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Seth Sternberg, Founder of Meebo & Honor

Seth Sternberg, Founder of Meebo & Honor
Seth Sternberg is the founder of Honor. Honor is working to re-invent in-home care for parents. Honor is on a mission to enable parents to live in their own homes for as long as they please! Honor has 300+ HQ employees, is operating in 6 states and has raised $220M+ in capital.

Honor is working to re-invent in-home care for parents. Honor is  on a mission to enable parents to live in their own homes for as long as they please! Honor has 300+ HQ employees, is operating in 6 states and has raised $220M+ in capital.

At Google Seth was Product Management Director for Google+ Platform. They launched Google+ Sign-In, a great way for users to connect their Google experience with the rest of the internet. Seth Co-Founded Meebo along with Elaine Wherry and Sandy Jen. He is Incredibly proud of the entire Meebo team and all that it accomplished - they reached north of 100M US Uniques monthly and revenue in the mid 8 figure range. Meebo was acquired by Google in June, 2012.

Prior to Meebo Seth was at the Stanford GSB. He left a few weeks into his second year when Meebo began growing too fast to concentrate on both. His first job out of school was at IBM in their Corporate Development group where he learned a ton.

Seth Sternberg joins me today to discuss how he got started as an entrepreneur creating Meebo, with some of his fellow business school chums. Seth discusses the many challenges with startups but also how mission driven startups pushes you through to the rewards. He also shares how his station in life informed his next venture, Honor, an elder care provider company and how that company utilizes technology. Seth shares with us how being a mission driven company has helped him to perform better as a business. Honor had some challenges during the COVID pandemic and Seth discusses the many ways that the company addressed them and innovated during a difficult time.

“I could have some pretty great returns, but I could also truly make the world a better place for a certain segment of the population. And that's like, by far the number one thing that being a mission driven company, I think gets us is really great people.”

- Seth Sternberg

Today on Startups for Good we cover:

  • How to find good people to work with on startups
  • Does the team come first or the idea
  • Managing an elder care company during COVID-19
  • Machine learning and how it relates to the complexities of elder care
  • Long term orientation
  • How to communicate with employees differently than investors

Connect with Seth on Twitter: @SethJS

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Transcript of the Episode:

Miles
Seth, welcome to startups for good. Thanks for coming on.

Seth
Totally! Thanks for having me Miles.

Miles
Yeah, it's wonderful to have you, I'm so excited to chat about your experience as an entrepreneur, and really dive into the story of Honor, and how things have changed over the years. Maybe we could start with how did you decide to be an entrepreneur,

Seth
Ah, uh, I decided to be an entrepreneur, basically, because I don't think I could hold down a normal job. I mean, I, I literally was scared of, when you and I were in college together, I was scared of the notion of having a normal job where you would be sat behind the desk, and, you know, have to do stuff that other people told you to do. So I think that was one part. And that almost led me to my first company, you know, working in my first company, which was, you know, fun, for, uh, you know, me in my early 20s, but not like, changed the world for the better. And then when you got to like me in my mid 30s, it was while I still really, really want to be an entrepreneur, I want to create stuff, and I was addicted to creating stuff. But it had to have the ingredient of changed the world for the better. Otherwise, the like, it was too hard. And so, these days, it's like, you get to work on really fun problems that are really hard, but really meaningful.

Miles
And when you say otherwise, there's too hard. You mean, it's a lot of work. So it might as well be for a good cause.

Seth
Yeah, you know, startups are almost no startup looks like YouTube or Facebook, right? Like up into the right all the time. And even YouTube and Facebook, you know, if you knew those guys early on, like, it was really hard for them to start up, they're really, really hard. And they are not, they're almost always not the right risk reward trade off. If your goal is just like, don't work that hard, don't kill yourself. But make you know, a decent salary or whatnot. So you do, like startups are just like really hard. And when I got to doing my second one, I just knew like, the thing that would keep me going through all the hard times was if I was working on a super big kind of meaningful world problem. And that would make it worth it. Like, who cares about the risk reward trade off? Who cares about the salary or the ultimate outcome? Like, let's just try to solve that world problem. And that's meaningful. And that'll keep you know, me and the founders and ultimately, the team going?

Miles
Yeah, so the mission really got you motivated. Before we dive in your second startup, I'd love to start with you. First, tell us about how you got involved in what you guys did.

Seth
Yeah, so I, the first one was called Meebo. And it was a webmaster as a web messenger. It was like, let's make it possible for people live chat through a browser instead of software, which back in the day was novel today. It's not we do it all, all the time. But you know, back in 2005, you needed to download install software to do live chat on the internet. And the way that came to be was I was in business school, and I saw business school as you've got two years to start a company or you failed. So my friends and I were meeting every Wednesday night, and every Sunday all day. And just brainstorming ideas and working on prototypes of different ideas. And we finally launched our idea, like right at the end of my summer in between my first and second year. And that took off really fast. And I ended up dropping out of school a few weeks into the second year and working on Meebo.

Miles
How did you decide who to work with?

Seth
You know, it's, it's really hard. And you hear all these stories about founding teams that don't get along and founding teams that break up. So I took the route of if I had super trusted friends, who told me that I could trust other people, because they knew them. That that seemed like the right path. So from a kind of personality perspective, and knowing you can work together, etc. I went with if my friends vouch for them, then that's good. And obviously, you know, we spent a ton of time together just when we were initially brainstorming. And then the other thing you just have to think about beyond personalities is what's the skills matter to skills profile. So like, so often, you'll get, you know, three MBAs and they want to do this really great consumer internet. And, you know, they'll pitch me and say, Hey, we want to do this great consumer in a company like video something or other and I'll say okay, but I've questioned they'll say, what is it? I was like, well, you're an MBA, you're an MBA, and you're an MBA, so like, Who's gonna build the product? And all like, look at each other and they'll say, oh, look Get an undergrad to do it. It's like, okay, you're screwed, right like that, that doesn't work. And so you need to find people with complementary skills. So if you're like a businessey person, you know, find a product person, find an engineer, if you're an engineer, find a product person and a business person, like, you kind of need to make sure you have the right basic skills covered to get going.

Miles
And so you had team first? Is that what you're saying? We

Seth
have, oh, yeah, we had team first. So we went team first, and then into, you know, kind of ideation on the on the first idea and, and the second idea and Honor,

Miles
Yeah, so you have a commitment that you wanted to start something together were this loose sense that it would be nice to work together?

Seth
Uh, you know, we, we all wanted to build something. An d in the first one, you know, we were really at a different stage in our lives than where we were when we did our second one. But we wanted to build something really fun for us to use, right and useful for us. And we all used instant messenger and time. And that's how we came up with well, like, we'd really like to be able to use instant messenger everywhere else do it on the web. So but it was like, you know, we were literally spending, you know, a day and a half a week together, over the course of a year brainstorming. So we all like wanted to do something, we had the right DNA in the team, like there was a product person and slash designer, there was a hardcore engineer. And there was, you know, me that kind of business, the person who was product he, I mean, I was I was probably the least valuable person, like by a mile on that one, at least. And then, a second time around, it was the same deals, I was actually just getting together with one of those two co founders from Meebo. And then another two people. And, you know, again, it was like the four of us just brainstorming ideas. And we knew kind of the sketch of what we wanted to do. And we knew we wanted to do something together and honing in on what that idea would be, and ultimately building and launching.

Miles
Now, part of the reason that I wanted to spend some time on the team was this notion that you carried forward and had the same co founder for your second business. But before we get there, a little bit more Meebo. How did it turn out?

Seth
Yeah, so 6.8 years in, which is really close to the average duration to liquidity. We sold me but a Google. And so the team went over there. And I was a product director there for a little while before bouncing out and doing Honor. So turned out well.

Miles
Great. And so when you're ready to do it second time round, you knew you wanted to work with your co founder again. It sounds like you also decided you want to do something mission driven. Yep. What were the only things on your mind?

Seth
Yeah, so we had basically three rules, it was like a human in the eye and know you're gonna make it their life fundamentally better. Be able to believe that it could be what we call the hundred billion dollar company market cap, which means not just one person, but millions of people in the eye and make their lives better. So it was a it was a measure of the amount of impact that we wanted to have. And then the final one was kind of interesting, because we were doing it when Y Combinator was just like, exploding and everyone was talking about it, we kind of said, well, what's our advantage versus everybody who's doing Y Combinator. And what we said is, well, you've you've kind of got to put startups on two ends of a spectrum, one end of the spectrum is it's got a lot of market risk, like, I can build the thing, it's actually not not that hard to build v1, but I have no idea if people want it. And then on the other end of the spectrum, is, you know, this thing is like frickin really hard to build. But obviously, people would want. And we basically decided that multi time entrepreneurs, which that point, we were had an unfair advantage on the really hard to build. But you definitely know people want it. Because, you know, you know how to hire teams, you know, how to raise money, you know, how to solve how to solve hard problems, but you don't want to take risk on is there demand. Whereas, you know, I think when you're in your early 20s, you know, you know, early 30s, whatever it is, you don't have a family, you don't have a mortgage, like you have many less responsibilities in life. You can just like, stay up until 2am all night, iterate, like, you know, hack stuff up, throw it out there. It's kind of like throw spaghetti on the wall and see what sticks. And like, that's your unnatural advantage, right, you know, of kids that you need to, you know, feed at dinnertime. And so, I think those are really great for when you've got that kind of time. And I think the hard execution ones are really great for when you really know how to build a company. And also, the last one

Miles
I also think that younger people sometimes are living in the future. could see an early market developing before others can?

Seth
Yeah, and certainly ones that affect their lives and their cohort. I mean, like, if you look at what we built in our first company, it was totally demand response. Right? It was like, Do people really want this. And it was about, you know, kids who are our age or slightly younger. And that's who is using it. And now, you know, we built our second company, we built something where I'm, you know, I'm right in the target demo to slightly older folks than I am, you know, usually it's a 40 to 60 year old person who's buying care for their, you know, 75 to 100, some odd year old, you know, mom or dad. So you, we tend to build, you know, what we need, and I think you might be right, I think, you know, what, what the older people need might be more defined, whereas what the younger folks want may not yet be built.

Miles
I think you also said something interesting, which is using what others could perceive as a weakness, as a strength. And Paul Graham talks about that in one of his essays about when you start a company, when you're younger, even out of school, your ignorance, your naivete, your lack of, you know, burn rate, and commitments, personal expenses, all these things actually can be used as a strength, you don't know how hard it will be. So you, you go at it, or you don't know, what is supposedly the way to do it. So I think sometimes it's really a matter of looking at your situation and understanding how you can leverage your supposed weaknesses.

Seth
Oh, that's, that's exactly right. I mean, like, and I think you almost in all cases, you want to take advantage of that in some way. You know, I think when people do their first startup, they have no idea how hard it's going to be. So even that is, you know, I don't know until I until I know, you know, if you look at Honor, which is doing elder care, we had no idea how hard it was to do elder care. We didn't know much about elder care, we didn't fully understand, you know, why was it a no one ever scaled and elder care company before? Until we got into it and did it and found out all the things we didn't know? Right? So not knowing, lets you dive in and make some mistakes, but like, you know, find some avenues that, you know, people with lots of experience might have closed off in their minds, but might actually be possible.

Miles
So tell us more about Honor. What was the original vision? And then we'll get into how it changed?

Seth
Yeah, so the original vision was pretty simply wanted to just do care for parents. So we, we realized because of an issue I had with my mother that our industry like the technology industry had not done much around the elderly, and that the elderly population was exploding as a percentage of population. And then that's way too broad first startup, right, you have to focus so we focused down on Let's help people stay in their homes as they age. And then we looked at all sorts of potential solutions and settled on this space called non medical homecare, which is where a person goes into the home of an elderly person helps them with really basic things called activities of daily living. So things like getting out of bed or getting food or getting dressed like literally helps them live their lives. And if someone weren't there to help them, they couldn't be at home. And we settled on non medical homecare, basically, because we saw it as really large market that was pretty well pretty broken and very fragmented, like super, super fragmented as a marketplace, which creates like not great experiences for the customers and for the care professionals for the people who are the paid caregivers who go in and help the elderly. And so we thought we could really like make people's lives better if we were able to bring scale, which we perceived we could only do through technology. So we launched that way, we then we knew, you know $30 billion market had never scaled, hyper fragmented, we thought going in that it was mostly around the logistics and operations that kept it from being able to scale. That turned out to be mostly true. But we had to do a lot of experimenting long way as well on how to you aggregate up demand in this market. And if you fast forward to today, it's we still do not medical homecare, we've we've done a lot of iterating on the right way to go to market like how to amass users quickly and grow it venture speed. But the core service is basically not changed since day one.

Miles
And how much of tech is woven in with that customer experience?

Seth
Yes, it's interesting that your average Honor customer would probably say almost none, which is intentional. So we do not want an 85 year old with dementia to need to use technology in order to use Honor. And we would prefer that they're 40 to 60 year old kids used our app to like do scheduling and such, but they don't have to, they can call us where Honor's technology is super important is in solving all of the problems around logistics and operations that had previously made it impossible to scale non medical homecare. So it's stuff like running machine learning against why is it that care pros on the surface seem to call off, which is to say, randomly not show up to a visit up to 11 or 12% of the time? Or, you know, when should I issue a bonus, if I have to cover a last minute shift where I care? You know, where call off occurred to do it 50 hours before or 10 hours before? How much should it be? It's about what is a good character? You know, you can't, you can't just say to a customer, hey, is your is did you like your care pro if your customer has late stage dementia? Right. So like that, you know, a 1-5 star rating from that particular customer is probably not particularly meaningful. So you find yourself having to turn to ml. Literally just figure out at scale, who are the really great care pros in the in the not great characters. And then what you find because it's a human service, is, you know, everybody's definition of good is really different. And there is no static algorithm against who's good and bad care Pro. It's more about who's a good and bad care pro for you and your mom. And so it turns out that homecare is so human, right, it's literally humans caring for humans, that it cannot be scaled, except for being able to build like really flexible, algorithmic approaches to what's good and bad, what's bad? And how do I give you the care pro better work that you'll like more, that fits your life better, so that you will perform better, we call it care for care pros. And then ultimately, then giving better service to our elderly customers and their kids. And that's where our technology is super critical. Like we literally couldn't build Honor without, like, super deep machine learning.

Miles
Which is the current version of AI that everyone's talking about?

Seth
Yeah, I actually explained this, because you know, we interface with the, with the homecare world a lot where there is not yet a lot of technology. And I often, you know, talk to talk to people about like, look at the base at a basic level. When you hear people talk about ml, machine learning, ml AI, big data, it's kind of all the same thing. So and basically what it is, is let's look at patterns from the past to predict the future. And if you get that, then you're good. And you know, we could talk about it.

Miles
So give us a snapshot of Honor by the numbers today.

Seth
Sure. So it's a little over 300 people in HQ. HQ is a funny definition now because everybody works from home. That's a crazy story. We had to disband in like three hours because we got to someone who had a sister visit her who called her a few days later and said, Hey, just tested positive for COVID. It's like, Oh, no. So very quickly, we went from being office based and not office space. We cover six states, most California, some of Texas, most of Arizona, most New Mexico, Detroit, Cleveland. We have over 40 partners. So we help a homecare agencies run their entire businesses end to end. So they they can literally sell for Honor and run care management and Honor will kind of run all of the home care for them, if that makes sense. But that's, you know, that's our scale.

Miles
And so you've raised a number of rounds of venture capital, are you able to talk about that?

Seth
Yeah, um, so we've raised we just right, we just closed on and announced $140 million round. I think over the life of the company we've raised, if I remember, right, it's about 225 $225 million. The most recent round is it's great. It's, you know, it's kind of double the money so to speak. It's, you know, it's sent to the team. In a week, we've raised as much money as we raised over the last six years. So man, we better change the world real in a really meaningful way with this money that just came in. And it'll just let us you know, grow to more places and really product differentiate in a way that'll start to really change how people even think about non Medical Home Care and start to push it more over to care for mom and dad. Which I'm super excited about the new investors in this round or you know, the number of new investors but two of the two who led it or co-led it are T Rowe Price and then Bailey Gifford, who's kind of I think of them as similar T Rowe Price, a mutual big mutual fund operator but out of Scotland. And they're great because they're super long term investors who are super long term focused and can support the company as it continues to grow and mature.

Miles
And that long term orientation, is that the same thing as buying into your mission for care? Or do you see them more as financial investors?

Seth
Yeah, that's a really good question. So at the end of the day, all financial, all investors are financial investors, right? Like, they're, they're only going to invest because they're investing other people's money. And their job is to provide a return to those people or they have failed, right? And it's bad for those people that don't provide a return. So they're not going to invest if they don't believe that there's a solid business case. That said, one of the ways that they clearly think about what to invest in is, you know, is this a really large market? Is this a growing market? You know, does the world care, right? Because does the world care? is a proxy for is it gonna remain large? Is it gonna keep growing, even if there's a global pandemic? And you know, stock market crashes? 30%. So, you know, they both T Rowe and Bailey Gifford both, like really had strong theses around eldercare, you know, the population of elderly folks exploding, needing to, you know, create more goods and services that really help the elderly and their caregivers. But they also, you know, they they use that as a lens to find really great investment opportunities and ultimately returns.

Miles
Do you feel like you have to speak differently to employers, vers investors about the company?

Seth
Employees versus? Yes, obviously, yes. You know, it's when you're, when you're talking to invest, it's something that I wish I wish the answer were no, it took, it took me a long time to realize that the answer was truly Yes. And it's because when you're talking to investors, first and foremost, they truly do come at it from a business standpoint of is this thing going to be massive, right? Is this thing going to provide a return to my investors, which are called LPs are limited partners. When you're talking to employees, especially at a super mission driven company, like Honor, they care, you know, they care about the value of their equity, right, like an employee at any at any startup or, you know, growth company, but they really also care about the mission in the in the care pros who are employees, and the customers, right, they really, really care and Honor deeply. And so it's, it's definitely a different, you know, framing, when you're talking to one group versus the other.

Miles
How has being mission driven, helped you perform better as a business?

Seth
Yeah, um, so by far, it lets us hire better people than we should be able to hire. Like, I think that's the most important thing. You is a startup, for sure, lots of people have said this on this podcast, you live and die by your people, you live and die by the quality of your people you live and die by, like how hard your people push. We're no different. And we have always kind of punched above our weight, in terms of the quality of people that we've been able to attract against kind of the stage of the company. And I think it's really because of the mission, right, like people can come to Honor and truly believe I can make money, which is you know, what lots of people want, right, and there's nothing wrong with that. But at the same time, I can do that while doing good for the world. And that's unique, right? Because it's not often that you get such a direct tie between, I could have some pretty great returns, but I could also truly make the world a better place for a certain segment of the population. And that's like, by far the number one thing that being a mission driven company, I think gets us is really great people.

Miles
And that does make such a difference.

Seth
Like, it's everything.

Miles
Let's turn to challenges. You've mentioned COVID a few times, how has that impacted the business?

Seth
Yeah, um, so what we saw on COVID like, by far the biggest issue is, you know, if you think about it, we have care pros who are employees going into the homes of the elderly, and the elderly, of course, are the most at risk around the implications of contracting COVID. And, of course, our care pros often actually pretty, you know, they're not all, you know, young, where COVID has generally less of an impact. We have characters who were in their 70s. So, like immediately, we just went into this like crazy, you know, mode of trying to understand COVID Trying to source PPE directly from China when hospitals couldn't get PPE, I mean, we were literally like, using connections through like, clothing etailers to get connections to factories in China that were producing PPE. And we're ordering hundreds of thousands of masks. We were building symptoms checkers as we were building for care pros to check their symptoms, we've launched about two weeks after COVID kind of really hit. We were launching, we launched a PPE distribution service to our customers so that they would always have PPE, that would auto upgrade them and for anybody ever became symptomatic, to M85 as opposed to surgical masks. We built stuff like, you know, degree checkers, where if someone came down with COVID, we'd instantly know like, you know, first degree, second degree, third degree who they interact with, and who do we have to go check. So we just built so much, we even put, you know, like, some states don't have paid sick time. And in, you know, if you're a hourly worker, and all of a sudden, you can't go to work, because you're not feeling well. And it's too risky to have you go to work, because you might have COVID, that has an impact on your take home pay. And then a whole bunch of states, that just means you're you're kind of out of luck. And so we you know, practically chose to put paid sick time in the states that don't mandate paid sick time, because we wanted our care pros to not have a disincentive to tell us that they weren't feeling well. So we did like just an unbelievable amount of stuff to basically make Honor the absolute safest home care in a pretty wild environment. So it was just like a huge operational left. And this goes back to the mission thing, right? Like, if Honor weren't as mission driven as it is, I think the team would have broken. And like, honestly, like, it was just so hard for the team because it was non stop as COVID was breaking out and for the first X number of months after COVID had broken out. But the mission kept people going.

Miles
That's great. Any other big challenges you've had along the way?

Seth
Around COVID? Um,

Miles
no, in general, in the business general.

Seth
General. I mean, Which one? You know, one of the things that's hard about Honor is there's no obvious comp. So you know, it's funny a lot of people are talking about I really wish I had, like, I hate what sorry, they say I hate my competition. You know, I always have to explain to investors, why I'm gonna win versus my competition. And what they don't understand is that the competition helps make the market, right, it like helps investors understand how to look at a given market, how to value a market, how other people value market, how different you know, people are approaching the market. Honor doesn't have direct competition. And so that's actually a weird challenge that, you know, maybe people listening to the podcast one expect, but it's an important thing to understand, which is we're really creating like we're homecare is old as a market, but a technology approach to it is new. And so that creates a set of challenges around really explaining to people like white, like, how can technology possibly make this any better? Right, like the initial reaction of like the investors that, for example, would be that right? Like, how can we possibly, you know, make this a better business? So I'd say that's a big challenge. It's like just that we don't have a direct competitors that actually prefer we did.

Miles
Yeah, I think that is counterintuitive to people. But I totally understand what you mean.

Seth
Yep.

Miles
What advice would you give to an aspiring founder who might be listening?

Seth
You know, I mean,I think the number one most important thing is to work on stuff that you're passionate on. I mean, this is, you know, the 40 some odd year old version of me talking. It's it because I, like I said, up front, like startups are hard, you're gonna work really, really hard. There's going to be like, awesome days and really horrible days. And the thing that keeps you going into work on something that you're passionate about, like, that's probably Thing number one. And then Thing number two is work with people who you love, like work with people who you think are great, and work with people who are not like you. And you know, like, it can't be three MBAs, right? It's got to be complementary skill sets. And then as you hire, you really have to think about complementary skill sets, complementary points of view, complementary experiences, is that's what makes you ultimately much stronger. And so if there's two things that matter in a broad sense, it's that it's like passion and the right, you know, people in team.

Miles
Yeah, those are the important core parts. Is there a book article or website that you would recommend to aspiring founders? Yeah.

Seth
Oh, you know, I don't, I don't know that there's the one. I'm sure a lot of people have the one. I think I'm one of the most important kind of broader things, for founders to try to do is to understand better how the world actually works. And I know that sounds broad, but I think it's kind of important, like, you need to be naturally curious about, you know, why is it that that, you know, governmental system runs that way? Or why is it that, you know, we society aren't that great at caring for some given population, because that helps you inform how you attack problems, and what problems there are to attack in a way that like can be more powerful and more impactful than if you're kind of like not understanding the kind of dynamicism of the world if that makes sense.

Miles
Right. And in closing, where can people follow you online?

Seth
On Twitter, it would be at SethJS, for Jason Sternberg. And that's, that's probably the easiest way to follow me.

Miles
Great. Well, thank you so much for coming on. I really appreciate it.

Seth
Thanks for having me Miles. It was a lot of fun.

Miles
Take care.

Seth
You too.