blowing how much money they spend on this. A good proxy for the value of these athletes to these brands is the size of their followings on Twitter. But Twitter is real-time - ideal for Kim Kardashian tweeting about bumping into Tom Cruise at a party, not for Lance Armstrong showcasing a three-month journey that he’s been on to prepare for race-day. But Everest is! And we have some ideas about how to promote heroes... These don’t have to just be athletes. Jamie Oliver, for example, would be great for those of us who dream of being able to cook a gourmet meal to share with their friends. We could feature Heroes in the “Explore” tab. Once we figure this out in the product some time after launch, we’ll systematically reach out to them. Sponsorship What happens when all sorts of ‘ordinary’ people start doing extraordinary things? Why wouldn’t brands sponsor the most inspirational people on the platform? There’s an opportunity there. Integrations We’ve been watching the explosion of bio-feedback devices like the Jawbone UP, Fitbit, and Nike Fuelband with interest. Seeing Path integrate with Fuelband was eye- opening, and we definitely want to pursue these types of integrations down the road. Action is valuable data. We want to capture it, and make this a true ‘action network’. At some point we’re going to open our API to certain outside inputs. Linking Physical Products When The North Face makes a jacket, they design it with adventure in mind. What if each jacket had a serial number on it, which you could link to your profile on Everest, and unlock a secret challenge? What if you could “tag” your products in your steps? This would be fascinating data for these brands, who currently have no systematic way to collect data on what people actually do with their products when they walk out of a brick-and-mortar. This ties into a megatrend of linking the physical and digital. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 31 11 Funston Avenue, The Presidio of San Francisco, California 94129
  32. 32. 4. Marketing A. Brand Development Online Presence Later this month, we’re launching the new Everest homepage at http://evr.st. It matches the product beautifully. Victor referenced a variety of best-in-class landing pages, and tested a whole range of options. What he ended up with lets users explore the product’s features and uses in a way that’s interactive, streamlined, and natural. Our events series will also launch simultaneously. Producing Videos We spent about $7,500 producing a promotional video that didn’t turn out. It’s our single largest waste of investor dollars to-date. At first, other than feeling awful about it, we drew the wrong conclusion: that the only way to do this right was to spend tens of thousands at a big fancy agency. It didn’t take long for us to realize what an immature, cop-out excuse that was for proper failure analysis. So we examined the issue again, and identified three critical mistakes that we could address next time to achieve the result we want: - We hired a director that aimed to please, but wasn't firm about the division of expertise. Katherine came up with a concept together with the director, who did loose storyboards and then arrived, assuming she was the formal producer of the project. She didn’t have the necessary experience in set design, and ended up having to do a lot of the casting work. NEXT TIME: We need to hire a producer who can put together the right team and deliver a high production quality video from A-Z. We don’t have either the time or expertise to do any hand-holding. And Victor should be in the ‘client’ role providing creative approval and direction. - We didn’t provide adequate guidance on how we wanted our brand to be portrayed in video. So even though some of the shots were well done, they clashed with the look and feel we were hoping for, but hadn’t been able to fully articulate. This experience prompted us to do an exercise to further define our guidelines for our brand (see below). NEXT TIME: We need to provide clear guidelines to the producer. - Our director didn’t tell a story. NEXT TIME: Pay a small amount for concepts and storyboards and don’t move forward until we’re in love with the concept and are convinced that the producer ‘gets it’. We Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 32 11 Funston Avenue, The Presidio of San Francisco, California 94129
  33. 33. need to hire a producer who is deeply in touch with our brand and has an incredible ability to craft powerfully moving narrative. Now the safe thing for us to do would be to just tell investors all these great things that we’ve learned, and leave ‘next time’ until after the next round. But the reason we wanted this video in the first place was to support our launch, and so we decided to go ahead and commit an additional $10,000 to produce another video, and this time, get it right. We’ve looked at a number of producers and even had some visit the office to pitch us. We ended up going with a recent Masters graduate of the Pasadena Art Center College of Design, a born storyteller, who blew us away with his concept presentations - he gave us goosebumps. We’ve been applying the lessons above, and are optimistic that what he’s putting together for us will make others feel the same way it made us feel. If this producer turns out to be as talented as we hope, it will be a huge accomplishment. Finding the ‘right’ person for this role always is. Steve Jobs had Lee Clow at TBWAChiatDay. From the 1984 video to the ‘Think Different’ campaign, Lee had a remarkable gift for telling grand narrative, for weaving a story for the company as it moved through various stages. We think our guy may just be ‘in touch’ enough with Everest to pull off something similar. We’ll see... Guidelines Exercise Across several sessions, Francis, Katherine, and Victor spent a number of hours defining guidelines for the Everest brand to be applied to both the design of the product and all outward-facing communication. We want to present Everest in a way that honors the human experience and the individual, while also giving credit to the community of support behind the individual. We hadn’t thought too much about storytelling, but this helped clarify the sort of stories we need to tell to create moving content for our blog, videos, and other channels. Another principle is to showcase people, not design. Too many apps, including some of ‘the best’ (we won’t mention any names), are over- designed. In the user experience there is too much focus on showy and flashy. We wanted to put people and their journeys on a pedestal, not the app. To quote Jack Dorsey, “the best technologies disappear”. There’s tension between being aspirational and being accessible. ‘Epic’ may be a word people use to describe Everest, but that shouldn’t be the focus of our brand. Some companies (again, no names) spend obscene amounts of money creating extreme content in order to make their marketing campaigns more ‘epic’. They film videos with stunts, lots of air, crazy risk-taking, and inhuman skills. While this stuff can be visually impressive, we refer to it as Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 33 11 Funston Avenue, The Presidio of San Francisco, California 94129
  34. 34. ‘extreme’ porn - it leaves you with an empty feeling, and something about it feels fake. That’s partly because these extreme experiences just aren’t accessible for most people, but more significantly, it is because they create content that is epic for the sake of being epic. And epic is not an end in itself. The truly great journeys, the ones that stay with us a long time, are motivated by more than a desire to “do epic shit (on TV)”, and rather by longings deep in the human spirit for meaning, fulfillment, or expression. We would rather tell those stories, with real people doing real things. Epic should be a natural bi-product, not the focus of, the way our brand does marketing. That’s how we resolve the paradox of aspirational and accessible. What relationship does our brand have to its users? We’ve decided not to adopt the posture of a ‘leader’, as someone with all the right answers, pointing the way forward - but rather to adopt the calm and patient voice of a guide, asking the right questions, but letting people find the path on their own. Because there isn’t just one way to achieve a goal - there are infinite paths from point A to point B - we shouldn’t tell people every step they need to take. Instead, we give you a framework. Or we’ll show you others who’ve done similar things, and how they did it. Or help you find potential companions for your journey. But Everest itself does not dictate or prescribe. One of the ways that applies to our marketing is that we won’t write blog posts with titles like “The 10 things you need to do in order to...”, or “The secret you need to know in order to...” We would rather let people share insights from personal experience and ask questions that prompt people to reflect and think about how they relate to their own experiences. This does not mean that Everest is agnostic, that we don’t have a stance. We have things we believe in, and that creates a framework for the things that we ask, but we won’t force our beliefs on our users. We use technology, but we are not a ‘technology company’. We don’t define ourselves by our means, but by our end. Our vision is to inspire and empower people to live their dreams. Not restricting the scope of our activities to building and deploying technology allows us to think more expansively about opportunities to further our vision. It allows us, for example, to start things like our event series. B. Community Building - Results The Everest Dream Series, our event series, which we’ve described above (3B), will be an excellent venue for building a community around Everest. To test the model, we’ve been slowly ramping it up through a series of Monday night rock-climbing sessions which we’ve organized within the startup community. It started with just ten people or so, and has grown organically into a Facebook group of over fifty. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 34 11 Funston Avenue, The Presidio of San Francisco, California 94129
  35. 35. We’re interested in attracting more startups to the Presidio, and have gotten a few investors interested in starting an incubator with a unique model here to foster an ecosystem around us. We re-launched our blog a week or so ago, and we’ve begun to release a steady stream of high-quality scheduled content: company announcements, personal stories from our team, advisors, and friends, and more... We stopped using our last blog after we realized that because it was powered by Tumblr, none of its content would rank in search engines. So we switched to the Wordpress platform and customized it to align with our branding. As we were planning to re-launch the blog, for almost two months the team debated our content strategy. Pumping out lots of weak posts with generic content that we somehow ‘relate’ to our brand and product would allow Everest to rank high on search results for an array of high-volume keywords. But we didn’t want to contribute to the ‘noise’ of the internet. We wanted to produce high-quality and meaningful content, even if it meant it would take longer to rank up. Katherine came up with a strategy that will still allow us to publish a steady stream of content, but maintain a high threshold of quality. Over the last month or so, we’ve really begun to establish our presence on Facebook and Twitter. We’ve got a strategy for engaging our following, posting regularly, and creating thoughtful content. We’ve got a strong following already in the San Francisco technology scene, and according to Facebook we already reach 20,000 people. The charts are all trending up and to the right at an accelerating pace, and we intend to keep it that way. Of all the things we’re doing on social media, designing inspirational posters like http://on.fb.me/KkjhWO and http://on.fb.me/JceW9o has gotten us the most views and shares. We’ll continue producing the series and have plans to sell a selection on our website (together with a line of Everest branded clothing and swag) and FAB.com. - Strategy We’re taking on two interns this summer. As mentioned above in the section on recruiting (1C), we interviewed two dozen people for the position, and the two that we took are extremely qualified. In addition to helping with a wide- range of activities, both of them will be devoting a significant portion of their time towards marketing. After we launch, we’ll start doing all sorts of things like: - Once a month we’ll pick a user and help them make one of their dreams come true. - Interview users and relay their incredible stories on our blog. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 35 11 Funston Avenue, The Presidio of San Francisco, California 94129
  36. 36. - Mail users a postcard that looks beautiful, with content from one of their dreams, so they can put it somewhere as a reminder to keep taking the next step. - Run a “What’s your Everest” marketing campaign, tied to contests on Facebook and Twitter... - Create a ‘street team’ to deploy guerrilla marketing tactics as part of an interactive marketing campaign around San Francisco to surprise and delight. We’ve got some awesome plans in motion for this. - Create a college campus program - On Labor Day, we’ll do a campaign with messaging such as: “you spend 364 days laboring for them, spend today laboring on your dreams...” - New Years is a huge opportunity for us, and we’ll start planning for that as early as August. - This is probably a year and change away, but we’d like to host a conference, borrowing some things from TED, Summit Series, and others, but with a unique Everest twist on it. With the caliber of our investors and advisors, we shouldn’t have a problem putting together an all-star cast of speakers. One draft title for the first event is Different & Better, based on Jony Ive’s line: “It’s very easy to be different, but very difficult to be better...” And much, much more... C. Evangelism Allies We want to be wonderful by association. We’ve already aligned ourselves with great people and brands, and it has been very effective. We’ll continue to do so as part of our evangelism strategy moving forward. There’s a list of people that just need to be a part of this: Richard Branson, Bear Grylls, Tony Robbins, Tim Ferriss, David Allen, and a long list of others... We’re going to win them over one by one. Public Relations In January and February we spoke with several firms but just weren’t impressed. Rather than court articles by the technology press about our first round, we decided to keep a low-profile until launch, so it felt too early to hire a firm. Aside from that, the motivations of the people we spoke with came across as mercenary rather than sincere. Our brand is of the most Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 36 11 Funston Avenue, The Presidio of San Francisco, California 94129
  37. 37. extreme importance to us, so we hold all potential stewards of it to the highest standards of artistry and passion. We just weren’t convinced that the people we spoke with were capable of truly inspired work, or that they felt genuinely passionate about our vision. So they didn’t win our business. Now we’re back in the market looking for various firms to represent us to audiences in different verticals. We’re being more systematic, but just as selective, as before. We know that it will take a few months to start seeing results because of editorial calendars. We see these as long-term relationships and expect them to work at reduced rates for those first few months to demonstrate their investment in our future together. On our end, we’ve put it in the budget, and we’re planning on allocating enough resources to really get this right. To get a head start, we’ve prepared a list of journalists, publications, and story ideas that we want to follow through on. Mashable also approached us about doing a sixteen-piece video documentary on the “making of” process a startup goes through before launch. They had received applications from over one hundred startups. We hadn’t applied, but they got in touch with us anyways. We were one of the final few under consideration. We had a number of reservations about invasive film crews and pre-launch attention and they went with the other company. A journalist from Fast Company would like to cover the company’s launch and has received approval from the editors. We also have access to Om Malik and Robert Scoble. Our friends at Apple are also collaborating closely with us on our launch, both with PR and App Store promotion. We’ve talked with a few of our advisors about how to tell the company’s story. We talked through a number of potential arcs, and almost attempted to ghost-write a few. In the end, we decided not to over-script this. Instead of accommodating lazy journalism, we’d rather cultivate relationships with a few really good ones that are willing to do the work required to write an original piece, and let the rest of the press cue off that. While it’s alright to look for ways to tie-in Everest into other stories, we shouldn’t focus on a strategy that paints the company into the periphery. We want the big push to be on front- and-center articles about how we came to be, why we’re in business, and what we’re doing that’s never been done before to change the world and make people’s lives better. Francis is running point with the press. Public Speaking To get warmed up, Francis spoke at Stanford, Columbia, USC and UC Irvine. Harvard, U Chicago, and Cornell expressed interest, but we postponed till the fall semester. His talks drew on lessons from our journey leading up to Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 37 11 Funston Avenue, The Presidio of San Francisco, California 94129
  38. 38. Everest, and encouraged students to think in a structured way about three questions whose answers would define them as they embark on their careers: “What sort of entrepreneur do you want to become?”, “What sort of company do you want to build?”, and “What sort of people do you want to work with?” The message was well-received. Members from each of the audiences sent heartfelt “thank-you” notes. Francis felt that he had a special connection with students because he was in their seats not long ago. These experiences were excellent warm-up for the fall, when he’ll have to take the stage in front of larger audiences at more places. He has already begun to outline several new talks to add to our repertoire. We learned that to make public speaking a continued and effective investment of company time and resources, we would have to be more actively involved in planning for it. Ideally, we want to book Francis for multiple talks per campus, scheduled throughout the day, and do whatever we can to support the marketing efforts to draw larger audiences. Then think about how to maximize the engagement of live audiences with the brand on social media, how to make the experience worthy of broadcasting and sharing to their friends, and how to cultivate our relationships with these students long-term for use in recruiting and on-campus promotional activities. The talk itself has to fit into a broader strategy that Katherine has already begun to implement. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 38 11 Funston Avenue, The Presidio of San Francisco, California 94129
  39. 39. 5. Operations It’s probably unusual for a startup to have a co-founder as operationally talented as Katherine, so we’re impressively well organized. All of our vendors are getting paid. We even paid our taxes on time. Legal In January we engaged Orrick as our legal counsel. While they’re an expensive firm, they are being very good to us. We love Chad Rolston. All expenses to date are being floated into this upcoming round, so we were able to temporarily lower our burn when it counts most. They helped us incorporate as a Delaware C-Corporation, issued shares to the team, including FF stock for the founders, put a restricted stock agreement in place, had everyone assign IP rights to the company, etc. Basically, we’re all papered up. All the basic stuff that you’d expect. It took us nine revisions to finalize the cap table, hence the delay in sending out the advisor stock agreements paperwork, but we finally got those out, and appreciated everyone’s patience. Getting the cap table finalized took longer than we wanted, but it was part of the incorporation process and there was really no way to shorten that time up. We were trying to decide how much we wanted to raise, were forming our initial advisory board, setting up our stock option pool, there were adjustments based on people’s willingness to move to California, etc. We also developed contracts for the Everest challenge platform and for the interns that we’re going to bring on this summer. To save on fees, we decided to hold off on trademarking our brand name, logo-mark, and slogan until this next round closes. We took initial steps and had some conversations and realized it would be quite a distracting process, and while necessary, would be better to postpone. However we did have them draft our privacy policy, as well as our terms and conditions. Thanks to DMCA provisions (Digital Millennium Copyright Act) we’re completely covered if someone goes into our app and infringes on a trademark or copyright: there’s a procedure where they can notify us and we can’t be held liable. Orrick is expensive, and if they weren’t treating us so well and weren’t so highly regarded and connected in the technology community, we’d go with a less expensive firm. For certain non-strategic items, like paralegal work, we may opt to go with a less expensive firm. Web evr.st Mail f@evr.st Twitter @everestapp AngelList angel.co/everest Page: 39 11 Funston Avenue, The Presidio of San Francisco, California 94129

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