Courtesy of Greg Poulin
Pictured, from left to right, are Billy McGrath, Dylan Blatt, Gregory Poulin, Hemant Verma, and Niko Lalos, the founders and early employees of Goodly.
- Y Combinator is a startup accelerator that's launched successful companies such as Airbnb and Dropbox.
- Goodly is a new startup that helps companies offering to pay down their employees' student debt. They were part of Y Combinator's summer 2018 batch.
- Here's Goodly's successful application to Y Combinator.
- Visit BusinessInsider.com for more stories.
Greg Poulin and Hemant Verma left their jobs in April 2018 to start their own company.
At the time, they both worked at Rippling, a service that provides businesses with easy onboarding tools. They weren't especially worried about striking out on their own, Poulin said, because they felt they'd stumbled onto a huge opportunity.
Their idea was to build a startup that helped companies pay down part of their employees' student loans. Employers would make matching contributions the same way they would for employees' 401(k) retirement plans.
The issue was personal for both Poulin and Verma. While Poulin was a student at Dartmouth, he borrowed $80,000 in student loans. Meanwhile, Verma was still paying off debts from his own education in India.
The founders submitted an application for Y Combinator - the startup accelerator that's launched the likes of Dropbox, Airbnb, and Stripe (as well as Rippling). Y Combinator is notoriously selective, accepting less than 5% of the founders that come its way.
Goodly was accepted into Y Combinator's summer 2018 batch, meaning the company received a $150,000 seed investment in exchange for giving up a small amount of equity.
In March 2019, Goodly closed a $1.3 million round of seed funding, led by Norwest Venture Partners.
Here's their original application to Y Combinator.
(Note: This is an unedited copy of the application, though we've redacted phone numbers and email addresses. The parentheticals throughout are instructions found on the application.)
COMPANY
Company name:
Goodly
Company url, if any:
https://www.goodlyapp.com/
If you have a demo, what's the url? For non-software, demo can be a video.
(Please don't password protect it; just use an obscure url.)
https://youtu.be/wYeR55ccjwE
Describe your company in 50 characters or less.
Student Loan Repayment as an Employee Benefit
What is your company going to make?
Goodly makes it easy for employers to offer student loan repayment benefits. Our platform allows employers to make monthly payments directly to employees' student debt. Similar to a 401k to pay down student loans.
Offering student loan benefits as an incentive for recruiting and retaining top employees and to foster diversity and inclusion has become increasingly essential for employers. Student loan benefits rank as one of the most desirable employee benefits for millennial and gen z employees.
When we looked at existing options, it was clear that the market does not have a great solution for employers that want to offer student loan benefits. Current options are difficult to implement, expensive, and have limited resources for employees.
Goodly will:
Benefits administrator: implement plans, enroll employees, verify student loans, and facilitate payments.
Improve workplace diversity:
- Women hold two-thirds (66%) of all student loan debt
- Black and Latinx Americans have 31% higher student loan debt
- LGBTQ community holds significantly higher debt on average
Which category best applies to your company?
B2B
Is this application in response to a YC RFS?
Yes
If yes, which one?
Diversity
Where do you live now, and where would the company be based after YC?
(List as City A, Country A / City B, Country B.)
San Francisco, USA / San Francisco, USA
CONTACT
Email address of the founder who is filling out this application:
[Redacted]
Phone number(s):
[Redacted]
FOUNDERS
Founders
Screenshot/Goodly
Please enter the url of a 1 minute unlisted (not private) YouTube video introducing the founders. (Follow the Video Guidelines.)
https://youtu.be/wvI8fei2nvA
Please tell us about an interesting project, preferably outside of class or work, that two or more of you created together. Include urls if possible.
Last winter, we were curious about what it would take to build a decentralized social network and hacked together Peppy, a block-chain alternative to Twitter as an experiment.
How long have the founders known one another and how did you meet? Have any of the founders not met in person?
Greg and Hemant have known each other for well over a year, and met when they started working as early hires at Rippling YC W17 out of Parker Conrad's unfinished basement in the Mission.
PROGRESS
How far along are you?
We're building our MVP. Over a two week period we met with 40 thought leaders in the HR/benefits space, including startup founders, tech CEOs, VC's on the boards of HR/benefits companies, and HR and people operations employees in our target market to guide our product development.
We started sales outreach for our alpha last Friday, by end of day Monday we had five alpha customers.
How long have each of you been working on this? Have you been part-time or full-time? Please explain.
We quit our jobs at Rippling four weeks ago to work on this full-time.
Which of the following best describes your progress?
Prototype
How many active users or customers do you have? If you have some particularly valuable customers, who are they?
We have five alpha customers that we're onboarding this week.
Do you have revenue?
No
Anything else you would like us to know regarding your revenue or growth rate?
We're preparing to launch our beta and plan to have revenue soon.
How much money do you spend per month?
500
How much money does your company have in the bank now?
0
How long is your runway?
(e.g. 5 months)
We're bootstrapped, but have received investment offers, including from the CEO of Postmates. We have enough savings to go a year without funding or revenue, but we hope to get revenue soon.
If you've applied previously with the same idea, how much progress have you made since the last time you applied? Anything change?
This is our first time applying :)
If you have already participated or committed to participate in an incubator, "accelerator" or "pre-accelerator" program, please tell us about it.
Nope.
IDEA
Why did you pick this idea to work on? Do you have domain expertise in this area? How do you know people need what you're making?
We picked this idea for three reasons:
Idea:
Goodly came from Greg's personal experience with student loans. After Greg's father passed away unexpectedly due to a heart attack, he had to borrow $80k in student loans to pay for his education at Dartmouth. After moving to Silicon Valley to work for a startup, he saw the war for talent and how challenging it is for tech companies to hire a diverse workforce.
Need:
- 44 million Americans hold $1.5 trillion in student loan debt (300% increase since 2006)
- 70% of Americans graduate from college with debt
- Average borrower owes $37,127
- 22 years (average time to payoff)
- 1 in 4 student loan borrowers are in default
- 37% have missed at least one payment
49% of millennials prefer student loan benefits to a 401k and 53% would consider a salary cut to have this benefit. 86% of employees said they'd stay with a company for at least 5 years if their employer helped pay down their student loans. Goodly bridges the gap between the demand for this benefit from employees and the cost and complexity of administering student loan benefits for employers.
Domain expertise:
Hemant and Greg gained deep domain expertise building and selling HR/benefits software at Rippling. They started working together a week apart, before Rippling launched or had customers, and helped build the company from the ground up. Hemant built over 100 of Rippling's integrations.
During YC W17, Greg worked with Parker to develop and execute Rippling's go to market and first sales strategy. Greg had a 75% close rate selling Rippling's HR/benefits software.
What's new about what you're making? What substitutes do people resort to because it doesn't exist yet (or they don't know about it)?
The implementation process for employee benefits solutions on the market today can be needlessly complex and expensive. Many HR/benefits solutions are cumbersome and cost prohibitive for many employers to offer.
Goodly can be implemented in 10 minutes and is flexible enough to fit any budget with no setup or annual fees.
Who are your competitors, and who might become competitors? Who do you fear most?
Gradii, Tuition, Student Loan Genius, Peanut Butter
We fear large financial institutions with significant resources and existing partnerships.
What do you understand about your business that other companies in it just don't get?
A focus on employees (not just employers) as end users:
Many employee benefit vendors are focused on developing relationships with employers, Goodly is building a highly differentiated brand that is employee centric. Goodly will provide all of the tools needed for employees with student debt manage and pay off their student loans, allowing Goodly to become a trusted resource for employees and employers.
How do or will you make money? How much could you make?
(We realize you can't know precisely, but give your best estimate.)
Starting with a bottom up approach, our initial target market will be startups with 1 to 500 employees.
Our immediate source of revenue will be a SaaS-based pricing model of $6/month for each employee that participates with no setup costs or annual fees. 44 million Americans have student debt, charging $6/month x 12 months would produce $3.16 billion in ARR.
The total U.S. student loan market is $1.5 trillion (larger than all consumer credit cards and auto loans) and growing by $2,726 per second.
Bipartisan legislation in Congress would make up to $5,250 a year in employer contributions for student loan repayment tax-free. The bill has 118 co-sponsors as of April 17, 2018.
How will you get users? If your idea is the type that faces a chicken-and-egg problem in the sense that it won't be attractive to users till it has a lot of users (e.g. a marketplace, a dating site, an ad network), how will you overcome that?
Bottom-up approach targeting other startups as beta users and rapidly expanding to target professional services companies (law firms, consultants/MBAs, medical/dental) to gain a foothold in the market and then expand to other sectors.
- Working through personal networks to gain traction with beta users
- Connecting with startups in major tech hubs
- Education/Awareness: seminars/workshops for employees on how to manage student loans
- Online distribution to employers
- White papers/case studies
- Gaining traction in the press/media
EQUITY
Have you incorporated, or formed any legal entity (like an LLC) yet?
Yes
What kind of entity and in what state or country was the entity formed?
(e.g. Delaware C Corp)
Delaware C Corp.
Please describe the breakdown of the equity ownership in percentages among the founders, employees and any other stockholders.
50/50
List any investments your company has received. Include the name of the investor, the amount invested, the premoney valuation / valuation cap, and the type of security sold (convertible notes, safes or stock).
We're bootstrapping, but have received investment offers.
Please provide any other relevant information about the structure or formation of the company.
We formed the company using Gust Launch. Goodly's incorporation documents were reviewed by Mike Sullivan (a partner and head of the Corporate Group at Orrick serving as a mentor to Greg).
LEGAL
Are any of the founders covered by noncompetes or intellectual property agreements that overlap with your project? If so, please explain.
Nope
Who writes code, or does other technical work on your product? Was any of it done by a non-founder? Please explain.
Hemant writes the code and technical work.
Is there anything else we should know about your company?
(Pending lawsuits, cofounders who have left, etc.)
Nope
OTHERS
If you had any other ideas you considered applying with, please list them. One may be something we've been waiting for. Often when we fund people it's to do something they list here and not in the main application.
Marketplace for job applicants to find open roles at companies that offer the benefits that matter most to them.
Please tell us something surprising or amusing that one of you has discovered.
(The answer need not be related to your project.)
Recent college grads in the Bay Area without student loan debt will spend 12 years saving for a home. Recent college grads with debt will spend 27 years to do the same.
CURIOUS
What convinced you to apply to Y Combinator?
The first thing Parker said when Greg told him what we're building was "Apply to YC!"
We want to rapidly accelerate our growth and saw first-hand the value YC provides to early stage companies during our time working at YC companies, including at Rippling W17 and Optimizely W10.
Many of our friends and colleagues are YC founders and pushed us to apply for the S18 batch, including: Parker Conrad Rippling W17 and Zenefits W13, Ryan Jackson MicroEval S12 and Paid S14, Jeff LaBarge Tule S14, Marta Jamrozik VanGo W17, and Zack Brown Haiku W18.
How did you hear about Y Combinator?
Reading PG's essay's over the years and being early employees at YC companies.