🎧🍌 Immigrant to $250M CEO: How Circle Powers the Creator Economy with CEO and Co-founder Sid Yadav
🎧🍌 Immigrant to $250M CEO: How Circle Powers the Creator Economy with CEO and Co-founder Sid Yadav
Why the creator economy isn't dead, inside Sid's Series A led by Tiger in '21, convincing Zapier CEO Wade Foster to be his coach, the importance of creator flywheels, and how to write investor updates
🙌 Keep scrolling for the full episode transcript
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Sid Yadav is the Co-founder and CEO of Circle, the all-in-one community platform for creators. Sid started the tech blog Rev2 in high school, and was one of the first to write about the launch of products like YouTube and the iPhone. He was the founding engineer and designer at Teachable, which he helped scale to $25m+ in ARR before it was acquired in 2020. He started Circle in 2019 with his co-founders Rudy Santino, and Andrew Guttormsen, which they have since scaled to over $16 million in ARR by December of 2023.
Circle has raised $31m from Investors like Tiger Global, Notation Capital, Bungalow, Todd Goldberg, Rahul Vohra, Scott Belsky, Josh Buckley, Ankur Nagpal, Wade Foster, and Dharmesh Shah.
Topics discussed include:
Why the creator economy is booming despite negative sentiment
Writing a popular tech blog as a teen in the mid 00’s
Joining Teachable as the 2nd employee
Why Teachable CEO Ankur Nagpal invested 90% of his liquid net worth in Circle’s $1.7m Pre-seed round
Sid’s inside view at the creator economy before, during, and after COVID
The magic of Lenny Rachitsky’s creator flywheel
Why Circle manually on-boarded its first 1,000 users
The reason Sid raised a Seed from lots of investors instead of one large check
Inside raising a Series A from Tiger Global in 2021
Why Sid writes an investor update every month
Going from Zero to $16m ARR in four years
How Circle approaches its product roadmap
Building a community around your product
Advice for running a remote-first team
How Sid convinced Wade Foster, Co-founder and CEO of Zapier, to be his CEO coach
Why founders need to deal with reality in 2024
Sid immigrated with his family to New Zealand as a teenager and then to the US after college. His story is a perfect encapsulation of the American Dream, and I’m excited to share this conversation.
Find Sid on Twitter and LinkedIn
Transcript
Find transcripts of all prior episodes here.
Turner:
Sid, how's it going? Thanks for joining me today.
Sid:
Thanks for having me on the show.
Turner:
I wanted to kick things off, I believe this is how we connected. You had a viral tweet on X, formerly known as Twitter, where you said the perception is that the creator economy is dead, but you actually argued it's not and creators are crushing it. Can you unpack that?
Sid:
Yeah. I feel like, maybe much like you, I live in two worlds. I live in the tech world, I live in the creator world, and a lot of times I felt like in the past year the perception of the creator economy in the tech space has not been very positive. And I've been thinking about why is that, because what I see day-to-day at Circle is super, super positive. I'm just exposed to all kinds of stories about people making something out of nothing.
I think in the past year there's been a consolidation of a lot of creator economy startups that were likely overfunded, and there were likely a lot of them in the 2020, 2021 era when we had the interest rate bubble. And thinking about that got me realizing that there's a bit of a narrative that's come up that needs to be corrected. When I think of the real creator economy, I think of almost the GDP of the internet. Who are all of the creators online who are monetizing? Is that number growing? So are there more creators and are they making more money over time?
And so if you look at all the various monetization channels available to creators to start with, YouTube revenue, look at sponsorship deals, look at products like Circle, Patreon, Kajabi, I just feel like the latter is just on and up and up and up and up. And that doesn't get talked about often and no one's correcting the narrative.
Turner:
Maybe explain what is a creator or who is a creator when we use this word, can you just kind of explain that and get us in that mindset?
Sid:
What's interesting is I feel like I was a creator from the years 2005 to 2012, but that word did not exist. I didn't call myself that, I would call myself blogger. And in 2014 I joined a startup called Teachable and we sold to educators. Again, the word "creator" was not very popular, and it's only popular as I feel like in the last three years.
I think what it started to refer to is with the internet, you have essentially unlimited distribution available to entrepreneurs who want to build and grow an audience and then monetize that audience. And I think YouTube kicked it off in a big way. I think obviously Instagram, TikTok, Twitter, these have all been top funnel channels for folks to build and grow the audience. And then you have side channels like Twitch, even OnlyFans if you were to look at that as a channel.
And so what that's kicked off, especially post-COVID, is you just have a bunch of people around the world who are building audiences online. And then some of those people are also making money from those audiences, either directly through YouTube ad revenue or indirectly through selling courses, building community, selling events, starting a VC fund. And so to me, it always feels like eventually the entire world will be full of creators. It just feels very inevitable to me. And what's exciting is to get to build a product for that potential.
Turner:
Yeah. I just think about it as creators are just the new business. If you think about what did the internet replaced? It replaced something like the Yellow Pages. How did most businesses used to get a lot of business, like revenue, customers? From the Yellow Pages, or from all these other offline things that are now on the internet.
Sid:
And that's a great point. I feel like the lines between creator, business and brand are blending. You see creators like MrBeast launching businesses and launching brands. And then you see brands with creators at the forefront, whereas before I feel like the world was fairly institutionalized, as in institutions were the brand, but not so much the creator. And so yeah, it's just a melting pot of a lot of this stuff.
Turner:
Yeah, and when you think about an individual that has influence, that used to be more traditionally a celebrity, like a movie actor or TV personality, and the internet made anyone able to reach that kind of status. It's not necessarily a new thing of somebody making a business around their personal brand. I don't know, I mean, Ford, it was the guy's last name and it's a car company. It's a little bit of maybe a weird example, but going back over 100 years, that's how it's always worked.
Or maybe those are some of the best businesses where you infuse your personality into just the core operations of the business and then that leads to better margins over time, like more profitability, whether it's people will pay more, you can acquire your customers more efficiently or faster. It's an interesting thing to have in the toolkit.
Sid:
It's a mutually enforcing feedback loop. People build businesses ... Or people build value, the value builds a business, and then the business kind of almost props up a person, like a Ford.
And we've always had that. I think what's changed now is the internet as a channel of distribution, a channel of reach and potential, has just opened up a lot of this potential to a lot of people around the world. I mean, grew up in a very small town in New Zealand, a town called Queenstown. And the only reason I get to do what I do is because I discovered and fell in love with the internet back in 2003.
Turner:
We should go back then, the early days. You mentioned growing up on welfare in New Zealand, you discovered the internet, discovered this whole thing. How did that happen?
Sid:
Yeah, honestly, by such an accident. I was born in India. At age 10 my parents decided to immigrate to New Zealand. My dad applies for a green card in New Zealand, having never visited, just online. Again, speaking to the internet part, and he gets it.
And the next thing we know we're packing our bags, selling our assets, and moving to a very small town called Invercargill, which is at the southern tip of New Zealand, having never visited. And he always looked up or imagined New Zealand as a place to be, as a destination, never having visited again. I think it was a lot about just also the tourism industry, the landscape, the scenic beauty, the lifestyle, et cetera.
Turner:
Yeah, that's fair. So you kind of became a creator at one point?
Sid:
Yeah. What happened is age 10 we move over to New Zealand, restarting life. My parents don't have a job yet, so they're living on welfare. We discover the concept of a yard sale. That's where we get our first computer. I think it cost him maybe $50, it was like a Windows ME computer.
And I was getting bored having just moved to this country, I didn't have too many friends yet, and I just get sucked into the internet. So I start building websites. My first website was on Angelfire. If you remember, back in the day we had GeoCities and Angelfire and Lycos and-
Turner:
Yeah. It was like the even jankier version of GeoCities basically. The ads, I think the ads were even worse than on GeoCities.
Sid:
Yeah, so I built my first website and I was like, "This is awesome." One thing leads to another, and before I know it I'm deep into the concept of a web blog. Super accidentally I just run into this tiny community of bloggers online. I was 12 or 13.
And so I start a blog and then I start discovering products, companies. I learn about Silicon Valley. I learn about the founding stories of Google and Sun and Microsoft, and I was a very curious kid. And so I started writing about companies and just writing about products. And I think TechCrunch might've started somewhere around 2004. I fall in love with TechCrunch as a reader. And then I realized that I have a lot of time on my hands after school, why don't I start writing about the stuff that TechCrunch writes about, which are essentially products, venture rounds, sort of broader macro tech movements. So I start a blog called Rev2.org.
Turner:
Rev2.org. Okay.
Sid:
Yeah. This was an ode to the Web 2.0 movement, if anyone can remember that. And so I start a blog, and no one knows my age online because-
Turner:
Did they know your name?
Sid:
Yeah. Yeah. So it's all under my name, I never share my age. And I just start writing five to 10 blog posts every single day. I start accumulating readers. The blog grows through SEO. I start being almost the first to write about a bunch of great products. I was the first person write about Wix. When it first launched, I'm one of the first few people writing about YouTube, of Weebly. And the reason why is it's very hard to get on TechCrunch back in 2005, 2006. So a lot of entrepreneurs would go to a smaller blog like Rev2. I would write about them and they'd get that break into the press ecosystem, and then TechCrunch would pick them up.
And then I think the 2006 to 2008 era, every couple months there was something that tended to blow my mind. So MySpace, Facebook, Flickr, BuzzFeed way back in the day, and it was just a crazy, crazy era. Super exciting for me as someone who's just like south in New Zealand, has nothing else to do. And so I started monetizing my blog. I sold sponsorships, subscriptions. And then eventually got my CS degree in New Zealand with the intention to then move to the States.
Turner:
Do you remember, how did you run your business back in 2004, 2006? Could you accept credit cards online, was it PayPal?
Sid:
Yeah, it was entirely through PayPal. I remember I would have all my sponsors pay me through PayPal. I think it costs maybe $1,000 to get one of these 125x125 banners on the site. So that was my bank. I didn't have a real bank account, I didn't have a real credit card. Remember I was 14, 15.
And so I'd have all the money come into PayPal. And then I had about five international freelance writers. We'd have this content calendar, we'd assign stories, or I'd assign a lot of these stories during the day. Then I'd come home from school, edit their posts, write some of mine, and then I would pay them out at the end of every month, also via PayPal. And that was the entire business.
Turner:
Wow. Do you remember how big it got? I'm assuming any number that you say is a really big number for a 15-year-old.
Sid:
For me it was massive. We used to get up to about 100k MAUs a month, so about roughly a 100k readers. And then some months that would go up even higher if we had a viral post. Like when the iPhone first launched, I did one of the first summary posts of the top 25 web apps, because back then you'd have the app store, that you could get. And then that got massive. I mean, that was the first result, I actually remember for so long, when you looked up the words "iPhone apps" was a Rev2 article. So some months it got up to 300, 400k.
Turner:
Oh, nice. I definitely remember doing that back in the day, Best iPhone Games. So many of those.
Sid:
It was such a fun time, honestly. And the AI era right now feels a lot closer to that, where things were moving superfast. And you might one day read about Google launching Google Video to compete with YouTube, and then two months after they're buying YouTube. And then it's game over for all other video startups, like YouTube is the de facto kind of, player number one.
Turner:
Yeah. And then I guess you still had to figure out other ways to make money, at least during part of it. You're old boss, Ankur at Teachable, we'll talk about Teachable in a second, he told me you were moonlighting as a chef also. You were like 15 years old. What is the story behind that?
Sid:
Yeah. Okay. Here's the thing. So even my writers did not know my age because I would only go on chat. I wouldn't do Skype calls or anything. And I had the personality of let's say a 25-year-old. It'd be pretty reasonable to read my blog posts and say, "Yeah, this guy's probably-"
Turner:
Just like a young guy, like young adult.
Sid:
Yeah, 20 to 25. I don't think anyone ever would've thought I was 14 or 15. And my intention behind that was I felt like my words had to be taken seriously. If anyone ever found out that I was 14 or 15, I just feel like it would've been the end of my blog. I don't know if that was true. Maybe it would've made things even more interesting, but that was my perception.
So I had to come up with this persona of why isn't the editor of Rev2 ever online within these working hours? And so my story was, "Well, I'm actually a chef by day, and this Rev2 thing is really a side hustle when I come home from my day job." And that's the story I fronted to anyone who ever inquired or to my writers, et cetera.
Turner:
Interesting. Why did you pick a chef? I'm just curious, what's [inaudible 00:17:40].
Sid:
I think it might've been because my dad's in the hospitality business, I just knew what the chef life was. But yeah, there wasn't any intention behind it. And even when you went to the About page of Rev2 it said I was a chef. And we all had little South Park characters, and so my character had the little chef hat. And so that was a real thing that I tried to front up with.
Turner:
Okay. That's amazing. Well, and then at one point you mentioned you were on a vacation in the US and you just kind of randomly got a job interview and got a job. That's a crazy story. How did that happen?
Sid:
Basically, after I graduated with my CS degree, I was just visiting New York. I have a cousin who went to NYU back in the day. And I literally, I stayed in his roommate's room, which was not occupied he was away on break, and I would just walk around New York City all day. I did that for about a month. So this is towards the end of undergrad. And I had sold my blog by the way by this time, so the blogging days were done. I was actually coding, I was building apps, et cetera, for fun, but I didn't have a day job or anything.
And New York City just had me super inspired. So that month I was like, "I don't care if I have to work at Disneyland on a J-1 visa. I need to eventually make it here. I need to eventually make it to the US." And so basically what happened was my cousin, who then went to NYU, he introduced me to a startup that he was interning for, very, very lightly. The way a finance student at NYU would intern for startup. You can imagine.
Turner:
Pretty low lift on the finances for the startup.
Sid:
Yeah, yeah, yeah.
Turner:
Weren't spending money.
Sid:
Yeah. And so by the way, this was a day before I was supposed to go back to New Zealand, and then the thought was I would look for employment in New Zealand and move on with my life. And so I walk in for this interview. I mean, it's a very, very early stage startup. They raised maybe a $500k seed round. A startup called Whisper, which was in one of these Clarity.fm style ideas of expert advice.
And so I go into the interview and I tell them about Rev2 and my blogging days and everything. I show them the apps that I've built, and I just tell them, "You don't have to pay me. I will code, I will design. I'll do everything, just give me a job." And I didn't expect anything of it except they kind of took me up on that, and they asked me to join. I hadn't told them the part about me going back to New Zealand throughout the interview but they offered me the job on the spot. And then I had to reveal to them that, "I'm actually going back tomorrow."
Turner:
Okay, how did that go?
Sid:
Not as badly as I thought, because they just convinced me to come back to the US in a couple months. They said, "All right, how about you work remotely for us for a couple months and then come back to the US? We'll sponsor your visa." And that's essentially what happened. And so it's quite an accident that I ever made it to the country.
But once I did, that startup lasted a couple years. It was a classic startup story. You have the seed stage startup that builds a product, never gains any traction, never managed to raise an A, and then has to shut down. And I'd say as an employee, it's not bad at all because I learned so much because I was trusted to do all of the jobs. They couldn't afford to hire any more engineers, so they had me doing design and engineering and even some of the product management work. And so we built the app. It just never gained any traction. And then it was obvious a couple of years in that we had to shut this down.
So that's what happened, and then that led me to Teachable.
Turner:
So you kind of went through this journey where you first started on the internet as probably primarily a writer, then more of an engineer, building things, and then you kind of started transitioning more to designing. I'm assuming you encompass all of them together. It's not like you just forgot about writing or forgot how to code, it all was like an evolution almost.
Sid:
Yeah, I think the best engineers are also designers. The best designers are also writers. So I feel like there's a ton of overlap with all of these skillsets, which people tend to undervalue when they get super specialized, especially early on in their career.
And that was always my edge. So when I was interviewing for a design and front-end job at Teachable with Ankur, the founder at Teachable, my pitch to him was, "I'm not just a designer. I have a CS background. I build apps. I can code. I'm a writer. I'm the kind of generalist you would want to join your founding team," which is essentially what I ended up doing. And yeah, I think people often underrate the leverage that being multidisciplinary brings, both to yourself and to the company.
Turner:
Yeah. I mean, if you're starting a startup, you are working at an early stage startup, you have to do everything. Traditionally, it's like it might be one person's job to just do the accounting at the company, but when you're a startup founder, that is one of 20 things or 50 things you may have to do. Like, "Oh, I have to do some QuickBooks stuff really quick before I go to bed tonight," so that I could get it out of the way and work on the next thing tomorrow.
Sid:
I think for, yeah, flexibility, versatility, super important. And it's especially great when your founding team consists of generalists because now it's not just you as a founder who's stretching yourself, it's a whole team doing that.
Turner:
Yeah. And you were the first employee or engineer or designer at Teachable?
Sid:
Technically the second engineer, but I was the first designer and the first front-end engineer. And so the idea was I would come in, Ankur had built the V1 of Teachable. Back then it was a product called Fedora. And the idea was, he was a Udemy instructor, and so he realized that Udemy takes a massive cut, it makes sense for him to sell his online courses on his own website.
Turner:
The actual product at Teachable, it's kind of similar to Circle actually. Essentially it was helping teachers create courses and it took a lower cut than Udemy, which was an existing, a little bit more of a legacy, incumbent type product. Is that a fair way to think about it?
Sid:
Yeah, much lower cut. And it was a white label platform, so much like Shopify. You got your own website. You hosted your own landing pages. Your checkout on Teachable is white label. Your brand was front and center as opposed to a discovery platform like Udemy.
And so he built this product that allowed him to do that and then want to productize that as a SaaS product, except his code and his- I mean, he built it superfast, but his code was pretty awful. There was maybe a couple PHP files. You could go to I think /stats.php on any Teachable school back in the day and just look at all the metrics. Yeah, I hate to embarrass Ankur like this, but I'm pretty sure he was using FTP to deploy changes to the website, and so we didn't have any versioning.
Turner:
So instead of a cPanel or something you're saying, or?
Sid:
Or like GitHub, or a Git system. The way you would make changes to the PHP site is you would drag a file, a PHP file, on one of those FTP servers. And so we were hired, essentially rewrite the product, which by the way was actually gaining traction. So I think he built something meaningful, but we were hired as the early team to rewrite that in Ruby on Rails. Rebuild the entire thing, clone what he'd done for the most part. And then I think MRR was barely, I would say, $2k to $3k back in the day, so it was very early days.
And then yeah, we did that, we relaunched, rebranded to Teachable. My job changed from an IC designer engineer to a product, so product management, a couple years into that. And then a year, after a couple other PMs also didn't work out, he was like, "How about you lead product? You're the head of product. Go build a team of PMs. Go learn whatever you need to learn."
And for me that perfectly aligned with my vision, by the way, because the whole reason I immigrated to the US I feel like in the first place was to be an entrepreneur, to start a company, to fulfill that dream. And so my thought was, what's better than a zero to one startup experience where I get to do product and flex all of my skillsets and learn from someone who's a terrific entrepreneur, and then I can maybe go on to do my own thing.
Turner:
Yeah. I also want to make sure we give Ankur the shout-out. He's publicly admitted that the code was not very good. I've been on a panel with him and he said, "My code is not good. The people I hired did a way better job." So I think he does acknowledge that.
Sid:
And by the way, so I wrote the version one for Circle and all of that code has been rewritten as well. So I can't say much better about myself.
Turner:
Wow. So Teachable, the initial Teachable code, the initial Circle code, even that is getting all replaced, all the different levels of-
Sid:
Yea, it's been replaced.
Turner:
Been replaced, okay. I guess we could shift gears to Circle in a second, but I'm curious, maybe we touch on them, but anything else big that you've learned from Teachable or the founders of Teachable? Any lessons or takeaways?
Sid:
I feel like it's where I got all of my learnings, and specifically from the frame of what not to do. I think Teachable, when it came to product market fit, was amazing. The product actually was the right product at the right time, built with the right feature set, so we never had problems growing. The five years that I was there it grew from zero to I think $25 million in ARR. I mean, it's now much bigger.
But internally, we were all first-time VPs or heads of departments that were all trying to figure it out, along with Ankur being a first-time, CEO. So I feel like we made collectively probably every mistake in the book that can be made by a first-time manager, a first-time exec.
And so an example of a mistake would be if I'm now the head of product, my first PM hire was fairly junior. And so it took me a while to realize that if you're ever the department lead or even a CEO, it's your job to hire people who are better than you, not people who are junior who you can train up and boss around. And so that was just a very basic lesson that I had to learn, along with countless such lessons throughout that journey.
Turner:
Then were you kind of junior though, I guess, when you started at Teachable, or is the thinking then you were really good at certain things and you were upgrading the skillset of the team at the time?
Sid:
Yeah. I looked at myself as a founder and I kind of still do. And I feel like different rules apply to founders. It's just the way it is, where I think founders are trusted with a massive responsibility, but they have to be great at learning and leveling up, picking up new skillsets, and having a great vision of what it is that needs to be done. And so that part I think I was pretty good at.
What I wasn't good at is realizing that in order to do that in any role where you are leading a team of people, you need specialists. You need people who actually are not from that mindset of a founder, but are really great at what they do. And you need them to at times tell you what to do as well, so there's almost like a quid pro quo. And so I was on that trajectory of learning as fast as I could. I was meeting with maybe five heads of products a month in New York City for coffee, for dinner. I was reading all of the books.
So one track at Teachable I had was leveling up as an IC, then a PM, then a VP. The other track I had at Teachable was I was getting incredibly inspired by that creator ecosystem that I was seeing develop, ever since the early days actually. At Teachable, we would do these meetups every Friday where we would invite customers to show up to our offices, and a lot of them would bring their laptops. And at times I was just chit-chatting with them about their businesses, at times I was helping them fix issues or I was filing bug reports. But I really fell in love with the people that we were building the product for, so essentially the creators.
Turner:
And it was basically this one main feature of selling a course of some kind?
Sid:
Yeah. And so as I would talk to them, I would realize that an online course or a school as we called it, that may or may not be the key part of someone's business, there were a lot of creators who had that almost as for a side hustle or side income. And for some it was the main thing and they were crushing it.
And that got me fascinated into the idea that you build an audience on the internet, and then what is step two? Step two is you have to engage that audience and you have to monetize. Not just to make money-
Sid:
And you have to monetize not just to make money and be rich or whatever, but to build a business that's sustainable because if you don't do that, the reality is you're going to stop being a creator in a year or two years. Right. And so Teachable was kind of solving for that problem. And about five years in when I realized that courses were not the sort of right kind of frame to look at monetization from where it was actually much bigger than that, it was about the engagement part of the audience. And courses are one form of the engagement and monetization. They're not the end all be all. And sort of that started the trajectory that eventually led me to circle.
Turner:
So then what was kind of that journey from going Teachable, VP of product to day one of Circle?
Sid:
Yeah, so basically five years in, I kind of started having these thoughts about leaving the company. I'm starting my own. The one thing that always prevented me from making that leap sort of year four, year five is that I was actually a, I was a husband, I was a father. I had a 4-year-old daughter at the time and we didn't have any savings at all. And we were living in New York City in a one bedroom back in the day. And I almost kind of took it for granted that my Teachable equity means something and it will eventually make me money to do my own thing.
Turner:
So you did think it would or you did not think?
Sid:
I did think it would, but it hit me five years in that I kind of needed that cash,
Turner:
Oh, yeah.
Sid:
To make that leap because we were, I think seven credit cards down, probably about $30,000 in debt. So just credit cards on credit cards. So we do vacations on credit cards. And the way I justified it, by the way, is I always offset it with the theoretical value of my Teachable equity. And so I was always in the up in my head until five years in, I realized that until I see that cash or see some cash, I can't just leave a job to start a company and I don't want to get another job. So essentially what ended up happening is one of my old friends from way back in the internet days is this guy called Sahil Lavingia. He's the founder of a Gumroad and kind of big, a Twitter personality. And so we'd known each other since we were teenagers too. So we're about the same age. So we met at 15 or 16. He actually also is one of those people who didn't know my age back in the day.
Turner:
So you were both like 12 talking to each other?
Sid:
Yeah, we met up in New York City and he yeah, he later discovered that I was actually the same age as him.
Turner:
Nice. That's awesome.
Sid:
And so I kind of pinged him for a chat just on life and career advice. He'd had that journey at Gumroad where I think they downsized and he was living in Utah and other things. And he gave me the suggestion to freelance for Gumroad sort of three days a week doing engineering and code work. And it turns out that's the model with which Gumroad operates is they don't have any full-timers. They just have folks who are putting in 20, 25 hours a week. And then I could spend the rest of my time working on my own ideas. And that opened up the opportunity to not take a massive risk when it came to my family, my daughter, to take that leap with a bit of a cushion even before Teachable exited, which it did about a year later.
And then that gave me the runway to spend at least two days a week working on my own ideas. So this is when I started kind of grouping with my founding team. So I'd always had these two people who I knew I'd reach out to start a company. So one of them was Andrew Guttormsen, who was Teachable's VP of growth and marketing. So we were sort of dear friends along with Ankur and I at Teachable. And so he has the entirely opposite skillset to the one that I have, which is he's a marketing, sales growth kind of expert and really was responsible for Teachable's growth and success to a large part in that area. So we'd always have this joke that we would try and recruit the other person whenever one of us left.
Turner:
Whoever had the good idea first.
Sid:
Yeah. So he'd be like, "I'm going to recruit you one day," and I'd be like, "I'll recruit you one day." And so we started chatting and my other co-founder, whose name is Rudy, I'd known him from actually before Teachable. He's also a designer engineer. We built products together. He then worked for Teachable for a little bit and he'd left his stint at Teachable to then become a sort of fractional CTO to about 30 course creators. So he was on the other side of what I was doing at Teachable with direct access to a lot of these course creators where they trusted him to help them sort of plan out their stack. He knew about a lot of their pain points, he knew about all of Teachable's pain points.
And so when the three of us started chatting, we realized that this would be a pretty awesome sort of founding team where you have someone who's on the ground, who knows the customers through and through. You have Andy and I who built a product like this before who know a lot about SaaS. You have me on the design and engineering capacity, and then you have Andy on the marketing and sales, the go to market capacity. And so we started talking about ideas. So we'd jam on ideas two days a week. We went through the entire laundry list of all of the creator economy startups that were funded and eventually shut down as potential ideas to work on.
Turner:
What year was this?
Sid:
This is probably sort of early 2019, early to mid 2019.
Turner:
So we hadn't quite hit the, maybe had just started to pick up just the broader excitement about creator economy in the investment community.
Sid:
Yeah, it was right before Covid, but it was picking up. So I think the 1000 True Fans blog post had maybe gone viral at this time. And for me, I was committed at this point to build a company for creators. I knew I want to do that. I didn't want to build a consumer product that we'd later have to scale to massive degrees and monetize via ads. And I didn't want to build enterprise B2B because actually I love the idea of serving entrepreneurs, serving creators, helping them grow and build successful businesses. There's all of the touchy-feely aspects that one can imagine when you talk to these people and then there's also the sort of monetary aspect of they're paying you for the product. You can generate revenue on day one. You don't have to rely on a ton of VC rounds to eventually monetize. So we were essentially spending two days a week sort of jamming on a bunch of ideas.
So we went through like should we do newsletter? Should we do podcasts? Should we do a FinTech startup for creators? Community was always sort of one framing of the ideas that we ran through. And eventually what happened is we started to get excited about community from the framing of if it's about engaging the audience once you build up the audience communities, both in the concrete sense of Slack, Discord, Circle community, but also in the abstract sense of the engaged audience is really the thing that helps you take that next step before you monetize the community. Right. So that framing both in the abstract in the concrete sense was getting us super excited and it became super concrete when we just over a span of a week, we jammed on Figma, we built a prototype, we started showing it to the people that we'd been talking to.
So one of them was Tiago Forte who's written a book called Building a Second Brain. Yeah. And he was actually an ex Teachable customer as well. And so he was actually struggling a lot with his community stack and the way his course was running. So when I showed him that initial product, Tiago was like, "I'm in. How do I sign up?" And I had to tell him that, "Well, we still have to build it, but you saying that will now make us."
Turner:
We've got a customer.
Sid:
Yeah. And so Rudy, who was now a consultant, 30 of these folks had that same experience with about five of his clients where they were like, this is awesome. Sign me up. I really need to figure out community, or I need to fix my community stack. I love that Circle's taking the approach of it's white labeled, it's extremely flexible. And remember Circle at this time was in Figma, but we were getting that validation pretty early on. We're getting super excited about it. So we booked out this Airbnb in Venice Beach for a week. Both of us have families and kind of hold ourselves up, built the prototype sort of coding day in, day out and onboarded a couple of customers, showed it to Ankur, who was then basically very excited to invest. He kind of knew where we were going, that this was like, yeah, this is the next thing. And all of it made sense and offer to invest $250,000 as our first check, as did one of Teachable's other co-founders whose name is Conrad Wadowski.
And so we barely had a product, but we had a $350k sort of pre, pre-seed round and both of these guys asked the team to go full-time. So they were like, if you're going to work on this, you got to do this full-time. Stop the consulting, stop working on other ideas. You have to take this seriously. This is awesome.
Turner:
I think I remember Ankur saying he used 90% of all the cash that he had. It was an insane percentage of his total net worth or something that wasn't in Teachable. He just basically gave it all to you.
Sid:
Yeah, I didn't know this back in the day actually. So he never told us that part.
Turner:
Okay.
Sid:
He later told us.
Turner:
You're just like he's loaded.
Sid:
I might've tried to talk him out of it if I'd known that because yeah, we barely had a product. But yeah, there's something in him that I guess saw the potential and wanted to invest in his own early team. And yeah, that was super sort of validating. Right. So when you have two of your ex-bosses, Conrad and Ankur willing to shell out real cash pre-exit, Teachable had not exited back then. And we had these customers like a Tiago, like a David Perell and about three or four other customers who are kind of getting onboarded, who are enjoying the experience of setting up their community.
And we just said, I think this is the right frame for what we want to work on. It's all about engagement. Courses are going to be a form of engagement. They're important, but it's not the end all, be all. Community is a larger thing. Community is an abstract thing. So community is all about, you can build community through events, you can build community through running an online course. You can build community through discussions the way you would in a Facebook group or Discord. And we want to be that sort of end all, be all platform eventually. And that's a very exciting vision that we can work towards for I'd say 15 to 20 years.
Turner:
Okay. There's probably two or three different things I want to hit on based on what you just said. Community, what is that? What does it even mean? Because you've touched on a couple times. Engagement, what does that mean exactly? And I'm also just curious, like the rest of the fundraising around, just how that all came together. I don't know how interconnected all these things are, but if we could touch on them.
Sid:
So just to double click on what our conception of community has become over time actually, it wasn't always this way, but I feel like it's really crystallized. I think if you were to take a very concrete example of maybe even yourself or someone who's in your position. So a lot of these creators start out building an audience. And the way they do that is not by building community first. They do that by going viral on TikTok or Twitter or YouTube, right, and posting a bunch of shorts, having a daily cadence of posting short form videos. Right. So it's really the algorithm that gets them that attention on these various platforms initially, right, where they maybe identify with the niche, they become someone who's very interesting to follow. And over time what develops is this very lightweight fan following. Right. The 1000 True Fans thing starts to actually emerge. And while this is happening, you may still just have one Twitter account or one TikTok account.
So it's not about where it's happening, it's about the fact that it is happening and people know who Turner Novak is and the kind of content you produce. Right. And I think this is the point where the sort of more abstract definition of community really starts to get developed, which is you now have an engaged audience who know about you, who watch your stuff. And if you want it to take that to the next step, there are probably things that you could do to engage further with them. Right. And this is where I think a lot of people get tripped up. So yeah, you can run a Discord or Slack like community on Circle. I mean a lot of people do that. You can run a Facebook group like community on Circle. A lot of people do that. But I think when you look at community more from the abstract lens, I think the potential of being very creative with what your version of community is to you can set you apart and can help you truly monetize to the extent that just making money on YouTube or TikTok or Instagram cannot.
So once you identify that opportunity, I think it's about figuring out, okay, is it a paid newsletter? Is it a membership? Is it an online course? Is it a virtual event series? Is it an IRL event series? So all of these options open up. And when we started Circle, we sort of had this diagram of a wheel that consisted of you have discussions, you have events, you have live streams, you have payments, you have chat. And the idea was can we build that one true platform that supports any version of a community that someone wants to build and is flexible enough to even evolve with them over time? So maybe your community starts off with one chat space for your fans to interact with each other, non moderated. It's just super fun.
And then eventually that develops to a cohort based online course that's pretty intense where you have weekly live workshops and you have a whole bunch of resources that you're producing and sharing with your folks. And by the way, you're charging like $1000 bucks for entry to that cohort. Right. And so can we build that one ultimate platform that's got the building blocks and the flexibility to scale up? So that's kind of how the idea of Circle started to evolve over the course of the first couple of years.
Turner:
So trying to give people concrete examples of some of this stuff. And maybe a good way to answer that question is do you have any favorite or the most interesting kind of businesses or creators that you've seen using Circle? Can you just kind of talk us through what their Circle looks like? You open their community, what do you get?
Sid:
Yeah, so maybe I can give a couple examples. I've talked about Tiago. So Tiago started to build up a fan filling, Tiago Forte for anyone who wants to look him up, a lot of folks might already know him, started to build up a following around the knowledge management and personal productivity space online. He had an amazing newsletter, he had a Twitter following, and eventually Tiago realized that it's very hard to monetize a Twitter account and even a newsletter to the extent that he wanted. And really the opportunity was to build this paradigm, the system he calls building a second brain. It's got something he calls the PARA Method of how someone goes about sort of managing all of their knowledge, all of their notes.
Turner:
What is the PARA Method? I've never heard of that before.
Sid:
I don't actually recall right now what it stands for, but in the abstract sense, it's about managing all of the ideas and all of the resources that you come across. And it turns out that's super valuable to folks right now because the internet tends to overwhelm. Right. So people will pay to have a more organized mind and a more organized life. And to learn from a Tiago is kind of what he realized.
Turner:
I just Googled it. So we get a definite explanation here. PARA stands for projects, areas, resources and archives. So it's projects or things you're actively working on. Areas are just roles and responsibilities that you're kind of managing over time. Resources are topics that you're interested in that could be relevant or useful in the future. And then archives, so it's completed or inactive items from the other three categories. Seems pretty straightforward.
Sid:
Yeah. And just when you hear that framework, you're like, that makes sense. Am I putting that to work with my life, my notes, my business? Right. And so that's an example of a community that started to form around Tiago's ideas, starting with his newsletter, then through his online course and now he has a book that's evolved. Another great example of a Circle creator is Ali Abdaal, who sort of, I think he was a doctor in a past life, started making YouTube videos. I think a lot of his videos were around productivity sort of as well, kind of similar to the space that Tiago is in. And he actually went in a tangential direction, which is Ali started what he calls a part-time, YouTuber Academy. So his course and community is about helping others become YouTubers and then monetize their YouTube channel. And that runs on Circle as well. And so you see that there's two ways you can go down as a creator.
One is the direct monetization of your ideas, your thought and sort of direct education of that knowledge. The other is the sort of second order, like the periphery of what you do and kind of operationalizing that and then educating people about that. So on the one hand it's like I'm building Circle and that's a product in the creator economy. On the other hand, I'm learning how to build companies and there's value to that knowledge as well. And so all of these I think add up to more monetization opportunities, deeper monetization opportunities. And eventually it's about, I think for a lot of creators, it has to be about kind of owning your audience and owning your distribution. Right. Because,-
Turner:
You don't want to rely on the algorithms.
Sid:
Yeah, because YouTube, TikTok, Instagram, all of these platforms are great when you're starting out. It's those algorithms that get you that attention. It is not in their best interest to keep you sort of front and center in all of these news feeds in front of people's eyeballs, right, because there's way more creators for them to highlight and emphasize. And if you're just relying on monetizing through those platforms, I think you're leaving a lot on table. And it's a risky proposition. Right. Because what happens when you stop monetizing? You have nothing else to go after as opposed to you have the community, you have a business, you have an income stream that you can rely upon beyond just the initial audience.
Turner:
Yeah, I don't think, it's kind of hard to explain how challenging burnout is to manage as a creator, because to your point, whether or not YouTube promotes you or Instagram promotes you, you have to just keep creating regardless of if they do, and hopefully you're doing it because you enjoy it. But there are times where it's hard to just stay consistent with it. And especially if you're not seeing the results that you want to get, like it can be pretty discouraging. Or you start to burn out almost where it's like, how do I just stick with this? And sometimes it's the same thing over and over again. That can turn wheels or your business isn't growing or shrinking because of things outside of your control. Have you seen any ways for managing that as a creator specifically? Maybe you guys are helping with that.
Sid:
Yeah, I think communities, honestly the answer to that, because if you just have this broadcast medium and you're on this hamster wheel of creating content for your audience, to your point, eventually that gets tiring. And eventually, I don't know, you might not want to do that for a few weeks. Right. You might just want some fresher newer ideas. And I think when a creator forms that direct connection with their audience, that sort of deeper engagement through community where maybe you're running an event series where you get to really interact and get to know your audience or you have some way to connect more deeply, I think one, the ideas get better and fresher because now you're in direct dialogue, you're not building content and sort of hypotheticals, you're actually talking to the people who love your stuff.
And so again, community in the abstract sense helps extend that shelf life. And then in the monetary sense also gives you that runway. Right. So to my point about what happens when your viewer count start dwindling, when you are no longer as sort of popular, famous as you once were, I think you have your community to rely on. And you have your business to rely on if you've set it up in the right way.
Turner:
Yeah, I think not saying that he's peaked or that it's declining, but one creator that probably a lot of people listening might be familiar with that I think is done a really good job is Lenny Rachitsky. Do you follow Lenny at all?
Sid:
Lenny's awesome. Yeah.
Turner:
Yeah. He started his newsletter a little bit before I did, but we've kind of always just traded notes, learned from each other. I think he's probably one of the best executed creator playbook kind of in our space. He did a really good job where building the community, but he uses the community to create more content. If you go through and look at the stuff that Lenny puts out, a lot of it is just from the community. And it's almost like taking this concept of UGC, like user generated content that's that essentially the business of a Facebook, a TikTok, all these social media platforms. It's basically you're getting, he shares wisdom from the community, like just feedback, thoughts, people trading notes, how they dealt with certain problems. And that's an email that he sends out every week. And I mean he does a little bit to kind of grease that wheel, but there's like, I don't know, there'll be like 50 people that contribute to that post in the Slack group that he has.
Sid:
And isn't that so much more fun than again being on that hamster wheel where you're thinking about the content that people might like. Right. So again, going by the abstract notion of communities, kind of what I mean, and again, I think the Circle or the Discord discussion area is like one sort of expression of that. It doesn't have to be the only expression. And if I was to kind of really boil it down, it's about, you build an audience, you build a community, you build a business. Right. So kind of three steps. Community's the thing that extends your shelf life. Community is also the thing that feeds back into the audience, right, because community helps you grow that audience one directly through word of mouth because now you have super fans, you don't just have viewers. And the other thing is it feeds back to the type of content you might want to create to grow your audience as well. Because you're learning from that direct engagement, direct interactions. You're not sort of on an ivory tower trying to imagine what people would like to consume.
Turner:
Yeah. And even on that note, I mean the way we connected, Dave Ambrose, who introduced us, he is a fan of the podcast. And when we met up in New York, he's like, "Dude, you got to have a Sid on. He'd be a great, great guest."
Sid:
Dave is awesome, by the way. Dave was one of Circle's, earliest investors. Again, one of those people who backed us before we had a fully functioning product.
Turner:
Okay. So well, yeah. So going back to that fundraise, I think you raised a one and a half million dollar pre-seed. You had the first $350k from Teachable founders. How'd you get the rest?
Sid:
Yeah, so what happened was, and all of this happened within a span of a month. So this is December 2019, which is we had the initial product, we had the $350k, and I was not planning to raise any more than $500k because my thinking was it would just be the three founders toiling away at this idea for a couple years and we don't need that much money. That was my initial thinking. And after talking to Ankur and after meeting a guy named Brian Tobal in New York City. Brian's a serial entrepreneur. Actually Tiago is the one who introduced us. So I meet Brian and Brian tells me, he's like, "Hey, you might want to raise a little more. Go for $1.5 million."
Turner:
Yeah, $500k is pretty tight.
Sid:
Yeah. And I was like, No, I'm cool with the $500k. I don't want to raise any more than that right now. We're going to take our time, et cetera. And he was like, "No, I think you should go for it. You've got everything going after you. You've got the $350k, you've got a product, you've got customers who want to use it. I'm going to send you a bunch of intros to some of New York's best seed investors." So Dave was actually one of them, Nick Chirls from Notation Capital who lead our pre-seed and our seed was one of them. David Tisch from BoxGroup was one of them. And he was like, "You're going to talk to these people and you're going to close it in a week or two." And I was like, "Okay, sure."
Turner:
You're like, whatever.
Sid:
Yeah. When someone says that, you're like, okay, whatever. I'm sure I'm being like whatever. And so we were also three or four old fashions down at this point maybe. So it was like I didn't make too much of it, if I'm being honest. A couple of days later, the intros drop into my inbox. It was about 10 intros, and all I do is I get on these calls and I just start telling them about the idea. I don't have a plan to raise a round or anything like that. And I just start getting yeses for a $50k, a $100k, a $150k. And then I talked to Nick Chirls from Notation, and he wants to buy out the rest of the round. He wants his sort of 10% ownership. And so within a couple weeks of Ankur backing us, we had the pre-seed closed. So there's $1.5 million, or I'm sorry, $1.7 million round, had about a $10 million post-money valuation cap. And really, yeah, that set us up to actually then build a product in the right way and actually to build a company.
Turner:
Anything else you think a founder should consider when doing that very first pre-seed round?
Sid:
When I look back at it, it was fairly accidental. No one had told me how to do this. Not even Ankur. Yeah, it was like,-
Turner:
He should have. He should have been like, here's what you do. Yeah.
Sid:
It's interesting where like, yeah, no one sat me down to say, here's how you raise a pre-seed or whatever. I just started talking to a bunch of people and I started realizing, okay, these are my options and I could close a bunch of saves and I have that money. But I think in hindsight, what I had going after me is, one, I had the track record of Teachable, two, I had the founders shelling out their personal cash as the first couple checks, so that's a strong signal, right? Three, I built the product. It wasn't a great product, it was a very basic MVP, but the product existed. Four, we had our first five customers, they weren't paying yet, but they were getting onboarded to Circle and Tiago is going to run the next cohort and so on. Right. So I had all of this going for me.
So I can now imagine in hindsight why like, yeah, we'd make for safe sort of pre-seed bet, but honestly it blew my mind away back then that people were willing to back us on not that much because I really thought we need to build a product, start to show a bunch of traction, the classic 20% growth month over month, and only then would we close a bigger round. But yeah, it happened much sooner and I'm so glad it did because that allowed us to build the team fairly early on. And so we ended up essentially building the product and launching in, I think it was September of 2020 is when we launched publicly.
Turner:
And just like wrapping up the fundraising discussion, I mean, it sounds like it happened because you weren't necessarily thinking about this as like a, I need to fundraise and give a pitch. You were really thinking about it as I'm building a business, I'm building a product, I'm solving problems. As an investor, if I'm thinking about some of those things you checked off the box, those are some of the risks. It's like, well, is this actually a problem? Can you make money doing this? Can they actually build it? Can you hire a team? And you'd kind of checked all those boxes. So making a real business, you just tell investors like, Hey, this is the business that I'm trying to build. Like, oh, we want in. You weren't trying to sell it to them. They were selling you on why you should take their money.
Sid:
Yeah. I had one notion doc, by the way, and that notion doc was primarily for me and the founding team to align on to know what we're building and why this is a big opportunity. Right. It was really for us, and when people ask for you have a deck or whatever, I would just share that notion doc and they'd kind of get the gist of it. And that had everything from our landscape, our pricing, the big opportunity, what makes us like a 100x thing. But that was really for us more than it was for an external audience. It wasn't very polished.
Turner:
Yeah, I mean, those are some of my favorite fundraising decks where, I mean, you can just tell the goal is not raise money. The goal is we are building a company. This is going to be a big business. This is almost like the directive or the agenda, or this is the framework that we're going to be using. So I can totally see how that all worked.
Sid:
And one thing about my background is I took that money so seriously, which I don't know if every founder does that, where to me that $1.7 million was maybe the last money I'll ever raise. I have a moral commitment to 100x this cash to the investors, and I will get that done. And also I have a wife and a 4-year-old daughter, so I need to do this. I do not want to go back to being a head of product or a PM.
This is my one shot. Finally, in America, the right idea, the right team, et cetera. And so I think that conviction almost gave me this sense of like, I do have things to lose, but also the upside is so great and everything kind of has led me to this point towards this opportunity that I was super optimistic about where towards this opportunity that I was super optimistic about where this could go.
Turner:
Yeah, it was kind of... You weren't just... It sounds fun, a startup thing. It was basically your life's mission, it all coinciding, this was the thing that you were going to do. Very serious, you had a plan and you were going to make it work no matter what. No matter what kind of roadblocks got in your way, you were going to solve all the problems and stick with it. So basically you did this round, very end, very beginning of '19 and '20. And then, did COVID hitting, was that a big thing in the history of Circle or?
Sid:
Yeah, so obviously COVID was not good for the world, but it was actually great for Circle and great for the creator economy and the community space because a lot of these IRL communities started to go virtual, and we were a virtual community platform as well. So yeah, I do think that helped. Maybe not to the extent that it helped some other startups, but it was the right time, it was all... It was in the zeitgeist, a lot of this stuff. And so I feel like pure dumb luck, I think we were working on the right idea at the right time.
Turner:
I was going to say, you were kind of building as the hype and the interest maybe started to also build up.
Sid:
Yeah. And so what we did was, the first thing we did is we launched a wait list in January when I announced that we're working on Circle and here's the mission and the vision, and that's all we had on the marketing site. And that tweet went semi viral, where within a couple of weeks of that we had a wait list of about, I'd say 500 or so folks, and within actually a couple months there was a 1,000 people. So product barely exists, I mean it's there but it's like in a v0.1, but we have the waitlist.
And so, what we realized is, okay, the initial challenge for us is we need to make Tiago and the four other customers super happy. How do we do that? All of those customers have my phone number, I'm talking to them multiple times a week, I'm digesting all of their feedback, all of their suggestions, I'm improving the product. So that was the first three to four months where it was literally me doing that, doing the design, doing the code with my two co-founders. And then beyond that, started to build out the team. So it'd be nice to not have to answer every support ticket myself, "Should I bring on someone who can do customer support, so maybe she does half the tickets?" And that was Keisha, our first support hire, who now runs a team of say about 15 or so folks.
Turner:
And so that was the first hire?
Sid:
Yeah, first full-time hire. We also had some contract engineers starting to work with us who then later on went full-time. And then, I think the product just got better, more mature, more polished over the course of that. And also what happened is, we started to work through the wait list. One of my co-founders, Andy, he's the go-to-market guru. The deal that I had with him is, he couldn't grow any aspect of Circle until we personally onboarded the first 1,000 customers. So if he has a challenge to growth hack this to a million in ARR, we could do that in a couple months regardless of the quality of the product. He's just such an amazing marketer. He'd set up a bunch of partnerships, we'd run a virtual summit, we can do that.
But my intention was to first and foremost build that early product that's a decent product, has real super fans using it and talking about it. And so, that first year was essentially me, Andy, and Rudy doing five to 10 demos a day and we were onboarding all of the initial customers. So that's essentially how we got to the first, I'd say 1,000 customers in the first year.
Turner:
This was calendar year 2020?
Sid:
Yeah. And by the way, that had an amazing feedback loop of, because I was personally doing the demos and then Andy was doing the demos and there's a lot of feedback that was exchanged directly or indirectly about the product that we just had to solve or fix. And the other thing that I sort of said as a constraint is, I didn't trust that anyone could onboard themselves to Circle at that time. It's like you had to have the call with me or my co-founders for us to explain our vision of community, show the product, and only then did I expect someone to even be able to figure it out because we didn't have an onboarding experience. And so that took a while to build, and eventually in September we started to feel good about opening up the floodgates a little bit to the remaining wait list and launching them on Product Hunt and doing the standard thing. And that's about when we closed our seed round, which is a $4 million round on a $40 mil post money valuation.
Turner:
Yeah, I do remember that. I think, well context, and we talked about this when we caught up before, but context for the audience, I'd invested in kind of adjacent company, not quite the same, but I just never met you at the seed because I was like, "It's too familiar." I usually try to stay away from those kinds of things. So, I'm interested in how that went. So you launched, I know you hit about a million in this subscription recurring revenue within I think three months of the launch, and then you raised the seed round. What was the dynamics of the seed round? How did you put that together?
Sid:
Over the course of the year we had a lot of interest coming in. Also, by the way, because I was heads down and I was not talking to anyone, I feel like that actually helps build up momentum. It's very counterintuitive, but I think founders need to realize it's a bit like the dating game. The person who's attractive is not the one going around asking people to date them, they're just kind of doing their own thing. So it's a bit like that, where I was super heads down, maybe once in a while I'd take a call. And coming into August, we knew we were about to launch this, kind of closing in on four to $500k AR and really started to think about, "Okay, what does our seed look like?" And then we were super fortunate because both Nick Charles from Notation Capital and Encore offered to also lead the seed round, so they offered, let's say million dollars each.
Turner:
Encore had a fund, right, that he had raised?
Sid:
Yeah, by this time he had a fund.
Turner:
Teachable exited, right?
Sid:
Teachable had exited. Yeah, he... So we were one of the first investments from his new fund.
Turner:
Slightly less percentage of his net worth.
Sid:
Yeah, yeah. He was kind of in the green by then. And so, these guys were like, "Hey, instead of talking to these institutional funds, how about you just do a three to $4 million seed, we can back about half of it and the other half you could just fill up with useful angel investors?" so founders, creators. And so we compared a bunch of these options of getting an institution involved early on to front up the whole thing versus this. I liked this approach a lot because I realized Encore and Nick backed us when we had nothing and had been super, super amazing to us. So it kind of felt right and felt fair to have them re-up and felt validating that they want to do that. And also felt like a great opportunity to fill up the rest of the round with folks who could be helpful with 20 to 100 K checks. And we essentially ended up with about 30 or so people in the cap table that way that invested in our seed.
Turner:
What was the trade-off in terms of, you talked about you looked at smaller checks, one big institutional check. Were there any kind of pros and cons you found with the larger checks and specifically that made you decide to go the angel route?
Sid:
With Encore and Nick, we had the big, bigger checks, the one mil each. And I realized, instead of having four million dollar checks, it's kind of nice to have two million dollar checks and then 30 other smaller checks, just more fun that way. It's fun for us to get to interact with people like Todd and Rahul and Scott Belsky and Josh Buckley and a bunch of these folks who were entrepreneurs themselves. Dharmesh Shaw from HubSpot, and it was very validating to even get to know them, honestly, because I wasn't super plugged in back then into the ecosystem. And so it was almost an easy call, because when I compared it to the other option, I was like, "There's just more upside here." And I honestly didn't see much upside in the other option.
Turner:
For people to get context, if you wanted to raise money from a traditional venture fund, they need to own a certain percentage of the company basically to make the math on their fund work. Topic for another day. But essentially they probably would've had to do a $4 million check.
Sid:
Yeah. They would've had to have half or if not most of that round. And I spoke to some people about that. So we did shop it around. I think we had a couple term sheets, but I guess, yeah, I didn't see the value add justifying that versus the benefits we would get from just the other route.
Turner:
Yeah. And probably you were set up in that position because your existing investors who got their fund targets met. Like Notation owned 10%, their follow on round which was just kind of like a, I'm sure it mattered, but they were kind of like, "Do we need to own another 2%, 5%? It's kind of a wash."
Sid:
Actually, I think what happened is, in the pre-seed Notation owned about 7% and I told Nick that, "Okay, maybe eventually we'd get you up to the 10." So that was a part of that as well. I kind did feel like I owed it to him, and to Encore for that additional investment.
Turner:
You launched, and I think we've kind of touched on really briefly, you guys grew pretty quickly right after that, right?
Sid:
Yeah. So number one, we had the wait list. Number two, a lot of the early customers are extremely generous. So like Tiago, David Perell, Ben Tossel from Makerpad, and Laura [inaudible 01:12:22]. A lot of these folks had thriving communities on Circle, were talking about us for no benefit of their own. And that truly helped in the early days, because that kicked off the momentum. And I wouldn't say that we went viral or anything, but it was just a constant building of the top funnel through your customers who've set up their communities and are fairly successful and liking the product.
And I think the reason, by the way, a big reason why they loved us back in the day, it wasn't really the product or the features, it was more velocity and our momentum. And the fact that I was super involved and my co-founders were super involved in making them happy. So they had that white glove experience where they could text me at any time and get a response. I would jam on ideas with them and those ideas would get built.
And so, that's almost like a... Yeah, technically, is it a growth hack? I don't know. But it's a good way to get to that first million dollar AR, which is, you have to make a small group of people really happy and your unfair advantage as a small team is you can work very directly with them. You can have all of the feedback exchanges, whereas other incumbents cannot. So that is almost, that creates a wedge in almost any market if there is a product to be built within that market, which is, founders are incentivized to do that and then a lot of customers love that, and it's not something they can get in other products, other more established products.
Turner:
Yeah, it's basically just talk to your customers, listen to them, solve their problems.
Sid:
Yeah, give them your phone number, such a small thing. Just, "Here's my phone number, text me anytime." Which other company, established company that you might be competing with is willing to do that. Even we don't do that at our current scale, obviously.
Turner:
Yeah. And then you also, talking about the heat of this creator economy hype, it sounds like you almost took advantage of it from a fundraising perspective. I don't know if that's true, but you raised a series A that, I mean you raised quite a bit of money. Can you just take us inside that and how that happened?
Sid:
Yeah, so jumping into 2021, we started at million and ARR, we've now launched publicly. I'm now starting to build out the leadership team. I'm starting to move away from coding as an IC and hire way better engineers than me who can rewrite a bunch of my stuff and all of that. My co-founder, so Andy is finally able to build out his marketing team and his sales functions a little bit, because now we're feeling like, okay, there's something about the product that is working organically that we can fuel. So basically, 2021, we end up going from about a million to $4 million in ARR.
And then what happens around September, again, I wasn't fundraising, but these are 2021 times, so I'd get a lot of this investor outreach. I think through a friend I learned about John Curtius from Tiger, and it turns out John's emailed me and I've just ignored the email and I'm talking to this guy who John's invested in and he's like, "Tiger's awesome. John is the best." And he's telling me that offhandedly. I happen to look at my inbox, I noticed there's an email from John and he tells me, "Dude, you're crazy if you're not responding to that email." And so I'm like, "Okay, I guess yeah, I should talk to John from Tiger, Tiger's a big deal." Especially back then, they're moving just super-fast and extremely generous terms and everything. So I hop on with John and short call, I do the standard pitch and I thought it'd be a quick intro call. John proceeds to tell me that Tiger's done all the due diligence on Circle, they've talked to our customers, they know our numbers and John's going to send me a term sheet.
Turner:
You were not aware of this?
Sid:
Yeah, yeah. And that was the first call and we were not thinking about fundraising. And so the term sheet drops in and it's an okay valuation. Actually, it's an incredible valuation by today's standards. So I think it's something like a 150 million post, I hope Tiger wouldn't mind me on sharing this information. And I talked to some of my seed stage investors and just kind of get their opinion. I felt like I owed it to everyone to shop it around a little bit, so I do that. End up hopping on with John again at the end of the week. And he basically then offers me terms that we can't refuse and that ends up being sort of a $20 million round at a $200 million post, so about 60x ARR. Which weirdly enough, I don't know if you remember these times well, but I think 100x ARR was more of the standard.
Turner:
Yeah, I was going to say, it's not even that unreasonable for 2021.
Sid:
Yeah. But to me, I don't know, 60x still felt like that's a lot.
Turner:
It was a lot. If you look at public comps, yeah, I'm sure if you're publicly traded or even right now, it might be closer to, I think 10 is usually kind of my go-to. Yeah, and then you tweak up or down depending on velocity of growth, quality of the product team. Under the hood, like how profitable, how cheap the CAC is, how efficient the business is, all that kind of stuff.
Sid:
Even during the pre-COVID times, the 2014 to 2020 era, something [inaudible 01:18:07] and I, and my co-founders would talk about in various capacities is, the real valuation of the company is more like a 10x ARR. So we'd kind of internalize that, that's the true enterprise value. Any other multiples are bullshit, it's kind of the thought that I'd been trained to believe in and sympathize with. So, I was not very carried away in the 2021 times as a lot of other founders were. So I kind of didn't see that as being incredibly sustainable. So for me it's like the 60X seemed super reasonable, 200 mil post, extremely generous terms and everything else. And so that was a no-brainer. So yeah, we closed that round within a week.
Turner:
Yeah. Well, if you think about the long-term value of the business and dilution, when you raise money, it's not like a... It's often positioned as a fun like, "Hey, we raised money" But there's also the other side of like, "Hey, you gave away some of the business." When I think about just traditionally, you usually sell about 20 to 30% of the company when you do these first couple rounds. Your first round it sounds like it was around 10 to 15%, and then the seed was also 10. The series A also 10. You only sold 10% of the business in each of these cases. So, you can make the argument of, yeah, the valuation was too high, but if you get through that and continue to build a big business, it doesn't really matter.
Sid:
Right. Yeah, we're now at $16 million in ARR, so I hope it's been a decent bet for Tiger.
Turner:
Yeah, you could probably say like, "Oh, it's the same valuation or very similar." And that's good. That's probably outperformed the rest of most venture portfolios. Just keeping it steady or maybe it sounds like maybe you're up a little bit, if I'm just taking a guess. If you can take us inside working with Tiger, how has that been, just for founders who are curious about that experience?
Sid:
Yeah, so something I actually really appreciate about Tiger is, and continue to, is they're very no BS. So when we were talking to John, it always felt like he's very direct with us. I'd had other conversations with other VCs and frankly I never got sucked into any of a pitch where people offer the value add. And quite frankly, it's like I have a lot of faith in the founding team, I have a lot of faith in the advisors that we have, with Ankur, with Conrad, with Wade Foster from Zapier, who's now my CEO coach. I've always felt like I've had everything we need, so I don't need a seasoned investor to tell me how to build a company.
And Tiger backed that up, because when I talked to them about their value add, they're pretty straight up about it that, "We back awesome entrepreneurs and we get out of your way. The value add with us as you don't have to deal with BS," essentially. And that was the right pitch for me at that time and maybe even continues to be. Which is like, "Yeah, that makes sense, you guys have the capital and the reputation." And it's like, "This win-win for all of us, we're going to put that money to good use, we are legitimately trying to a 100X your money. We're building a great product and going after a massive TAM and you trust us to do that."
Turner:
Yeah. I mean, I get maybe a pitch for myself. That's usually what I say to founders. It's just like, I think this value add thing is just total BS. I think it's a waste of time for me to be coming in and telling you how to run your business. The way I think about it is, I just try to be really responsive. It's just like, whatever you need, I'll do it, I'll try to help. But anything I'm going to tell you, this value that I'm going to add, everyone else is telling you the same thing. So at the end of the day, it almost doesn't matter. Maybe you have something super unique.
Sid:
All of the best investors, by the way, in our cap table are that. Encore, Nick, David Tisch from Box Group, where it's just, whenever we need them, they're there, they're super responsive. And we try not to need them. And we try to just impress them with our monthly updates.
Turner:
So on that note, that was actually a question that Dave at Bungalow, who, existing investor introduced us. He said, "You got to ask him about these investor updates on the clock every month, first of the month consistently for three plus years, however long you'd be doing it." Can you just take us behind the scenes of those updates? Why are they so important? Why are they so good?
Sid:
Yeah, it's all about self-accountability, right? So I wrote my first investor update in January of 2020 after having raised that pre-seed, the $1.7 million pre-seed. And my mentality was, I've raised $1.7 million, I need to 100X this and I need to tell the people who gave me the money how my company's doing. And I also need to tell the team how everything's going. I need to be honest about everything and I need to be accountable first and foremost to myself, because writing the update as a forcing function. And by the way, Encore also has been terrific at that. So I'd always read the investor updates at Teachable. He's always very transparent with the team. So I just felt like it's a no-brainer to do that.
So, it's kind of turned into this ritual for me at the end of every month. I have a lot of fun actually writing the update now. And it's no longer just about the numbers. I mean, I'm super transparent with the numbers, but I just see it as an opportunity to have a bunch of high leverage communication with my team, with the investors, and it takes maybe a couple hours of my time once a month at most.
And I think it is not something I was very intentional about, but on their end, if I was to imagine, if I'm getting these updates month over month or for multiple years, it builds trust. Because you're watching that journey, you're watching me say stuff and either do them or not succeed, but if I don't succeed, I'm telling you why. So that feedback loop then also motivates me to want to be honest and to deliver a great update. And so yeah, it's just super recommended for any early stage founders. Do the monthly update, always report your revenue, always report your churn, don't BS the numbers and just use that as a forcing function to just get better month over month.
Turner:
Yeah. Even on the not reporting churn or do report your churn. If you just say, "Our biggest problem right now is churn because credit cards are getting declined," or something. If you dissect it with your cap table, you have a 100 people, whatever the number is, I'm sure at least one person in there can be like, "I have dealt with this before," or, "I know this guy, he's an expert on solving credit card churn," or whatever the biggest issue is.
Sid:
Yeah, it's a newsletter, how I look at it, and you're building and engaging that audience just coming back to everything we're about. And so when you need them, they're there for you. You're not just going to investors to ask for help and they're not going to have any context.
Turner:
And then just generally, you guys are doing fairly well. What's the state of Circle today?
Sid:
So from a number perspective, and then maybe I can get into product and vision. We've grown from eight to about 16 million in ARR this year. So we grew from four to eight last year, one to four before that, and then this year it's been eight to 16. And I think that's been pretty decent, especially in the times that we are in right now. And the goal is to keep that up, for how long, can we roughly double with a new constraint that I've added, which is we want to be cashflow positive by early 2025. Cashflow positive with say 12 to $13 million in the bank. So something I realized, especially in the last six to 12 months is the macro shift that is like, there's nothing better than owning your destiny, being cashflow positive to ourselves, to the investors, to everyone involved. It's a signal of building deep tangible value that your outputs are greater than your inputs. And we can just fund ourselves to a 100 mil plus ARR, that way we're never going to have to raise again if we can do that.
So, I've just set that constraint up for the company that we're going to be cashflow positive no matter what. Now, whether or not we grow 90% next year or 85% or a 100%, I don't know, but we're going to try and grow as fast as we can with that constraint. And we're not going to rush into it. So a lot of founders when they don't have this goal set in advance and they realize, okay, the runway's been dwindling and now we're at 15 months, at 12 months. It's too late, you can't do anything about it. But as a founder, you have Google Sheets or Excel, you can model it out and say, "It feels like if we were cashflow positive by this time and we continue to grow at this pace and here's all of the levers that will help us grow, it feels like that's a decent business." So that's sort of the numbers side.
And from a product and business side, we're now, I'd say about team of 130. One thing we haven't talked about, by the way, is we're a completely remote international company. So we have team members in over 30 countries today. And from a product perspective, a lot of the last couple years have been about completing that all in one stack. So we started with just the discussions and the spaces or channels. We've added events, we added live-streaming, we added payments, we added courses, we added chat over the last couple of years, some very exciting plans next year as well to continue to expand the stack, continue to go multi-medium, multidimensional, sync, async, all forms of community. And I think that builds up real value in an all-in-one product. And the challenge for us is always, how do we build a lot and execute at a high enough caliber so the quality of the product doesn't deteriorate? And I think that's a challenge for me as a product and Eng leader to get right.
Turner:
So there's a lot of different directions we can go based on what you just said. You hinted at some new products launching in 2024. Me, without disclosing what you don't want to disclose, can you maybe get into just the broader vision of Circle and what we should expect from the company and the product over the next couple of years, decades?
Sid:
The ultimate vision for Circle is to be the one product that helps you build an audience, build a community, build a business. And so I'd say to date, we've just been focused on the community part and maybe somewhat the business part as well, because yeah, we let you monetize and our GMB has 4X'ed in the past year. I think there's two aspects of the vision that gets me really excited, which is, so one of them is, we can build the ultimate journey product for creators and also for brands. And something we haven't talked about is, a lot of brands use Circle, so like Adobe, Webflow, Framer, Miro, Udacity. So as we talked about before, I think the line between a brand and a creator has been converging a little bit. Brands have to front up as creators and creators are now owning brands and businesses. And so it's been fascinating.
And that was a key realization early on as well, it's like, it's not really a different product for different personas. I think product is fairly similar. It's about having the flexibility and the building blocks to allow different personas to build different forms of community. So, I think for us it's about, number one, having that flexibility. Number two, having the ultimate journey product of, I want someone to be able to start off, when they've barely started to gain some traction on TikTok or YouTube or Twitter or Instagram. Start with their email list, start with their newsletter on Circle before they need community, before they need events, before they need courses. Grow that into a thriving community, grow that into a thriving business. And the goal is to be the only product that, essentially, creators and brand needs to scale their communities over time. That's the ultimate goal.
And I think going back to the challenges there, I just feel like the vision part to me is so solidified in that if we don't do this, someone else will. And you can think about examples in other verticals like Shopify for the e-commerce space or Rippling for the HR space or HubSpot for the CRM sales, marketing, customer support type space. I think someone's going to build this product for the creator's ecosystem. We want to be the ultimate product that does that, does that well.
And then, I think the challenges are all about execution. Anytime you're building across such a wide stack with the breadth of functionality, depth is also super important. And our customers don't compare us to other products like us, they compare us to point solutions that may do payments better than us or chat or courses or just the discussions aspect of community. And we have to compete on all of those raised dimensions. And the value add that we bring is, we're just one product. So, everything's super integrated, all your data is in one place, all your analytics, your workflows. From a cost perspective, you're not paying for multiple products. And so I think the value prop is super obvious. It's more about delivering on that vision that's the ultimate challenge.
Turner:
When you mentioned brands creating communities, if I'm somebody listening, maybe I'm not... And we touched quite a bit on creators, but just more broadly, creating a community in general. How do you do that around a product or a brand? What have you seen work the best?
Sid:
Yeah, I can actually tell you about how we built our own community, and I've seen a version of that with some of the communities that I mentioned, like a Webflow and Framer. Which is, for us, obviously community was something we had to live and breathe from day one. And so, it started out in that year one of just adding our customers to a community, to Circle community where the founders were sort of all in there talking to customers, standard hanging.
And what's great, by the way, about a community in the early days is you're also helping scale customer support, because yeah, they may be expecting a response from support because they may be expecting a response from you, or they can share their question and maybe someone else, like another customer, may help them out. Or maybe they can look up whatever their issue is and find a post that someone else made who had the same problem or same question and got resolved. I think that's almost a no-brainer when you're starting out, and what that started to evolve to is we started to first just do betas in there as well. Exclusive beta for events, for live streams, for payments. As we were building these massive features, we would have a group of 10 to 20 customers or beta testers get access, give us all of the feedback in a single private gated space within the community. They'd have that experience that our earliest customers did of like, "My opinion actually matters. I can share feedback, and I see that addressed right away."
The founders are in there, so those wow moments, you never have to let go of those as you scale. Though obviously the scale is a little different. Then what we started doing were events. We hired a community manager who then built a community team. We started to run weekly office hours where any customer can show up and ask a question and get help. It's almost like group support. Not even support, so it doesn't even have to be product related. It could just be you have a question about how to best build a type of community or how to price your membership. Since then it's been about scaling the community across all of these vectors of you've got the more async support type community use case to scale support is how I look at it.
You've got the more exclusive betas or VIP groups that we put together. Then you've got the events happening where you can show up and talk to Circle team members, ask questions, get feedback. Then obviously whenever we do launches, we have community events where we'll hop on and we'll show off whatever the new product or feature is. Again, we'll form that direct connection with the audience. It's not us or product people or engineers on an ivory tower guessing what people want. We're in there engaging with our customers, talking to them. It's never a guessing game.
Turner:
It's just a very hyper efficient way to do support, customer support, customer service, but also feedback and brainstorming. Then also sounds like new products. Well, actually launching them.
Sid:
And to grow because an engaged member is having an amazing experience if they're meeting people, if they're making friends, or even if they're getting to talk to the team and get their problem resolved. That's a customer that's going to talk about you to someone and will be super positive about you if you're actually helping them out. That loops back into the top funnel of your product, much like it does for creators. You're getting ideas from them, they're getting that high touch experience or semi high-touch experience, and all of this feeds back into a bigger audience, a bigger community, bigger business.
Turner:
One really interesting topic that you mentioned before we started recording... Well, actually I think it came out because speaking of Lenny, he had a really interesting interview that came out recently with Brian Chesky at Airbnb. We'll link it in the show notes if people haven't watched it yet. But you do something similar with how you design the team and structure and do your hiring. Can you explain that?
Sid:
There's two aspects to what makes Circle let's say a unique culture. One is, as I mentioned, we're remote international. We hire globally. We comp people according to maybe Tier 2 US cities. Maybe not like an SF or New York, but maybe for an Austin or something. But it literally does not matter where you are in the world. I think that approach has helped us a lot in terms of gaining access to incredibly underrated talent that wouldn't otherwise either work for a company like Circle, and also a company like Circle would not be as lucky to get access to them if we were just hiring from let's say New York or SF. Because it's hard to compete in Tier 1 US cities. You're competing with insane packages and scaled companies, and the option for a lot of these folks to be founders themselves. I never understand why any startup would want to compete in that talent pool when there's literally the entire world you could hire from.
I almost look at it as, man, another version of me, if they're out there today and if they're in New Zealand or India or Brazil or Columbia. Instead of them having to change their life around and immigrate to the US, which I was crazy enough to do, what if they could just get an incredible job with real comp and equity wherever they are and just continue to live their life? That's been awesome for us. We do two offsites a year roughly. We did one in Cancun last year. We did one in Italy, actually we actually did three last year. We split up the latter one. One was Thailand, one was in Italy. We meet up as a group two to three times a year. That's a very high-touch bonding experience. It's literally like you're constantly hugging people and you're telling stories about your life and your kids. The opposite of being in a cubicle or an office. It's a different vibe altogether.
I love that part of remote company building. The rest of the time we're just super heads down, working or spending time with our families or our friends. That's just the life balance that I've learned to really appreciate because I have an 8-year-old daughter. I live out in Great Neck in Long Island. I like the lifestyle that I have. I would never want commute into the city, and yet I get to work with super smart people. That's been one aspect of scale that I think has worked super well for us. I think I'm a bit of a contrarian now. It seems like there's a whole remote movement and now people are going back in person. I just don't get that at all. I think it's worked incredibly well for us. I wouldn't change a thing. We have incredibly high Culture Amp's NPS scores. I don't know. We're super productive I think as a team, and I just love the people that we get to work with.
It's so awesome by the way, when you're in a Zoom meeting and you have someone from Argentina and someone from India and someone from Columbia all talking to each other and learning to collaborate and shipping awesome products together. I wouldn't change a thing about the remote part. Then in terms of company building, what's been interesting is... I see myself as someone who has dual responsibilities at Circle. Maybe a little similar to Brian at Airbnb where one aspect of my job is I manage our leadership team. Your standard... My co-founders and our head of finance or head of people, head of customer support. The other aspect of my job is I directly manage our engineering leads. We have about seven teams at Circle. I was very intentional about structuring those teams very early on, which is a mistake I think we made at Teachable is that we were a monolithic team for too long, I'd say.
We're now a team of about 45 engineers and designers. It's a fairly flat organization in that NIC is no more than let's say two levels removed from me. I think that structure is one I would highly recommend for product-focused companies with product-focused CEOs because you get to have your cake and eat it too. You get to run the company, set the culture, do all of the CEO stuff, and you get to really have your hands on the steering wheel when it comes to the product vision, the strategy, the execution. Which, by the way, then inspires the team to do great work because you are connected to them. You don't have an intermediary like a head of product or a bureaucracy in there repeating your vision to the ICs. You are in there day-to-day almost on the assembly line as Elon sometimes describes himself. That's the vibe that is set. I think it's highly energizing for strong ICs in my experience.
Turner:
Then doing all of this remotely is an extra challenge to this slightly unique way of doing it. What have you learned on doing that efficiently?
Sid:
Again, I feel like it's less of a challenge because I think remote forces you to write, to document, to be async wherever you can. We've had that skillset set from day one. We have updates and docs flying around left and right. What shouldn't be a meeting shouldn't be a meeting, and I think people forget that in-person environments where maybe it is fun to get into room and to banter with your colleagues about stuff. But also, if you're super busy is the time to do that really within the context of a status update meeting, which could have been a Slack message that someone just skimmed past and got the gist of? I think people don't contextualize the dynamics and the cost of all of this. I recently learned about Toby from Shopify putting a price or a cost on each calendar event to communicate as employees about how expensive a meeting is.
My understanding is if you're a Shopify employee, your calendar invites have a cost in there that tells you how expensive a certain meeting is. By the way, I'd love for that to be a product one day if anyone's building that. I think even if you don't have the exact cost in mind, you can tell that, okay, if there's 10 people in a room that's a super expensive meeting. Are you really getting the value of 10 people's best ideas and their best selves? Or are most people just barely listening and tuning out, and there's maybe one or two people likely the highest people on the corporate ladder-
Turner:
Spewing.
Sid:
Yeah. Spewing brain dumps that no one is listening to, which is what a lot of these companies become which is why it's dreadful to work at a lot of these companies many years down the line. I think remote forces you to think what is it that should be async? What is it that should be sync? People run out of steam eventually on Zoom, and that's a real thing. It's hard to sit through eight hours of Zoom meetings. But also, you can maybe cut down the amount of meetings you need to sit through. Because in a well run company where people are documenting stuff, people are sharing updates async, there's less to meet about. What I like to do is I like to make my meetings as fun and meaningful as possible. It has to feel like the opposite of a boring status update. It has to feel fruitful when you're in there.
Turner:
Actually, on the note of the price of a meeting, there's this really funny guy on Twitter, Soren Iverson. He does these basically fake product tweets. One example will be on Tinder, you can see what the person's response rate is or it will call out them lying on their profile.
Sid:
I've seen this. Yeah.
Turner:
The one that he's-
Sid:
He's hilarious.
Turner:
I think one of them is on a airline booking. Like booking your flight on Delta, you can pay to steal a seat. One of his funny designs was actually cost of a meeting where it was like each calendar invite will show the cost of the meeting. It's funny. It actually is a real tangible thing when you look about when you're calculating different metrics or numbers or efficiency of the business, it's a hidden cost. It's like, "We have too many meetings and nothing gets done." You're technically spending money on those people's salaries and the time. If you've got, like you said, 10 people in a meeting. If everyone's making 100 bucks an hour, hour meeting. $1000 meeting.
Sid:
It's just a no-win situation in those bad meetings. Literally no one is winning. There's no net benefit to any entity. Whereas I do feel like remote actually forces you to think about that dynamic a lot more. It's also, by the way, easy to get remote wrong. If we lean too hard on async and if we lost the human connection and the vibe, that's not great either. Or if I was just in Zoom calls literally all day every single day, as with our leadership team, that would not be great either. I think you have to strike that balance, but I found it easier to strike that balance in a remote environment than I did in person.
Turner:
I had Wade Foster at Zapier on the podcast I think two weeks ago. We actually... Sorry. It was a couple of weeks ago. We publish it the day that we are talking. I usually ask people like, "Hey, do you have a suggestion on another guest we should have on the podcast?" He suggested you. He described it as like, "Yeah, this guy. You probably haven't heard of him, this founder. This is his company. He's just really impressive. I'm his coach." I was like, "I have heard of him. He's coming on the podcast. How did you get Wade as your coach and has it been beneficial? What's the relationship look like?"
Sid:
Yeah. Wade is one of the most incredible people I've ever met in my life actually. Wade actually came on as a seed investor at the 40 mil seed round. He was just one of those maybe 10 to 20K checks. It made sense. I love Zapier. Circle is a Zapier partner and so on. I'd heard of Wade's story in passing of like, "These are the guys who never really raised a VC round after pre-seed." You can now see why that would appeal to me as if... To me, it's like that is the ultimate success story. I'm more impressed by that than I'm by the unicorn that's on their series F at a whatever billion dollar valuation.
Turner:
That was an inspiration for you was what WhatsApp did?
Sid:
Yeah. When I first talked to Wade when he was investing, so I think it was maybe a half an hour call. Wade gave me so much incredible advice about all of this stuff. Actually, Wade was one of the people I talked about whether I should raise the four mill. The... What is it? I don't know if it's called a party round or whatever, but that or the institution round. Wade was one of the people I reached out to and spoke with, and so just incredible advice. On and off, I talked to maybe once a quarter after that. He would have the most awesome advice. After every single call, I wouldn't have to debrief on that for myself. I might sometimes used to share certain notes with my co-founders. It would just always end up being like, "I just had the most incredible conversations with Wade ever. It's game changing." I did not have that experience if I'm being honest with anyone I talked to during that journey of like, "Oh my God, there's so much that I've just learned."
Each time it's like every conversation with Wade had continued to blow my mind. When I was looking for a coach, one of the conversations that I reached out to him about is like, "Hey, can you help me think through what is it that you would look for in a CEO coach, and how did you get your CEO coach?" Wade talked me through his reasoning. He has a coach himself who's more a professional type of coach from my understanding. Less so a founder, but Wade talked me through that dynamic and how helpful it was. Wade introed me to his coach. I did a bunch of these open-ended conversations with like potential coaches. I got super sold on the value add of a coach. Eventually I just went up to Wade and said, "I love the coaching model, but I've been thinking a lot about... I wasn't as blown away talking to those professional coaches as I am every time I talk to you. Is there any world in which you would consider being my coach using a very similar format to the one that you follow with your coach?"
"We'll talk sometimes once a month. Sometimes could end up being once a quarter. Really whenever you're free. Whenever I need to reach out. It's ended up being a roughly once a month. The thing that I have to offer... Because Zapier is a 5 billion company. Wade is a founder, CEO. Wade has many better things to do. The thing that I have to offer, the only thing is that I will be super transparent with you about all aspects of everything that I'm facing. Maybe it's a way for you to also bounce certain ideas to get insight into other dynamics. Also by the way, to be someone who offers insights and guidance without ever having to implement it. I will tell you about the follow through. It's almost like you can experiment on your insights and your ideas through me. Give me that feedback. I will implement something, and I will tell you how it went. That'll be more data for you."
Essentially, that was a pitch to Wade and with a little bit of equity, but nothing meaningful I'd say compared to the actual value that he has to offer. He agreed. I've found Wade to be a super, super awesome guy. I often get the sense that... He's what? Maybe 11 or 12 years into Zapier. He doesn't have to do any of this stuff. I think he just deeply loves all of it. That's inspiring to me because I see myself as wanting to be that 10 years in, 15 years in of when you have someone who's like world-class who's crushing it and eventually they're purely in it to crush it, and not in it for the financial reward or to have an exit or to do the next thing. Every time I talk to Wade, I'm like, "Zapier's going to 10 to 100 x where they are right now." It's just that passion really rubs off on me, and so it's incredible value add if you can ever convince another founder CEO that you look up to be a mentor or coach. I would just incredibly highly recommend it.
Turner:
It almost sounds like the pitch to them is maybe there's an equity component. A small... They do benefit financially. Maybe they just invest, like they're an angel investor. That's the equity component. But it sounds like it's... I will be in the weeds and I'll share exactly what I'm... Hopefully you'll learn some things from me too.
Sid:
I hope to be a mentor to someone else someday too. I just feel like it's just such an underrated thing for founders to do. The other thing I found, by the way, is no one truly empathizes with all of your struggles unless they are in that situation. Unless they're founder themselves. I found founders to be the most honest and altruistic people in terms of how they go about giving and sharing advice. Investors and folks in your team even, even your co-founders at times just do not have that level of maybe exposure and honesty to do that as do seasoned founders and CEOs.
Turner:
That's partially why I like running my own fund. It's not the same. Running an investment firm in a startup is not the same, but there's elements of it where it's like your name's on the door, you have to do everything. There is some pressure in some sense. You do feel some of the same... Life or death. You got to do things. You got to get them done. It makes it a little bit more relatable as an investor, as somebody who didn't previously build and scale an Exodus startup. One question we've been asking a lot lately, there's this Instagram page, it's called Traded VC. Everyone loves it. They post a lot of great content for founders. Some serious stuff. Some funny stuff. They have a question for you. Do you have any one single piece of advice for other founders?
Sid:
Yeah. I think there's a lot of advice. But if I get one piece of single advice, I'd probably say don't bullshit yourself. Don't get high on your own supply. Question yourself. Be super humble. Be transparent. Get all of the feedback and stay relevant. Stay true to yourself because I really feel like a lot of the downfall and the downward spirals, a lot of those situations stem from a founder who's just not been very honest with themselves for many months or many years. I think that is a kernel of what ends up in a story where you hear of startups that scale up to hundreds of millions and then eventually have to shut down or exit at a lower than ideal valuation. It's likely because the founder has been telling themselves a narrative, let alone others, that is not true and has not kept up with the reality.
Turner:
That's fair. When you really think through a lot of those maybe high-profile situations we've thought of, there are cases where it was going really well. Sometimes the media will paint a narrative of like, "The investors were scammed or screwed or the employees or the customers." Maybe that's true, but there are a lot of cases where it was real. There was truly tangible things that were being done.
Sid:
A great quote I've heard, by the way, is, "You have to deal with reality or reality will deal with you." I found that to be so true in life.
Turner:
I've never heard that before. "You have to deal with reality or reality will deal with you." Wow. Okay. That's probably a good way to end it. The meat of all the discussion. Do you want to just do a little bit of rapid fire? Just a couple quick questions.
Sid:
Sure.
Turner:
Do you have a favorite emerging creator right now? Someone we should all keep an eye on?
Sid:
Yeah. I love a guy named Myles Snider, his name is. Myles, I think he's born in a family of chefs. He's a cook himself. Myles is very akin to the narrative that we talked about started a newsletter, I think it was on Substack, teaching people recipes. Built an audience. Started a Circle community and online course called 80/20 Cooking. He does these four-week cohorts where you get in, it's very immersive. It's multiple life sessions a week. You're in there with a bunch of people who are learning to be I wouldn't say professional chefs, but great cooks at home. I just find his story to be so inspiring with the background that he comes from. I've been lurking in his community a little bit. I just find the vibe in there is so awesome and I'm like, "Man, I would love a world in which there's maybe thousands or hundreds of thousands of miles out there doing something awesome for the right reasons, having incredible impact and making a ton of money."
Turner:
I love it. Do you have a favorite go-to interview question when hiring?
Sid:
One thing I do with my interviews is I like to keep them fairly informal and non-standardized. I find that the best conversations are ones that you don't plan too much for and things spur up in the moment. What I just like to do is I get deep with people about what they're passionate about. I want them to share stories about the moments in their life that set them up on an incredible trajectory, or maybe they failed on a certain project or initiative that they learned a lot from. But I just like getting deep and personal people, and I find that through that you get to learn a lot more about the person than short smart questions to which people have planned and wrote answers for.
Turner:
Last question, do you have a favorite new startup or tool that you've discovered or started using recently?
Sid:
I actually love ChatGPT. I use it honestly as a sparring partner where I will tell ChatGPT about what I'm thinking and how I'm thinking about it. I will ask it to respond to me and critique my ideas. It's very different from how I see a lot of other people use it. I don't use it to automate myself or to write on my behalf or anything. By the way, Wade is someone who's [inaudible 01:59:01] talked about this topic because he does use it I think in the right capacities. I use it more as a reasoning engine, thought partner of like, "Here's an entity that has unlimited patience. Who you could talk to day and night about your ideas, and it keeps getting smarter and smarter."
Turner:
Yeah. It's just a large language model. It's favorite way to respond to your questions. You can't tick it off. It'll keep going. It'll keep answering.
Sid:
Yeah. The app especially is so good because you can be lying in bed and be like, "I wonder what ChatGPT will think of this." I'm big into reading philosophy. I will often have it ask super obscure questions about Plato and Nietzsche. Like, "What would X, Y, Z think about the other person's argument?" I find that it's extremely smart and on point and just continues to get better. It's the most trite and obvious answer, but it is truly life-changing where a lot of this is headed.
Turner:
Yeah. Have you experimented with any new LLM-related features in Circle? I guess have you done any or thinking about any, or do you think there will be any in the future?
Sid:
Yeah. We actually did a launch for what we call community AI back in June. The idea with that was... This is right when a lot of this stuff started popping off, and so we did a bit of an internal hackathon. We launched a content co-pilot for long-form writing, especially for the community managers and creators. We launched automated transcriptions for any video that you upload. We launched a machine learning model for activity scores to measure engagement, and we are working on something... It's incredibly exciting in this context of blending AI with the knowledge within these communities. I'm not quite a believer in you're going to have AI bots talking to each other because I feel like community's the opposite. Community's an area where you want humans to interact with each other. I think even in a post-AI world, community matters a lot. But I am a fan of helping the community builders get a lot more done and helping the members get answers to stuff and to all of the social wisdom and knowledge that might be in there. We're solving for AI within the landscape of community in those two areas.
Turner:
Interesting. When will we see those publicly? 2024 sometime?
Sid:
Definitely 2024. Yeah. I think we're planning something towards Q2. It's a new thing, by the way. We're not looking at any other product or comparison that exists. I just feel like when you apply a lot of these concepts from first principles to an area like community, the opportunities are endless and there's just so much stuff to experiment with.
Turner:
I'm excited to see it when you guys watch it. Well, thanks for coming on. This was awesome. This was a lot of fun.
Sid:
Yeah. This was an incredible conversation, Turner. Thanks for having me on the show.
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