Office Hours: I founded Scale AI and Backend Capital. I'm Lucy Guo.
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Office Hours: I founded Scale AI and Backend Capital. I'm Lucy Guo.Featured
Posted in:Venture Capital Office HoursStartups
Hi everyone! I’m Lucy Guo, founder and general partner of Backend Capital, an early stage fund focused on backing brilliant engineers.Previously, I co-founded Scale AI (Y Combinator S16), which delivers high quality training data for AI applications. And before that, I was a product designer at Quora and Snapchat. I studied computer science and human computer interaction from Carnegie Mellon but dropped out to pursue the Thiel Fellowship. For fun, I work on random projects (that have been used by 10M+ people around the world), skydive, workout (too much) at Barry’s Bootcamp, and ride electric longboards.Ask me about founding startups, product design, investing, and more!
jessicali·Jun 28, 2020jessicali·Jun 28, 2020Thanks so much for joining us, @lucyguo. Elphas: please reply in the comments with your questions for @lucyguo before this Friday. She may not have time to answer every single question, so please emoji upvote the ones that interest you most.
Hi Lucy :) So exciting seeing you on here! I still remember seeing your YT show and being featured on Techcrunch for Scale API. I have a few questions for you:- You were quite young when you started launching random projects that made money online. How did you learn about digital products or monetizing web properties and getting traction? Do you have any good books/resources to recommend?- How did you decide to go into product design after you left school? (I ask because I am in CS currently and don't hear much about it compared to, say, SWE or PM, even though it seems super interesting). Do you still use design thinking or aspects of product design in your current projects?- How did you get the idea for your company and how did you find your cofounder? (Finding a good cofounder is super hard- did it happen by chance for you?)- Also, what has changed (if anything) in your approach to launching companies after you joined YC, namely from Scale API to Backend Capital?- How did you know what first steps to take to start your own fund? Did the YC network help or was it something you had to learn from scratcH?I know that's a lot of questions, so feel free to pick whatever you want! Thanks again for doing this Q&A and wish you continued success.
- You were quite young when you started launching random projects that made money online. How did you learn about digital products or monetizing web properties and getting traction? Do you have any good books/resources to recommend?I was on several forums growing up! Joined a few blackhat (which have whitehat techniques) and whitehat forums to learn about internet marketing. I believe warriorforum.com was the site I spent the most time on in high school.- How did you decide to go into product design after you left school? (I ask because I am in CS currently and don't hear much about it compared to, say, SWE or PM, even though it seems super interesting). Do you still use design thinking or aspects of product design in your current projects?I got into product design during school! I started going to hackathons and taught myself, then picked up a HCI double major at CMU.I realized I enjoyed the process of creating products much more than the engineering itself. I didn't want to just be writing specs all day long though. So I searched for companies that would combine a product design-product management role where I'd still get to be creative in Sketch but be able to own entire products and write out the specs as well.- How did you get the idea for your company and how did you find your cofounder? (Finding a good cofounder is super hard- did it happen by chance for you?)I met my former cofounder at Quora. We got the idea because we were working on an app that involved calling doctors. We wished there were an API that would call the doctors for us every time someone made an appointment in the app. Our roommate joked "Hah! You should do an API for humans"... and here we are. :) - Also, what has changed (if anything) in your approach to launching companies after you joined YC, namely from Scale API to Backend Capital?Raising a fund and raising for companies is very different! In terms of how I help our founders figure out what to work on, I'd say the approach is similar - landing page or *very basic* MVP, and then launch.For my own personal projects, I do the same. Campaignwith.com was really just a landing page per person at first, all manually done. We built out the other features as it got traction. I think the thing I'd do differently in launching another company is to not take as much funding in the beginning. We took a lot of dilution during our Series A which was essentially a large seed round. My philosophy now is bootstrap as long as possible unless someone offers an uncapped note. But I'm lucky to be able to say that now. - How did you know what first steps to take to start your own fund? Did the YC network help or was it something you had to learn from scratcH?We had a lot of help from other partners who have started their own microfunds - they gave advice, introduced us to LPs, etc.
Thank you so much for the detailed responses!! I really appreciate it.
Hi Lucy! Thanks for taking the time to join us. I'd love to learn more about what projects you've been working on, and what drew you to creating or building those specific things.
As of late, campaignwith.com has been my main focus! I've always wanted to do nonprofit work. The protests specifically sparked my desire to create this. When I saw the protests erupting, I realized I couldn’t stand and do nothing. I started donating money, then matching my friend's donations. But realized that for those that don't, they can donate time.Protests ignited new movements -- they ignited CampaignWith. :)
This site is awesome. I didn’t know about this. Definitely going to share with others. :)
Thank you for the response, I definitely will have to check CampaignWith out! I love that the recent wave of social movements spurred on something like this.
@lucyguo Thanks so much for being here and answering questions. I'm the founder of a start-up that's guaranteeing more women and women of color are hired into top leadership roles. I'm getting great signal and would like to hire and scale. While I have deep industry experience I don't have experience and connections when it comes to raising capital. How do you suggest I get in front of firms with my deck? Or connect with a mentor who cares deeply about my mission? The funds that seem to care about my mission have invested in competitors. It feels strange to send it through websites without talking to anyone or an NDA. PS. I'm from Pittsburgh and saw you went to CMU :) And I was a diehard Barry's fan years ago.
NDAs are pointless and no one will sign one.As for getting it in front of firms, I would:1. Research firms and partners you'd like to work with2. Checked Linkedin and see if you can get a warm intro3. If not, send a cold email asking for advice with the deck attached Do something unique (i.e. mobile deck) to get the buzz going
Hi Lucy, thank you for the response. I thought I'd share this article which reflects some of the challenges I've found with this approach. https://thebolditalic.com/vcs-have-a-well-known-black-founder-problem-but-really-they-have-just-forgotten-about-people-2e8452029793 Even when I do paid research for contact info, it's difficult to get responses. If you don't have relationships in the VC world how can you build them quickly?
Hi Luch! Glad to connect. Have a few questions about product design and investing1. How can we self learn product design? I am still a college student major in physics. Any books, websites, or learning advice?2. How your previous product design experience helps you in VC career? Any special insights or perspectives?Thanks!
1. I would go hit up a hackathon and work with a designer on your team 2. Otherwise, some good resources are designcode.io, udemy, learnsketch.com 3. It helps in that I can tell when a founder has great design sense. It also helps me get into deals since I can offer design-as-a-service :)
Thank you Lucy!
Excited to see your journey and excited to see designer found companies @lucyguo! I have a similar background with you, computer science and HCI background, and now a product designer. And I've always passionate about the startup world.I'm curious what lead you to go found a startup after working as a product designer? Looking back, what was the greatest decision you've made?Have a nice day!Weiwei
I've always wanted to build a company! Since I were a child, I've been figuring out ways to make money (from selling pencils in school to creating wordpress sites for people). Greatest decision I made was joining Snap -- I learned a ton and it gave me the experience/reputation needed to go start my own company. Or going to my first hackathon, which made me fall in love with the startup scene.
Joining a great startup, learning by doing. It's really inspirational!I really appreciated your answer!
Hi,Thank you for doing this.Based on your experience, do investors have a problem funding a solo founder? If so, what's the best way to reassure them?I have a lot of traction already with my product (puppetmaster.com) - nearly 1 million downloads and an issued non provisional utility patent. I've got a background both as a programmer and a visual artist, so that helps, and I'm confident that I can hire for whatever I need. I wanted to just go ahead and try to raise so I can grow the team, but I've heard from other founders that being a solo founder is some sort of red flag.Thank you.
I love solo founders, but some investors are averse to the idea. If you already have traction, they won't have a problem with the fact you're a solo founder. The aversion is due to the fact:1. Easier to give up2. Nobody to bounce ideas off of 3. Can you hire? But if you have traction, those 3 points are mute.
Thank you! This is encouraging, and informative.
The community is amazing and many of the fellows are some of my best friends. I think it's important not to let it get to your head - I definitely saw this happen to a lot of fellows, myself included. It's hard not to when you're under 20 years old and the entire world is showering you with praise, telling you you've made it already. But everyone got over that hump and they're killing it now! :)
Hi Lucy! Thank you for sharing. I'm Masaaki Furuki, a trans woman founder, UI/UX designer, and full-stack engineer specialized in prototyping at Sokett, based in SF. I also dropped out my collage to start my tech career in Tokyo back in 2005 and took me a decade to find my track. After failing a career building in Tokyo, I decided to explore the world and be a digital nomad for a year and then moved into SF in 2014.It's been such an intimate journey in SF, failing a couple of idea stage startup, fought with co-founders, experienced social network crisis, and coming out as a transgender person so on.I'm now pursuing my idea for financial wellbeing automation at my company Sokett which I wanted to have in my 20's. It's not only about money but life with money.Sokett analyzes your banks, cards, investments, and automatically generates budgets based on our financial freedom algorithm. Sokett gets you out from debts and helps you build emergency savings. Best of all, you can always start investing with Sokett while you are paying off debts and making emergency savings or pursuing your dream because we know how much you can afford to invest, and we want you to focus on growth.It's like Tesla automating driving to solve human errors. I wanted to get advice from you about ideas, design, and founding team. Please reach me out if you can spare me your time for a quick intro call. Thank you!
Congrats on everything -- that's a tough journey to go through. Shoot me an email with your deck: [email protected]
@lucyguo I help female founders scale businesses. What were some of your biggest challenges outside of funding? What is one piece of advice you could give founders scaling a business?
I think the biggest challenge every founder has is hiring talented people - which is key to scaling. As for how to close talented people who have multiple offers, I've found tapping into their desire for community/friendship is best. I would invite potential hires to barry's bootcamp, send pokemon slippers, etc. to win them over.
Thanks! I love those ways of getting to know a candidate!
Hi Lucy; thx for doing AMA. Do you ever connect brilliant engineers with experienced Entrepreneurs? I'm founding a re-engineering of shopping startup as a non-tech Founder; have raised $$$ and executed well prior. There is a niche for this (so many bright people need tech co-founders) so wondered if you can help? Thx & I wkout too much too! :)
We'll do double opt in intros - feel free to shoot me an email at [email protected] that I can forward to engineers I know.
Thanks for joining, Lucy! What are some problem spaces that you're excited to solve yourself or for entrepreneurs to solve?
I'd personally love to see more work being done in the nonprofit, climate change, and biotech space.As for spaces I think are going to grow in the next few years: Machine learning in old industries, tech for religious groups (i.e. church tech), death space (i.e. funerals)
Hi Lucy! I am specifically interested in voice recognition technology. Where do you see voice to text heading in the short, medium and long term for accented English? What reason or reasons do you think large players (Google, Amazon etc) have not implemented tech that better recognizes accents? Thank you for your time!
This is a *huge* market. I actually just stumbled across a company in Southeast Asia working on automated phone support for people with accented english and their revenue growth in just one year is insane. It's just a really difficult problem not on their priority list. It's hard to beat an incumbent if your product is #1-3 on their priority list, but if it's not, you have a shot as a startup (i.e. Scale vs Mturk).
Thanks Lucy for the AMA! As a first-time founder, we face the dilemma of building a relationship with VCs, while at the same time knocking that great first-impression. If you are a work-in-progress, you are bound to be imperfect the first time! And once rejected, there's an uphill battle to change that first-impression.Should we wait until we are awesome and have hockey-stick tractions before even attempting to reach out to VCs?
I would reach out sooner rather than later; say you're just looking for feedback/advice. Cold emails usually work :)
Hi Lucy, huge fan + great to see you on Elpha! I'm very new to the founder world: a lawyer with low ego, a drive for collaboration and a big pull towards creating something of value with genuine D&I measures, it didn't make sense for me to keep barking up the wrong tree (law firms etc = notoriously traditional) so I've taken the entrepreneurship route to build my vision from scratch. I'd love to get your thoughts on two things:1) I'm not a natural "sales" person. I have the drive, vision, dedication etc, but literally struggle verbalising it in a way to draw people in. I often wonder whether that means I'll fail as a founder... do you have any advice on how to become the sales wizard you need to be to showcase your company?2) what are your thoughts on legal tech (if any) from a product perspective?
1. Being a founder is all sales. When you're not selling your product, you're selling people on the company itself to hire them. I think this becomes easy when. you truly believe in the product and the company mission. Unfortunately, don't have any concrete advice -- there are sales bootcamps out there, maybe that'll help! 2. Important to not become a consulting agency. There's room for AI lawyers though -- Donotpay just recently raised a Series A!
Hi Lucy! I am such a fan. So great to have you here! I recently just started my first job and I am also somewhat curious about the startup scene. I have 2 main questions:- Where do people who have graduated typically meet other founders? It's quite hard to meet people!- At what stage at the ideation/building process should founders reach out to VCs or for mentorship? Thanks so much! Would love to meet in person someday.
- Where do people who have graduated typically meet other founders? It's quite hard to meet people!I see this happening most either at their jobs or within living communities. - At what stage at the ideation/building process should founders reach out to VCs or for mentorship?I think anytime really - whenever you have a deck you can whip together. Shoot over the deck, say something along the lines of:"I'm [x], formerly an engineer at Facebook. I'm currently exploring ideas for a startup. Attached is a deck, I'd love your thoughts on what I'm working on." That's usually enough. If you don't have target schools/companies on your resume, I think a basic prototype (which you can hack out over a weekend) is enough. Just send a link. VCs check cold emails and they love seeing something tangible.
Hi Lucy, I am working on bootstrapping my own company that’s in the Applied AI field. What’s your advice on finding the right technical founder and any suggestions on how I should start my search?
I would go within network. If you have to go out of network, there are a few programs out there structured to finding a cofounder.Besides our own (Hacker Fellowship Residency), Ondeck and Entrepeneurs First are specifically designed to help find cofounders as well.
Lucy has also been killing it during quarantine with amazing projects!Check out CampaignWith, where you teach a class and fundraise for causes you care about! Show her and her team some love! https://www.producthunt.com/posts/campaignwith
Thank you for the shoutout <3 Have definitely been more productive during quarantine, almost feel like a robot
Hi Lucy, glad to see your AMA here on Elpha! Fellow Comp Sci / HCI /Design person here, welcome!I'm curious: there are quite a few players in the data annotation space now along with Scale AI, do you feel that there is still room for startups to come in (yes, totally selfishly motivated question :))? Thanks in advance!
Lots of startups have come into the space with focuses on areas that Scale doesn't focus on. It's a bit late for self driving car annotations but there are certainly other potential spaces.
Hi Lucy! What are some of the top qualities you look for in a great CTO for an AI company?
Ability to assess technical talent (by being brilliant) and ability to hire and retain talent better than themselves (low ego, charismatic, leadership skills, etc.)
Hey Lucy! <3
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