Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I do interviews with proven entrepreneurs about how they built their businesses. And I do it for an audience of real entrepreneurs. And as I say this, today’s guest is nodding because he’s one of the people who listen to these interviews. He listened and he built up his company. And you know what? I watched it. I remember when he posted on Hacker News that this new thing launched. I didn’t even know that he did it. I didn’t know who did it. I assumed it was a whole, developed company. It was like, “Here you go. This new business is launched. It’s called Codementor, instant one-on-one mentoring.”
And I thought this makes a lot of sense. If you’re a developer or someone learning to code, you want a pro to just look over your shoulder and give you feedback, especially since so many online classes now are just do-it-yourself. We’ll teach you via video, or we’ll teach you via these short clips. And then you do a short homework assignment or take a quick quiz and continue to the next and the next. And there’s nobody there to help you. There are no teachers.
And so, I thought, “This guy’s brilliant, whoever came up with this. No wonder it’s doing so well.” Just get on Skype with someone, share your screen, show what you’re doing, get feedback and get unstuck. And it turns out it wasn’t a big business at the time, it was just some dude, some guy who had a lot of entrepreneurial experience who said, “I’m not going to do it the same way anymore. I just want to start this thing easy and build it up.”
And today’s guest is that founder. Weiting Liu is the founder of Codementor. Their community, which gives developers live mentorship, still true to the original goal. Live mentorship. And it’s more than just someone who’s learning, it’s a team. Sometimes we get stuck somewhere and there’s nobody to turn to until Codementor comes into play. And they can go to Codementor and get help. They’ve expanded beyond that to hiring freelancers. Turns out a lot of people actually want to hire from them and so they are facilitating those introductions.
All right, we’re going to find out how he built up this company, how it took off, and then it almost fell. And how this guy named David, who we both know, came in and did something to change things for the business, and apparently it still ran into trouble afterwards. But here it is today, a successful business. We’re going to hear how he did it. Thanks for two great sponsors. The first is a conference I freakin’ love. It’s called the Fireside Conf. I did it just a few months ago, I guess, at this point. It’s coming back. I want you guys to go check it out. And the second is a place where you can go hire talent. It’s called Toptal. So Fireside and Toptal. Weiting, good to have you on here.
Weiting: Andrew, good to meet you, finally.
Andrew: Yeah. You know where I’m going to ask you . . . what I’m going to ask you first, which is about revenue. What is the revenue last 12 months, let’s say, of your business?
Weiting: Yeah, your team asked me to fill this survey. So, they tier that I put down with between five to 10 million.
Andrew: That’s unreal to me. Because I remember how you started and because I see how bare bones it was. Between five to 10 million, are you guys profitable?
Weiting: Not yet. We continue to grow the team. So, not yet profitable.
Andrew: I think at some point you were thinking of making this into a bootstrap company and look to make it profitable and then you changed your mind. Is that right?
Weiting: That’s correct.
Andrew: Okay. The reason that you came up with this is that you were working somewhere and your team ran into problems. Where were you working and what were the problem so you guys ran into?
Weiting: Yeah. So basically, I’m a serial entrepreneur. I’ve been starting companies since I graduated from Stanford such a long time ago now. So, I started this company called SocialPicks that was YC07 back in the day. After I sold SocialPicks, I went to . . .
Andrew: So, SocialPicks was a Y Combinator-funded company and it helped people pick stocks?
Weiting: Yes. It’s one of the early Web 2.0 sites where we connect stock market investors with each other. I remember Forbes call us, it’s like Myspace, but for stock market investors. With the measure of Myspace, you can tell how long ago that was.
Andrew: It does give me a sense of it. And so, the idea there was, “We’re going to help investors talk to other investors so that they could figure out what to invest in.” No, it wasn’t connecting to gurus.
Weiting: It was not. We also do track gurus’ performances such as Warren Buffett, such as Jim Cramer on TV. So, it’s all about performance tracking social network for stock market investors.
Andrew: Okay. All right. And it looks like you guys raised at the time about half a million dollars. Am I right?
Weiting: Yes. Which was, it felt quite a lot. I guess it was most like, it’s like, it feels like the equivalent of a 2 million realm for today’s realm.
Andrew: And like so many people who ended up at Y Combinator, you went in because of Paul Graham. What was it about Paul Graham that attracted you?
Weiting: So when we first started, it was like ’07, ’06, ’07. Honestly, at that time, I didn’t really know who PG, who Paul Graham was. I have never heard [crosstalk 00:04:51] either, but at that time, my co-founder at that time, Kevin, he’s a huge fan of Paul’s writing. Like he follows . . . there was no Hacker News at the time. So, he follows Paul Graham’s personal web blog. So, he just encouraged us to apply and I was like, “Well, okay.” I mean, that’s how we’re already talking to, like, venture capitalist in the Silicon Valley, right? So, I was like, “Okay, let’s just try to apply,” and then we got in. And it’s probably the one of the best experience ever.
Andrew: How did it shape these ideas of SocialPicks into something that grew?
Weiting: Yeah. So, at that time, YC was still quite small. I remember we had 19 companies in our batch. I think now YC have over 100.
Andrew: That’s a lot.
Weiting: Yeah. Two demo days, right? So, you felt like this cozy family of entrepreneurs and smart people like Paul Graham, Jessica, we all work very closely together. They all gave us very intimate, honest feedback and advice about how we could become better either as a team, as entrepreneur, and also for our startups. And they made a lot of a few key introductions Demo Day, or just a lot smaller, a relatively but already . . . it’s already gaining traction among VCs in Silicon Valley. So, it kind of gave us this much needed boost already on.
Andrew: Okay. So, you had it in, you at the time, in the Dropbox cohort. And so you knew Dropbox back when it was just a couple of guys and an idea. And as you were doing that, tell me about the problem that led you to create Codementor. How did you experience it?
Weiting: Right. So, after I sold SocialPicks, I moved to Taiwan and started another company with my brother, which was a social media marketing company for brands and agencies in Asia. But we grew very quickly from two people all the way to 50 people in like, less than two years, right? Or maybe one and a half year. So, we grew so quickly that we were not able to hire senior developers fast enough. So, I recall that we probably have a team of relatively young, smart, but relatively inexperienced engineers at that time who were constantly stuck with issues, right?
I remember there was this instance where that entire team were not able to figure out like this Amazon UC-2 [SP] settings, and the entire team was stuck for two days. I figured at that time, I just thought that if there’s a magical server where I can instantly find like a guru of Amazon UC-2, I will be more than happy to pay like thousands of dollars on that spot because that’s a huge business problem for me as a business owner. And then later on . . .
Andrew: Before you continue, they eventually solved the problem. How did they do it? Was it just them spending two days on their own trying to figure this out?
Weiting: Yeah. So eventually, like, they figured out. I remember I also made a few calls to my friends in . . . I just made a bunch of calls and finally tried to figure it out. It’s like, I can’t really remember, it’s probably just like waste . . . it took time for the entire team to figure something out.
Andrew: Okay. All right. So then, you didn’t do anything about it at the time, you continue with the business. That business was called Mr.6. How did it go with Mr.6, I mean?
Weiting: Mr.6, it’s actually the online moniker name of my brother. My brother is actually a relatively well known tech blogger in Taiwan. He has like 400,000 fans on Facebook. And the company’s doing well, they’re not expanding to other regions. Also pivoted a little bit, but they’re doing okay. I got . . . you like working with your brother, right? It can be fun or it cannot be so fun from time to time.
Andrew: What do you mean? When it was not so fun, what was it like to work with your brother?
Weiting: Well, it’s kind of like, in a way, it’s like a family business. So, we are making a meaningful revenue for the family. However, I also want to do my own things, right? I am more like a product person. Our company at that time was all of our services, right? It’s basically an agency. And mostly for the Taiwan and the Asia market, I kind of want to go do something at a more global scale. So, I started to play around with a few ideas. So, I am kind of a developer myself, but I’m obviously not the best programmer in the world. I have never been professionally paid, the programmer myself.
So, as I was hacking away by myself, I thought that if there’s a service . . . again, if there’s a magical service where I can quickly find like a Google developer sitting right beside me to let me, like, constantly ping him to help me solve my own issues, that would be very interesting. They’ll make me more productive as an entrepreneur. And it’s almost like a . . . it’s like a CTO on demand.
I just figure, “Yeah, if I’m an entrepreneur, it’s definitely something that I would use.” And it just turns out that . . . I also at that time, like learning how to code is becoming mainstream, right? And sites such as Code School, and also Treehouse, whom, I think Ryan Carson was on your show earlier. They all started to pop up. But I just realized there isn’t really like a human tutoring element online at that time. So I just thought it’s going to be . . . at the macro level, it sounds like a very interesting product for the world to have. And it also does solve my own problem, right?
So I just figured, let’s just try to do this myself. And as you kind of mentioned earlier, I remember very, very vividly on June 1st, 2013, which is almost five years ago today, I hacked together a landing page I just posted on Hacker News. And actually just got on the front page of Hacker News at that time to my surprise.
Andrew: And the reason that you said, “I’m going with this idea,” you told our producer, “I wanted a minimum viable product. I was heavily influenced by 37signals and their belief in keeping things simple.” And you said, “I wanted revenue from day one.” So . . .
Weiting: Yes. At that time, I was toying with a bunch of ideas. My criteria for the idea is, one, it has to . . . I need to be able to do this all by myself to get started. So, at that time, I don’t know how to program in iOS, I don’t know how to code. I still don’t know how to do Objective-C programming. So, I only knew how to do web development at that time. So, something that’s on web, and also I want to build something that can generate revenue from day one. So, that means I will not be able to do something like at Facebook where I will gather millions of users and then hope that can start generating app-based revenue three years down the road. So, something that can be completed by myself, something that would make revenue from day one, and something that I feel passionate about working on because I know . . . Andrew, I think you’re muted.
Andrew: I’m wondering why. Why does that matter to you? You’re a guy who raised money, you were involved with a co-founder of two successful companies, they weren’t Facebook-level successes, but they did well. Why would you say, “I’m now going to go back and be a bootstrapper,” as opposed to saying, “I’m going to double down on what I know. I know how to raise money, I know how to build businesses big, let’s raise money so I could build the next thing big.” Why did you go smaller?
Weiting: I guess at that time, again, I was heavily influenced by the 37signal guys. And I always like the bootstrap mentality. In some way, I am pro-entrepreneur and anti-Silicon Valley investors, in a way.
Andrew: I don’t see . . . Did you have a bad experience with them? Or was it just the . . . No.
Weiting: No. Not really. I feel like I’m a born entrepreneur. So, I respect other entrepreneurs. And I kind of feel that by controlling 100% of the company for as long as possible, I can control my own destiny. I can do whatever I want at whatever pace I want. And I think generating revenue is very important, which I guess at that time, it’s like, it’s actually not something I had really done before, like, build a product and just let it generate revenue consistently. I also felt that that will be a good challenge for me to have as an entrepreneur at the time.
Andrew: Yeah. And the 37signals guys, the people behind the product Basecamp, they really make compelling case for not raising money, for keeping it small, for owning the business and deciding where it goes, for not having crazy schedules to try to hit growth levels that somebody else demands of you, but focusing on the product, the customer, and frankly, even yourself in your team. All right. And so, you said, “This is what I want.” You decided you’re going to put up this website. Was it just a website? Was there anything else going on? Because when I look at it, I am looking at a screenshot of it, there’s nothing but, “Here’s what we do, here’s what we have expertise in, enter your email address if you want to be invited.”
Weiting: So, at that time, the only thing that’s really working was the landing page and the sign up form. While I have that form up, I have been busy hacking away the real product in the background. But honestly, at that time, it was not a working product.
Andrew: What was the product going to be?
Weiting: It’s going to be . . . it’s a basic service where any client who was going to look for a developer to learn how to code can post a request, and that would connect to a developer via WebRTC. I made the decision earlier that it has to be a native experience. So, we’re not going to use Skype or Google Hangouts. I’m not sure if Google Hangout really [existed 00:15:25] at that time. So, it’s a simple WebRTC chat room of some sort, and developer can text chat with the client. So, it’s like a work . . . it’s supposed to be a working platform to connect mentees and mentors.
Andrew: Okay. Why didn’t you want to do Skype for the first version. There’s somebody in here who saw your post and said, “I had a similar idea a while back and I used Screenhero.” Why didn’t you just use Screenhero?
Weiting: Oh, yeah. So, we did use Screenhero, but mainly for the screen sharing purposes. But for the audio and video chat, we’re using WebRTC. I remember we’re using OpenTok at that time.
Andrew: I guess what I’m wondering is why bother with that? Why did you spend your time on that part? Why did you want to build it natively? It seems like that was an important decision for you.
Weiting: I guess it’s just like the product CEO in me that told me that I want to build a very small UI, a very awesome user experience that native to the entire software.
Andrew: Instead of saying to people, “Hey, connect via Skype, share Skype contact.” Yeah, you know what . . .
Weiting: [inaudible 00:16:43]. So I guess, had I had a chance to go back to do the same thing all over again, I would just use Skype.
Andrew: Because you know what? The screenshot on your website, I think is Skype. I’m 90% . . . yeah, it is. It’s Skype on your homepage, in this landing page, there is code on the screen and then there’s Skype for how to connect.
Weiting: I think what has happened is that we’re using Skype as like a temporary solution. I was like, “Okay, it kind of sucks,” because then you have to . . . Skype did not have an API at that time. So that means you have to then usually like manually add each other on Skype. So, that’s just like, bad user experiences, and just give people more reasons to interact directly off the platform. But the WebRTC thing gave us tons of issues at that time. So, in retrospect . . . in the end, it turned out to be okay, but in retrospect, that we actually spent tons and tons of it early energy than time just getting the fundamental product to work.
Andrew: So this person who came in with feedback, who said, I tried this idea before, I thought he had really interesting things to add. He said, “My big problem was, it was hard to connect people . . . hard to connect clients to mentors, because scheduling was a nightmare.” Did feedback like that help you think through the product better, understand where the pitfalls were, what people were looking for?
Weiting: Initially, yes. So, I may or may not have emailed that guy. But yes, we got a lot of very interesting feedback at that time. And it just helped us bake into more features into the product to help solve the set issues. For example, I recall, like Clarity.fm was quite popular early on. I remember talking to investors at that time and they’re saying, “Oh, so you guys are just like Clarity but for developers.”
Andrew: Because Clarity.fm, for people who don’t know, is a place where you can get a mentor for marketing or business advice, and it’s all by phone. And that’s what one of the people who commented on your post on Hacker News said, said, “You know, here’s how Clarity.fm does it. They ask each person to suggest . . . the person who wants to schedule an appointment to suggest three times and the person who’s going to get paid should just pick from those three times and make it simple.”
Weiting: Yes, yes. So, I think we actually took their advice and just copy that feature into our product.
Andrew: So, you didn’t ask them to connect their Google calendar or anything. You just said, “Suggest three times and we’ll send it over to the developer.”
Weiting: Yeah.
Andrew: Okay. All right. Yeah, I see that a lot of this was actually really very positive. There’s one person who said that a lot of online courses like Code Academy, they are great for learning, but they don’t give you any direct advice. There are people who gave you similar sites to think about. Really useful stuff.
Weiting: Yeah, so all these great people on Hacker News, all these people that are commenting, they did not know that all these positive comments actually gave me like this huge confidence boost. At that time, honestly, before that day, I wasn’t really sure whether this is going to work on not. I wasn’t really sure that this is the project that I’m going to spend the next number of years of my life to work on. So, on that day, I remember that gave us the first initial traction, thousands of people sign up on the waiting list waiting to be invited in into the platform. So that gave me this huge confidence boost.
Andrew: And the waiting list is waiting for Weiting to actually create the software that they are all signing up for. All right, let me take a break here to talk about my first sponsor then we’re going to come back into what happened with the story. Weiting, I saw your eyes light up when I told you about Fireside Conf. Let me tell you what this is. My eyes actually did not light up the first time I heard about it. I was a little freaked out because what happens is you go to this guy’s campground . . . one of the creators of Fireside had a great experience as a kid camping every summer. And he said, “You know what? I want to do this now as an adult.” So, he rented out the whole campgrounds and he invited entrepreneurs to come over, entrepreneurs, developers, and investors, just the whole thing, to just come hang out for the weekend.
And the thing that scared me was no internet. In fact, there really is no internet at all. Even if you have cell coverage with whatever carrier you have, except in this one room where they have an old-fashioned modem connected, which is fine. I got strong enough internet that I could call home from there, but only from there. And it turns out the thing that I was most scared of was the most exciting thing, there is no internet, no one’s on their frickin’ phone. I swear to you, I don’t think I saw single person look down on their phone for anything because there’s nothing to photograph. We’re all just like in our dirty clothes because we’re just hanging out at this campgrounds. And what you have instead is a forced experience where everyone’s looking up and talking to each other at breakfast, at lunch, at dinner, activities.
I remember I first got there and I said, “I want to go and kayak in that lake.” And Steve, the founder, said, “Hey, can somebody get Andrew into the lake right now?” Boom, I swear to you, within minutes, I was on the freakin’ lake kayaking. And then because I suggested it, a few other people want to go do it too. And then I said, “I want to go swim.” And so, I went and swam. In fact, if you go to firesideconf.com/mixergy, you can see my shirtless body. Let me see, a Fireside Conf., as in conference, firesideconf.com/mixergy. I asked them to take a picture because I was so excited. I didn’t think they would put it on their website. I’m a little embarrassed because it’s on there, but there’s no shame in online anything anymore. So, send people over there.
The reason I’m embarrassed is I’m a runner and I’m a swimmer and I got this, like, love handles in that frickin’ picture. But that’s the thing, I was just so carefree, jump in the water whenever you want. Go hang out with people whenever you want. And sit by the fire, endless fires. This isn’t just a name. Usually, they’re all these restrictions around who can start fire and where and so on. No, they have campfires everywhere and just go to hang out and you talk to people.
A lot of meaningful conversations, a lot of really good business relationships for me and others came out of that. I really urge anyone who’s looking for a conference, don’t just go to one where you’re sitting in a conference room listening to someone talk, go to one where you’re experiencing something different and hanging out with good people and getting to know them and doing it in a place where you kind of are forced to experience each other, forced to be there, really well done.
I didn’t say this my favorite all time ever conference. I don’t know that I ever want to say that because then everyone else going to be upset, but man, this is so good. All right, September 6, through the 9th, go check out . . . oh, and here’s the best part, apply. You can’t pay to get in, you have to apply. And the reason I like that is every single person who was there was a really good person. And I mean that there are a handful of people who were there because they were into the weed business and so that was really big there and there’s a bunch of people around the campfire talking about that. They may not directly relate to my business at all, in fact they don’t, but they were so interesting, so smart, so good to get to know.
I can talk about this for hours. Instead, I’m going to say, “Guys, go check out why you should sign up for Fireside conf. and see my shirtless body and me raving about in like five different videos. They really clipped every frickin’ thing I said about it by going to firesideconf.com/mixergy.
One of my closest friends now came from there. It’s a guy who I interviewed, Justin. He’s on that landing page, I interviewed him, he said he was thinking to go on a Fireside we hung out there, became with really good friends. All right, firesideconf.com/mixergy. I need somebody to stand on the side, and when I go too long with a sponsor, just prod me because I get excited.
All right. You launched it, it was on there, and now you had to build it. How long before the thing was built so you can finally get some of that money?
Weiting: The site, the official site did not launch until, like what? Nine months later. Like a public launch. But we had this private alpha that people can start to . . . like the people on the waiting list like where should be like a semi-working alpha version so people can start to come in on a selective basis.
Andrew: Did you have a marketplace by then, I mean, like an active marketplace where they were developers and customers and you are matching them?
Weiting: Somewhat. So, as a smart people say that for building two-sided marketplace, you have to bootstrap one side in the beginning. So, the way we do it is we bootstrapped the supply side. So, I remember very vividly, we actually, the first ever real Codementor session, it was between me who was acting as a mentor and another gentleman by the name of Kevin, he actually owns a barbecue place, happens to be Taiwan. He’s like this American guy who owns a barbecue place in Taiwan. But he actually moonlights as a Magento developer and he’s trying to learn Ruby on Rails at the time.
So, I was his mentor for free. So we spent a very awesome 30 minutes together, talking about why he should choose Ruby on Rails, instead of . . .
Andrew: Wait, he came into you asking for help with Magento, you said, actually, switch over to Ruby on Rails?
Weiting: Yeah, he was trying, he was very intrigued by learning Ruby on Rails, so he just came in and then . . .
Andrew: And you knew enough to give him input into that?
Weiting: Yes.
Andrew: So, you were selectively picking the people who you could personally help because you didn’t have enough developers to be there to help?
Weiting: Yes.
Andrew: I don’t understand why. And I heard this about your story. And the reason I don’t understand why is there’s so many people in this Hacker News post who wanted to be a part of your network. Many of them actually were suggesting different languages for you to focus on. And so I thought, “Well, he must have a bunch of people now ready to go and work.”
Weiting: Yeah, it’s all about marketplace liquidity. So, if people are . . . people, of course, developer will be excited to become mentors on the platform, but if you don’t have a really working platform, you don’t have enough clients or mentees coming in on a daily basis, after a while, people will start to get bored. So say, once a real client comes in and if no one really act within 12, 24 hours or so, like the client, it’s going to be a crappy experience for the client. So that’s why we . . . basically, the liquidity kind of eventually happens over time. But initially, we actually needed to, like seed a few, like very dedicated mentors, just at least to be responsive to the client’s request.
Andrew: Yeah, that makes sense. And I have found that in marketplaces, that if you have a marketplace, it’s hard to get both sides at the same time. So you pick one, and you kind of fake it either by doing what you did, which is doing the work yourself or hiring a few people to be on one side of the marketplace, or by scraping content often for one side of the marketplace and putting it on your site. And I think it was Jason Fried from 37signals, now Basecamp, who said to me in an interview, “Focus on the people who are paying.” Like if you have to pick one to focus on, focus on the people who are paying. So for you, it would be the clients who want to learn how to code or get help and just hack your way through the other side of it.
Weiting: Yeah, yeah. We also, we try very hard to bootstrap both sides. I also recall that while we’re going through Techstars at that time, we are also . . . we’re doing some incremental changes on the platform. But at that time, because it’s not, it’s totally not a very liquid marketplace. So people’s experience is not optimal. So what we did was that we just issue off free credits to client for them to just do sessions for free, lose money, because we still need to pay the developers for the time. Was just a way for us to make sure that we will get new mentees to try out that new features that would be out for that week. And we just give all these developers something interesting to do.
Andrew: I wonder why you didn’t collect money sooner. You said that one of your goals was to get revenue from day one and still, it took two months to actually get money in the door. Why didn’t you take the people who were on the waiting list and say, “I’m going find a way to just generate some revenue from them.”
Weiting:Right. So I guess . . . I tried. So I guess we’re also a fault there. So in retrospect, we probably launched officially a little bit too late. We probably could have launched like three months earlier. People read about, you know, like Reid Hoffman was going to say, “When you launch and you’re not embarrassed by your product, you launched too late.” At that time, I was really . . . I was really quite embarrassed of our product. Sometimes things are easier said than done, but in retrospect, we could have launched three months earlier. But it’s just that at that time, people are not, it wasn’t really a liquid marketplace. So even though a client will be interested in paying, they might not find the right developers in time for them to want to pay the money. Also, there’s a lot of like connection issues. I recall that we have a lot of, we were bombarded by complaints about like, “Oh, this WebRTC thing does not work. Why does it not work on my browser?”
Andrew:And that’s why you said, “You know what? Maybe we should have just use Skype in the beginning and not spend so much time on that.” All right, before you really started to make money, you went out and you raised money, raised funding, who’d you raise it from?
Weiting: So, we went through Techstars in Seattle.
Andrew: Was Techstars first or was it a few friends first?
Weiting: So, we raised a first seed round from an investor based in Taiwan. At that time, honestly, we probably did not need that money at that point because it was just myself. But you know, after working on your own idea for months, you start to get a little bit lonely. Because I started this company as a solo founder. So I just realized that, “Okay, maybe instead of having a co-founder, maybe I should just have a seed investor, at least have like a partner to bounce ideas off with, and actually keep me really focused and engage about pushing Codementor further and push Codementor as fast as possible.” And it is true that it’s easier to spend other people’s money, but it’s actually necessary.
Andrew: You’re more rational about spending other people money than yours, you mean?
Weiting: Yes. Because there are just certain things that need to be done.
Andrew: Did you have money at the time?
Weiting: Personally?
Andrew: Yeah, savings.
Weiting: Some, I guess. I was not prepared to spend too much of my own money.
Andrew: You had more than half a million dollars? No.
Weiting: At that time, no, I did not.
Andrew: So, here’s the thing that I wonder about Silicon Valley, about startups. You started a Y Combinator company, you sold it. It wasn’t, like I said, a huge windfall, but you sold it. You get a W up on the board. You were part of your brothers company, they did well. How do we not have more in the bank after years of working if you’re a success and you don’t? Why not?
Weiting: Well, there’s a difference. There’s a saving cash reservoir and there’s like illiquid asset and there’s a cash flow.
Andrew: What’s the illiquid asset?
Weiting: Oh, mortgages or . . .
Andrew: Okay, so some of your money is in a house, and then what else is it in that’s in illiquid?
Weiting: That’s basically it.
Andrew: That’s what, sorry? That’s basically it.
Weiting:Yeah.
Andrew:Yeah, you know what? This is the thing, though, that entrepreneurship gives you a big windfall, but if you don’t get that windfall, and most people don’t, even if you’re successful, you’re not doing as well as even a Wall Street guy. I got friends who work on Wall Street, they’re making good $400,000, $500,000 a year without this type of risk.
Weiting:Exactly. So, if you’re in this for the money, then you’re probably in the wrong profession.
Andrew: Right. That’s a shocker. Okay, but I do also get what you’re saying about wanting somebody else to be there as a partner. I don’t get lonely, but I do feel like at Mixergy, everything is on me. And nobody could care as much as I do because they don’t have as much invested. Now, you take an investor, they still don’t care as much as you do because your life is in this, their money is in this, there’s a difference in commitment. But still, it’s something that makes them feel like they have to show this, see this through, and to be there for you. As you get him as an investor, why him? Why do you think that he was the person that you’d want to have as almost your co-founder, as your mentor, as someone to bounce ideas off?
Weiting: So the investor is called TMI, it’s actually a small fund in Taiwan. Kai Fu Lee was affiliated with that fund at that time. So, they just . . . we had a very nice discussion about working together and they just believe in me as a founder, as entrepreneurs. At that time, Codementor did not exist. It was just like, yeah, I’m this guy from the Silicon Valley, I had a wing as my track record, I seem to know what I’m doing. There’s like a few ideas I’m playing with, I don’t know which I’m going to work on. And yet, they still say, “Okay, you know what? Would you like . . . We would love to invest your venture still.” So, I was quite appreciative of that. So, I decided to just take their money so I can move faster. And that’s how I started to hire a contractor to help us out, build the first version of the product, and then we’re going to Techstars that would further enable us to move even faster.
Andrew: Techstars and not Y Combinator again?
Weiting: Right. So, it’s mostly because of two issues. One, timing at that time, YC was between batches and Techstars were just around the corner. Also, at that time, the managing director of Techstars, Seattle at the time, Andy Sack, he actually started another coding boot camp called Code Fellows in Seattle. At that time, like the concept of coding boot camp was still relatively new. I just felt that there probably will be a lot of synergies, or at least at the very least, I’m sure learnings that he can particularly share with us. So, I just decided to just move to Seattle for a few months and try to move faster on our progress.
Andrew: And you told our producer, I underlined this in her notes, “But by the second month, things started to go downhill and I started have a lot of self-doubt.” What was going on around there that made you feel like things were going downhill?
Weiting: Yeah, so at that time, we’re doing a lot of customer development during Techstars. What that means was I just talked to a bunch of fellow entrepreneurs, a lot of developers are mostly in Seattle. And just at that time, not too many people are that interested in using our product users. A lot of people just bluntly told us in our face that this is not going to work. So, after a while, I started to have some self-doubt as well, although they’re still highlights, right, for example, I recall like Rand Fishkin, of Moz, at that time, I also met him in Seattle, I recall that he was one of the very few that were like super excited about this idea of live mentoring of developers. So, that gave me some confidence boost. Thank you, Rand.
But generally, like people, like the entrepreneurs in Seattle . . . for example, we actually had a lot of . . . we had 11 companies in our batch, right? They’re all trying to work on their product. They all know that we are Codementor, but none of them really try to use our service, right?
Andrew: Yeah. Why do you think? Now, in retrospect, now, when you’re not at a place of self-doubt, now that you know it worked, why do you think that they didn’t sign up to work with you?
Weiting: One, for budget reasons. Two, they’re all developers themselves. So, if you’re a great developer, especially if you are entrepreneur, you tend to be the type that would want to figure things out by yourself rather than hire a mentor to help you accelerate your earnings. But whereas if you are a relatively less technical founder, whose sole goal is to complete and launch this project as fast as possible while learning how to build things the proper way, then that’ll be a much better fit. It’s all about product market fit, right?
Andrew: Yeah, it feels like they’re not the right market for that product to fit with. Because, like you said, they’re smart, and all the things that you said for sure. But also, they’re surrounded by other developers because they’re in this accelerator and they don’t have that much money and a huge incentive not to spend money. And because they were picked by the accelerator, they now have a halo effect so they could go and reach out to other developers and say, “Hey, I’m now in Techstars, will you help me?” And of course, people want to help you when you’re at that stage, especially if you’re someone that Techstars believes in. But when you had self-doubt, how did that affect you?
Weiting: Right. So I recall that there’s . . . I would still like go to the Techstars office every single day just attend session that were working on a product. So, I recall morale was really low at that time. And what changed was that we’re like a few weeks before Demo Day. Like, I honestly wasn’t sure whether it’s going to work or not. I was really down, and then all of a sudden, David Cohen, who’s the founder of Techstars, he expressed interest in investing in us. I say, “Wow.” So, I remember that Andy Sack at that time, he just encouraged me to fly all the way from Seattle to Boulder, Colorado, and just try to close David Cohen, which I did.
Andrew: How did you close him?
Weiting: I just showed up, gave a relatively okay demo, which I remember it actually crashed at that time. So, during the demo, I was like, “Hey, David, check this out. This is all we’ve got.” And I recall there’s like this small bug that . . . it wasn’t like a perfectly smooth demo, but I guess we still left a pretty positive impression on him so he still decide to invest. So, he actually didn’t know about this, but that was actually the turning point of the entire company . . .
Andrew: Because if he invested, then you go into Demo Day where you’re supposed to demonstrate your software and your business plan to a team of potential investors, because he invests, they’re more likely to say yes, and then you ended up closing people including Fabrice Grinda, the founder of OLX, a past Mixergy interviewee. Oh, he’s an investor in Alibaba, I didn’t realize that, and a bunch of other companies. And so he invested, too?
Weiting: Yes.
Andrew: Largely because of David Cohen.
Weiting: Partially because of David Cohen because also, he’s a marketplace investor and at that time, no marketplace like Codementor really existed at that time. We had a pleasure of working with him and his team.
Andrew: Yeah. Did you get any feedback from him on how to . . . You know what? Let me take a moment here and then come back and ask you what did you learn from working with him. But first, I’ve got to talk about my sponsor Toptal. I told you before we started, hey, Toptal is all about hiring developers and you guys now have a freelance hiring service. Are you feeling like they’re competitive with you? And you said, “Not exactly, we’re going after different groups of people, plus Toptal is expanding to . . . ” Do you remember what you called them?
Weiting: They’re more like they’re trying to become this McKinsey of talent.
Andrew: Yeah, why do you say McKinsey of talent? What is it about them that makes you feel like that’s their aim now?
Weiting: Right. So, I think they just like Upwork, they’re trying to cover many verticals. So, [inaudible 00:40:52] developers now have designed financial services and more. And they’re trying to be this premium version of talent.
Andrew: So, Upwork is trying to give you the cheapest person that you can have, and give you software to make sure that they’re doing their work. Toptal is saying, “We’re going to get you the best people. You don’t need to watch them minute by minute.” But it’s the other thing that that struck me about your characterization of them as a McKinsey of talent of online talent, they are going into finance. And so, I’ve talked about this in the past. I felt like I was the only one who cared about our income statement. I would show it to people on the team, they don’t care, their eyes glaze over. They care but they don’t love it. I show it to the bookkeepers but their job is to manage the numbers, they’re not giving me enough insight.
So, I went to Toptal, I said, “Can I hire someone like a CFO, someone to come and look over my books on a regular basis, tell me, Andrew, you’re making a mistake here. Andrew, you’re doing okay there.” And I found someone, Jack. Jack is fan freaking tastic, he did that for me. He identified, for example, that we’re paying way too much in credit card processing fees. I didn’t realize it. There’s huge savings to be had in credit card processing fees. He also said, “Hey look, you’re making some decisions about your team that are a mistake.” I needed that, I needed somebody with number sense to say here is why that is spending too much money and is a bad direction for your business. I thought, “All right, great, I’ll do it.”
And then even small things, he said, “You know, bigger companies that you don’t respect necessarily or idolize but they do frickin’ well, they have contests to see who could lower expenses,” because you want to try to lower the expenses, the company’s gotten too big for you to be able to see where all the little expenses are. Put a list out for everyone on your team and tell them if they save you this much money, you send them to dinner for two. If they save you this much, you do that.
I resisted it. I said, “That’s on me. They care just because they care. They don’t care because I’m sending them for dinner for two.” Then one Friday I said, “I got to listen to Jack.” I did what Jack said. Boom, people are finding savings that I never anticipated and they’re doing the work to save money. It’s fantastic, and the final thing I have to say about Jack, he’s . . . I think he was a McKinsey person too.
My wife was given a couple of job offers and here in San Francisco, you know, when you get a job offer, it’s not here’s how much money you make and here’s how many days off you get, it’s also, here are the stock options and then the RSUs and then this and that. I said, “No, why don’t you talk to Jack, don’t talk to me.” Jack gets on, does deep research for her and says, “Here’s what this means. Here’s what that means. Here’s why this package makes sense. Here’s what you want to watch out for.”
All right, I’ve talked too much about Toptal, let me tell you guys if you want the best of the best, the kind of people who care that much and have that much experience and knowledge to come and help you out with your business, you just go get them from Toptal. I’ve hired for a long time from Toptal. Past interviewees have hired from them, I forget who I just interviewed but he said at the end of the interview, “Wait, what it called? Toptal?” And he started writing them down so that he can call them up and potentially work with them. It was Nathan Miller, that’s who it was. And if you haven’t yet, you should go and schedule a call with Toptal and talk to them about your needs and see maybe they could help you.
Here’s where you go schedule it, go to toptal.com/mixergy. The reason you want to do that is number one, they’re going to know you came from me, they love Mixergy, they’re going to take good care of my people. Number two, then you’re going to signal to them you’re a listener so they’re going to give you 80 hours of Toptal developer credit Mixergy when you pay for your first 80 hours in addition to a no-risk trial period of up to two weeks. That’s top, as in top of your head, tal as in talent, toptal.com/mixergy, toptal.com/mixergy.
All right, the thing that I wanted to ask you was what did Fabrice tell you about marketplaces that you didn’t know? How did having him as an investor help you become a better entrepreneur?
Weiting: I’m trying to recall. It’s been quite a long time ago. So, I think Fabrice bring me a lot of marketplace experiences. We work mostly with his team so we didn’t work with Fabrice directly that much, other than the first initial calls here and there. But it’s all about like liquidity is everything. I remember someone said, “Liquidity is not the first thing, it is the only thing.”
Andrew: What do you mean by liquidity?
Weiting: Basically, the user experience on both sides, supply and demand. In our case, it’s someone who’s trying to come here to look for a mentor, the experience must be super awesome, enabling them to find the great mentor in the shortest amount of time possible. Also, if a developer sign up to become a Codementor, if after signing up, they get no business, they it’s going to be a crappy experience for them. So, how can you keep the supply and demand side balanced?
Andrew: How do you do that?
Weiting: It’s just constant struggle and it’s constant work.
Andrew: Is there anything that’s worked for you? Do you have any tips for that? I have a hard time even, frankly, with interviews. People, I’ll have a month or two where we have so many interviews scheduled that people have to wait till three months into the future before they get an interview, and others where I’m sitting there going, “Why didn’t we book anything?” I’m sitting in the office anyway. That little bit is even hard. How did you do it?
Weiting: I guess there’s no silver bullet. There wasn’t really one thing that just worked for us. Just a bunch of small things here and there.
Andrew: For example? What can you tweak if you have not enough developers? Or what can you tweak if you don’t have enough customers?
Weiting: Right. So, first of all, you’ll need to know which side is lacking at any given point. So, making sure you have the right metrics, that’s very important. It actually took us quite a while to add all the necessary metrics in. So, my suggestion is try to figure out what like the most important metrics for you to monitor to know the health of your marketplace. I think that’s very important. Try to figure it out as early on as possible.
Andrew: What metric do you use to tell you if you have enough people on both sides?
Weiting: Percentage of activeness, for example. And then that’s a different definition for different type of marketplace?
Andrew: So, percentage of activeness for you might mean how many of my . . . actually, what does it mean?
Weiting: So, for example, like what’s the percentage of developers who have shown interest in the last 30 days? How many of these . . . it’s like a funnel. People who have applied, who are signed up, who have applied, who have a proof, who have shown interest, who have started talking to potential mentees, who have actually getting paid as a mentor. Who would like come back and do the same thing over again. There’s all these funnels that we track that we didn’t previously track, say, during the first number of months of our existence. So, it took us a while to kind of like learn everything by ourselves, do a lot of experimentations.
Andrew: Okay. By the way, I’m looking at his investments on AngelList, I lost track of him. I can’t believe how many investments he’s made in, like you said, a lot of marketplace and a lot of really innovative companies. There’s Codementor down there, but there’s also, what is Pillow, which I never heard of, which helps building owners list their buildings on short-term rental sites like Airbnb. There’s Code Fight. Do you know Code Fight?
Weiting: Yeah. So, I think it’s more about like developers play a game of programming. And they would enable you to, they’ll connect you to like companies for hiring developers.
Andrew: Based on how well you do. It’s all about screening out developers. Speaking of people used to email you all the time and say, “Can I hire a developer? Can I hire a developer?” You got to tell people what you did. What did you do with all those emails?
Weiting: Initially, I’ll say, “I’m sorry, Codementor is an educational platform.” Like freelancing requests are literally considered a spam for us internally. So, we’re actually turning people away. That you’re more than welcome to come here and learn from these great developers as your mentors, but they’re not really available for freelance projects. But then over the years, we just realized that this can be a potential huge opportunity. Hiring developers is hard as we all know, and we accidentally stumble across this interesting opportunity because by starting our journey as a company, as an educational marketplace to actually be able to attract a lot of great developers who you’ll never be able to find on the traditional freelancing marketplaces, we have developers who are like ex-Googlers or great YC CTOs.
They came in not just because they want to earn an extra money because they don’t, but just because they want to help fellow developers to become better. They see this as a very meaningful, worthwhile experience. But occasionally, be also be available and open to working on interesting project on themselves. So, I just figured well, maybe this maybe an interesting opportunity for us. So, that’s why about a year ago, we started this new session of our website called CodementorX, where ideas we want to connect the best developers on the Codementor community with companies in need.
So, we’re trying to build this developer ecosystem where we are a developer community first. We have over 300,000 developers within our network, they just come in here and learn from each other, and help each other become better developers. And we want to build this marketplace on top of this community where we can connect companies or entrepreneurs to great developers to afford them to hire either as mentors or as freelance developers, or potential as full-time team members.
Andrew: It’s a significant part of your business. But does it mean now that you’re going after a third group of people. You went after your clients who need mentors, you went after freelancers who are mentors, and yeah, those freelancers can do double duty as potential recruits for companies who come to you. But you have to then go after a third group, which is the companies that will hire freelancers, is that right?
Weiting: Yes, that’s correct. So, we have different types of . . . so in some way, you can think we’re now trying to build this three-sided marketplace, which is to sound challenging, but it’s actually, we’ve built enough of a solid foundation that it doesn’t seem to be that hard. And there’s a lot of overlaps between what we used to do. And so, we kind of see CodementorX as a very natural extension to what we’ve done on Codementor. We actually had quite a few students of Codementor that eventually need to hire a developers for their team and they just come to us.
Andrew: That’s what I was wondering. How many of your students say, “I’ve hired this guy to mentor me, now, I just need to bring them on the team more permanently, or longer term?
Weiting: I think more and more. And sometimes it’s less about a long-term engagement, but it’s more about I actually don’t need to learn from this developer, but I just would like to hire my mentor to work on this short-term task for like five to 10 hours. So, it’s like a natural extension of the mentorship engagement.
Andrew: You’re in Sunnyvale right now, which is not too far from my office here in San Francisco. But that’s not where you live, you moved to Taiwan. Why did you move to Taiwan?
Weiting: So, we have a large team in Taiwan. So, I actually spent half of my time in the U.S., half of my time in Taiwan. So we have a team of over 30 people, like distributed worldwide, we have a large team in Taiwan, but you also have other team members based in the U.S., Canada, and in Berlin as well.
Andrew: It seems like though, you found a good group of developers who are less expensive than the U.S. in Taiwan. But how did those hours work out . . . the developers in Taiwan, are they building your business or are they the mentors on your site?
Weiting: They are the core team members. And we have more than just developers in Taiwan. So, we have marketers, we have product team in Taiwan.
Andrew: So, the people who are buying ads for you guys, who are promoting you there in Taiwan now, too. And I’m sensing that you got them largely through the experience you had working with Mr. X, with your brother, Mr.6.
Weiting: Because I’m also . . . I’m originally from Taiwan as well. So, I consider that as my native country and it’s kind of natural for me to try to build a team in Taiwan. It’s actually become more and more common in Silicon Valley. It’s now becoming this best practice. So you now have this team who had like dual offices . . . like business office in San Francisco or the Bay Area.
Andrew: And in their home country.
Weiting: Yes, exactly.
Andrew: You’ll see it back in Israel, you see them back in Russia. And now with you, it’s Taiwan. And it is looking more and more like an asset to bank on a guy who isn’t just from another country, but has deep ties there because they could not just recruit people, but manage them with the right attitude.
Weiting: Right. And it’s actually . . . I’ll argue that it’s actually more beneficial for me as an entrepreneur as well because if you were to only stay in the Silicon Valley, you’re kind of trapped inside this Silicon Valley bubble where like the Silicon Valley is not the world. Like the rest of the world don’t really think like the Silicon Valley people. So, it’s sometimes would be very helpful for me to just get out of the Valley from time to time just to learn what the real world is all about and what other developers outside of Silicon Valley think about, like freelancing and the user experiences and so forth.
Andrew: I mentioned at the top of the interview that even after raising money from Techstars, that you went through an another difficult period. What was that other difficult period?
Weiting:I forgot what . . .
Andrew:What was the lowest point of the business?
Weiting: Right. There’s always highs and lows. So, one of them is actually, you know, after like, a few years of running Codementor, we actually became like the largest player of our kind. So, Codementor right now is the largest live mentoring marketplace for software developers. But we’re not a huge company. We don’t have hundreds of employees, we don’t have hundreds of millions of revenue. Silicon Valley investors will come to us and say, “Yeah, you guys are a cute business. I’m sure you guys can be acquired for like, 30 million, 50 million, Good for you.” So, it’s almost like a kiss of death in some sense. But we also thought, “Okay, that might be a good route for us to take, but we’re essentially trying to bank on a potential future acquisition that may or may not happen.” So, we kind of want to control our own destiny, we want to continue to grow, we want to continue to do well.
So, for the longest time, we’re trying to think about what are the possible way for us to expand beyond our business? So, as we kind of discussed earlier, then we realized that people are looking for developers all the time. With Codementor, we’re actually happy managing to attract a lot of great developers within our network. We can leverage our existing user base. So, instead of focusing more . . . instead of focusing just on mentorship, we can able these developers and make them available . . .
Andrew: So that’s the other reason why. So, as well as you are doing with Codementor, helping people get mentors, that’s not a huge business. It’s not going to be $100 million a year business, even if you get it all exactly right. And so, that’s the hard part. Investors don’t take you seriously. You don’t know how you’re going to grow, even though it looks like you’re doing well, and you are, it’s not enough. And so, that’s partially why you said, where’s the bigger market? What are people coming to us for? What can we help? Got it. And now hiring is a huge market, especially if we’re talking about developers who are so strong that other developers come to them for advice.
Weiting: Exactly.
Andrew: And so, the way you thought of it as I presented it here in the interview was a lot of people are coming to us with email asking to hire us. I said, no, I turned them away. And then I finally said, “Hey, why am I turning them away?” But it seemed like there was more analysis. I’m curious about what does a venture-funded entrepreneur with the need to analyze his business, what do you go through to analyze all the options and come up with this one as the one that you’re going to bank on, which was hiring freelancers? How did you go about that decision?
Weiting: Yeah, it’s really hard. It’s all about there’s a lot of potential opportunities. And people, other smart people, investors, advisors, they’re going to say different things to you, they’re going to say contradicting things to you. It’s all about what kind of route you want to take. It’s sometimes the decision has already been made for you in your DNA. So as DNA is, we are more about developers. We’ve almost for the longest time, we also . . . our advisors also thought about do not just expand to other verticals, like instead of only Codementor, can you not do design mentor, [inaudible 00:58:32] mentor, sales mentor? But we’ve realized that, for example, every single vertical, you have to start from scratch for the developer. Like we have a liquid marketplace in the software development verticals already, but then for designers, and for marketers, we need to start the same thing over and over again.
Andrew: Right, right. Like if you think about Toptal, I, as a business owner, might need to hire a developer from them, but I also could hire a designer and a finance person. But if somebody is hiring a code mentor, they’re not going to say, “You know what? I also want to get a design mentor, and I also want to get . . . ” Yeah, see, I love this analysis. Okay. So, that’s part of it. So you couldn’t expand that way?
Weiting: So, we kind of look at our core competency, right, which is, we are all about developers. We think whoever gets the best supply win this space. We have the supply. Also like in terms of personal interests, I enjoy building marketplaces, I enjoy building scalable businesses. So, it felt right, it felt right. So, it’s all other considerations include, can we not just do enterprise training? But what that means is that we’re going to hire a bunch of enterprise sales people, and then I probably need to start trying to sell to enterprises myself as well. I don’t consider myself as the best salesperson in the world. I consider myself more as a product entrepreneur. So, it’s kind of like, based on my, what we’ve built as a company and what my personal interest is as an entrepreneur and combine everything together, we kind of think about what’s like the best direction that is you can go in the next five years.
Andrew: At Stanford, did you guys do Harvard Business School case studies?
Weiting: I think so. Yeah.
Andrew: It feels like that. Did you like them at the time?
Weiting: I’m sorry?
Andrew: Did you like them at the time?
Weiting: Yeah, yeah.
Andrew: I loved them because it would be a situation like they tell you a story, an entrepreneur build this business, is doing well, but now he has to go to the next level, where does he go? And to puzzle through the options is one of the best most interesting parts of entrepreneurship and a business in general. All right, you know, I’m going to close out on this kind of random thing that I’m curious about with you. When you focus on your numbers, what numbers do you focus on, how do you get them organized so that you can run your team and run your business well?
Weiting: Right now we use a tool called Metabase, which is just a graphical interface that we run a bunch of SQL queries and just shows you like a bunch of beautiful graphs.
Andrew: So, what are you looking at? Are you looking at numbers like traffic to your site, are you looking at, you said, utilization of your developers? What else?
Weiting: On a daily level, like number of size of tough panels, numbers of conversions, percentage of conversions, how far away is that towards our current goals. Things like that.
Andrew: So, you’re looking even at conversions and traffic to the site. So for example, I was looking at where you get your traffic. Where is that screen? There, like share of sales, for example, seems to be sending you a lot of your traffic. You’re looking at that as a CEO, you’re aware share of sale is helping me, I want to double down on that, that’s . . .
Weiting: Yeah. The channels, we’re talking about. And on a certain day like a channel somehow, the traffic from that channel suddenly drop, they’re going to see okay, what’s going on? Is it like a bug? What’s going on?
Andrew: Okay. Why don’t I close this out by saying, first of all, thank you. I am amazed by how far you’ve come. Now that I’ve looked over the years at the evolution of your site, it’s exciting to see that you’re doing so well and to know where you’re going next. Anyone who wants to go check out your website, it’s codementor.io, codementor.io. And the two sponsors who I mentioned in this interview, the first will help you hire next amazing finance guy the way that I did. Go check them out at toptal.com/mixergy. And the second is an event that was so good. You know what? I was so eager to go back again that when they had this like charity auction thing, I said $4,000, just take the money. And the reason was I don’t even know what I get for the $4,000, but I knew it was going to come with a ticket to Fireside Conf., so I got it.
And then they emailed me the bill and they said, “Andrew, here’s what it is.” I said, “No,” I said, “4000, not 3000 in change,” and my assistant said, “Andrew, they quoted it to in Canadian dollars.” It’s good. I love Fireside so much, I paid them 4000 in U.S. dollars. That’s how much I love it. Such a great conference. If you’re looking to go, go check them out at firesideconf.com/mixergy. Apply, it’s worth the application process to get in because they let in really good people. All right, Weiting, thanks so much for doing this interview.
Weiting: Thank you so much, Andrew. Take care.
Andrew: All right. Bye-bye.
