Friday, February 14, 2020
A Conversation With James Borow, Pepper Financial
Our interview this morning is with James Borow, the co-founder of Pepper Financial (www.trypepper.com), a startup which is creating a new set of tools to help businesses grow smarter. The company—which is being very quiet about what it is working on—was founded by a group of former Snap executives, and is venture backed by Upfront Ventures, and which also included Lerer Hippeau, Manta Ray, and angels. James told us a bit about the lessons he's learned as the founder of a successful startup (SHIFT, which he sold to Brand Network for $50M in 2015), as well as his time as an executive at Snap.
Tell us a little bit about what you're up to now?
James Borow: This is the second company that I have been the CEO of now and co-founded with a team of four other pretty early members of Snap. We all left together fairly recently to start this business, and have raised $5.6M. Our round came from Upfront Ventures and Lerer Hippeau, along with a variety of angels. We have some really great advisors as well, all previously at Snap, including Imran Khan, who was the Chief Strategy Officer, Chris Handman, who was formerly General Counsel, and Jeff Lucas, formerly Head of Sales. We have a broad list of people who were influential in Snap, and who are really helpful with Pepper.
What kind of lessons did you learn from Snap, which seems to have aimed quite a bit higher than startups typically do have in the LA area?
James Borow: One of the takeways in LA, is that at a minimum, we're actually as strong an engineering market as Silicon Valley is. In some ways, I think we're even stronger, because we have a really great mix of technical skills and creativity. I think Snap really personified that. The lesson for me, and for most LA entrepreneurs, is that this is a market which can support a huge, massive business. If you look at the fact that Snapchat is here, and so is SpaceX, I think it's still under-rated for how talented and how capable people really are here.
Did it help in your conversations with investors that you were all at Snap?
James Borow: I actually think that having a team that you've worked with before is almost a bigger part of that. The five of us have worked together over many years, and I think investors understand the importance of a founding team. We're almost an extension of a family, in some ways, which I think was the major driver. That we all executed well together at Snap was extremely helpful, but a lot of our team at Pepper was also at SHIFT, my first business. The idea that you back teams, instead of individuals, is something that really resonated with investors.
Any particular lessons you learned at Shift and Snap that you're trying to apply now?
James Borow: I think our belief in this ecosystem, and in Los Angeles in particular, continues to be reinforced. When we were doing SHIFT, Los Angeles was considered to be a tier 2 market in terms of technology. I think Snap really did change the point of view of people on that, and I think the lesson there is that you can build a huge business in this market. If you look at Snapchat, with a current market cap of around 25 billion dollars, and you look back o SpaceX down the street, and how they're out-competing Boeing left and right, it proves this market can support massive innovation. I think that's a lesson we're trying to take with Pepper, and really building a big, lasting business.
You mentioned you've had good luck finding talent here. We often hear startups complaining about difficulties with recruiting, how have you managed that challenge?
James Borow: We have really recruited based on our previous relationships. Snapchat was able to recruit a huge talent base. What we've really focused on, are people we've worked well with in the past. Many of the employees at Pepper had worked at SHIFT, or Snap, or are friends of engineers we've brrought on, or friends of those people. When you are trying to build a business which is headquartered in this market, it's really about the network. I think one of the benefits for us having been at Snap, is really opens you up to a lot of people that you don't traditionally have exposure to when you're at a small startup.
Where are you at Pepper Financial now?
James Borow: We're still in beta, and next quarter, we will have a lot more to share. We'll let you know when we're ready to talk about it.
Finally, what's the biggest lesson you've learned from this round of startup life?
James Borow: That's a good question. I think what we're most excited about, is that we have a problem that we can solve that is just massive. The biggest lesson, which I would credit Snap for, is that we need to be thinking as big as we can, and that investors and this market really are able to support these kind of really big businesses. That's something that is different from what we were doing at SHIFT eight years ago, which is something I'm really excited about.
Thanks!