20VC The Biggest Growth Opportunities for Young People in Tech Today, Why Distributed Workforces Are The Secret To Beating Incumbents & Why It Has Never Been Easier To Operate A Company Than Today with Andy Pflaum, Founder & CEO @ Astro

In this episode of Founders Friday on the 20 Minute VC, Harry Stebbings interviews Andy Flom, the founder and CEO of Astro, a startup that integrates email, calendar, and an AI-powered assistant. Flom shares his journey from working in non-profits in Southern Africa to tech startups in Silicon Valley, including his role as CMO at Zimbra and managing a family winery in Chile. He discusses the challenges of competing with tech giants, the benefits of a distributed workforce, and the importance of focus and long-term dedication in startup success. Flom also touches on fundraising strategies, the value of trusted conversations with investors, and the vision for Astro's future as an indispensable service for workplace productivity. Additionally, the episode includes promotions for healthy office snacks from Naturebox and quality mattresses from Lisa.

• Harry Stebbings hosts Founders Friday on the 20 minutes VC podcast.
• Harry invites listeners to follow his behind-the-scenes content focused on health and nutrition via Snapchat and Instagram.
• The episode features Andy Flom, founder and CEO of Astro, a startup integrating email, calendar, and AI-powered assistance.

This is Founders Friday with me, Harry Stebbings on the 20 minutes VC.

Harry Stebbings introduces the podcast series dedicated to founders.

• Andy Flom has a diverse background with 15 years in Silicon Valley.
• He served as the CMO at Zimbra, leading to a $350 million acquisition by VMware.
• Post-acquisition, Andy gained experience on the other side of the table.
• Andy managed a family winery in Chile for one and a half years, a unique experience among podcast guests.
• Astro, his current venture, aims to streamline workplace communications by combining email, calendar, and an AI-powered assistant.
• Astro has raised over $10 million from West Coast investors, including Satish at Redpoint, Kent Goldman at Upside, and Michael Dearing at Harrison Metal.

So joining us in the hot seat today, I'm delighted to welcome Andy Flom, founder and CEO at Astro, the startup that brings email, calendar and an AI-powered assistant together to help you focus on what's most important.

Harry Stebbings provides an overview of Andy Flom's career and his current startup, Astro.

• Naturebox offers an unlimited snacking program for offices, recognized as a highly requested employee perk.
• Naturebox emphasizes healthy snacking with simple ingredients and no artificial additives.
• Lisa, a mattress company, offers a premium foam mattress with a universal adaptive feel, contributing to good sleep.
• Lisa donates one mattress to a shelter for every ten sold, with mattresses being 100% made in the US or UK.

And if your body is a temple like mine, clearly is not with all those mojitos, then have no fear with nature box, real simple ingredients, no artificial colors or sweeteners.

Harry Stebbings discusses the benefits of Naturebox and Lisa, aligning with the theme of health and wellness.

• Andy Flom started his career supporting democratization in Southern Africa.
• He lived in Cape Town, South Africa, during Nelson Mandela's presidency.
• Realizing the barriers for black South Africans in participating in development, Andy decided to learn about economies and businesses.
• He attended Stanford for grad school and joined Onebox, a startup in Silicon Valley.
• At Onebox, he met Satish Dharmaraj, who later became an investor in Astro, and co-founders Roland Schemers and Ross Dargahy.

But what I learned very quickly is that in a country where 80% of the population, primarily the black South Africans, were suddenly now free to vote and in theory, to participate in all aspects of the country's development, the economy, politics, the education system.

Andy Flom shares his early experiences in South Africa and the motivations that led him to the tech industry.

• After Onebox, Andy joined Zimbra, an enterprise collaboration suite, as a startup with his future Astro co-founders.
• Zimbra's success led Andy through acquisitions by Yahoo and VMware.
• Seeking a change, Andy and his family moved to Chile to manage a family-owned winery.
• The winery experience taught him about managing physical inventory, shipping, seasonality, and hospitality.
• In 2015, Andy returned to the tech industry and co-founded Astro with his former colleagues.

And at the end of that my wife and I took an opportunity we'd always talked about, which was to move our family to Chile in South America for a bit.

Andy Flom recounts his journey from Zimbra to managing a winery in Chile and back to the tech industry with Astro.

• Andy Flom provides career advice for individuals entering the workforce who seek to optimize their learning experiences.
• He believes that joining a medium-sized growth company offers incredible opportunities for career advancement.
• While startups and large tech companies have their merits, growth companies like Stripe or Slack are currently recommended for learning and growth.

I think there's merits to all of them, but I would now lean more toward go to that medium-sized growth company. If you can get in today at a company like Stripe or Slack, for example, I think you get incredible growth opportunities.

Andy Flom shares his perspective on the best learning environments for individuals starting their careers.## Recruitment and Learning Opportunities in Startups and Big Companies

• Startups and big companies offer unique learning opportunities for individuals entering the workforce.
• The growth environments in startups are particularly highlighted as unparalleled.
• Big companies also provide learning opportunities, though they may differ in scale and scope.

"In some sense. I may be speaking against myself, because of course we want to continue to recruit great people into startups like our own, but I think for the person just coming out, there are unparalleled opportunities now to learn in those growth environments and even some of the bigger companies."

This quote emphasizes the speaker's belief that both startups and larger companies present valuable learning opportunities for newcomers, despite the speaker's vested interest in recruiting for startups.

• The fallow period for startups refers to a time when it's challenging for new companies to emerge due to the dominance of established firms.
• Consumer startups are often cited as facing significant incumbency advantages.
• The discussion touches on the difficulties startups face in competing against large, well-established companies.

"And speaking of those kind of growth environments and the big companies, as we said, working at large corporates, I do want to discuss an element that comes up frequently on the show being the fallow period for kind of startups, and most notably, often it's cited as consumer with the incumbency advantages."

The quote introduces the concept of a fallow period for startups, which is a challenging time for new companies to grow due to the advantages held by existing, large corporations.

• Startups face significant challenges when competing with large tech companies.
• Misleading research in the past suggested that large companies were easy to topple.
• In reality, large companies, especially in tech, tend to maintain their dominant positions.
• Startups must be creative and flexible, particularly in developing distributed workforces.

"A startup compete in a landscape so heavy with multiple tech giants of scales never seen before?"

This quote poses the central question of how startups can effectively compete in a market dominated by massive tech companies.

• Past research by McKinsey and academics suggested rapid turnover among the largest companies.
• This research was misleading; large companies are typically very strong and enduring.
• The stability of big companies presents challenges for startups, requiring them to be clever and creative.

"And frankly, there was some misleading research that led to that. In fact, the big companies tend to stay very strong across most industries."

The speaker corrects a misconception that big companies are frequently replaced, clarifying that they usually maintain their strength, which challenges startups.

• Startups can gain an advantage by being effective in managing distributed teams.
• Recruiting talent from various locations can help startups grow and compete.
• Flexibility in workforce location is key to startup success in the current market.

"And one of the ways that we can be most effective is being flexible and smart about how we develop distributed workforces."

The quote highlights the importance of startups being adaptive and intelligent in developing distributed teams to compete in the modern business landscape.

• Incumbents offer interesting projects but often in a narrow scope for individual employees.
• They provide competitive compensation using their substantial cash reserves.
• Startups can overcome these challenges but face a stronger competition than in the past.

"Challenge that the incumbents pose? Is it kind of salary differentials? Is it career trajectory in terms of kind of having a very defined career trajectory, what do you think it is that they, is it data incumbency? What is it fundamentally that you think they pose?"

This quote presents the question of what the main challenges are that incumbents pose to startups, such as salary differences, career paths, and data advantages.

• Startups require an exceptional level of effort and commitment from their teams.
• Ordinary work is not sufficient for achieving extraordinary outcomes in startups.
• Big companies may allow for ordinary work, but startups demand consistent, high-level effort.

"You're rarely going to get extraordinary outcomes from ordinary type work."

The speaker emphasizes that startups require extraordinary effort to achieve remarkable results, contrasting with the level of work that might be accepted in larger companies.

• Startups typically require a full commitment from their team members.
• Side hustles may be viewed positively if they demonstrate creativity but can be problematic if they take too much time.
• Long-term dedication is crucial for building a successful startup.

"Generally? Yes. I certainly like people who have a creative side that flex their muscles beyond just what the day to day of the job entails."

This quote conveys the speaker's general preference for team members to be fully committed to the startup, while still acknowledging the value of creative pursuits outside of work.

• Startups need team members who are nearly "all in," but also recognize the importance of balance.
• Sustaining prolonged effort requires team members to have healthy outlets, such as family, friends, or physical activities.
• Balance helps maintain the intense commitment required in a startup environment.

"People have to have some good balance and some good healthy outlets."

The quote stresses the necessity for startup team members to have a balanced life that includes healthy activities to support their intense work commitment.

• Access to information and resources for startups has greatly increased.
• Online services and SaaS products reduce the need for hiring specialists for administrative tasks.
• Cloud services like AWS and online tools for company operations make it easier to manage startups today.

"Well, one thing I would say is there's just so much more information available even than there was ten years ago."

The speaker notes the abundance of information and resources now available to startup managers, which was not as accessible a decade ago.## Operational Efficiency in Company Management

• The use of online services has reduced the need for human resources and financial expenditure in managing operational aspects of a company.
• Services like Hired.com and Handshake have replaced traditional, more costly recruitment methods.
• These changes have made it easier and less expensive to start and manage a company.

"It doesn't take us the same number of people or the same amount of spend to manage the operational aspects of starting a company like it once did."

The quote emphasizes how technological advancements and online services have streamlined the process of starting and running a company, making it more cost-effective and requiring fewer personnel.

• The ease of starting a company has led to increased dependence on key team members.
• CEOs and VPs are now handling tasks that were previously outsourced, leading to potential time and focus drains.
• Hiring technical talent has become more competitive and expensive, especially in the Bay Area due to competition and high cost of living.
• Startups are increasingly relying on paid growth, which can be challenging and risky if it becomes a dependency.

"It's a bit of a drain sometimes now with that, but a major one is just the overall challenge in hiring for technical talent."

This quote highlights the shift in responsibilities within a company due to the use of do-it-yourself services, and the significant challenge of hiring technical talent in a competitive market.

• Startups should balance paid and organic growth, using paid growth for testing and not letting it exceed a certain fraction of user acquisition.
• Paid growth is also used for testing different messages and channels in preparation for scaling up.
• There is an emphasis on ensuring that paid growth does not overshadow the importance of product appeal and development.

"We try to never let it go beyond a certain portion, a very kind of low fraction of our overall caneman of new users."

The quote discusses the strategy of limiting paid growth to a small fraction of overall user acquisition to maintain a healthy balance and focus on product development.

• Taking multi-stage funding is a strategic decision based on the long-term nature of the company's market and existing relationships with investors.
• Trust and the ability to have open conversations with investors are crucial.
• The importance of investors' domain expertise and their ability to provide insights while respecting the company's operational knowledge is emphasized.

"And so we knew this was not going to be something we could just conquer the market in a year's time. And so we were going to need to put our heads down and work for quite a while."

This quote reflects the strategic decision to seek multi-stage funding due to the anticipated long-term effort required to succeed in the competitive workplace communications market.

• Concerns about signaling from investors in follow-on investments can impact market perception.
• The onus is on the company to perform well and maintain good relationships with investors who have provided funding.

"But that just keeps the onus on us to perform as we need to anyway, and to execute and to be good partners with the folks who've entrusted us with the money."

The quote discusses the responsibility of the company to perform well and justify the trust placed in them by investors, acknowledging the potential impact of investor signaling on market perception.

• A great VC is characterized by the ability to have trusted conversations without the need for constant selling or pitching.
• Building relationships with investors is based on track records and recommendations.
• There is a two-way street of signals between investors and the company, with each party assessing the other.

"So having a sense that we could have those trusted conversations...and that it's not going to wound us or cause us to change how we communicate with them."

The quote signifies the importance of open and honest communication between a company and its investors, which is a key characteristic of a great VC relationship.

• Focusing on investors who can provide valuable insights and feedback in the domain of the company is important.
• Investors should have domain expertise but also recognize the company's expertise and evolution.
• The dynamic between company expertise and investor feedback is a delicate balance that needs to be managed well.

"Ideally, these are investors, as we have, who have some knowledge of our domain and some expertise around it, and are willing to share their views."

This quote highlights the beneficial aspects of having investors with domain knowledge who can contribute valuable insights while respecting the company's operational expertise.## Fundraising Strategy and Focus

• Narrow focus on proposition is beneficial for clarity, feedback, and business building.
• Scope can be expanded later, but starting too broad can confuse investors and hinder product focus.
• Importance of careful spending of money and time, akin to using tissues sparingly as they run out.

"Having a relatively narrow focus, you can almost always expand your scope from there."

This quote emphasizes the advantage of starting with a specific focus when raising funds and building a business, as it lays a solid foundation for future expansion.

"And the same thing happens with your time, with your energy, and your finances as a company."

The analogy with the tissue box illustrates the need for frugality and careful resource management in a business, especially during the early stages or when resources are limited.

• Michael Dearing's view that markets are better at allocating capital than CEOs.
• The importance of market signals in guiding company decisions and resource allocation.

"He also said on the show that markets are better capital allocators than ceos."

This quote refers to the perspective that the collective wisdom of the market can be more effective at determining the best use of capital than individual CEOs.

• "The Wright Brothers" by David McCullough recommended for its portrayal of innovation and determination.
• The Wright brothers' story is seen as inspirational, especially their rapid progress in aviation.

"I love the Wright brothers, which is written by David McCullough a couple of years ago."

The recommendation of the book about the Wright brothers suggests its value in understanding the process of innovation and the pursuit of groundbreaking achievements.

• "Do unto others as you would have them do unto you" is a guiding principle for both life and work.
• This motto is applicable to a wide range of situations and promotes ethical behavior.

"No better one, frankly, in life and in work than do unto others as you would have them do unto you."

This quote reflects the speaker's adherence to the Golden Rule as a universal principle for interpersonal interactions and decision-making.

• Astrobot aims to be the intelligent layer for work across various services.
• Focus on helping users prioritize important tasks and reduce distractions.
• Vision includes AI-powered service, subscription model, and strong SaaS partnerships.
• Goal to be a thriving, profitable, and independent company in five years.

"So we want to continue evolving Astro and Astrobot so that it becomes the layer of intelligence for how people and teams work across a range of services."

This quote outlines the company's ambition to develop their product as a key intelligence tool for workplace efficiency and productivity.

• Selective reading of blogs and newsletters, with a preference for certain thought leaders.
• Tom Tunguz's blog and Michael Dearing's videos are highlighted as particularly valuable.
• Recode Daily is the go-to source for news.

"Tom Tongas at Redpoint has a great blog just at his website, tomtungas.com."

This quote points to specific resources that the speaker finds valuable for insights, particularly for operators of early-stage SaaS companies.

• Need for improved access to early-stage capital for first-time entrepreneurs.
• Recognizes existing challenges, especially for those without strong connections in Silicon Valley.

"We really need continued improvement in access to early stage capital for first time entrepreneurs."

The speaker identifies a critical gap in the startup ecosystem where new entrepreneurs struggle to obtain funding and suggests that this area requires further improvement.

• Invitation for entrepreneurs to connect via LinkedIn or email for assistance.
• Emphasizes the speaker's openness to helping others in the entrepreneurial community.

"And if I can be helped, any entrepreneurs listening to this, please feel free to connect to me on LinkedIn or send me an email at Andy at astro Inc.com."

This quote is an open offer of support and networking opportunities for entrepreneurs seeking guidance or connections in the industry.

• Naturebox and Lisa mentioned as partners aligned with health and diet themes.
• Naturebox offers unlimited snacking for offices, and Lisa provides online-ordered mattresses.
• Both companies are highlighted for their health-conscious products and services.

"Naturebox is the first ever unlimited snacking program for offices of all sizes."

The speaker introduces Naturebox as a service that caters to the demand for healthy office snacks, emphasizing its relevance to employee satisfaction and wellness.

"Lisa have done away with a terrible mattress showroom buying experience."

This quote describes how Lisa is innovating in the mattress industry by offering a convenient, online purchasing experience and a focus on quality sleep.