Gem Makes Y Combinator’s List of Top Companies
Today, my co-founder Nick Bushak and I are thrilled to announce that Gem has made Y Combinator’s 2021 list of top companies by valuation. Y Combinator (YC) provides seed funding for startups under a unique accelerator model: they work intensively with early-stage startups over a three-month period to help them iterate towards product/market fit and raise seed funding. Gem was chosen to be a part of YC in Summer of 2017. YC puts together their “Top Company” list annually to help partners, late-stage investors, and prospective employees learn about a broader range of YC-backed companies. Of the more-than-2000 YC companies, 135 made the list—and we’re one of the youngest companies on it. This would have been an exciting honor regardless of the year, but it’s a particularly remarkable privilege after a year that was so humbling, threw us all so many curveballs, and offered us so many opportunities for growth through challenge. Indeed, thanks to many of the early lessons we learned through YC, Gem saw some of its best quarters last year; and we plan to more-than-double our headcount in 2021.
YC believed in our vision before we even had a product—let alone customers. As engineering managers, Nick and I had had first-hand experience recruiting the best talent at Dropbox and Facebook, respectively; and we witnessed (and participated in) the paradigm shift in which rapidly-expanding companies started going out and looking for top talent rather than waiting for talent to come to them. The majority of “recruiting” was now happening prior to application; yet recruiters didn’t have a single source of truth to track and manage all the work that happened in that new top-of-funnel. They needed visibility into the entire history of passive talents’ interactions with their team. They needed to write personalized outreach at scale and automate follow-ups through drip campaigns—then access stats on that outreach to derive best practices for their messaging. Nick and I were validated by seeing large tech companies writing their own internal passive candidate databases to track and manage these new top-of-funnel workflows. We watched recruiting teams at smaller companies adopt sales automation tools even though those solutions didn’t address their specific needs. We knew recruiters needed a tool built for them. Long-term, we planned to become a full-fledged CRM for the top of the funnel.
We chose YC because we were excited about the community of early-stage founders it supported and sustained and because we knew that YC would provide invaluable guidance to us as first-time founders. And we were right. YC’s guidance was so significant that two of its mantras (focus and growth) led to two of Gem’s core values (customer focus and velocity).
The motto at YC is to “make something people want” first and then grow fast. There are a thousand potential distractions in early-stage growth—from VC meetings to dinners to desired press coverage. Our group partners Jared Friedman and Gustaf Alströmer regularly reminded us not to lose sight of the fact that the two most important tasks for any early-stage company are to write code and talk to customers. Nick and I would have a ton of things pulling us in different directions, Jared and Gustaf warned (and we did!). But if we didn’t resolutely focus on these two things—talking to customers, then taking that feedback and iterating—we ultimately wouldn’t be building the thing people wanted. We took this advice and ran with it—so much so that every member of our founding team, including engineers, spoke regularly with our customers (in fact, most of them still do). Engineers sit in on sales, customer success, and support conversations every two weeks to stay in tune with what excites our customers, what’s broken, and what they wish we’d build. Our roadmap is heavily shaped by feedback from both current and prospective customers because their feedback provides the single strongest signal on what to do next. It’s a strategy that’s served us well. Recruiters do a lot of moving between companies, and they bring Gem with them as they move. We’ve even heard from recruiters who’ve told prospective employers that they would only sign offer letters if Gem was added to the team’s tech stack. That demand is about our product, sure. But our product is only as strong as it is because we’ve listened closely to users, and iterated from there.
But YC also stressed the importance of growing fast—after you’re clear you’re building what customers want. As Nick wrote last year about another of our core values (velocity): “When it comes to product, we know there’s a tradeoff between building fast and building right, and we think we’ve found a good balance. As we build new features, we sprint to an MVP to get something in the customer’s hands, then iterate based on feedback from a core set of users. A tight feedback loop ensures that we’re always building the right thing and not burning our efforts towards the wrong goals.” Velocity demands taking calculated risks; it requires creativity on the engineering side. And while velocity hasn’t necessarily been a safe bet, it’s been the right one. Gem now has over 400 customers, including Dropbox, Lyft, DoorDash, Twilio, Pinterest, Roblox, Snap, Square, Epic Games, Trade Desk, Instacart, Square, Chime, Cisco (AppD and Meraki), and Realtor.com.
YC was foundational in helping Gem get to product/market fit, but it’s continued to add so much value well beyond the batch. In Fall 2019, we were selected to join the YC Growth program (YCG), which gears up growth-stage YC companies of ~50-150 people to scale rapidly. Through that program, we had the opportunity to learn again from the YC team, as well as some of the best founders and operators in the world, about topics like scaling people and culture, leadership and management, and scaling as a CEO. Among our mentors in YCG were Ali Rowghani (Managing Director @ YC Continuity & Former COO @ Twitter), Erica Galos Alioto (Chief People Officer @ Opendoor), Peter Reinhardt (CEO @ Segment), and Claire Hughes Johnson (COO @ Stripe), all of whom are now either investors or customers of Gem. Nick and I were blown away by the wisdom and support we received from YCG.
Possibly one of the most exciting things for me about having proved out YC’s hunch about Gem is the way things have, in a sense, come full-circle. Gem is now at the stage in our growth in which we can give back to the YC community and help pave the way for every future YC company. It’s really fun to be invited back to every batch to give a talk on how to hire. And Gem’s Free for Startups Program—in which we give teams of up to 15 people free Gem accounts for up to 2 years—is in partnership with YC to help support the community. Hundreds of startups have signed up.
Nick and I—and our remarkable team of Gems—look forward to continuing to work closely with Y Combinator for years to come, and see YC grow and evolve. It’s thanks in part to YC that Gem is entering 2021 with plans to more than double our headcount—despite all that 2020 threw at all of us. If you’re interested in what we’re building at Gem—and if customer-centricity, velocity, and diversity are values that speak to you—check out our open roles, or get in touch; we’d love to hear from you. And if you’re in the talent acquisition space and you want to learn more about the product YC took a strong bet on four years ago, you can request a demo of our product here.