The Snakes and Ladders Game of Startups
Earlier this month, Y Combinator hosted its third annual Female Founders Conference, which brought together more than 800 women building women-led startups.
Here on the Macro, we’ll be sharing full videos of the onstage talks from YC alumni and distinguished guests who shared stories and practical advice on building companies.
In this inspiring talk, Ooshma Garg, the founder and CEO of dinner kit delivery service Gobble, detailed her company’s complicated years-long path to what might look from the outside like simple success, and described how building a startup is like a daily game of Snakes and Ladders that can take you two steps forward, and then two steps back. She also gave her best advice for other entrepreneurs.
A full transcript is below.
Hey Everyone! How’s it going? Are you excited to be here? Let’s have some fun…
My name Ooshma and I’m the founder and CEO of Gobble. Gobble helps anyone cook dinner in just 10 minutes. We’re the inventors of the 10-minute 1-pan dinner kit.
On the screen right now, you can see one of my favorite tweets. After we finally raised Series A, Paul Graham tweeted, “Ooshma Garg does not give up.” I think that’s why I’m here today. I live an hour away, but it took me five and a half years to get here.
I could tell you our whole story with this graph in three seconds. This is a Stripe revenue data dump of Gobble over the last five years.
You might be wondering what happens right here [highlight inflection point]. Doesn’t it look like we had no idea what we were doing and then all of a sudden we just figured it all out? That’s not the case. In order to understand what happens at the promised land, you have to know what happens in the beginning and the middle and all along the way.
What you’re seeing up there are actually the words from the startup curve that Paul Graham coined. He talks about how most startups have a launch. It’s very exciting! They fall into this trough of sorrow which is oftentimes a multi-year slog, then you have these wiggles of, I like to call them hope, but maybe they are wiggles of false hope. Then, if you’re lucky and you have the stamina, maybe you get to the promised land. That was our story, and like Jessica said, it’s not so uncommon.
In 2010 Brian Chesky of Airbnb gave a talk at startup school. His graph from 2008 to 2010 looked similar to our graph.
It was a launch, a trough, and wiggles of hope. What’s interesting though is now, that whole area of the graph looks smooth.
When you look at a startup, it looks like there’s nothing, and then something. But, what’s important to know is how it really is day-to-day. And to me it feels a lot like a game of Snakes and Ladders.
That’s what Gobble is like. Oftentimes, it’s two steps forward and two steps back, and other days, it’s all about forward. Today, I’m going to tell you about some of our early snakes and ladders and some of the lessons I learned from both and some big lessons at the very end.
Gobble started when I had another startup company. I was at Stanford, running a group called Stanford Women in Business and I was actually helping women get jobs at banks, consulting firms, and ultimately law firms. As you all know, startups are a 24/7 commitment. I was working for 16 to 18 hours a day, and I was eating nothing but take out and Starbucks. I ate alone at my desk and alone in my car, and oftentimes I ate in my car more than I ate at my apartment. Eating take-out is very unhealthy and it’s very lonely. I was beginning to get very unhappy.
This is even more personal to me because I grew up with an upbringing of home-cooked food. I would come home from track practice and my dad would be in the kitchen singing and cooking a traditional North Indian nutritious and colorful meal. My family had a great tradition of eating together every single night. For me to cook these meals as an adult, I’d have to cook for two hours at night after coming home from my startup work. It just didn’t feel possible. My parents actually offered to move here from Dallas, and I didn’t really want them to move here. I wanted to be independent.
I had to solve this problem another way. I posted an ad on Craigslist see if any chef would make me a home cooked meal for $8 a plate. I got 70 responses in 24 hours. I thought “Wow! There are so many people in the Bay Area that are proud of their food and want to earn a living from it.” I ended up asking my friends, “Who wants some free food?” We started meeting chefs and their interview was to cook us a free dinner. So in the beginning, I thought “This is an amazing dinner hack!” But what started out really fun and amazing and funny became a very serious opportunity very quickly. These chefs were driving from Fremont or San Jose or San Francisco to my office in Palo Alto and they were putting their culture, their pride, and their heart on a plate.
I know what you’re thinking… We did get food poisoning. Twice… There are some risks in the prototype phase of your startup.
We ended up choosing our favorite chefs, and I learned that in order to get food for myself, I had to get food for others too and make this worthwhile. So in solving the problem for myself, I made a calendar of chefs and what they would cook each day. I emailed my friends and asked if they wanted to order dinner that day. This business that was starting, where I was first just solving a problem for myself and later it evolved organically into a business, was just prototyped with email, PayPal, and me driving my car. There was no tech and all of a sudden we were figuring out the supply and demand and a business was forming. I was a delivery driver. I was driving dinner to all of my friends and then eating it myself.
I thought to myself “This is really fun!” I was having a lot of fun, and what I was doing was feeding my soul and my heart. I was giving people home-cooked food, which is what love means to me and how I grew up. I wanted to take this further and people were starting to order every day.
Most people advised me that I should find a technical co-founder. I’m a mechanical engineer and I had no experience with software. I started looking for co-founder, meeting friends of friends, going on coffee dates, and no one was as passionate about the idea as I was, they weren’t willing to quit their job, and we just didn’t connect in a deep way.
This idea was happening, it felt amazing, and it was already moving, so I thought “Screw it! I’m just gonna do it anyway.” Lucky for me, the investors felt the same way. I had the passion, there was a market, there was a proof of concept, and there was a mission. I’d already built a previous start up company. So, my fear of not having a technical co-founder did not need to be a fear. We were able to raise our seed round.
It felt amazing! It was actually pretty great. We got a new office, I started hiring people, and Gobble was off to a phenomenal, almost dream-like, start. I hired our first engineer and we were months away from launch. We were building our website, getting customers to pre-signup, and all of a sudden, our first engineer quits just weeks before our launch. I was walking to our local Starbucks, and I saw him sitting there with someone. Looking at me, he turned pale. I knew something was wrong. I walked back to our office, and sure enough, a few minutes later, he walked in and said “This is too much pressure. I can’t handle it anymore! I quit.” At that point, I didn’t know what to do. I felt like I had failed all of our investors. I didn’t know the code base. Where would I find the next engineer? What was I going to do? Would our launch be delayed? How would I look? That was our first big snake, and a very dark day for Gobble.
As it turns out, the next day, I spoke with a few investors that I trusted, and they introduced me to some Ruby on Rails consultants. It took a few days, but I was able to beg someone to come to our office, meet our former engineer, and learn the codebase. That person helped me on contract for a little bit, and ultimately we were able to hire some great engineers, who are my favorite engineers today. But, it delayed our launch and it was a hard hit that we had we had to get through, in order for Gobble to survive.
Ultimately, we were able to launch our first product, which was a Gobble marketplace. We were in TechCrunch. Our investors were really happy. I sent out a great update, and it looked like we were getting our footing back, and I was really really excited. What I didn’t know is that we were standing on a cliff of a multi-year long trough of sorrow that was ahead. Just because you launch doesn’t mean you’re going to get customers. After those couple first days of the “honeymoon phase” of a launch, I had to fight tooth and nail for every customer and for growth every week. I put coupons in Palo Alto coffee shops and went to mom’s events and pitched our company, and every time somebody signed up, I personally emailed them, followed up, and gave them a promo code to order again. It was all very manual and I was pounding the pavement.
After a few months of this work, we had small numbers but we showed promise and growth. One of our investors suggested that we try to raise Series A. He actually wanted to lead the round and had a lot of experience investing in Silicon Valley. I structured our process around this investor. I was so excited by the opportunity to work with him. I spent a long time preparing our deck, and I only met with a few people that he recommended. I thought that everything would be a done deal. As it turns out, we met with their firm first and after the partner meeting, I wasn’t able to get the sway of all the partners. He wasn’t able to get the sway of all the partners. The whole deal unraveled. It felt like we were back to square one. I felt like a fool. I did so many things wrong in retrospect. I didn’t meet many different investors. I met five, not forty. I thought that a deal was done before it was done. Next time, I would know that the deal isn’t done until the money is in the bank. Most of all, I shared my whole process with someone when I needed to run that process. There were so many lessons learned. I felt crushed and I felt foolish.
We had some money in the bank, and I decided that this wasn’t the end. I was going to take whatever money we had left and keep going. I started meeting with customers again to see how we could ramp up the growth in an organic way. What did they want? What was wrong with our product?
At the time, they would order in the morning, and we would deliver food in the evening. What people said they wanted was they wanted to order right away. They’re really busy, and they may forget to order in the morning. They wanted to order on demand. Back in 2012, when no other on demand companies were around, we started a version of an on demand company called Gobble Instant. The funny thing is this model was a total flop. It failed hardcore. We got nothing. Our target market was families and they mostly lived in the suburbs. We were in the peninsula. On demand didn’t work for us. Even though we’re allowing them to order last minute, it would take a 30 minutes to get from Los Gatos to Los Altos. The food was wilting on the way. We weren’t making any money, and we were losing money on orders. So, we tried out this idea but really we remained in the trough of sorrow.
Some of our investors were losing confidence in us. We’d tried two different versions of Gobble over a couple years, and we weren’t getting anywhere. One of them even suggested that we sell the company to a clothing start up and go through an acqui-hire.
The reason I didn’t do that is because our mission was still alive and well. Busy people still were not eating home-cooked food, and they still weren’t happy at dinner time. What I did at this point is I laid on the couch in our office, and I surrounded myself with blank sheets of paper. I stopped listening to our investors and other people, and I started listening to myself. I thought about “What are all the insights that I’ve learned thus far and what do my instincts tell me?” That’s what I came up with some really bespoke ideas that made a big difference.
In the case of dinner, people eat dinner everyday. Their tastes don’t vary that much, and they usually eat around the same time. So, I really thought that dinner should be a subscription. I just wasn’t audacious enough to do that from day one. But, my heart always told me that the best company would be able to solve this for someone every single day, because you go through this behavior every single day. The way to do that is really exciting, because it’s through technology. The way Netflix and Pandora understand your tastes for movies and for music, I knew somebody could do for food and for taste, and I wanted to be that company. So, I came up with this idea for a personalized dinner subscription and we launched the service as our next product. Again, not always with the support of all of our investors.
The good news is that this idea worked. It was showing in the numbers, and we were climbing ladders of success. We were making five times the revenue than we did with any other version of Gobble, and the technology was working. I decided to try and raise Series A again. We’d made a lot of progress. We had a defensible technology. It was time to go! However, by this time, a lot of other food startups had come up in the space, and it was very competitive. This time when I was raising money, the space was heating up, and I got a lot of pushback because investors had already made their bets or they just wanted to see how it would play out. They said “It’s a competitive space. It’s early, so we’re gonna wait.” We failed again at raising Series A, and we were back to square one, again.
This time, the fall with a lot further and it was a lot harder because I had no money left. I was running out of money, but I had this product that was working and that people liked and that was solving a problem and I wanted to keep working on it. Even our current investors weren’t willing to give us money. At that point, we were too old of a company, they didn’t have space in the fund, and it was November and December. Thanksgiving and Christmas were tanking our numbers. Everything was down and to the right.
One of my friends suggested “Hey, YC is starting in January… Why don’t you try joining Y Combinator?” At first, I thought “What?! We’ve already raised seed money, and we’ve already launched a product. Why would I join a startup incubator?” My decision then was to either join YC or to die. When you look at it that way, you put your pride aside and you keep the company alive.
We joined Y Combinator and it was one of the best decisions I ever made. Just so you know how bad it was, this is a screenshot of our bank account before we got the Y Combinator money.
I had just made the last full payroll that I could make. Nobody knew this but me.
Starting and running a company, as a founder, is a very lonely experience. Sometimes, only you know the reality of the low times. YC was a lifeline, and without Y Combinator, we wouldn’t be alive today. After we joined Y Combinator, it was ladders, and ladders, and ladders for some time. It was really great.
YC helped us get back to the basics. Even when you have a product and a team, founders focusing on the basics is amazing at any point and anytime in your company. We had innovated on the technology and started meeting with our customers, and we learned that next we had to innovate on the food. We needed consistent quality and consistent portion sizes. We got our own commercial kitchen and ultimately hired an Executive Chef. These were two really key moves for us.
Our Executive Chef is Thomas Ricci, he’s the tall and debonaire gentleman to my right, and Chris Woodford is our lead engineer, who’s on my left. The reason I show them is because they’re 10X hires. The three of us had years of experience in our fields, and we came together to visit customers. We all want to customers’ houses together. It was kind of awkward because we were standing in the corner of their house, while they were cooking and talking to their spouse or their kids were on their legs. Then, they were eating and we were watching them eat. That’s what you have to do!
The interesting thing that we saw is that when people were microwaving our food, we had great quality, great portions, and great sourcing, but they would cringe when they microwaved the food. Microwaving was not a great experience for adults to feed their loved ones. We were learning a lot. While we were learning, news came out about the food industry, and this is what they said about Gobble: “Gobble was puttering about on the peninsula with its paltry funding and ever-evolving business model.” How many of you have had something negative said about you in public? This was probably one of the worst public things said about me. Hats off to the writer because she put a knife right in my heart and twisted it. It was a very well done insult. We were making a lot of progress and I didn’t let this phase the team. I said, “Let’s put it in a box. We are the underdog. No one knows what we’re up to, and we are about to come out like a storm.” And that’s what we did.
We talked to our customers after they would microwave and eat those meals, and we learned from them that they really wanted to cook, but they didn’t have the time. Now that we had a kitchen and a phenomenal Executive Chef in Thomas, I started spending time with him, and he would say “Well, why don’t you cook? What’s wrong with it?” And I said “I don’t want to chop everything! And I don’t want to spend hours doing this prep work.” It was then that Thomas taught me about the restaurant concept of mise en place, which is where the prep cooks and sous chefs chop the vegetables, make the sauces, and marinate the meats, so that the Executive Chefs can finish off the meal and serve it to the customers. We ended up applying that concept to families. We started by testing it with me in our kitchen. Here’s a photo of me giving a TaskRabbit some of our very first dinner kits to take to friends in Palo Alto and try out this idea. We wanted to see if it was easy for them to cook and if they felt good. Sure enough, it was. Our social media blew up, the word of mouth blew up, the pride and the smiles blew up, and the growth blew up. We had hit the promised land.
By the way, we still today don’t have one marketing hire inside the company. All of that growth is what product market fit looks like. It’s really exciting and energizing to see that growth after four years of not having any of it. After a few months of working on our product and seeing this organic growth, we were able to raise a Series A from Trinity Ventures and Andreessen Horowitz. This milestone was towards end of 2015 last year. What’s interesting though is that both of those firms had said no to me when I tried to raise Series A the other two times. The lesson there is that it’s important to accept rejection with grace. Understand that startups are a marathon and a long game, and the same people you may not work with right now, you may work with in the future.
Here we are today. This is a photo from Gobble Thanksgiving. We’re 120 people strong, and we’re delivering thousands of dinner kits every day to families across seven states on the West Coast.
There’s still work to be done, and there are still challenges ahead. What I wanted to tell you from Gobble’s start up game of Snakes and Ladders is that there are lots of snakes in the beginning and there are lots of things that will take you back or take you down. But, as you get through them, and you have grit and perseverance and you believe in your mission, those future snakes aren’t snakes anymore, they’re just obstacles that you can isolate and then work around.
Also, the game doesn’t really end. It just gets harder. After raising this money, we want to expand across the country and we want to expand our defensibility. There’s a whole new level of play. People ask me “With ups and downs every single day, how do you get through all of it?” [Show slide of empty wine bottles] If only it were that easy.
I have three takeaways for you.
The first is GRIT. How I think about grit is that it’s the thing that comes from your core. It’s this place inside of you when no one believes in you that tells you whether you should keep going or what to do. Another way to think about it is that you should compete with yourself and not with others. You’re the only person in your life every single day and every minute. Staying the path and playing the long game, and trying to make yourself better and your company better and not looking at the other flashy companies that are around right now or may be dying the next day, but staying your course, and listening to your grit and your core, is very important.
The next takeaway is to EXPERIMENT. Use your head. We launched four different versions of Gobble to get to where we are today. A company is not just a product, a company is solving a problem. It’s a mission. And, if the mission is alive, you should keep working on it.
That’s what I want to end with. Our MISSION is to create love through food. All along the way, I knew that moment with your family and that moment of a home-cooked meal was not being felt by millions of families. We stayed the course, and now it is being felt because of our invention.
An easy way to remember these takeaways is to be a “GEM.” Running a startup and being a successful founder is a full body experience. Make yourself a gem. Have grit from your core, run experiments from your head, and believe your mission in your heart, and you will be successful. Thank you.