UrbanSitter's Lynn Perkins on How to Scale a Startup

Lynn Perkins of UrbanSitter - Podcast Transcript

Scott Orn:	Welcome to the Founders and Friends Podcast with Scott Orn at Kruze Consulting. As part of our continued rebrand, we’re re-releasing a best-of series, our previous podcast. This is one of my all-time favorites. Lynn Perkins from UrbanSitter. She is just fantastic. Tons of actionable advice here and lots of good stories from her boardroom. Lynn was such a pleasure and she’s a friend outside of the podcast. So thanks for coming on Lynn and the hope the audience, I hope you guys really enjoy this. Talk to you soon. Welcome to Lynn Perkins of UrbanSitter. So glad to have you.
Lynn Perkins:	Thanks for having me.
Scott Orn:	So how’s your day going? What’s going on?
Lynn Perkins:	So far it’s going great. I’m enjoying the nice San Francisco weather and wishing we were doing this outside.
Scott Orn:	Oh that would be a technical challenge though. Maybe I’ll look into that for next week. So UrbanSitter, one of my favorite companies, I met you a long time ago right? When you’re getting off the ground. You started it with my friend Andrea Barrett. Just tell us like how you started the company. Like how you had the idea.
Lynn Perkins:	Well it came to me. I’d taken some time off after my previous job and it was the first time since I had kids that I had actually connected with the parent community and I found it fascinating that moms would use their mothers group or their online LISTSERV to find recommendations for everything from child care to vacation spots and types of cars they should buy. And at the same time, I saw a lot of online businesses using social recommendations to show you what products you might like. And I felt like if there’s ever a service or a product where I wanted a friend’s recommendation, it was in the child care space.
Scott Orn:	That makes so much sense. It was kind of like unstructured, right? Like people would just go on like the Golden Gates Mothers Club online or it was never like in a structured way though I feel like.
Lynn Perkins:	Exactly. I might go to Golden Gate Mothers Group which is a local group of thousands of moms and one person might recommend a nanny and then I might go to my Noe Valley Moms LISTSERV and find somebody and I found it fascinating that people were never going to know that person in the group and yet for some reason, because that person was part of the same group they belong to, it felt more trusted than meeting somebody that was a total stranger.
Scott Orn:	Totally. And this is like the early days of Facebook Connect, right? This is like … was Facebook Connect even out? Where was that?
Lynn Perkins:	It was out. It was pretty early on and Andrea, my co-founder and I decided to take a risk by using Facebook connect as the way that you had to sign-up for UrbanSitter from the get-go. And we knew this would potentially limit sort of like the traffic from top of funnel to signup but we also knew that the real value in the product was going to be in this connection component and it’s proven to be one of the best aspects of our business.
Scott Orn:	Yeah because I remember like I remember seeing the demo or like the concept, like the concept stuff and I was like, oh wow. This is like one of the first cool applications that Facebook Connect had seen. And I don’t think I really … like I’d seen companies that were spending money on Facebook and like you know, getting viable growth but I don’t think I’d seen anyone like use Connect the way you guys were using it.
Lynn Perkins:	Thanks. We now have LinkedIn as well.
Scott Orn:	Oh wow. Now I do remember a young, very handsome investor guy talking to you and being like, I don’t know. I’m talking about myself by the way, audience. It’s okay to laugh. And so I’ve never been like oh, I don’t know if this is going to work because I’ve been told by all my married friends with kids that no one shares babysitters.
Lynn Perkins:	It’s true. And in the very beginning of UrbanSitter, parents had that fear. Why would I want my friends to see which babysitters I’ve used? And very quickly parents realized that oh, aha! Not only do I have my one sitter but I also get all of her friends to babysit and I get all my friends’ sitters. And so you know, you might have three sitters that are your favorites but it doesn’t necessarily mean that they’re going to be available when you need them. So you really need access to a wider pool of sitters that are equally qualified and ideally connected to either of your favorite sitter or one of your friends.
Scott Orn:	I remember you telling me that. It was one of those moments where it was like hard to get in my head. I was like, oh I don’t know. But I’m so glad you didn’t listen to dumb me and you actually like went out and did it.
Lynn Perkins:	One of my proudest moments was when one of my friends who’s like the uber connector, I told her about UrbanSitter and she said, I would never need it. I have six sitters. They’re always available and then before we’d even launched, we are in sort of like a private I would even call it like an alpha. She texted me one day and said, can I use your service? My sitters aren’t available. And she’s become one of the biggest offline tell-her-friends-about-it advocates.
Scott Orn:	Oh that’s awesome. What markets are you guys in? San Francisco’s our home market and I’ve seen you guys grow up inside of San Francisco. Have you expanded? Or where are you?
Lynn Perkins:	We have. We started in San Francisco but we’re technically in 60 cities now.
Scott Orn:	Oh my gosh. No way.
Lynn Perkins:	Yeah. We focus on 10 markets though and next to San Francisco I would say they’re the big ones that you can imagine. So New York, Chicago, LA, DC.
Scott Orn:	What have you seen like … so let me take a step back. What did you … I think you were pretty smart about like making sure it worked in San Francisco. Like what did you figure out? Because I think there’s a lot of entrepreneurs out there who are building marketplace companies who can actually learn a lot from UrbanSitter.
Lynn Perkins:	It’s true. I think with a marketplace business, you are either going after verticals so types of services you’re offering or in our case you’re going location by location. And credit to my other co-founder, Daisy Downs for creating a playbook from the get-go. So that when we went from San Francisco to New York, we had a playbook of what had worked here and we’ve had to modify it slightly by market but for the most part it works and we have an 8-week rollout where we can go in and build brand credibility through the people that we partner with so these would be the moms groups in New York or the Stocker Club in Chicago. And when we go into a new market, we don’t really have any brand credibility. So we look to these partners or these affiliations that we build on our site to help give us that credibility.
Scott Orn:	That’s super smart. So you kind of have like … you know to reach out to the equivalent of the Golden Gate Mothers Club, whatever that LA thing might be. It might be the Stocker Moms Club or the Stocker Dads Club or whatever it is but there’s some groups for you to reach out to.
Lynn Perkins:	Exactly. And then on the sitter side, every market has sort of the repeat part which is the college students, recent grads and then each market has its quirks. So for instance, it’s not uncommon to see sitters in New York that are trying to make it on Broadway or in LA, they’re trying to make it in Hollywood and they have flexibility in their schedules and they’re recent college grads and perfect for what we’re looking for.
Scott Orn:	That’s amazing. I mean I would say this about Uber and I think UrbanSitter because I didn’t do much babysitting but my fiancé did and like this would’ve been how we would’ve put ourselves through college. You know, like I worked at a job making like $6 an hour in college when I could’ve been making $15 or $20. I don’t even know what babysitters make these days but something substantially more than what I made.
Lynn Perkins:	It’s true. And they … I hear great stories from parents about meeting wonderful sitters but when a sitter comes to you and says, because of UrbanSitter I was able to help my parents with tuition or buy my first car, it’s really inspiring.
Scott Orn:	That’s awesome. What was your second market? Was it LA?
Lynn Perkins:	I was trying to remember that the other day. It was either San Diego, New York or Chicago. I think it was Chicago actually.
Scott Orn:	Did you have … I’m kind of putting myself in your position like did you have like a ton of anxiety going into the second market? Because like you knew it was working in San Francisco. Were you like oh my gosh, what if this doesn’t work? What were you thinking? What’s going through your head?
Lynn Perkins:	I was a little nervous. But we made sure that we had a really high quality supply side before we launched. So for us, it’s not necessarily about quantity. We don’t need a lot of sitters in a market to get going. We actually just need an incredibly high quality group of sitters that are connected to each other. So those connections are key. So we would never just go to LA and say okay, we’re rolling out in LA. Instead we would say, we’re going to focus on the West Side and specifically from we’re going to focus on Santa Monica, Pacific Palisades, Brentwood and we’re going to focus on UCLA to Pepperdine to Loyola. And we’ll get sitters from those places and parents from that area. And then it’ll grow after that.
Scott Orn:	Did you build like a queue or did you have like soft promises that people would signup? How did you do it? Or did you actually on-board them and then …
Lynn Perkins:	The sitter side, we would on-board a quantity of them. A small quantity to get them going and then once they had been reviewed by people we knew in the area or parents that were in our sort of early tester group, then from there, it would really just take off.
Scott Orn:	Wow. Now you did something early on which flies in the face of what everyone will tell you what to do when you’re starting a startup because you’re like a business person. You’re not like a technical computer scientist or anything like that. What did you do that everyone told you not to do?
Lynn Perkins:	The biggest issue our early investors had with our business was that we outsource our technology. I should say one of my co-founders is technical and he led a team of people that were not part of our company and our investors absolutely hated this.
Scott Orn:	So like how did you get them over the hump? Like because I’ve heard so much people always say like oh no, no, no. Only start with technical co-founders. And that is kind of like Silicon Valley’s playbook. But there’s all these super smart business people like you and I would … I don’t know if I’m super smart but I put myself in that category who like want to do something, have a really cool vision for the future but it’s hard to recruit a technical co-founder and like I feel like you’re better off going forward and being scrappy and building something than spending 6 months finding the right person.
Lynn Perkins:	And the technical co-founder that we had, he was great and because I had trust in him since I’d known him for a long time, I trusted him to bring in consultants that could get the job done for us. And as a result, we were able to do mobile much faster. We were able to add payment much sooner. I think had we looked to hire each of those skills in-house, it would’ve taken us longer. And so instead, what we had was the ability to once the business had taken off and we’d actually sort of had like proof of concept, then we could hire in to replace the skills that those consultants had one by one and it allowed us to really pick better talent and take our time.
Scott Orn:	Was there ever a moment where you like had to look someone in the eye and sell them … like one of your investors sell them on this and be like, no. This is how we’re doing it.
Lynn Perkins:	Oh every Board meeting. I almost just decided to put it … I feel like it should’ve just been in like the administration topics at the end like …
Scott Orn:	Just like Slide 4?
Lynn Perkins:	Okay, investors, tell Lynn that you don’t like how this is going with … that you don’t like the contractor idea. Lynn, tell the investors and we’ll revisit it next time. And that was kind of how it went for a while.
Scott Orn:	Oh my God. I love it. I love it. Now you mentioned … so Andrea Barrett is a friend of ours and she’s like the … what’s her title and what does she do there?
Lynn Perkins:	She’s VP of Products. So my co-founders have very different skills and that was something I learned having started other companies that this time I wanted to found this company with people whose skills complemented mine rather than overlap. Also I don’t really have a lot of outside skills. So Andrea runs product. Daisy does marketing and Hadar who was our original technical co-founder led technology.
Scott Orn:	Oh. Now talk about like I think it was probably a super team effort but I feel like UrbanSitter was one of the best companies at PR. I feel like you projected you were a bigger company than you really were for a really long time. That’s a huge compliment.
Lynn Perkins:	And today perhaps as well. Isn’t that always the goal?
Scott Orn:	Like did you sit around … like how did you guys come up with that? And I love this concept of the playbook maybe you can explain that a little bit.
Lynn Perkins:	I will. So the playbook is kind of separate. On the PR front, I think one of the things we did well was we worked with a woman who had previously been at a big firm but was now out on her own. And so we are able to get more. We could put more … get more time for the dollars we had to spend and some things that she’s really done well for us is number 1, we really leveraged the infographic because we’re transaction-based, we get a lot of interesting data from parents and sitters. So we were able to offer this expert data on rates and times that parents were spending out. Things like that. So the infographic really worked in our favor.
Scott Orn:	I’ve seen that. Like I’ve seen the like average babysitter salaries across the country.
Lynn Perkins:	Right and it gets picked up by everyone from CNN to the Today Show. We’re also … she kind of looked at what our strengths were where we have a lot of female founders so we can get press in that side. This on-demand economy. We serve both the parents and the sitters who are looking for flexibility. So we have that story angle as well. On the lifestyle front, the parent-sitter component … family publications are often writing about child care. So we sort of honed in on four areas and then we also looked at times of the year when news was at a ball. And so being able to have stories ready when it’s not necessarily a busy news time is really helpful.
Scott Orn:	That’s super smart.
Lynn Perkins:	And then on the playbook, what we’ve done is we have sort of an 8-week plan where we know okay, week 1, we go into a market. We find the person who’s uber connected to the net market and they help us figure out what affiliations we need. At the same time that we’re trying to partner with those groups, we’re also recruiting the top sitters from the college in the area. Week 4 might look like getting very hyper connected parents to meet with us and learn about the company and review some of the sitters we’d met and then it goes from there. So as the playbook expands, it becomes less grassroots. Meeting people 101 and then eventually moves into something that’s much more online acquisition focused.
Scott Orn:	Do you ever like cross-pollinate people from like one market to the other?
Lynn Perkins:	Oh absolutely. It’s one of the best things about our supply side and now more recently very noticeable. So I’ll give you an example. So I try to meet sitters in every market when I travel for work and there were a few sitters I met in New York that I thought were just amazing. And recently I noticed that one of those New York sitters who had become a top sitter in New York had moved to San Francisco and what’s nice about it is that she could take her track record with her. So her …
Scott Orn:	Oh because the rating system was totally portable.
Lynn Perkins:	Right. So on you know, when she moved to San Francisco, all of a sudden there she was, a sitter with 20 repeat families.
Scott Orn:	Oh my gosh. Yeah.
Lynn Perkins:	35-star reviews and she was able to get jobs here within days.
Scott Orn:	That’s amazing. Now you guys are all … you, Daisy and Andrea all have … you kind of like embody the company, right? Like you’re all women with kids which that was one of the first … I was like, you know I love you. You’re like one of my favorite people. You get after it which I love. Which is a huge compliment. But I also thought like it was so cool that you embody the company like but on the flipside of that, did you guys ever have like any of those dark nights where like you all have kids and you’re like, oh my God. Our kids are going crazy at home. We got like … how do you cope with that?
Lynn Perkins:	Well first of all, I would say that not only did I start this business because I felt there was a huge opportunity. Let’s be honest. It’s kind of selfserving. So on those dark nights, I would book a sitter for the next day to give myself a break.
Scott Orn:	That’s super smart.
Lynn Perkins:	The good news is, I would say that you are always juggling career and work and luckily because there are three of us, we seem to have our ups and downs at different times. So for instance, I actually had a child during this run of UrbanSitter. And I had to take … I took maternity leave for a period of time and then right after that one, my other co-founders had a child and we’ve been able to make it work and I feel like one of the things that I always encourage parents to consider is working at a startup because yes I work crazy hours but at the same time, my kids are asleep by 7:30. So I can go home for dinner and then I’m working again at 7:30.
Scott Orn:	Yeah.
Lynn Perkins:	And really I think like startups should hire more parents because parents don’t really have a life outside of their … I mean hopefully they do and they’re using UrbanSitter to support that. But when they don’t, and they’re working, comes 7:00 at night, 8:00 at night when your kids are asleep, you’ve got sort of a captive audience versus the young dating engineers.
Scott Orn:	You’re not like going to a club or anything like that.
Lynn Perkins:	No. Hopefully on the weekends when you’re using your UrbanSitter. But what’s even more frightening is then you realize you’re old because you come home and you’re really excited because you’ve actually been at two places in one night and then your UrbanSitter like puts on her fancy shoes and goes out and you’re like putting on your pyjamas.
Scott Orn:	So I ask that question because my Mom was an entrepreneur herself and she had a partner who’s a woman as well. I think you said it perfectly like they kind of covered for each other. And I still have my fondest memories of my Mom’s partner where her name’s Gail was when I would be sick and she would come over and bring me a toy or something like that as a kid. I think it’s really cool. And you guys are all friends. Like you hang out outside of work. I think it’s just a really special dynamic you guys have there.
Lynn Perkins:	It’s fun. Yeah. I like it.
Scott Orn:	That’s amazing. Now where are you … where is the company going? Like because this is what 3 or 4 years into it now? It feels like you’re on this really nice growth. I’m super fired up for you.
Lynn Perkins:	We’re 4 years into it. We’re definitely seeing growth in our biggest markets where we’ve focused the majority of our marketing dollars. We’re also starting to see other use cases. So we have people coming to UrbanSitter to find their nanny. One common use would be oh, my kid goes to the Mandarin Immersion School and I don’t speak Mandarin. Wow. You have these sitters that do. I’m going to hire one to come and work with my child. And we definitely see that as people stay on the platform. They use it more frequently and so the use increases as they’ve been with us for a longer period of time.
Scott Orn:	So it sounds like if I were to put that into like math investor terms, your lifetime value of a customer is really really high.
Lynn Perkins:	Our lifetime value of our customer is high. I mean imagine you find UrbanSitter when your child is 6 months old and you need some type of child care until they’re at least 10 or 11 or if you have crazy boys like me, maybe like 12 or 13.
Scott Orn:	Off-mic, Lynn had just told me a story about her two … both her boys breaking their nose separately within a month of each other. So yes they are crazy boys. Oh my gosh. So that means … so if you have a really big lifetime value of customers, I mean you can spend like pretty aggressively on marketing like how do you trade off like being aggressive about growth but also being responsive of how much money you raise and you know, how much preferences you have in a company and things like that?
Lynn Perkins:	Well, we definitely set goals for ourselves. I did this at my last company too where I said, okay, with the seed money, this is what I want to prove out. And if I can prove this out, then I think this company should be able to raise and support an A. And then the same thing happened for the B. And so for us, it was really important to say, okay, in San Francisco, our original market, we want to be able to look at our customers and say, we’re profitable on those customers by month 3, month 4. Whatever it might be that we set the target as. And we use that as a benchmark and said, when our business gets there, then we know we can take that and support growth in other markets as well. And so we’re all … I mean one thing I would say, we’re all very different but we’re all very sort of quant-focused and our company in general has this culture of being very goals and number driven and we’re very transparent about that. And so I think even new employees understand like what we’re striving to and how you need to be able to support the actions on whether it’s how you spend your time or your money looking at the outcome.
Scott Orn:	Yeah. There’s a ton of nuggets in there. So I feel like I’m just going to record that and like hit play for entrepreneurs that I talk to. One of the things that I picked up was like you have a 3 or 4-month payback. That’s insane. That’s awesome. Like how did you …
Lynn Perkins:	Not in all of our markets. Let’s be clear. In our original market, let’s get to that. And once we know that we can get to it here and we believe it’s replicable, we tried some other markets where we use the same tactics and applied the same amount of marketing dollars in those markets. And we also learned quickly that hey, for us, don’t go spend money in 20 markets. Focus, double down in the markets where you’re seeing growth because actually, as your brand awareness increases, more of your traffic will come to you directly. You’ll spend less per acquisition and you’ll start to see the values of scaling in terms of it’d be more viral.
Scott Orn:	Totally. And then I think the other thing, the macro thing you said which I love is like, you basically are looking at milestones. Like you raise money on a specific milestone and it seems like that’s clearly communicated between you, the investors and the team. Like that’s gold. That’s like what a CEO should do.
Lynn Perkins:	And we do it through the whole company. So we have our 2015 goals that the executive team buys into. Those should translate into department goals which you as an individual, I hope that within 90 days of you starting at UrbanSitter you have your … you understand that what you’re doing is contributing to those goals and how you’re looking at improving those metrics.
Scott Orn:	That’s super interesting. Can you talk a little bit about that? Because that’s … that’s not something I hear almost ever. Like that’s a pretty unique … I think that’s really good management. Like …
Lynn Perkins:	Well I actually have to give credit to a couple of years ago we hired Jessica Steel who had been at Pandora. She’s now part of our Executive team and my partner in crime and she brought with her a really great discipline in terms of setting goals and then since then, our new VP of Engineering kind of laid that out into the sort of OKR philosophy and we’ve modified it to fit our company and I’m making it sound like we’re this like stodgy numbers-driven organization and I really encourage like creativity within that like how we get to those results. I hope that people are testing and failing and testing and failing. And as we see those successes, obviously doubling down on them. But I think having that framework, like you need that framework to even … one of the biggest problems as a startup is you have limited resources and a lot you want to do. So creating a framework that then lets people figure out okay, those are the priorities. What am I going to do creatively within that framework is actually in my opinion better.
Scott Orn:	And just getting people to buy into that is really amazing. I mean that’s why you guys are so successful company. That’s really cool. Now, unfortunately I apologize. We got to wrap up. This is kind of a … we were chitchatting so much before because we’re friends and it’s fun to talk that I don’t think we left quite enough time for the podcast. But we’ll fix that. Lynn will come back. What’s like your … like there’s all these budding entrepreneurs out there who listen to this and like you were one of them. You started a couple of companies but this is like your big, potentially a big win. Like a life-changing company that’s going to stay with you for the rest of your life. Like what do you say to those people? Like how do you help them get going? Like is there one piece of advice that really helped you or is there one action you took early on that just made all the difference for you?
Lynn Perkins:	It’s something that you and I had talked about that I would say is like I think the early investors you get are incredibly important and finding people who are your early investors that really get your business and making sure that when you bring them on as investors, that you say to them, this is what I’m striving to do with this money. Like do you and I both agree that if I hit this outcome that means success? And having those people who have your vision and being really clear like make sure that they’re not just nodding. They’re like okay, yes. I understand that when you say growth you mean this. Yes we agree. But getting investors that are supportive and have been through it themselves before and not just at bigger companies but specifically at the stage that you’re at, that’s been really helpful for us and whether it’s to people who are starting the company that are looking for funding or just finding advisors, like looking for advisors that have been in the place where you are right now and have grown something, I think that those type of people can be the most helpful.
Scott Orn:	That’s amazing advice. Agreeing on a milestone, making sure on the same wavelength. And by the way, you love your investors. I tell you this all the time like you love your investors maybe more than any CEO I know. Like who’s been hugely impactful for your company out of your investors?
Lynn Perkins:	I mean they’ve all been really impactful for this stage. So First Round Capital led our seed round. [Inaudible 00:22:05] led our A and DBL led our B. And I’ll give you an example. So for instance in the seed round Rob Hayes from First Round Capital led it and we met with him for half an hour and told him our business idea. It wasn’t one of the most intense half an hours I’ve had but he totally got it and I’m like a very direct person and I’m like listen, I want to get the most out of my time with you. I don’t have a lot of time and so I knew right away out of that half an hour meeting like okay, he’s the kind of guy like he’s going to be straight with me. I’m going to know when he likes what we’re doing and I’m going to know when he doesn’t. But when he doesn’t, he’s actually going to be really helpful in terms of how he guides me because he has all these other companies at the same stage. And I could say the same … I could take that same compliment and pay it to all my other investors at the different points that they’ve helped us. And so I think I would say that finding the right people for the right stage that we’re at has been really important.
Scott Orn:	I mean I met with John Balon on an introduction from you and he like, it was like he was talking about like a family member when he was talking about you. Like he loved you so much.
Lynn Perkins:	But family member is a good analogy because companies are messy as our families and so you want someone who you can jive with them when things are going well but things don’t go well. And so even in the best companies things happen and so you want someone that you’re like, okay, when the shit hits the fan, are you and I still going to be able to get through this and are we going to get through it in a positive way? And those are the kind of people you want as your investors.
Scott Orn:	Very well said. Alright. Well, we got to wrap this up. I’m so sorry it’s so fast. Lynn, just tell everyone where they can find UrbanSitter. Tell them about … just give them the quick pitch here.
Lynn Perkins:	Sure. So we are located nationwide. It’s UrbanSitter.com and if you have kids, it’s a great way to find child care and if you don’t and your friends aren’t going out with you that have kids because they say they can’t find a sitter, send them there.
Scott Orn:	Awesome. And I have to say, I have a lot of friends who are married and have kids and I do not take I-can’t-find-a-babysitter as an acceptable answer anymore because all I do is text them UrbanSitter.com and I demand they find a babysitter that night so they can go out with me. And just to finish up, how would you describe … how did Andrea Barrett describe UrbanSitter in five words? What was that? You guys were winning an award. And how did you describe it?
Lynn Perkins:	We won an award and she could only use five words and she said, “Because mommy needs a drink too.”
Scott Orn:	Alright we’ll end it with that. Thank you so much.
Lynn Perkins:	Thanks.

Lynn Perkins of UrbanSitter on Scaling a Startup

Explore podcasts from these experts