Albert Lee, MBA 04 – Entrepreneurship Through Everyday Problem Solving

(Transcripts may contain a few typographical errors due to audio quality during the podcast recording.)

[00:00] Sean: Welcome to the OneHaas Alumni Podcast. I’m your host, Sean Li. And today, we’re joined by Albert Lee. Albert is a fellow Haasie, class of 2004 in the Full Time program.

Welcome to the podcast!

[00:20] Albert: Thanks for having me. Go, Bears!

[00:22] Sean: Go, Bears! Albert is an entrepreneur, advisor, and investor. And as a fellow entrepreneur myself, can’t wait to hear about that and dig into that. But before all that, Albert, I love to start these conversations to hear about your background, your origin story of sorts, if you don’t mind sharing where you grew up, how you grew up.

[00:44] Albert: Yeah, I’m actually from a small town, so to speak, I guess, in upstate New York. I was born there. My parents immigrated from South Korea many years ago. My dad came here to go to graduate school in the ‘60s. He ended up taking a research position with a big corporation. So, he worked in a research and development laboratory, which was located in upstate New York, very close to the capital, Albany.

And so, I was born there. I grew up there. Had a very interesting kind of childhood experience. This lab had probably 1,000 PhDs in it, and it was located right next to my high school. So, my high school, as you can imagine, was actually quite good, from an academic standpoint, because a lot of the kids that went there all had PhD parents from all over the world.

We were in this very unique situation where we were, where everyone was super educated. All of my friends’ parents were really educated. And so, I had a fantastic experience. It was very diverse, which was also not very common where I grew up.

And I don’t know. What’s kind of crazy is I ended up going to Cal, from there, which is something that doesn’t happen very often, as you can imagine. Coming all the way from the East Coast, from this small town, nobody, for many years prior to me, had gone to UC Berkeley, from where I grew up. But I had some relatives in California and I’d come out here and I visited. And I just got it in my head that I wanted to go to California.

And so, then I ended up at Cal. I did my undergrad there. And after I finished, I think, like a lot of people, I didn’t really know, honestly, what I wanted to do. I know I was an econ major. I would had considered going to medical school. I actually did all the pre-required coursework. But by the time I was graduating, I pretty much decided that that wasn’t what I wanted to do.

So, I ended up interviewing for jobs on the East Coast and finance and consulting. And so, I took a job in finance, and I did that for four years in both Connecticut and New York, very classic finance position. So, I was rotating around, I did a bunch of different stuff, ended up, actually, in my last job in finance, working as an investor. And we were investing in very specific stuff like high-yield security. So, this is a lot of weird things, like pork farms and ammonia producers, like, the most boring stuff. Forgive anybody who’s in those businesses that might be listening to this podcast, but I found it to be very boring, unfortunately. And so, I was doing that in my last couple of years, working in finance. And this was right at the end of the ‘90s, around 1999.

[03:30] Sean: Yeah.

[03:30] Albert: I felt like I wanted to return to California. I knew that I loved living in California. And it was just coinciding with this giant boom in technology. And so, I started talking to some of my friends, both from undergrad and other people that I knew in the area. And they gradually convinced me that I had to come back, I had to work in tech. And so, I returned to California in 1999, and I actually started working at Yahoo!

[03:56] Sean: Good days.

[03:58] Albert: Yeah, good days. Yahoo! was ruling the world at that point. It seems crazy to say that now, but they were like the mega Goliath in technology, at least, in the internet side. So, I joined when there was about 850 people. I was working in business development to start, which was natural, given my background, business development and corporate development. But ultimately, within six months of working there, I knew I wanted to be working on the product side.

And so, after about a year, year and a half, I ended up transferring into a product management position. And that’s essentially what I’ve been doing for the remainder of my career in technology. So, since 2000 to now, I’ve been working on consumer software, doing consumer product management type work.

The last big thing that I did was my brother and I ended up co-founding a company together. It was called MyFitnessPal. It’s an application that’s widely used around the world to help you track your nutrition, track your exercise, and hopefully, through that process, gain some insights that can help you change your behavior to improve your health.

It’s a super popular app. Lucky for us, it’s got hundreds of millions of users worldwide. We started that in the late 2000s. And the company ended up getting acquired in 2015 by Under Armour, very strange destination to end up in when you start a technology company to end up working in a branded shirts and shoes business is not what you would expect.

[05:35] Sean: Yeah.

[05:35] Albert: But it was a really amazing place for us to land. I actually really enjoyed my time working at Under Armour. And I left there in 2018 after working there for about three years. And since then, I’ve just been independently working on software projects. I’ve been working with a lot of different startups and companies, both as an advisor, as an investor, an informal advisor, in some cases, been doing a little bit of nonprofit work as well. And that’s where I am now.

[06:07] Sean: That’s amazing. So, going back a little bit, you mentioned you co-founded this company with your brother. What was your upbringing like? You grew up in the East Coast. Was it very traditional Korean, would you say? Because you guys were born here.

[06:24] Albert: Yes, both my brother and I were born here.

[06:26] Sean: Did your parents meet here in the U.S. as well, or did they meet in Korea and move here?

[06:30] Albert: My parents met in Korea, but they actually got married here. I know that sounds kind of crazy. That was also not that common at the time. I think we had, in some ways, I guess, I think we had a very traditional Korean upbringing. My dad was highly educated. My mom actually went back, and she got a degree at a university in the States. She actually went to the University of Albany and got a computer science degree in the ‘80s, which is a very progressive thing, I think, for a woman who grew up in Asia.

We were very close as a family. My dad was a scientist, and he had a very curious nature, as you can imagine, as a scientist. He loved building things. He was always making stuff for us. Everything that we wanted, he would make. My brother was a really good pitcher. Both my brother and I were pretty good baseball players when we were young. And so, my dad, one thing that we really remember was our dad, this was before they had those pitchback things that you can go buy in the store now. He wanted something so that we could practice pitching without having to have anybody catch for us. So, he actually built our own pitchback. He built it in the basement, and then we had it. And we could just roll it out of the garage and then throw pitches at it and had targets and all this stuff.

[07:45] Sean: Wow.

[07:46] Albert: But he was that kind of father who really was always doing things to role-modeling, having that curiosity. Our school environment, as I was mentioning, was really different. Our school, actually, what’s crazy is, has a couple other very successful entrepreneurs that have gone through it. So, prior to me, a guy named Colin Angle, who founded iRobot, the company that makes the Roomba, he actually went to my high school.

[08:15] Sean: Wow.

[08:16] Albert: And after me, actually, Brian Chesky, the CEO of Airbnb, he went to my high school as well. So, it’s this small high school in the middle of nowhere, but has this background of being affiliated with all of these inventors and scientists. And so, I think it’s fostered some entrepreneurial activity. One of my classmates, actually, he’s the head of GPU engineering at NVIDIA.

[08:44] Sean: Oh, wow.

[08:45] Albert: And he’s been with NVIDIA for well over 20 years now, and he was one of my high school classmates. So, it was not very typical, I think, in that way.

[08:54] Sean: Yeah.

[08:55] Albert: We had a mainframe in our school, which was something that was really unusual. So, actually, my dad got a terminal, a little dumb terminal that you could use, a modem where we’d literally have to plug in the handset of our phone. You’d have to put it into this little coupler. And by noise, it would actually communicate with the mainframe.

And so, we got accounts on there. And we could play these weird little text-based games. And then you could write programs in there. And so, my brother wrote a lot of software, I wrote a lot less than him. But that was a way that we got into programming and got interested in computers, in general. And that was a super atypical thing, I think, at the time. But obviously, I think, had a big influence on where we both ended up.

[09:41] Sean: So, that does beg the question, why econ?

[09:47] Albert: Well, it’s funny that you asked that because…

[09:50] Sean: I mean, that’s a science. It’s a social science, but…

[09:54] Albert: You’re not trying to disparage the econ community. It is a real science, we believe. Well, my father, one of his observations, working as a corporate research and development scientist, was that the managers were the folks in the company that had the most accolades and were rewarded the best. It wasn’t the scientists, even though they were the ones who, in his mind, were really spending all the time to come up with the innovations that were ultimately being used in the products.

So, he had very clear advice, like, “I want you guys to be businessmen.” And so, I don’t think that either my brother or I left, at least, home after high school with this inclination or intention to want to be in science, per se. And I think, in an atypical way, I think, for a Korean parent, my dad was generally pretty open-minded about what my brother and I were going to end up doing.

He was not like, “Hey, you need to go to medical school and be a doctor. You need to be a lawyer. You need to do any of these things.” He was somebody who, I think, benefited from having a career where he was really pursuing something that excited him, something that he was passionate about, that allowed him to be the best version of himself. And I think that’s what he wanted for us. So, he always encouraged us to keep searching. If that was not how we felt about the work that we were doing, I think that, also, was something that was encouraging, going down an entrepreneurial road, perhaps, was just having the ability to say, “Hey, we’ve got free reign to go after something that is something that we feel passionate about doing.”

[11:42] Sean: So, then, take us through the story of how you and your brother came to start MyFitnessPal.

[11:53] Albert: My brother was actually the real, sort of, the father of this company and this idea. My brother and my sister-in-law were getting married. And they had decided to have a beach wedding in Mexico. And my brother was like, “Man, I am not in good shape.” He’s like, “I really want to look good for this wedding.”

So, they went to a gym. They went to see a trainer. They started working out. And the trainer said, “It’s great. This is definitely important to get him to a fitness plan. But if you really want to reach your goals before this wedding date, you’re also going to have to think about what you’re eating. And so, the way that I want you to do that is to keep a food journal. And here it is.” And he literally presented my brother with this paper and pen diary, plus a little reference guide that had some generic information about foods and calories. And he said, “Just write down what you eat and use this reference guide to keep track of how many calories you’re consuming. And keep it under the certain level for the whole time and you’ll be good to go.”

And so, my brother took that. I think he felt like, logically, it made a lot of sense to do this thing, but you just couldn’t believe there wasn’t a better way to do it. And you have to imagine this is in the mid-2000s. So, we’re deep already into this first wave of internet companies and, already, companies like Facebook are starting to emerge. So, there’s plenty of familiarity with using software solutions for all of these types of problems.

And what he found was, at the time, there were actually quite a few software tools that would allow this. But it wasn’t an area where you would see a lot of Silicon-Valley-type technology startups being built. These are more software that was built by health companies or dieticians. So, I think, in his opinion, at the time, there were a lot of usability challenges with this software. It’s like it wasn’t a lot of software design expertise that was being put into something that is really tedious and hard to do on an everyday basis.

So, his observation was, “I think there’s a lot you could do to make this process simpler, faster, easier.” And so, he decided to just take it upon himself to write his own software. So, he started building this thing, and he built this prototype himself. And he liked it. And both of us tried it, and we both thought it was pretty cool. So, it’s like, “I think I’m just going to make this thing. I’m going to essentially publish this for the public. We’ll see what happens.”

And it was interesting. It wasn’t like, overnight, we had millions of people using the product, but there were definitely people who loved it. And even if it was 500 people in the beginning or 1,000. And this very enthusiastic community of users started using the app. And I think my brother and I just got some inspiration from that. It started to feel like, “Wow, there’s some momentum building around this thing. And it’s really clear that the small customer base that we have really loves this thing.” And it was showing some very steady growth, even if it was not astronomical at the time.

And so, I think we just had a discussion and I laughed about it because it sounds like we had a discussion but it was, basically, like my brother said, “Hey, I want to work on this thing full-time. And I think you need to do it with me because I don’t want to do it by myself.” And so, he’s like, “So, quit your job and let’s work on this and let’s just see how far we can take it.” And it sounds like a weird, simple conversation, but that’s basically how it went. And we were both like, “Yeah, let’s do it. Let’s give it a try.”

[15:45] Sean: I mean, this is pre-mobile, pre-social media, right?

[15:49] Albert: Yeah.

[15:51] Sean: Or, current iteration of social media days. How did you guys go about finding your product market fit in your initial batch of customers or your early adopters, if we’re to use all this lingo?

[16:02] Albert: I think what’s really interesting about this product is there’s a lot that I don’t know how to replicate, because people ask me all the time, it’s not like that many companies that have built a consumer application that has reached the hundreds of millions of levels of customers.

So, they’re like, “Oh, do you know these amazing growth hacks? Are you some distribution expert?” And it’s like, “No.”

My brother actually had a career in sales and marketing. And I obviously had a lot of consumer product experience. So, we were familiar with a lot of tactics at the time, things like SEO was still really big, obviously, because this is literally pre-mobile, right? Everything is still web-only.

[16:45] Sean: This is pre-YouTube.

[16:47] Albert: Yes, and SEM.

[16:49] Sean: Yeah.

[16:50] Albert: So, we started by doing just a little bit of that stuff. But it wasn’t really cost-effective because the site was being monetized through advertising. So, getting the acquisition costs below the revenue was almost impossible, even though CPMs for advertising were a lot higher, actually, for web advertising at that time than they are now.

[17:09] Sean: Yeah.

[17:11] Albert: But it did allow us to build this very small community of users. And those users were highly engaged, and they did a few things for us that were really valuable. So, one was they participated within the community that we had built for the product itself. So, we actually had our own forums, our own Reddit-style forums that were built. And we had these really hyperactive users that were in there, just talking to each other, helping each other, sharing knowledge, just providing support to each other.

And that became a little bit of almost like a center of gravity for some level of activity and drew some people in, because there was a lot of SEO value to the content that was being generated. And so, you start to get people from, like… 

What’s really weird is the initial set of customers, mostly not these very casual people, right? At that time, if you were going to go on this calorie-counting journey, you were typically somebody who, maybe, had a medical condition that they needed to help address by losing some weight, or you were more like an enthusiast, like, you were a trained athlete, or you were a bodybuilder, or you’re someone that had, like, were on the opposite end of the fitness spectrum.

And so, what was really interesting was, within the community, you had this mingling of these two groups that don’t normally mingle very much. So, people that were, in some cases, really struggling with weight issues or they had other health issues and had very little experience with exercise and nutrition. And then, you have these people who are hyper-optimizing everything in their life at the time to try to get maximum performance or to build muscle mass or whatever it is.

And there was this very symbiotic thing that was happening, because there was people who had a lot of questions and there was people who had a lot of answers. So, that developed this very unique community. So, that was one big thing that was happening, even with a not a humongous amount of customers.

The other thing that we did early on that really helped us visa the competitors that we had was we saw that there’s a pattern in, people are often eating a lot of the same things. And so, one of the challenges of doing this food tracking is that it’s really tedious and hard to put in new information. So, if I enter food and that is not in the MyFitnessPal food database, then I got to enter in all the details myself, like all the calories and stuff. And it’s okay to do that every once in a while, but if you have to do that all the time, then it becomes very burdensome for you as the customer.

But that information, typically, doesn’t change that much. It does change a little bit over time. And so, our thought was, “Well, why don’t we just take our user contributions, save them, run some processing over that data to try to make sure that it makes sense and is clean as much as we can, and we’ll allow users to just share it with other users. So, essentially, we crowdsource this data.”

And what’s incredible is, even if you have a small amount of very dedicated users, you accumulate data very quickly. And so, what ended up happening was our database went from being very small to being the most robust, the biggest, the most comprehensive database in the world in terms of food and nutrition information. And when you have that, then you actually have a little bit of this situation where, “Well, everybody wants to use that app because that’s the one that you never have to enter in any of the foods yourself.”

So, the culmination of having those things was there was a lot of word-of-mouth referrals that were happening. So, people were basically saying, “Hey, love this app. It’s got a great food database. There’s a cool community. You should try it.”

And this other kind of thing that would happen that was also really weird that it’s like somewhat specific to what we were working on is there’s two things that would often happen for a user if they were using our product and having success with it. One is there’s a certain type of person that just wants to tell everybody, right? They’re like, “Dude, I’m using this new app and it’s like I lost 10 pounds. It’s awesome.” They’re literally oversharing it, telling everybody at their work, telling all their friends about it. So, that would happen to some degree, where you just get crazy evangelists out there.

And the other thing that would happen that is also really weird is you get the flip side where there are people who might be quite shy about it, but there’s a literal physical transformation that some people go through, right? If you lose 20 pounds, it’s pretty noticeable.

[21:46] Sean: Yeah.

[21:46] Albert: So, oftentimes, people would actually reluctantly get asked, and they would say, “Well, yeah, I’ve actually been trying this diet,” or, “I’m using this MyFitnessPal app.” And so, when we would go out, because we were trying to understand the dynamics of this, we would go out and survey our customers, we would talk to them. And it was inevitably always one of those kinds of cases that ended up being the reason why somebody learned about our app from somewhere else versus any advertising or marketing that we did, because we basically stopped advertising altogether.

And so, the mixture of those things just turned into this very steady growth engine. And there was a pattern to it, where, every single year, essentially, right around New Year’s, as you can imagine, we would get this humongous jump in customers, right?

[22:33] Sean: Yeah.

[22:34] Albert: Everyone shows up on the first Monday after New Year’s because it’s actually not New Year’s Day that people use these products, because we’re too hungover or whatever it is. It’s, the first work day after that, we would just get 400% usage immediately.

[22:49] Sean: Yeah.

[22:50] Albert: And what would happen is our usage would go up and then it would decline a tiny bit going into February. And then it would just stay at that level and then grow slowly for the rest of the year. And then, in the next January, same thing would happen. So, after two or three years, it became really clear, like, “Wow, this pattern is not changing it all.” So, you go from… if you’re going four X a year and you started even a small number by three or four years later, it starts to become a big number. And that was when things got really serious.

[23:21] Sean: That’s amazing. Wow, thank you so much for sharing all of that. It was so much wisdom and knowledge from what you just shared.

[23:31] Albert: I think of it more as dumb luck. That’s how these things are, in some way. You have to make some good choices, but there’s a lot of good fortune that happened. I didn’t even mention this, but between when we started and we ended up selling the company, the iPhone came out and social media took off and all of these things that were propellants, wearable technology took off. Those are things that didn’t exist when we launched.

And every single one of those is like a tailwind for what we were trying to do. So, you get this very lucky set of new innovations that you maybe could have predicted were going to come, but you didn’t know when it was going to come. And every one of those things made our business better, made our product better, faster, more usable, more valuable. So, sometimes, you need some of that stuff to happen.

[24:23] Sean: I mean, I 100% agree, but this next question is going to debunk luck a little bit sometimes, in that I’d be remiss to not ask, if you can try to think back, remember, what were some of the biggest challenges that you, guys, encountered, top one or two?

[24:42] Albert: Well, one thing that is hard is because we didn’t go down a very conventional path from a startup standpoint, back in those days, it was like there was even a lot less angel investors and seed investors. There’s many, many more now. But you would typically gone to a venture capital fund and raised some money. And by virtue of doing that, you would have probably raised your profile in the press. And there would have been some benefits associated with that that would help establish you as a legitimate Silicon Valley startup, with the primary benefit of that being, you can recruit people who are interested in working at that kind of organization.

When you’re two guys bootstrapping this thing and you try to hire people, they’re like, “What? I’m going to go work on what with you two guys?” It’s like, “Who are your backers?” And it’s like, “No, we don’t have any backers.” And they’re like, “Well, how are you going to pay me?” And it’s like, “Well, our app makes some money right now. We can use that money to pay you.”

I’m obviously telling the story in the least flattering way possible for the organization, but at the time, that was something that made it hard to grow because you really… you didn’t have the benefit of having this company brand out in the marketplace that would get really high quality, high talent people excited.

So, I think we had to be very scrappy with how we found people. As you can imagine, a lot of it was convincing people who knew us to join us. So, it’s crazy. A great hire that we made is a guy that grew up across the street from us. He’s literally our neighbor. Incredibly smart guy. He’s a literally trained dramatic actor, was working on Broadway, was always very fluent in technology, which is interesting. He was a total technophile, loved computers, loved everything, but he was also a dramatic actor. And he was thinking about making a career switch. We were still in touch and good friends from our time growing up together. And he was talking about how he was working at an Apple store, actually. and the Apple stores were famous for having incredible service levels. And so, we needed somebody to run our customer support organization.

And we just couldn’t think of somebody that would be better than him, even if he had no experience doing it, being a software support person. And so, we hired him and he did an amazing job. He built an incredible team. He built amazing processes and culture around how that organization would work and how important it was for an app like ours to be really attentive to our customer needs. Because the last thing we wanted for you is to quit making some health change in your life because our software was buggy or you were having problems figuring out how to use it.

So, in any case, we were having to find people like that who were like, we’re making a bit of a gamble and they’re also making a bit of a gamble, and trying to be really smart about how we did that. That was, I think, a challenge in the beginning, but something that we were luckily able to overcome in the early days.

The other stuff, and this is a really weird psychological thing about doing a bootstrap-type business, and I don’t know if it exists as much anymore as it did back then, but it was just so much more uncommon to go down that route, right? You didn’t have people who were like bootstrapping technology companies that much. That just wasn’t as a usual route that people would go.

And so, there was a little bit of a, like, if you went out and talked to people about what you’re doing, it was like, “Oh, that sounds nice.” It’d be as if you told them that you were starting a laundromat. It’s not that there’s anything wrong with that. That’s a perfectly good, honest business to run and can be a really lucrative one. But if you’re in Silicon Valley, people are like, “Oh, it sounds like you don’t have ambition or you’re not trying to build something really big and interesting.”

And so, that can… I think if you were in a cultural situation like that and you’re hearing that kind of stuff, it can actually bleed into your own mentality where you start thinking less aggressively and less ambitiously about what you’re trying to build. And so, that was strangely, I think, something that both my brother and I had to overcome.

And I distinctly remember having a conversation with a good friend of mine who was also a Silicon Valley person, a really early employee at Yahoo! and some of these really big companies. And we were talking about this goal that we had, and we’re like, “I think we want to try to be a top 10 application in health and fitness.” And we thought that that was this really bold statement.

And he looked at us and he’s like, “Are you guys stupid?” And I’m like, “Why?” And he’s like, “Why would your goal be to be number 10? Don’t you want to be number one? What reason do you see that you couldn’t be the number one application?” And then we thought about it and we’re like, “Dude, you’re totally right.”

And I know that sounds completely just strange, right, why does that matter? But when you start to think about a vision that is really different and more ambitious, it does change a lot of how you view certain decisions along the way. And this is something that I actually talk to a lot of startups about now, which is, how do we be really focused on delivering something that we can definitively say solves a problem even if it is small, right? Because we are a startup, we are obviously not going to change the world in the next 10 minutes or 10 hours or 10 days?

This is like we have to solve a singular problem, we have to do it really well and do that in a way that we believe can ladder to a solution that can actually change the world. So, we have to have a product vision that we aspire to and think about all of the components, all of the assets that we build and we develop as an organization. So, if we build capabilities in our software or we collect certain data or we build a certain kind of network, like a social network, those are all things that can be leveraged upon to pursue bigger and bigger ideas, right?

And so, having a mindset in the beginning and trying to, really, even if it’s not totally clear, map out in your head, what it is that we do well today, what does that get us? And then, how does this allow us to deliver more value in the future? And then actually designing a long-term product roadmap and product growth plan to try to do that is something that requires actually having an ambitious end state that you’re looking at.

And so, I don’t know, it’s a weird thing, but I think both my brother and I look back on that conversation and we think, yeah, I feel like our mindset’s really changed.

[31:36] Sean: It’s really interesting. And I’m sitting here taking notes, because it’s something that I’ve had to come to realization grips with as well, just that realizing there’s so many different types of entrepreneurs. When the media shows you this one type, you start getting imposter syndrome. It’s like, “I’m not an entrepreneur.” And these guys building or these gals building these big major tech companies, Airbnb, they’re real entrepreneurs. But what that does create is a lot of doubt, I think, for a lot of people starting out, because the whole ethos of an entrepreneur is to solve problems, right? And that’s what I tell a lot of people. And to your point, you should be passionate about solving problems, not about how big of a company can you build. I think that’s the results of it. Or, how much money you will make, right?

And it’s interesting that you had those hiring challenges, because as I’m listening from my perspective, now, my shoes, I think that’s a beautiful challenge, because a lot of times I also see startups that have VC backing that, sure, they have easy time finding talent, but is it the right talent? Does that talent have the right motivations for joining that company, right? Are they just here for the big flashy name of Uber, whatever, and then just hop out after two years? Then they’re not really invested in helping you grow the company, right.

[33:03] Albert: Yeah.

[33:04] Sean: And so, everything is a double-edged sword. I truly believe that.

[33:09] Albert: I think that’s a very astute observation. It’s like, even all business advice, it’s like there’s two sides to it. You can be honestly too frugal, and it’s not the most common scenario in Silicon Valley startup building, but that can happen where you underspend what you need to to really develop what you’re trying to do. There’s a reason that you’re taking venture money, is because you’re trying to push yourself.

But on the other hand, a lot of companies just burn the money frivolously. It was one of the things that, like, there was a really funny conversation. Having been on both sides of it, been bootstrapped for a long time, and then actually having raised money from institutional venture capitalists and gone through that process, one of the conversations we had when we were raising money was with a really well-known VC who had talked to us and was a great guy. It was very interesting to talk to him about our business. He talked about how he’s like, “Guys, I love that you’re bootstrapped. I love that you did all these things.” He’s like, “When that wire hits your bank account, you’re going to spend it.” And we were like, “What? Are you crazy? No, we’re scrappy. We’re the scrappiest dudes you’ve ever seen. We’re our own janitors. Of course, we’re not going to spend that money.”

And when we looked 12, 18 months after we raised that money, it’s like there was definitely a lot of, “Wow, how do we get to this place where we’re spending this amount of money on a monthly basis?” And it was another one of these things where we could clearly remember having that conversation and thinking, “God, that guy was right.”

So, it’s funny how these things happen. Even when you feel like you know they’re going to happen, you still just forget and it ends up happening to you.

[34:52] Sean: Yeah, you’re just making me remember. I also come from a bootstrap entrepreneur style. I think it would just happen to be that way. And then when I did raise money for a startup after Haas, 800k, burned right through it in 16 months, 16 or 18 months. It was gnarly, looking back.

I do believe there’s definitely a time and a place for that type of investment and spending and whatnot. But at the bottom of my heart or my soul, even, I really believe for a lot of people, there’s a lot of discipline to be learned in bootstrapping. Going back to something you said that was very astute early on, you said, you make different decisions when you’re bootstrapping and when you’re venture-backed. You make very different decisions when you are trying to figure out, “Do I have 12 months of savings or three months of savings to pursue this idea?”

And I think a lot of these things do set people up for better chances of success when they have the right environment that is suited for them, too, for their own entrepreneurial style or leadership style.

[36:10] Albert: Yeah. One thing I think is prudent, whether it’s building products or building companies, is, I think people see constraints as the enemy, but they’re also very powerful in terms of forcing prioritization and really pushing you to understand what’s truly important to whatever it is you’re doing. Being in a bootstrap situation, oftentimes, we talk about how we’d have 100 item list of things that we wanted to do and we could do three of them. And it’s like, “Well, okay, what are the three things that are really going to move the needle or put us in a better position?”

It’s like you’re always trying to do things that, if you accomplish them and you are successful, it creates a little bit of a glide path to the next thing. It’s like, what is the stuff that I do that makes doing something else in the future easier?

[37:02] Sean: Yeah.

[37:02] Albert: And so, we would think about that stuff a lot, both from a product standpoint, which is like, well, what are the things our customers can do that makes their experience a week from now better than the one that they have today, right? They save meals that they eat often. That’s something that they do a few times. And then the next time it’s much easier. But even as a company, what are the capabilities that we can build that just make it easier for us to do stuff later on?

So, I think constraints are really useful. They’re going to be there, no matter what. Even Apple has a lot of constraints they’re dealing with when they’re building a headset or whatever it is. There’s a ton of stuff that they wish they could do that they can’t do yet.

[37:45] Sean: That’s so interesting. You just made me synthesize or realize something. I’ve always felt but I never really conceptualized until just now the differences, in that, when you bootstrap or when you make decisions like how you just described, you’re looking for small wins that build upon each other, like what you’re saying. I’ve always found more success personally, and I can’t speak for everyone or anything else, but personally, in all the businesses I’ve built, that is how I have found success.

How I have not found is the antithesis of that, which is the “fail quick, fail often” mentality, right? And when we did get money, that was the mentality we adopted, right? We’re just like, “Well, we have VC money.” Everyone’s like, “Fail quick, fail often, fall forward,” right? It’s all these things.

And what I realized is what you may end up doing, somehow, some people may, like myself, took that advice in the wrong way, was let’s throw all this resources at a ton of stuff and see what’s going to stick, right? And it doesn’t instill confidence. It doesn’t give you any better picture because a lot of things are failing. And I think that that actually works against entrepreneurship or entrepreneurs sometimes. You hear both these things, but it’s so such a different path.

[39:05] Albert: Yeah, I think that’s right. It’s funny, we used to always have this saying that thinking is cheap.

[39:11] Sean: Yeah.

[39:12] Albert: And so, a lot of times, there’s problems that you encounter, and the first instinct is to do something, let’s launch this feature, let’s run some tests. And it’s like, no, let’s spend some really deep time examining this problem, talking it through, thinking about what the motivations are that the customer has, what are the problems that they’re encountering, what are the reasons? If I go really deep, what is the psychological reason why they find something difficult to do, hard to use, whatever it might be?

And I think that there are more answers there than people believe if you spend the time. Even people who are not necessarily feeling super confident that their intuition on these things is right a lot, but I think if you actually go through there and debate things at this very granular level, you can avoid actually going out and trying a lot of things that have a very low likelihood to succeed.

[40:14] Sean: Yeah. So, on that note, what are some things that you’re working on nowadays? What’s next for Albert Lee?

[40:24] Albert: I am still helping a lot of companies. I am dabbling in building some new software. You heard it here first, OneHaas Podcast. I don’t think I’ve publicly declared that anywhere else. So, hopefully, there’ll be a new project that I can talk more about probably next year, not this year, something that I’m working on with my brother. I wish I could share more details, but I can’t.

And it’s been an interesting experience, I’ll be honest, as a second-time founder in my experience. I’m not like you. I wish I had founded more companies, but I got to it late. And trying to figure out, well, what is it that I want to do? What do I want to build? And there’s a lot of different ways to go about trying to answer that question. And it’s pretty difficult. We actually hired an external person to help us, almost like an executive career consultant type, but someone who had a process to go through to explore what is exciting to want to do. Because we had gone through a bunch of different exercises to determine possible things that we might want to build. And you can go from a very consultancy, boiling the ocean and looking for opportunities. You might say, “Okay, wow, healthcare, there’s probably a lot of things inside of healthcare. Let’s go look in there. Oh, okay, clinical trials is this really weird blocker to a lot of research. So, okay, let’s go deep dive into clinical trials,” and trying to go that way or you can start very organically from your own experiences and say, “Okay, well, what is the stuff in everyday life that I’m doing, seeing, feeling that just doesn’t feel quite right to me?” Are there products that I’m using that I don’t like? Are there experiences that I’m having that don’t make any sense?

And I think my brother and I had determined that, the latter way of trying to build something was much more aligned with how I think we think and we operate and how we feel motivation. And it comes a little bit from the selfish place, which is, like, “Well, I have this problem and I want to solve it. It doesn’t look like anybody else is going to solve this. So, I’m going to try to do it on my own.” And I think that can help give you the passion. And I think it’s very aligned with even how MyFitnessPal came to be, in the first place.

[42:43] Sean: I think that’s, in my opinion, I mean… so, we both live in, I feel like, pretty affluent areas of our cities. And when I go around and I just see how much wealth is around my neighborhood, or when I go to Newport Beach or CDM (Corona Del Mar), I’m just like, what do all these people do? And they can’t all be tech billionaires, right?

[43:10] Albert: Right.

[43:11] Sean: And I just remember growing up reading The Millionaire Next Door and all these stories and Rich Dad, Poor Dad. And you realize that there’s so many entrepreneurs that just you’ve never heard of, you don’t know about. And they’re just solving problems the way you’re going about this.

This is fantastic. Anything you wanted to share that I didn’t get a chance to ask you?

[43:33] Albert: No, I will say, since this is a Haas podcast, that my experience at Haas was actually very transformative for me, personally. I’ve been working in technology from ‘99 to 2002, so, the three years prior to going to Haas. Those were the crazy boom and bust years. I mean, literally, just in that three years, things went crazy and then they went to nothing, pretty much by the time I started school.

[43:58] Sean: Yeah.

[43:58] Albert: And during that whole time period, I’d never thought about doing anything entrepreneurial, even though I was surrounded by it. I was working in business development for a while. So, all I did was meet with startups and meet these startup founders. And they seemed like crazy. Half of them didn’t have any experience in anything. I mean, I can tell you a million stories about weird teams that I met with.

And I think part of that was it just seemed chaotic and risky, but part of it was also really struggling to see myself as an individual who could take on the task of running an entire organization, running an entire company, building something from nothing. That just seems so daunting to me. And what was really interesting is I didn’t expect to have this experience at Haas, but I think one of the magical things about being a business school student is this, you get this new identity where you’re something but also nothing. And I don’t mean that in a disparaging way, but it’s like you have this opportunity to reinvent parts of who you are and expose yourself to a lot of different things.

And just immersing myself in a community of people who, many of whom had entrepreneurial aspirations, just completely changed my personal mindset. Not necessarily to the point that I was ready to start a company right after I graduated, but within a few years of when that happened, I was off on my own, running a business and feeling comfortable that I was doing the right thing, and also feeling comfortable that I had a community of people to support me that was more diverse and more broad than the one that I had built as a technology employee.

So, I had a lot of people from Yahoo! who helped me out along the way, but a lot of my business school classmates had experience in these really different disciplines and areas, everything from recruiting to finance to whatever it might be that we needed. And I called upon those people quite a bit as we were going along.

And so, it’s interesting. I think that there is, as we’re trying to foster entrepreneurship as a discipline in business schools, and certainly Haas is going to be way up there, probably one of the best schools in the world to study this stuff, I think there are just some of these things that you don’t know that you are going to get as an experience, being somebody that went a business program like Haas, that are essential, I think, in a way to feeling confident, putting yourself in a position to be successful.

So, maybe, given that we’re both Haas alums, I just want to shout out the school and say that I’m really grateful for that experience. And I think it was super helpful to me, personally.

[46:52] Sean: Same, same. Well, on that note, go, Bears!

[46:57] Albert: Go, Bears!

[46:58] Sean: And thank you so much for coming on the podcast today, Albert.

[47:02] Albert: Thank you for having me.

[47:07] Sean: Thanks again for tuning in to this episode of the OneHaas Podcast. If you’ve enjoyed our show today, please hit that Subscribe or Follow button on your favorite podcast player. We’d also really appreciate you giving us a five-star rating and review. If you’re looking for more content, please check our website at haas.fm. That’s spelled H-A-A-S.fm. There, you can subscribe for our monthly newsletter and check out some of our other Berkeley Haas podcasts.

OneHaas Podcast is a production of the Haas School of Business and produced by University FM.

Until next time. Go, Bears!