Algolia is a hosted search API founded by Nicolas Dessaigne & Julien Lemoine in 2012. They were part of the Y Combinator Winter 2014 batch and have raised over $74 million in funding to date. They have offices in San Francisco, Paris, New York, Atlanta and now London. You may have seen “Search by Algolia” on your favorite startup site like Product Hunt or Hacker News, and you’ve definitely used one of their 4,000+ customers’ sites — they power the search behind Twitch, Medium, Under Armor & more. CEO Nicolas Dessaigne stopped by STATION F for a Fireside Chat with some of our resident startups.
On Y Combinator
Nicolas & Julien applied to the summer 2013 batch of Y Combinator, passed the online process & flew to San Francisco for the 10 minute face to face partner interview. Things were looking good until…
“We messed up the interview because we really didn’t know what we were doing at the time. So we decided to spend the week in San Francisco, met a lot of great entrepreneurs and got so much feedback that it really transformed the company.”
Returning to France after the YC interview they had their A-Ha moment and were confident they found their problem-solution fit. They realized Algolia needed to pivot from being a mobile search SDK to the search API they are today. A few months later they raised a seed round, hired their first employees and launched a product.
That fall, Nicolas returned to San Francisco to meet with clients, some of them YC alumni, who encouraged them to apply again. This time they were accepted, in part due to a recommendation from one of their customers, YC partner & Justin.tv (now Twitch) cofounder, Michael Siebel. Siebel was also cofounder of a video sharing platform called Socialcam (YC Winter 2012), which was the real beta test for Algolia. It became the proof of concept they were waiting for. Nicolas & Julien were able to prove that their product could work in Silicon Valley, so it could work everywhere.
“A big advantage was we didn’t know anyone in Menlo Park. We had no family or distractions. It was an excuse to just focus on work and do it.”
Initially they were an all tech founding team with no business experience. Their first hire was their VP of Engineering and their second was to help them with business and today he’s the VP of Sales. Nicolas said they learned so much about business in the office hours at Menlo Park, especially with mentorship from people like Michael Siebel, Garry Tan, Sam Altman, and Paul Graham.
On Strong Company Culture
Company culture is crucial to Algolia’s success. Actually Nicolas wrote a great blog post about just that! The culture reflects strongly in their hiring process. Recruiting can take a long time, but the most important thing is finding the right fit. They encourage employees to really take ownership of their work, to be really invested in their projects, and empowered to make decisions about them.
Dessaigne took some time to explain Algolia’s core values, which are:
Grit, Trust, Care,Candor and Humility.
The most difficult to scale he says, is candor, which he defines as the sweet spot between caring and challenging your employees. Nicolas strongly recommends the book Radical Candor by Kim Scott as being incredibly helpful to being a good boss and leader.
When it comes to constructing a global company, there can be challenges such as communication between offices in different time zones, and newer offices not having a founder present at all times. But they’ve come up with policies to encourage communication within the team, like rotating members between offices and doing all company communication in English, even though their biggest office is in Paris.
Dessaigne sees being a European company in the US as both a limit and advantage. It’s almost like having two businesses with unique organizations and compliances. They needed to incorporate in both Europe and the US and have two separate Stripe accounts. When asked where they store Algolia’s intellectual property, Nicolas responded:
“Our developers are in Paris, so our IP is in France.”
Algolia also has investors unique to each market. When it comes to working with investors, Nicolas insists on the importance of understanding the term sheet and recommends the book Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist by Jason Mendelson and Brad Feld as being extremely helpful. Different investors bring different levels of involvement, so it was important to find investors that understood the company culture. That’s why Algolia chose to work with investors that showed real interest, as opposed to faceless giant funds to who whom they would just be pocket change.
“It’s your job as founder to raise funds and create value for your employees.”
On legal structure and compliance
As a SaaS company grows, some of the biggest challenges are compliance, privacy and data storage. Scaling with customers all over the world put Algolia in a unique position regarding compliance.
“We have more than 1100 servers and 50 data centers around the world. If we have a customer in Germany who is very concerned with privacy, we have data centers in Germany compliant with those security standards where we can store that customer’s data.”
Having tackled these issues before compliance standards like the General Data Protection Regulation (GDPR) become European law in May 2018, they will be prepared well before any new regulations take effect.
Algolia continues to be a great example for French startups to find success in Silicon Valley and worldwide and we look forward to seeing them continue to grow!