Dec. 23, 2020

YC during pandemic - how did it work out? By Vladimir Klimontovich

YC during pandemic - how did it work out? By Vladimir Klimontovich

Vladimir Klimontovich, Co-founder & CTO @ Jitsu (YC S20) talks about how it felt to be in the YC during the pandemic. He explained what major problems he saw in participating in the program fully remotely and also discussed the benefits of remote-YC. We also spoke about creating the momentum for fundraising and how YC still manages to do its main job even during the pandemic.


Vladimir's LinkedIn: https://www.linkedin.com/in/klimontovich/

Jitsu: https://jitsu.com/

Here are some articles about Jitsu, if you'd like to learn more about it: 

https://techcrunch.com/2020/12/02/jitsu-nabs-2m-seed-to-build-open-source-data-integration-platform/

https://markets.businessinsider.com/news/stocks/jitsu-raises-2-million-seed-financing-to-launch-open-core-platform-for-data-integration-1029858437

https://www.finsmes.com/2020/12/jitsu-raises-2m-in-seed-funding.html

Transcript

And today's a guest speaker will have who recently graduated from Y, Combinator and this voice 1st Y, badge that went through.

Completely online and today we'll talk about that. How do you feel to go through Y, see during the pandemic? How was it different?

From the previous experiences, et cetera, et cetera. So let's kick it off by you giving us some background on yourself and on so.

Okay, hi, everybody. So, my name is Vladimir. I'm the CO, founder and CEO of Gita it's an open source data, integration platform.

Basically, we're helping data engineering team to assemble the information in the single or few data warehouses.

So, we with my partner about a year ago, but.

To current business model just recently. Actually somewhere in the middle of the batch we recently closed the seed funding. It's about 2M before.

It's not my 1st company before. So I was running as a city or a company called get content. It's it's an advertising technology startup.

Which we developed initially, and in Russia and broad brought to United States and.

I was running the company for 5 years, and eventually I sold it sold my share to existing investors, the company and started.

That's a previous start and by the way yeah, I forgot to mention that in this episode. We'll also talk about how can someone make money from an open source project?

Because that's something we've never discussed and something that I'm personally curious to hear about, but 1st of all talk about. So, 1st question is how many times have you actually tried to get into why come here before you finally got in.

Yeah, actually, it's maybe it's a pretty unusual, but we got in from the 1st attempt, so we started the company in September.

We didn't apply to with the winter, the winter bench, because we've been awake and in in February or March, I don't remember we decided to apply and we got him actually earlier than than usual.

Got it so, do you think it's actually a lot of people don't apply because they know that's acceptance rates are tiny and those applications quite some time to.

Uh, make else you have to go over those if you want to make sure that yours is perfect. So a lot of people don't apply just because they are very certain that they will not get in.

So, who do you think should actually try to apply to do you want to say everybody should try and apply to? I see.

So, targeted that making an application, it's a waste of time.

It's not even if you to and even if you're not sure you wanted it, you want to get in which you spend about a week, preparing our obligation and it's not like a full time week.

We've been working a couple of hours each day, and it actually helped us very much to answer the right question to think about our business model to think about what we do. So application.

They asked very good questions and it's actually healthier to understand your idea better business better. And even if you want accepted, I'd say.

This time was very well spent and I encourage everybody just to try to feel the application if in the middle you understand that or you're not sure you can always stopped working on it,

but once you completed the application,

there is no harm in submitting and right.

I've heard some rumors that way. She doesn't like people.

Twice or 3 times for play basically every but I'm not sure. It's true. I'm not sure they even take this in consideration. I mean, how many times the applied.

In total, right? Yeah, I think that's not the case as well. Sometimes actually investors like founders who just keep applying, but they make sure to to write, you know, what kind of changes did you make since the last application? So, I think.

That's actually even the Cape sign. Um, anyways, now, let's talk about the major topic for discussion today. How did feel to go through completely online can tell us a little bit about that experience.

Oh, I mean, it's I can't really say, because it's my 1st, twice in batch, so I have nothing nothing else.

So I cannot really compare but if somebody told me that, you know, if it's that that's possible to do Y. C.

or a lot of other things remotely before the pandemic, I wouldn't believe it, because at the beginning, it sounded like a very, very scary. What can you do?

Just talking with people over zoom but overall it was good. I'd say, I can say it's a few is definitely good because.

Because you can take more meetings in general, and specifically with investors after the demo day.

So how things works and demo day in the open of cyber investor pitch, which is recorded on video, see a slide and they basically click a button on the Facebook or something.

So, once.

Yeah, and once the rest of life, you basically in the mail introduction and you start the conversation from there and.

I mean, it's a, it's a very, it's very cheap action to, like, anybody on the, from the investor standpoint on the demo day website. It is basically 0T time.

So company is getting a lot of likes and we can set up a lot of meetings. I think, you know, I wasn't a part of all of the, most of them initial meetings.

My Co, founder of the grinding talking with the investor for that now for the 1st time. So I think that the toughest day.

And was about 8 or 9 meetings in total. So there is a way.

Yeah, yeah, and there is no way to do the 9 meetings in person. So I guess this was definitely good and I'm not talking about investors.

You can, you can pack a lot of meetings with your fellow match rates with prospective customers and so on.

And so that's definitely good,

but I,

I can,

I'd assume that the networking component of is not as remote as it should be in person because she runs a few events per week.

Talks and dinners, and basically for the 1st, part of the event, you listen to the speaker and after after after finished, you just go Internet network. So they try to do something like that using zoom.

Like, you just breakout.

Yeah, but I think I'm pretty sure that in person, it would work much better.

Right Yep,

that was actually my next question I was gonna ask,

you know,

it's why SES have their famous dinners for founders where it's just all founders from the from batch and mentors,

and investors,

they all mix together and it's just great networking opportunity.

That usually takes for a really long time. So, with that being gun or transferred to the online format, which is slightly worse, what do you think is now the major value? That's why company provides to start founders.

I think the greatest value of why see, it's basically demo day and packing all the investor conversation in the.

2 weeks following dominate, because it creates a sense of urgency, a great sense of urgency. And investor has a huge incentive to close. The deal faster rather than just waiting.

So that's definitely good.

You have a huge incoming pipeline of investors, and they all want to close as many deals as soon as possible, because all the best deals will be done after month after.

So that's still very great value of. I see the 2nd.

I mean, I'd say like, every accelerator incubator, it's more like more like coaching rather than providing that actual business value. So the give your right advance advices asked a very good question. Very thoughtful questions.

And basically, you face the truth, and they make it to face the truth about your startup. And that's really good.

And and obviously,

the network network a lot,

because a lot of companies has been for,

why see and if you have a very specific questions about some product or experience with some product or experience with some service company,

you can ask this question for the network.

And the chances are pretty high, you're going to get a very thoughtful answer.

Right, right so speaking of why of the demo day of why can very that's another.

Probably 1 of the most famous things that they have. So, can you tell us shortly? What happens right after you present at that virtual demo date?

So, yeah,

what happens as I mentioned this demo day website where investors and see the features and click this button and you get an introduction with the investor after that you just reply to this

email and set up a meeting and you talk with a lot of investors, I think we had a in Google spreadsheets,
and we talked in 1 way or another with,
I think,

like 80 or 90 investors.
So you talk with the investor investors. They ask questions about your company.

You sort of the questions you're doing a beach, and after that, you know, some, some investors, they want to continue the conversation and basically it's like a sales funnel.

So have a lot of leads in the 1st, stage of the funnel. And after, after some stages, you have some investors who can, who ready to invest in your company.

You just negotiate the terms. So it's not as fancy as it seem. It's a lot of grinding works basically having. I know Mike. A founder he's, he's a hero.

I was I was involved in the conversation in the 2nd stage only, but on the 1st stage, you investigate need to have.

You do all the same page and answer more or less the same questions. So it's a lot of work.

By the way, speaking of those new initial similar pictures, where you answer pretty much the same questions, can you give us some idea of what kind of questions to investors ask to you by graduates?

I'd say the most popular questions is how you better than your competitors. So how different because especially in our space.

The condition is very tough, so we have a lot of companies doing this approaching the similar problem, but from different angles, and they want to and they want to know that.

At least we'll have a theory that makes us better than other competitors. So that's a question number 1 the 2nd question.

The 2nd question, they always ask us about the team because at this stage, they invest more in the team rather than in a product because a product isn't pretty early stage. So it's really.

Hard to tell if the is good or not and a lot of company, a lot of companies pivot, even after seed round.

So they definitely ask about the team about the experience what we accomplished in the past and so on and so on and yeah.

And they always ask about the validations, but it's not that important to be honest. I mean.

About relations, so I'd say, I'd say most of the way see, companies are in the same market I'd say from 8M to 15M something like this and.

Yeah, and to my my point of view, it doesn't matter. It doesn't matter much.

Um, yeah, yep, that's completely right. I think that's just a question that they have to ask just to pretend that they actually care about that part, but now, let's make sure we move on and talk about how an open source project got into.

And how are you planning to make money.

Yeah, so, uh.

When we got into I see, we've been working on a slightly different, slightly different problems.

So, within in a SAS application that house or customers to consolidate data into a single database and apply visualizations and.

On top of the date, so, and somewhere in the middle of the badge. We understood that the problem we're trying to solve.

It's too big, so you can't be good in visualization and data, warehousing and and seeking data from external sources to your data warehouse.

So, the problem is, you can't do well, and all and all parts of this equation. And there are a lot of companies which specialize only in part of what we've been doing.

For example, for visualization, it's, I think the visualization of the winners step law, it's a large company. I think they've been acquired by sales force for 15B or something. So it's basically the winner in this space.

So we decided to concentrate in the space of. Uh,

update the integration and we check who's in there who's which company is working in this space so large players I think the largest 1 is the segment,

which has been acquired for 3B,

but who their religious recently the other 1 is 5 trend.

So we decided, okay, what can we offer to our.

Which is better than our current solutions.

To quickly discover that when it comes to data, a lot of companies, they don't, they don't want the data to go from some.

External systems, so they don't trust them or there are a lot of regulations and so on and so data is very valuable.

So they want to keep everything in house, but nowadays,
if you develop the product,
which is not a SAS,

which,

which is data to the hosted on Prem customer servers,

it need to be open source.

You can't make a product,

which is close source because basically your main customers developers who are using a product on daily basis,

configuring pipeline configuring pipelines are doing similar things and they want to know how this product work and the best way to know how the product works is to see the source code so open source.

It's a way to go if you're developing something, which is, which is not hosted in cloud, but can be hosted on Prem on the company's servers. So, and.

And talking about miniaturization, so how it usually works, which we did a small research working. We just we just research a few public companies doing open source project and.

Uh, the person is very clear, so, most of the users using a free version, which is, which is free of source, and they don't pay much for that but for a small set of enterprise features, you charge a lot.

For example, I know Google can be a customer, so if they want a specific feature, which is, which is actual, for all their watch company, they probably they won't care about the money.

So, it's called this model is called open core for the most of the part of the product you don't charge, but for small fee for some.

Small feature set, you charge a lot and basically that's how it works.
Got it. All right. That's interesting. Now, let's move on to another interesting part of it.

Not moving to the United States even while you're in Y Combinator batch. So you've spent the whole time of in Russia. Moscow how did you feel how did the fact your fundraising event?

Well, actually, for the fundraising, I, uh, I flew to New York for, like, 3 weeks for the hardest time of the fundraising. I think it's been a week before them a day and 2 weeks after the Monday.

But it's a lot of New York just to be in the same time zone as my Co, founder and investors. So I can't say it would be very different here because.

You know, it's still a zoom calls being at the same time zone, made it easier because otherwise I would probably, you know, wake up at noon and go and bad at 5 0T am or something. Yep. Yep.

So, uh, you basically sit with your laptop taking calls.

And and it's, it's really convenient that you can do it from anywhere. Uh, probably for some people, it's better to go through the stressful time.

You know, being at home in a comfortable setting, you know, with the friends and family around. So, it has a lot of benefits being being remote if you're just talking with on zoom with people. But, uh.

I can't really compare, you know, having impersonate direction interaction. Definitely has it.

And has it sparks so maybe it would be better being in California, but definitely it's cheaper not to move.

Yeah, most definitely that is true. So, let's think about that moving, not moving staying back in Russia. We're moving to California or New York.

So, uh, even what wants to fundraising was over, he moved back to Russia and eventually didn't move to the United States. Why is that?

Well, I mean, I think it's my personal preference.

I used to live in New York for a year, and a half when I've been during my previous company and I personally prefer to live in Moscow.

I mean, the company's very important for me. So, if I need to move, I will move to United States, but so far, I don't see this as a necessity at this point of this company.

And if you have that kind of freedom, I don't know if it's if it's, we think would be different different.

Otherwise, if we didn't have a corporate pandemic, but now nobody requires you to move and mitigate freedom of living in your home country or any country. Very good.

Because it's the cost of life, the quality of life. Sometimes. I don't know. Some people don't like that weather in California. Ah, some people. Yeah.

So we will also live in the mountains in somewhere. So basically it's more freedom and overall it will attract more talent because some people really want to work for that.

They can benefit from working on the start up in California and startup can benefit from having them, but they can because person,
for example,
is ready to move somewhere.

So it's definitely better for everyone. That's freedom of application.

Right. That's very true. So, now we're moving on to last 2 questions of today is the episodes. 1st 1 is going to be specifically for our Russian listeners, or at least from Europe in general. So, like, 5% of our listeners.

What's your advice to those people who are not based in the United States? What would you recommend them?

I mean, like, what do you mean? Like, you know, in general, you know, about starting a start exactly. Starting to start. Plus, let's make it 3rd, general.

The sourcing starting a start up. I mean, it's globally we don't need to be in California to start a company to apply to. I see. And actually, it's been it's been the same way even last year. So I think we published the stats.

And about 20, 30% of founder site international so you don't need you don't really need to be in California to start the start up. And being in Europe definitely has.

Definitely can be better in some aspects.

For example, like your personal quality and cost of living and definitely the cost of engineers and even user base.

So all our competitors, they probably are in United States but I talked with our users in Europe a lot and basically the landscape is very different large companies.

They put a lot of money in marketing advertising and so on, and so on, and they're trying to reach out for American users, but in Europe, especially in the data space as ours, there are a lot of customers.

A lot of people having basically the same problem data integration. It's a problem of engineers and product managers and product managers and engineers everywhere.

And this market when the European market is definitely easier to attract the users, especially early users.

So I definitely encourage you to start a startup to apply to ways to try to do things remotely even even.

If you need to when this covered pandemic is over, even if you need to move somewhere to United States to be a part of the program, usually it's temporary. So you don't need to make a life changing decision to move somewhere.

You know, do it.

Absolutely perfect. Very positive advice as well. So I think, I think I'm definitely in the same they share with you since Philip endemic everyone's doing it online.

So I think right now it's a good,
really good time for non us based people to try to get into United States, and at least get a sense of how it feels to work with the Americans,
you know,
because the difference from the experience that you get Europe,
so definitely give it a shot here on these positive note.

We're moving on to the last question after these episode, we choose a call to action. So flooding or what is the 1 thing you want to do as soon as the episode is over.

I mean, right now, I just go back to the coding.

So, what's your recommendation to those listeners? You know, most of our listeners are early stage founders. Most of them by the way are non technical are more like business finance related. What would you recommend them doing?

Like, right after the episode stops.
It's a good questions, I think let me think.

So I guess from not technical founders is definitely beneficial to learn how to code or a little bit of technology. It's not it's not hard at all.

It's very easy to do and, you know, educating yourself. Occasionally. It's something you can do once, like, once a week, it's definitely good. And.

About about, like, you know, advice in general.

I think the good advice would be think less about fundraising and more about product.

I think a lot of people they when they start the start up and it was my mistake as well. And I think I still think a lot about fundraising violations and so on and so on all those things. They do not matter. Even have a great product.

And if you product.

He is not good even if you, if you raised a lot of money, you're probably going to fail eventually.

Right here, I'm somewhat on the same page with you, but not as much focused on the product. I'm more focused on the customers. A lot of people forget about fundraising. Forget about customers and just go and develop the product that they think is good.

My recommendation is go, try to talk to your user's potential users, your friends who might be your users, whoever that is just get some feedback in.

And that should be helpful. So, do that followed advice mentioned in the episode, I'll also leave a few links in the description of this episode.

So, if you're curious to hear more about or definitely check out the description and as usually. Have a good day.