Adam O'Donnell: Seth, thank you so much for being Adam O'Donnell: on sit down, startup founder podcast. Would Adam O'Donnell: you first just tell us what you're Adam O'Donnell: working on at honor? I know you've Adam O'Donnell: been working on it for a bit, Adam O'Donnell: but for anyone who doesn't know. Seth Sternberg: Yeah. So at honor, we help older Seth Sternberg: adults remain in their homes as they Seth Sternberg: age. And the way we do that Seth Sternberg: is we send a care professional into Seth Sternberg: the home of an older adult, and Seth Sternberg: they help that person with what are Seth Sternberg: called ADL's, or activities of daily living. Seth Sternberg: So it's like, get out of bed, Seth Sternberg: get food, get dressed. It can be Seth Sternberg: bathing. It's like anything where if you Seth Sternberg: can't do, like, two of those things, Seth Sternberg: you can no longer live in your Seth Sternberg: own home. And so you get someone Seth Sternberg: to help you out so you can Seth Sternberg: stay at home. Adam O'Donnell: I love the simplicity. I'm curious to Adam O'Donnell: learn if it's always been that simple. Adam O'Donnell: You always had that same mission. Seth Sternberg: Yeah. So, yes, but the mission is Seth Sternberg: actually a little broader than that. So Seth Sternberg: I built a company with some other Seth Sternberg: co founders, and we'd sold that one. Seth Sternberg: And the next company that we worked Seth Sternberg: on, we wanted to be look at Seth Sternberg: human in the eye and know we'd Seth Sternberg: make their lives fundamentally better. But then Seth Sternberg: we wanted to be millions of humans, Seth Sternberg: not just one. And then we wanted Seth Sternberg: a hard societal problem because we felt Seth Sternberg: like, as multi time founders, we could Seth Sternberg: kind of go for something that was Seth Sternberg: really difficult to accomplish. Right. And then Seth Sternberg: if we could win, then it would Seth Sternberg: be a big win for society. So Seth Sternberg: what we actually think about is, hey, Seth Sternberg: how do we change the way society Seth Sternberg: cares for our older adults? Like, we Seth Sternberg: have this big problem where the world's Seth Sternberg: aging very quickly. We are not very Seth Sternberg: good at taking care of older adults. Seth Sternberg: And we see home care is kind Seth Sternberg: of the first place on the, you Seth Sternberg: know, kind of, you know, travel or, Seth Sternberg: you know, voyage, if you will, um, Seth Sternberg: in order to achieve that ultimate goal. Adam O'Donnell: That's really cool. I appreciate you, like, Adam O'Donnell: kind of helping with that. Cause there's Adam O'Donnell: so many times where I hear just Adam O'Donnell: pivot stories as well, but taking it Adam O'Donnell: to, like, the personal piece. Cause I Adam O'Donnell: think when I first started this podcast, Adam O'Donnell: it was only just about the business, Adam O'Donnell: but I think there's such an interesting Adam O'Donnell: piece of, like, knowing where did you Adam O'Donnell: grow up? Maybe what made you first Adam O'Donnell: get excited about starting companies? I'd love Adam O'Donnell: to hear that story. Seth Sternberg: Yeah. So I grew up in Connecticut, Seth Sternberg: and why did I get excited about Seth Sternberg: starting companies? I guess I started my Seth Sternberg: first company maybe largely because I was Seth Sternberg: scared to work for anybody else. That Seth Sternberg: probably had a lot to do with Seth Sternberg: it. And then you have a product Seth Sternberg: that you come up with that you Seth Sternberg: want to exist and you find people Seth Sternberg: to help you build it. These days, Seth Sternberg: probably the only thing I think about Seth Sternberg: is how do you build more things Seth Sternberg: that will help society in some way Seth Sternberg: or another? Because I think that's a Seth Sternberg: good way to spend your time. But Seth Sternberg: yeah, I grew up in Connecticut and Seth Sternberg: I came up with this idea because Seth Sternberg: I ran into an issue with my Seth Sternberg: mother. Entrepreneurs, you probably hear this all Seth Sternberg: the time, they tend to solve their Seth Sternberg: own problems. And since I'd already built Seth Sternberg: one company and so therefore I was Seth Sternberg: older, I didn't have this much gray Seth Sternberg: hair, but I've gotten it on the Seth Sternberg: path of doing honor. But since I Seth Sternberg: was a little bit older, I'd already Seth Sternberg: done one company. My parents were no Seth Sternberg: longer my solution, but rather they were Seth Sternberg: now a thing that I was thinking Seth Sternberg: about how to solve for. So that's Seth Sternberg: how the idea of helping older adults Seth Sternberg: came to be. Adam O'Donnell: That's so cool. And so those are Adam O'Donnell: just, they seem like the best companies Adam O'Donnell: because you're like, hey, I'm just being Adam O'Donnell: real. I'm authentically trying to solve a Adam O'Donnell: real. Seth Sternberg: Need that I've felt, yeah, I think Seth Sternberg: the best ones. And I, you know, Seth Sternberg: what I say to entrepreneurs frequently is, Seth Sternberg: you know, it's, it's going to be Seth Sternberg: hard. It's probably going to be seven Seth Sternberg: years. And so to get yourself through Seth Sternberg: those hard points, you've got to really Seth Sternberg: care, right. Because it's so easy to Seth Sternberg: give up again. Like so many, there's Seth Sternberg: so many opportunities to give up and Seth Sternberg: you've got to have that reason why Seth Sternberg: you're going to keep fighting. So you Seth Sternberg: have to really, really care about the Seth Sternberg: problem that you're trying to solve. Adam O'Donnell: So, so good. Tell me about how Adam O'Donnell: you got to Silicon Valley, like the Adam O'Donnell: decision to move and why. Seth Sternberg: Yeah, so like I said, I grew Seth Sternberg: up in Connecticut and I guess I Seth Sternberg: was lucky. One of my best friends Seth Sternberg: moved to California for college and I Seth Sternberg: visited him and when I'd visit him, Seth Sternberg: this was, you know, he was, we Seth Sternberg: were class in college, we're a class Seth Sternberg: of zero one. So, right. We were Seth Sternberg: graduating when the world was falling apart Seth Sternberg: and being massive economic down cycle first, Seth Sternberg: bubble pop, blah, blah, blah. But I Seth Sternberg: visited him in 1998 and 1999 too. Seth Sternberg: And Im watching all these companies get Seth Sternberg: created and just feels so energetic and Seth Sternberg: so much is happening. And I knew Seth Sternberg: that if I wanted to start companies Seth Sternberg: growing up, honestly, growing up in Connecticut, Seth Sternberg: it was somewhat a culture of you Seth Sternberg: cant or heres why itll fail. And Seth Sternberg: that always really, actually chafed at me. Seth Sternberg: Like, I have these ideas all the Seth Sternberg: time, and everyone would tell me why Seth Sternberg: they'd fail. And when I was in Seth Sternberg: California and the people I was hanging Seth Sternberg: out with, there was more like, hey, Seth Sternberg: here's the reason why it could succeed, Seth Sternberg: or here's what you could do to Seth Sternberg: make it better. And so I really Seth Sternberg: wanted to get out there because I Seth Sternberg: could just tell that it had the Seth Sternberg: ecosystem to help me start building companies. Adam O'Donnell: That's like, I moved from the east Adam O'Donnell: coast as well, and I started how Adam O'Donnell: to start up there. And it is Adam O'Donnell: just a different, like, people just don't Adam O'Donnell: understand it as much. It just seems Adam O'Donnell: like kind of pie in the sky Adam O'Donnell: stuff that we're doing over here, whereas Adam O'Donnell: here it's like the whole ecosystem is Adam O'Donnell: set up, ready to help you run. Seth Sternberg: I think that is the difference. So, Seth Sternberg: like, in the east coast you can Seth Sternberg: do startups, right? And now more than Seth Sternberg: ever you can do, because remember, I'm Seth Sternberg: talking about the east coast 20 years Seth Sternberg: ago, but, you know, more than ever Seth Sternberg: you can do startups anywhere. But there Seth Sternberg: is something about the percentage of people Seth Sternberg: who you surround yourself with who are Seth Sternberg: kind of familiar with and helpful with Seth Sternberg: what you're trying to accomplish. And the Seth Sternberg: thing you have to remember when you're Seth Sternberg: doing a startup is it's really just Seth Sternberg: like, can you keep knocking down the Seth Sternberg: next barrier? It's like, it's, you know, Seth Sternberg: can you get a team together? Can Seth Sternberg: you find an office? Can you get Seth Sternberg: insurance in place? Can you find a Seth Sternberg: lawyer? It's like all these can you Seth Sternberg: do's, and it's just like a, you Seth Sternberg: know, it's a task list. And some Seth Sternberg: of those things are hard, some of Seth Sternberg: them are easy, but the more people Seth Sternberg: you have around you to kind of Seth Sternberg: ask, like, hey, how do you do Seth Sternberg: this? Or how would you approach this? Seth Sternberg: And to get like a, yeah, you Seth Sternberg: can. And here's how that's helpful. Adam O'Donnell: Getting the playbook. Here's how we did Adam O'Donnell: it. Boom, boom, boom. I love that. Adam O'Donnell: Help me with a low moment that Adam O'Donnell: you had in the journey that you'd Adam O'Donnell: be comfortable sharing, because a lot of Adam O'Donnell: founders just see the TechCrunch article and Adam O'Donnell: they get discouraged. But I know there's Adam O'Donnell: a lot more that's been happening. Seth Sternberg: Uh, yeah, I mean, so, you know, Seth Sternberg: one of our low points was COVID Seth Sternberg: breaks out. Um, and in our business, Seth Sternberg: you know, we're literally sending people, care Seth Sternberg: professionals into the homes of older adults Seth Sternberg: to help them. And as COVID was Seth Sternberg: breaking out and we're starting to understand Seth Sternberg: what COVID is, we're like, oh, my Seth Sternberg: God, we're sending people into the homes Seth Sternberg: of older adults who could infect them, Seth Sternberg: and that could be really dangerous. And Seth Sternberg: that was a big, low moment. We're Seth Sternberg: like, can we possibly survive this? Should Seth Sternberg: we keep operating this, et cetera? And Seth Sternberg: what we did is it's like anything. Seth Sternberg: It's just another barrier that you have Seth Sternberg: to decide if you're going to push Seth Sternberg: through or not. So the way we Seth Sternberg: push through it is we created all Seth Sternberg: of these kind of infection control protocols Seth Sternberg: where we got really strict about monitoring. Seth Sternberg: Did our care professionals have symptoms? Were Seth Sternberg: they reporting anything? We even put other Seth Sternberg: things like sick leave for the entire Seth Sternberg: country, even where it wasn't legally required Seth Sternberg: in place, because we wanted the care Seth Sternberg: post to not have any kind of Seth Sternberg: incentive to not tell us. We wanted Seth Sternberg: them to tell us if they were Seth Sternberg: not feeling well. And don't worry, you Seth Sternberg: will still be paid. We created policies Seth Sternberg: that, on the surface, looked like they Seth Sternberg: cost us a lot of money, but Seth Sternberg: they kept our employees and they kept Seth Sternberg: our clients safe. So, you know, you're. Seth Sternberg: You just have to recognize you're always Seth Sternberg: going to hit, like, brick walls. They Seth Sternberg: suck. And you just got to be Seth Sternberg: creative, right. And find a way to Seth Sternberg: bust through them or climb over them Seth Sternberg: or dig under them or something, some Seth Sternberg: way around. Adam O'Donnell: That's amazing. Could you take us into Adam O'Donnell: maybe a board conversation? Because I imagine Adam O'Donnell: that there might have been some pushback Adam O'Donnell: on even that strategy or even just Adam O'Donnell: into your head or before you got Adam O'Donnell: to that strategy, when you realized, like, Adam O'Donnell: the brick wall is there. Seth Sternberg: Yeah. You know, board meetings in that Seth Sternberg: time, I mean, every board was, you Seth Sternberg: know, looking at their portfolio and kind Seth Sternberg: of looking at this kind of disaster Seth Sternberg: or that kind of disaster. So there Seth Sternberg: was nothing abnormal about, hey, we've got Seth Sternberg: this big problem because of COVID and Seth Sternberg: we don't know how to deal with Seth Sternberg: it. Right. Other companies had other problems, Seth Sternberg: but very few were, like, problem free. Seth Sternberg: One of the things that I think Seth Sternberg: is kind of, like, a hallmark of Seth Sternberg: great boards is they do not try Seth Sternberg: to run the company, and they know Seth Sternberg: they shouldn't run the company because they Seth Sternberg: don't have the day to day data. Seth Sternberg: They're not there. They understand that they've Seth Sternberg: invested in a certain management team, and Seth Sternberg: they can choose to change the management Seth Sternberg: team, but they don't run the company. Seth Sternberg: And so I doubt we even brought Seth Sternberg: that one to the board. It doesn't Seth Sternberg: rise to the level where we'd feel Seth Sternberg: like, oh, we have to talk to Seth Sternberg: the board about this. Like, this is Seth Sternberg: the decision we're making as the people Seth Sternberg: running the company. Adam O'Donnell: Wow, that's really good. It sounds like Adam O'Donnell: you got great people around you, trust Adam O'Donnell: you. Seth Sternberg: Yes. And that's like, I kind of Seth Sternberg: was saying upfront, that's one of the Seth Sternberg: key parts of the game, right? Is Seth Sternberg: how do you surrender? And it's kind Seth Sternberg: of a key part of the game Seth Sternberg: of life. You often take on the Seth Sternberg: traits positive and negative, the people around Seth Sternberg: you. It's just the way it is. Seth Sternberg: And, you know, if you surround yourself, Seth Sternberg: you know, typically I try to surround Seth Sternberg: myself basically with people who are smarter Seth Sternberg: than I am. Like, I literally feel Seth Sternberg: like most of the people I hang Seth Sternberg: out with are smarter than I am. Seth Sternberg: And then if you hang out with Seth Sternberg: people who have really, like, diverse experiences Seth Sternberg: and perspectives, that makes you much stronger. Seth Sternberg: And, you know, a thing that you Seth Sternberg: have to remember. And I felt this Seth Sternberg: acutely, like you walk into a high Seth Sternberg: school or a college and you look Seth Sternberg: at who kids are sitting with and Seth Sternberg: like, almost just visually, each lunch table Seth Sternberg: looks like that table, right? Like, all Seth Sternberg: the kids at that table look like Seth Sternberg: all the other kids at that table. Seth Sternberg: It's kind of sad. And you have Seth Sternberg: to push if you want to. I Seth Sternberg: think if you want to be an Seth Sternberg: effective entrepreneur, you have to push out Seth Sternberg: of that, right. Because you just can't Seth Sternberg: understand everything about how to do everything. Seth Sternberg: You need to hang out with people Seth Sternberg: who are not like you and you Seth Sternberg: want those people to be smart, right. Seth Sternberg: And you want those people to pull Seth Sternberg: you up and make you more capable. Adam O'Donnell: That's really good advice. And, yeah, it's Adam O'Donnell: so easy to have that echo chamber Adam O'Donnell: piece as well, but. Seth Sternberg: Yeah, that's the human default. Adam O'Donnell: Yeah, yeah, unfortunately, that's really good. Well, Adam O'Donnell: the rest of the conversation, I love Adam O'Donnell: to prioritize talking about the moment that Adam O'Donnell: you hit product market fit and then Adam O'Donnell: the steps before that, not to replicate, Adam O'Donnell: but just to inspire a similar strategy Adam O'Donnell: for founders who haven't done it yet. Adam O'Donnell: So it's, if you could. I know Adam O'Donnell: this is tough, but like, with Sammy, Adam O'Donnell: I did this with trilio. Like, just Adam O'Donnell: like even getting a month where you Adam O'Donnell: were like, or that first moment where Adam O'Donnell: you're like this, we've hit this. There's Adam O'Donnell: something here. Seth Sternberg: Yeah. So I hate to do this Seth Sternberg: to you, but I would actually posit Seth Sternberg: to you that that's too simple a Seth Sternberg: heuristic. And there's actually this scale that Seth Sternberg: you have to look at startups on. Seth Sternberg: And one spectrum that you can kind Seth Sternberg: of plot almost every startup on is, Seth Sternberg: is it taking execution risk or is Seth Sternberg: it taking market risk? And if it's Seth Sternberg: taking market risk, your question's valid, right? Seth Sternberg: Like, hey, I don't know if people Seth Sternberg: want this thing, I'm going to keep Seth Sternberg: iterating until I find a thing that Seth Sternberg: they want. And at some point I Seth Sternberg: hit what people call product market fit, Seth Sternberg: right? Like, oh, I'm selling a thing Seth Sternberg: people want. There is a different kind Seth Sternberg: of risk, which is execution risk. It's Seth Sternberg: like, hey, if I build this, I Seth Sternberg: know everybody's going to want it, but Seth Sternberg: wow, is it really, really hard to Seth Sternberg: build. So that's execution risk. And what Seth Sternberg: I would argue is that you want Seth Sternberg: to do a startup that has either Seth Sternberg: market risk but very little execution risk Seth Sternberg: or execution risk with very little market Seth Sternberg: risk. Because you want to know the Seth Sternberg: reason you're failing. You want to know Seth Sternberg: the reason why it's not working. And Seth Sternberg: you don't want to have to debate Seth Sternberg: with yourself, do people want this or Seth Sternberg: not? Did I do a good job Seth Sternberg: of building or not? You kind of Seth Sternberg: want to know. So startups that are Seth Sternberg: kind of equally in the middle between Seth Sternberg: those two, I would say probably don't Seth Sternberg: do them. And so honor was very Seth Sternberg: much an execution risk company. We already Seth Sternberg: knew there was a $30 billion industry. Seth Sternberg: We already knew it was hyper fragmented. Seth Sternberg: We already knew the experience for care Seth Sternberg: pros and clients were totally broken. So Seth Sternberg: we didnt know why per se. It Seth Sternberg: didnt scale well, we didnt know why Seth Sternberg: it was so hyper fragmented. So that Seth Sternberg: was an execution risk problem. But we Seth Sternberg: knew, hey, if you can build good Seth Sternberg: home care thats better than what people Seth Sternberg: currently buy to $30 billion, then you Seth Sternberg: will be in a good spot. So, Seth Sternberg: sorry, threw you a curveball on your Seth Sternberg: PMF question. Adam O'Donnell: No, this is why I asked that Adam O'Donnell: question. And its amazing. Its way more Adam O'Donnell: insightful what youre saying. And I completely Adam O'Donnell: hear that its almost like a cancer Adam O'Donnell: drug. Well, people buy that. We know Adam O'Donnell: that. Seth Sternberg: All execution risk. Right, exactly. Adam O'Donnell: And you're saying you're a little bit Adam O'Donnell: off of the cancer example in that Adam O'Donnell: one. Seth Sternberg: Yeah, we're not quite the cancer example, Seth Sternberg: but you're really, really close to that, Seth Sternberg: right? Because if you one of the Seth Sternberg: models you can take as entrepreneurs just Seth Sternberg: say, look, there's this thing people already Seth Sternberg: do, but like. And they need it. Seth Sternberg: You know, in our case, we're like, Seth Sternberg: wow, people are spending $30 billion in Seth Sternberg: home care, but it sucks, right? Like Seth Sternberg: it really needs a reboot. Thats amazing. Seth Sternberg: Imagine how big the market would be Seth Sternberg: if you built really amazing home care. Seth Sternberg: Thats the way we looked at it. Seth Sternberg: There was no EMF do people want Seth Sternberg: it question. There was just, can we Seth Sternberg: actually do it? Had not historically been Seth Sternberg: done. Adam O'Donnell: Clay, that is really cool. So in Adam O'Donnell: that kind of execution risk company, I Adam O'Donnell: imagine that youre competing with a lot Adam O'Donnell: with larger incumbents who have a lot Adam O'Donnell: more money than you more frequently. Seth Sternberg: So in our case, it was a Seth Sternberg: little bit different because what we were Seth Sternberg: competing with is 20,000 mom and pops. Seth Sternberg: Now, half of them had joined franchise Seth Sternberg: networks and half of them were technically Seth Sternberg: independent, but they all really were just Seth Sternberg: independent. So what you're competing with actually Seth Sternberg: in this case is this market force. Seth Sternberg: It's okay, I'm going to hang a Seth Sternberg: shingle in the SFA area. You're competing Seth Sternberg: with 200 other agencies, literally 200 other Seth Sternberg: agencies. And really the competition is like, Seth Sternberg: why is it 200 other agencies? Why Seth Sternberg: are none of them bigger than in Seth Sternberg: a roughly $300 million market in the Seth Sternberg: SFB area? Why is it that none Seth Sternberg: of them have gotten bigger than like Seth Sternberg: five or $6 million? What is the Seth Sternberg: thing that's holding people back? So oftentimes Seth Sternberg: people worry about? So people always fixate Seth Sternberg: on the competitive company. And I think Seth Sternberg: what people should fixate on is that Seth Sternberg: as a startup, and I definitely am Seth Sternberg: not the one who coined this, but Seth Sternberg: I'm going to remind everybody, startups do Seth Sternberg: not die by homicide, they die by Seth Sternberg: suicide. Like, that's how startups die. You Seth Sternberg: didn't make it. You didn't succeed. And Seth Sternberg: in our case, it was very clear, Seth Sternberg: right? Like, the market was really hard. Seth Sternberg: Something about it was really hard to Seth Sternberg: scale in, and it would be on Seth Sternberg: us. It wouldn't be that one of Seth Sternberg: those other little agencies killed us. It Seth Sternberg: would be that we didn't figure out Seth Sternberg: how to address the market dynamic. And Seth Sternberg: what that does, by the way, is Seth Sternberg: kind of empowering. Right? Because you don't Seth Sternberg: get to outsource your failure on something Seth Sternberg: else. It is on you to succeed Seth Sternberg: or fail. Adam O'Donnell: This is interesting. I want to dive Adam O'Donnell: into how you analyze this, because I Adam O'Donnell: know you authentically had the problem. So Adam O'Donnell: it wasn't like you were just like, Adam O'Donnell: I'm going to pick the best possible Adam O'Donnell: thing to build. You want to do Adam O'Donnell: something in this, but what was different Adam O'Donnell: about this? And how, how did you Adam O'Donnell: look at it? Seth Sternberg: Yeah, so what we, it's a great Seth Sternberg: question. What we saw very clearly is Seth Sternberg: the needs of my mom and your Seth Sternberg: mom are probably different. The wants of Seth Sternberg: one care pro versus another care pro Seth Sternberg: are also probably different. Different schedules, different Seth Sternberg: skills. They live in different places, et Seth Sternberg: cetera. They like different kinds of people Seth Sternberg: to work for. So it's a two Seth Sternberg: sided, heterogeneous marketplace because both sides are Seth Sternberg: heterogeneous. Like your mom, my mom are Seth Sternberg: different. That care pro and that care Seth Sternberg: pro are different. And so what you Seth Sternberg: can say is that almost certainly with Seth Sternberg: more market liquidity on both sides, you Seth Sternberg: will have better matches, right? Because that Seth Sternberg: heterogeneity means you benefit from a lot Seth Sternberg: of supply and a lot of demand. Seth Sternberg: And yet it had never happened. And Seth Sternberg: so we had a going in theory Seth Sternberg: on the reason why it had never Seth Sternberg: happened. But we knew we couldn't be Seth Sternberg: sure. We only had research, and research Seth Sternberg: is not as good as actually seeing Seth Sternberg: it and doing it. Touch, feel. So Seth Sternberg: what we did is we built some Seth Sternberg: thin veneer technology that made our initial Seth Sternberg: home care company that we launched in Seth Sternberg: the SF area look modern, but under Seth Sternberg: the surface it was run by humans. Seth Sternberg: We didn't try to fix these difficult Seth Sternberg: logistical challenges because we just had to Seth Sternberg: see, like, why the heck did this Seth Sternberg: thing not work, right? And so the Seth Sternberg: way we approached trying to validate, like, Seth Sternberg: what is it that has kept this Seth Sternberg: thing that should consolidate from consolidating? We Seth Sternberg: just needed to experience those problems ourselves. Seth Sternberg: And let me tell you, we grew Seth Sternberg: quickly. We experienced those problems big time. Seth Sternberg: They were really, really painful. It was Seth Sternberg: like, okay, we now see exactly why Seth Sternberg: this thing never scales. We almost shut Seth Sternberg: down. There is this point where we Seth Sternberg: hit about 10 million in revenue. And Seth Sternberg: I literally was saying to myself, this Seth Sternberg: is not a technology tractable problem. I Seth Sternberg: just don't see how this can possibly Seth Sternberg: be solved in technology. It's so impossible Seth Sternberg: and humans are so heterogeneous. But it Seth Sternberg: turned out that at that scale, we Seth Sternberg: had just enough data to start running Seth Sternberg: some real ML against the problems, and Seth Sternberg: we're able to figure it out. Adam O'Donnell: Wow, what a story. It's so unique. Adam O'Donnell: But I. So you basically just built Adam O'Donnell: like a mom and pop on steroids Adam O'Donnell: in the beginning as an experiment with Adam O'Donnell: the scalable mindset. And you got, you Adam O'Donnell: were able to raise money on that. Adam O'Donnell: Did you have any investors who were Adam O'Donnell: like, hey, how do we know we're Adam O'Donnell: not just going to be investing in Adam O'Donnell: a lifestyle company that stays like this Adam O'Donnell: forever? Seth Sternberg: So, fortunately, since I had built a Seth Sternberg: previous company that had gotten pretty large, Seth Sternberg: it was a little bit easier for Seth Sternberg: us to raise money. This is why Seth Sternberg: I actually said we wanted a hard Seth Sternberg: problem, because one of the things about Seth Sternberg: being a second time entrepreneur, if you've Seth Sternberg: had a first successful company, is you Seth Sternberg: both can raise money easier. But let's Seth Sternberg: throw that one out. That's important for Seth Sternberg: what I'm about to say. But what's Seth Sternberg: really important is that you already have Seth Sternberg: the basics down. You know how to Seth Sternberg: build a team, you know how to Seth Sternberg: incorporate, you know, which lawyers to use, Seth Sternberg: like, a lot of the blocking and Seth Sternberg: tackling that you have to your first Seth Sternberg: time around. You just know. And so Seth Sternberg: you can focus on a harder problem Seth Sternberg: as a second time entrepreneur, because a Seth Sternberg: lot of the, like, rote stuff you Seth Sternberg: already know how to do and that Seth Sternberg: lets you put more of your brain Seth Sternberg: cycles into. Hey, but this is a Seth Sternberg: really, really challenging problem. How could I Seth Sternberg: unlock it? Adam O'Donnell: It makes a lot of sense. Yeah. Adam O'Donnell: You want to move closer, essentially, to Adam O'Donnell: the execution risk side. Seth Sternberg: Execution risk as a second time. That's Seth Sternberg: exactly right. As a second time entrepreneur, Seth Sternberg: you are incented to be more on Seth Sternberg: the execution risk side than on the Seth Sternberg: market risk side. Because market risk, who Seth Sternberg: knows? It doesn't matter if you're first Seth Sternberg: time, second time entrepreneur, you just don't Seth Sternberg: know until you try. But execution risk, Seth Sternberg: you are disproportionately likely to be able Seth Sternberg: to solve an execution risk thing. As Seth Sternberg: a second time entrepreneur, that's so good. Seth Sternberg: You know, one thing, sorry. That I Seth Sternberg: would just say, and I feel this Seth Sternberg: really strongly, is a bunch of my Seth Sternberg: friends are second time entrepreneurs and have Seth Sternberg: done exactly this. They have launched companies Seth Sternberg: that are healthcare or some other kind Seth Sternberg: of, like, hard problem that's aimed squarely Seth Sternberg: at societal good. And I really, really Seth Sternberg: respect that. And I wish, like, I Seth Sternberg: kind of wish, honestly, all entrepreneurs would Seth Sternberg: focus on that. Like, especially second timers. Seth Sternberg: It's like, hey, if you have the Seth Sternberg: capability, for whatever reason, you're a second Seth Sternberg: timer, or some other capability you have, Seth Sternberg: and it's an entrepreneur, you're a first Seth Sternberg: timer, solve societal problems that matter. Right. Seth Sternberg: Like, something that's really going to help Seth Sternberg: move the world forward in the right Seth Sternberg: way because, like, we need it. Adam O'Donnell: That's so good. And, you know, the Adam O'Donnell: death rate's 100%, so there's only so Adam O'Donnell: much time. Seth Sternberg: Yep. Adam O'Donnell: I really appreciate that. The, the next Adam O'Donnell: question I wanted to just double tap Adam O'Donnell: on, like, what were some of the Adam O'Donnell: problems that you saw when you're at Adam O'Donnell: that 10 million state that, like, overwhelmed Adam O'Donnell: you to the point where, like, we Adam O'Donnell: might need to shut down and this Adam O'Donnell: might not be solvable. Seth Sternberg: Jeff. So, like, one example would be, Seth Sternberg: you know, you'd have a client, misses Seth Sternberg: Smith, and she would love this care Seth Sternberg: professional, Janet. But then your other client, Seth Sternberg: misses Jones, hated Janet, the care pro. Seth Sternberg: And so it's like, well, is Janet Seth Sternberg: good or bad? And the answer is, Seth Sternberg: she's good for some people and bad Seth Sternberg: for other people. Right. And that shouldn't Seth Sternberg: be surprising because that's the way humans Seth Sternberg: work. But then you'd have these other Seth Sternberg: sets, one kind of problem, another kind Seth Sternberg: of problem would be, you know, you'd Seth Sternberg: talk to Janet and you'd say, hey, Seth Sternberg: Janet, when can you work? One example, Seth Sternberg: what days do you not want to Seth Sternberg: work? And Janet says, well, Saturdays, I Seth Sternberg: just don't want to work. And so Seth Sternberg: then you show Janet, like, three clients Seth Sternberg: that Janet could choose from same day. Seth Sternberg: Three clients. Here they are. Here are Seth Sternberg: their schedules. Which one would you like Seth Sternberg: to work for? And Janet picks a Seth Sternberg: client that has care on Saturdays, and Seth Sternberg: you're like, but, janet, you just told Seth Sternberg: me that you don't want to work Seth Sternberg: on Saturdays. And Janet's like, oh, well, Seth Sternberg: that's different, because blah, blah, blah. And Seth Sternberg: you're just like, oh, my God. So Seth Sternberg: you can't figure out who's a good Seth Sternberg: and bad care pro. You can't figure Seth Sternberg: out how to ask care pros even Seth Sternberg: when they want to work. So we're Seth Sternberg: talking about, like, a totally, what, seemingly Seth Sternberg: impossible problem, right? Like, you can't get Seth Sternberg: these most basic things down. Like, can Seth Sternberg: I figure out if this is a Seth Sternberg: good or bad care pro? Can I Seth Sternberg: figure out when this care pro wants Seth Sternberg: to work? And in retrospect, when you Seth Sternberg: start putting ML against it, you can Seth Sternberg: actually make it work. Every one thing Seth Sternberg: you have to remember is products and Seth Sternberg: industries tend to happen when society is Seth Sternberg: ready and when technology platforms are ready. Seth Sternberg: Like, those two things have to converge Seth Sternberg: for a new product category to emerge, Seth Sternberg: like social networks or car share or Seth Sternberg: whatever. One of the things that had Seth Sternberg: to emerge for home care was AI, Seth Sternberg: because there is no one right answer. Seth Sternberg: There's no static algorithm on who's a Seth Sternberg: good care pro. The answer is, it Seth Sternberg: depends based on people and heterogeneity. So Seth Sternberg: AI is good at that. I'm not Seth Sternberg: talking about Genai. We use that in Seth Sternberg: other ways. I'm talking about ML, statistical Seth Sternberg: regressions, AI, it can be very good Seth Sternberg: at that. And that was necessary to Seth Sternberg: unlock kind of scaling home care. Adam O'Donnell: Did you know that going in, like, Adam O'Donnell: when you were evaluating this in the Adam O'Donnell: research phase? Seth Sternberg: Definitely not. No. We knew logistics was Seth Sternberg: the reason why, or we were pretty Seth Sternberg: sure logistics was the reason why. Home Seth Sternberg: care agencies could not scale. They got Seth Sternberg: to what's called the Dunbar number. So Seth Sternberg: in someone's head, they were running a Seth Sternberg: group of 150 people. It's like 30 Seth Sternberg: clients, 40 care pros, 40 sons and Seth Sternberg: daughters, and some office staff. It was Seth Sternberg: 150 people. And that's as big as Seth Sternberg: they could ever get because the owner Seth Sternberg: was kind of solving it in their Seth Sternberg: head. But we didn't know until we Seth Sternberg: got there that if you could actually Seth Sternberg: use what at the time was kind Seth Sternberg: of this novel AI thing where you Seth Sternberg: could say, hey, I'm not going to Seth Sternberg: have a static definition of what a Seth Sternberg: good care pro is, but I'm going Seth Sternberg: to be flexible about that based on Seth Sternberg: who the care pro is and what Seth Sternberg: the client's needs are. Adam O'Donnell: What an amazing, so in your research, Adam O'Donnell: like, going back before you actually, like, Adam O'Donnell: launched the company that became a $10 Adam O'Donnell: million SMB, essentially, what did you, how, Adam O'Donnell: how did that fall short? Because I Adam O'Donnell: imagine that you interviewed some owners of Adam O'Donnell: these care, of these organizations already. Seth Sternberg: Yeah. So we talked to owners. We Seth Sternberg: talked to a lot of care pros, Seth Sternberg: actually. We went to Phoenix, interviewed 25 Seth Sternberg: of them. Sacramento, interviewed 25 of them. Seth Sternberg: We didn't do it in the Bay Seth Sternberg: Area because the Bay Area is too Seth Sternberg: weird. Right. We felt like the market Seth Sternberg: day won't be good. And we interviewed Seth Sternberg: agency owners as well. Obviously, one thing Seth Sternberg: you have to just remember, when you're Seth Sternberg: doing initial research, users tell you what Seth Sternberg: they think they want. They definitely don't Seth Sternberg: know how to build it. The most Seth Sternberg: helpful people that we talked to were Seth Sternberg: actually the care professionals. One of the Seth Sternberg: things this really poignant one interview in Seth Sternberg: Phoenix at Starbucks, that care professional said, Seth Sternberg: look, I am a professional. I want Seth Sternberg: to be treated like a professional, but Seth Sternberg: I'm treated like dirt. It was actually Seth Sternberg: in the flight home that we said, Seth Sternberg: you know what we're going to actually Seth Sternberg: call these people care pros. Care professionals. Seth Sternberg: That's what we came up with. The Seth Sternberg: word they said, like, in a very Seth Sternberg: basic sense, we're going to call care Seth Sternberg: pros what they want to be, not Seth Sternberg: caregivers, but care pros, care professionals. So, Seth Sternberg: you know, no agency owner. The other Seth Sternberg: challenge in this complexity is agency owners Seth Sternberg: usually will say, hey, the thing that Seth Sternberg: keeps me from scaling is I can't Seth Sternberg: find enough care pros. They have like, Seth Sternberg: caregivers, but like, and the problem with Seth Sternberg: that, of course, is if you say, Seth Sternberg: then, well, what percentage of your market Seth Sternberg: do you have? They'll say some really Seth Sternberg: low number, like one or 2%. And Seth Sternberg: you'll say, okay, so for like, every Seth Sternberg: two care pros you employ, someone else Seth Sternberg: is employing 98 care pros. So it's Seth Sternberg: not that they don't exist. Right. Like, Seth Sternberg: it's that somehow something in the way Seth Sternberg: you're running your agency is not enabling Seth Sternberg: you to be able to either find Seth Sternberg: them or scale to finding them or, Seth Sternberg: you know, match them with customers. You're Seth Sternberg: experiencing it as, I can't find care Seth Sternberg: pros, but it's actually a logistics problem Seth Sternberg: because you don't have your full market. Adam O'Donnell: This is amazing. I, I have thoroughly Adam O'Donnell: enjoyed this. And so thank you for Adam O'Donnell: just, like, going under the hood here. Adam O'Donnell: I'm. The next phase that I'm just Adam O'Donnell: curious about is, like, how do you Adam O'Donnell: approach customer experience? And, yeah, you know, Adam O'Donnell: everyone knows this is in desk podcast. Adam O'Donnell: I usually don't directly ask these, but Adam O'Donnell: I'm. But I think because of what Adam O'Donnell: you're working on, it must have been Adam O'Donnell: so essential to be able to have Adam O'Donnell: that quality experience that you don't fully Adam O'Donnell: control. Seth Sternberg: Yep. So the first thing that we Seth Sternberg: started with is what we call, we Seth Sternberg: started calling care for the care pro. Seth Sternberg: And the idea was if we created Seth Sternberg: better jobs and a better life for Seth Sternberg: the care pros, that they would end Seth Sternberg: up providing better care to our customers. Seth Sternberg: And we really stayed with that for Seth Sternberg: a really long time. Like, we, we Seth Sternberg: kind of like, you know, squeezed that, Seth Sternberg: you know, orange or whatever, as much Seth Sternberg: as we could to get all the Seth Sternberg: juice out of it. And the reason Seth Sternberg: is, is that we really deeply believed Seth Sternberg: in it, and it got us a Seth Sternberg: lot of gains around client experience. It's Seth Sternberg: just creating a more stable, better job Seth Sternberg: for care pros where we truly treated Seth Sternberg: them like a professional. What we then Seth Sternberg: moved on to is kind of this Seth Sternberg: defect framework that we use today where Seth Sternberg: we would say, hey, what are the Seth Sternberg: defects that clients really care about? As, Seth Sternberg: as represented in statistics, like, but based Seth Sternberg: on client behavior, we can see this Seth Sternberg: thing really bothered, bothers clients en masse, Seth Sternberg: and then we can kind of rank Seth Sternberg: them and we can look at how Seth Sternberg: they interact with each other. And then Seth Sternberg: once we know what those things are, Seth Sternberg: we can then change the way the Seth Sternberg: system works to try to address those Seth Sternberg: problems. And so that's kind of our Seth Sternberg: latest state of the art that's more Seth Sternberg: client focused because we have built this Seth Sternberg: really solid foundation on the care for Seth Sternberg: the care pro. Right? So, like, first Seth Sternberg: part was care for the care pro. Seth Sternberg: Build a really solid foundation there, then Seth Sternberg: switch over to a client view and Seth Sternberg: look at basically a defects framework. Adam O'Donnell: Wow. That is. So what was the Adam O'Donnell: client view? If you could tell me Adam O'Donnell: more about that one. I love hearing, Adam O'Donnell: like, prioritizing the employee. The customer is Adam O'Donnell: not always, the customer is not always Adam O'Donnell: right in a lot of examples. Seth Sternberg: So, yeah, actually, oddly, that was sometimes Seth Sternberg: quite true in care for the care Seth Sternberg: pro. Right? Especially if you have clients Seth Sternberg: who have dementia, for example. And they Seth Sternberg: might say, hey, this care pro stole Seth Sternberg: something. But that care pro has a Seth Sternberg: stellar record otherwise. And you can say, Seth Sternberg: hey. Or they'd often say, hey, the Seth Sternberg: care pro was late or whatnot. And Seth Sternberg: we used gps tracking, and we could Seth Sternberg: say, you know what? The care pro Seth Sternberg: actually literally was there at this time. Seth Sternberg: Like, we know it's gps verified. So Seth Sternberg: we, early on, we found a lot Seth Sternberg: of cases where we really had to Seth Sternberg: care for the care pro, and that Seth Sternberg: had to be the base on the Seth Sternberg: client side. One of the top things Seth Sternberg: that's super interesting that we found is Seth Sternberg: clients really care about what we call Seth Sternberg: consistency. And consistency is they want to Seth Sternberg: see the same care pro again and Seth Sternberg: again. They want to form a relationship Seth Sternberg: with that person. So our systems seek Seth Sternberg: very much to create these really stable Seth Sternberg: relationships between care pros and clients. And Seth Sternberg: it turns out that the care pros Seth Sternberg: really like that, too. Adam O'Donnell: Wow. Yeah. And that's a human tendency Adam O'Donnell: that we could, like, quarterback and look Adam O'Donnell: behind and say, oh, that makes sense. Adam O'Donnell: But, um, I I wonder. Like, it Adam O'Donnell: just seems like that shouldn't be insightful, Adam O'Donnell: but I imagine how it's interesting that Adam O'Donnell: it was. Seth Sternberg: I mean, a lot of stuff. I Seth Sternberg: think the problem is this. I could Seth Sternberg: throw, like, five things at you that Seth Sternberg: sound right. Right? Like, clients like a Seth Sternberg: reliable care pro. Clients like the same Seth Sternberg: care pro. Clients like a care pro Seth Sternberg: who cooks the kind of food they're Seth Sternberg: used to eating. Like, I could throw Seth Sternberg: a bunch of stuff at you. The Seth Sternberg: problem is that we'd have no way Seth Sternberg: to know which ones actually matter if Seth Sternberg: we're just bantering about it. When you Seth Sternberg: get powerful is when you look to Seth Sternberg: the data and you can find the Seth Sternberg: patterns in the data that tell you, Seth Sternberg: hey, what a client really cares about Seth Sternberg: is blah. Or these three things, and Seth Sternberg: here's even how they interact, et cetera. Seth Sternberg: And I even can know how much Seth Sternberg: better I'll grow if I fix this Seth Sternberg: thing, because I've statistically analyzed its impact Seth Sternberg: on experience. Like, that's when you get Seth Sternberg: powerful, right? When, you know, you stop Seth Sternberg: the debate. And you know what things Seth Sternberg: clients truly care about. Prioritizing another way Seth Sternberg: of saying it's another way of saying Seth Sternberg: everything. In retrospect, of course, seems obvious, Seth Sternberg: but before you have the data, you'd Seth Sternberg: be debating whether or not it's the Seth Sternberg: one. Adam O'Donnell: That is so good. Well, just a Adam O'Donnell: final question, like, what would you tell Adam O'Donnell: yourself before you started? Honor, if you Adam O'Donnell: could go back and give yourself, like, Adam O'Donnell: one big piece of advice that you've Adam O'Donnell: learned, it'll be even. Seth Sternberg: Harder than you think. Probably that. Don't Seth Sternberg: worry about it. You'll get through it, Seth Sternberg: but it'll be harder than you think. Adam O'Donnell: Wow. Even in those low moments, which Adam O'Donnell: I know you had, and this has Adam O'Donnell: been amazing. Thank you so much, Seth, Adam O'Donnell: for taking the time. And I can Adam O'Donnell: just tell you have a scientific approach Adam O'Donnell: to this that is really interesting. Seth Sternberg: Yep. It's been fun. Yeah, it's great Seth Sternberg: to chat. Thank you so much for Seth Sternberg: having me on, Adam. I appreciate it. Adam O'Donnell: Thank you.
