To have a successful company, you need some way to start it, whether that’s partnerships, sweat equity, or cash, you need the right cocktail to allow your business to grow. In the early days of Official, I was just working nights and weekends while I was a venture associate at a fund in NYC.
Startups have such a glamorous reputation. Companies like Facebook, Instagram, Youtube, Uber, and Airbnb once started as scrappy startups with huge dreams and huge obstacles.
Yet we of course know that most startups don’t end up as success stories. What does a founder or a founding team need to know to create a highly successful startup?
In this series, called “Five Things You Need To Create A Highly Successful Startup” we are talking to experienced and successful founders and business leaders who can share stories from their experience about what it takes to create a highly successful startup.
I had the pleasure of interviewing Zac Stern, Founder of OFFICIAL.
Zac was closing VC deals while a student at NYU’s Stern School of Business where he was class President for three years. He was hired as a full-fledged analyst as a Senior and promoted to Associate upon graduation. He’s now behind a start-up app with a mission to foster healthy relationships.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?
For me, it was two-sided. I came from the venture capital world, and I have analyzed the business models of everything from jetpacks to cancer research; dating apps somehow fall within that range. At the same time, I was in a long-distance relationship which gave me first-hand experience with some of the problems that Official set out to solve.
From the venture side I understood what investors were looking for, the first thing you learn is that you want to keep your customer. Relatively obvious, but not when it comes to dating apps.
Dating apps are an interesting business because when they do their job correctly, they lose their customers, but the same thing happens when they do their job poorly, or when an outside force accomplishes their “goal.” So, from a financial perspective, I realized that it made more sense to focus on helping people stay together, because the longer they are together, the longer they want to be our customers.
Official switched the incentives so that when we win, you are happy in a great relationship, and when you lose, we lose a relationship with our user. It changes it from what is seen within the dating industry in general.
From a personal side, I was dating someone long distance at the beginning of 2019 while I was studying abroad, I was in London, and she was in NYC. What was ironic was that I met her two weeks before I left to study abroad. So, we started our relationship with a lot of calls, texts, and facetimes because we couldn’t be together. This led me to realize that I needed a way to remember everything, so I started making a notes tab on my phone to remember things she would say, then I made another one to remember things about her family or other tidbits. At that same time, as we started getting more serious, she would come and visit, and we would travel together around Europe. We would research places to visit within cities and create Instagram saved folders. What we quickly realized is how inefficient our process was: we still had to find where every place was and research all of the addresses. What we ended up doing is favoriting every spot on one of our phones’ maps so that we could see once we got to our destination how close we would be to everything. While it was tedious, it was the only option we had so we smiled and just did it, but I knew there would be a better way. Also, many of my friends were in relationships as well, and what I noticed was that everyone wanted to be the “perfect” couple; the couple that had the best dates, cutest photos, best sex. I realized that there was nothing out there for couples to help them be better, and that’s how I got the idea for Official.
Was there somebody in your life who inspired or helped you to start your journey with your business? Can you share a story with us?
My first advisor, Mike Vorhaus, is one of my inspirations and the one who truly inspired me to go all out on the concept. Prior to starting Official, I ran an angel investment syndicate, at which point I was connected with Mike. Midway through our conversation he stopped me and said he wasn’t interested but asked: “What would you do if it wasn’t venture?” I took a second and then I brought out a pitch deck I made, it was for Newel, the predecessor of Official. At this point, it was just an idea, nothing tangible, nothing real, but he saw it and liked it. This led to multiple discussions, and he continued to be involved and help me grow myself and the idea into something bigger, and that’s when it turned into Official. Mike became my first advisor and I set out on a mission to make him proud; still working on it!
What do you think makes your company stand out? Can you share a story?
What makes Official stand out is the fact that we are taking a very Gen-Z/Millenial approach to a much larger problem. When I dream about all that Official will accomplish, one thing that is clear in my mind is that Official will help couples with their relationship. However, even though therapy is more accepted than ever, couples therapy isn’t. What we realized is that we want to bundle the tools and tricks that someone may learn within couples therapy and give them to our users. Couple’s therapy or coaching has a stigma because it implies that your relationship needs help or has problems, but we know that isn’t the truth. This is leading us to take a trojan horse approach to therapy and share it with our users as social media. If we highlight all of the fun couples are having in their relationship, offering the tools a couple may need to have a healthier relationship is seen more as a bonus. At the end of the day, we aren’t therapy, we never plan to be, but our goal is to take some of this knowledge and share it to make people happier.
How have you used your success to bring goodness to the world?
Personally, I don’t see myself as successful. I think I am very lucky to be in the position that I am in, but until we start to have the data that we are making relationships better and bringing happiness to people’s lives I won’t consider myself or Official to be a success.
Official’s mission is to further develop happy and healthy relationships, if we are successful, it will be because we have done that and are continuing to make relationships better.
Describe three character traits do you think will be most instrumental to your success? Can you please share a story or example for each?
The three traits that I have found to be the most beneficial to my success are:
- Always try to be remembered
While not in the business world, when I was running for class president, I realized that there were 7 other people running against me for the same position my freshman year. Luckily, I had an advantage: my last name was on the door. I went to the Stern School of Business at NYU, and while not related, it definitely made it easier to be noticed. Yet, this wasn’t enough to secure me a victory. So, I did what every young business major would do, I set out to make sure everyone knew who I was, and I did it by making a fool of myself. Every year NYU Stern hosts a carnival right in front of the building and no carnival would be complete without a dunk tank. I made a video of myself and my best friend waving money around, blasting the song Money, and we had laptops with stock graphs pulled up. In the video, I told everyone that I would be dressed in a suit and that they could dunk me that day. The video went viral around campus, and people lined up to take a shot at dunking me while in full suit and tie. I won the presidency the week after, and no one ran against me the rest of my college career. Doing something that would make people remember was essential to my success, and this is something that I strive to do in all that I do.
- Network with everyone, you never know who will be able to help
Something that I learned pretty young was that most people are afraid of what others think of them. I fall into that most people category, but I realized that talking to people is the best way to learn more about others and I have always been curious about what everyone does. Everyone around you has a story or something they are passionate about and sometimes building a connection is as simple as asking, ‘how can I help you?’?
- You don’t have to be the smartest, but you can work the hardest
I have never thought I was the smartest in the room, if I ever am then I know I am in the wrong room. And while this may be, I know that being the hardest working in the room is something that I can control. The reason I have gotten to where I am at this point of my career is because of my work ethic. I am fine waking up at 8 am and working until 3 am, 7 days a week. I don’t do it because it’s fun, but because I know it is the fastest way to achieve my goals and accomplish what I have set out to do. There are a lot of things I have chosen to give up: parties, gatherings, and memories. But at the end of the day, I know that the only thing that is standing in the way of my goals is the amount of time and effort I put into things.
Often leaders are asked to share the best advice they received. But let’s reverse the question. Can you share a story about the advice you’ve received that you now wish you never followed?
I don’t consider myself normal by any means, and at one point people told me I should try to fit in more. I thought about it for a while, and I decided to try it, to be “normal.” I tried to act to what I thought normal was at the time and less like myself. This was the hardest thing I have done to date because it was so far outside of my comfort zone. After a while, I realized there was no purpose in trying to be normal because everyone else is trying to be different. Why default to the norm and be miserable when you can be extremely over-the-top and happy? From then on, I knew that being normal wasn’t the goal, but to be weird was.
Can you tell us a story about the hard times that you faced when you first started your journey?
When I first started my journey, I knew that not everyone would understand or like what I was building, especially coming from the Venture Capital world. I knew how many “No’s” I would face but even when you know what’s coming it’s hard to have people tell you that your dreams don’t make sense, or there isn’t a market for it. I vividly remember when I first went out to raise money that I thought it would be easy since I knew the space, but it wasn’t. I had nothing in retrospect but a can-do attitude and a smile, and no matter how many people told me no, I never lost my smile because I knew it was the only thing keeping me going. I had three meetings back-to-back, in each meeting the investor said no in a different way, and for contradictory reasons. One said that the market was too small, another too big, another just didn’t get it. It was hard, but it teaches you to think about every crack and to know every angle of the business.
Where did you get the drive to continue even though things were so hard? What strategies or techniques did you use to help overcome those challenges?
I wish I knew where the drive came from, it has always been something that I had within, I feel like I need to prove myself every day to those around me, unfortunately. It’s my greatest gift, but at the same time, my biggest curse. I am highly motivated and driven to the extreme to do whatever I need to, yet even with all that is going on I still feel as if I am an imposter, and I don’t deserve it. Ultimately, this just makes me work harder. For me, the only way to get through hard times is to work hard and try to make the problems disappear.
The journey of an entrepreneur is never easy and is filled with challenges, failures, setbacks, as well as joys, thrills, and celebrations. Can you share a few ideas or stories from your experience about how to successfully ride the emotional highs & lows of being a founder”?
Entrepreneurship is a wave of emotions and the best way to ride them is to find some sense of structure within your life to make sure that you are doing what you love while still having time to be a person and living a sustainable life. Shortly after going full-time on Official, I realized that I needed ways to release my stress and frustration from work, so I ultimately started working out two days a week, which then led to four, which then led to six/seven. It became part of my routine and now I always have something to look forward to. This is my me-time. This has allowed me to know that even when times are tough, I still have this time to myself. This allows me time to clear my mind on a daily basis.
Something that I learned the hard way is that even though you are a founder, you are still a person. You can work 100 hours a week easily in this line of work, but you still need to make time for yourself otherwise your lows will be lower, and you won’t have anyone to share the highs with.
Let’s imagine that a young founder comes to you and asks your advice about whether venture capital or bootstrapping is best for them? What would you advise them? Can you kindly share a few things a founder should look at to determine if fundraising or bootstrapping is the right choice?
I think bootstrapping is always the way to go if you can afford it, the problem is that it’s very hard to afford forever. I started by bootstrapping the business in the early days, I took all my savings from college and put them towards the development of the MVP. We started out with $30K to spend, and we got it to go a long way, but it wasn’t sustainable for the long-term business, we knew we needed to heavily invest into technology if we wanted to be a tech business so that is what we did, we went out and raised a pre-seed round that allowed us to invest into the business the way we needed to. In a perfect world, I wouldn’t have done that, but it’s something that you have to do if you want the business to succeed. The benefit of being venture-backed is that you have more money and more connections at your disposal, which can be hugely beneficial to most companies, but it comes at a cost, and that is part of your business and autonomy.
Many startups are not successful, and some are very successful. From your experience or perspective, what are the main factors that distinguish successful startups from unsuccessful ones?
Time, the key factor to if any startup will be able to make it work is time, and perseverance. The more time a startup has, the more chances it has to fail and then get back up and figure out what it did wrong. Every startup has the same problem, it needs to find its market and grow within it, this takes a massive amount of time and effort to do, yet the more time a company has and the more opportunities it has to do this the better chance it has of success.
Behind any successful company, is a remarkable group of people that do incredible things to get the company off of the ground. You can have all of the time in the world but if you have a mediocre founding team that doesn’t truly care about what it is doing then you will never have a company that will succeed.
What are your “Five Things You Need To Create A Highly Successful Startup”? If you can, please share a story or an example for each.
A strong team is at the heart of any company, and that’s something that any startup needs more than ever. You cannot do this alone. A startup takes a literal village to get off the ground and to become successful, I would be nothing without my team because they are the ones that are smarter than I am, think differently, and challenge me. There are days as a founder when you just want to sit in silence, and your team is the people that will send you puppy videos to cheer you up and make sure you are alright. On my team, my head of social media and marketing, Sarah Dempsey, quite literally does this when she knows we are having a hard day. She’ll just send me videos of golden retriever puppies and it gets me through the day. Life is truly about the little things.
To have a successful startup you need to leave your ego at the door and just listen to what everyone has to tell you no matter how insulting, rude, or obvious. There are times where it is remarkably hard to listen to the same advice, or criticism again and again, but as a founder, you just need to take it and smile because there is nothing else that you can do. If you were to bring your ego into things and tell people what you think you know, you will never understand your product or market and it will just blind you to the point of failure. If you want to be successful you need to have a balanced ego.
If you don’t understand the problem you are solving, then you don’t understand the business. To be successful you need to understand the market you are going after and be able to convey it to others. This is something that I have had a hard time doing even with Official, when we first started people always asked me what problem I was solving. I would say we are trying to help relationships, but that isn’t a problem: it’s a solution. What I should have said was that we are working to help couples understand and communicate more with each other through modern tools of social media and others that allow us to help grow their relationship. By understanding the market, we are going after allows Official to target and grow within this segment better than we could any other way.
Without a passion for the business, you might as well not even start. To have a highly successful startup typically takes years and is something that has a lot of ups, but a lot more downs. Any founder that wants to do this needs to understand that it will be hard, so much harder than you thought it would be. I was having a discussion with my father who I am lucky enough to work with on Official, as he advises me, and we were laughing about how hard it is, vs. how easy I thought it would be. If I would have known how difficult it would have been, I may have tried to do something else. Ignorance is bliss, but passion is all you need.
To have a successful company, you need some way to start it, whether that’s partnerships, sweat equity, or cash, you need the right cocktail to allow your business to grow. In the early days of Official, I was just working nights and weekends while I was a venture associate at a fund in NYC. I was remarkably lucky that I was able to grow my network through work, and it benefited Official too without the money I saved while working in venture, I would have never been able to get Official off the ground. As unfortunate as it is, you need some sort of fuel to grow your business, you need to find it somewhere.
What are the most common mistakes you have seen CEOs & founders make when they start a business? What can be done to avoid those errors?
Every mistake when you are starting a business can be deadly to the business. The most common mistake I see is when founders throw money at a problem and expect that to solve it. The only thing that does is burn a hole in your pocket and that is a bigger issue to solve. My best advice to avoid this common mistake is to look at every dollar’s opportunity cost. A somewhat controversial move that I did was I haven’t paid myself yet, because I know that the money I would be taking from the business could be better spent elsewhere in the early days. Every dollar counts, as the founder, you need to spend it wisely.
Startup founders often work extremely long hours and it’s easy to burn the candle at both ends. What would you recommend to founders about how to best take care of their physical and mental wellness when starting a company?
The best thing to remember is that even though you are a founder, you are still a person who needs to make time for yourself. If you want to be remembered, you need to do things that are memorable, and that means you need to work hard to not only be the best at your business but also be the best person you can be. If you want to be successful, you need to do it in a way that is healthy and you can do it for a long time, otherwise, it will be something that you burn out and then nothing good will ever come from all of your hard work. I view that as someone who is a role model to others, and that’s what drives me to work out, cook for myself and eat healthy because I know that if I want to be a success, I need to be successful that others can emulate.
If you could start a movement that would bring the most amount of good to the most amount of people, what would that be?
If I could start any movement, it would be for people to love each other and recognize we are all just people. I think so much of this world is divided by various thoughts or ideals and it goes against who we all are. At the end of the day, I wish everyone would realize that we are all just humans: we all get happy, sad, mad, and face challenges and hardship. I would love to start a campaign or a movement to show that love is the answer for so many of the world’s problems because for so long the world has been driven by fear, but that won’t get us where we need to be.
We are blessed that some very prominent names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch, and why? He or she might just see this if we tag them.
If I could speak with anyone it would be Peter Thiel, he is someone I have admired for years and who I think understands the venture capital space better than almost anyone. One of the earliest books I read in business was Zero to One, and it shows what’s at the heart of any founder. The hardest part of any problem is starting something new, and I would love to chat with him about starting a new market and get his ideas on where I am going astray. If he is reading this and wants to grab breakfast or lunch, I am more than happy to clear my schedule!
How can our readers further follow your work online?
This was very inspiring. Thank you so much for the time you spent with this. We wish you continued success and good health!