Youngest Self-Made Female Billionaire: How she Co-Founded Scale AI At 21, then Built another Nine-Figure Company Again!

0:00It's a symbol to a lot of people. I think it signifies hope to people that it's possible for women to achieve this status. And that's what I noticed when I got it. I didn't think about it, but that was pretty much what my DMs were. Where people were like, oh my god, thank you for setting an example. You're so inspirational. You've made me want to wake up early and work out every day and be disciplined and do my job.

0:25Lucy Guo:What would happen if we just told the truth? Welcome to TruthWorks, where we dig into the nitty-gritty of leadership and work. And what needs to change. I'm Jessica Neal. And I'm Patty McCord. Our journey together started in HR, but trust us, it's evolved into something wild, honest, and, well, a bit rebellious. So throw out the handbook. We're here to redefine rules to work for us, not against us. Let's dive into another episode.

1:02Lucy Guo:Hi, everyone. Welcome to another episode of TruthWorks. I'm your host, Jessica Neal. And today I have a really fun guest. I'm so excited to introduce Lucy. Lucy is, you probably all know of her. She is an entrepreneur, an investor, and an unconventional builder in modern tech. She founded Scale AI at 21. I mean, who does that? Nobody. And then she, I think, was the first woman to become a billionaire and self-made at that. And so she's scaling companies. She's at another company that she's founded. She's an amazing woman, an amazing entrepreneur. And I'm just so excited to have her on the show.

1:51Lucy Guo:Welcome, Lucy. Thank you for coming and joining. Thank you for having me. I'm so excited to be here. Yes. So like, let's, let's talk. Okay. Because I don't know, I was actually reading something before the show and it's going to sound maybe a little gross, but this woman founder was like, there's a tampon tax. And I was like, I hadn't thought about it like that, but I guess that's kind of true. But here you are 21 founding a company, becoming a billionaire and it seems like you haven't, maybe I'm guessing you've experienced boundaries, but it hasn't held you back. So let's talk about your story.

2:32Lucy Guo:Like, how did this all happen? Yeah, definitely. And it's getting better once I recognize the fact that people are born with advantages and disadvantages in life. And my disadvantage happened to be, you know, being a woman in tech, which is always a disadvantage compared to other people's disadvantages in life, right? So after that, I just accepted like certain places. So like to receive funding, to be able to hire, et cetera, to be able to get my next job. I think once I recognized that, I no longer complained. I just did it. But how it all happened, are we talking about like how scale happened or how I got attacked?

3:07Because those are two different things.

3:08Lucy Guo:I mean, I think I read somewhere that you started building like companies when you were young. Like you started doing things like as a kid. So maybe this was just like in your DNA. DNA. Maybe it started very early. I don't know. Tell us. Go back. Go back in time. Tell us. Yeah, let's just get on your mind. I would say that, like, you know, I have Asian immigrant parents and I think that was a lot of the reason of like who I am today. My parents didn't let me buy nice things. So I figured out that like I needed clothes I wanted or toys I wanted, etc. So I would say like probably started back in kindergarten where I was figuring out like, Like, oh, I could trade up Pokemon cards and then sell Pokemon cards for cash.

3:49And then I started playing Neopets back in second grade because I was in a lot to have a pet. And then I wanted rarer pets than ones that I was getting. So I started digging into online forums and found this entire, et cetera. That's when I started learning how to make bots to be able to get the pets and the Neopoints, et cetera. And I started reselling them on these gaming forums and trading them up as well. Then went on to just learn how to make tons of different websites to make money from like online streaming sites to arcade game websites. Ended up making my own virtual pet site and then started creating the networking tools because internet marketing was, I think, the hot thing back then.

4:26And people were bots like, you know, Twitter bots, etc. to be able to up their followers. So I think it was slightly in my DNA and slightly like a order that way to learn technology.

4:38Lucy Guo:Yeah, that's amazing. My husband is Korean and his parents immigrated here and he always says he didn't get anything either. But he did not do what you did, which would have been amazing. So I think like let's go back to so you're doing this as a kid. You kind of have this entrepreneur spirit because you want the skateboard or you want, you know, whatever type of clothes you wanted. But then it kind of turned into like real, like a real, like you're doing real stuff in real companies. Like, and you were very young, like for scale AI at 21. Like, can you take us through like how that happened? Cause I'm sure it wasn't as easy as it all looks.

5:21Yeah. So I would say, um, even though I started young, I think very young, I learned I had adrenaline for having users on my product. And it could be any product. It could be, you know, like a WordPress website or it could be an Arcade Games website or my virtual pet site. But I got excited when people were using that. And then I discovered hackathons in college. So I realized that growing up when I was building these websites, it could be any website, but I was really excited when people were on the website and using my product. So I realized pretty early on, I started learning that there was more to the world than internet marketing tools.

5:53So you could create these startups that like millions, billions of people could use. And I think that concept got me very, very excited. So when the opportunity to drop out of college through the Teal Fellowship came along, I realized that that was my best chance at building a startup. So I ended up taking it and then took a non-traditional path where I ended up working at Quora and Snap. But at Snap, I got the itch to just build something on my own again. Much like those great building products that all these people were using. But it's a little bit different when you're building zero to one, right?

6:24At this point, I had already, so that was like nothing new. And so I basically was like, I want to go join Y Combinator and build a company. And the first app I had built was actually ClassPass with Clubbing, which pivoted into this healthcare app called Ava, which then pivoted into scale. So scale building happened by accident. Right. Which is, I think a lot of companies actually happen by accident where you're like fixing the problem that you personally have. And then you realize like, the question of whether it's a startup or a lifestyle business is just how long does it come?

6:55Lucy Guo:Right, right. And so when did you know that, you know, through those sort of iterations of the company, when did you know that it was like a real company with a big TAM? Like, when did you have that aha moment? So I'm going to be completely honest. My first aha moment on like we should build scale is that the tagline is API for humans, which I believe to be very controversial because it's dehumanizing humans. So I knew it would go viral. That being said, we were completely sure. We said we should work on another idea. and that idea just had more complications because i built this pokemon go map that went viral seemed like a pokemon go map they could build this into something bigger but i'd actually done that with someone that was not my like yc co-founder so they're just complications on like how we would split equity etc um it only was when we received like a series a term sheet on the company yc was like oh actually you should go work on that and even then like we didn't have we kind of let investors think about it themselves and i guess they thought that like we never really knew that it would be a huge company, I think, until we realized the self-driving corner market.

7:59Lucy Guo:Right. And talking about fundraising, and you mentioned, you know, everything's a little harder being a woman in tech, which is just true. So what was the fundraising process like for you? And what's your advice to women who are thinking about, you know, being a founder and doing something, how should they think about doing it? Yeah, so I give a very specific advice when it comes to this. And I think my specific advice is go work at a large company, something that is like a company that's reputable, but is known as great engineers. So it's called like Palantir, right? For anywhere between one to two years, and then go get some startup experience for one to two years at a high focus.

8:43Create this resume that is so quantitatively like undeniable that you are going to be the founder like you're smart you can match up these to these men um that investors can't make excuses in their head on like why not to fund you um and i think that's kind of a problem that women face when they are like fundraising where there's a stuff everyone wants to invest in female founders i think that's undeniable like everybody wants to be able to say like i invest in female founders and bcs want to feel like good people but um i think there's a subconsciously going on and that subconsciousness makes it so that women have higher standards to live up to to get that money um as for me i took that my own advice there and you know i worked at quora i worked at snap and like after snap and i was the only woman on product team then i think i became like very fundable so um they just looked at my resume and they're like okay she's one like that snap like she went to carney melin she's like which is you know the best cf school um studied CS and HCI, like we have to fund her.

9:45So the fundraising wasn't hard for me, but I also recognized like when I talked to investors before that resume.

9:52Lucy Guo:Yeah. Like you had to, which it kind of sucks, but you have to kind of have more credibility than the men because the men just walk in with automatic credibility. Exactly. They just, they can just graduate from Carnegie Mellon and get funding whereas you have to like yeah you have to go build a resume kind of sad but great advice it's advice it's so undeniable that like you're worth putting a bet on and I think that once you have that resume it actually becomes easier to get funding as a female founder versus like a male with that resume because everyone's no yeah I mean you definitely don't But to your point, you know, there is a subconscious thing, you know, and as women, it is a disadvantage.

10:38Lucy Guo:But what I love about what you're saying is that you knew it and you just went for it anyways. And like maybe you had to do a couple of things that our male counterparts don't have to do, but you wanted it and you did it and you didn't let it hold you back. So that's pretty cool. So, you know, early on, I guess, at Scale AI, like, you know, you sort of are building a company. Like, what were the lessons that you really learned in how to build a great company, how to lead, how to show up, not just as this, like, visionary entrepreneur who's, you know, going out there and creating a product? So I would say that very early on, I realized that your employees are only going to work as hard as you do.

11:27And to be a good leader, you need to be able to do the job yourself to be able to determine whether someone else is doing a good job or not. So in the very beginning, like I always came into the office earlier than everyone else. I made sure to leave later than everyone else so that my employees became encouraged, like, you know, come in early and leave later. Because you really do set an example. I really wanted to create a culture where no task was too small for a singular person. So we all labeled data. Like during the pilots, like we would go into a war room and we would all be labeling data.

11:58And it was really like we had a goal as a team and everyone was willing to do whatever it took to reach that goal, which is like close a contract in the early days, right? Yeah, of course. So, yeah, exactly. I think that my philosophy was always lead by example and understanding that your team is only going to be as strong as you are as a leader. And I just took that philosophy very personally in the beginning. Quite literally in the beginning, before we even hired people, I was labeling data. So I think it was always in me to just do whatever was needed to make the company go further. Yeah.

12:35Lucy Guo:Yeah. I think, did you ever like have sort of some, some aha moments around the talent you were bringing into the company and who you were surrounding yourself by? Like, is there, there are any learnings there as you were building and growing? I'd say my main aha moments were probably we liked hiring for people that were competitive, whether it was competitive sports, competitive math, et cetera. Because I think if you were doing competitions and winning those competitions, and it really didn't matter what the competitions were, like it could be anything, that showed that you were willing to work really hard.

13:14Because to win national competitions in really anything, whether it's gymnastics, it's like math, it's chess, it takes a special type of person and a special type of discipline. So that's what we looked for, because they could translate that into company building.

13:29Lucy Guo:Yeah, you know, I think the types of folks that you're describing are, they're only competitive, but they, there's probably a self-awareness about them that other people don't have. And then there's just like a huge appetite to get better and learn. Exactly. Yeah, because, you know, if you want to be the best at math, you have to, you know, practice the one thing that's really hard for you over and over again until you, you know, get it and you want to learn that. We thought about it kind of similarly at Netflix, too. You know, so just tell, so you start scale and then where does it, how big does it get?

14:13Lucy Guo:Where does it kind of stand when you leave? Like you go from zero to what? Yeah, I mean, we were able to be pretty efficient as a small team, but we probably got to around the Series B stage when there were just roadmap differences that I had with my co-founder. And I wasn't super excited, I'd say, about the product. I felt like my learning was stagnating because at the end of the day, I was like, you know, we were a data labeling product and I was in charge of the operations and the product side of the labeling. and scaling that became very like routine i'd say like we figured out an automated way to do it i figured out quality control etc and i had always been consumer focused everything before scale and i wanted to get back to that so um i ended up deciding to leave and after that i thought i was ready to jump in so i honestly like literally the next day my co-founder at that point in time quit stripe and joined me uh but unfortunately for him i think i wanted a little break A month ago, I helped him get his job back at Stripe and went on my little break and then went into venture because I didn't, like, I guess, like, for me, I was like, I wanted to optimize for learning, like I've said before.

15:27And I had done everything operationally, but I've never done venture. And it was something that actually our Series A investor told me, like, hey, we think you'd be a good at venture. So, like, here's some money. And we just want you to invest and you'll earn a percentage. So I was like, great. And I ended up creating a good enough portfolio. I raised my own fund and then did that for the next few years up until I got the itch to build something again. Because it is a little different. It's like breath versus depth. And after having so much breath, I started craving depth again. And during the venture fund, I had founded this program called HFZero where you live with founders.

16:00So I was living with these founders and helping them build products side by side. I think that like being around so much ambitious energy drove me insane. Like I was like, I need to build something. Well, because you have that energy. Yeah, for sure.

16:14Lucy Guo:And so now that brings us to passes, right? And tell us a little bit about that. Yeah, so we're building infrastructure to help creators monetize their brand. We have a few thousand creators that have made over nine figures. So that's been exciting in the last, it's been under three years. We're three years soon. So yeah, I would say super excited. And now we're exploring how we can help everyone make money outside of creators. so experimenting with a few different like products in the b2b space which we're hoping to launch next quarter cool well everybody you know everybody wants to make money i have a six year old and i was picking him up the other day at school and he was like mom you know this uh this girl in school she's like he goes she said her dad just throws his money in a pit and he doesn't care about money and then he goes but mom like why wouldn't you care about money money's great.

17:07Lucy Guo:Money is great, honey, but I'm trying to teach them it's not everything, right? And oh, by the way, you don't have any money. I have money. That's a really important lesson to teach her. I don't want spoiled children. So my first one is going to be fine economy. They're just going to be normal. Yeah, right. And so that's what I'm trying to do. But speaking of money and making people money, how should, if I'm a creator or I'm someone who wants to start making money on my own. How can passes help me? Let's say a few ways. So like we really help your fans become super fans. And it really depends on, I would say what your audience is, right?

17:42So like if you are a live streamer, then you might make more money off of our live stream product and our merchandise product where we help you create merchandise. And we actually have designers in-house that will design for you. And it's print on demand. So you don't actually have to put upfront money to be able to test the merchandise line. I would say that if you are a expert at something, I've had people, for example, used to ask to pay me like$100 a minute to chat. We have like pay per minute calls. So if you're like, our spirituality creators actually use this a lot too. So like, yeah, I guess expert in something, whether it's like advice giving or spirituality, et cetera, you can charge people by the minute to get your expert advice on something.

18:21So we created these like different tool sets. And I say we have more tools than anyone else to help like creators of all different like niches be able to monetize?

18:29Lucy Guo:Yeah. Well, I've had to become a creator with the podcast. I never thought I would be a creator. And most of my content is created on LinkedIn. And I'm lucky that I have a good team of people that help me do it and think about it. But it is really challenging. Yeah, it is. We actually have a podcast studio in the office. So we have creators that come in and film podcasts and we'll actually help them edit, et cetera. And the deal really is just like okay we obviously want these podcasts to be on spotify youtube etc because distribution matters but for your super fans like have an extra episode per week that's just for passes or have an extra 15 20 minutes per episode that only lives on passes and that's how they monetize with their super fans but i do think it's hard but i think nowadays especially people are getting podcasts distribution through tiktok reels and clipping etc oh or tiktoks and reels yeah so yeah it like Takes, I think, a team that understands viral marketing as well.

19:29Lucy Guo:Yeah, no, it's so, so, so true because there are many podcasts one can listen to, right? And how do you find the one for you? Thank you, listeners, by the way. We love you for listening. So we appreciate it. Okay, Lucy, so what's different for you this time around? So this is, you know, bounded scale. Now your past is like, what are you doing differently? what are you doing the same? Yeah, I would say for the same, it's been very close to the customers. We're a very customer first company. So that means that like if something happens at 3am on a Saturday where like, for example, our payment system is bugging out, like we're going to be there to fix it.

20:10I am online constantly 24 seven, no matter what I'm doing to like help with creator complaints. And this was very much so the same at scale where we were very customers first, because they're the like lifeline of your business. I would say what I'm doing differently is I've been honestly back and forth on this. I think I've been more open to senior management. That being said, like I do expect like all senior management to still be doing IC work. And I think that that was something that we didn't really do at scale per se. Like we were a bunch of like 20 year olds running around, which worked really well.

20:48I think there's like pros and cons to it, right? Right. Yeah. Yeah.

20:52Lucy Guo:What's making you feel like you need more senior people this time around? I think that with scale, like I said, we were a bunch of 20 year olds running around and it did create a few culture issues due to that. So I recognize like the need for seniority. That being said, and like experimenting with senior managers at passes. One thing that I have now like just literally just changed was that all senior managers need to be icy still. because I think that we had a problem with senior managers not recognizing who was a good employee versus a bad employee because they didn't do their job themselves.

21:29And it was something where like I would tell them they were like their direct reports were not good employees because I had done that job and they would just not understand what I was saying. And I really do. The only way you understand is like if you're doing the job yourself, you recognize like they're not like responding to tickets fast enough or they're not coding fast enough or like at a high enough quality. Like you really have to be able to do the job and you need to be actively doing a job to understand whether that employee is doing a good job.

21:57Lucy Guo:Yeah, no, I think it's true. And I think the best operators that reach leadership levels, you know, whether it's director, you know, or hire, they always stay close to the work themselves, right? I did that myself. I was always hands on. Because it's true, you want to know. For me, I wanted to know how the work was evolving, how the work was changing, what was challenging, what wasn't. And I couldn't really guide people if I didn't know it myself. Right. So I appreciate that. But, you know, I think I've seen a lot of companies resist hiring the senior talent. And I don't think about it as like you need an adult in a room, right?

22:43Lucy Guo:Like, you know, an adult to me, you can be more of an adult at 20 than you are at 40. It's not a number thing. But there is a bit of like that expertise that you need to bring into the company that like propels you to that next thing, right? And some of those companies that have done that and brought in that talent have changed things from a, you know, like they are now scaling. They are now, you know, in another ethos than that they were in a year ago, you know. But had they not brought in those people, they might not have been. Yep, I agree. I think it's a very delicate balance because like to counter that, I would say that sometimes they come in with such a strict mindset on like a framework on this is the only way.

23:32can be done. And the way startups are built are being able to break out of that framework and finding innovative solutions to things. Yeah.