Start-Up Advice From Care.com’s Founder

sheila

Sheila Lirio Marcelo, a scheduled speaker at Silicon Valley Comes to the UK, a conference which took place November 14th to November 19th in London and Cambridge, is the founder and CEO of Care.com, which launched in the U.S. in 2007 and currently has seven million members spanning more than 15 countries. She shared some of the secrets of her success with Informilo’s Jennifer L. Schenker in the run-up to the conference.

Q: What gave you the incentive to start Care.com?

A: The idea for Care.com really came from both my combined personal and professional experiences. I became a mother while in college and, as an immigrant, had no family nearby and no care support system. I needed to find quality affordable childcare so my husband and I could finish school. I relied on word of mouth and the telephone book. I got lucky but it was hard…harder than it should have been. Then, a few years later when we had our second child, my parents were there to help but my father had a heart attack. I needed care for him, help for my mother, care for my children … again, I thought there has to be an easier way and I knew we weren’t the only family struggling with care issues.

On the professional side, though my parents wanted me to be a lawyer, I wasn’t sure that was the path for me so I deferred law school and went into litigation consulting. My first project there involved satellite transponders in Latin America and I quickly realized that technology was a passion of mine. After other opportunities in strategic consulting and completing my JD/MBA, I taught classes at Harvard Business School that focused on building technology companies and on women in technology but I quickly realized that I didn’t want to study businesses … I wanted to build one. I took a position at a start-up company called Upromise which used the Internet to help families save for college. Not only was it my “management tour of duty” where I learned all aspects of building a site, marketing, product management and everything else, but it was also the personification of something I’d been thinking about for a while: using technology to help people. Then I moved on to TheLadders.com, the job search engine. Again, a business that harnesses technology to solve a problem.

So, drawing from my own experience with care, it was a natural step to found a technology company devoted to helping families around the world find the care they need for their loved ones.

Q: How did you get started?

A: After TheLadders, I was an Entrepreneur In Residence with Matrix Partners, where I put the plan together and got initial funding based on the vision. Then I recruited my co-founders, all of whom I’d worked with before, to run three critical legs of the company: operations, technology and marketing.

Q: How much money has the company raised to date? 

A: This summer, we announced our Series E round of $50 million, bringing the total we’ve raised since 2006 to $111 million.

Q: Was it tough to raise the first round?

A: The only tough part is making sure your investor audience can relate to the mindset of the user. Since women make the majority of the caregiving decisions for their families and most VC rooms are overwhelmingly male, that was especially important for me in selling the Care.com story. Before any presentation I’d ask how many of them were responsible for hiring a nanny or senior caregiver. None of them raised their hands so I’d follow up by suggesting they ask their wives how hard it is. They would … and then they got it.

Q: How many employees do you have today and how did you go about building your team?

A: Currently we have 450 employees around the world. Building the team is critical to the success of any company. In choosing my co-founders, it wasn’t just about their individual talents and skills; it was about who they were as people and the values we shared. Because those values define the culture we’ve built at Care.com. From the first employee we hired to the most recent to join our team, we’ve applied the same philosophy. Yes, talent matters but having the right people and the right fit matters more.

Q: What — in your mind — is the toughest part of scaling up? Is it finding the right people? Setting priorities? Staying one step ahead?

A: Without a doubt, finding the right people is the hardest and most important element when scaling a company. The right team is self-motivating, can make a great idea even better, and can turn a mediocre idea into something special. And, in a start-up, the right team will be there when you have to pivot – and that happens a lot.

Q: How many countries is Care.compresent in now and what have you found most challenging about your international expansion?

A: We’re currently in more than 15 countries and we have lots of expansion still to come. The biggest learning curve as we expand internationally relates to the nuances in each culture … the best ways to market to people, the things that they respond to.

Q: Have you expanded internationally mainly through acquisitions?

A: We both acquired and launched our own international operations. Our first international site was Care.com UK, which we built and launched in April 2012, followed by Care.com Canada, which we also built, in July 2012. Later that same month, we acquired Besser Betreut, based in Berlin, with operations in more than 15 countries.

Q: It is tricky to absorb another company. How do you mesh the company cultures and ensure that goals are compatible?

A: A fundamental mistake that companies make when doing acquisitions is to think short term … just getting the deal done and worrying about culture and fit later. I believe you should think long term and consider the relationships you’re building with the same vigilance as you apply to reviewing the balance sheet. Do you have shared values? Do you have the same vision and goals? If you complete a deal, you’re going to be part of the same team and together for the long haul so those are questions you should ask at the beginning, not the end.

Q: What is the most important advice you would give to an entrepreneur trying to scale their company?

A: I’d offer three key pieces of advice. First, focus on building the right team around you. When I reached out to my co-founders, they were people I knew and with whom I’d worked before. I knew how talented they each were and that we shared a common vision for what our ideal company would look like. But sharing values does not mean being identical. We complement each other’s strengths and challenge each other in the best possible ways. That’s critical to any company.

Second, take risks. Don’t be afraid to test your hypothesis and based on what you learn, adjust and test again. Ideas are only perfect in a vacuum but they can’t grow there. Test your concept or strategy and if it doesn’t play out as you expected, see the opportunity to learn and make it even better.

Third, a scalable model has to be both realistic and ambitious. I know that sounds contradictory but it actually isn’t. The reality is based on who the customer or audience is. Is it finite? Growing? Limited by geography or demographic? Once you can honestly answer those questions, the ambition comes into play. Knowing how and when to reach your audience, do you do it at once or in steps, etc. That ambition should be a stretch but something rooted in reality.

 

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