Zach Sims at Startup School NY 2014

– [Alexis] I have a distinct privilege
right now to introduce another one of those New York
Y Combinator Company’s CEO. This is Co-Founder and CEO Zach Sims
who started Codecademy. You guys hopefully all know about
Codecademy. If programming is the fluency of this generation they are the place,
they are the global place to learn it. Since they launched about three years ago,
they’ve now served, I think over 24 million students all over the world
in every single country, is that true? As well as Antarctica. Presumably?
We’re going to hear more about that. One of the things that’s really exciting
about this is, not only was he a dropout from Columbia, but… Yes, was that for dropouts or for
Columbia? I’m not sure, but we’ll say both. But like so many start up stories,
from the outside it seems really simple, really clear. Figure something out, make
something that people want, grow grow grow and before you know it you’re on the
Colbert Report. Which Zach was, it was a great episode. But in fact
every start up has its own cluster. And I hope Zach shares with you the story
of the few weeks running up to Demo Day, because Codecademy was anything but a sure
thing. So please give it up for Zach Sims. [applause] – [Zach Sims] Awesome.
Thank you Alexis. I didn’t realize I’d have to compete
with the soccer game today, I should have interwoven
like the score in my presentation. Anyway, my name is Zach Sims, as Alexis
just mentioned I started a company called Codecademy with my co-founder Ryan, and
we teach people the skills they need to find jobs in the 21st Century online. But
as Alexis mentioned it wasn’t always that way. So, when I go to a talk like this and
I sit in the audience I always ask “why is that person on stage? What experiences
have they been through that let them stand up and preach to people, and
what can I learn form that?” So today, I looked at the
slate of speakers that’s here today and saw a
lot of pretty awesome names. You have world class investors,
you have people who are changing the world with non profits, and
people with super fast growing companies. Then I think they needed someone to fill
the cliché spot, they needed the dropout. So my story is somewhat similar to what
you’d see on the Social Network, the movie that hopefully a lot of you are
familiar with, but with a lot less Trent Reznor
music, and a lot less cocaine. So what I hope you guys
leave with at the end of today is kind of our story, and hopefully
a few key lessons you can learn that will tell you some things you can do to
eventually on day prepare yourself to start your own company. Then a lot of
things that we did that you probably shouldn’t do if you do start your own
company, and hopefully a couple of fun stories in between, because as Alexis said
you hear all the time about people who would kind of just hit it and it just
works. I think the story that has been told about Codecademy a lot is that we
built the actual product a few weeks before Demo Day and launched and had a lot
of success; but it really wasn’t that easy. So I want to go back to 2003 when I
really Started becoming interested in the internet. That was the year that the
iTunes music store got really big, they ran the first advertisements for the
iTunes Music Store, and somewhat ironically they were headlined by Dr. Dre.
So now that’s all kind of come full circle few years later. But I got my first iPod
in 2003 and I brought it with me everywhere. For the first time, you could
carry 1000 songs in your pocket. So I brought it to the gym,I brought it on
runs, and it skipped throughout the runs. But what I didn’t have was a way to
protect it when I dropped it on the ground, which happened all the time.
As all of you know with hard drives, dropping them on the
ground isn’t so great. So I looked online and I tried to find a
case that I could use for my iPod. And instead of doing what the normal
person does, and buying the first one that I saw, I realized I should just make one
myself. So at the age of 13 in 2003, I emailed a bunch of different iPod case
manufacturers across the country and told them that I had the greatest idea ever,
to build a water proof iPod case. I didn’t tell them that I was 13 and had
no idea what I was talking about. So after around six months of emailing
with someone who worked at a big case manufacturer
across the US, finally I had something in my hands that had
gone from having an idea when I first got the iPod, to having something that
now protected it everywhere. Then a couple weeks later, the guy on the other end who
worked at the case manufacturer asked to get on the phone with me so we could talk
about how we were going to launch and market what we had built. So what I
thought was really cool, was that no one on the internet knew that I was
13 and in my parent’s basement. It’s really the great equalizer. The
great equalizer that is, until you get on the phone with someone and your voice
cracks 10 seconds into the phone call. So that relationship was really
fruitful until he realized that I was 13. But what was really
empowering about that was that I realized that being young
or being somewhere not in New York or San Francisco didn’t matter on the
internet. Didn’t matter that I never built hardware before, it didn’t matter
that I didn’t know what marketing was. But, the internet allowed me to learn
all these things very quickly and to build something that came out of that.
So, I think that was one of the first lessons I learned early on
is you don’t know until you try; and so I started trying pretty early.
So after that first experience, kind of kept going back to the question of, how do
I learn more about the internet and what I can do with it? I had already
seen what an amazing impact it could have on me
and people around me. So I went to the library and I picked up a
book on PHP and MYSQL for Dummies. I went to a shelf and I saw a list
full of yellow and black books, picked up a few of them
that had acronyms I didn’t quite understand.
I figured, a book for the rest of us, I can really sympathize with that.
I went home and I read a bunch of For Dummies books, but it never really
clicked, and I never really built anything with the knowledge that I picked up by
reading these books. Because they didn’t actually have me working on real projects.
So when I turned 18, I went to Columbia in New York as Alexis mentioned, and instead
of studying computer science, for some reason I decided to study political
science. I usually try not to mention that, but I’ll tell you guys that secret.
So I went to college and my first semester I tried to find people that were like me.
They were interested in Technology, they were interested in start ups; but there
was no one. I asked everyone around me What are you guys interested in doing
with your future and your careers? And half of them told me “we’re definitely
not thinking about that, we’re just interested in partying.” The other half
looked at me similarly weirdly and said “we’re working in banking and
consulting obviously, like everyone else in New York.”
So I was little discouraged, but second semester of my
freshman year I saw a poster that there was going to be a talk from someone who I
thought was kind of famous in the New York startup scene. His name is Sam Lessin and
he started a company called, that was a file sharing company and he was
coming and I showed up two hours early for his talk. I was thinking there
was going to be a packed house; I got there and it was
in a really small room but it was in that
really nice building, so I figured very important person, a lot of people are
going to be here. Sam showed up on time, and no one else showed up. So that was New
York in 2008, it was a world where no one was interested in startups and you got
ridiculed. There was no one to talk to you about working in technology. So Sam was the only thing I had so I
pestered him for the next six months until he finally let me work for him for a
summer for free, and I tutored the SATs at night back in Connecticut where I’m from.
I sat on the couch and I learned everything I could from what Sam was
doing. I went back to college and I said, what can I do next that will help me learn
more? Help me become better than the experience I had at I definitely
wasn’t taking another class on political theory which at that point was
interesting, but not quite relevant to what I wanted to do after I graduated. So
I got to know a lot of other people in New York who were working in startups, and
I went to TechCrunch Disrupt that year and I saw two friends of mine demo something
called GroupMe, that at the time allowed you to text one phone number and it
created a group chatting application. You could send one text to one number, it
go to five or six people and they could all text back to that number. I thought it
was super cool. The two founders who were friends of mine had been at a music
festival the week before hand and experienced this themselves when they were
trying to text and there was no data, and for their emails to get through, and they
couldn’t text each other and they got lost. Then a week later they built
something that solved their problem, that was crazy to me. So GroupMe went on to be
super popular at TechCrunch Disrupt, and I eventually joined them to work on Group
Me when it was just the two of them and me in an apartment with a couple other
people. I realized that solving their problem was the key to their early
success. They had built something that they needed to use, they figured there’s a
lot of people that go to music festivals, and there’s a lot of people that need to
communicate. So they built something for themselves. So what I had at GroupMe was
something that finally my friends believed in; it went from my friends looking at me
as if I had the worst ideas ever, to adding them all to a group chat. For the first time they thought that
something I was involved in was pretty cool. Then a lot of other people thought
it was pretty cool too. So we went from nothing in, think it was July of 2010, to
sending hundreds of thousands of messages a day really really quickly. We hired a
team, we came up with the sign, the pound sign… In retrospect a little
embarrassing, I’ll just pass that slide quickly. I realized that the most
important thing I could do is get a front row seat on the rocket ship and watch as
GroupMe grew from two people to 15 people to 20 people. Then less than a year after
it started it sold to Skype. So after that I went back to college, you know I had
such a good experience, kind of figured what most people would do is double down
and go back and work in start ups. I fell prey to the peer pressure and I
interviewed at banks and consulting firms like everyone else, and I realized sitting
across the table from all these managing directors, there was absolutely nothing I
wanted to learn from these people. Just absolutely nothing. I sat there and I
regurgitated a discounted cash flow function I had learned the night before
hand, and even doing it in an interview was just massively painful. I figured if
that was going to be my life 18 hours a day for two years I should choose
something else to do. But what I also saw was that the skills that I had learned
over the past two and a half years while I was at Columbia weren’t relevant to what
mattered in the job market. I saw that all my friends struggled to find jobs too. A
friend of mine Ryan at the time, was a senior and all of his friends were trying
to find jobs. Even though they were seniors graduating from Columbia a lot of
them still struggled because the skills that they were learning weren’t
immediately practical. So I talked to Ryan, who at the time
probably thought I was crazy and said we should fix this, this gap between
education and employment, it shouldn’t be too hard to solve. I sent him an email,
the first email that I think really started the company was headlined ‘one
other thing’. That other thing turned out to be our company. But we started talking
about ways to connect people with skills that would eventually help them find jobs;
and we realized, we should just get started. We had a lot of free time, nights
and weekends, and so we started building a bunch of different ideas. The first one…
We’ve always been really great at naming, so the first one was called
“Come Recruit Us.” I believe, I think we had the
dot US domain names so… we’re very inventive. At the
time, we figured the best way to connect students with jobs was to have them log in
with their Facebook account and just say where they wanted to work. Seemed pretty
simple. So we built the first version of this in 2011, and we talked to a lot of
friends and mentors, people who worked at startups before; and all the people who
worked at startups looked at us and just said this is the dumbest thing I’ve ever
heard. We’re like, it’s okay, and you’re not the market for this. So we spoke to
our friends at Columbia, and were like, we’re going to help you get jobs; and they
all looked at us and said this is the dumbest thing I’ve ever heard. So it’s
very very encouraging. So Ryan and I took that feedback and we said, yeah you know
we’ll roll with this, and we’ll apply to Y Combinator. Because if no one else
thinks our idea is good, maybe at least
someone will think it’s crazy. So we filled out our Y Combinator
application and we asked for some feedback and got some of the best
advice I think I’ve gotten since we started the company; which is, we have too
many words and not enough information. That was probably because we didn’t really
know what we were building our self. So we just kind of put a lot of words around a
thing, and then we applied to YC and figured we’d never ever get in.
Turned out we got an email a couple weeks later and
we were invited to interview. So we flew out to California, and we met
with all the partners. Before doing that though, we landed, went to a coffee shop.
We figured out how we’re going to put the finishing touches on the thing that we had
built that helps people find jobs through Facebook. We realized on the plane, we
some how had an epiphany that this is just a horrible idea. Everyone who had been
talking to us was absolutely right, it was just the worst idea ever. So at the time
we figured, well, we can help programmers find jobs, that’s a better niche; because
we were… I was learning to program myself, my co-founder was a programmer, we
were doing programming challenges. So we spent the next 48 hours in a cafe in
San Francisco building a way for people to take programming challenges and then find
jobs from there. We’re so focused on building the first prototype of that
product that we didn’t realize that we had locked the keys to our Air B and B inside
our Air B and B. So we went back that night and didn’t have a place to stay. So
next morning we showed up at Y Combinator looking a little raggedy and just a total
mess; we figured… We walked in, we spoke to the partners for 10 minutes, and we got
question after question, but the weird thing was they were answering each other’s
questions. So we didn’t know whether that meant we had a really good idea, or a not
so good idea and we didn’t have a chance to demo what we had spent 48 hours
building. So on the way out one of the partners tapped us on the shoulders, kind
of looked at us and said “can you guys even actually program?” Kind of sheepishly
nodded, they didn’t ask how well. The answer was yes, so we left and we said,
well we blew it, we flew out here we had this big shot, we got asked a lot of
questions, we didn’t get to answer any of them. They didn’t even think we knew what
we we’re doing; which wasn’t far from the truth at the time. So we had
went from being on a super high before interview to
a super low walking around Palo Alto. Then a few hours later Paul Graham called
us and said we’d like to have you for Y Combinator this year. I think my answer
to him on the phone was is this the wrong number? Are you serious? And then I did
something smart and I said, can I get back to you; which I had no idea what we needed
to think about, but apparently we did. So a couple weeks later we got our first
check from Y Combinator, this is the first feeling of ‘wow we actually made it’.
Every one gets into Y Combinator instantly successful, it’s like pixie dust. So
that’s what we figured, and we moved out to Silicon Valley and we said, awesome.
Everything is set from here on out. We’re going to live and work in this sweet
office. You see all those pictures of brick in San Francisco. Then we get out
there and we crashed on the floor of a friend’s apartment who worked at
Pallentier. So this was our office, and where we slept for the first couple of
weeks, until we realized it’s not productive when your desk is the box for a
coffee machine. So we moved into our own office, it felt really warm and cozy, this
was our apartment too. You’ll notice we’re really good at naming, so the company’s
name is Ryzach; because my co-founder’s name is Ryan and my name is Zach. We
figured like very very inventive, you’ll see this is a recurring theme, we’ll get
back to this. So this was our first office, and finally we were excited. We’re
doing something right, we have an office, we have an apartment. Let’s prove what
we’re doing, it shouldn’t be so hard you know. So we spoke to a bunch of startups
and we said, we have a way for you to hire more programmers, and they said that is
awesome. The hardest thing we do is hire, and we can’t find a way to find people, we
can’t find a way to evaluate them. So we knew we were on the right track there.
Then we talked to the programmers and we said, we have this really awesome thing,
we will help you get jobs. To do it you just have to do these fun challenges; and
they had absolutely no interest in what we were building. Went to a
Y Combinator dinner and they were like, we just started a company in
YC and I still get 50 LinkedIn email request everyday. Why am I going to mess
around on your garbage platform? So we went back to the drawing board; and you’ll
notice this is not the first time that we went back to the drawing board. But this
time it wasn’t just metaphorical and we didn’t go back to the original concept
that we had of helping people learn skills to find jobs. Instead we basically became
random start up idea generators. So here’s a few of our idea, you’ll notice some of
them are really good like building a CRM for club promoters. Really if you spun
like a jackpot wheel you will not get anything as crazy as what we were coming
up with. So we just kind of sat there and we were like, well unclear of what we were
doing, but we’re in Y Combinator and we have $170,000 so that’s cool. There’s two
of us and we figured we could move in with friends, we could eat Ramen, and we would
have five years of burn. Just work on CRMs for club promoters all day.
[audience cheering] So we were determined
not to fail. I remember going to office hours with Sam Aldman, and Sam
called us the worst ratio of intelligence to ideas. So smart but such stupid ideas.
So every night we’d go home and I’d sit there, and Ryan and I would write code for
one of these ideas, and we’d get super super frustrated both with what we were
building; but for me without a formal programming background, I had taken CS101
when I was at Columbia. I had read a couple of those For Dummies books. Ryan
had actually started an organization on campus at Columbia to teach people how to
program. So in the process, I was learning the skills I needed to do my job,
basically. So we kind of came back to where we started. Just can we teach people
the most important skill they need to find a job in the 21st Century, which was
programming. We had sort of patient zero which is me;
if I could learn how to program well, then probably a couple other people could use
it too. This was around three to four weeks before Demo Day at this point. So we
started building the first version of Codecademy, and we spoke to a couple of
the partners at YC and some investors, and again you’ll notice this is a common
refrain, they told us it was really stupid. A lot of them told us that there
are only 100,000 employed programmers in the US, like there’s no market for
something that teaches people to program. People are not interested in programming
and never will be, that was something we heard a couple times. But this time
something was different, Ryan and I were super interested in what we were doing;
mostly because we were building for me and based on Ryan’s experience. So we’d go
home every night, worked all the time. We did some research for some of the
fundamental pieces of Codecademy. Ryan still tries to convince me that
playing Farmville counted as research for how we eventually built the
gamification into Codecademy. I think he was addicted.
Then we showed the first version of Codecademy to a
lot of investors and everyone at Y Combinator, and the line
that people generally use is, “you should be embarrassed when you launch for the
first time.” What people told us was, “you should be embarrassed when you launch for
the first time, but not this embarrassed.” It’s like, basically get out, is what we
were told. So we went back, I played with it a couple times. I said this was made
for me and it works for me, and I know JavaScript now, so we’re doing something
right. And I really like the experience. This was another thing we learned again,
as I learned in the GroupMe instance, it’s much easier when you’re building for
yourself. All these people we were showing Codecademy to didn’t get it because they
knew how to program, but I didn’t. So this was one of the early versions of
Codecademy, you know you learn in line, learning by doing. There’s no video and no
boring books you have to read, it’s all instantaneous feedback. So we launched
Codecademy and we left the apartment, Ryan and I bet that that there wouldn’t be
more than 50 people on the site at the same time that day. And we installed
Chartbeat and we left, went to get bagels. We got to bagel store and my phone started
going off because there were 1000 people on the site at the same time with
something that we had built basically for me and my mom to use. And we noticed stuff
like this on Reddit where people just had no idea how to program before, how to
learn this skill, and all of a sudden we made it easy for them. And that was super
super empowering. Turns out that wasn’t an isolated case, this was
Ryan with Chartbeat dash board that day. You’ll notice we actually broke the
Chartbeats speedometer because so many people were on the site at the same time.
So immediately we basically went from being the least popular company in
Y Combinator that summer, where three weeks before hand it was actually
suggested to us that we just not demo on Demo Day because you don’t have an idea,
you haven’t built anything. It’s not possible to make anything in three weeks,
just not possible. So we built something anyway and we were the fasted growing
Y Combinator Company at that time. This was sort of the
bullet points for us. We taught people to program, and finally
we had the data that millions of people do want to learn
programming and we were the answer. This was the side the two of us used to
talk about ourselves, look a little young. we went from having no one pay attention
to us, and no one returning our cold emails, to investors texting me and saying
that they actually had a dream about Codecademy.
[audience cheering] Turns out, I thought this whole things was
a dream. I was like we’re still eating Ramen and nothing… Like this is not
possible; to a few weeks later we closed our Series A with a gentleman who just was
on stage with Fred, at Union Score Ventures. We moved back to New York, and
we actually went to an ATM to verify it, I was like this cannot be real. How is this
money in our bank account? [audience cheering] So armed with $2.5 million and on
cloud nine after raising our Series A, we set about building a company.
But we realized it pays to be a cockroach,
and by that I mean it pays just to not stop, and just to not
die. We thought everything along the way had tried to kill us, right. All of our
friends were like startups are dumb, you’re dumb, your ideas are dumb; and we
kind of just looked at all of them and said whatever, and built Codecademy. So
it pays not to quit. So after moving back to New York we thought, we’re on cloud
nine, we have all this money, all this people on our website, turns out that last
part was not true. All those people were on our website because we were on
TechCrunch. Hopefully some of you are familiar with the TechCrunch of initiation
where you get super popular, then you hit the trap of sorrow where everything’s
miserable. And we had that. And we went back and we tried to find more people to
join the team; we interviewed 100 people before hiring our first person. That is an
exercise in frustration. So we realized start ups really are a roller coaster, you
know. We went from getting into Y Combinator and thinking success was a
sure thing, to two weeks later realizing we didn’t have an idea, to eventually
going back to the original idea that we had and finding the right implementation
of it. The thing is, startups are much easier to deal with when you actually care
about what you’re doing. So now every morning we wake up, we read
the newspaper, you see that a year after they graduate more than 50% of US college
students are unemployed or underemployed. That by 2020 there’s going to be more than
a million open programming jobs if education keeps going at the same speed.
This is really motivating for us, because this is a massive problem. The world…
Companies won’t grow as fast as they can, people won’t have jobs if we don’t exist.
To this day more than 24 million people have used Codecademy, something that
we started building in our dorm room at Columbia, and then built in California,
and now proudly built in New York. More than 24 million people have used something
that we built. And what matters most is the stories of the people that use it.
People like Ryan, who a year and a half ago had absolutely no idea how to program,
learned on Codecademy, built an app called sore kit that was featured as one
of Times best websites of 2013 and then two weeks ago Ryan sold his company. So he
went from knowing absolutely nothing to a year and a half later building a company,
and a startup and a product and selling it. There’s people like Amy who at 13
started learning to program on codecademy and by the time she was 14 the EU
had called her the European Digital girl of the year because she spoke all over
Europe telling everyone how important programming was for the future. So,
there’s hopefully a couple things that you guys will take away from today’s talk.
First you shouldn’t make excuses to get started. It’s really simple, you have the
internet which is the biggest distribution engine ever, and the tools. All you need
is a web browser and a text editor, should optimize everything you do for learning.
Should get a front row seat on a rocket ship so you know what it’s like to build a
company, and we’re hiring if you want us to be that rocket ship. You should realize
that startups are a roller coaster and you should never every give up. Lastly,
you should be passionate about what you’re working on, because that will make all the
difference. Maybe the most important thing I’ve
learnt after doing this for a few years and speaking a few times, and speaking
with a couple other people that speak is that everyone up here has no idea what
they’re doing. So even as you get further along and you build a startup, you
realize that startups are hard and there are new challenges at every step along the
way. So despite the fact that none of us quite know what we’re doing yet, you don’t
know until you try. So thank you.[clapping and cheering]

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