Adi Tatarko, Founder and CEO of Houzz
The Houzz that Adi Built: Adi Tatarko
Pardon the cliché, but it’s true — a picture paints a thousand words. Adi Tatarko, founder of online home remodeling platform Houzz, explains how the desire to collect images of home interiors transformed into an idea for one of the fastest-growing startups in Silicon Valley.
If you’re anything like me, as the years click by, you’ll find yourself more interested in home improvement as a recreational activity. You might spend a growing number of weekends finding the perfect cushions for the couch or meandering down the aisle of a giant home furniture retailer, pushing a cart piled high with knickknacks you never knew existed but now your home can’t do without. All to build the best nest.
However, if you have set foot in the world of home renovation and interior design, you’ll know that it’s a place that rookies can find pretty intimidating. When the time comes to remodel, you might spend months poring over pictures and taking design notes from television shows. And that’s just the ideas phase. Then there’s cost, and every contractor and supplier seems to charge about five times more than you anticipate. And soon, creating your dream home becomes a source of massive financial, not to mention psychological, strain.
Adi Tatarko made it her mission to ease that strain, and has become quite successful along the way. The founder of online home design platform Houzz began this journey by purchasing her own dream home built in 1955, a fixer-upper, and then setting about renovating it. “Unfortunately the process itself wasn’t so dreamy … it was pretty much a nightmare,” Tatarko says. “So we ended up building Houzz in order to make the whole process better.”
Honoring the cliché about pictures, in order to best communicate the vision of their dream home to their architect, Tatarko and her husband Alon Cohen started a humble website displaying images of home interiors.
This was in Silicon Valley, 2009. In that environment, the journey from personal project to company was a natural progression. They created an online platform to showcase the work of architects, so home renovators could access endless images to inspire the vision of their own dream home.
The couple then asked local Bay Area architects to upload their portfolios. Their initial community was made up of “20 local homeowners, mainly our friends, and a group of professionals from the Bay Area.” What started as a trickle of design portfolios soon became a flood.
Tatarko is a veteran of the tech startup space and this comes across in her delivery. A sharp and articulate businessperson, Tatarko coolly communicates a splendid vision for the company. “We really wanted to help people learn more about the [remodeling] process, about design, about what’s possible, and about different materials to help them make the right decision. And help them be more knowledgeable when they start their project.”
Houzz would grow to become what is now an online hub that displays the portfolios of “450,000 active professionals from all over the world” and receives 25 million monthly unique visitors. In five years, the site has become the biggest residential remodeling community online.
Plugging in to an already existing, widespread passion for home renovation globally, you might say that Houzz is a long-awaited, online paradise for homeowners. It connects renovators to architects, contractors and interior designers, greatly simplifying the contracting process. It’s no wonder it’s become such a highly focused, engaged, and active community.
And the growth has been completely organic. “The need was there and the product we built is one people loved using,” Tatarko says. “So they told other homeowners. They told the professionals they worked with: the architects, designers, constructors. Then professionals would tell their clients about it, and their peers outside of the Bay Area. That is how we started getting requests from people who wanted to open it up to different metros, open up a group for different types of professionals. This is how we spread it out of the Bay Area and to different homeowners all over the world.”
Now Houzz exists as a visual library of inspiration and collaboration. The images are uploaded by design professionals, illustrating recent projects. Professionals also provide instructions and responses to homeowners’ questions. And therein lies the essence of Houzz’s success: fostering community between homeowners and professionals. It’s almost surprising that the idea wasn’t done sooner.
Home renovation is a $300 billion per year market in the United States that was ripe for disruption, having seen little previous technical innovation. The key was digitizing design expertise. Tatarko and her team set out to “do something really innovative and different and encourage everyone to take this fragmented industry and completely flip it and bring it to the 21st century.”
Part of the site’s strength is that it’s not solely image-focused. “We’re not a media site,” Tatarko says, “but it’s important for us to be a top-notch destination that would truly inspire with millions of high-resolution retina display images, and lots of useful information beyond the pictures.”
For that reason, you can spend a lot of time on Houzz. If you’re in any way interested in design, style, or living anywhere that isn’t a cave, the site will be a welcome addition to your online browsing habits. Houzz publishes upwards of 20 articles daily ranging from topics like “Clever Design and Decorating Tricks for Compact Apartments” to “Easy and Inexpensive Ways to Make Your Bathroom Feel Better.” Spend 10 minutes on the site and it’s easy to see how Houzz can make the simple transition from a fun tool to an obsession.
It’s difficult to comprehend that all this started from humble bootstrapping origins. When Tatarko and Cohen did finally pursue venture capital, Houzz raised more than $48 million from three rounds of financing. But when it comes to securing financing, Tatarko advises caution. “We were very careful in terms of bringing investors on board,” she says. “You learn to be very selective. Investors can be very helpful if you choose the right people that understand that their job is to support and help the company, and not the company’s job to please them and support them.”
Houzz has grown at a rate that has dwarfed most other companies. And the key to building a thriving community is no secret, according to Tatarko. As long as your area of business is something you are truly passionate about, you will “become your first enthusiastic community member.”
For Tatarko, the drive was always about solving a problem as effectively as possible. If your motivation is monetization, you’re doing yourself no favours. “You need to really focus on the product and not be distracted with unnecessary things like monetization early on. You want to make sure that community members appreciate what you are trying to do. You need to develop the product and make sure that you are building the right user experience. You need to create something that people enjoy, something they really need and love using.”
Praise for Houzz has been sung from the (well-designed) rooftops by renovators around the world and a range of publications including The New York Times. Yet the company owners don’t put their success down to simple business acumen, although that definitely plays a part. Tatarko maintains that it’s the quality of the product that’s responsible for the company growth. “There is nothing else that can explain it. The need was there; the product was the right one for the industry. It solved a specific problem in the industry and people just adopted it.”
- 04:00 – Tips on how to turn your passion into business ideas
- 06:00 – The importance of delighting your costumers with your product or service
- 13:52 – Why being optimistic with your startup is important
- 18:00 – How Adi overcome the struggles of startup and the sacrifices she made as an entrepreneur
Full Transcript of the Podcast with Adi Tatarko
Nathan: Hey guys, hope you’re all having a great week, my name is Nathan Chan, and I’m the host of the Foundr Podcast. As always thank you for taking time to join me today. This is just a short quick update from me and what’s been happening. I’m actually going to India next week. I’m super excited. We’re actually going to meet up with my designer of Foundr Magazine. So we’ve been working together for about 18 months, and he’s getting married, me and my girlfriend Emily we’re going to go to his wedding. So it’s going to be a really, really cool experience. I’m gonna get to meet him and hang out.
I’ve never experienced an Indian wedding before. I’ve heard they’re really awesome. And just gonna explore and have a bit of fun. Hope you are all having a great week. Today’s guest is Adi Tatarko, and she’s the founder of Houzz. Houzz is one of the fastest growing companies out of Silicon Valley, and they have really disrupted the home and renovation space and the design space to a certain extent. And in this interview, you’re going to learn some really interesting insights on how to build a really powerful community, what it’s like to run a startup out of Silicon Valley, and some insights around investing.
And some really interesting things around the mindset of somebody that had an idea, conceptualized it, and have really found a lot of success with it. So that’s it from me guys, let’s jump into the show, hope you’re having a good week. And as always if you’re loving this podcast, please leave us a review. It really, really helps. If you like these interviews, by all means. check out the magazine at foundrmag.com/itunes, or foundrmag.com/android. Now let’s jump into the show.
Today I’m speaking with Adi Tatarko, and she’s the founder of Houzz. Houzz is a website and online community about architecture, interior design, and decorating landscape design, and home improvement. So Adi, thank you so much for taking the time to speak with me today, it’s an absolute honor
Adi: Yeah, my pleasure. Happy to talk to you this morning.
Nathan: Awesome, so can you tell us a little bit about how you got your job?
Adi: How I got my job, well it started with a house. A house that both my husband Alon and I had big dreams, you know, how wonderful it would be to renovate it and make it our dream home. And unfortunately the process itself wasn’t so dreamy, to say the least, it was pretty much a nightmare. We ended up building Houzz in order to make the whole process better. It started as a little pet project with our community, 20 local homeowners mainly our friends from the kids’ school, a group of professionals from the Bay area and and started growing organically.
And we got to the point where we said, “All right, we need to get some help from other people.” And we turned it into a real company and started scaling from that point really fast. Today the 20 homeowners that originally participated, you know had helped us create the community, it grew to be 20 million monthly uniques. And a small group of professionals from the Bay Area is now 450,000 active professionals from all over the world. So it grew quite a bit but still organically and we’re still very passionate about it.
Nathan: That’s extreme amounts of growth. There’s quite a lot I’d like to unpack there. Can you tell me around how you dreamt up…so it started as a passion project. So you just thought because this was pain you had with dreaming up your house, you just started with the basic website, and then had your community of 20 friends, and how did you spread the word to start off with?
Adi: Yeah, well we do have the website, we do also have to be app for iOS and Android. Frankly, I guess that the need was there and the product that we built was a product that people really love using. So they told each other and homeowners would tell their professionals they worked with, their architect, the designers, their contractor. They would tell them about it and then professionals would tell their clients about it, and then also professionals started telling their peers, and people out of the Bay Area. And this is how we start getting requests from people.
Professionals out of the Bay Area that wanted to join and wanted us to open different metros, and open up a group for different types of professional and this is how we spread also to other metros out of the Bay Area and to different homeowners from all over the world. So it was pretty much the product that helped us grow like this. There is nothing else that can explain it. The need was there and the product was the right one for the industry, really tailored, meant to solve the specific problems of the industry and people just adopted it.
Nathan: Yeah. And look when you go in Houzz you can just get lost in just all the different designs. I’ve known about your company for quite a while now, and something that really struck out at me that I really wanted to ask you is, I recently have been taking a course by Seth Goldin, and he talks about delighting your costumers with your product or service. And you guys really delight your customers, like as a visitor coming to Houzz I’m just like, “Wow, this is amazing.” Was it like that from the beginning? What did the first version look like?
Adi: Frankly, since the mission is still the same mission and the goal to transform these bad experience, and fragmented and unefficient and not fun, into something way more productive and creative. Where people can use technology and have fun while they’re collaborating with many other people. It was pretty much what we wanted to do from the beginning. So while over time we definitely added more algorithms and more layers of technology in order to make it even better.
The original idea of having both sides of the market place, both homeowners and professionals from the industry, interacting and making it very visual and easy to move between one layer to the other, reading content, interacting with the community, and seeing all the product and materials was pretty much there at the beginning. Again, of course, it grew a lot from a small group to a very big group, from having fewer pieces of content and less projects and people involved to something so big.
But the basics were there from early stages, and we wanted to make sure that we are doing it in a very different way than all the other players that existed before, more of the traditional industry if I can call it like that. So for example, when we look at content we’re not a media site. But it was important for us that on the content side, not just this was gonna be a top notch destination that will truly inspire with millions of high resolution and display images, we are also gonna provide lots of information beyond the pictures.
It was important to us that we take all the data that we’re getting from our community on a daily basis, and the editorial team would take that, analyze that, interview as many people as possible and give it back to the community. So the approach there was we really need to help people learn more about the process, about design, about what’s possible, about the different materials to help them make the right decisions, and be way more knowledgeable when they start the process.
When it came to connecting the professions to homeowners, we said, “We don’t believe that a lead gen solution for this industry is the right one.” Because frankly, when we were looking for somebody to help us design our house or do our landscape, filling up the form and getting four leads that pay this certain company just to send their info would not…probably would not connect us to the best people that will he lp us specifically build our dream home. So for us, it was how do we create a huge marketplace where people in a very fun way will be able to see thousands of people around.
And read their reviews, see how they interact with other people, look at their beautiful portfolios, and so on. And then decide who they should go to and who they should bring to their house to help them. So all these things and of course the product and materials, I mean a picture of a house is way more than just a picture. It’s a to something way broader, where you can see the rest of the house, you can ask lots of questions. And people that created the space are behind it, you can definitely get to the service providers and hire them too.
Or you can see how the rest of the community is interacting with the space and read their questions and obviously also identify and buy all the product and material that you see. So the whole approach there was let’s me do something really innovative and different and hopefully that will help everybody take this fragmented industry and completely flip it and bring it to the 21st Century. Yeah, this is what it’s all about. So what was there from the beginning, pretty much all the basics, you know great technology, less innovation in terms of we’re gonna do things very, very different. And the community that was super passionate from day one, and everybody was into what can we do, how can we help, how can we be involved in this.
Nathan: I’m really curious, before you started Houzz with your partner, did you guys have a background in building companies or?
Adi: Not really, I mean we’re not complete strangers to the high tech world. First of all, we do live in the Silicon Valley. I have more of a business financial background and Alon did have a technology background. When Houzz started happening Alon was at eBay, I was working in a boutique investment house. We did have some knowledge but obviously we never built something like this before. I think that for us it was a product that we really needed and were truly, truly passionate about the whole space, and what can be done.
And the more feedback we got from our community about how frustrated people were, and how much they would love to see this changing and becoming something much more fun like it should be, the more I guess courage we had to spend more time on it, and really build it from the ground up which we did.
Nathan: I love the fact that you said that it started as a pet project, you didn’t take it too seriously. Did you put all your eggs into one basket and say this is what it’s gonna be we’re gonna have this many?
Adi: No, we really didn’t think that much at that point, we didn’t understand that what we’re doing is all the eggs in one basket, or the fact this one day will be a huge company. We didn’t think that much at this point, we just had a lot of fun building it, and working very closely with all the players in the community to really get all the feedback and build the right product for the industry, and that’s what it’s all about. And in retrospect, it was probably one of the best things that happened to us, because bootstrapping for a long time first of all forces you to be very lean and very focused on the right things.
And not just that you’re going to do everything by yourself, and really understand the needs in the business but also the innovation is very, very focused and in the right place. So you just don’t have the money or the time or the energy to waste on things that would not move the needle or would not make the greatest impact. So in retrospect, that was a very, very good thing that happened to us. Of course, because we grew organically and because the community grew very fast, later on when we decided okay maybe we should make it a real company.
And hire people and bring it back to…then get out of the house and move into a real office and all that. I think at this point, we had a lot of traction and great feedback from everybody that everything else was much, much easier at this point. So actually it was all for the best.
Nathan: Did you ever think that it might fail or were you ever afraid?
Ado: Why to be pessimistic? Why to think about failing? I think that every day when we received lots of great emails and had great conversations, and meetings, and phone calls with people that really wanted to give us their amazing feedback. And we were really impressed and even more optimistic about what can be done for this industry. It seems at the time that we’re almost getting a with many frictions and lots fragmentation to fix and many excited people in the community that would love to help us make it happen for this industry.
How many times entrepreneurs get an opportunity to really make a difference and to lead a whole transformation of such a big industry. I don’t think we realized it very early days, you know we just wanted to make things better. But the more we got involved in this and the more feedback we got, and of course did our research and learned more and more about the problems and the industry, the more optimistic we became. Actually, the about what can you do if you have great people around you, that are helping you to scale this, and you’re building the right product with the right technology.
And so yeah, I think pessimism is not part of our DNA in general, because we are not looking at a certain outcome, or we never had a goal this needs to be a certain size of a company. It was always about the journey and what you do every day in order to make the life of so many people much better, and the whole process much more fun and productive for everyone.
Nathan: That was a great answer. It’s exciting. I can hear you like just the way you’re passionate about disrupting this industry. It’s exciting.
Adi: Yeah, I am. And it’s truly a lot of fun and we feel very honored and glad that we had the opportunity to do it for the industry, and to have lots of great people that joined Houzz and helped us make it happen. I think that if you’re looking at accomplishments in life, for me, it’s not about money or about future exits or anything like that, that people keep asking about. It’s really not what makes me happy. What makes me happy is talking to a business owner that he’s telling me that Houzz completely changed his business, and he’s getting the best clients ever.
And he had to buy more trucks or hire more people, or open another office in another country just to accommodate all the requests and happy clients that are coming along. And when it comes to homeowners’, you know people that are telling you the great stories about building houses in remote or being much more happy and feeling much more in control in the process. This makes me feel like, “Okay, you’re making many people happy and making their homes much nicer.” So it’s our little contribution to make this world a little bit better for some people. This is what it’s all about.
It’s really the day to day of the great feedback from the community, the achievement of really making something that was so important to so many people but as at the same time so bad and not fun. Almost I would say people were afraid to start the process of redesigning. It doesn’t matter, it can be a small project of I’m gonna redesign my bedroom or my living room, or I’m gonna do a big project and build a custom home or anything in between doesn’t matter. People felt almost afraid to even start, because they had no control on the process, no knowledge.
The fear of not being able to bring the right people that will do it, or being able to keep the budget, and have the right materials and product to really get to the end the product that they really like, the home that they really dreamed about. And I think we’re helping many of them actually do just that, and have a lot of joy and fun in the process. But this is what it’s all about and yes, we are very passionate about it. You know building company, it’s not an easy thing, to say the least. It’s just a crazy roller coaster, with lots of ups and downs.
But if you’re doing something that you are truly, truly passionate about, and you truly love, and you’re building it with people that you really like, then link it with, which we do, hiring and building the company and making sure that the people around us people are the best people. And that we’re having a lot of fun building Houzz with them, it’s kind of this is what it’s all about. You get up in the morning and you work around the clock but you enjoy every minute of it, right.
Nathan: Yeah, I love it. I’m curious let’s switch gears and you said building a company is not easy, can you tell us about your struggles and some of the sacrifices that you’ve had to make to get where you are today with Houzz, and your development as an entrepreneur?
Adi: Sacrifices in life in general in order to be entrepreneur. Well, to start with, you can’t do everything exactly like it was before you became entrepreneur. Let’s just face it, this is a very demanding job or…I don’t think it is a job, really. This is something it becomes major part of your life. It’s pretty much around the clock. If you add on top of it the fact that we do have a family, we actually have three kids. One of them is a baby, nine-month-old baby. So between that and the company, you don’t have a lot of room for many other things in your life.
So if I used to really invite lots of friends and cook for them every weekend and in the evening, forget about it. You have to realize it’s not possible. Too bad, but you know what if my friends like me and I do have some that I believe that do like us, they learn to live with it. So you live in another place just to keep it very, very as simple. So you just have to live with the fact that you know your life will change completely, but if you’re up for it, it can be a great journey. So we have to make lots of adjustments at home and at work in order to make it happen.
Don’t forget that in our case, it’s even a little bit more complicated, because my co-founder and my partner is also my husband and the dad of my kids. When other founders find some comfort with the idea that their personal partner is at home, he’s taking care of his family. We don’t have that luxury. And our kids are the most important things in our lives. They are human beings and they are great startups on their own, and we do wanna spend quality time with them, and make sure that they are happy and they are growing as compassionate and great human beings.
So it’s just making your own priorities and understanding that you can’t do everything but if you focus on the things that will make the most impact both at home and at work, it can actually happen and make everybody happy. And I think that it takes time to realize that, that you can’t have it all, it takes time to adjust and be happy with that, but if you do it, it can work very well. So we did that.
Nathan: No, thank you for sharing that with me. Let’s switch gears around community, because Houzz is a massive community. What advice would you recommend for any startup or entrepreneur looking to build a thriving community?
Adi: Well, to start with as I said before I think the entrepreneur should pick a topic or a domain that they are truly passionate about. And let’s just say, be the first on enthusiast community member. So don’t try to do something just because you think there is a business opportunity, or there is something that you could do better than others, just if you’ll do a few tweaks there. First of all, you need to choose something that you really, really like and you’re really passionate about because you are your own first community member.
And then I think that you need to really focus on the product and not be distracted with unnecessarily things like monetization earlier is probably not the ideal focus because you wanna make sure that community members will appreciate what you’re trying to do. And therefore, you need to develop the product. Make sure that you’re building the right user experience. Why would people come to a place where what you wanna do is just get more dollars, and you jeopardize the experience just in order to get a little bit more money.
So I think the focus needs to be very, very important from day one, and the focus should be the user experience. You wanna create something that people would really enjoy using, that they really need it, and they would love using what you’re offering. And then the second thing would be on top of being very, very focused on choosing something that you are very passionate about, to find the best people that will help you execute.People that you will enjoy brainstorming with and building the platform with them, but also would be a good cultural fit and great professionals and true partners.
I don’t believe in hiring employees. You wanna hire people that will be super excited to come to work with you all day all the time. Because they truly believe in the company and in what you’re trying to do. And this is not an easy thing, but I think that if hiring is one of the first priorities, it’s doable. We still interview all the candidates in the company for example.
And we now have over 250 fulltime employees but either Alon or myself need to interview each one of the people we hire. So that’s also very, very important. One more thing I would say that on top of being very focused of course and hiring the right people, remembering that in order to become a leader and get lots of traction from the local community or global community in our case, you really need to innovate. If you’re offering something that is already out there, then what is the solution? And when you innovate you need to know that you’re gonna make some mistakes.
You’re gonna try different things and you’re gonna listen to the people that are becoming your community members because you’re creating it not just for yourself but also for them. So innovation should be something that is in your DNA if you wanna lead something and disrupt something, and you get lots of traction, and definitely, innovation and technology is the focus at Houzz. And finally, there is no magic. It’s a lot of hard work, so don’t fool yourself that you can start something overnight and magic will happen.
Yes, Houzz grew a lot and we are very happy when we’re looking back and we’re saying we created something that really made a huge impact on the industry, and many people enjoy using. But we worked very hard not just us, everybody at Houzz. So lots of hard work, dedication and this is why being very passionate and choosing the right thing for you as an entrepreneur would be a good idea from the beginning.
Nathan: I’m curious also what action steps…because we’ll work towards wrapping things up. If you were to give two action steps to entrepreneurs or startups early stage, that are looking to grow their business, what would those be? What two action steps would you give?
Adi: I guess action steps early days, number one, I would say the first few months or maybe even the first year, instead of trying to lock down some investment and trying to convince people that you have a good idea and you can actually execute on that idea. I would say just go and try to build it, and get some traction from your community, and prove to yourself first of all, that this is a good idea. That other people think that it’s a good idea and you can actually execute.
I think it will make your life as entrepreneur much easier if that would be the focus, and later on investors would follow you versus you going and bugging them to get some money. It’s just a matter of how do you start and I truly believe that even though we didn’t meant it or didn’t understood that completely that is what we’re doing, which I think is not a bad idea definitely for entrepreneurs that are trying to build a consumer-facing Internet company or a different community around different industry.
Bootstrapping as much if you can, prove to yourself that you can execute, that you have a good idea, get some feedback from other people, real people, potential community members, and build it. Before you go out there and try to bring other investors. And then I think that the second thing would be early days you need to surround yourself with people that would complement and bring to the table different skills sets and that will become your true partners. So I would say the first core team that you hire is probably the most important one, don’t compromise.
Bring people on board that truly believe in what you’re doing. You think that you have great chemistry with them. They’re in some cases know more than you about some things, which would be great addition to the team. Treat them as partners not as employees. These are the people that are gonna stick with you during the journey and you better have fun with them, and you better trust them. So I think build a foundation the right way, focus on the right things in the beginning.
And definitely, the people around you and the way you are approaching product versus monetization or other unnecessary things at the beginning would probably gonna have a great impact later on the business.
Nathan: Yeah, that’s awesome. One last question and we’ll work towards wrapping things up. You said before previously that it hasn’t been that easy, building Houzz it took a lot of hard work. Was there any failures or big struggles that you guys faced when growing the company or has it just been all up…?
Adi: Of course, there’s always struggles if you do think it’s all glory and fame and articles and of course, I mean you struggle a lot. Lots of ups and downs and good days and bad days, you make lots of mistakes. You think that something is gonna be amazing and then you hear from your community that it is actually not. But it’s part of being an innovator. You need to try different things. Its okay. I think the best invention on earth happened after different time phase and different people tried many different things.
And it’s realizing that it’s okay to actually…something that we really encourage everybody at Houzz to do, you need to try different things. Yes, you need to be smart about it. You can’t just make mistakes all day long, and when you make mistakes you need to understand that these are mistakes and fix them. But we definitely have lots of things you know even on the hiring side. We’re doing everything we can in order to make sure that we bring the best people on board, and that they are great in terms of cultural fit and professionally that would be wonderful.
But you don’t always predict the future and how…if the fit is gonna be good or not, and sometimes you just need to learn to let go. You definitely have some you know hard moments where you need to either kill a project that you started within the company, or let somebody go or completely change the direction of something that you thought it would be good. But it’s all great because it’s all part of the learning process and it’s part of making the company even better and the foundation even stronger. So we’ve been through many moments like this.
Nathan: Can you give us a specific example of a failure or something that didn’t go right and a lesson that you really learned from it that the audience can learn from too?
Adi: I mean there were different things that we released that we later on decided that they are probably better if we’ll do it differently in terms of the user experience. I wouldn’t call it significant because again we’re releasing and changing the product constantly just to make it better and better over time. So the core is there but different things will change. I wont specifically get into cases where we have to let people go, but what I just told you really happened. So unfortunately, from time to time you do need to make a hard decision that you know…and it’s also good for the person.
Because you’re not doing anyone any favor if you’re keeping somebody that is not a good fit in the company. You’re not doing a favor to the person and you’re not doing a favor to their company. I think that one thing that kind of surprised us that we were pretty much…I wouldn’t say against but we were very careful in terms of bringing investors on board, and for a long, long time we didn’t wanna do that. I think that we kinda had a perception that investor can come and completely ruin the culture and the way you were doing things in the company.
I think it can happen in some cases, but again if you do it the right way, at the right time after you’ve built some traction and great product and the DNA of the company, and you choose the right investors, I think that we learned that actually the opposite is gonna happen. And we have great amazing investors. I have only good things to say about them truly. So we were very fortunate that things happen in the way they happened. And obviously we’re not gonna be afraid of that anymore.
It’s just we learned to be very selective and to do the fundraising at the right time, in the right place and absolutely from the right people. Investors can be very smart and helpful if you choose the right people to work with you. And the right ones are the ones that understand that their job is to support the company and help the company, and not the company’s job to please them and support them. And there are different investors out there are obviously. This is a world where you all kinds of investors and we learned.
We’re very fortunate that at least from that front we don’t have any regrets or I truly don’t think that we could have better inventors on board. But it’s something to learn from because if I would have known earlier that that’s how it’s gonna look like, I would be less worried about bringing investors. So you learn all the time, you learn every day we definitely understand what to look for today, in terms of hiring, in terms of investors, in terms of all the people we interact with.
You learn that you don’t need to do any one with partners, you really wanna do things that would make a lot of impact on the company. And focus is very important. Understanding who you are, what are you trying to do, what are you trying to get, and then only doing things that would be relevant is very, very important. And I think that is something that we definitely developed pretty well over time being very focused on that as well.
Nathan: Okay. Look so I said last question, but I have one more question that I’m dying to ask you just from your previous answer, and that is, you said around getting investment and knowing the right time, how do you work out when the right time is?
Adi: So I think if we’re talking about the first investor, if you are trying to build a product first and get some traction, and first of all prove to yourself that you can execute and you actually have a good idea that you are passionate action about, and you can grow with that idea, and build it for the long term. Then first of all, that’s gonna put you in a much better position if you are able to do that. For some people it’s just impossible but if it’s possible then I highly recommend that.
Again, it’s not for everyone, if you’re in that position so hopefully you’ll have interests and different types of investors then I love investors that are not just… definitely early investors like the angel type if you’re going with them, the type that are just doing the…I don’t know if you’ve heard the term pray and prey? Which means some angels would invest more amount in 50 to 100 companies a year, and hopefully a few of them would work better than the others. It’s also a system and it can work for some of them and maybe these entrepreneurs believe that that they only want the money and nothing but the money.
It can work. Unfortunately, I’ve heard many stories where it came with lots burden from these investors and it’s not good, you can’t also expect to get any help from them if this is the system. So I truly believe in finding somebody that would be good for the DNA of the company, which we did that will be really open to stay aside one when being asked to stay aside and let you run the business. Because at the end of the day, it’s your business and you are the founder, and you’re gonna build it.
But also be prepared to…this person is prepared to help you as much as possible when you want the help and also capable of providing that help. I think that the first investors, the first either angel investor and later on if you did have angles, the venture capital that will come on board are probably the most important. Because they will create kind of their own working environment, the DNA of the board, of the way you work with investors. If you have people on board that understand what it means to be entrepreneurs…we for example, after we had our first amazing investor we brought our major VC.
And the fact that we that was before and he completely understand what it means.It’s not just that he’s investor, he understands what’s really, really important when you are running a business, he’s just focusing on the right thing for us. And we truly appreciate it’s actually way more helpful than what we were thinking about originally so it’s very good. And last, I think that it’s probably always good if you can raise the money when you don’t really need the money, right.
Then you don’t have the pressure you can take the time and really find the best partners, and the people that you can enjoy working with and who you really trust. It’s always a good advice I know it’s not easy to follow, but again it all goes back to build something that really works, build something that people really like, and really need. And if you have something like this in hand, everything will kind of fall into that great path of working with great people. And so surrounding yourself with great people.
Nathan: All right, look we have to wrap things up, but this has been an awesome conversation, I’ve really, really…
Adi: Well, I am happy, happy to hear that.
Nathan: Okay. Well, look I just want to say thank you so much for taking the time and yeah, sharing your words of wisdom, and what it takes to build a fast-growing company, and what it builds to create something amazing and disrupt an industry. So thank you, I really appreciate it.
Key Resources from the Podcast with Adi Tatarko
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