James Beshara, CEO, Tilt
In 2012, James Beshara and his co-founder officially launched Tilt, a platform that aimed to make crowdfunding not only more personal but to make the process as easy as possible. But if you ask the Y Combinator alum himself, he’ll say that Tilt was created years before it even launched.
Originally an offshoot of an earlier startup he was working on, he soon found himself working on Tilt more and more. It was then he realized he was onto something.
“For every young entrepreneur out there, starting, or building, or founding something. It always sounds like it just starts one day in February or starts one afternoon when you get hit with inspiration. When in truth, I think it is the amalgamation of just always starting things, doing things, trying out ideas and one of them just starts to get pulled from you, and you start to spend more time on it.”
Ever since its inception, Tilt has been on a tear.
In just four short years, Tilt is now valued at $500 million and has crowdfunded some of the world’s most memorable campaigns in recent memory. Like sending the Jamaican bobsled team to the Sochi Olympics or raising over $180,000 for several campaigns providing relief to the victims of Hurricane Sandy.
Along the way though, James has learned some very valuable lessons on what it means to be the CEO and co-founder of a fast-growing startup. We chatted with James and he revealed his personal methods and strategies on how to build a startup that not only scales, but scales quick.
- The importance of waiting for the right co-founder
- How to get out of your own head and move fast, all while developing the best product possible
- Why the smartest people in the room might not necessarily give you the best advice
- How to design and build a product to grow as fast as possible
- The two key things every entrepreneurs needs to focus on if they want to succeed
Full Transcript of Podcast with James Beshara
Nathan: Hello and welcome to another episode of the Founder Podcast. My name is Nathan Chan. I’m coming to you live from Melbourne, Australia. What up guys? Hope you’re pumped, hope you’re having an awesome day wherever you are around the world, whatever time it is. Yeah. I hope that things are going well with you and your business and I just wanted to say thank you so much for sharing your ear buds with me. Now, I came away from this conversation with today’s guest James Beshara, extremely inspired, extremely pumped, felt so privileged that you know, I got to speak to someone like this guy because he’s actually changing the game when it comes to crowd funding. And his company Tilt, has over $400 million valuation. He’s learnt from some of the most smartest people around the world. Some of my all time favorites, the guys from Andresen Horowitz. He actually shares some very interesting stories around these guys and what he’s learnt.
And for those of you that are not familiar Andresen Horowitz are like I guess, one of the biggest VC firms in the world and these guys are kinda like the real pioneers or the real big decision makers in Silicon Valley. These guys fund some amazing startups you know, pretty much all the household ones that I know of. So yeah, I’m a big fan of these guys. They’re serious bosses so yeah. Look, I was really pumped to speak to James. He shared a tone of gold. I know you’re gonna learn so much from this interview and I’m just gonna leave it at that. So yeah, look, that’s it for me guys. If you are enjoying these episodes please do take the time to leave us a review. Please do tell your friends you know, if you have any entrepreneur friends just let them know about this podcast you know, it helps us grow and we’re here to help and serve as many entrepreneurs as we can and that’s what we’re trying to do with the brand. So yeah, that’s it from me guys. Now, let’s jump into the show.
First question I ask everyone that comes on is how did you get your job?
James: How did I get my job. I created it from scratch really, to answer bluntly and yeah, I think I’ll basically leave it at that. It is a job that out of necessity and desire created it from scratch.
Nathan: I see. And what is your job right now?
James: I am the CEO of a fast growing startup called Tilt.
Nathan: Fantastic. And what do you guys do?
James: Tilt is the easiest way to collect, fundraise or sell with your community. So it’s a really simple app. If you’re trying to collect money from 12 mates or from 120 community members for a cause you really care about Tilt, you know, the tagline is that it’s the easiest way to collect fundraise and sell with your community but we really do believe it. We obsess over being the easiest way to do that.
Nathan: I see. And you guys have been backed by Andresen Horowitz over multiple rounds, you are a Y Combinator alumni. We actually featured and spoke to Jessica Livingston, one of the co-founders not so long ago and featured her on the front cover of our magazine. Yes, she’s amazing. So question, when did you start the company? Can you give us some metrics on how fast you guys are growing and where you’re at right now?
James: Sure. So I will tell the you know, for the beginning of the call, I wanna be super transparent, super specific but, I’ll have to be guarded somewhat with user numbers we’re just always are. But I can give directional notes on that but we started in 2011, my co-founder and I started at the end of 2011. We launched publicly beta in February 2012 and came out of beta in April 2012. And I think that that’s you know, when the company quote unquote launch. But I’d say I’ve been working in this space really since about 2008, 2009, working in the crowdfunding, collaborative funding social payment space, since this space really had a name. So it’s you know, there is the launch of the company but I think that that accidentally kind of connotes that if something just started and it ignited from there and I think real life doesn’t really work like that. I think real life is more of an evolution and a growth of things that you might not really know what it’s going to become but you start on that path and it’s absolutely critical and necessary a foundation for you to really find yourself where you are today.
So even before Tilt I started a social payments, a crowdfunding application called dvelo.org in Cape Town, South Africa, where I was working and living. And I started that, launched that in beta in 2009. And I always think about my experience in starting that as being absolutely critical and foundational to being able to start Tilt and build it in the fashion that we’ve been able to build it.
Nathan: I see. And what happened with that company?
James: It no longer exists. We had to shut it down and long story short, the regulation here in the US changed while we were building it and in 2010 we had to shift the model and it’s the business model. Because the SEC here in the US, the Security and Exchange Commission changed their stance on online lending and it had an element of online lending built into it. And it really kind of killed the economic model of the idea. And we tried to make it work, tried to find exemptions, tried to build around that new regulation but it made it exceptionally difficult and we ultimately had to wind it down. I look back at that experience though and recognize that it was kind of like, it was like a mulligan, I got to start a company and do everything wrong and get it out of the way and kind of start clean and fresh with Tilt. And I can’t tell you just I did everything the exact opposite with Tilt that I had done with dvelo.org because of my experience and because of making every mistake in the book.
So for every young entrepreneur out there you know, starting or building or founding that sounds like it just starts one day in February or starts one afternoon when you get hit with inspiration, when in truth I think it is the amalgamation of just always starting things, doing things, trying out ideas and one of them just starts to get pulled from you and you start to spend more time on it and it gets pulled further and you spend more time on it. And then you kind of look back and just for the story’s sake you say, oh yeah, I started this company or I founded this company, when in truth it was kind of an evolution of starting things constantly. I think that was definitely my past. Even before dvelo.org I started a nonprofit in college and I started fly fishing company and in college of all things. So I was always starting things yet when it hits you know, print for Tilt it makes it sound like oh, we just started 2012 and we’ve been on a tear ever since. Which isn’t really you know, it isn’t really accurate.
Nathan: I see. And you talked about you know, when you had a lot of good learning lessons, can you share with us compared to dvelo.org and then launching Tilt, what did you do differently? What just quickly if you could wrap it up nicely?
James: Yes. So specifics would be you know, with dvelo.org anyone and everyone that would listen to me I tried to get them involved and helping build it. And I really you know, economically I thought well, if I can convince friends to work really cheaply then that’s really great and if I can find co-founders, multiple co-founders and just bring people on then it validates my idea and you know, it’s like this is worth working on if I can convince someone else to work on it with me and with Tilt it was the exact opposite. I waited months and months and months, chatted with dozens of people and just kind of held out for the right co-founder. And ultimately I look back and that was one of the most fortuitous things that ever happened in the company’s life was the co-founder that I was introduced to Caillat, who is the luckiest thing that ever happened when I got an introduction to him. And that wouldn’t have been possible had you know, I fill the seat with the closest warm body that I could find. And so I’d say that that is a you know, a huge tactical specific thing that was you know, very different from dvelo.org, find the nearest person to Tilt or it was just wait and wait and wait until the person is absolutely the right fit.
The other things were you know, other just really good pieces of advice I think for young entrepreneurs would be, with dvelo.org I was just very overconfident in my ability to know what the world wanted and thought. All right, I’m gonna keep this a secret, I’m gonna build and not show it to anyone until it’s ready to go, it’s ready for the limelight. And part of it was I don’t want anyone to steal the idea and the other part was just I know what people want and once the people see this they’re gonna really want it. With Tilt it was the exact opposite. I literally wanted to launch as soon as possible, talk about it with as many people as possible just to get their feedback on the idea and ultimately launch it, put it in people’s hands so that I can see, do people actually value this. And I think that’s a really scary…it’s a really scary moment for young entrepreneurs and until you build up this justification for not showing it to people or you just are overconfident and thinking people are gonna love this once it’s finished and that couldn’t be further from my experience at least. Tilt is what it is today because of all those conversations and because of the flexibility and openness to saying okay, I kind of have a general idea of what might be interesting but the other 90% is going to come from customers actually telling us what they want and not from us just whiteboarding what we think people want. And those are very two different ends of the spectrum and starting Dvelo verses starting Tilt.
Nathan: I see. I’m curious, are you originally from South Africa?
James: I’m not. I’m not. That was my first job out of school was working on the ground and development in Cape Town. My background and what I studied in undergrad was development economics. So with that degree you either go and work for the World Bank or you go work on the ground somewhere and I was lucky enough to get a really cool position down in Cape Town, South Africa where I started to build out dvelo.org. But I’m originally from Texas, originally and proudly from Texas.
Nathan: Awesome. And at what point did you decide you wanna get into Y Combinator?
James: I look back at that and also just kind of it’s a continuation of man I was so so wrong and really didn’t know what I was…I constantly look back and I’m like, didn’t know what I was doing last week much less three four years ago but with Y Combinator it was this I think my co-founder and I, I think we thought to ourselves you know, we don’t need an incubator, we’re just gonna launch this and it is you know, Larry and Sergey didn’t need an incubator. We could not have been further from the truth. This woouldn’t be possible without Y Combinator. No matter how confident or how much believe you have in what you’re doing, startups are so freaking hard, they’re so hard, that you really need every advantage you possibly get and you really need to take advantage of every resource you can possibly have. And so go through Y Combinator, a look back, if it did just made our jobs 5% easier it would have been worth it, but it really made our job I feel like 50% easier. Because it allowed us in the very beginning to get in front of investors and you can just instead of you accelerate the dating process instead of spending six months of convincing and I know what this feels like in Texas. Before Y Combinator I would spend six seven months convincing investors what we’re doing was interesting and then coming out of Y Combinator would be five or six days. And so you had a lot of street cred going into each conversation to where you could just get down to brass tacks and what are you building and why is it important and why is this worth investing. Whereas before Y Combinator it’s basically you spend 90% of your time of who are you and why should I make the bet that you can build this out. I think YC really accelerate this conversations.
On top of that it really helps with recruiting and helps with just all of this influx of advice and information that you get here from the partners that you start to find these equilibrium of man, I keep hearing this advice there must be some real truth to it. So it’s just it was a phenomenal experience for us.
Nathan: I see. And you know, once you come out of YC you then went on to raise, you say how much did you raise?
James: We raised $2 million seed round right after that. And then we raised about a year after we raised about 12 million from Andresen Horowitz, Sean Parker and SK Angel and a number of other great investors.
Nathan: I see. And then you’ve also done a series B as well.
James: Right. We are, as far as I know, we’re the first, one of the only companies, I think we’re the first company for Andresen Horowitz to do a series A and A series B back-to-back. So about six months after they did our series A they actually came to us and said what if we do your series B right now. And based on our progress and based on just what we’re putting together and building and so that is a testament to amazing investors in Andresen but also just really good, extremely fortunate for them to like what we’re doing so much that thy you know, can call it for that.
Nathan: Yeah, no. That’s very very cool. I’m massive fans of Ben and Mark and I follow their stuff and I always listen to everything they say. I consider these guys the true bosses of Silicon Valley. I’m really curious what’s it like to work with them? What are some key things that you’ve learnt from working with these guys.
James: It is so much with Mark so part of the series A deal was that Mark would get dinner with us once a month and it was a pretty competitive series A and so they added that into the mix and it was a huge just testament to how much they believe in what we’re doing but also obviously really attractive part of the deal where you get to spend time with you know, the inventor of the browser. And you know, childhood hero of mine so it’s pretty surreal, still is pretty surreal when we had to interact with them or just like the Saturday just emailing back and forth with him is pretty crazy. So I don’t think that ever gets old. But you start to recognize, and this is something I think it’s really important for young entrepreneurs, you start to recognize that even the smartest people in the world, much less the smartest people in the room can actually give you know, bad advice and it’s not out of bad intent but it’s just it doesn’t apply. And so, one of the things that we’ve seen by being in the position where we’ve been able to get advice from someone like Paul Graham or someone like Sean Parker, is some of their advice is unbelievably brilliant, 50% is unbelievably brilliant and 50% of it it doesn’t necessarily apply.
And one of the most critical things I think that we have learned as a company and where we are today and something that we talk about more and more as a company and what I think about as a leader is we have to discover things that make sense for us and what is right for us as a company. Because we’ve tried outsourcing our thinking even to some of the smartest thinkers in the world, like Paul Graham and Mark Andresen and it hasn’t been, actually hasn’t been the right advice for us. And I think the more that you can own your own independent thinking, your own just muscle around what is right for us the better and I think that we are a generation that is addicted to advice. And we learned it from our parents always buying, they were by so many self-help books that it got to the water when we were growing up to where, it’s like oh, other people will tell us how we should be living our lives and we should definitely have our ears open. And it’s somewhat obviously ironic that I’m telling you this on a podcast for young entrepreneurs but you know, I think the thing that we didn’t hear enough, and I think that young entrepreneurs and aspiring entrepreneurs don’t hear enough and need to hear more of is actually the advice for don’t take advice.
Nathan: Yeah, that’s interesting. So tell me what something are you able to share, like what something that Mark shared with you that wasn’t the best piece of advice? That wasn’t a good fit for you?
James: I don’t know if it’s something specific off the bat, I think it’s more holistic in the lens of whatever is said that it needs to go through a filter of does this make sense for us or is this great advice, generic advice but you know, at the heart of wisdom it is doing the right thing, the right way, at the right time. So for something to be bad advice all it takes is for one of those three things to be wrong, the wrong way, the wrong time or the wrong thing. And so when you really kind of think about advice from people that aren’t there in the you know, in the trenches with you day-in day-out and building your company, it could be the right thing but the wrong way and still be the right time and it’d be bad advice. And so it’s something that I think is just thematically important for entrepreneurs to understand that it is and I think where entrepreneurs need to index more is on the side of less advice and more doing. And trusting your own intuition or you experience gained by doing rather than just having one input, what do you think you should do and then having this kind of windsock out there just catching what other people think you should do and acting on that. And I think it’s just when you think about those things that need to line-up the right thing, the right way, the right time, it’s much more often, much more likely that one two if not all three of these things are actually wrong in that coffee conversation that you’re having with someone. And so I think it’s just something that needs to be said, I feel like should be said more often which is don’t take advice and don’t outsource your thinking to other people.
Nathan: That’s a really interesting insight man. I wanna talk more about Tilt in the sense, you guys are growing super fast, how many countries are you in at the moment?
James: We’re in eight countries around the world.
Nathan: You’re in eight countries. And you’ve done some cool campaigns, notable campaigns like was Soylent or you know, you’ve done some relief projects and some really interesting things. And I read a statistic from the next web that 86% of your campaigns are successful, is that correct?
James: That is correct. I actually wanna take a quick moment just to plug all the small use cases that we love. It’s so cool when you get to see the big campaigns of like we’ve had fans bring the flu fighters to their small town. That’s like it’s unreal to build software that allows for things like that. But at the same time I really love the small use cases where it’s 15 friends pulling together money for a gift for their best friend that’s getting married or it’s 25 people pulling together money for medical surgery for the friend’s dog or it’s you know, 10 friends just getting a party bus for Friday night. And that type of stuff, is that smaller stuff, it might not grab headlines but it is something that I think just enriches lives in a much more I think a much more accessible way, in a much more frequent way than just these massive crowd funding campaigns that grab headlines or sound, a super epic that will get you know, a write up in the local newspaper. When you download the product or you go to tilt.com and you check it out, you’ll see that it has far more accessibility, applicability in your daily life than the most products in this space. And I think that that is something that we it is by design and it’s not by accident. So it’s something that we think about a lot, is accessibility and frequency.
Nathan: Yeah. It’s such a brilliant idea because like that is a massive problem. Like you know, you wanna get together you know, you have to walk around. Like I remember when I was in my day job before I started Foundr you know, if it’s someone’s birthday you walk around with a cot and it takes hours to go around the office and collect that money. It’s so off that you need to just gunner funds together and in a quick fashion and in a scalable way. So it’s such a smart idea. I’m also curious around the change up in the model. You change up the model slightly around the fee collecting and the business model, can you tell us how that came about and what the realization was there?
James: Sure. So the the evolution that was, we started to, the value prop for Tilt started with it is a way to collect money from a group. And as people collected money from their groups they started to request ways to sell to their group. They would collect money for an event and wanted to collect money for a larger event and a larger event. And then they get to the part where it’s well, can we actually just sell on the platform and sell to our communities to where it’s selling tickets or we would really love the ability to collect address information for us to sell you know, these t-shirts for back to school or these you know, this piece of merchandise that I wanna create for my community you know. If you have 2000 followers on Twitter and you wanna sell something to that community, Tilt was an easy way to collect money for that but it didn’t necessarily have features for you to collect shipping address or to collect sizing or to you know, charge for shipping. And so, we started to build out features for selling as well. Now, the value prop is very firmly the easiest way to collect a fundraiser or sell with your community because we started to see more and more usage around selling and around people wanting to use the platform for commerce.
And as we started to see that get more and more adoptional we realized man, collect could be a way that we actually don’t charge and make that free to collect from your group but allow you to and build out features instead of charging two and a half percent for collect, let’s make it free to collect. And our hypothesis and belief was it will be, you’ll get your community on, you’ll get your group on, you’ll get your neighborhood or your fraternity or your social group, social club on the platform and then you’ll wanna sell to them or you’ll wanna do something bigger and bigger and bigger and we will be the natural platform choice for that as well. So let’s charge for the large things and make it really free, make it awesome, no friction and really easy to say let’s use this for all of these small things. So that was kind of the evolution of it was these commerce features that we’re building we realized man, we can provide more and more value for these larger and larger things. And if you really wanna make a valuable sell, we’ll obviously have to generate revenue as a company, we’ve gotta make money. But if we can not only provide features and provide a platform where your friends or your community is already users then collecting shipping address is really important but so is every single one of the people you’re trying to sell to is already on Tilt, then that’s like you know, a killer combo so let’s let’s work towards that. And it then became very clear let’s make collect free and let’s assert two point five percent to sell to your community which is still a very low fee.
James: It has. I think you know, any product that takes on a freemium type of model, something like Spotify or Dropbox you can see definite boost in usage. And actually boosting the bottom line as well. So it is something that’s yeah, it was a very successful experiment and I think you know, Spotify is a good example where use it for free and you get to a point where you wanna use the paid product. But if it was paid right off the bat you might not have gotten to the product exposure or the familiarity to where you know you wanna pay for it. So it has been a very very successful experiment for us.
Nathan: Awesome. Look, I know you gotta run. We gotta work towards wrapping up brother. One question and I have to ask this, Tilt is growing 40% month on month on college campuses and will be in 10 countries by the end of the year, what do you think is fueling growth besides these freemium model great value prop massive problem? Is there any key tactics that you guys have used that our audience could take away? And how you know, how many marketing experiments are you testing right now? What’s your number one like yeah, just hit me.
James: Yeah. The high level answer, I mean, this isn’t even like ambiguous or too high level, it really is, I mean, it is the details that we obsess over every day. But the high level answer is really building the best product possible. And not just having a tagline of the easiest way to collect fundraiser sell with your community but actually really obsessing over being able to go to bed at night and knowing that you have built the easiest way to you know, collect money from your group of friends. And that I’d say is the biggest reason people want to share it with friends. They use it once, they don’t wanna use it again. They are an email chain where someone is collecting money for you know, group trip and they mention we should use Tilt to the organizer it’s because they’ve had a good experience. I think that in 2016 it’s a type of world that we live in where if you have a great experience with a product you wanna tell your friends about it. So there’s not too much hand-waving on top of that, of just building a great product and that is something that you know, every product that grows really fast sustainably always has it at its core is built a great product.
I think the secret to that was making every mistake in the book. You know, dvelo.org was example of it wasn’t a great product, it was a lot of marketing and not a lot of substance or a lot of hand-waving of how great this could be for the world but not nailing the actual thing that the world cares about. Which is product experience, value that you know, it’s derived from the product. And so yeah, with Tilt it was just constant constant iteration obsession every single day over the product. I think what helps that is when you use Tilt, if you use something like Evernote you don’t necessarily, maybe at dinner you tell your friends this product is really awesome but you don’t necessarily invite your friends to use it. With Tilt by definition when you use it you have to invite your group and your friends to use it. And so by definition you’ve got to spread the word on the product because if you’re collecting money from 12 people or 24 people, all 12 or all 24 are gonna sign up and use the product and then split off it. And hopefully if they have a great experience and we hope that they then take it out to the next thing and they’re gonna do with friends and use the product themselves to collect money you know, two weeks later, four weeks later. So that is definitely a implication of building a really great product, is Tilt just naturally has this a venality to it if you’re needing to invite your friends to use it.
The third thing that I think for young entrepreneurs to gather I think is worth talking about is just in general to build anything of significance or to build a successful startup I think it simply comes down to these two things. It doesn’t mean it’s easy. But it does come under these two simple things, you have to solve a problem for your customer and solve a problem for distribution. And if you can nail both of those then you have a really successful start up on your hands. If you only have one of those then the other one will catch up to you. If you have distribution and your product’s viral but it’s not really solving a problem for them then or spammy then you know, it will catch up to you. Or if you solve a problem but you can’t get the word out for it you know, that will also just quickly become unsustainable. So it’s nailing both and they both are every startup goes through their grind of figuring out how to nail both of these. Typically you wanna start with nailing the value for the customer and actually solving a problem for them. But then right after that, you quickly go into trying to solve for the other equally hard problem which distribution. And so, I think it’s something that it’s worth spending time upfront before working on an idea to try to suss out some the details on both fronts and know that you will have to solve for both. And to not overlook the fact that you will have to solve for distribution. And if it’s a great calendar app or a great email app but it’s gonna be really difficult to get distribution then you might save yourself a lot of trouble by thinking about how difficult that will be up-front rather than figuring it out on the fly nine months in.
Nathan: Yeah. Now, that’s gold advice man. Thank you. Well, look, the last question, where’s the best place people can find Tilt or yourself?
James: To download Tilt you have to fly to San Francisco. Come to these GPS corner. Now, the easiest way to, I mean, it is on the app store. Tilt is the app so and IOS in android or tilt.com to go and check it out. And if you just wanna you know, to kick the the tires I think tilt.com is a great place for you to go and just check it out. We were pretty hard to make it easy to find. So hopefully we’re doing our job on that front.
Nathan: Awesome. Well, look, thank you so much for your time James. It was a fantastic interview and conversation. Really enjoyed the chat man and keep up the fantastic work. It’s really inspiring.
James: Nathan, so great to chat with you and thank you so much for taking the time and thinking what we’re doing is interesting. So we really appreciate it.