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.
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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.
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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.
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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
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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.
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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.
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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).
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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.
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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.
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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.
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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.
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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
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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
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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.
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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.
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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.
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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.
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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
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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,
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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
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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.
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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.
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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
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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
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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
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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.
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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.
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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,
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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?
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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
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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.
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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
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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
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‘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.
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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.
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- 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
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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
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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.
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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