CEO & Co-founder, Petcube
Yaroslav Azhnyuk is the CEO and Co-founder at Petcube, a company reimagining pet care, and using technology to keep people connected with their pets.
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Rohit Mittal: Hi, I'm Rohit and I’m here with Yaroslav who is the cofounder and CEO of Petcube. And I’m going to read the Petcube bio because it’s pretty long. So Petcube is a leading company that sells pet cameras to pet owners in the US primarily. Their products have been very highly rated and they have won many awards, including the prestigious Webby Award in 2017. Petcube has sold hundreds of thousands of camera and it got started in 2013 by Alex, Andre and Yaroslav. Petcube has raised more than $14 million in equity from Y Combinator, Almaz Capital, A-Ventures Capital and CABRA.VC. Did I get everything?
Yaroslav Azhnyuk: That’s right!
Rohit: Cool, welcome — thanks for talking to us! So let’s just start from your background. You are originally from Ukraine. Tell us a little bit about how it was growing up there, colleges that you went to and how they shaped your experience in being in the tech industry.
Yaroslav: Sure. Born and raised in Kiev, Ukraine which is the capital. It’s a pretty large city, about 45 million people live there, so much larger than San Francisco. You know, can’t complain — I come out of a family of scientists, so my parents are linguists, my grandparents are physicists and economics, whatever, English literature professors. So I guess that background in an important formative piece for me when I was growing up and before school, I was kind of thinking about things and parents were definitely role models for me. But I was growing up, seemed like science was a cool thing to do but in the 90s, after the collapse of the Soviet Union, the economy wasn’t in any great state in those countries in Eastern Union. So yeah, I was inspired by entrepreneurs and reading books, things like Jules Vernes and people doing something out of nothing, Robinson Crusoe — all those kind of books. So I kind of figured kind of early on I would like to create things and be an entrepreneur. And then got [ph ‘one or two’ 5:07] computers when I was probably 4 years old. Pretty lucky, it was like 1994 or 1995. And I kind of figured okay, if you create software, there is something you can create as one person and then millions of other people can use it. That’s pretty impactful, pretty cool. And yeah, went on to get my education in Applied Mathematics in Kiev Polytechnic Institute, which was co founded by Dmitry Mendeleev, by the way. Also gave folks like Igor Sikorsky, the inventor of the helicopter. So really, really good educational institution. Enjoyed my time there, really loved the math and physics and calculus, all those things — programming, one of the solid backgrounds in terms of data structures and all that kind of stuff. I started doing stuff pretty early on in parallel with my third year of university education. I started doing business and through an NGO actually to educate other people about the possibilities of social media and the internet, it’s called Internet Initiatives so that was early on when I was 18 or 17 years old. I also made a website about contemporary arts and culture, another passion of mine and started an agency to do social media marketing and website development, stuff like that. It was 2008 or something like that, it was a hard topic back then. I didn’t really like that business, sold that out to [inaudible 6:51] in Ukraine. Started to think of what’s next, so around that time met my co-founders and we started Petcube.
Rohit: Got it, and did you finish your college or did you drop out?
Yaroslav: I did finish my college. I actually was pretty bad at finishing my college, my last year or so. So basically I get my bachelors and that is four years and the masters you get another two years, and basically you have to finish your masters paper. So I was late with my masters paper for a couple of days and they would not allow me to defend it, and they told me I would have to stay for another year. So basically, all my classmates were out and I had to just wait for another year just to come and defend the very same paper that I had ready just a couple of days late. So it was whatever…
Rohit: What did you do during that year? Were you exploring business ideas?
Yaroslav: I was running like 3 things at the time. So I was running an NGO, I was running the digital advertising agency and I was running this website about contemporary arts and culture, and trying to study at the same time. It was crazy balancing those.
Rohit: That’s awesome. When you started Petcube, was in in Ukraine or did you start it in the US?
Yaroslav: So the way we started Petcube, it was actually at the end of 2012, we started the company. My cofounder, Alex — and he’s our CTO, he had a dog that was barking all the time when Alex was not at home. So he built this camera and added a laser pointer on two servo motors to play with his dog remotely and watch out for him when he’s not at home. He showed that to his friends, everyone was like well, this is really cool — I would like this thing to be on the shelves and I’d love to buy this. So we sat down, we kind of started thinking — okay, is it just a product? Or is there a way to build a business around this. And what we realized is that there is a really big market for pet care that has not seen any digital innovation, and pretty much any kind of product — the feeder you buy for your dog looks like something out of the 70s or 80s, something you plug into an outlet, but no smarts, no internet, no mobile — and also not sexy. Just grey plastic, not cool. Not something you want to have in your home. So we figured okay, there is really an opportunity to build this kind of digital first brand that would leverage all the opportunities technology gives us to help us keep connected with our pets and contribute to better lives of our pets and so on. So that was the thesis, how we started this company, we were thinking okay — if we can connect, essentially this camera is like a smartphone for your dog. It connects your dog to the internet. So if you could connect millions of dogs and cats to the internet and then build a platform on top of that, use the data to improve other third party services, then that’s really a potentially good business. And from day one — life in a big city, I’m pretty sure it’s true for every city in the world, if you live in a megapolis, if you were lucky to be born here — the further we go in time, the more similar it is between New York, Kiev, Delhi, Antananarivo, wherever you go in the world, all these big capitals. People watch the same YouTube shows, they read the same TechCrunch, if you’re in tech or something. So we were like yeah, reading TechCrunch, reading some books about the roots of the technology revolution and so on and figuring — alright, if we build this technology company that is innovative on a global level, we’ve got to be in the Bay Area, right? Because this is where the capital of innovation is. At least it was in 2012. I’m less sure about this now, there are a couple of interesting centers like China. But we figured okay, we will be there. And we figured that we have to incorporate the company and all of that. So we basically went by this classical startup route.
Rohit: So you started in Ukraine.
Yaroslav: Started in Ukraine, spent a year in Ukraine and then actually went to an accelerator in China. It was a hardware-based accelerator. So it was run by some European guys but happening in Shenzhen, to figure out how we’re going to manufacture this and then the demo day for the accelerator was here in San Francisco, and we knew that after we go through that accelerator we move here, we open office here and we start hiring people here.
Rohit: And what’s the name of the accelerator? This I find interesting.
Yaroslav: It was HAX.
Rohit: H A C K S?
Yaroslav: H A X. So until this moment, they are the world’s largest hardware-focused accelerators, and I think they are one of the world’s largest seed investors — like period. They’re invested in 100s of companies in the world today.
Rohit: And hardware-focused? Or everything.
Yaroslav: This is like a group of accelerators. There is this VC fund called SOS Ventures that stands behind that and they call themselves accelerator VCs. They own HAX which is a hardware accelerator, and they have a biotech accelerator as well. And then they have some software thing in China for China-focused companies and maybe something else.
Rohit: It’s pretty cool, I’ve never heard of them. I just wanted to touch upon how did you meet your co founder? Were you in college together or did you come together after you started Petcube?
Yaroslav: I think that’s very important and I have the most amazing cofounders, we were together from the start and we’re still together and everyone is still kicking.
Rohit: You still like each other?
Yaroslav: Yeah, we all enjoy spending time with each other and kind of managing each other. So the way we met — so there’s Andre who is the Chief Marketing Officer, Chief Design Officer, Alex who is the Chief Technology Officer and myself, I’m the CEO. Andre and I met a long, long time ago. It was 2006, so 12 years ago or even earlier, maybe 13 years ago. And we met on an online forum, those days — forums, you remember those. Not all our viewers might remember, but yeah basically we were discussing — it was the forum of a Ukrainian singer and artist and it was just a place where creative people would flock and exchange their ideas and people would post their drawings or poetry and conceptual photography. So Andre was the sickest and coolest poet I ever read. I was so in love with his poetry that I wanted to meet him in person. And back in the day, where people would meet online, they would try to go offline and meet at a spot. That’s where I met Andre for the first time and we started hanging out. At some point he switched his art to survive from poetry to visual arts, and at some point I was going into web design. And I was like “Hey, do you want to make a web design for a web site? And he was like, “Yeah sure — why not? I can design anything.” And his approach to design was always very independent in thinking and the stuff he would create, I consider that to be years ahead. And that was later on, many times, confirmed. So I really liked working with him. I can’t say I liked working with him. I liked his work! But working with him was super, super hard. It’s like you know how it is with designers and especially when you’re 18 year olds, you’re really radical in your views. It was like, look — I really don’t like this and this, how about this? And he’s like, “No we’re not doing that.” “Why?” “Because that is shit.” Okay, I’m not sure how to argue with that.
Rohit: So he was very straightforward, very honest.
Yaroslav: He was straightforward but we figured out how to work with each other. And I think that’s very important. All the people are really different, but I think you can appreciate the difference, and many times the differences between us would actually be helpful, if not life-changing for Petcube as a company. That’s how I met Andre and we worked together on that online advertising agency. And then when our agency was acquired by the biggest Ukrainian digital advertising boutique, that’s when we met Alex, the CTO. And Alex and I were also really conflicted in the early days because both Ale and I supposedly knew how to make websites. How to design them, what the layout should look like, what the user experience should look like. And apparently, our views on that were different. And when Alex would offer something, I would very publicly criticize him, which is a wrong thing to do, as I learned later. If you talk, talk in private! So we were pretty much confronted for the first months of our acquaintance. And then with time, I kind of grew very appreciative by how Alex approaches his work and how he is capable of doing multiple things with very short timelines, this kind of a hacker approach. And at some point when Alex suggested that the 3 of us come together and start this company — when we were considering this, the fact that we are really different but share some common values and a worldview — that was a really important fact. And I also think if there was only Alex and I, I would probably have not partnered but since there was Andre and I really enjoyed working with Andre, and I really enjoyed working with Andre and I had previous experience. And with Alex, I didn’t have previous experience but I respected him for other things. I felt like it would be like okay, a good balancing act. We have complimentary skills. So that’s how we started.
Rohit: So now you’ve known Alex for more than 10 years and Andre for more than 12.
Yaroslav: Yeah, Alex — probably 9 years or 10.
Rohit: That’s cool. So you got together, you started Petcube — first you went to China for the accelerator, then you moved to the US. And did you start Y Combinator right after you moved?
Yaroslav: No it took us a while. It took us maybe two years to get accepted into YC. So we only were accepted on our 4th application.
Rohit: Oh, you applied 4 times.
Rohit: Cool, but when you moved initially, how were you managing things? Because you moved presumably without any strong network, either in the Bay Area or New York or anywhere else.
Yaroslav: I had one friend in San Bruno — he allowed us to crash on his couch, we’re super grateful!
Rohit: And just to add more context, have you raised more money outside of the accelerator when you moved here?
Yaroslav: So during our time at HAX, we ran a Kickstarter campaign, and it was actually really, really funny because we were here for a couple of weeks during our demo day at HAX and our fundraising on Kickstarter just closed on those days. So I remember very vividly how the 3 of us — the three of us were here, how went to the ATM to withdraw the last $3000 and saw that we have some money to buy food, because we knew that the next day we should get the transfer from Kickstarter. So it was really tight — so one day we’re literally having 0, actually withdrawing money to buy some food.
Rohit: And you are not US citizens, so it’s not like you could max out your credit card or something like what people do. The cash that you had was the only money that you could use.
Yaroslav: And before that, we spent all of our savings.
Rohit: Yeah, you sold a company and all that stuff so you….
Yaroslav: Yeah, but it was not crazy amounts of money. It was a 5-digit amount of money. [inaudible 20:34]. So it was a fun time. I came here as a CEO and my goal was to build a network here, fundraise here and understand consumers here. And once the product is ready, to facilitate the launch and talk to the press and start building the office, and the guys — Andre and Alex were between Kiev and Shenzhen, we’re in Kiev in Ukraine and we still have a big engineering team and it’s a huge benefit, I think. Any human brand, if your home town has some highly dedicated workforce, you got engineering or design or finance or whatever it is, it’s really cool to leverage that and combine that with your global ambition and selling in global markets. I think that’s kind of the recipe for success. So engineering and design in Kiev is maybe like 5 times less expensive than it is here in the Bay Area, so this is big leverage.
Rohit: Got it. Because Andre and Alex were already in Ukraine and you were here, so that remote work culture, I’m sure crazy hours — like it’s night there, it’s day here.
Yaroslav: Yeah. Well, it’s a 10-hour difference with Kiev and 16 hours difference with Shenzhen. So pretty much, I think there is a 1 hour window in which we can connect, which is 8 AM in San Francisco, whatever it is…. 6 PM in Kiev and like 12 AM in Shenzhen. So that was when we would connect, the 3 of us and we would sync a couple of times a week. So that was a fun time. And the biggest goal here was — I was realizing okay, I’ve got to understand this country. Because I’ve never been to the US before, I was still a really young kid. I was 23 when I moved and I was like okay, the next decade of my life I’ll be definitely doing this, so I want to understand these consumers and make products for them. So how different are they? And my biggest surprise was when I was moving, my expectation was… well I had been traveling around Europe for a little bit before, so my expectation was — well, the US is probably not that much different from Europe. It’s probably the way Italy is different from Germany, the US is different from Italy. And I realized — No.
Rohit: The US is a different beast.
Yaroslav: It’s a different planet a little bit. I had an experience with China before. China is also a different planet. So I was like okay, I’ll put this in the category of different planets. And i started kind of connecting with people and learning. It’s kind of interesting because you’re not very confident, even like in the language and your understanding of reality. And you can forget about all the usual things like if you’re going out, where you live and your teens and all of that. Just the environment, it takes time to get used to. So yeah, I started going to meetups and conferences.
Rohit: So all in the Bay Area. So you landed in San Bruno, you were just not leaving the couch of your friend….
Yaroslav: Then I found other friends, and they were living in San Francisco and we figured we would share the rent. So basically, we were living in a room there, in a two-bedroom. And yeah, so we moved to San Francisco and San Francisco was the base.
Rohit: Got it, and how did you for the first two years get in touch with investors, what were those days like in terms of raising capital?
Yaroslav: It was really, really fun. I thought that since I read a lot of TechCrunch and books, I kind of know how it works. And it’s like things like that, a couple of really fun meetings — in one I came to the CES, Consumer Electronics Show in Las Vegas and had probably my first meeting with a real VC there. Like an angel investor of ours had introduced us. The guy’s from Boston. So we were talking, I introduced my company and said there is probably an opportunity for that. So we kept talking, so yeah — what are your plans, how long are you staying here for? Oh I have just moved. He’s like “Really, oh wow — cool. So have you already shipped all your stuff?” “I was like, “What stuff?” I had a shit face. And he’s like, “Oh, okay — wow!” And he smiled. I didn’t quite understand why. So it definitely shows the difference in perspectives. In Europe, when you’re a young person, there’s not much you need. You can be wherever you want. And people who have seven lives and families and all of that they view this as something for them. Moving from one city to another or across the ocean. So that was interesting, another interesting meeting was here in San Francisco. It was Stephanie Palmeri from SoftTech and I met with her in her offices, so we were speaking about business, explaining the pets and all that and at some point, she asked, “Okay, so what’s your Go To market strategy? I’m like — “Um, what?” I had no idea. This was the industry term! So that was really, really funny. And then after that, I figured — okay, I’ve got to figure out these things. That was quite embarrassing, I should have known that. So I’d rather [inaudible 26:37].
Rohit: Did you find a mentor? Were you able to find people who could guide you, who could help you learn the language of the valley and startups so you know Go To market strategy before you go to the meeting?
Yaroslav: Yes and no. So we’ve had some good market angel investors and we’ve had some [inaudible 27:02] but it’s not like finding mentors is something that we’ve been focusing on. It’s not something that fixes all your issues. Essentially you’ve got to be competent enough to ask the right questions and you’ve got to go on that path of self-education. Whatever works for you. My way was connecting with all the people from the Industry through people I know but also through going to conferences. I figured early on that meet ups were pretty much lifeless because on a meet up — since it’s usually a free-to-attend event, you have a bunch of people who have nothing to do in their lives. I don’t want to be offensive to anyone but often times I’d come there and see that people who actually have some good knowledge and are good at something rarely go to those events. And I started going more to bigger conferences, that was more meaningful although the reality is — if you are a good and a strong startup founder or if your a strong VC, or a strong professional in any area, you tend not to waste your time on these events. So in conferences, you can meet other people who are speakers who are pretty strong or in all attendees, you can meet people usually from larger corporations, people who are [inaudible 28:38] there, so to say. But still, they have really strong knowledge, strong networks and so on, but they’re not super entrepreneurial and pushing forward. Or people who are on that stage but are about to become entrepreneurs and just need to dive into some area. I met a bunch of people from all these 3 groups and the usual path would be to talk to people and try to understand what they’re interested in. If we have common interests, we maybe go out for a coffee and schedule a meeting another day in the week and then talk, I tell them about my business and ask for advice, ask what they think. And we usually ask — who are people you think I should talk to? And the good thing with people in the valley is that they’re usually really open minded, if they kind of like you, if they think you are getting something meaningful, they are happy to help. Because it’s all this pay-it-forward culture. So yeah, I was really lucky with all those people, got a bunch of connections, much of good thought, much feedback to my presentation which I would change basically everyday or every night. I went through dozens, if not hundreds of iterations. And yeah, probably trying to run the company and so on, definitely might be much more taxing, but good times.
Rohit: Yeah, I think a lot of people that are not in the valley are surprised by how much a stranger is willing to help if you set the right tone and if they think that you actually really are trying to achieve something, they can play a small part in getting you closer to your goal.
Yaroslav: Yeah, and it’s very — I would not recommend thinking of it from a sales tactics standpoint, because whenever someone has a sales-y and pushy, that is being felt and that is very off-putting. Right? Ugh, sales person… You don’t want to have anything with this person. But if you are really genuine and passionate about your idea, but also not only about your idea, you’re passionate and curious about the world and you want to learn about what this person is doing and what they’re doing, what are their challenges, and you think immediately about how you can help with your knowledge, with your network and so on — those are the kind of interactions that people in the valley really enjoy. That’s what I found. And yeah, look — so many things, when I would be going to conferences in Kiev, in my hometown, you know I had some reputation there, I was invited as a speaker, I would be speaking about social media or whatever, I know some people. Usually when you go somewhere, you know a bunch of people there and they introduce you to other people and that’s easy. Here you come into a new city, you don’t know anyone. So you need some hacks to — how do you start conversations? So I would actually list a number of things. A number of conversation starters like, “How do you like that speech?” Or “What brings you here? What do you do?” “Or where is the coffee here?” Or “Hey, nice shoes!” So all of those things might be pretty much obvious for someone who is a natural salesperson or a good communicator or whatever. Not as natural for me, so I had to stop and actually think, what are ways to start a conversation with a stranger that are not creepy and not weird. So I came up with a list of those things and those were some of the things I was doing. Another thing we discussed previously, so I have this hobby, I dance.
Rohit: Yes, Lindy Hop.
Yaroslav: Yeah, swing dancing. So it’s like these social dances like Salsa or Tango or you know, you go to a club or jazz music and whoever is there is usually a dancer — do you like to dance? And we dance, and it starts a conversation, it’s really cool. And so I started dancing in Ukraine, I was dancing for a couple of years, it was pretty good. And I was traveling around Europe and competing and all that.
Rohit: You also won competitions!
Yaroslav: I won some competitions, yeah. So I came here i was like of course I want to go swing dance, not only because I want to network there. I want to dance. And I went to one of those parties. Actually the first money I ever made in the US was through dancing. It’s really funny. I went to a party and then this guy comes to me and we have this gig a couple of weeks from now and we need a leader, we need a guy. You seem to be good. If you dance, we’ll pay. I’m like — sure!
Rohit: It’s so funny, I kind of figure out like Airbnb guy did some hacks for initial money, you went dancing and you won competitions! [inaudible 33:55] I think that’s the first time I heard someone’s first money as a startup founder is through a dancing competition.
Yaroslav: Yeah, it’s pretty unique, I agree. I met a bunch of really good people there. I don’t think that there was anything that resulted in anything professional-related. But you’re not focusing — why focus on just professional-related? Your goal in your new city is to get accustomed to it. Get a feel, get an understanding of people. So I think that [inaudible 34:32] understanding this place.
Rohit: Cool, so those two years you spent, you participate in dance competitions, so you won a lot of money.
Yaroslav: Not a lot of money.
Rohit: A little bit of money. And now you’ve applied to YC and you got in.
Yaroslav: You know, even before — when we applied to YC, we already were making $2 million in revenue, we had like 30 people on the team, we raised about $4 million in venture funding. So we were accepted into YC at a pretty late stage, later than a medium company, I guess.
Rohit: Okay, and the money that you raised was all, or mostly in the US — the $4 million?
Yaroslav: It was all around the world, it was both in the US and in Ukraine and Europe.
Rohit: And how is the team divided back when you were 30 people and now — I don’t know how many people you are. Like how do you manage the team between the US and Ukraine and how does Andre and Alex sort of spend time between yourself and…
Yaroslav: Yeah, that’s a good question. So sales and marketing is here. Maybe some of performance market is in Ukraine. Design team is in Ukraine as well. All the engineering is in Ukraine. All the operations, finances are in Ukraine. Some of the customer support for the second line is in Ukraine. The first line is in the Philippines. And then the manufacturing-related part is in China. So it’s all kind of wherever it makes sense.
Rohit: And in the US, you only have offices in San Francisco?
Yaroslav: Only in San Francisco, yeah. So that’s I guess, how we manage. Just because it’s in the company’s DNA to be able to work across the timezones. It’s pretty easy. You know people travel time to time to see each other and so on. But it’s usually — every manager has weekly 1-on-1s with everyone on their team, plus in every team there is a weekly sync. So for example, I’m a CEO, I manage the team of top executives and we’re like 6 people on that team. So we would have 1 call per week where everyone goes in 5 minutes through what’s going on on their team, on their direction and what they’re planning to do in the next week. And this way, everyone gets a view across the company of what’s going on. And then I have a 1-on-1 with each person on that team every week so we have time to speak about the challenges we have and the goals and so on, [inaudible 37:25] get feedback, ask questions and so on. And then direct ad hoc, things calls, whenever they are need or sometimes it might be departmental scheduled calls once every week or once every two weeks. And once a month we have all hands, where we basically connect both offices and we can talk. And that works pretty well for us.
Rohit: Are you open to talk about what visas you guys were on initially and what’s your current status now, are you a green card holder?
Yaroslav: Yeah. It’s O1.
Rohit: O1, okay. So let’s talk about when you moved to the US, applying to visas earlier on and then overtime, how you’ve changed, how you’ve navigated the visa situation to do a company in the US and yeah, and then slowly we will move on to your advice to other founders, especially immigrant founders who are moving to the US and are wanting to start companies, so interns of fundraising tips and stuff like that. How many people are you now?
Yaroslav: Below 100.
Rohit: Okay. Cool, so 1-on-1s and [inaudible 39:03] So that works well.
Yaroslav: Well there are much bigger companies that are completely distributed, even without offices…
Rohit: Yeah, GitLab is another one. That’s a much bigger company.
Yaroslav: Actually GitLab — one of the founders is from Ukraine.
Rohit: Oh, interesting. So must have a team in Ukraine too. So when you moved here back in 2013/2014, how did you navigate the initial visa situation — what visa did you get on?
Yaroslav: The easiest visa to get was B1/B2, that’s a visa that allows you stay for about half a year. It does not allow you to work, but it allows you to work in a Ukrainian company while, you know [inaudible 39:58] So that’s what we used, and then we used a hack — then we basically went to — I had to go to student visa. The reason why we did that, I think we did not have money to hire a lawyer to do the O1. So I made a decision, I’ll be just like a student here and I applied for the cheapest English language school I could find where I would go for a couple of classes per week and being here on a student whatever, it was J something, J1.
Rohit: J1, yeah.
Yaroslav: So I got that. Maybe there was some other reason, I don’t remember. Because I remember a lawyer was involved int hat. So I got that, I could stay here for longer. And then the next goal was to get an O1. So I returned to Ukraine to do that, got my O1 and got back here. Since that time, I’m on O1. And O1, I think is a good solution if you are a startup founder, it’s a pretty easy way to get it. It will cost you maybe $4000 in legal fees, but then you can get it. And all the founders got it and since then we are on that visa.
Rohit: And essentially how long have you been on O1? The past 5 years?
Yaroslav: About that. 4 or 5 years. So they usually give it to you for 3 years and then you have to renew it.
Rohit: And Petcube, the company that you work for has to file it. So the visa is also associated with the company. It’s not like you can do anything, kind of…
Yaroslav: Yes. So for example, if you need to start working for another company, then there is some process there, I’m not sure.
Rohit: Yeah so you actually have to just transfer the other one and it’s a new application. We did the same thing, we were on H1Bs and then we…
Yaroslav: H1Bs actually, you have to win those.
Rohit: You win the lottery. We won the lottery and when I applied for H1B, my chances were 1 in 4, so I was crying. I wasn’t sure if I am going to stay in the US and that is when I was working for a company called PopSugar, so I got my H1B and when we applied for O1, we did it in premium and we got that in I think 4 days. Yeah we did that after YC, after we got into YC. Then we applied for…
Yaroslav: Gave you the confidence!
Rohit: Yeah, otherwise — because we can’t do a company on H1B, you can’t stay jobless… if you are jobless you can’t be on H1B. So there were a lot of issues that we have to navigate to. And we, I don’t know about you being interested in learning specifically about this issue, some people when we went to raise money from them were like, “You’re on H1B — we will only give you money if you are working on it full-time.” And we couldn’t work on it full-time because we didn’t have the right type of visa. So it was a catch-22 situation for many months for us. And that’s kind of a different dimension of risk that immigrant founders especially face because people are not sure if they are going to stay in the US, could stay in the US to start a company.
Yaroslav: That’s right.
Rohit: Cool, so you’ve been doing it now for 7 or so years.
Yaroslav: 7-ish years.
Rohit: And when you moved from another country, started completely fresh — what kind of advice would you give to other potential founders or people thinking about companies who are especially immigrants and thinking of navigating this big tech world?
Yaroslav: Yeah, advice about…
Rohit: Starting a company, finding…
Yaroslav: Should you start a company or not? You should not.
Rohit: We are assuming people want to start companies.
Yaroslav: If you are asking that question, you shouldn’t.
Rohit: Totally, you are in a world of pain otherwise. But let’s say people want to start companies but they don’t know where to start. They have no background in starting companies, they have no network. How do they think about it, what kind of first steps they can take towards that…
Yaroslav: I think basically, anything — a good idea would be to talk to someone who has done that before. So talking to other entrepreneurs really helps. And talking to someone who went through a path that you’re about to go really helps. So maybe for some people watching this conversation, it’s something kind of like talking to…. I’m trying to imagine all the question that people would ask. Whenever I talk to aspiring entrepreneurs, I meet these people all the time. Usually scattered between [inaudible 45:31] this is my day of advice, so whatever it is. Sometimes the best advice I can give them is — we think, what is the company I want to start. So if someone got a niche to start a company, it’s most likely they will start it. But they still have a chance to choose what kind of company they’re going to start, where — and some ideas are just much better than the others. And not even ideas, I should say some spaces, some markets are much better than the others. And if somebody comes to me with an idea and I know that there’s a lot of stuff being done and there’s a crazy war going on — lots of big companies with a lot of money struggling really hard to do something — going into that war is pretty much a disaster. And I would not recommend you do that. But I could try guiding the entrepreneur to where there’s not as much competition, where there’s not much innovation, where you make a difference and you’re contributing and where you can see the path and where your expertise are and so on. So thinking hard about what kind of company you want to start and where will you actually have good chances and where it will actually be meaningful and something that you will enjoy doing, I think that’s a really important thing that every entrepreneur should do. And then, if your decision is to move to the US from other countries, then why would somebody be doing that? Probably because their market is here, or because unique talent is here. But some people will do this because they want to move to the US. I’ve met people like that. So those are all different reasons. Like someone wants to live in the US and then moves to New York and realizes it’s really cold in the winter. So we try to do it in a phase approach. You come, you try, you start, you see [inaudible 47:58] and you move from there.
Rohit: What are your thoughts on working at a growing startup. Still young enough but growing startup before you actually jump in and start a company? Do you suggest people do that so they get a sense of what it is like and it’s not just writing code. People don’t realize a lot of it is sales….
Yaroslav: Lots of things they have never thought of. They have never imagine, never done, and maybe they are not good at. They’ll have to learn a ton of new things. So when we were starting a company, for us — we sat down with my co founders and we discussed the values. Why are we going to do this? And one is kind of very ego-driven when you make a change to the world and you make something that millions of other people use, you in some ways improve their lives, that is very satisfying. Especially for us, we work with physical products and with pets, there is lots of passion and love and all of that. So that was kind of one thing. Another big thing for us was early on, we thought that we would most likely not succeed because basically most of the startups do not succeed, we never had any experience with hardware, we never had any experience with consumer products, we never had any experience with the American market, we never raised any VC money before and we were 3 23 year old dudes from Ukraine. So based on that we estimated the chances of us succeeding are less than 50%.
Rohit: 50%! You all are generous.
Yaroslav: That’s what I’m saying, most likely we will not succeed. If that would be higher than 50%, we would likely be more likely to succeed — definitely I would say below 10%. Anyhow, our thinking was at least we’ll learn a lot. So the passion for learning things and trying to make it happen was a big driving factor for us. Sorry, what was your question again?
Rohit: Essentially things that founders should think about before they jump into starting companies.
Yaroslav: So for us, we’ve learned a lot. That was a good motivating factor, I guess. And then —
Rohit: Yeah, pick the right cofounders, I think. You should know the people. Don’t just not meet someone in person and then decide to start a company with them.
Yaroslav: That would be riskier, I think.
Rohit: Yeah, that reduces your chances of success even lower than 50%.
Yaroslav: Hey, look — you’ve got to work on that. So there’s this really nice story of us being close to closing the company after maybe half a year of working on it. Still in Kiev and we were really struggling to find a factory or manufacturing advice and we were kind of fooled by a couple of people who said they would provide their services and… just assholes. So we were really sad about those experiences and Alex and I were kind of heartbroken and we’d meet in this cafe and Alex and I would start talking about how it looks like this is a really difficult task and it looks like it will not work out, and it’s more difficult than we can handle and we probably should stop. And Andre, it was after new years, Andre was just looking at us and was just silent. He was like, “Are you guys crazy?” And he pulls out a business card holder out of his pocket which is shaped as our logo, it’s a hexagon made out of leather and it has the Hexagon-shaped business cards, it’s really a beautiful piece of design and he said I hand-sewed 6 of these, so only top executives of the company have them and now you say we can’t do this? And when he put that on the table, immediately the room had changed its color and we were like, “Yeah, we’re going to do this — Yes!” So that was a really good example of how the differences within the founders and the team basically saved the company. Really, no kidding. If that didn’t happen we would just close the company right there. If Andre would have said, “Yeah guys, you are right.” But only because he was an independent thinker and Alex and I would have computer science backgrounds, Andre would be kind of passionate and kind of design and poet and liberal arts education. He saw things differently and that’s why the company exists. And many stories like that have happened throughout our history.
Rohit: That’s pretty cool, any last things you want…
Yaroslav: In terms of advice for new founders who are coming out here, I think you’ve got to be really passionate about what you do in careers and all of that, but do your homework and definitely, if you’re just starting a company — if you think this is a good way to make money, everyone says it’s a bad way, I can confirm. This is one of the least efficient ways if you basically calculate the mathematical expectation of the amount of money you’re going to make — the probability that you will make something on whatever you make, you will end up with a pretty small amount so you probably be better of doing something else. But if you have a drive to make something that other people enjoy and if you’re genuinely curious about learning, and you will be challenged by the fact that you not only need to cope, but you need to learn how to do market research and understand what your consumers want and understand how to speak to consumers and how to sell, how to talk to investors and how to work with financials and to know what a P&L is what the GAP is and figure out HR and figure out how you’re going to retain your best employees, and figure out what leadership is. And all of those things. If you feel passionate about that, not so much maybe passionate — but just [inaudible 55:14] itself — then it’s probably the right world because you will learn a lot, you will probably become more interesting, a more diverse person. You will meet super interesting people on your way. So yeah, it’s definitely worth it. I think for immigrants, my definition for strategy is strategy is about how do you win using your unique advantage. Any kind of strategy, be it a sports game, be it a war, or be it a [inaudible 55:49] or a company strategy. So as immigrants, every person comes with their own background. So your strength is always in your background, in the way that you are different from the others. And I think there’s lots of opportunity in today’s world given all the development of communication methods and the common culture field we have created through Facebook and YouTube and so on, there’s lot of opportunity to do really high quality products in local markets but sell them globally and first of all digital and technological products, software and so on. And if you do that, your cost of production is much lower than if you have a full team here in the states. And your revenues or the amounts of capital that’s available for you are on a global scale, so you have an advantage there. And the challenge is usually on the product side. So if you are selling to the US consumer or Chinese consumer or any kind of consumer from a big market where you were not raised and you don’t really know those consumers, being very intimately close to those consumers and having that product manager or product owner field is super important, super important for the CEO of any company. It’s not replaceable, it’s not like oh, we will hire a VP of product and he will fix it for us. No, never CEO’s is always the main product person. So that’s one there. That’s what I would focus on for sure. And usually people within local markets have, I would say — from my experience, they really can be amazing product managers. [inaudible 58:05] So you’re going to spend time to understand your consumer and [inaudible 58:09] So that, I guess — those are some points.
Rohit: Cool, yes — thank you for the pretty specific and actionable advice that people can use. So thanks for talking to us and best of luck for the future!
Yaroslav: Sure. My pleasure, best of luck for anyone starting new companies.
Rohit: Yeah, thanks guys. Bye!
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