From 99 Nos to 3.5 Million Jobs: How Fountain Pivoted to Win

"This is never gonna work, and I don't believe what you're saying. You're lying." These were the words Keith heard over and over again as he pitched his startup idea to investors across Silicon Valley.

Today, that same startup - Fountain - has raised $225 million and helped 3.5 million people find jobs in the last year alone. What started as a college kid's frustration with existing technology has become a global platform serving hourly workers across 77 countries in 35 languages.

In this candid conversation, Keith opens up about the pivot that saved his company, the CEO transition that accelerated their growth, and why building software that gets people jobs is fundamentally different from any other tech venture.

Keith: Growing up, I always had a lot of frustrations with just generally technology and the way that the world kind of worked. I'd always think, why does this work this way? Freshman year of college, there's a movie called The Social Network that came out and after watching that movie, it became clear that just college kids with just a laptop and an Internet connection could really make a big difference. I think that's what really motivated me and gave me that confidence to work on my own business even as a college kid.

So I was working on a project at the time called On VR which is a self-learning educational platform where the idea was that I like to learn things online by myself whether that's online investing or computer programming, but as a beginner my biggest problem was that I didn't really know what I didn't know and the feedback that I got at the time was a lot of small business owners came up to me and said we're small, so we don't have the time or the resources to develop our own content so we rely on existing materials, but it's a very haphazard process.

Keith: At the time we said yeah, sure, like that sounds like a pretty easy change and that's what I was working on for the last two years of college and in 2014 when I graduated, I moved out to San Francisco to sell that product. We had one paying customer that was paying us $50 a month, but I didn't really have any sort of cash saved up and so I called my parents. They said, Here's $5000. Take this. Just go out there and make sure that you have no regrets.

$5000 while that is a lot of money, it doesn't really last you that long in San Francisco. First year and a half, I was living with a random 80 year old lady in a one bedroom apartment that I found online, and she was living in the living room. I had my small kind of attic room, and that's basically the first year and a half. I was very happy that I was in Silicon Valley meeting like-minded individuals. We were close to our potential customers and customers, and it was just a very fun experience for me at the time.

Keith: I was looking through TechCrunch, seeing which companies got funding, reaching out to them. You guys are probably gonna hire a lot of new employees soon. Can we help out with your employee training? And a lot of them said no at the time, but we have this other pain point around having to hire and manage this large hourly workforce.

What they told us basically was, first of all, it's hard to find a lot of these hourly workers, and we're competing against all these other companies. Even after we convinced them to show up, only half of the people that said they'll show up to these interviews actually show up, so no show rates were a very big issue, and this is around the time that Uber and Airbnb and DoorDash and all these on-demand companies were coming into the market, and this created a completely new set of challenges around having to hire a large volume of hourly workers. And so at that point we basically pivoted the company from an employee training platform to applicant tracking system that was designed for this high volume, high velocity type of recruiting.

Keith: We had a really hard time fundraising. I was 22 years old and my co-founder Jeremy was 19, and we both didn't come from an Ivy League background. We both weren't engineers. It really took us a long time to actually get that first yes, but we were lucky enough that a lot of our initial customers were on-demand gig startups, which meant that they also raised capital from VCs. Once we got the customers on board, we would get their CEOs and the other co-founders to invest in us as an angel, and then they would introduce us to their VCs.

Sean: I was the first angel investor in Fountain. As proud as I am right now of Fountain, there was a day when it was 2 or 3 people with an idea and a product that barely worked, that was being developed in real time with almost no customers, and I decided to invest in that company. What was it about that day? Something about what the founders at Fountain were doing made me super interested in being an early, early, early investor in the company.

Sean at the time was the CEO of a company called Xerx, which is an on-demand valet service. Because he was a customer early on, he understood the pain points exactly. He saw the pain points firsthand and he worked with our team as a customer first, he got to see the insights. The product wasn't perfect. I think Sean saw that and so he gave us feedback, we borrowed a conference room, 2 to 3 hours. We built some of the features that he had requested and then we called him back and said, hey, you had asked for these features, we delivered on it. Is there anything else?

Sean: They showed me the idea that I had talked to them about in the product and I was like, wow, we talked about this thing, this new page, and in the last 2 hours you guys built it. I think this is a team I wanna be more involved with. I said to them at the end of that session, I said, if you ever decide to raise money, consider me interested. It was a week later or a day later or something like that. They called and I wrote a very small check to help fund the company and a number of years later and $225 million later, we've helped 3.5 million people last year get a job, 225 great fountaineers around the world. Pretty amazing to see from initial moment of this is a team I want to be involved with to here we are today.

Sean: In every startup you hit moments where you have to completely rethink where you are, and if you're not willing to do that, it's gonna be really tough, and how you react to the moment is as important as the moment itself. Like all startups, it goes through periods of incredible growth, incredible product progress, and then periods of slower growth and slower product progress. And Fountain's no exception to that, neither is any other startup of the 20 that I've invested in. They've all had similar trajectories over time. 100, 1000 to a million is incredibly difficult. 1 million to 10 million is incredibly difficult. 10 million to 50 million is incredibly difficult. They require different skill sets. They require different areas of focus.

Keith: So when I look back at Fountain, we always have this question about market size. That would be the number one reason why investors would say no to us. We did a great job finding customers in the on-demand gig space, but we always knew that we would run out of customers eventually and so we needed to make the shift from this startup cohort into something else. After a while, it became clear that we had to go through this enterprise phase. At that time, I felt that the skill sets involved in going after enterprise customers is a very different skill set than building your product from 0 to 1 and selling it to start-up companies. I think this was around the time that we realized a leader with an enterprise motion help us take us to the next level, and that's how the CEO search kind of started.

Sean: When we're doing our CEO search, there was only one person that really understood the mission and the company from day one, and that was me, and luckily for us he embodies the culture and the values that Fountain had just because he was so close to the business from day one. Keith and I wrote the values together. I knew the vision. I knew the mission. I knew the team. I knew the challenges. I knew the opportunities that made the transition to being the CEO easier for me and I think easier for the team.

Sean: I became the CEO at Fountain right in the middle of COVID. It was a challenging period in the overall macroeconomic picture. We definitely saw big changes. There were areas that experienced incredible growth. Prior to COVID, warehousing, transportation, logistics business was relatively small. During COVID, because everyone was ordering packages online, that part of the business exploded. We got more customers, people who needed delivery drivers and warehouse workers and shift loaders and package loaders. Those parts of our business exploded in COVID.

So this period of time has been a growth period for us. We brought on SoftBank as our Series C lead. That was an $85 million investment we brought on B Capital as our series C1 investor and an additional $100 million in capital, and we entered a period of what I would call kind of rapid growth.

Sean: We've really expanded the company. Half our business is outside the United States now because the vast majority of blue collar and hourly workers exist outside the United States. The population around the world is in the billions. The thing we've been fortunate about is many of our customers are large organizations who have operations both in North America and in Europe or in Asia, they see the benefits of using Fountain in Europe and they want to expand. And so it's actually been our customers that have been the ones to encourage us, hold our hand and bring us to new markets, to have our companies hiring people in 77 countries around the world and in 35 different languages. We continue to believe, given the scale of workers outside the US, that the opportunity outside the US is as big, if not bigger than the opportunity inside the US.

Sean: Being a CEO is, it's an incredible job. I hope to get better at it every day. A couple of things that I did that I think were helpful, one, I really spent time with engineers, product managers, and designers with an engineer, trying to understand how our technology worked, how it interacted with our partners and our vendors, with our customers, and trying to become an expert in that world. The only way I knew how to do it was to go deep, going almost to the bottom, the basic levels of the technology and what it does, and then only from there building up to understand more and more about how it works, how it interacts, and I think as you do that, as you spend more and more time immersed in that technology and in that conversation, you become better and better at understanding how it works and what you can do with it.

When you're a CEO, all of those things are done by other people. You're not building your own financial model. You're working with a team of people to build a financial model, maybe working in Salesforce.com, but you're not the one actually working in Salesforce.com. You're consuming data, so it's a transition from being a very big doer of tasks to somebody who is trying to motivate, encourage, and direct a company around where they need to go.

Sean: Number one job of the CEO is make sure the bank account doesn't run out of money. Everything else, including strategy and hiring, which are so important, come after the fact of making sure you have money in the bank. This is going to be a challenging time for lots of entrepreneurs over the next 18 to 24 months. The world of fundraising and the capital markets and the macroeconomic environment have shifted pretty dramatically over the last 2 years, and it's made it so maybe this era of being very easy to raise money and easy to get investors has changed to a world where it might be more difficult to get investors and so it may take longer, it may take more creative solutions, it may make some companies have to pursue profit over growth or at least some measure of profit in addition to growth instead of kind of what's characterized the last 10 years, which has been growth, growth, growth no matter what.

Sean: There's something unique about building software that has people get a job. It's actually a tangible thing for a human being in the world. Of all the companies I've ever been involved in, Fountain has the biggest opportunity to be a global public company, we believe that opening opportunities for the global workforce is a worthy endeavor, a profitable, worthy endeavor. That's the future for Fountain. I don't know how many years it will take. Will it take 3 years? It'll take 5 years, it'll take 10 years, but I know that it's a worthy journey and it's a journey worth going on.