The vital question Taskrabbit founder Leah Solivan wished she asked investors

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1:34So it was always a popular task, okay?

1:42And I would always, you know, I'd give these talks and be like, can anyone in the room guess the most popular task on TaskRabbit? No one would ever guess it was always Ikea. TaskRavit can help you find someone handy to do all sorts of work, like assemble a bookshelf, pick up your dry cleaning, or help with the yard work. And that's Leah Sullivan, who founded the company and, in the early days especially, often did the tasks herself. She grew the company to impressive scale and then became laser-focused on a perhaps non-obvious partner, IKEA. They were on our dream list for a long time. We want to be in-store.

2:20We want to be part of their checkout process, you know. But they were really very elusive, very difficult to get to. Private company, family-owned, out of Sweden. And at that point, we were live in London internationally. London was our fourth largest market. It happened to be IKEA's first largest market in the world. Leah convinced IKEA to pilot a partnership with TaskRabbit in London. You'd buy IKEA furniture on checkout. you could sign up to have TaskRabbit, deliver it, and assemble it. Drove up average order value immediately for IKEA. They were psyched. And we were excited we had all these new customers.

3:01I mean, it was a win-win. It was so obvious. We were not thinking acquisition, but IKEA started thinking acquisition. That led Leah to successfully exit her Boston-founded tech startup to a Swedish furniture giant. TaskRabbit's scale stories about meeting customers' timely needs and Leah's ability to leverage transformative technology.

3:28You've got to have incredible talent at every position. It's like this huge push. There are fires burning when you're going home. Can you believe it? Such an idiot. And then you go back to, this is totally going to be amazing. There are so many easy ways. I have no idea what to do. Sorry, we made a mistake. But you have to time it right. Oops. working as a three-bedroom apartment. Stuff that just seems absolutely nut balls. Ten years later, we're like, well, that's just how you do it. We haven't made it just how you do it. This is Masters of Scale.

4:05I'm Jeff Berman, your host. Leah Sullivan founded TaskRabbit in 2008 and helped lead the company as it expanded to more than 40 cities. We'll hear more about that impressive scale story later. First, I wanted to hear about her second act. She's now a general partner of an early stage fund called Fuel Capital.

4:29Leah, welcome to Masters to Scale. Thank you so much for having me. I'm thrilled that you're here. Before we get to how you built a company and sold it to Ikea, you've been doing Fuel Capital now for how long? Almost eight years. Yeah, almost eight years now. And what made you decide to stop being an operator and start being a VC? It was a big decision to go over to the dark side, as some would say. I really started TaskRabbit out of a place of being a technologist. My background's engineering. I love technology. And I sort of accidentally started this company. And it took up 10 years of my life and had a great outcome.

5:10And it was an incredible journey. And that was all good. But at the end of it, I had felt like I had missed out on other emerging technologies that, you know, were forming. And I was excited to kind of be able to dig in and learn. And I wanted to do something next that stayed within the realm of entrepreneurship, but allowed me to kind of continue to expand my learning and work with more founders. So I'm curious when you're either vetting entrepreneurs or you're coaching your portfolio leaders, what are you drawing on from your own experience that is surprising to you? What do you find yourself going to with them?

5:50I mean, a lot of PTSD. Yeah. I mean, honestly, it's just I have so much empathy for the journey and the process. And I had a very complicated board dynamic at different points in my TaskRabbit journey. And I was always super sensitive to the imposition that an investor can have on a founder. And I always wanted to be that investor that was going to be really helpful and was kind of the back channel call or the back channel reference. And I've been very careful to not be an imposition. So I think it's really about having sort of that personality, that low ego, that sense of humbleness that you can bring to a board meeting that allows you to ask good strategic questions and not just asking questions for the sake of asking, but to really understand deeply the business and how you can be helpful.

6:45As we sit here, if my math is right, we're about 16 years after you founded TaskRabbit. Sounds crazy to me. What is different that is not obvious starting a company today than when you started TaskRabbit? I mean, I think a lot of things are very different. I mean, let's start with the technology stack first. I left my job as an engineer at IBM, where I was programming in C++ and Java. We were burning CDs and we were shipping them around the world on an 18-month cycle. For some of our audience, we're going to have to explain what that is. But yeah, go ahead. Okay. Yeah. Now I'm working with a couple startups and advising that are building AI products.

7:26Okay. This is a different game. We're talking GPUs. We're talking very expensive. We're talking one server, one GPU can run one thing at a time. And I'm like, how do you launch this to the masses? I don't understand. And so I think that technologies like AI, it's a big game-changing technology, but the costs are still so high to launch something. I think startups need to raise a lot more money to get started right now today than I did. I mean, I started with$250K from angel investors, right? And that got me pretty far.

8:06is the cost of especially an ai-driven startup right now is that making you hesitate more about making investments is that changing how you invest it absolutely is changing where i think it makes sense for early stage small funds to invest i mean it's almost like um when we used to look at hardware companies and we're like whoa this is going to take way too much capital like ROI on our investment. The math just doesn't work for our fund. I mean, I think to some extent, to some of the big AI companies, you see the same thing. And so you see the big players like Andreessen or you see Microsoft investing in open AI.

8:45Like you need really, really deep pockets to be successful. I think it's harder for the small funds to play here. Yeah. Okay. I'm going to take you back to winter 2008? It was a snowy night in Boston. It was a dark snowy night. I mean, it was literally, right? It really was, actually. It was a big snowstorm. And so what happened that night that gave birth to what became TaskRabbit? So I was getting ready to go out to dinner. I had called a taxi to come pick me up. We were meeting friends and we realized we were out of dog food. And we had this hundred pound yellow lab named Kobe at the time. Amazing, amazing dog.

9:29And I thought, you know what? How are we going to get this dog food? This is such a stupid problem. We're going to be late for a reservation. Are we really going to stop on the way home while the stores will be closed? The iPhone had just come out four months earlier. And I grabbed my iPhone and I thought, why can't I use this device? to connect with someone right now in real time and get the dog food. You know, at that time, no one was using location-based awareness in their tech stacks to pinpoint where people were, right? Because the iPhone had just come out. Facebook was just sort of breaking out of the college scene, becoming more mainstream, but no one was really leveraging the social graph to build trust between users.

10:10But for me as an engineer, I saw these three technologies, social location and mobile. And I thought, there's a lot here. There's a lot that we can do. And so that was really where the idea for TaskRabbit was born. I used my phone at that moment and I thought, okay, if such a site existed, what would it be called? And I typed in the domain name runmyerun.com and it was available on GoDaddy for$6.99. So I bought it. And then for the first 18 months that we existed, we ran under that name. But at the time you had this idea and the URLs available and you're putting these new things together, you've got a pretty good job at IBM.

10:48I have a great job at IBM. So did you decide to jump right away or did you take your time? How did you play it? It took me a little while. And really thinking back to that time, I realized that a couple of things. One, I started out as a quality engineer at IBM, not as a programmer. And I had a background in computer science, but I got my first job as a QA engineer. And so I was looking, you know, for bugs in the code and I'd find them and then I'd pass it to the engineers to fix. It took me a really long time for them to move me into an engineering role. I had to really fight for it. I actually had to get a job somewhere else and come to them with the offer and say, this person's willing to hire me as an engineer.

11:28And do you think that was misogyny? Do you think that was, what do you think that was? At that time, honestly, probably a little bit. And I was also pretty young. I was in my early 20s at the time. I was young, female. I saw young men come out of college and get the engineering job, and that always bothered me. But it was also a track at IBM in a big company where you had to pick if you wanted to be a technical track or a managerial track. I loved being on the technical side. I think they thought I'd be better on the managerial side. Again, I'm not sure if it was because I was a young woman. I mean, honestly, you can ask anyone about my people management skills.

12:08Like, I think my technical skills are better. I'm guessing you're pretty good at both. Yeah, I mean, but you know. So I was a little bit frustrated, to be honest, there. I had spent eight years there. And did you have a mindset of like, hey, 30 years in a gold watch is still a career choice? That is the model I had seen in my life. My father spent 30 years in the Air Force. No one in my family was an entrepreneur. No one had started their own business or company or even worked for a small company. My parents were extremely proud of me getting the job at IBM. But there was always this nagging, you can do more, you can do more, you can do more.

12:49And so I think I started to kind of follow that curiosity. And when I saw these new technologies develop and emerge, I just started playing around with them nights and weekends. And I think that's what sort of started to pull me away and drive me towards, if you have a great idea, maybe you could actually go build it. You could go start it. But it was a big decision, and it wasn't an easy decision to leave. I ended up cashing out to start the company my pension from IBM. That's a big decision. How did you get to the point of saying, I'm maybe not going to burn the boat, but like, I'm going to go and do this and give up a very safe, very secure, prestigious career track?

13:35I'm not sure exactly what gave me the confidence to do it in that moment. But I think I remember being eight years old and asking my father what the highest position in a company was. And he told me it was being a CEO. And I remember asking him that question when I was eight and then creating my first startup, which was this recycling program in my elementary school. Wow. I liked being the boss. Yeah. And I think, so I had the personality that was like, I have the ideas, I like being the boss, I like organizing things and people. And then I think as I built up the skill sets, I sort of realized, you know what?

14:08Maybe I could do this. I think a key person though, a key mentor that really got me over that hump was Scott Griffith, who at the time was the CEO of Zipcar. How'd you get to him? It was complete serendipity. I was out to dinner one night with friends, telling them about the idea. And this one woman said, oh, you know who would love this? My friend Scott. You should email him. Here's his email, scott at zipcar.com. You know, just go shoot him an email. This was on a Saturday night. I was like, okay. I didn't know he was the CEO. And so I emailed him, cold email. I said, oh, your friend said I should email you about this idea.

14:40He writes back Sunday morning and he's like, why don't you come by my office this week? And I see that he's the CEO of Zipcar. And I'm like, okay, I should prepare for this meeting, you know? And so I got lucky. And then Scott and I just really hit it off. I'm curious because so many of the entrepreneurs who we talk with on Masters of Scale have a similar story where they were at a company, they had a job, and they didn't leave right away. They spent some time working on nights, weekends, whatever. When entrepreneurs are coming to you and they're in that position, they work at Meta or Microsoft or whatever it is, but they have this thing.

15:15What advice do you give them about when to make the jump and actually go do it full time? It's really hard to be all in on something if you have a day job. Yep. So I do believe that you have to give it your all. You have to dedicate your all one way or another. I'm also very sensitive that not everyone has the access, the opportunity, the privilege. Just to be able to do that without a safety net. Yeah. So I'm very sensitive to that fact as well. you know but I sort of look back on my journey and it was like the$27 ,000 pension plan you know like any little thing it was you know the credit cards that you know took me time to pay off whatever it was and so my advice is if you really have conviction around something you are going to find a way you're going to find a way to go for it and so many startups fail too right like so many ideas are just not good or the timing's not right or the market's not right.

16:18And so I'm always digging in with entrepreneurs too that aren't sure. Like, is this the idea? Is this the thing? Is this the thing? Yeah. Because it's a lot to sacrifice if it's not the thing. If it is the thing, it's a lot to sacrifice. Yeah. And you have to sign up, be ready for it to be a 10 year plus journey. And to your point, it's seven people in a room. And if the trash needs taken out, You're taking it out. Absolutely. Yeah. And I, you know, leave my job at IBM. I wake up the next morning and I just start coding. Like I like roll out of bed. You're a one-woman band. And I just code for like, I don't know, six weeks straight.

16:58And it's all in my head. And I got to get it out of my head. And so I got a first version built. and sort of what was very helpful in that time was I spent a lot of time locked away in a room coating, but I also spent a good portion of time at a little coffee shop surrounded by people. And I would pull people over. I'd grab them and be like, hey, let me tell you about this product. I'm like, would you use this? And like, how does this interaction feel to you? I mean, I would get people in real time and, you know, the little coffee house, Zoomies coffee shop in Charlestown was super nice to me and let me hang out there and talk to their customers all the time.

17:36Free Wi-Fi, free refills. I know. Yeah, it was a lot. And it took six to eight weeks to get something built that I felt like was ready for people to use. And then I said, OK, I need to find people that are going to do the jobs. So I went on Craigslist, put out an ad for someone to run errands. And I was completely overwhelmed by the number of people. Deluged. Oh my gosh. I mean, it was September of 2008. The stock market had crashed. Everyone was being laid off. I had lawyers coming to me, teachers looking for work. I mean, talk about timing. And I didn't plan the timing like that, but it turned out to be the perfect time to launch a company like TaskRabbit.

18:21And so the supply side, the taskers or the people running errands. It was overwhelming. And so I hand interviewed every single person because I was very worried from the beginning around trust and safety. And again, this was long before you jump into a stranger's car. Feel okay about that. I started with 30 taskers that I handpicked. That's a big number. It was a lot. But I felt like for what I wanted to do for the launch, I found this mother's group in Boston. It was 900 moms in one square mile, but they were very concerned about trust and safety, right? And so I was like, okay, if I launch a closed beta just for them, I just built it for them, and I found 30 taskers that I hand-selected.

19:06Wow. And then that's how it started. Still ahead, Halia scaled TaskRabbit from a single neighborhood in Boston to a global business.

19:29Real leaders don't back down when the stakes are high. They innovate, they push forward, and then they take the stage at the Masters of Scale Summit. Join us in San Francisco, October 7th to 9th, to hear from the CEO of the New York Times, scientists using cutting-edge technology to find cures, the leader of crypto powerhouse Coinbase, a retired four-star general, and many, many more. Apply now at mastersofscale.com slash apply25. That's mastersofscale.com slash apply25. If you're ready to take your startup from idea to impact, then AWS is your launchpad. From data storage to machine learning to secure app hosting, AWS gives you the tech trusted by the world's fastest scaling startups.

20:19And here's the best part. Join AWS Activate today and you could score up to$100 ,000 in AWS credits tailored to your stage and network. Go to aws.amazon.com slash activate and start building. Expanding your business in the U.S. can feel like a maze. Every state has its own payroll, benefits, and compliance rules, which can pull your focus away from growth. That's why founders use Deal. Deal is the professional employer organization, or PEO, that gives you a dedicated HR expert plus Fortune 500 level benefits for your team. The National Association of PEOs says businesses can grow twice as fast if they use one.

21:03So if you're scaling, make it simple with Deal. Go to deel.com slash mos and get up to three months free. Welcome back to Masters of Scale. You can find this episode and more on the Masters of Scale YouTube channel. And so you do this closed beta, 30 taskers, 900 moms. What do you learn from that? One of the main learnings was I needed to be the first tasker, the task rabbit as well. And so I had this little Vespa scooter I rode all over Boston running people's errands. Wow. That was the best learnings that I could get about building this company. And that's another thing I'll tell founders when they're building their business.

21:52Can you be a part of the process? That is how you learn about what customers want. Because taskers are customers too. And so I needed to understand how they were getting jobs, finding jobs, how much money they were making. Did that make sense for them economically? What types of jobs, what types of skills did I need to recruit? I mean, it was so much learning. I learned very quickly that by offering a service where you could get anything done, one, people had no idea what to post. Right. It's unconstrained. You actually needed constraints. Exactly. It was like blank space. No one knew what to use the service for.

22:29And then two, on the tasker side, I needed people that could do a lot of different things that weren't just specialized in one or two things. Just picking up dog food is one thing, but fixing a leaky pipe is another. Exactly. Leah kept tweaking her Boston model, but was eager to expand. A path toward scale emerged when she learned about something called the Facebook fund for early stage founders. It came with significant strings attached. If she accepted, she'd get just$15 ,000 and she'd have to give Facebook 2 % of her company. People, everyone's like, no, that's crazy. And I was like, oh, it does seem crazy.

23:08But it also feels like an opportunity and a way for me to open doors that I didn't have access to. Growing up on the East Coast, not involved in any sort of entrepreneurship, no network in the startup world. and so I was like I I know that everybody thinks this is a bad idea but I think there's something here that I'm just gonna make it into something that's worth it and so I ended up doing it so that 15k basically paid for all my flights back and forth because I was running the market in Boston Boston was up and running live I have all these taskers and moms and everyone using the service and then I spend a summer going back and forth to Palo Alto to do this incubator program at Facebook.

23:51The program came, I assume, with other benefits that an accelerator would come with. It did. It did. Lots of incredible opportunities to network. This is where I met Tim Ferriss, who became an advisor. Right. Pretty good one. He introduced me to Ann at Floodgate. He introduced me to Steve Anderson at Baseline. I mean, they led my seed round. So it really was turning that 15K into the million dollar seed round I was able to raise at the end. But from the beginning, I was like, if it's just about this 15K, this is not a good idea. But if I can turn this into something else, then I'll be happy. Yeah.

24:27Okay. So let's jump forward a little bit. The company is scaling. Things are starting to work. And at some point you decide maybe you're not the CEO of the company. Yep. What happened there? I was an accidental solo founder and I always wanted that business partner. I think it was after the Series A, I said, you know, this is a real company. and it's scaling and it's turning into something really incredible. I really want to focus on product and technology. I really want to find that business person. I said, I'm open to a COO and I'm open to a CEO. I think my mistake there was that the company was still so young.

25:03It was still so early to remove the founder as the leader. A COO would have been fine. And in fact, the second time around, we brought in an incredible COO that's been on this podcast before, Stacey Brown Philpott, she really helped me take the company fully to scale and to exit. But at this point, the company still needed the founder to be the visionary and to be the leader. And so, you know, we tried it. We had someone come in for six to nine months. We ended up hiring too many people, scaling up too fast. The burn got really high. And it was just kind of like, we need to get back to basics here and regroup.

25:41Yeah. There's a lot of discussion in the world about finding your technical co-founder. I think there's less about the technical founder finding their business co-founder. So how would you advise a technical founder to think about that? If I could go back and do it all over again, I would have tried harder from the beginning to find a co-founding partner. Like before I went to the incubator program, you know, maybe even before I left IBM, I would have taken the time from the very beginning to formulate the team that was going to build it. And instead, I was like, oh, I can build this. I'm going to launch it.