Chase Adam at Startup School NY 2014

– Chase Adams, the founder of Watsi.
Watsi is the crowdfunding platform for healthcare that lets anyone donate as
little as $5 to fund medical care for people in need. So before starting
Wasti, Chase traveled, worked and studied in more than 20 countries. He spent time
in private sector intelligence in Washington, launched a national health
program in Haiti, and served in the Peace Corps in Costa Rica. Wasti was the first
non-profit that was funded by by Y Combinator, and
we’re very happy to have him here today. Welcome Chase. – Thanks for having me.
I love New York. I was just walking here and there was this really old construction
worker crossing 42nd, and he was walking really slowly, and there was this
young delivery guy in a van. He was obviously in a huge hurry,
and he just lays on the horn, and the old construction worker just stops in the
middle of the street, and he looks up, and he just gives the guy the finger. And then
a second or two later, they just both break down laughing. It was beautiful
but that would never happen in San Francisco.
So about three and a half years ago, I was serving in the Peace
Corps in Central America, and I was sitting in the back of
a bus and I remember that at that point in my life, that bus was the last
place in the world I wanted to be. It’s really hot, it’s muggy,
I remember the smell of dried sweat kind of coming
off the top of my shirt. There was a black Northface duffel bag
at my feet, and in that black Northface duffel was just about everything in the
world I owned. I’m in credit card debt, I’m in student loan debt, and I
remember the worst part was that the day before I had just gotten off a plane from
San Francisco, and I had been home in San Francisco visiting friends and family for
the first time in a year and a half, and I don’t know why I thought this, but, I kind
of expected that everyone back home would be kind of miserable,
I had spent the last 6 years of my life traveling the world,
working with non-profits trying to do good. I figured
that everyone back home was, you know, living the office space life, working 9:00
to 5:00’s for big corporations, but that wasn’t the case. I remember being really
surprised when I got back to San Francisco and realized that most people were working
for companies or starting companies or building products that they really
believed in. It seemed like a lot of people had found
a way to do good and do well. And, in contrast, a lot of the work I had done
abroad with non-profits, it felt really small, it felt really slow and it felt
really bureaucratic when compared with the scale and speed with which things were
happening in San Francisco. And so, I remember saying to everyone I saw, and
this is a direct quote, I said, “Fuck, non-profits.” I said, “I’m done with
this.” And I want to make it clear that I believed then and still do that
non-profits are incredibly important. There are certain problems that markets
and government just do not solve. Imagine a 10 year old girl in Somalia needs a
$1000 for a life saving surgery and her family earns less than a dollar a day. The
local government doesn’t have the resources to provide an adequate
social safety net and the market just hasn’t found a way
to create profitable businesses that provides surgeries to people
that can’t afford to pay for it. That’s where non-profits come in.
Non-profit will come in, they’ll fund her health care, she’ll live to see her 11th
birthday, she’ll go to school, get a quality education, get a job, contribute
to her local economy, pay taxes, and hopefully in the future if she has
children and they get sick, hopefully either she, her family, or the
government will be able to cover the cost of her
medical care. So when I said that I was done with
this, it wasn’t because I thought non-profits weren’t important. It was
because, from my perspective, the most important problems in the world
were being solved so slowly. So there I am sitting in the back of
this bus, in the most beautiful place on Earth, during the most exciting time of my
life, and I’m somehow jaded beyond belief, and a woman gets on the bus, and she
starts asking all of the local passengers for donations to pay for her son’s medical
treatment. And I’m embarrassed in retrospect, but I just reflexively just
tuned her out. People get on the bus every day and ask for money and almost
no one would ever give. So I looked back up a few minutes later,
and I see that almost all of the local passengers are giving her donations. She’s
holding this plastic bag, it’s almost bursting with money, and I cannot for the
life of me figure out why all of these local people trust this woman
when they had never trusted all the women that had
gotten on the bus before her. And it turns out they trusted this woman
because she had her son’s medical record with her. It was in a red folder, she was
passing it around the bus, people were looking through it, asking her questions
and through that process she seemed to earn their trust.
So she gets to the back of the bus, I make a donation,
almost everyone around me makes a donation. She gets off and I get
goosebumps and I think, “Why on Earth is there not a website where you can fund
medical care for individual people that need it? Why is there not a global
crowdfunding platform for healthcare?” So I decided to start Wasti
and decided to name it after the town I was
traveling through at the time. To go back to my house, this is where I
lived in the Peace Corps. Recruited my two best friends, Mark and Howard, to join the
organization. We spent our last six months working on the business plan for Watsi,
and I’ll never forget that a few weeks before the Peace Corps ended, all the
volunteers decided to rent a house on the beach and celebrate by having a party. And
at this point in Watsi’s history, my primary objective was to find a
developer who could build the website because
none of knew how to code. So were at the party, it’s the last
night, everyone’s on the beach, drinking, having a good time, and I decide
to start showing people mock-ups I had done
of the Watsi website. And so if you think people’s start-up
ideas are annoying in San Francisco or in New York, here I was on the beach, at a
party, in my bathing suit, holding my $200 Netbook in my hands, going around to every
single person I could find, shoving my computer in their face, making them look
at my absolutely horrific mock-ups for an organization website that didn’t even
exist, and asking them if they knew any developers that would be interested in
joining the organization. And by some absolute miracle, the next
morning, it wasn’t even that night, the next morning this girl, Chamise,
offered to introduce us to Jesse, her
ex-boyfriend, a developer who lived in Portland. We jumped on a few Skype
calls with him and after basically convincing him that Wasti was a
hell of a lot more established than we really were, he agreed to join the
organization. So we got back to San Francisco, we
decided to do Watsi part time as volunteers you know, Mark went and
got a job with a start up in L. A. , Howard went to get his MBA, I was working
in finance in the city, and we just built this amazing team, of, of part time
volunteers, Grace joined to help with marketing,
Sally joined to help with medicine, etc. , etc. , and we would jump on a hangout
every single Tuesday and talk about our progress. At one point,
we were 8 volunteers, across 4 continents, and 6
time zones, all working on Watsi. And in retrospect, not raising money and
starting Watsi as volunteers was one of the best decisions we made and it was
good because there was really no downside, the only downside was that it just
took us a lot longer to launch, but that didn’t matter because we had no users who
were waiting on us, we had no funders who were expecting results, and we all had
jobs, we could support ourselves. But the upside was huge. The upside was
that we were beholden to no one which meant that we could take risks and make
decisions that we otherwise probably wouldn’t have been able to. So we made
three decisions during that year as volunteers that I believed shaped
the future of Watsi. The first was that we decided that 100% of of every
single donation would directly fund medical care.
We’d never take a cut. We decided that we’d be completely
transparent. We’d go though the extra effort to put all of our financials and
operations on the website, and that instead of just focusing on top-lying
growth like a lot of non-profits and start-ups, that was actually most
important to us was the ratio of how much money we spent on our operations, compared
to how much value we were creating for patients. So after working on Wasti for a
year as volunteers, we were ready to launch to the public. I’ll never forget
the day we launched. We launched on August 23, 2012.
We sent out an email We did the Facebook post…
all the things and I remember thinking, “OK, it’s just going to
explode now. It’s going to be huge. ” My mom donated, Grace’s mom donated, Jesse’s
friends and family donated, and then it just died. A few hours nothing was
happening. And so I decided to posted on Hacker News, had never posted on Hacker
News before, was terrified of all the comments that were just going to destroy
me and so I created a user account post on Hacker News, and I don’t tell the
team because in the event the post flopped I was just going to pretend like it never
happened. So post on Hacker News, and within what
feels like minutes, were in the number one spot, 16,000 uniques hit Watsi, we funded
every single medical treatment we had in our pipeline for the next six months in
matter of hours. So completely exhausted, spend the
entire week trying to do my job and also doing Watsi and a week later, I
remember sitting in bed and getting a Google alert that Wasti had been featured
on Techcrunch. And another embarrassing moment in retrospect, but it was hard for
me to actually hold back the tears, and that’s really embarrassing,
but I was so excited, Techcrunch, you have to understand, like
Techcrunch and Hacker News for me and the team was like the entirety of our
start-up education, we hadn’t missed a post in the last few years
and to be featured on both prominently over the course of a week was more than we
actually ever thought was possible for Watsi, so I remember reading the post
a few minutes later after the kind of like the emotion died down, I remember turning
to my girlfriend at the time and asking, you know, “Do you think that all the
start-ups that Techcrunch writes about are
secretly as crappy we are?” And I figured, you know, I was like
reading about Wasti and Techcrunch I saw some Hacker News and I figured there’s
probably at least one human being in the world that thinks were like are a real
organization, but in reality on the inside everything was broken, no full time
employees, we have no patients on the website, no operations, and at this
point in my life, I was still naive enough to think that all other
companies were perfect. I actually had this image in my mind of
employees at Google and Facebook just playing ping pong all day. Like, I just
thought that’s what people at start-ups do is just play ping pong because everything
was automated, computers did everything, nothing was broken and all the graphs
would just magically always go up into the right. I since learned that’s not true.
I’ve learned that pretty much every company probably at any start-up, you
always kind of feel like you’re standing on a house of cards and I imagine
that the more successful you are, the larger that house of cards feels. But at Watsi that house of cards was
really about to come tumbling down, I mean, to give you an idea of how broken
our operations were, we had never in a million years expected that we would fund
all the treatments we had in our pipeline. So we had no idea how we going to find
more patients. We were completely on the website, there were thousands of people
going with nothing to do, and so we have two hospitals we work with, one in Nepal,
one in Guatemala, we call in both frantically saying, “We need more
patients! We need more patients!” So go out, they’re trying to find
patients, they go through all this work, and then they compile this information,
and they put it into a word document, and they email it to us, we have
no forms, no admin, nothing, and they email us this word
document, and the word document would go to Mark, and Mark would make sure all the
privacy waiver was there all the information everything was signed, and
then Mark would send it to Sally, and Sally was doing her residency in emergency
medicine at UCSF which basically meant she was working 24-7 as a doctor, and Sally
was our bottleneck. So we would text message Sally like 15
times in one night, “Sally you’ve got to approve this patient, we have no patients
on the website. ” Sally would sneak into the corner of the emergency room and
basically approve the Watsi profile from her phone. Then Sally would email it to
Grace, and Grace was responsible for editing the content and publishing it on
the website, but Grace had been working on Watsi so much from her day job in New York
that she was having to sneak into the bathroom to edit and publish Watsi
profiles from her phone. So it became clear pretty quickly that
we needed at least one full-time employee if Watsi was not going to implode, um, and
so I decided to quit my job and work on Watsi full-time. And I only had three
months of savings in the bank so my objective was to go out and to raise
enough money to cover at least my own salary then hopefully the salary of a few
other people. So I read a bunch of, a bunch of books on non-profit fund raising,
um, I go out, have a million meetings, I have no connections in the Valley at all,
um, and just fall completely flat in my face. Not a single person would give us a cent
and just like with for profits, one of the most challenging things about raising
money initially is that no one wants to be first. No one wants to be that first
person to take gamble and support you, but beyond that there are a few things that
make fundraising as a non-profit even more challenging. The first is that as a for
profit you have the opportunity to go to a fund and say at least attempt to a
$500,000 convertible note. As a non-profit, you usually have to go to 100
people and try to raise $5,000 from each one, it’s just incredibly time consuming. The other thing is that there’s no
deadline there’s no va….there’s no roundness about to end, there’s no limited
amount of equity so there no urgency, you just constantly get pushed to the bottom
of peoples to-do lists. And the last thing is that, people are just too nice, and
they don’t want to say no to you, so they kind of just end up stringing you along
forever, and you just like of keep turning your wheels, um, until you eventually give
up. So I went out, um, wasn’t able to raise
any money, we start getting really desperate. So we decide to enter this
Huffington Post competition. We make it to the finals of this Huffinco…. Huffington
Post competition, the prize is $10,000 which at the time seemed like the largest
sum of money on the planet, I was like doing the math, I was like, “I can live
for a year on 10k, ” um… So we enter the Huffington Post, um, we
make it to the finals and the way the finals work is that it’s an online vote
between us and one other non-profit. I will never do another online voting
competition for as long as I live, um, but it was the most stressful week of our
lives. We email everyone in the world we know, we Facebook message every single one
of our friends, I get defriended by like 100 people because I’m being so annoying.
We’re stopping random people in the street asking them to vote for Watsi, and then
it’s 9:00 p.m.the night before, the night before voting closes at midnight and we’re
still, like, neck and neck with this other non-profit. And then all of a sudden, we start
getting a bunch of votes, and I have no idea where these votes are coming from.
I’m like, I’m like completely out, like, if I send another Facebook message, I’m
not going to have a single friend left, um, and it turns out that Grace was at a
bar and she convinced this bouncer to get every single person to vote for Wasti on
their phone before coming in. [laughing] [clapping] So we end up taking the lead, we win the
competition, and at midnight, the bartender apparently rings the bell and
buys shots for everyone in the bar to celebrate it, um, so we won the Huff Po
competition, um… Immediately after, I’m flying down to
Palm Springs to spend Thanksgiving with my dad, I’m in the plane, the plane lands and
I start getting all these messages on my phone, and I see that I have an email for
Paul Graham, um, he had seen a recent post we had put on Hacker News, the secret
reason we had posted this post on Hacker News was to get votes for the Huffington
Post competition, um, he had seen a post we had done on Hacker News, and he wrote
an email with just two sentences, and it said, “Are you in the bay area? If so I’d
like to meet. ” And I remember being so excited, I just
could not believe this was happening, it was like an out of body experience, I was
so excited that I got off the airplane and left all my luggage for Thanksgiving on
the airplane, just completely left it behind, um… But, it didn’t matter, I had my phone, I
remember, like, I got to my dad’s place and I had, like, 15 people read my, like,
one sentence reply to make sure there were no spelling errors or grammatical errors,
um, took me like 10 minutes to send it, um, but get back, um, the next week Jesse
flies down from Portland, um, I don’t think anyone at YC knows this, but that
was the only the second time Jesse and I had ever meet in person despite working
together remotely for over a year and a half, um… We meet at a coffee shop were like, get
kind of….plan out what were going to say, we meet with PG, have an amazing
meeting, um, he writes us our first check and invites us to join YC, so that’s
enough to get Vince Grace to move from New York, Jesse to move from
Portland, we rent a little apartment in Mountain View, we have three bedrooms
upstairs, we convert the living room into a full-time office, and we just work on
Watsi, you know, 24-7. Um, learned a ton during YC think the biggest things for us,
um… The first one was to just to focus on
One Metric, that it was so easy for us to, like, get distracted by the million things
that we had to do, and when we realized there’s always a single thing that is most
important, there’s always one thing at any point in time that is the most important,
and that for us it was just so valuable to focus on that one thing, and for a lot of
YC was really just donations, average weekly donations, that was like all we
focused on, um… The second thing that we realized during
YC that we learned, um, was that, we’re not in this alone, um, you know I think
it’s so easy to think that all your starts-ups are perfect and this was a time
in my life where I realized that really all the other companies were facing the
exact same challenges we were. They were facing the same problems, same
opportunities, um, and what we learned at YC was that really the only thing
separating us from success was just hard work and not giving up. We realized that
if we never quit, it’s impossible for us to fail. And the last thing we learned was
that it’s OK to hand crank things, it’s OK to do things manually in the beginning
when you’re still trying to figure out what’s going to work and what’s not. So we did YC, um, obviously the way
sy…. YC works at the end you have Demo Day where you pitch to a bunch of
investors, and I just starting having these recurring nightmares. We’re the only
non profit that’s ever been accepted at YC, and I’m having these recurring
nightmares that I’m going to get onstage and I’m going to do so terribly that YC is
never going to invite another non-profit to join. I’m like, “I’m going to be that
guy that ruins it for everyone.” So I practice the pitch so much that I
end up losing my voice the day before Demo day. Voice fortunately comes back, we do
fine on the pitch, and it kind of kicks off, um, our next round of fundraising. So this time we learned a lesson, and we
char….we decided to try and do something crazy. We decided to raise a round of
donations, and really, all that meant was that we picked an arbitrary date, three
months in the future, and we said, “The rounds closing on this date,” and
everyone said, “We’re stupid.” Like, “Why would you stop raising donations?”, um,
but it worked and for whatever reason just having that date, despite it being
arbitrary was enough to convince people to at least make a decision within those
three months, um, so it wasn’t easy we went out, we had 138 meetings, in 5
states, over 3 months. We ended up convincing 14 people to
support our operations and we got really lucky, um, some of the best investors in
technologies and entrepreneurs in the world decided to back Watsi, um, PG
donated, Ron Conway donated Vinod Khosla donated, Paul Buchheit,
Geoff Ralston, Tencent… just the most amazing group of people on the
plant, um, and that’s not a responsibility that we take lightly. So since raising
that round a little less than a year ago, we’ve been lucky
enough to grow the team and we’ve definitely grown
the team pretty slow compared to other start-ups, um, at our
stage and I think that was the right decision, um, and I think it was the right
decision because, you know to be honest, like, were not trying to build an
organization or a start-up where worst case scenario, we cannot go higher than a
year and a half, um, that’s not possible because were non-profit, but even if it
was possible, we’re not interested in that. We’re really trying to build an
organization that if we do well and if we get really lucky that we hope that will be
around for 100 years, um, and what that means is that founding that initial team
is just so important, um, not just from a technical perspective, but from a culture,
and from a mission perspective, because if we do get lucky and Watsi does exist for a
long time, hopefully the characteristics of that founding team will be compounded
exponentially time and time again, um… And the last thing is just efficiency,
that, it’s so tempting to just look at those top line revenue numbers and just
hire more people, hire more people, but efficiency being our core value, um, we
found that it’s actually kind of nice sometimes to just embrace the challenge
and the awkwardness of not hiring, of not having enough people to do everything that
you need to do because it forces you to be more creative, it forces you to be more
efficient, and it forces you to focus on what’s ultimately most important.
I’ve made a ridiculous number of mistakes at Watsi as the
team will attest to, I tend to learn just about everything
the hard way, um, but I think one thing that I fortunately did right was from the
beginning only agreeing to hire people that were a hell of a lot smarter and a
hell of a lot better than I was, um… And as a result, I think we built one of
the most amazing teams in the world, we have Grace who is without a doubt the
hardest working and most passionate person I’ve ever met, Dan built the medical
philanthropy team here, Tom is just an amazing engineer,
Netta the most talented designer I’ve ever known, um, you
know, and as result, actually, every day I come into the
office, you know, I think to myself, you know, I hope it’s true, I hope it’s true
that you end up becoming the average of the five people you spend the most time
with, because if that’s the case I think I’m honestly, um, I’m honestly one of the
luckiest people out there. So as a result of the work the team did,
we grew 1007% in our first calendar year, um, but the stat I’m actually the most
proud of is the fact that every single team member at Watsi raised more
than 10 times the amount of money for patients that they took in their own
salary. So with growth comes challenges, we have
no shortage of them a few that we’re facing right now which are maybe
of slight interest to you guys is just the first is unsustainable growth
that this definitely falls in the good to have problem camp, um, but one of…
there’s, like, press and hype is kind of, like, this
double-edged sword because for our first year, you know, it was really hard for
us to balance resources between kind of like managing these short-term spikes in
growth that you’ll get from an article or a press release and actually
building features that are going to help you
succeed in the long run. You obviously have to do both.
You have to have patients next week when every article comes out but you also
have to invest in the future and balancing those two is always challenging. The
second is the internet. When we started YC we were working with hospitals
in two countries. We’re now working with hospitals in 19 countries.
Most of those hospitals just got access to the internet
very recently, and for most of them, internet access is
spotty at best and so it’s been really challenging to find out the best
and most efficient ways to collect and disseminate information. And
the last is marketplaces they are just really challenging,
I mean, you obviously have to manage both sides. We have donors
on one side, patients on the other, but what makes Watsi even more challenging is
that it’s not like really a free market because we leave patients posted
until they’re fully funded, we never want to promise someone health care we cant
deliver, but at the same time the cost of health care doesn’t fluctuate
based on donor demand, which means if a surgery is 500 bucks, it’s just $500
regardless of whether or not there’s 1 donor interested in funding it or 100
donors, so behind the scenes we have to do some really interesting stuff to try and
replicate natural market dynamics. So in closing, one question people
always ask us, they think were crazy, they ask us, “Why? Why are you doing this?” Um,
you know it’s obviously not for the money, if money was the single most important
thing, there are a bunch of other places we’d be working, um, it’s not for the
fame. Honestly the anxiety of preparing for a talk like this probably
takes a year off of my life and it’s not because it’s easy. Building a
non-profit start-up especially Watsi is probably one of the hardest
things anyone on our team will ever do, So why do it? And I think the answer for
us is that the idea that everyone matters, matters to us, you know, think back on
human history, you know, and ask yourself, “Is there a difference? Is there
a difference between denying someone, you know, their rights because of their race
and denying Prianca the right to use her
hand because she was born on the wrong side
of an imaginary line?” You know, ask yourself, “Is there a
difference? Is there a difference between denying someone the right to vote because
of their sex and denying Y-Lin the right to see because he was born into
a poor family?” You know, and ask yourself, “Is there a difference between
denying someone the right to speak their minds and denying Titus the right to live
long enough to ever learn how to speak in the first place?”
In the next 10 years, just about every single person on the
planet is going to be connected for the first time in human
history, and I believe that that’s going to be the beginning of a transition. Just
like we transition from families to villages, from villages to towns, from
town to cities, cities to states, and states to counties, I believe we’re in the
process of transitioning from countries to a world. And when that happens it’s
going to be impossible to deny the fact that every
single person in the world matters. And I honestly, we don’t
know, we don’t know what role Watsi is going to play in that
process, but what we do know is that when we look back on our lives in history in
50 years, that whatever we accomplish would have been worth
the effort. Thanks. [Applause]

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