Getting accepted to join Y Combinator must feel like winning the Super Bowl. With alumni like Reddit, DropBox, AirBnB, and Heroku, and Paul Graham’s leadership it’s an opportunity for a startup to take a great leap forward.
Victoria’s sendwithus is the first BC-founded company to earn that distinction. The eight person team has joined YC on the strength of a SaaS solution, allowing marketers to manage transactional email content. It can also conduct A/B tests on both subject and body content, and create new transactional emails using a code-free editor.
For cofounders Matt Harris & Brad Van Vugt it’s be an interesting journey. Harris shared his story of being a lifelong Victoria boy and a self-admitted horrible student. He dropped in and out of UVic a number of times to work with various startups and different technology companies. He was the “typical nerd who started programming when he was ten or eleven.”
Until cofounding sendwithus he’d never been an employee, and only ever worked on contract.
It was working on other startups projects where he and Van Vugt connected. Requests started coming to make email template changes to align with branding changes. “We really focused on transactional email, like welcome emails after web site sign ups, Facebook or LinkedIn message alert emails. When people build apps, those emails end up being stuck in source code. It was painful having to edit all of those files. We build some one off products, to let marketing people manage their email templates without bugging us. We ended up building tools to off load the work we didn’t want to do.”
When a request to A/B test an important notification email came, the process started feeling Groundhog Day like. They’d been building little different pieces of this numerous times.
It was an in the coffee house moment when Brad said, “this is stupid, we just keep building this same thing over and over again, so that’s when we kind of took our heads out of the sand. We started looking at the market. We were lucky having friends working at Dropbox and Amazon who were happy to talk about how they handle transactional email (not well), which got us thinking not only do startups need this, but there are really big companies who have the same problem.”
Harris and Van Vugt cold-called CEOs at the biggest email delivery companies, with two questions “are you going to build this, and are your customers asking for it?” More importantly they asked, “will you send us customers if we build it?”
In late November 2012 three enterprise class email service providers agreed to work with them. Harris said, “at that time we had zero code, zero customers, but now we had a customer acquisition channel. While we validated the big idea and a path to customers, we still had to validate being able to put something out there people would pay for.”
They incorporated the company in January 2013. A $300,000 seed round helped keep things moving forward. One of their investors is Ben Yoskovitz whose article The $250,000 Funding Trap, Harris thinks every startup entrepreneur should read. He added “we kept the round small, keeping in mind we didn’t have a product, we didn’t actually have any customers, we had a list of people who said they’d be customers, and a list of partners saying they’d send us customers.”
For them “what was important to us was being a Silicon Valley based company that happened to have a team in Canada. That was our mindset. It helped us secure some additional early investors from the Bay area.Their network was a really important part of that round.”
Harris appreciates their roots and shared how important the Victoria startup community has been to their success, mentioning the likes of early investor Rasool Rayani (co-founder of Metalogix Technologies). He offered that Dan Gunn (director of VIATeC) “has it in their hearts to do the right thing in building the community around assets like Accelerate Tectoria, that was our home for four months. The value it brought to us was a free place work, a connection to other entrepreneurs, and a ticket out of the coffee shops.”
Harris spent the last half of 2013 in the Valley getting new clients on board. It turns out he was very successful signing up YC companies as customers. Having advisors in place with YC ties, adding Stripe (YC connection) as a customer and starting to show 50 percent revenue growth month-over-month made applying to YC complete sense. He said “while we had enough cash in the bank we wanted to grow faster, and joining YC would embed us fully into the place where we wanted to be.”
While despised by some, email is still relevant. To Harris “it’s still the backbone to everything. Email still drives an incredible amount of engagement. Remember, even any new temporal photo sharing app still sends out a couple of welcome emails, and that’s not going away soon. The industry is not about spamming people, everything is moving towards being more personalized. It’s less about spray and pray, and now about sharing content to the people who care about it.”
Celebrating acceptance to YC was short and sweet. It’s a further big step towards even bigger potential wins for this Victoria team. Keeping true to their roots might also help set the path for future BC startups to earn the YC journey.