Woman: From the campus of the Wharton School in San Francisco, this is Startup School Radio. Here is Y Combinator partner Aaron Harris.
Aaron: Hello and welcome to Startup School Radio live from Wharton's San Francisco Campus on SiriusXM's Business Radio Powered by the Wharton School. I'm your host, Aaron Harris. I'm a partner at Y Combinator where we fund early stage companies and work hard with them to build billion dollar businesses. Every year at Y Combinator we do a conference we call Startup School where we bring amazing founders to tell the stories of what they've learned building their companies; the screw ups, the successes and everything in between. Here on Startup School Radio we'll be bringing those founders to you on a weekly basis, broadcasting every Wednesday at 1 p.m. Eastern, 10 a.m. Pacific with the goal of helping anyone thinking about starting a company learn how to do it better.
Coming up on today's show I'll be joined by my partner at Y Combinator, Kat Manalac, to talk about how she thinks about finding and helping great startups. We'll also talk about her previous work at WIRED and what it was like working with former guest on the show, Alexis Ohanian. Plus founder of Silicon Valley company Bellabeat, Urska Srsen talks about why she decided to found a company producing smart devices and wearables for women. If you're thinking about starting a company or you're an entrepreneur in the early stages of running a startup and have a question for us we'd love to hear from you. You can e-mail us at
[email protected] and be sure to follow us on Twitter @BizRadio111 while I tweet under the handle @harris.
I'm happy to welcome my first guest today, my partner at Y Combinator, Kat Manalac. Kat's with me today to talk about being Director of Outreach for Y Combinator, as well as her previous work as Chief of Staff for Reddit co-founder Alexis Ohanian, and what it was like managing brand and strategy for WIRED. Kat, thanks so much for joining me.
Kat: Happy to be here Aaron.
Aaron: Kat, we've spent a lot of time together in the last couple days and I'm looking forward to spending a little more time together today. So we just went through all of our interviews at YC. That's the time of year, well one of the two times a year where we bring in all the companies that applied that made our bar that we actually want to meet in person. It's kind of a whirlwind.
Kat: It is. We get over 5000 applicants and then we bring in - it was about 430 teams.
Aaron: Yeah, it was a lot of interviews.
Kat: And we met between 17 and 25 companies per day for the past, was it five days?
Aaron: Five, six I don't even know, my brain's a little fried.
Kat: Yes. Our brains are a little bit fried today but...
Aaron: It's funny because there're a lot of startups in the world and there're a lot of people trying to start startups and I think that number is increasing all the time. And one of the toughest things to do I think is, obviously it's hard to choose the right companies but I think before you have to choose the companies you have to find the really good ones. Now there are obvious places where those companies exist. Okay, Silicon Valley there're people starting companies but we see companies from all over the world and more than almost anyone else at YC you've been spearheading the effort to find great companies in more places.
Kat: Yeah, that's been one of the most interesting things of the past couple years. We've really seen an increase of applications from all over the world, from every country and from people that you wouldn't necessarily expect to start startups. And so it's become this much more common job now, I think, as people realize that it is a path that they can take.
Aaron: That's a pretty interesting idea. I mean normally people think about the jobs they can do as being, "Oh, I can do this pre-defined path, this thing, a doctor or a lawyer," it's kind of standard. What do you think is going on that more people are saying, "Hey I can actually start my own company," is this something brand new out there or is it an evolution of another idea?
Kat: One of the things we saw with applications at Y Combinator is in the summer of 2012 we had a massive spike in applications and that was right after the Social Network movie came out. And I think that's something that, people's parents started to realize that this is a viable career option for them. People started to think about this. As you started to get major successes from founders it became something that people were more comfortable doing.
Aaron: That's crazy. So you think it was the movie that actually influenced people to start companies?
Kat: I think people began to realize that it was an option and that it could be huge for them. And so I think that was one of - I think media it's become - you have Silicon Valley the TV show, you have all of these, it's become... every news organization now covers tech and they have many people on their staff specifically looking at what is happening in the startup scene and I don't think 10 years ago this was the case at all.
Aaron: It's really interesting because you say 10 years ago but I'd go back - 10 years ago actually Facebook started, 2005. I'd go back further when looking at this trend and say look at the first tech boom or the original tech boom in the late '90s. A lot of companies got started, a lot of companies got funded, a lot of people made a lot of money.
Kat: Right.
Aaron: But the penetration of the Internet at that time, people had it but it wasn't as deep a penetration as it is now. It certainly wasn't as much of people's lives.
Aaron: And certainly, I think, since then the smart phones have exploded. Everyone is on mobile. Everyone has a mobile phone. You go to almost every country and that's people's first introduction to the Internet and so many more people I think are building for the mobile.
Aaron: Yeah, and not only are they building for mobile or something like that but I think people are more aware of the fact that technology is touching their lives on an everyday basis. I think it used to be you had a computer, oh, it was like this complicated box that sat on your desk that you used for work. And now everything you do in life in some way is influenced by technology. You need to find your way from the subway to a store, you pull out your phone and you look at Google Maps and you think to yourself, "I'm going to use Google Maps," not "I'm going to use a map." "I'm going to use this product created by someone that is on this other product created by someone that I'm using and that's going to get me where I'm going." That's a crazy idea.
Kat: It is crazy. I mean if you think about even the coverage of technology, when WIRED Magazine started in the early '90s, that was something that only super early adopters and academics and very early tech people read and now it's this.
Aaron: You can say nerds, it's okay.
Kat: Basically nerds. And now you have - everybody reads it.
Aaron: Right.
Kat: It's very consumer. You're right, everyone is so aware of how technology is impacting culture and your day to day lives. And I think it's become easier and easier for people to build companies. You don't need as much deep technology experience and background.
Aaron: Yeah, I think it's funny. I'm joking about WIRED was read by nerds in the early days but it was true. Something that's happened is that I think it probably used to be a negative term and now I think it's actually pretty positive, it's like, "Yeah." I wonder if people self-identify because they build things.
Kat: Yeah.
Aaron: Like, "We are the ones who are making things happen and bringing technology out." And I think it's become a good thing to identify with and it's flipped the social order a little bit or maybe we're just in a bubble of our own making.
Kat: Perhaps.
Aaron: We think we're the cool ones but I don't know.
Kat: One thing that I think has driven a lot of entrepreneurs around the world to start companies is seeing examples of people from their own regions become successful. So I think that is what, for YC, for applications I noticed a spike in applications coming from France. And I believe you had Matilda on the show.
Aaron: Yeah.
Kat: And I think in the batch before you had a company called Algolia and everyone in France, they were in the press a lot as being funded by YC and the founders in France realized that we were interested in funding French companies. And from then we had this snowball effect. You'd more founders applying and I think more founders realizing that it was an option to start companies. But as we've traveled around the world one thing we've seen is that the investors in anywhere else other than Silicon Valley for the most part have less of an appetite for risk. So it's been hard traditionally I think for a lot of these startups around the world to raise capital. But now I think more are seeing that they can raise from here or there's also crowdfunding of course which has fueled some of that growth.
Aaron: So let's talk about that risk thing, because that's a really interesting concept. I guess maybe here in the States the idea of starting a company and that's the thing that you do is dearest in several ways. One, there's capital available for people, so that's cool. Two, I think the bigger risk for a lot of people is social pressure.
Kat: Right.
Aaron: "Oh, I can't believe you're starting a company." I remember when I stopped working in finance and went and started a company my parents were a little miffed. This was back in 2007. And then I remember the day we got funded, the day we took funding from Sequoia I was talking to my mother and she said, "Oh, maybe this means you can get a job now." I was like, "No mom, that's not actually what we're talking about here. This is the thing I'm building.' And I mean, she was joking but kind of not because she was still thinking about the traditional path. Do you think that in other countries where people are coming from, I mean all those risks I think are still higher. Do you see certain of them falling faster?
Kat: I talk to a lot of founders from - for example I just met with a bunch from Korea and Japan and a group from Switzerland came by and they said that there's still a lot of social pressure not to fail. And they think that in Silicon Valley there it's okay to fail, there is this appetite for it. And here we are very lucky in that if you start a company here, it's very easy for you to get hired by another company should your company fail or acquired. And that kind of social net doesn't exist anywhere else.
Aaron: Right. Yeah, I mean that's super interesting. I love what you said about the idea that part of what spurs founders in a given area is good founders coming back in and being an example. And it's kind of central to something that we've talked about before in the context of YC, which is come to Silicon Valley. This thing you're talking where it's okay to fail here. And I think that people coming to the San Francisco Bay area from other places can get a lot of that even in three or four months and take it back with them. But I wonder if you have a sense of what it is about this small area of a country and certainly fairly small area of the world that is so special? Is there something in the water? Why are we okay with this?
Kat: A lot of people have asked that question and I don't think there's been a really comprehensive study of why Silicon Valley. But I think it's a mix of there are incredible schools here. We were the seat of where as you said the first dot com boom happened, where early tech people built their companies. And so then you had a lot of people as you said get very rich in that first dot com boom and then started funding companies themselves.
Aaron: Right.
Kat: And still I think that the best investors to get are people who've built companies. You want those people who can empathize, who can give very actionable advice. And so you have that ecosystem of investors who've built companies themselves that still live here and that are funding companies. And so I think a mix of talent and capital. And there was this - California and San Francisco itself, it's changing so quickly. I grew up here but - in the past even 20 years I've seen it change so much but there's always been this sense that you could experiment and try new things. And it's I think always been something I grew up around.
Aaron: Yeah.
Kat: And so I think it's really exciting. Everyone in California is seing us as pioneers and we've seen ourselves that way for hundreds of years at this point.
Aaron: Right. It's just funny, trying to argue it goes back even further than 20 years. I mean you have the early semiconductor fabs going back to just post World War II when people were really developing the first computers. They were based here and then running through Xerox PARC and HP. And all these companies were here and then you mix that and I'm not making - this is not an original argument for you to make, you mix that with the counterculture movement which was here. I mean the Grateful Dead started on, "Hey."
Kat: Right.
Aaron: The Warlocks I think was their original name. That's part of it, it's pretty well known that Steve Jobs dropped acid or whatever. The drugs, it's this creative momentum and this creative thing [inaudible 00:14:30] technology.
Kat: It's true. Even today I think the tech community is very open to alternative lifestyles and alternative ways of thinking.
Aaron: Yeah, so you've lived in San Francisco, you've lived in New York. There are incredibly successful people in both places but I think there is probably a difference in terms of the way they approach things. Do you get the sense that what happens here in San Francisco is unique? Is this the only place where you can actually build one of those big companies?
Kat: It's hard to say because I believe you can really build a great company from everywhere. But I do think it helps anyone from anywhere in the world to spend at least three months or to spend a certain amount of time in Silicon Valley as you said, meeting . . . there is so much talent, there is some serendipity when you're walking around somewhere just because you see all these other founders, all these investors and you're just walking down the street. So I think it benefits anyone to spend a few months here to soak up that knowledge, to make those connections and then you can go back as you said, to New York, to London, to wherever you're from.
Aaron: Yeah. It's funny, you mentioned France which is a place we're seeing a lot of companies from. We were talking the other day about India.
Kat: Yes.
Aaron: We had obviously a massive market in India and we had a company I think three batches ago or two batches ago funded by [inaudible 00:15:56] called ClearTax. I think it was one of the first companies Indian founders based in India.
Kat: Yes, it was the first company that was building a product for the Indian market.
Aaron: Right, and they came to YC and they did YC and they went back and people went bananas, like all over. The press, all over, everywhere. And I've noticed and this is anecdotal, I haven't actually run the numbers, a huge influx in Indian companies and Indian founders that we're seeing and just amazing companies. So it seems like your thesis about sending people back works all over the world.
Kat: Yeah, I think that is the most powerful - for example, even just doing college tours within the United States we always go - YC will go and do an event and we'll bring back alumni from that school. Not only alumni from YC but people who have graduated from that university. So we'll go to Harvard and we'll bring you back or we'll bring back a few other - Tyler from Clever or Parker from Zenefits, we'll bring back those founders to tell their stories.
And I think that's some of the most powerful messaging that we can send out there, that this is someone who was just like you and the only thing that separates these students from these founders of billion dollar companies is a few years.
Aaron: Right.
Kat: And I think that is just so powerful to show people that they can do it too. Basically it's the whole concept of if you can see it you can be it.
Aaron: Right. If you're just joining us, I'm Aaron Harris and you're listening to Startup School Radio. I'm speaking with my partner from Y Combinator, Kat Manalac, and we were just talking about this idea or as I think Kat just put it - if you see it you can build it. And it's this idea that examples of great companies and examples of great founders inspire other people I think to do great things. You were just giving this example of college tours and there is this funny thing where lots of people start businesses and there is absolutely no age restriction in terms of how old they are or where they're from. But there's this, it's kind of a meme of - all the people starting these tech companies are like these young people and there is some truth to it, right? And I think it goes back to the thing you said before, which is risk, where the people with the least risk when it comes to starting a company are going to be people straight out of college or in college because they don't have families to support, they don't have home . . .
Kat: You have a low personal burn rate, you're used to eating Ramen.
Aaron: It's a funny thing. But what we're - I know we're seeing even at YC is that we're getting applicants from all over the age range and starting incredible companies. Do you think that that's a function again of a change in how people are thinking about the I think the upper bounds of what they can accomplish with a company or is it just some sort of sampling error that we happen to be seeing at YC where we see a bunch of applications and we happen to be seeing more? Or is there something underlying going that's not just people from different countries, it's people from all different professions and ages saying, "Hey, I can turn this idea that I had not into a late night infomercial product or something like that but a huge company."
Kat: I think one of the things might be - so the founders that we get that are from the older end of the age spectrum tend to be category experts. People who've been working in their industries for a while who are experts in their space and realize that there are a number of problems they can fix and that they can do it themselves and they can build these enormous successful companies around these insights that they've built over the past 10, 20 years that they've been working in their industry. And I think more and more people are seeing building startups as a viable career path. So I think again that's a reason why we are seeing more applicants from the entire spectrum.
Aaron: Yeah. That subject matter thing is such a cool thing to me because the way I think about this is there're companies that I guess are startups that come out of thin air kind of thing. I think Facebook is a pretty good example of this. It was like this thing, I mean yeah, there was Friendster before it but there was no real analog in the real world. It wasn't solving a known problem of an industry. It was "Okay, we're going to build a social network which is going to help connect people more." And actually the original thing was at Harvard we had these things called Facebooks, right, which had literally little pictures of every person in every house.
Kat: Yeah, they were paper books.
Aaron: Yeah, we also had them on our intranets.
Kat: Oh?
Aaron: We had them on our intranets. But you couldn't access the Facebook of another house if you didn't live in that house. It was coded to your e-mail address and your house affiliation. And the original thing was like, "Hey, I want to see someone from that other house that I met at that party last night because I thought she was cute," or something like that. And that's why we originally all signed up.
Kat: Right.
Aaron: It was to do that. So there was like this analog problem that it was solving but it went so far beyond that. And I think one of the cool things we're seeing now is people who are taking problems like logistics and saying there is a much better way to solve logistics. Or Zenefits, which is one of our companies. Parker said the way that companies do health benefits for their employees is stupid.
Kat: Right.
Aaron: And a kid in college probably isn't going to have that idea because they've never had to deal with it.
Kat: Exactly.
Aaron: And so that opens up the universe of startups I think almost infinitely?
Kat: Yeah, almost infinitely. I mean we're seeing people who have worked in the medical field, we're seeing doctors or scientists or people who - as you're saying logistics or insurance. And that's been really exciting to see them solving their own problems.
Aaron: Yeah. Have there been any startups that you've seen come through where you were like, "I never thought in my life that someone would make a startup out of that?"
Kat: Oh God, I'm sure there's a few. I'm trying to think of...
Aaron: We got a rocket company in the last one. That, like literally space.
Kat: Yes.
Aaron: Putting things into space as a startup. I think that blew my mind.
Kat: I think that's not something that I'm surprised people are making companies out of but those are I think some of the ones that are most exciting to me. They're so ambitious.
Aaron: Yeah.
Kat: And should they work they'll be huge and will impact hundreds of thousands of people potentially and I just love that.
Aaron: Yeah. One of the things that I think I'd love to hear your thoughts on because I know this is an issue that you think about a lot is there's a lot of conversation about diversity in technology overall, in founders in terms of starting companies. How do you think about the issue and is it a problem? Are there are solutions? Is it something to work on or is it the way the world ... how do you think about I think of this?
Kat: There is multiple parts of this problem.
Aaron: Yeah.
Kat: So the one thing that we noticed is for the last batch, we haven't run the numbers on this batch yet but for the last batch 23% of the companies that applied had a woman founder. And then it turned out that 23% of the companies who we interviewed had a female founder and then 23% of the companies, around 23% of the companies that we funded ended up having a female founder. Why isn't that...
Aaron: It sounds a little too perfect.
Kat: Yeah, I mean actually ...
Aaron: And we didn't control for that. That wasn't...
Kat: We didn't control for that at all. What we saw was that the percentage of companies that we accepted had a woman founder was proportional to the percentage of companies who applied. And so I want to see that closer to 50% of the companies who apply have a woman founder. And so what is the... that part of it is a pipeline problem. And so we do things like the Female Founders Conference.
Aaron: What is that?
Kat: It is a conference we do every year. It's Startup School essentially that highlights a lot of women founders as speakers. So we take a lot of our alum that are doing very well, we had Adora Cheung from Homejoy. We had Tracy from PlanGrid and then we also had...
Aaron: Tracy was on the show a couple of weeks ago.
Kat: Yes, so you're familiar. And then we take women in the community like Kimberly Bryant from Black Girls Code, the founder of Eventbrite, Julia Hartz and they tell their stories. And so the point there is for women to tell their stories from the very beginning; how they got started so that to inspire women who haven't started a startup yet or are interested or maybe in the very early stages to keep going and to keep building and to help them build a network of people that can help support them. And so we saw I think it was one out of eight attendees at the last female founders conference applied to YC. And I can't say who ...
Aaron: How many attendees were there?
Kat: There were 700 attendees.
Aaron: That's a lot of people.
Kat: That is a lot of people. It's a free conference and so we'll likely be doing it next year and I would recommend anyone apply and we take people from all over the world. Women flew from India, from London, from New York and all came together for one day. And it was really exciting and the atmosphere was just electric. And so I'm really excited to see that women are actually starting companies with people that they've met at the Female Founders Conference. I'm seeing on our applications from this batch that women said that they applied because they realized YC was a supportive place for women. And we have a couple founders that we funded who attended the last Female Founders Conference. So half of it certainly is a pipeline problem. And getting more women to start companies and getting more women to apply.
I think the other part of it is basically keeping women in technology careers because I think that's a huge piece of it because you get a drop off. You get a lot of - I don't know the stats off the top of my head but you get a large number of women in engineering leaving.
Aaron: Right.
Kat: And so I think that there is - and I've seen companies trying to solve for that problem. And then of course it's an education problem, getting to young girls and inspiring them to get into math and science and STEM careers. So I think there're three big pieces of it.
Aaron: Yeah, it really sounds to me a little bit like the earlier thing you said, which is if you see it you can do it. So giving people positive role models and role models and seeing other people who have done it helps move the needle and helps get more people involved. But it sounds like it's also going to take quite a while to really get it up to that 50%.
Kat: Absolutely. But similar to sending founders from India back to India to be those role models, I see the same success with women.
Aaron: Awesome. And actually our next guest, Urska I think fits into this model incredibly well, both international and a female founder. I'm Aaron Harris and my guest this hour is Kat Manalac. Just ahead, Urska Srsen joins Kat and I to talk about her experience and decision to found Bellabeat, a company helping women take care of their overall health. You're listening to Startup School Radio on Business Radio Powered By The Wharton School, SiriusXM 111. Thanks and we'll be right back.
Woman: You're listening to Startup School Radio Powered By The Wharton School. Here again is Aaron Harris.
Aaron: Welcome back to Startup School Radio on Business Radio powered by the Wharton School, SiriusXM channel 111. I'm your host Aaron Harris. I'm a partner at Y Combinator and I've been speaking this hour with my partner at YC Kat Manalac. Kat, thanks so much for sticking around.
Kat: Yeah, excited to join you for this next segment.
Aaron: I'm also very happy to welcome to the show my next guest, Urska Srsen. Urska is the founder of Bellabeat, a Silicon Valley based company although with offices in Croatia, Mountain View and China. And they are a company that produces smart devices and wearables for women helping them take care of their overall health. She joins us today to talk about where the idea for Bellabeat came from and share her experience launching her own company, being part of YC's winter 2014 batch and all the traveling she must be doing. Urska, thanks so much for joining us today.
Urska: Hi, thank you for having me.
Aaron: So I'm going to dive right in. Kat and I were just talking about a bunch of different things that I think you probably have incredible perspective on. One is being an international founder, one is being a female founder. You're doing both of them at the same time building an incredible hardware company with software. You're doing all of the things that people say don't happen in the world. So why did you decide to do this?
Urska: Yeah, exactly. So I often get the question like, "What is your biggest challenge as a female founder?" I'm like, "I'm a European in Silicon Valley. I do hardware, I'm a non tech founder. I don't even get to be a female founder," that's so far in the line of trouble that, it's not a trouble but...
Aaron: Right.
Urska: So the idea basically just came very spontaneously. I studied Fine Art Sculpture before so I was in no way thinking that I'm going to start a business or work anything related to probably tech.
Aaron: Right.
Urska: So it just came as a coincidence. We started to work on this project of remote patient monitoring system back in Europe, in Croatia.
Aaron: Sorry, I've got to interrupt. How did you happen to be working on the problem of remote patient monitoring?
Urska: It just happened over a family lunch. So my mom is a gynecologist and obstetrician and Sandro, my cofounder is a software engineer. So they started talking about these problems in healthcare systems in Europe and how remote patient monitoring has been a subject that has been talked about a lot but nothing has been done so we were like, "Yeah, maybe we can just do it." It was very naïve. And basically I got involved as a designer for interfaces and medical data visualizations and then we just kicked it out. We started working on this project and we didn't even know what direction this was going. We didn't even think of it that this is going to develop into a company. It was just like we want to do this thing that is going to solve problems in healthcare, is going to start reducing costs. And we just didn't think that this is going to turn into a business eventually.
Aaron: Right. It's funny, I think a lot of the best companies or certainly a lot of great companies started out as, "We don't know if this is a business," right? And then the business grows out of it. And Kat...
Kat: You're just solving a problem for a lot of people.
Aaron: Right.
Urska: Exactly, I think that's like ...Then you're not very burdened with it, like you're not thinking so much about how are we going to make money out of it or how are we going to position ourselves on the market, you're just focused on the product. And I think that's very good, especially in the start, when you can easily get just freaked out by everything if you start overthinking things.
Aaron: Yeah, that's a great point. Like this thing of well there isn't as much pressure on you because it's not really a business so all the reasons that you shouldn't build a business don't matter because it's a hobby.
Urska: Yeah, they disappear yeah, exactly.
Aaron: Who cares if I'm a fine arts major trying to build a hardware company for medical, which is like the hardest thing you could possibly do considering all the laws around it.
Urska: Exactly, exactly and the people don't judge you for it because they do not think that you're actually going to make something out of it. They're just like, "Yeah, go ahead and play around."
Aaron: So at what point did you say to yourself, "Oh crap, this isn't just a hobby. This is actually a company that we need to start and sell to people all over the world?"
Urska: That was actually I think somewhere in the process when I was locked up in our apartment for 16 hours per day drawing fetuses for our apps. So I drew all the illustrations by hand.
Aaron: So the first version of the app and tracking was for monitoring?
Urska: Yeah, it was a consumer product. So from developing remote patient monitoring system we had difficulties approaching doctors, we had difficulties approaching patients, so we decided to do a spin off with consumer product which would introduce self-tracking in pregnancy gently to the consumers first and start teaching them about their health in pregnancy through easy to understand and engaging experience. So we developed this device and an app that allowed them to track their baby's heartbeat and record it and share it with their loved ones. So it was mostly based on this emotional experience of bonding with the unborn child. So it was very light and very nice and that's how women got very engaged into it and learned a lot about their pregnancy through our app.
Aaron: So was that original version of it designed as an actual health tracking device or was it more of a nice thing that you could... I mean, you said it was an emotional connection.
Urska: Yeah, exactly. So the original version of the remote patient monitoring system was a professional health tracking system. But then along the way we figured out that this is a huge chunk of cake just for us right at the start. So we focused on developing this consumer product which was more a bonding experience than health tracking.
Aaron: Right.
Urska: But of course it had elements that were teaching women about healt, which was very important.
Aaron: Right. And so were you in Croatia at the time?
Urska: Yes, yes.
Aaron: So I'd imagine there aren't a lot of people building tech companies, let alone medical device companies, let alone medical device companies with an important social and mobile element in them in Croatia.
Urska: Yeah. So actually not so many, but I'm actually from Slovenia and our industry of health industry, our pharmaceutical industry there is quite strong. So there is some background for companies like that.
Aaron: Right. So at what point did you say the company shouldn't just be in Croatia, it should be all over the world?
Urska: So we figured out that the market in Europe wasn't really ready for our product. Europeans are more conservative towards adopting technology into their everyday life use. We figured out that in the States, the Quantified Self movement is very strong and that we fit into that category. We didn't actually know that this is actually us but then we figured that we might be opening a whole new category of Quantified Self and that is Quantified Self in pregnancy. So we saw that we have to kind of bridge over to the States somehow. It was also because of the financial issues. So it was very hard, it's very hard for tech companies in Europe to raise ...
Aaron: What sort of financial issues, raising money?
Urska: Yeah, raising money.
Aaron: Got it.
Urska: So we figured that if we really want to build a successful company very fast we have to bridge over where our market is and be there and also start raising money.
Aaron: Got it. Kat, you mentioned before that some of the risks that international founders face is the difficulty of raising money is one thing, the path, that there are certain paths, right? It's harder to take the startup path in a place that isn't here. What about this other thing though that Urska mentioned, which is this idea that people just aren't as quick to adopt new technologies in other places? So building, how do you build things? Do you see that a lot also in the international founders you talk to?
Kat: I see that less and I see more that investors don't have as much of an appetite for risk and I see that founders are generally afraid to fail because starting a startup isn't as normal considered a path. But yeah, actually this is interesting to hear.
Urska: Yeah, actually we weren't afraid of failing, we were more afraid of losing this great opportunity. We really thought we were building something really great and we would be very, very disappointed and very sorry if we failed. It wasn't because of us, it was because of the product and the company. So but yes, like you said, investors in Europe don't just have appetite for risk. But it's also that they don't have as much I think experience as investors here. Investors here already see this pattern that they're used to so they know what to expect. In Europe investors don't know what to expect of young companies and young founders.
Aaron: So how did you get around that? How did you get to the point where you could actually build the company you wanted to build?
Urska: So we stumbled into Y Combinator. Sometimes I think we had more luck than wits because there is a series of coincidences that happened that led us to being in Y Combinator and eventually raising quite a substantial seed round at the end of it. So I think that was really a turning point for us.
Aaron: It's interesting that you're talking about this idea of stumbling into something or getting lucky. When I talk to people, everyone thinks that their experience getting lucky in some way is sort of unique. And while the individual manifestation of that luck I think might be unique I think that is a common thread in every single company. And I think the difference is that luck plays this huge role, it's a question of who is ready for luck? Who is actually going to take advantage of that opportunity that happens to pop up? I think for you guys Michael Seibel happened to end up in Croatia and happened to meet you guys or in Slovenia, I forget where he met you.
Urska: No, we actually happened to sign up for the startup challenge at Pioneers in Vienna and . . .
Aaron: Oh, right.
Urska: And Michael happened to be a judge there and we happened to win that competition.
Aaron: But that's the thing. It's not that you happened to win and you happened to sign up.
Urska: Exactly.
Aaron: You went and grabbed the opportunity.
Urska: Exactly.
Aaron: You kicked everyone else's ... in the competition.
Urska: Exactly.
Aaron: And that's how it happens.
Urska: That's how it happened, yeah, so it's not pure luck. You don't get anything without trying and without working hard. But then looking back there were just like, "Oh my God, all of these things happen in this specific sequence so..."
Kat: It is the intersection of the hard work and then grabbing that opportunity.
Urska: Exactly, exactly. Yes.
Kat: So changing gears a little bit, you've built what I think is one of the most beautiful pieces of wearable technology out there. So can you tell us a little bit more about your process, like how you designed - I think your newest product is called The Leaf?
Urska: Yes. So our company after YC expanded out of prenatal care as we thought the idea is much bigger. We want to develop a system that help women track their health throughout different stages of their lives so also before pregnancy and after pregnancy as we think that is very important. That not just apps but also wearables become adjusted to the female users, so software and hardware. Our next products that we're rolling out in May, end of May is called The Leaf and it's a smart piece of jewelry that helps women track their activity, their sleep and their stress through breathing. And all the data is also combined with the data on their period cycle.
So we're really developing this system that is tracking specifically health of women and giving them relevant insight into their health and information and advice that is specific to the stage where they're at or they want to be. So I'm leading the design team in our company because of my fine arts background. So I think my background also influences how we design hardware, what kind of materials we use. So all or new devices are made of natural wood so that we're breaking this cold and clunky surface of tech and giving it warm appeal that is then easier to adopt into your everyday life and also body proximity.
All our devices are also without any interfaces so that you don't get burdened by raw data. We really think that the data is just there to present you with an insight and you should be able to review it in a meaningful and understandable way.
Aaron: I'm looking at it right now, I think you're wearing a version of it.
Urska: Yeah, it is on my hand.
Aaron: It is awesome looking. If you're just joining us, I'm Aaron Harris and you're listening to Startup School Radio. I'm speaking with my partner from Y Combinator, Kat Manalac, and Urska Srsen of Bellabeat. And Urska was just telling us about the new device that Bellabeat is about to release called The Leaf, which is a health tracking wearable for women that goes certainly well way beyond the original Bellabeat product. And one of the things that's popping into my mind as you're talking about this is the original heart rate monitor was beautiful. It worked well and it did one thing in terms of measuring. It measured fetuses' heartbeat. And then did a lot of cool stuff after that.
What you're talking about now with The Leaf involves so much more than that and you're talking about real medical tracking, a lot of different data that you're recording, stuff that's tripped up some really big companies as they've tried to do it. What's the insight that you have that's going to let you beat everyone else that's tried this?
Urska: Exactly. So I think one advantage that we have is that we're focusing on a specific user and that's a female user and we're adjusting everything to that, so software and hardware. So we're trying to develop wearables that are easy to wear for them so that it's easy for them to use them every day as that's the purpose of wearables. But also we try to develop software that provides them with meaningful data so that they can see how all the data that they're getting is correlated and get a summary of it, not just raw data about this or raw data about that, so that they can see how their activity is connected to their sleeping or to their stress levels and how everything is connected to their reproductive cycle, which we think is very important.
We want to have this new approach to wearable technology which is more holistic. We also think that tracking your mind is just as important as tracking your body. So we're going into that direction trying to provide insights instead of stats.
Aaron: That's interesting. You say you're just targeting a specific kind of user and that's women. But that in and of itself is a huge category and I think there are a lot of different requirements that you have to consider. I think it was toward the end of what you said that that might be the key here, where it's really matching things up with the reproductive cycle. Is the goal or the focus still around this idea? Is it around helping women get pregnant and have children or is that just part of the continuum?
Urska: Yeah, so one thing that is very important that we figured out through our first product is that women tend to become much more interested in tracking their health and much more interested in their health situation during pregnancy. So pregnancy is like the epicenter of women's health. I don't want to say that every woman has to have children but their reproductive cycle is a very important part of their health so we are wrapping everything around it. So we're focusing on before pregnancy, during pregnancy and after pregnancy. And we're just using that as a thread that we can follow and also so that we can pinpoint specific points in women's lives that we can focus on and develop the product that fits that situation better.
Aaron: Right, and I think what's wrapped up in there which is so - like it's just brilliant is this problem that most wearables have, which I think the average use life of a wearable is like three to six months or something like that and then people get tired of them. And I think that's exactly because of what you said, they're something for everyone which means they don't actually solve anything.
Urska: Exactly, and it's also that the data that you're getting is not so relevant. I mean I've had trackers before and it's great when I'm going to fitness or jogging, they're keeping me boosted and stuff but then when I fall off the wagon which happens very fast because of my hectic lifestyle, then there's nothing left to track anymore with it. It's just useless. And what we're trying to do is create a system that supports you also in those moments. We're not trying to make women jog nonstop or wear yoga pants every day. We're just trying to be that supportive thing in their lives that provides them with data that they need at that specific time.
Kat: What was your process of figuring out exactly what data would be most important and most helpful?
Urska: The process was - it goes to the first base of our company, so the remote patient monitoring system through prenatal care. That's where we learned a lot about what is important about women's health, what is important to track and to remind women to take care of. So that's how we started to develop everything. We reduced it first to our first product and now we're just expanding it and following the first vision that we had, the broader vision. So in line of that we're developing these new products and we will be developing new products that will just support our vision from the start.
Aaron: I remember this image I think that you had in a presentation that you gave at some point, which I think it was your arm with like eight different fitness trackers on.
Urska: Yeah.
Aaron: And you're trying to show like, "Look, there're all these fitness trackers that everyone says are so amazing and no one uses them." I think the point at that point there was nothing designed for women.
Urska: Exactly.
Aaron: For a real use case.
Urska: Yeah.
Aaron: And I think that boiled it all down, like why are there so many fitness trackers trying to do the same exact general thing?
Urska: Yeah, I think what I was trying also to show is how our product is so much more emotional. It's based on the emotion, on the emotional tracking and that's what we're trying to do with The Leaf as well. It's not just tracking activities, sleep and stress. It's just like I said before, it's a holistic approach to women's health.
Aaron: Right.
Urska: So there's a lot of emotional attachment to it involved.
Aaron: Right. Kat, when you listen to this and hear about The Leaf, what makes you excited about wearing it? How do you see it fitting into your life? Have you tried other fitness trackers?
Kat: I have and as you said, I cycled out of them.
Aaron: Right.
Kat: Probably after using them for a few weeks just because yeah, I didn't have a specific use case. I mean I'm excited that - I love that you're saying it brings together tracking not only your physical but your mental through breath and then I just love the form factor.
Aaron: Yeah.
Kat: It's just a beautifully designed product. And so a mix of that holistic approach and the design of it, it just makes me want to try it. When can I get it?
Urska: Thank you. So you can get it, we'll be rolling it out on the 27th of May.
Kat: Cool.
Aaron: That's around the corner.
Urska: And that's when we'll be announcing also some new stuff connected to it so it's a very exciting date. But yeah, like you said, the design follows this holistic philosophy. It's made of natural materials. It doesn't have any interface, you can wear it as a clip or as a bracelet or as a necklace. So you just integrate it into your style as you want. The battery life is also six months so you just wear it and forget about it. Just don't wash it with your clothes which I have done some of that already.
Aaron: Shorted a couple of them out.
Urska: Yeah, I just wore it as a clip and I forgot about it.
Aaron: Good thing you have a spare supply of them.
Urska: Exactly, but that is the point, you should forget about wearables. You should just wear them and then get the data when you need it on your phone.
Aaron: Yeah, I think one of the interesting challenges that you faced and I alluded to it earlier is this idea that you have offices on three continents, which is one of these things that implies or suggests that it's really hard to keep everyone in the same place moving in the same direction. How many miles have you flown in the last year and how do you keep everyone pulling in the same direction?
Urska: Yeah, that is really hard. I don't know how many hours I've spent on the plane in the last year. I'm basically working - the founder that is actually working on the hardware product so I'm in between the offices non-stop as I'm also the face of the company. So I have to be here a lot, I have to be in China a lot, I have to be in Europe a lot too to pull it all together. So yeah, it is hard to pull everything together basically over the Internet but the up side is that Bellabeat is an operation that is working 24/7 literally, all time zones. So that's a good thing.
Aaron: Where are most of your employees right now?
Urska: Most of them are in Croatia.
Aaron: In Croatia?
Urska: Yeah, that's where development is.
Aaron: So I guess and just sort of our last minute here, our last 30 seconds or a minute, the next year or two years, what are you going to do other than release this thing? What's the challenge?
Urska: Oh my God, we have so many products in the lineup that I can't even wrap my mind around it. So we're already developing the next version of the devices so it's not just the devices that we haven't even launched yet but also the next versions that we're already working on. So it's pretty hectic but we're also focusing on the software a lot. Software is the core of our product.
Aaron: Kat, have you been seeing more companies coming out of Croatia thanks to Urska's influence?
Kat: I think we've seen a few.
Aaron: That is awesome. See, this is the circle and the cycle that we're talking about. Having amazing founders come here to the Valley for a little while, get the funding they need, get some inspiration, find more talent and then go back and bring more people and just be an inspiration to other founders. It's just so cool talking with both of you. Urska, Kat, thank you so much for joining us today. I learned a lot and I hope our listeners did as well and I hope some of you will start new companies and come to us and let us work with you.
For more information about what Kat's doing you can follow her @KatManalac. She also handles the @ycombinator handle. And to find out more about Bellabeat visit bellabeat.com or you can follow them @GetBellaBeat. Startup School Radio airs live every Wednesday at 1 p.m. Eastern, 10 a.m. Pacific right here on Business Radio channel 111. If you have a question about something you've heard on the show today email us at
[email protected] or you can tweet at me directly @harris. Thank you for joining us today and a very special thank you to my senior producer Lisa Mantineo, and associate producer and engineer Dion Simpkins.
Be sure to tune in next week when I'll be joined by David Bladow from BloomThat and Y Combinator's Geoff Ralston. I'm Aaron Harris and you've been listening to Startup School Radio on Business Radio Powered By The Wharton School, SiriusXM 111. Thank you and have a great day.
