I just read about Wufoo getting acquired by Survey Monkey, and I’ve had a few people tell me that I should release some more interviews here for people to read from the Startups Open Sourced book. Do you think I should add more? Let me know which ones you want to see on here.
One thing that stood out for me is how Wufoo handles hiring and retention. If
you’re you were lucky enough to get a job there, you can see how much effort they put into keeping you right where you were: productive, happy, and avoiding burn out. Startups: take notes.
Kevin is a unique founder and reminds me a lot of Brian Chesky with his strong background in design and being an artist. Design still matters to your users.
Kevin Hale, Wufoo
Tags: coincidental, Y Combinator, profitable, designer, design-focused, major league player (Alexa top 1,000). [Edit: acquired]
Overview: Wufoo started in 2006 as an online HTML form builder that allows anyone to easily and quickly create contact forms, design online surveys, handle event registrations, and process simple online payments. As Kevin describes it, “Wufoo is like a web-based version of Microsoft Access but it looks like it’s designed by Fisher Price.” The major value proposition is that Wufoo is very easy to use and also very powerful. Wufoo has helped people collect over $100,000,000 worth of revenue for the users and about $200,000 in payments per day. I remember Kevin Hale because he would attend every YC dinner, even though he was from a much earlier batch—I think he still showed up to every YC dinner to attend the talks. Kevin also does something interesting for the founders at the end, near Demo Day, but I won’t explain the details—we’ll keep that a surprise for future founders, assuming that tradition is still going.
How did you get started with entrepreneurship? You can go back as far as you can remember.
I had never really intended on becoming the lead of a company. I had zero entrepreneurial intentions coming out of college. I actually thought I was going to get my MFA and teach art to hippies; that was my goal.
It wasn’t until I met Chris and Ryan, the two other founders at Wufoo, that they got me excited about ideas and some projects while I was taking a year off, trying to figure out what I wanted to do in the interim; it ended up being the project that we worked on and it took off and was really exciting. All of the business aspects and financial aspects, the interest and the management aspect, have come as a result of always being interested in trying to do the best I can at whatever I’m working on.
How did you get into design and user experience?
In college I double-majored in digital arts and modern American literature. Digital arts was this interdisciplinary degree that combined computer science, art, and music all together—basically a fine arts approach. I did interfaces for museums, designed my own musical instruments, and worked on a lot of performance pieces. I was using all these skills to create experiences and interfaces for artists, musicians, and for people who attended museums. So, in that respect I had this background and understanding, but actually a lot of the interfaces I created in college were not as user friendly. They were more about bringing curiosity and eliciting emotion wherever I could because the electronic medium was very difficult.
Spending a lot of time on those things also influenced how I decided to design software for Wufoo. I knew I wasn’t interested in creating software that reminded you that you worked in a cubicle, and I thought, “let’s look at some more of the emotional aspects, since we’re basically doing a database app, and try to differentiate ourselves in that way.”
In high school do you remember doing any design projects?
In high school I was a big TV productions nut and I did some programming and web design, but it wasn’t a primary focus. Like I said, going into college, I was premed- and computer science-focused, and I ended up graduating with this weird fine arts degree and a background in writing.
In college I joined the newspaper, it was actually kind of weird. I rose up from the design angle and became editor in chief through the design track, which is sort of unorthodox for most people, but because I did design there; had worked on all the different sections of the newspaper; and had a writing background, I had a good understanding of the editorial process. When you become editor in chief you deal with lots of teams; having to deal with the ad design and concept development, meshing those two together and trying to figure out how to get things to fit, have schedules in place, and figure out how to get contributions and user content, all work together in a way that fosters community.
In that respect I had a lot of background and experience through working on the newspaper and even in high school, my background in TV production touched some of the same things; it’s about understanding how to take news and content and formulate it to present it to users in an electronic medium.
Did you know anyone going into college?
I knew one or two people but the college I went to was very small. It was about the same size as my high school; it was a small, private, liberal arts college called Stetson University that was near Daytona Beach.
So you weren’t looking for cofounders in college and didn’t have interests in a startup?
No, nothing like that. I didn’t even know Chris and Ryan were at the college. I met them during my first job outside of college. They are brothers; Chris is actually the one got me hired. He saw my portfolio background and was interested in all the web design I had done. He was doing basic database development for a research firm out of the public university here in Florida. He did web design and database applications and I also did some web design and wrote articles about covering research at the university. During all of the collaboration sessions we had to build these mini-database applications, we identified that there was a need for this kind of product, since all we did was these very tedious applications that we thought should be automated.
The idea came about very naturally because we had a problem we were complaining about and at some point realized it was an opportunity. It wasn’t necessarily that we were both looking for cofounders or that we had a goal we wanted to accomplish and recognized each others’ programming skills or design skills. I think it was part luck and part recognizing opportunities.
You met Chris and Ryan at your first job outside of college, what did you do there?
I was hired as a writer, primarily. I was supposed to cover research at the university, basically all sorts of PR stuff. My job was to wake up in the morning and think, “what’s something that I’m interested in?” and then see if any researchers at the university were doing research on that topic. I covered stories about engineering, robotics, cancer research, anything that I was interested in. Chris’ job was to help researchers at the university find electronic funding. So I also helped with that but his job was to facilitate database use, build apps, and look for funding opportunities for these researchers.
Because we were constantly looking at potential funding sources and opportunities, we heard about Y Combinator. When we saw it we thought, “that’s a really exciting opportunity that we could take some of our ideas to.”
And how did you find out about Y Combinator?
Y Combinator showed up in some RSS feed that I was reading. I don’t know, I couldn’t tell you exactly what it was.
But you heard about it and was there anything in particular that stood out about them? Did you look at other sources of funding?
No others. There weren’t many other sources of funding at that time. There wasn’t TechStars or anything else like that.
It sounded kind of like an internship where you get money for just submitting an idea proposal but instead of being an intern, it’s like starting your own business. That sounded really exciting and it had to do with creating software and web applications, which definitely we knew we had the skills to do and we thought—it was on a whim, even if we didn’t get in, it would be okay. It couldn’t hurt to just apply because it didn’t cost anything, all it took was some time to get setup.
We had been writing a blog called Particletree for about a year and a half before we even heard about Y Combinator and, basically, we wrote about any interesting new thing or technique we came up with, or anything we discovered about how to write web applications. We wrote experiments and case studies that ultimately showed we knew how to create stuff that people were interested in. I think at the time we had 10,000 RSS readers on that blog.
Did you pay your way through school with this project you did with Chris and Ryan?
I was really lucky. I had a full tuition scholarship when I went to Stetson. So I was actually one of the really lucky few that graduated with zero debt.
Did you party a lot or take time away from class?
No. I wasn’t one of those college hippies. I spent a lot of time in the computer labs, and different museums, and a lot of time writing papers. I did a lot of creative writing, creative interface creation, and video editing work, outside of class.
In college, I found web art or Internet art to be the least interesting to me, of the tracks we were studying, because I found out it was really difficult to elicit emotions and get people interested, in a museum context. I find it really surprising that I completely changed my mind about that, now that I am doing it as work. I find a web application to be a lot more organic than any art piece I ever did in college because every change I make affects hundreds of thousands of users at the same time, once you get a significant user base.
You see the application as almost a living, breathing thing, as you make changes to it; you see how it affects other people and how it evolves, whether it’s financial metrics or user metrics. It’s really interesting to see that dynamic interaction with the users, so especially on the things that we do that aren’t necessarily just product-focused or business-focused, you see a lot of people appreciate the little design touches that we add in to make things either easier for users or an overall better user experience.
You could have gone down the path of being an artist. Was the immediate feedback what drew you in?
Yeah. I think it’s because, as a designer, I came in at the founder level and I had complete editorial and design reign over how the app was going to feel and look and talk—I wrote all the copy in the early days.
Did anyone inspire you while you were in college?
In college I studied artists like Nam June Paik and the Fluxus artists. So I was studying how to create really weird experiences inside a museum setting.
What was that when you guys decided “we need to build Wufoo”?
We actually applied to Y Combinator with two ideas. We didn’t pitch Wufoo as an online form builder, we actually pitched it as a content manager that had two sides to it. The idea was you could both input data from the back end and from the front end, we called them “reversible forms” at that point, and we had to really thank Paul Graham during the interview process because he said “that’s really confusing, just call it a form builder.”
We were really lucky that we ended up going that track; it helped differentiate us out there because the market for form builders and the way that software was defined. It was a huge opening for us because the experiences there were really poor, unlike if we had tried to approach it as being another content manager or another database application builder. I think we would have been lost in that whole vertical.
You met your cofounders at work. Was it just serendipitous that you met or were you assigned to work on a same project?
Chris was the one that interviewed me at the university for the job. So he’s the one that actually got me hired. We hit it off really well. We didn’t decide to do a project together for a while, he was still learning a lot and we became friends in the meantime.
Here’s an interesting story. I think Everquest 2 was coming out during that time and they decided to do this forum thing dedicated to Everquest 2.
So they built this mini website and forum community area to talk about Everquest 2 and it didn’t take off because people didn’t end up liking it when it finally came out. But I helped them during that process with some of the design stuff and later on we ended up going to South by Southwest together. I was very interested in going and I told them about it and they both came along with me. My parents had a house in Austin so we had free lodging. We saw a session by Jason Fried called “How to do big things with small teams” and after that we were like, “There’s no reason their team is any different from the three of us or anybody else that was in that room.” We felt really inspired, like we could do what these other people were doing. We just had to put our minds to it.
One of the big things that Jason Fried talked about was: they created this blog first and they generated an audience and once they got that audience, then they released an app and were able to release it to this trusted users that they had established relationships with so it wasn’t starting from scratch. So we said “alright, we’ll start a blog and we’ll just write about everything that we learn about how to create software; then when we finally build this thing we’ll hopefully have an audience” and so that’s why we did Particletree. It was after South by Southwest and about a year and a half after getting into Y Combinator and building it, we were able to announce Wufoo to the 20,000 blog subscribers that we had cultivated.
Nowadays, Y Combinator people go in with finished products or things that have already launched or have user bases. At the time we didn’t even have a prototype, right? We hadn’t written a single line of code at that point. All we had was the fact that we had done Particletree and we had had all these ideas; it showed that we were technically capable; we definitely had a design sense; and that we knew how to work well together.
If you didn’t have this blog would Y Combinator still have talked to you?
Probably not. The reason Paul picked us out there as one of the final interviews, he said, was because he had been an avid reader of Particletree, for a while.
If we came with no prototype and we had never done Particletree, there would be nothing to prove that we would have been able to do it. At the time our other batchmates were ex-Microsoft employees, ex-Oracle employees, people that graduated from MIT, Stanford, and we were three guys coming out of Tampa, Florida.
Particletree helped us when we launched Wufoo; it helped us get into Y Combinator; it helped us understand how to write software a lot better. So, I highly recommend it. I think my advice to anybody that’s interested in entrepreneurship or trying to get something to happen is, have some place where you’re publishing your ideas and thoughts and experiments. That way, it helps you get better and also establishes a community to help you get recognized by other people that are like-minded.
You kind of took the approach of building interest before building the product; some people take the opposite approach where they’ll just build whatever and then go out and try to find people.
One story that we tell people, is that when we launched, we launched on TechCrunch and gave them an exclusive. We had some bad server configuration at the time and it immediately crashed from the traffic, and while we were figuring it out, obviously, all these comments were showing up on TechCrunch; people were sort of making fun of the issue.
But, I’d say, seven comments in, one of our users who had been beta testing and was a reader of Particletree, immediately chimed in and goes, “Hey, you know what, I’ve been following these guys for a really long time and I was beta testing their stuff and they’re really, really awesome, so give them the benefit of the doubt, I’m sure they’re just ironing some things out.” It turned the tide on the conversation right there on our launch day and that has to do with us establishing really good relationships with our readers and users right from the get go.
Tell me about your fundraising experience. Was that positive, negative, stressful, time consuming?
Well, Y Combinator was pretty straightforward. It was stressful in terms of going through the application, and going out and doing the interviews, because you don’t have a lot of time to make your case. Nowadays, I think it’s like two minutes long. We had 10 minutes because they interviewed a lot fewer teams. But we still felt like it flew by.
After Y Combinator, we did really well on demo day. There was a lot of interest in our product based on the demo we had shown there, so we interviewed with everyone that was interested. Tons of VC’s, tons of angels—and I’d say we got really lucky because there were two angels that offered us funding really early on in that process. They told us to definitely go talk to other people and then come back to them, but we ended up going with them in the end. So essentially, we knew we had guaranteed funding even before most of the interviews with VCs and angels.
I think Y Combinator, now, is in a completely differently state. We were the first ever, California class and the second ever, Y Combinator class. So the Y Combinator buzz and stature of being part of that organization wasn’t as beneficial as it is now, when it comes to fundraising.
We definitely knew from the start that we weren’t interested in venture capital, so we weren’t too stressed about having to try to secure that, as that tends to be a more tenuous process.
Also, we didn’t meet too many VCs at that point that we really liked or clicked with, and with the goals we had in mind and the kind of company we wanted to run, we knew it was going to work out well. But I have to say, we really owe the most to Y Combinator. If we hadn’t gone through that program it would have taken us forever to get our angel funding afterwards, if we had gotten any at all.
Did you do anything to prepare for the YC interview? Can you offer any advice there?
Being one of the oldest alumni in the Y Combinator group, we are always referred to—speaking with different potential YC groups—and they always ask things like, how to prepare for the interviews. I have to say, there’s no way to prepare for them because you have no idea what they’re going to ask or how it’s going to go.
I feel like the three of them are very unpredictable; what they’ll latch on to with your application varies heavily and the best thing to do is get comfortable with your idea and your application. Have a lot of confidence in your ability to execute the ideas, potential, etc.
I think everyone’s interview is different and so they might call you in there and say, “we hate your idea and we’ve got to come up with a new one here on the spot, but we really like you guys” and they might argue about something that they don’t ultimately care about because they’re just trying to see how much you push back.
I think you can’t prepare for it, other than to just be determined to start a company and do whatever you have to do to show off your determination, your intellect, and that you’re just really nice people, which shouldn’t be hard to do. Y Combinator loves to fund people that they would like to hang out with.
Is the $150K from Yuri Milner a good or bad thing?
Wow, it would be a great thing. We wouldn’t even have to do another round of angel funding if that was available. The thing is, we never took more money after our angel round. That convertible note would have remained a convertible note because we’ve never done a series A venture capital round. So, for us, it would have been awesome because we only raised $100,000. That would have been more than we ever needed and we were able to get to profitability just off of that. It’s great for the communities. I guess for other investors it might be more difficult, depending on the aspirations of the founders.
I’ve always been of the mindset that company founders should do whatever they can to do as much as possible with as little money as possible. At our stage now, we have so much more leverage if we ever decided we wanted to take a series A round. Once a week we have VCs calling us up asking to meet with us or saying, “If you guys ever need funding please do contact us first.” It’s at the point where we’re turning people down all the time. We had one VC that we met, just at the recommendation of one of our existing angel investors, as a courtesy, and he was like, “Oh god, I’m so glad I was able to get a meeting with you; I feel like it’s harder to get a meeting with you, than with the founder of Wikileaks.”
How did you guys spread the word about Wufoo? Sending the hand-written cards is a well-known tactic, now, but what other things helped you?
In the beginning we had Particletree, so we were able to use that leverage. Also, right before we got into Y Combinator, we knew we were going to try to start a business and build this software upfront. So, two months before we had even applied to Y Combinator we decided that we were going to start a web design/web development magazine called Treehouse. The reason we decided to do this was because Particletree had gotten Slashdot coverage twice within two months, and at that time we had a lot of traffic; we figured we could convert small percentages and do some kind of money, based on this content.
We could probably make enough money for us to work on the side to build the software. What ended up happening was Chris kept his job while Ryan and I quit our jobs and Chris split his paycheck with the two of us while we started building out Treehouse. So, Ryan built this digital download system so that people could pay for the magazine and get a digital download. I worked on the design and editorial side, and we worked on a publication schedule where it would just take a week and a half to build up the magazine, to create 100 pages of content, and then we could spend other weeks designing and building software.
Two months into all this, we got accepted into Y Combinator but we had this readership base that was pulled from Particletree. We wrote our first lines of code for Wufoo in January 2006 and then we had this interface prototype. We knew it was crucial to get the user experience for the form builder right initially, to figure out how the flow was going to work, and whether it was going to work or not. By early February, we had a prototype working and we were like, “this is really, really cool, this feels right.”
But it wasn’t hooked up to a database and you couldn’t save or do anything yet and we thought, “maybe we can just leverage this; maybe we’ll do an interface demo launch.” So we had a teaser screen that said, “this is going to be Wufoo; you can play with the live demo”, and people could play around and get an idea for how the whole thing was going to work. When you tried to save your form it said, “thanks for trying out this interface demo, if you want to learn more about the service sign up for the mailing list or we’ll let you know when we launch.” So about 7,000 people subscribed to be notified about the launch of Wufoo, just with the interface demo, and I think we had over 100,000 people try out that interface demo within three months.
It’s really cool even though we didn’t have the working software, we were able to leverage what we did have built up to that point to generate marketing, buzz etc. At that point we had very low conversion rate from TechCrunch users and it wasn’t indicative of who our paid users were going to be in the future, which we didn’t know until later. At the time, we had all these people visiting the website and trying it out, but we found out that no one was paying for it and we had really low conversions and didn’t understand why. We thought maybe our business model was incorrect but it ended up being just the audience and the links that we were starting from. Early adopter tech users were not an appropriate way to measure whether the app was going to be successful or not.
It sounds like you guys had a great launch. What happened after July to continue your growth?
We had 100,000 people try out the interface demo. So they didn’t become users. On launch 5,000-7,000 users signed up for the service and then afterwards we actually didn’t spend any money on marketing for the first four years of Wufoo. It was completely word-of-mouth.
The way Wufoo is designed, it’s a freemium model; on the free plans if you click an entry, it takes you to a confirmation message but it says, “Powered by Wufoo.” So, whenever the free accounts are collecting data, it says that the form was “Powered by Wufoo” and we got referrals through that.
The only other thing we ever did was focus on remarkable customer support; that led to a lot of word-of-mouth about the quality of the product and the experience. From that point on, everything was just people talking about how unique the experience was, how easy it was, and how much they enjoyed using the service. It was software that was described as really fun to use, even though it’s a database app that helps you create replacements for paper forms.
Would you say that the emphasis that you guys placed on customer service is the reason you were able to grow as quickly as you did?
I think it was. I don’t know how significant it was, but it was the only thing we did. Everyone in our company has to do customer support and so the way we approached it was, every single problem or issue or request that someone had, we said, “you have to look at it as an opportunity to turn someone into a fan.” Just the fact that we would respond to people within two-to-five minutes of them sending their question or issue, people were constantly saying, “wow, that was really fast.”
I believed it wholeheartedly but I don’t think we have direct metrics on it. Those were really the only things we did: the free forms that said, “Powered by Wufoo” and really good customer support. We have this cancellation service—for people who are deleting their Wufoo account—and it asks whether they would be interested in using Wufoo again. We still have around a 90% satisfaction rating, where people who are deleting accounts still say, “I would use Wufoo again in the future.”
You’re in that class of companies that actually takes their design and usability very seriously. So it also seems like that gets some of the credit. Maybe the product is actually just so good that people want to tell other people?
I think it helps to stand out. There’s this really great quote, I can’t remember who says it, that says that “advertising is the price you pay for not creating a remarkable experience.” So it’s one of those things where, if you have to spend a lot of research or resources on marketing, it’s because the product doesn’t speak for itself.
Last year was one of the first years that we actually started doing more traditional advertising and marketing and we found out the conversions on regular display advertising were really poor and that the only good returns on investment we saw, were through re-targeting. Re-targeting is this ability where, when someone visits your website, you’re able to show certain text ads to them when they go to other websites, based on key word, search engine advertising that we did.
I think we tried to do a fair share of speaking and interviews and conferences and such, but we don’t find large conversion rates coming from those either. So usually it’s our users telling other users.
I’ve noticed, anecdotally, that you, WePay, and Hipmunk are big on ad re-targeting.
It’s effective so that’s why we like it.
I think someone needs to figure out a way to not do re-targeting if you already have an account somewhere. I have a Wepay and Wufoo account, but I still get ads from you guys.
I think the things you can tweak on that. I think Chris, who does our advertising, is going to see if there’s a way to make changes on that.
Did you ever do any other big changes or pivots?
Payment forms is a big feature that we have at Wufoo and that’s something we even didn’t think about when we launched the service. It’s one of those things that our users ask us about, constantly. People are asking for payment integration like crazy; let’s just see what we can do to make it happen, and our payment integration is something that we’re really proud of—it’s this really easy way of assigning prices to different choices in the form fields, and a significant driver of revenue for us. Interesting fact: Wufoo has helped people collect over $100,000,000 worth of revenue for the users and we process probably about $200,000 in payments—in transactions—every single day. So Wufoo helps generate a lot of significant revenue for our users.
Did you ever think Wufoo would fail or did you ever get really stressed for some reason?
We never got to the point where we thought the thing was going to fail, we didn’t launch Wufoo until we had billing systems set up and were charging for prices. We always had paid plans on Wufoo, we never started out with free plans. From day, one we started making a little bit of money and we knew that based on the growth curve.
So nine months after launch, we finally were profitable and able to make money to cover our living expenses and knew that we wouldn’t have to go get other jobs. Once you become a profitable company, you find out that it smooths over a whole lot of issues and problems and answers a lot of questions. So it’s a lot harder now for us to have huge problems or issues, because we know that things are going to be okay at the financial level.
Our darkest day was probably a couple of years ago: we were having all these problems with our backup system. None of us are server administration guys so we hired this third party to manage that for us and they were just not really doing a good job on the back end and at some point, some cascading failure occurred and we ended up losing some of the file attachments for a very small percentage of our users, like 0.01%. For us, being a database application, we saw data loss as the worst thing we could possibly do. We had to go through this process of finding all these users, trying to figure out what data was actually lost, and then contacting them. We spent 12 to 18 hours handwriting apology emails to every single one of the users that were affected and it was still thousands of users that were affected. We figured that that was going to blow things up.
We figured that we were going to have a huge amount of criticism out there. I had to credit our fantastic support up to that point and how we decided to handle it, because we informed users as soon as we realized it, before they even realized that the data was gone, and we didn’t have a single complaint, not a single “Wufoo sucks”, or “I’m canceling” blog post written. We didn’t lose a single paid client as a result of the experience and we’ve been really grateful ever since.
Now afterwards, obviously, we got rid of that server company and moved over to Rackspace and completely changed their architecture and all that stuff; we pumped a lot more money into the back-end stuff, even though we were willing to pump in money beforehand with the other team. I really thought that we were going to take a huge hit from that experience; I thought, “that’s the worst thing we could possibly do”, and I felt we were going to lose a lot of face and a lot of reputation points on that, but we came out stronger than ever. It was as if our users appreciated us even more and they knew that we would do whatever it takes to make things right for them.
You hit profitability nine months in. Was there anything in particular that helped you get to that point?
I can say look at our revenue curve and I can’t say that there’s any one feature that we implemented that affected the revenue. For the first four years of Wufoo, we worked steadily on building new features and working on the product constantly to get it to a mature state; I can’t say that any one feature made anything jump, significantly.
I think everything helps a little bit along the way. The only thing that ever affected revenues or changed the slope of that curve was, we did raise prices a couple of years ago on our two lowest plans, and that’s the only phase where we raised plan prices by $5 and that jumped our revenues up, considerably. So chalk one up for the business guys for doing one little tweak there and actually making a difference, as opposed to writing a thousand lines of code.
I’ve heard complaints about building billing systems. What was that experience like?
We had to spend two months writing the whole billing system up; Chargify and those services didn’t exist at that point. So, if we wanted to have recurrent billing we had to write it ourselves and do all the logic. Chris is the one who wrote all that and it took a lot of time, but I have to say it was worth it that we did that early and launched with those capabilities, because I think looking at the revenue curve, we see that launching early and collecting money as soon as possible, helps increase your revenues. There’s not too much else that does. I’m really, really glad that we launched when we did and we launched with prices attached to our service and product.
How did you guys split up the work? Has it changed?
Chris focused on metrics, customer support, and he’s a PHP programmer also. He’s one of those guys that has a high level of integrity and you can rely on him to do whatever it is that you ask him to do. So Chris had a lot of bitch programming work, unfortunately, so he did things like a login system, the billing systems, writing out the payments integration; stuff nobody wants to work on but is extremely important and needs to work really, really well.
What was the schedule like in the early days? Has it changed over time?
During Y Combinator we were probably working 18 to 20 hours a day, it was nonstop. We only had four or five weeks to build the prototype and demo to pitch to people. So we never worked harder than we did during that period in Y Combinator. Afterwards, we probably were pulling around 12 to 16 hours, and now we have this four-day work week. It’s a much better work-life balance now, just due to the fact that we have scale and we know we’re in this for the long run so it’s important that everyone is taking care of themselves. We make sure that we partition off work from life and family and rent issues and social issues.
What is the biggest challenge today at Wufoo?
I’d say exposure. We love our product and think it’s really mature and great; so right now, we know that if everyone in the United States knew about Wufoo, we’d have a much larger user base. So our goal is to get the word out there as much as possible. We’re doing our best to increase PR, increase exposure, get people using us. Part of that is working with integration into other apps. We’re on the third version of our API and getting people to integrate with us on their own—we have over 30 applications that are now integrated with Wufoo. I think we can also do better in showing off case studies and examples of Wufoo. Wufoo is a really powerful, interesting, and useful app, so let’s show people how to maximize its usage so they see its benefits—that’s our biggest focus, marketing and relations and increasing exposure for our app.
What’s the culture like at Wufoo?
It’s really laid back. It is a company of friends, everyone hangs out and it’s very, very close knit. It’s mostly self-managed; you have to figure out how to motivate yourself. There’s a lot of this fun aspect to the company that’s about being friendly and also being respectful of everyone.
I guess the biggest cultural part is based on a support-driven design philosophy. Since everyone in the company has to do customer support, a lot of things are done in terms of looking at the software development to make sure that features are developed with the customer in mind, but also making sure everyone takes care of themselves so that when you’re doing customer support you’re in the correct mindset; you realize that these users make your livelihood possible. So a part of that support-driven design approach is everyone doing customer support but also everyone taking the time to thank the people that pay their paycheck.
We’re trying to do something really interesting and fun but we also need to be humble about the achievements that we had because we know that everything is based on this foundation that we’re trying to do what’s right for the customer. As a result, any arguments or issues or any sort of disagreements that ever come up, no one ever takes anything personally, because everyone knows what we’re trying to do was ultimately right for users. So it’s a really interesting culture.
Wufoo reminds me of Zappos’ customer-oriented culture, I went to a talk they gave at Startup School ‘09.
Yeah, I actually didn’t go to that one, but that culture and community is excellent. Another person that we were inspired by is the founder of Kayak.com. All their developers and programmers do support there and they have this big red phone in the middle of their office and whenever it rings one of the developers has to answer it; the basic idea is that once you have a programmer answer that phone a number of times, they’ll eventually write some code to prevent that issue from coming up again. He has some really awesome ideas of how customer support should be done by the people who are most empowered to fix the problems, reducing that distance between the ability to solve the problem permanently and answer the problem when it comes up.
Have you ever had trouble motivating people? Any productivity problems or anything like that? If so, how do you fix them?
Yeah, we actually did tons of little experiments. We read a lot of psychology research about management—we’re huge research nuts, the three founders, and it has to do with our backgrounds. So when we went to hire our first guy we knew, “okay, there’s a right way to do this” and there’s got to be stuff that science has shown on what’s the proper way to set this up. So we play with financial incentives, we play with social incentives, we try to figure out what are the issues that cause people to lose productivity and lose motivation.
One of the first things we read about was this idea of social loafing, where, when people come together they tend to be a lot less productive because they spend time socially interacting with each other; it’s one of the reasons why we don’t have a central office.
We know that we need some organization so people have to come together and figure out what needs to done but to actually get those things accomplished, they need to be left alone.
We also play with all these weird incentives. So every year our company has its company trip. We’ve done snowboarding, we’ve done a Mediterranean cruise, we’ve done a resort in Costa Rica. We know that you can’t push people to always do this crunching period where you’re having people work 60 hours a week, because whatever happens is eventually that period has to stop, and there’s productivity loss and the area of that productivity loss is actually greater than the productivity you gain from doing the crunching period.
So we have this work-life balance put in place and that’s why we have four-day workweeks and we say, “make sure you manage your time appropriately and take the days off when you need and get enough sleep.” But before we have a company vacation where we know we’re going to get 10 days off, we will do one crunch period because we know the recovery rate where everyone is able to recover during that company trip. During this crunch period, we try to make it interesting in a lot of different respects: when it was just the three founders we had really aggressive schedules and then whoever got the least number of things accomplished on their aggressive schedule during that crunch period, became the trip bitch on the company trip and they would have to carry people’s bags or do all the reservation stuff or drive people around if anything needed to be done or go get drinks and food.
So there’s this social pressure to make that crunch period interesting; now that we have 10 people, we’ve actually changed it to the gauntlet model. That crunch period is now two teams against each other. This year it was the founders versus the first-time hires. So we had “A team” versus “B team”; we had this really friendly competition and at the end of it, kind of a hack-a-thon. The teams presented what they worked on and how they made Wufoo better or whatever features that they implemented.
I’m happy to say that the founders won. The gauntlet period—we destroyed them, we built like 15 new support apps during that period. So it was a wash. I think they’re really motivated to beat us next year, but I don’t think they have any idea what they’re in for.
We’ve also done a thing called, king for a day. It’s actually for a weekend, but one person gets to tell people whatever they want to do in the company. So if there are any mingling issues or any wish-list items that they didn’t want to do, they got to tell everyone else to work on those issues and features. It’s a nice way of being able to be management for the day and it’s done over a two-day period.
Anytime that we need to do big push we always try to think, “What is something we can do to make it interesting or something that somebody might want to talk about or share with other people.” So, for example, when we had our API contest we called someone to do a custom-forged battle-axe that we gave away; we had this huge outpouring of entries because of it. A lot of that had to do with the word of mouth that came out of the bragging rights of winning a giant, medieval battle-axe just by programming code.
Do you have any tips for hiring? I think some people might get to that point in their startup and find it difficult. Do you have a process in place for that?
A large part of it is personality. The big thing to look for is self-discipline; usually you can’t measure that in an interview. With almost all of our major hires, we had to do a test project. So we had our two developers work on a side project for us. They didn’t know that we were going to hire them as a result of it but they did a really good job—they were already working another job, they were doing this in their spare time, and they spent so many hours on it and did such a good job that we offered them jobs as a result.
For our design hire, we had our experienced staff work with him on a redesign for a three-week project to see whether it would be a good fit or not.
For our support people, we really got lucky on that front. Wufoo has a really good audience and our blog does pretty well, so we just announced the support position was up for grabs on the blog and we had over 150 submissions in two days and these were people from all over the world. We actually had to close it early because we knew we couldn’t even get through all the applications in time.
We didn’t look too hard at resumes; we looked at writing samples and what they wrote about; then we had personal interviews. I feel like we got really lucky to have such a great audience for the work that we do. It’s the right sort of audience, lots of web designers and web developers use Wufoo; they are technical and they’re the kind of people that we need, so we were able to tap into that very easily. They’re really enthusiastic because I think they see the personality of the company and the personality of the app and as a result they’re very attracted to it.
What causes you to say, “I want to talk to this person”?
One of the four people we hired came with really fantastic questions. She had a good resume, it was a standard resume, but when we went through the interview process, we got to the point where we asked them “do you have any questions?” and we noticed that no other person that we had interviewed up to that point had asked. They were like, “no, everything seemed really straightforward”, and she asked these really in-depth, probing questions that either she was curious about or because she had done research on our backgrounds. That showed me that this is someone who took time, they care but also have a way of looking at the world to try to figure out, is there something deeper I can know about this?
I’d say hearing the questions that people ask is a really big indicator for us. Demeanor is a big part of it but, then again, we had to work with people for several weeks in order to get a feel for whether they were self-motivated enough to be able to do work on the schedule that we want them to do, because the four days we have people work is an aggressive four days where people need to get things accomplished—it’s basically just compressing 40 hours into four days.
I think also that seeing like people go through the decision process, seeing that they make good decisions on their own or they’re able to make the right assumptions to make those decisions—that’s important. It doesn’t really work, from a management standpoint, to have to be the one that everyone always filters everything through, in order to do any kind of action; that slows down the person who’s doing management, especially for three founders, because we all still work and write code. We’re still the center behind but we don’t want to have to answer every single problem; we want to see who’s able to make decisions on their own without a lot of supervision.
Can you provide any advice for undergrads who want to do a startup?
I don’t feel like it’s ever bad for anyone non-technical to learn how to program because it’s going to score you points when you need to find a technical founder. From my experience, when I hear someone that is purely non-technical or has no technical background I already discount anything that they’re going to say by like 75%, because I feel like they lack a lot of experience or understanding of how a technical startup is going to work or be managed. People who are in a technical startup, there’s this creation process and those kind of creative people are motivated by very, very different things and they require very different management styles.
I definitely recommend people work in a crappy job. Work in a job for a large company. I say a lot of reasons that we change how we decided to do our management or the reason we did research before we making startup decisions about the business was because we had worked for the government and we hated every bureaucratic process there. We were like, “there’s got to be a better way of growing the company than however this is going to be run”.
During Y Combinator we worked really hard because we knew what we were fighting for; we knew that we never wanted to work in a cubicle ever again and, as a result, you try to make decisions that prevent you from going back to that—it makes you a lot ‘hungrier’ to do things. I feel like college students—who have never had a job but they have all this computer science background—who go and found startups, often don’t realize the kind of companies that they’re on the fast track to creating, because they don’t have the experience to know that these are bad paths to go down. They think that this is going to be some fun or interesting experience and that they’ll just go and do something else afterwards; that’s not the way to look at it. It never gets more fun in the real world; it never gets better than you being in charge of your own destiny.
Can you talk about the time you most successfully hacked a non-computer system to your advantage?
We came to this realization that a rice cooker is essentially a pressure cooker and you can cook more things than just rice inside of them. It sounds really weird and lame.
Did you guys cook anything else in there besides rice?
Yeah, we cooked steak, stews, roast chicken, meatloaf; all kinds of vegetables.
Maybe I should get one of those.
You can make Ramen a lot quicker in a rice cooker than you can waiting for it to boil on the stove and it’s all going to come out right. Pasta too.
That’s a pretty good food hack, actually. I didn’t think about this.
Yeah, you just pop that sucker in there and it’s going to cook, especially those fancy fuzzy logic Japanese cookers, they all figure out how to time anything that you throw in there, but yeah, macaroni and cheese. The other thing is: it has that warm setting so it automatically pops up and then it just keeps it for as long as you need it.
I don’t even have a microwave. I should get one of these.
Try a rice cooker. I mean, rice is awesome but of all the things you can cook with, it is pretty good. I think now they have these cookbooks for other things you can cook with a rice cooker, but at the time we just did our own stuff. It was the only cooking appliance we brought with us when we came to do Y Combinator.
Unfortunately, Wufoo isn’t hiring right now—but can you tell us why you aren’t, despite your profitability? Why would someone want to work at Wufoo, in the event that you decide to hire in the near future?
We did just hire another support person to add to our team. But we’re really slow to hire anybody. It’s really awesome to come work for us, if we ever are in the hiring mood. We have profit-sharing which is based off this performance review multiplied by a percentage of your salary base and based on your responsibilities, whether you’re a manager or not. That profit-sharing happens three times a year and Wufoo is a very profitable company; our revenues grow month-over-month and we also have the annual 10-day company trip and we go to places all over the world. This year we’re going to take everyone to stay at this medieval castle in England.
You have to still do customer support on whatever your customer support shift is while we’re out there, but that’s like one or two days out of your week. We also have automatic raises; every six months that you’re with Wufoo you get a 3% raise, automatically. So it’s kind of this loyalty incentive and also, unlimited paid time off. We don’t track how much time you take off or how many vacation days you have. So long as you get your work done, you have people covering the stuff that you need to do, people take many weeks off. We already give the entire week for Thanksgiving off and we give the entire month of December off.
It’s a 4.5-day work week we’ll have one meeting a week on the Friday. So if you like to get things done and like not being interrupted you get to work from home and you get equipment for us and we pay for your iPhone or if you don’t have an iPhone we buy you an iPhone and pay for it.
So when you guys are hiring people need to apply for Wufoo?
Yeah. You have to be quick too.