What Surviving the Recession Taught me About Being a CEO

by kenn lin

We launched a year before the global financial crisis hit in 2008. In hindsight what was coming seemed inevitable

, but in 2007 no one knew that banks were in such trouble. We raised a small angel round without much hassle. The economy was going along okay. There was a lot of debt around, but no one was worried about it.

Things changed quickly in 2008. Suddenly, everyone was aware of the peril facing the nation's banks, some of which failed outright. Our business model depended on the banking system, so this especially wasn't good for us. Within one day we went from having 120 products advertised on the Credit Karma site to just 20. Setting out to raise more money, people who were once interested had now dried out.

We didn't know how long the recession would last. No one did. It would end up being four years until the economy loosened up. Keeping Credit Karma alive and growing through this time wasn't easy but it taught me a lesson I would not have gotten otherwise about what it means to be a CEO.

Everything else but product is a distraction

With fundraising going slowly we couldn't hire. Our office was tiny. The resources we did have we simply directed towards building the best product imaginable. Hitting major milestones with a skeleton staff made us stronger. Soon after we launched in 2008 our invite code leaked on Slickdeals. 6,000 people signed up in one day. We had one engineer on staff but the site held up fine, testament to the premium we'd put on building a safe, reliable and scalable product from day one.

We were constantly honing our offering and making sure our business model held the most value for both our members and banks advertising on our site. You can't afford to be anything less than perfect when your company's future is tied to an imploding sector of the economy. We eventually did close a $2.5 million Series A in 2009. At one point I had to walk away from the only offer we had on the table because it would have held our product back. It was terrifying.

Because of this early focus, if you look at Credit Karma in 2015 the core of our product and our mission has changed very little from 2007. Clearly defining so early on what we wanted to do and how we wanted to do it has paid off greatly over the years.

Make every dollar count

As we started to take on new hires in a perilous job climate in 2010, I felt personally responsible for every person on the team. I wasn't going to risk having to lay people off or jeopardizing our future by over-hiring. Wherever we could we buckled down and got by without taking on someone new.

We got the most out of every dollar. It became about company needs, versus wants. One of our desks in our first office was a door placed over two filing cabinets. We used open source software wherever we could. With a team of five, we didn't hire anyone in 2009. Until 2010 our head of engineering was doing member support. Our head of business development was running public relations. Ultimately, this focus on frugality helped Credit Karma take control of its own destiny faster.

At the end of the day, you're playing for time

These experiences showed me that the primary job of a startup CEO is to play for time. To use a baseball analogy, you want to give yourself as many at bats as you can. Products have their perfect moment. Google wasn't the first company to offer pay-per-click ads in search, but it offered them at just the right moment. In 2012, Credit Karma's membership and revenue started to scale as the global financial crisis started to slip from people's minds. It taught me that if you can scrape through, keep going and stay true to what you want to do, you can put yourself in the right place to hit a home run when your moment comes.