Jessica Alba, Howard Akumiah, & Max Levchin: Lessons Learned on their Journeys to Exit
Three seminal founders joined us to talk about how they went from idea to IPO and acquisition
The journey from startup to success rarely unfolds in exactly the same way. Every founder has their own story to tell, but some common themes unite them.
What do The Honest Company’s Jessica Alba, Betty Labs’ Howard Akumiah, and Affirm’s Max Levchin have in common? They all experienced a liquidity event this year. Two took their companies public, the third was acquired by Spotify. Each is a great example of the types of founders Lightspeed seeks to back since we began our Leading Lights series, celebrating leaders who have unique insights, not obvious ones.
In candid conversations with Lightspeed Partners, they break down some of the difficult decisions and circumstances they’ve faced along the way — including when to pivot, whether to accept an acquisition offer, being the only woman or person of color in the boardroom, and when it’s time to let someone go. (We’ll be publishing Q&As with each founder that go deeper on all of these issues — stay tuned.)
Perhaps the greatest thing that unites these three entrepreneurs is a strong sense of mission, which helps them overcome barriers they’ve faced when going against the mainstream on their path to success.
Difficult decisions in tough times
Howard Akumiah wanted to build an innovative product that helped sports fans engage with their favorite pastimes in more creative ways. But like a lot of founders, he realized he had to pivot sharply in order to achieve his mission.
After working at Google, Facebook, and Pinterest, Howard launched Betty Labs and developed Sideline, an app that allowed fans to participate in quizzes and win money during live sporting events. Growth was steady but unspectacular.
In January 2020, Howard made the difficult decision to pivot the company and build Locker Room, an audio platform for real-time sports conversations. Around that time he parted ways with his co-founder.
“That’s a very emotional and difficult maneuver to land,” Howard told Lightspeed’s Mercedes Bent. “That said, I think the decision to part ways with a co-founder or employee should always be arrived at through really rigorous logic. We felt it was difficult for us to execute on our ambitious vision because we had someone who did not believe in that vision.”
Less than two months later, all professional sports were brought to a halt by COVID-19. Suddenly there were no longer any games to run quizzes against. But without anything to watch, sports fans were eager to connect with each other — and Locker Room was where they chose to do it.
“Making the decision to shut your main product down and pivot to something else is a major gambit, but it was also exciting. The audience for Locker Room was doubling in size every three days, and the more people who were on the platform, the better the conversation got.”
Ultimately, however, he made another difficult decision — to sell the company to Spotify.
“I’m a very competitive person. I knew we’d built a great product, but we were always seen as being second to Clubhouse, and it began to grate on me. Partnering with Spotify gave us the best chance to become the number one company in audio.”
Diversity as a core value
Jessica Alba launched The Honest Company nine years ago after looking into the harsh ingredients that go into many baby, personal care, and household products. She thought, there have to be better options, both for her family and for the planet.
It was a cause before it became a company. Now The Honest Company is a publicly traded entity with a market cap of nearly $1.5 billion. Yet that strong sense of social purpose survives to this day.
As the only woman in the boardroom for many years, Jessica had to fight to represent her customers, who are overwhelmingly daughters, wives, and mothers.
“It took me a while to get comfortable with being the only voice of the customer,” she told Lightspeed’s Jeremy Liew. “When you’re representing half the population but it’s still one against nine in the room, you have to remind them who’s buying these products. I needed the board to understand that maybe I’m not the most seasoned entrepreneur and I haven’t launched 80,000 companies, but I’m coming at this from a genuine place.”
When Jessica first met with Jeremy in 2011 (read more about the early days here), we immediately grasped the market potential for socially and environmentally conscious products, as well as the value of having a diverse team making decisions. Now diversity is built into the DNA of the company.
Today, roughly 60 percent of The Honest Company employees and five of its nine board members are people of color. More than half of the people in leadership roles are women.
“Businesses that have more diversity get to solutions faster and are more successful,” Jessica noted. “But you can’t just say, ‘We’d love to hire more women and people of color.’ You have to put in the infrastructure around hiring practices and skill development. That’s why we started The Honest University, to help our people achieve their professional goals.”
Representation matters. It is hard to be what you can’t see. And that is why we celebrate the stories of women, Black, Latinx, and immigrant entrepreneurs, so the next generation of founders can see successful people who look like them.
Building the right team at the right time
Similarly, Affirm is driven by a strong sense of purpose: to deliver financial products that help improve people’s lives, without hidden fees, penalties, or excessive interest.
“Very early on at Affirm I was fixated on drafting a clear mission statement and being very crisp about our core values,” Max Levchin told Lightspeed’s Nicole Quinn. “Why are we doing what we’re doing, and how are we going to do it? What are we never going to do? Who’s the enemy? What sort of war are we signing up for?”
Yet despite a storied history of successful exits that includes Paypal and Slide, Max says he’s continuing to learn new things in his 10 years running Affirm, including when personnel changes are necessary for the good of the organization.
“The thing I’ve had to learn, some of it quite painful, is that the people who are amazing in the first two or three years of a company end up being absolutely not the right people for years five, six, and seven,” Max noted. “A lot of founders will think ‘Wait, this is my co-founder or close friend, someone I really trust.’ But some people scale, and some people don’t. And fundamentally, all of these companies are about people.”
He added that having a trusted core of thought partners is just as important as having the right team in place.
“I feel extraordinarily blessed to be married to a woman who’s been an equal partner in everything I’ve done. Not a single strategic decision happens without my having a multi-hour conversation with Nellie. I’m also lucky to be surrounded by long-time investors like Jeremy and Keith Rabois that I can call in the middle of the night. It’s not quite as intimate as fighting to the wee hours while wearing pajamas, but it’s close.”
You can learn more about the Affirm journey here.
We launched the Leading Lights event series in 2016 to highlight the success of founders and execs in tech with unique insights. We deeply believe representation matters and celebrate the stories of women, Black, Latinx, and immigrant entrepreneurs, so the next generation of founders can see successful people who look like them. It is hard to be what you can’t see.
In past years we’ve told the stories of people like the CEO of Task Rabbit, Stacy Brown-Philpot; the Chairman of Microsoft, John W. Thompson; the founder of Zola, Shan-Lyn Ma; and the founder of GIPHY, Alex Chung.
A heartfelt thanks to Jessica Alba, Howard Akumiah, and Max Levchin for joining the ranks of Leading Lights alumni and sharing their time, candor, and insights.
If you’d like an invite to Lightspeed’s next Leading Lights event, send an email to email@example.com.