Nailing Product-Market Fit & Bringing Back the Landline with Community Phone

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Summary of Episode

#57: James Graham joins Ethan to chat about his telecom startup, Community Phone which provides cell and landline service to users all across America. The pair have a riveting conversation about product market fit, the necessity of experimentation, and how you can generate unique startup ideas in order to disrupt the marketplace. 

About the Guest: 

James Graham is the founder and CEO of Y-Combinator-backed Community Phone, a telecom startup that provides landline service to a plethora of users. James is a member of the Theil Fellowship and has been featured on Forbes’ 30 Under 30.

Podcast Episode Notes

Salutations and World of Warcraft [0:49]

James explains what Community Phone is and the problems it is solving. [1:40]

Can funding become a distraction from product market fit? [5:28]

Who qualifies as an expert, and in what ways can you use expert opinion? [8:36]

James discusses the importance of adjusting your business to best align with product market fit. [10:11]

You’re a wizard, James! James expands on how he is able to ask questions in order to approach any situation from a unique perspective. Almost magically! [14:33]

James divulges how prioritizing user experience has been a launching pad for Community Phone’s success. [24:08]

James describes his line of reasoning when deciding what problems to solve with a new startup. [31:18]

James explains why the most beneficial piece of being a Theil fellow was the network he was able to build. [37:16]

James illustrates the importance of experimentation at Community Phone. [42:22]

James’ #1 piece of advice for early-stage entrepreneurs. [44:33]

Connect with James and Community Phone online [46:22]

Ethan Peyton: Hey everybody, and welcome to the Startup Savant podcast! I’m your host Ethan. And this show is about the stories, challenges, and triumphs of fast-scaling startups and the founders who run them. 

Our guest on the show today is James Graham. James is the founder and CEO of Community Phone, which is what we’re gonna talk about today. But before Community Phone, James founded Caffeine Software, a company that boosted speed and privacy of iPhone apps. He’s a graduate of Y Combinator, a Theil Fellow, and a Forbes 30 under 30 member. But don’t let all that intimidate you because before all that he was just a guy who loved playing World of Warcraft and Runescape. And I want to keep this part short because I’m frigging stoked to get into this conversation, but before I do, remember to click follow on your podcast app. That really helps us to grow the show. 

Without further ado, let’s jump in with James Graham of Community Phone. James, how are you doing today?

James Graham: I’m good! I’m even better after the World of Warcraft ref- it’s been too long since I’ve played!  

Ethan Peyton: Too long since you played? Well, we’re gonna have to get you back into that. My little brother is still on it and it’s been several years since I’ve played, but I’m sure it’s still a good time! 

James Graham: Yeah, yeah, There’s one thing I’ll add that, you know, three years of playtime and maybe…the game will tell you how long you’ve actually spent in the game. And so over the course of three years playing, I spent more than a year and a half in the game. And that’s not healthy at all! 

Ethan Peyton: It may not be healthy but it’s purely impressive! 

James Graham: Well, I…I mean we think so. There are like, five people in the game who also think so. 

Ethan Peyton: [Laughs] It shows dedication. 

James Graham: Or addiction. [Laughs]

Ethan Peyton: Well, there’s a fine line between those two things I’m sure. 

James Graham: There’s a fine line, fine line.

Ethan Peyton: Alright, let’s start at the very beginning. Can you tell us what is Community Phone?

James Graham: So Community Phone is a phone company. We have SIM cards, and we run a nationwide network on top of the big nationwide networks that exist. So we send you a phone, SIM card in the mail, you plug it in, you get wireless service. When you call in, you get somebody who is happy to help you. So it’s a friendly phone company at its core. 

Ethan Peyton: Is it just wireless or is it landline or what else you got going on there?

James Graham: Yeah, so the way that we provide service to landline phones is also using our wireless network. So we use our wireless technology to provide a variety of applications. But the technology, the way that we’re delivering the service is through wireless every single time. 

Ethan Peyton: So, since this is something that is already being…you know…solved, phones. I can go get a phone anywhere. Can you tell us what the uniqueness of Community Phone…what’s the problem specifically that Community Phone is solving?

James Graham: It is too hard or impossible to get service to your landline phone today. And you could be a business owner, you could be a senior, you could be a child with a senior parent, and you don’t have a way to solve this problem today.

Ethan Peyton: except with Community Phone. [chuckles]

James Graham: except with Community phone! [laughs]

Ethan Peyton: And how did you find that this was a problem that both needed to be solved and one that you specifically were best suited to solve?

James Graham: Yeah, well, we’ll see if we’re the best suited to solve that…that’s what maybe I intend to prove over the life of this company, right? So we’ll take the score when there is a score, right? Of course, I intend for that to be true. 

And the answer to the first question is we did not intend to solve this problem. We intended to solve a different problem, which was friendly customer support for your cell phone plans. So we tried to build a cell phone carrier company because that’s the future, right? It’s just cell phones. I mean landlines, that’s just the way of the dodo or some old dying thing. And for a large part, that’s true. You know, many of the homes in America don’t need a landline. But in the course of providing wireless service to cell phones, we got very lucky and stepped on a landmine that ended up leading us down this path. And the whole way down that path, I was saying, this is not…nobody needs this, these people are confused…the customers are confused, right? They don’t want a landline, they want to keep their landline number and move it to a sim card. And so after we stopped…I stopped trying to convince people they were wrong about the pain they were feeling and surrendered and said that, okay we don’t know, that’s when it started to work. So that’s the honest answer. 

Ethan Peyton: So it’s really about the number. People that have had their number for 20, 30, 60 years.

James Graham: It’s not.

Ethan Peyton: It’s not?

James Graham: It’s not. For some of them, it turns out…and this is what I didn’t understand, right? And this is the very interesting thing about operating in any market, is that we go in with a set of beliefs about what should or ought to be true, you know, and we brand it as the future, or we brand it as the technology. When really what we’re dealing with is a human who has a problem. And these humans cannot solve these problems with a smartphone every single time. Smartphones get lost and stolen and are more complex in certain workflows to use than just picking up a phone from the same spot every time. 

Ethan Peyton: Right.

James Graham: And so it turns out that they’re uniquely capable of things that a smartphone can’t quite do as well. And I didn’t know that.

Ethan Peyton: So landlines being the solution to this problem…this kind of leads me into the next topic that I wanted to talk about. Now you and I spoke very briefly on a call before this interview and we were talking a little bit about funding and you said something very interesting to me. You said that funding can sometimes be a distraction. Obviously, if you need money to make a startup happen then you should go get money. But if that’s all you think about, then it’s probably a distraction and it was distracting from product-market fit. So if you could tell us a little bit how you think about product market fit.

James Graham: Sure, yeah, and just to kind of qualify that, you know, if you’re a late stage founder and you need to just scale the vector and you just need to pour more gas on the fire, you know, you might really actually be bound by capital, but in terms of getting to product market fit, right? The first phase, the hardest phase, the only thing that matters is whether or not you find a really painful problem for a group of people that other people are not solving. Usually that is hard to do to parallelize. If you hire a lot of people with the capital that you have, it is unlikely that you will be able to improve the rate that you find product market fit, usually. And of course, I’m only speaking from one experience that I had. And so any answer to a general question, should always be qualified with that type of survivorship bias. And finding product-market fit, when it happens it is explosive and it will hit you in the face and hit you again in the face and then punch you in the nose and shout at you and say you need to sign me up! You will not miss it! 

Ethan Peyton: So what does that look like? I mean, are we talking like you’ve got people that you did not know were going to be your customers or people that you did know were going to be your customers and they are calling you, they are finding your office and they are beating your door down to sign them up?

James Graham: You are overflowing with demand. You are receiving more demand than you could possibly handle. You are experiencing pain and inability to fall asleep at night because of how much demand you are receiving. And you’re disappointing the majority of it. Because you’re just a small little startup at that point. You’re not able to scale to, like, it’s a very painful experience. So it looks kind of like that through all the forms. But it’s all inbound. It’s all inbound.

Ethan Peyton: Okay, so then…

James Graham: Maybe that’s different for an enterprise. I’m talking maybe about a consumer or SMB market. Product market fit for maybe an enterprise. Maybe that…if you’re building some radar that goes on submarines in the deep and there are only like 10 customers. Product market fit without that fluidity of market dynamic probably feels very different.  So I’ll disqualify that

Ethan Peyton:  Alright, that makes sense. Okay, so based on the fact that you’re the expert and I’m just some guy with a microphone, I’m gonna ask a very intentionally vague question. What do I do if people aren’t busting my door down and asking for my product?

James Graham: Well, and first I’ll say I am no expert. Throughout this process, I know that most of the things that I thought were valuable or important are way less valuable or important than I thought because the only thing that matters is whether or not you find yourself in a market that’s pulling it out of your hands. So I wanna say that now I’m confident that I don’t know. Before I was confused and I thought, now I know that I’m not an expert and also that there aren’t real experts!

Ethan Peyton: He’s just bashful everyone. Listen to everything he says.

James Graham: I promise this is not, but, to be honest, this is, there is no, it’s so personalized and custom to the market that you’re serving that any expertise or generality, I would be highly skeptical personally. And, can you, sorry, can you repeat the question?

Ethan Peyton: Yes, absolutely. And to preempt this pre-asking of the same question, I think that, yes, I agree with you, generalities should be questioned, they should be analyzed, they should be customized, but what I think that they do allow for is to set an excellent framework. You know, if I can see this is what company A did, or this is what company B did when they were facing a similar problem to what I was facing, then I can, if I’m smart, then I can take what they’re doing and fit it to what I’m doing. If I’m a little smart, then I can take what they’re doing and try to do it literally exactly how they’re doing it. So the question is, if customers are not lining up outside my door and tearing each other apart so they can be first in line, what do I do?

James Graham: Well, you don’t do what you have been doing, probably. So the general answer would be to change what it is that you’re doing. It would be to conclude failure and to move on and to change something, to change what you’re doing to solve that problem. And it depends on your confidence that this problem is here at all. If you’re solving a problem, like in our case, this was not a problem that we personally had, right? We knew that. We were very paranoid about whether or not this existed at all, and were intent on proving it existed. So you have to change what you’re doing immediately.

Ethan Peyton: I think that’s a smartly vague answer to a very silly asked vague question. So I’ll give you that one. And I think if people actually sit and think about it for a second, that it’s probably the exact answer that they need to hear instead of dump more dollars into Facebook ads. I think that this is a better answer than that. So thank you.

James Graham: Hmm. Well, I mean, most times most startups fail because they don’t get to product market fit, right? And most startups don’t get to product market fit because they are solving a problem that might not exist at all, or might not really be a severe and frequent problem for people. So solve that, right? No startup has died because they have been able to solve really frequent, very really problems for large groups of people. Every startup in the graveyard probably has a product and probably had a team.

Ethan Peyton: Alright, let’s move ever so slightly to the left. So everyone talks about product market fit, and there’s a less talked about, but it’s actually been brought up a couple of times on this show throughout the years. Adjacent to product market fit, there’s also product founder fit or problem founder fit. Do you have, obviously, your business is working and so you’ve found a working solution for both of those situations, both product market fit and problem founder fit. Do you have any advice for those out there who may be dearly seeking product market fit but that the problem might actually be problem founder fit?

James Graham: So sort of that if a person solving a problem isn’t inspired by the problem or the customer, that it will reduce the chances that they find product-market fit is sort of,

Ethan Peyton: Right.

James Graham: And then maybe also the, I mean, again, the only thing that matters is getting to product market fit. So, if you aren’t obsessed with it and constantly trying new things and you feel that you’re having to sell yourself or hair, probably not a great sign, and only you will know that. Right? Now, and then secondly, I think it does matter whether you like your customers. Like, you do end up building a better product. You probably have higher odds finding product market fit if you like it and are inspired by it. Though sometimes, I think form can follow function. And in the case of Community Phone, where I didn’t wake up and say, okay, I’m inspired to solve the landline problem leading. I was interested in things. I was interested in new technology. Even that word is a big suitcase word with a lot of meanings. But what we find is that when you start solving problems for people, it can change who you are. And it can pull you. And you can follow that contribution, which later turns to passion. So I think it also can go the other way sometimes, too. It’s very hard to argue with demand.

Ethan Peyton:  That’s very true. It seems to me, based on all the research I’ve done, based on the answers to the questions that you’ve given so far that you think a little bit differently than the rest of us muggles. It’s almost like you’re able to find a slightly different angle at which you’re able to kind of like approach the topic or a question or a problem. And I’m wondering if this is a skill that you’ve always had or if there was some sort of teaching or advice or something that you received in your life that has opened up this ability for you.

James Graham: Yeah, well first, thank you. I’ll take that as a compliment. And I’ll also maybe try to qualify that and say that I…the vast majority of thoughts that I have and call my own are thoughts that I was inculcated to and were other people’s thoughts. So I find myself…I find my will so weak in the face of any structure. From the society, from the peer group. So I find my thoughts incredibly homogeneous the vast majority of the time, right? And so it maybe has that appearance, but I promise you that we’re talking about single-digit percentage points of a difference, right? And that can be good. You don’t want to be totally off and then maybe, you know, we have words in maybe a clinical sense if you just have…totally operating a non-consistency reality, right? So we’re talking about this type of…like…alpha or something. And so the question is like, how does one try to think for oneself or how does one come or develop confidence that one is coming to one’s own conclusions? Sort of.

Ethan Peyton: I suppose if…yeah…if the…I appreciate that you, that you also…because there’s some people that might have answered that question with, oh, I don’t know, I think literally the same as everybody else all the time. But the idea that you’re open to this, and I’ve got a sticky note on my desk at home that says, great minds think different. And so I can truly appreciate that, you know, the way you’re coming to this. But the curiosity that I’ve got specifically here is if this is always something that you’ve had, or if this is a learned skill.

James Graham: I think both may be true. I think maybe if I think about my childhood I wouldn’t necessarily consider myself totally in the crowd, but of course I don’t know as a child you don’t really have self-awareness. So it’s really hard to give an honest answer. I’m not sufficiently self-aware, I don’t think. But I do think that what is very rare, lets you know we can take our programming and our DNA sort of sort of out of the equation and just kind of say, well, what we observe to be rare are adults, people with authority and the ability, the power, ability to make something, ability to do something, ability to change, you know, what we call the reality asking very simple childlike questions. That’s actually very rare to have the courage to ask really simple questions, right? And to need an answer and to…when everybody else goes what? Who invited that guy? Is that guy dumb? Like what is this guy? All of that, all of our heard mentality, our desire to be accepted by the pack and for our buffalo to not be stolen, like all the fear that we typically are experiencing all the time and don’t recognize it, is the other direction from I think what you’re describing. And I think what has helped me is studying the history of science and seeing that all of what we call…I mean, first of all, any conversation with anybody, we’re really relying on a short-term memory. Like nobody has watched the movies before 1980. Nobody has read most of the books that have been written before the current time. Like we’re really, there’s this myopia. And I think all of what we now have in our reality came from these breakthroughs really long ago, before it was obvious, and when it was way harder. Now it’s easy. We have access to information. We have, like it’s actually way easier now. The hard part is keeping our attention, so that’s harder. But like, how many people have seen any type of mold on bread,

Ethan Peyton: Ha ha

James Graham: and

Ethan Peyton: ha

James Graham: and are like, oh, that’s just shitty bread? We’re done. And then it’s like one dude who’s like the weird guy who looks at it twice, right? And then…penicillin. I think we talked about that earlier in the week. Same is true for x-ray. So I think like actually going through and reading the stories, or reading, you know, the Wright brothers, I think, are another great, great example. These weird bicycle mechanics who did weird tinkering things in the attic, you know, why were they the people to build the plane, as opposed to Samuel Pierpont Langley, who had all the VC funding from all the museums in his day, right? And the answer, I think, or I don’t know who knows if the answer, but what was interesting about this to me is that the Wright Brothers were the only people to actually get on their plane, and they described it like breaking in a horse, while all the others, you know, would use remote control or so much so, so their feedback cycle, they were really engaged with the problem, so much so that they got on their planet risk their necks in Kitty Hawk. Right? And so I think like it’s the obsession probably the desire, the desire to want to do this is probably more important than once because most of the time doing it is very scary. Like who wants to do that? Who wants to be a chude from the social group? Nobody. And that’s, but that’s the cost. Right? So if you want to do that, I think that’s what matters more than the programming [inaudible]

 some predetermined nature of any kind. It’s a desire, I think, that matters the most.

Ethan Peyton: This is, we’re getting into real territory where I’m gonna start forgetting how to speak because I’m so deep in my thoughts of what is being said here. So everybody, you’re gonna have to just hang with me. We’ll get there. Just give me that extra second, folks. All right, so there are tons of people out there who are searching for answers but I think that, I mean, for myself personally, and I think for many people who want to be able to think, and like you wanna be able to come up with novel answers and not just regurgitate what they’ve heard before, we’re actually looking for better questions, not better answers. Do you have any questions that you’ve come across that either you can ask yourself time after time and it helps you get into a right mind space or questions that if you get into a certain situation, you say, this is the question I need to ask to move myself forward in the best way possible?

James Graham: I love that inquiry. And that is what scares. All of us adults, we want to move quickly to the conclusion, right? We want to have the answer, right? So I really love that. And yes, I think, and I think there are two that come to mind. The first one is, am I actually allowing myself to be confused? Most of the time, the answer is no, confusion is not comfortable. We don’t want to be confused. We need this thing, we need to have the answer. And so most of the time I find when I take inventory, I’m not actually allowing myself to feel confused and to actually wonder about it. You know, the world is a very complex place. Like, if we start to really bear witness to it, we end up very confused, you know? And so I think that’s probably number one. And then number two is if I generate the wrong answer as I do normally, am I allowing myself to forgive myself? and move on. So I think if we allow ourselves to be confused, in any inquiry or in a discussion of generating and answering interesting or hard questions, I think allowing ourselves to be confused, are we actually doing that? And are we forgiving ourselves for getting the wrong answer or for building the wrong product over the past seven years? Or like, are we willing to actually move on and now be present in our confusion with the new question are kind of two things that I ask myself a lot. 

Ethan Peyton: Those are seriously excellent questions. And I think they both kind of fit in the same category of, am I willing to feel discomfort, a smaller discomfort now, in order to maybe feel more comfort later or to reach a situation where I’m building myself an easier, better, more fruitful life. We’re way off of business topics, but we’re also kind of not because life is business, business is life. It’s all the same big game that we’re playing and there’s no way to get business right if we can’t get life right. It’s kind of the goes to that saying of like, it’s hard to love others before you can love yourself. And…

James Graham: All people.

Ethan Peyton: Yeah, yeah, exactly! I’m having way too much fun with this conversation somebody’s gonna have to stop me. All right, let’s get back into a little bit more, a little bit more business-y type conversations. The business that you are running with Community Phone, especially on the landline side, seems to be taking a little bit of an operation, excuse me, taking a little bit of an opposite direction as most “tech startups”. Like so instead of blazing new trails, you’re kind of embracing like legacy-type technology with these landline phones and building what seems just like a better service surrounding that technology. What do you think makes this a viable venture for you but not as viable of a venture for the gigantic companies that you know they own the copper and they…we’re seeing them drop these customers? What’s making it good for you to come in and pick these customers up giving a similar service but it doesn’t work for them? 

James Graham: Well, I can’t necessarily speak on behalf of the larger companies, as if there’s one decision maker there, or there’s any sort of coherence. There’s a lot of randomness in the markets that we discount all the time. But we need reason in order to make sense of it. We need narrative, which is usually constructed looking backward, and therefore unlikely to be predictive, usually. that. When I think about the word technology, I think it’s about doing more with less for humans, solving a problem for humans in a leveraged way, rather than just hiring a human to solve your problem as kind of a one-off. And so I think that what we care about, you know, landline or wireless or sim card or voice Kodak or cloud? Not super interesting the whole question is: Are we solving problems for real customers? And are these customers loyal? And is this market growing? And do we understand the problem that we’re solving for customers? That’s what we care about. How we solve the problem for a customer is less interesting, because there are many ways to solve a problem for a customer and so there’s also the difference between…like…reality isn’t words! We point to it with it, but the actual underlying phenomena is separate from how we’re describing it every time. 

Ethan Peyton: Yes.

James Graham: And I think we’re sort of what the media talks about, everybody talks about where they say, this is how the world works, these are the things that constitute as the future. That’s a person with an opinion, right? So the question comes back to the other one, is that my…is that our opinion right? So what we come back to, I think, is the customer. Are we solving a real problem for them? And then what we also see is, I mean the beautiful thing about focusing on customer problems is once you get there, you sort of poked out and now there’s more surface area for new sets of problems, right? And an example, at Community Phone would be spam call. So we think the best customer experience is that when your phone rings, it’s friends, family, or customers, right? Like how about we just don’t send you the spam unlike…a lot of interesting technology that we’re bringing to bear and a lot of AI that we’re bringing bear to be able to provide a service like that. But at the end of the day, all that matt…the customer won’t even know about it because they’re just not gonna get the call.

Ethan Peyton: Right.

James Graham: So it actually results in a very simple, like non-noteworthy experience. It requires a lot of complex technology to build, but we start with the simplest customer experience and we try and it’s hard to do because we all love technology. Otherwise, why are we…we got here because we love technology? We think it’s awesome. But to start with that customer’s experience and to work backward, that is so hard to do. But that’s the only thing that matters. So I don’t know if that answers your question.

Ethan Peyton: Well it’s kind of interesting whether it does or doesn’t, but so that kind of gets us into user experience. And in your answer there kind of reminds me of the story of Steve Jobs building the first Macintosh where it not only had to be beautiful on the outside, but it had to be beautiful on the inside. And maybe 95% of his customers would be interested would never have opened that computer up to even see the art that was done in there. Maybe 99% of your customers won’t ever call you up and say, how is it that you’re blocking all these calls? Are you making sure that when my brother, who’s a telemarketer calls me, that his calls actually make it through? Maybe you will never reach those questions, but the idea that you’re starting from that experience, I find that to be extremely, extremely valuable because where your product meets the customer, where your solution meets their problem is kind of the only place that matters. If you’re not starting there, then what are you doing?

James Graham: That’s a great point and I think a business itself, like if we actually look into what a business is, or the thing that we’re building, right? We got our product, we got our business, right? We got our capital in the bank. All of those things are an abstraction. They’re this thing to build leverage to be able to solve a problem in the market. But the only thing that matters is whether or not the rest of it is itself a part of an answer to the question of how? How to scale, how to do it more effectively, how to build technology doesn’t break, but ultimately all comes down to the one real thing, which is when it’s the customer. Right, like they don’t care how big the business is or how well funded the business or who’s on the board. Right, the customer just has pain. And we build these very complex, very interesting, things called companies, right, which are also very new. A group of people working together throughout their whole career, I don’t think we had something quite like that before like the Dutch East India or when we used to go on ships together. It’s like, hey guys, if we did, how would we just stick around to stick together for the next time like we all rather than disbanding? So I think all of this is also very new. But I love the point that you are making. It’s a long way of expressing excitement and agreement.

Ethan Peyton: Well, you know what I’ll take it because I’m thoroughly enjoying all of this conversation. I want to jump into something that you mentioned there actually though. I’ll sum it up as the what versus the how. It’s the solution that you want to build, the experience that you want to build for this customer versus the how are we going to do it. And I think that a lot of young founders…They can either say this is what I’m gonna do and they have they put zero thought into how it’s gonna be done And then you’re you’re kind of you’re kind of selling a pipe dream at that point Versus another set and this is this is my Achilles heel where I’m like hey I want I see a problem. I see a group of people who need this problem solved But I’ve got no freaking idea how to build the thing that is going to solve that problem Or I have no idea how to solve the problem itself. Do you think that there is a middle ground in there somewhere? Well, I mean, there has to be. But I guess the better question is, when should I stop? When should I start thinking about the how? Because if I start thinking, me personally, if I start thinking about it right at the beginning, then I just won’t go anywhere.

James Graham: And the first comment I want to make is anybody who is doing anything like this at all in either of those two categories Like, I admire you like very few people do any action Like very few people ever step into the arena and actually put their name on the line and begin asking these questions put it because it Putting ourselves out here here. Like this is this requires real courage. Like this is a very unusual behavior, right? So, what’s also interesting is that if you, and this is just a quick digression, but a random walk over time, where it’s forward step, forward backward, you know, 50% chance of each, you know, after 100 steps, where is that player? The answer is not at zero. The answer is the square root of the number of steps. But there’s actually something to be said simply for taking steps and moving quickly, right? right? So I just want to call that out too. So okay, so how like do we like having a sense of the problem versus moving into an implementation of the problem? I would think of this like a funnel. If it depends on your confidence in the problem, right? And then there’s a discussion of cost. So and it’s all it’s like it’s peeling back an onion in the terms of proving the risk. Like is there really a problem here? And then eventually you have so many customers maybe who’ve committed to you or signed an LOI or a paid proof of concept, where now to get to the next stage in the funnel you have to build it, right? But most of the time we don’t have those LOIs or we don’t have the prepayments or the wait list with 100,000 people. And so then moving to the implementation might not actually there isn’t a problem here at all. That’s very severe and very frequent. So it’s a funnel, right? And so you have to just move down the funnel over time and have enough confidence and that we can maybe if you talk about the tactics of developing that confidence, you know, and I mentioned a couple, but that’s what it is. It’s further down the funnel.

Ethan Peyton: So these LOIs, these long wait lists, those are just kind of like proof points to you that this is an actual problem that needs to be solved. And now I need to start really thinking about how we’re gonna solve it.

James Graham: Potentially and then you know if that were to happen or you know and you know I work with people now You know because these problems never go away You know once you get product market fit it’s something you can do for features new markets new products So it’s it never goes away, which is like…And it’s so that and I think that’s also interesting because if big companies were good at this there wouldn’t be opportunities Right, so like it’s actually really hard to do this And you know I’d say something like well, okay, you got a hundred hundred thousand people on your waitlist like, well If you can’t get a prepayment from a thousand of them Do they really care? And that’s a question, right? Like, I don’t know, right? But there are ways to keep pushing it down the funnel without having to hire those fancy engineers, without having to do the fundraise, especially with all the tools now. You can do a lot of the no code, Google Sheets, stuff, whatever to provide it. Just start doing it manually. With the case of our landline, for example, When we were selling our product, we would have it running on flip phones in the backroom of an office somewhere. This was before we realized people wanted a landline and thought they just wanted their number. We would port their number to a wireless flip phone and go into the settings of some old Alcatel to set the forwarding number. So we had a wall of hundreds of flip phones with this. So it’s like I think like and that’s because you want to test you want to actually prove the demand and then the size of it You before you get bogged down in the implement, which is a very different set of skills There’s probably some more capital required. You really want to prove it as much as possible

Ethan Peyton: That’s an awesome story. I love to hear when it’s like, you open up the curtain and it’s like, it’s like two people, pumping a butter churn or something that’s like actually running the entire business. And you’re like, wait,

James Graham: Thank you.

Ethan Peyton: this is how this works? That’s awesome. It’s

James Graham: That’s

Ethan Peyton: like, yeah,

James Graham: it!

Ethan Peyton: this isn’t gonna work for long, but

James Graham: Right,

Ethan Peyton: if people

James Graham: right,

Ethan Peyton: keep

James Graham: right.

Ethan Peyton: asking for this, then

James Graham: Right!

Ethan Peyton: yeah.

James Graham: That’s right.

Ethan Peyton: All right,

James Graham: That’s

Ethan Peyton: I’m gonna

James Graham: right,

Ethan Peyton: jump

James Graham: that’s

Ethan Peyton: to

James Graham: right.

Ethan Peyton: a different topic even though I’m having so much fun. For everywhere we go, I keep having fun. So we’re gonna try one more. So you guys participated in Y Combinator, the startup school with Community Phone. And we’ve spoken with other founders who’ve also been through YC and everyone says that it’s valuable and they recommend it. And I’ve heard you say the same thing in other interviews. So I wanna take this kind of in a different direction. It seems like when you talk about your experience And also similarly with your experience in the Teal Fellowship, that the most interesting thing about these experiences is the people that you get to meet and work alongside. Can you tell us a little bit more about that experience?

James Graham: Yeah, yeah, and I think that that matters whether you get into one of these programs or not It’s also amazing just how accessible everybody is And I also think about you know if we want to you know I think a lot about when when I’m dying and you know what my life might have looked like and or and I think a great great Estimation of destiny are the people that you spend time with Much more than anyone’s own personal intention and so I would I think it’s very important to find these groups of people matter that much either as long as you get there. So sort of the question around the experience of meeting these people,

Ethan Peyton: What about

James Graham: what that was

Ethan Peyton: meeting

James Graham: like.

Ethan Peyton: the people was the, what about, all right, we’re gonna cut this to where I sound smart when I actually asked this question. What about meeting these people and building this network was it that

James Graham: Yeah.

Ethan Peyton: made that such a beneficial part of YC? Because obviously with

James Graham: Mm.

Ethan Peyton: YC and with the Teal Fellowship, you’re getting money, you’re getting guidance from people

James Graham: Yeah.

Ethan Peyton: who truly know what they’re doing. But this meeting

James Graham: Yeah.

Ethan Peyton: of people, this meeting of peers.

James Graham: which is very low or low value compared to this and I have a maybe a kind of it might sound silly you see that everybody’s startup is super ****** and you’re not alone you just see how bad it all is like and so you see that it’s

Ethan Peyton: Mm-hmm.

James Graham: all made

Ethan Peyton: It’s a huge

James Graham: up

Ethan Peyton: confidence.

James Graham: and you’re not alone because

Ethan Peyton: Ha

James Graham: you

Ethan Peyton: ha ha

James Graham: the super shitties. It’s everybody, even all the YC companies. And that changes as the company develops, but it’s really remarkable how not alone we are.

Ethan Peyton: That’s, it kind of feels, it kind of feels like, we’re doing Steve Jobs twice this episode, but it kind of feels like his quote about, everything around you was made up by people that are no smarter than you are. And that’s always stuck with me, because as a Midwestern boy, I’ve always thought, well, shoot, nobody’s gonna think I’m smart. So I better just stay in my lane. But now here we are, I’ve got a microphone in front of me and say whatever the hell I want to whomever. Which is probably not a good thing most of the time, but here we are.

James Graham: Thank you. It’s hard to know one’s own

Ethan Peyton: We’re gonna

James Graham: impact,

Ethan Peyton: find out,

James Graham: right?

Ethan Peyton: we’re gonna

James Graham: Yeah.

Ethan Peyton: find

James Graham: You’re

Ethan Peyton: out

James Graham: fine.

Ethan Peyton: someday.

James Graham: Right. Yeah.

Ethan Peyton: So,

James Graham: Right.

Ethan Peyton: all right, so you’re running this community phone, which is not, it’s not a web three company. It’s not a cryptocurrency. It’s not some super duper, tip of the spear, new technology, but here you are in YC. And I’ve seen it described somewhere you’ve written as you kind of felt like an odd man out. How do you think that that feeling affected your outcome from these experiences?

James Graham: And I think YC maybe was also helpful here because they’re all very clear, at least the partners that we worked with, that the companies that are super sexy and get all the funding at demo day are not really the companies

Ethan Peyton: Hmm.

James Graham: that end up being the big ones. And so they’re very clear and honest that there’s really, really great intellectual integrity at YC about this. And everybody loves an underdog story. And so I think it was motivating, I think, in short. It was very motivating and also isolating. But even in a room of odd men out, I don’t know. There might be a lot of people who feel, everybody could be together but still feel out. So I’m sure other folks have had this experience too, even the ones with the Web 3 or it’s But yeah, I think there’s a desire to show it, to actually deliver, in fact.

Ethan Peyton: All right, So there is a quote that I’ve seen attributed to you and that quote is, I value experiments. In fact, I encourage them at Community Phone and something about having all of my employees kind of freaks me out. And I’m assuming that you’ve got a little more constraint than that, but can you tell us more about experiments and how those might be set up in Community Phone and if there have been some that have had a really great output?

James Graham: Yeah. Well, there comes a point in the organization where you move from being a player to being a coach. And that’s a very difficult transition, usually. And what’s hard about a growing organization is keeping that spirit alive, because you end up moving in one direction. And you can hire a lot of very smart people to just keep going in this direction. And that’s great. Some of what that forgets is what brought us here in these types of discovery of what people want a new feature or how do we get downloads or and I think making it clear and this is very hard to do and it’s something that we’re trying to get better at and it’s certainly something that I get wrong regularly is the…it’s okay to fail it might be very expensive and but nobody wants to right like when it actually when you hire people that are great and you can trust them to actually trust them, it’s like a very different thing. And like encouraging that or sort of the value shifting to the result of the process is a part of that. And that can be scary because we want to move quickly and some of us may have the answer already but we want a culture that encourages that, that’s to do and we have a lot of growing to do there for sure. Yeah.

Ethan Peyton: All right, what is your number one piece of advice for early-stage entrepreneurs?

James Graham: Well. There is no general advice that works. The only thing is, do you find product market fit? That’s it. Right, do you solve a problem that’s really painful and really frequent for a lot of people? Or don’t you?

Ethan Peyton: That’s a very incredibly straightforward answer, and I’ll add to it from the beginning, or from more, that what we’ve said previously. Ask yourself questions. Find the best questions to ask yourself that say, are you getting close to product market fit? And if James is right, and I believe James is right about many things, I don’t think he’ll admit it, but I think he is. If you find it, they’re gonna come and they’re gonna find you, and they’re gonna say, you better give me that product, is going to be trouble. But if that’s not happening yet, find the answer. Find the question.

James Graham: Yeah. Right. Right. And talk to the customers all the time. Like, it’s not an intellectual excess. A lot of people starting companies are very smart. And sometimes that gets in the way. There’s no replacement for going and talking to your customers. That is 100% of your job should be like more than half of your time should be talking to customers all of the time and showing them everything and seeing their facial reaction and seeing how their tone changes and then asking them, okay, can you commit to pay right now for that, right? Which is an uncomfortable thing to ask another human. So you need to ask it. There is absolutely no replacement for talking to customers or talking to users at all.

Ethan Peyton: Excellent advice.

Ethan Peyton: It may be general advice, but it’s excellent advice. So we’re gonna take it and we’re gonna run with it. All right, I got one more question for you. Where can people connect with you online? And how can our listeners support Community Phone?

James Graham: Yeah, well, I mean, thanks for listening and happy to help. So my email is my first name at

Ethan Peyton: Pretty

James Graham: That’s

Ethan Peyton: simple.

James Graham: probably the best way to reach me. Yeah, and hopefully I can respond and be helpful.

Ethan Peyton: All right.

James Graham: Yeah,

Ethan Peyton: Well,

James Graham: emailing.

Ethan Peyton: you heard it here folks. Email James. He wants to hear from you. He wants to help you. He wants to help you solve all of your problems. He’s dedicating 48% of his working hours, waking hours even to solving your problems for you. I’m just kidding. Don’t do that. He’s busy. We got to respect this man, his time and his thoughts. But for real, you all should listen to this podcast again, heck maybe a third time and see if you can find some questions to ask yourself. Because that’s where the true insight is going to come from. It’s not from finding some random answer from some random entrepreneur online. It’s finding great questions to ask yourself to solve the problems that you are facing. So James, thank you very much for coming on. This has been a lot of fun. I hope to have you back someday. You’re gonna be back on the show because you’re gonna own the show. You’re gonna tell me how you’re taking over the world You own all media you’ve you’ve completely dominated everyone else in this game and And that you now own all the things so I look forward I look forward to that day

James Graham: Well, thank you for having me, Ethan. I’m very flattered. I don’t know if I agree, but I’m very flattered.

Ethan Peyton: Alright that’s going to be it for this week’s episode of the Startup Savant Podcast! Thanks for joining us!

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Alright, we’ll  be back next week with another awesome conversation with another awesome founder! Until then – go build something beautiful!

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