The Startup Slumber Party: How Living With Your Cofounders Can Save Your Company

/// The Startup Slumber Party: How Living With Your Cofounders Can Save Your Company

February 6, 2013  |  Blog

On a rainy Friday morning in Los Angeles, the Enplug house is quiet. The company, which started in May, is building a nationwide network of interactive ads presented on huge interactive TVs that passersby can interact with via smartphone. Like a lot of startups, this project is home-brewed, but what’s unusual about Enplug is that all 11 team members call the same place “home.”

Almost all the employees are engineers under 25, a heavily sought-after demographic for corporate recruiters, head-hunters, and other startups looking for technical founders. While many startups struggle to keep their teams together, Enplug decided to align their personal lives with their work so much that togetherness is a non-issue. In doing so, they’ve taken on the risks of being too cramped, too personal, and too vulnerable in front of their teammates–a gamble they say has paid big dividends for their nascent company culture. “We’ve all been poached at least once,” says CEO Nanxi Liu. “Our CTO was offered a corner office by a gaming company. He told them, I actually have a great office: It’s my house in Bel Air.”

It’s Morning In Los Angeles

When I walk into the Enplug house, I expect to hear the buzz of creativity and the tap of fingers at work, building the next generation of ad tech. Instead, I hear a quiet discussion in one room of the house and a pair of voices coming from the kitchen. Then I remember that this is a tech startup and it’s 10 a.m. Most of the team is probably still sleeping.

Alex Ross, the 22-year-old CTO, rolls out of bed to answer the door. He shares a room with Nanxi, who is also 22. Nanxi (pictured at right) built software as an undergrad at Berkeley, including one product–a 911 alert system–which the school ended up buying in exchange for grant money. Alex passed up a gig at Cisco to live (and work) at Enplug.

Living together like this wasn’t the plan, says Nanxi; few of the founders even knew each other beforehand. Nanxi met cofounder David Zhu last year, when he was a former professional poker player living in L.A. They hatched the idea for Enplug based on digital billboards David had seen recently on a trip to China.

“David told me they had people in China bicycling around with USB drives updating the content on the billboards,” says Nanxi. “He said, why don’t we do something similar, that could be updated remotely?” They figured that if they added social interactivity, they could revolutionize the outdoor ad business.

Nanxi and David parted ways excited. Flying back to Los Angeles, David happened to meet a designer named Zach Spitulski on the plane. After the in-flight conversation, Zach promptly dropped out of UCLA to join the nascent project. Zach had a roommate, Alex, who would become CTO. Since the team was split between the Bay Area and L.A., Nanxi made a radical suggestion: “I said: Hey, let’s get an apartment! It just made sense for us to not be traveling back and forth.”

Getting Paid In Cereal

In the Enplug world, no one gets salaries: all money is poured back into the company, and in turn, the company provides. Chores are split among the housemates, and grocery shopping is a team-building activity.

“The company buys food, pays rent, and utilities. We go to Costco together and buy tons of stuff,” she says. “We get boxes of cereal that will last us two weeks. If you’re taking a trip, put the miles on the company. Going out for drinks? Put it on the company. So it’s okay that we don’t get paid, because what would we do with the money? We’d put it back into the company anyway. This way, we don’t feel like we’re working.”

Of course, work still needs to get done, feelings notwithstanding. “We do weekly emails where people set goals and submit progress like any normal company,” Nanxi says, but the team also has more playful ways of rewarding progress. “We’re starting to nominate each other for weirder stuff: Who would be most likely to name their kid after Enplug?”

Keeping The Culture Alive While Hiring

“I actually think the company would have failed if we didn’t live together,” says Nanxi. “Startups are so fragile. If one person decided they had to go a different direction, it’d be easier for them if they weren’t living with the team. But if you’re in the house, you’re committed.”

Homes, like businesses, are meant to be filled with people who contribute to the energy and success of the venture. But how do you add people when a job requirement is living in the founders’ house?

“Hiring was super tricky,” says Nanxi. “We knew we were going to hire two engineers. First we went through a recruiting company, and they came up with the traditional candidates. But I’ve learned the best candidates you have to poach, since the best people never go through recruiters. We interviewed dozens of people. We wanted experienced people, but most of them were married or had a family, and they weren’t going to live with us,” she says. “We were serious about one candidate: he was going to work remotely from Hollywood, and he wanted 120k salary, but we liked him. Still, it bothered me that this cultural thing, we were going to lose it.” (The team has angel backers, and recently came out of incubation StartEngine in Westwood, CA.)

At the last minute, the team discovered Justyna Wojcik and Bruno Denuit, 31 and 35, two just-married engineers from Microsoft’s Azure team who were trying to launch their own startup. The Enplug team hired them instead–just two weeks after the wedding–and the pair moved in. “The right candidates are the ones who want to work for equity,” says Nanxi. Still, what about the vulnerability they experience living with coworkers?

“There are pros and cons to it,” says Nanxi. “With the vulnerability we know exactly how much each person works. So that may stress certain team members out. But we still have our separation of space. Alex works in the office room. I work in the kitchen. At the beginning we felt that pressure. It was hard to take vacation. But now we realize–we are the company. We all just trust each other.”

Who Needs A Corner Office?

Their first apartment was a two-bedroom convertible with one bathroom, and they crammed in the whole team. There were seven of them then, and the rent was $1,350. The place I saw, where the now-11-person team lives, is a definite upgrade, with five bedrooms and three bathrooms. Everyone shares a room. Rent: $6,000.

Housing settled, the team set to work building a network of indoor billboards, vertical orientation, in sizes from 46 inches to 80 inches diagonal. They recruited restaurants, bars, and theaters as customers, showing off how users could interact with an Enplug ad through their phones, using existing apps they already have–SMS, Facebook, Twitter, or Foursquare. Users can use the board to play games or put their own faces in the ad, and multiple people can connect at once for a shared experience.

In Los Angeles, startups can rough it in style: This isn’t some bombed-out Brooklyn loft or skunky row-house in the Tenderloin. “At night, the house looks over the lights of passing cars on the 405 freeway,” says Nanxi. “The Bel Air area has a lot of nature; we get up on the roof to take it all in. We even have a piano; I play.”

Day (Or Night) In The Life

As I stroll through the house, I meet other members of the team. Zach, the 21-year-old designer, David Zhu, the 23-year-old CFO and cofounder, and Justnya and Bruno, the married couple, who describe the living situation as “surprisingly frictionless.” I wonder: How is this possible?

The team concedes the house schedule isn’t always perfect. When Zach is starting his day at 9:30 a.m., some of the other team members are still a couple of hours from rolling out of bed. Justyna notes that this staggering of schedules is beneficial when she wants to get up and start working in a quiet house–however, the staggering presents a different set of challenges when one group decides to pull an all-nighter in spite of another group’s early bedtime.

“The people on the biz side wake up earlier and go to meetings, says Nanxi, “while the engineers had a midnight meeting on Christmas Eve. Alex sent me an email: Props to engineering team for meeting on Christmas. Our work is our life.”

It’s also a family life. “I’m the mom who says: If you use the dish, wash it. Bruno and Justnya are like grandparents: they take care of the house, always clean up after themselves, and go to bed earlier,” says Nanxi. The kids are Alex and Zach, the CTO and designer–one good kid, one bad. “Alex is super messy, and I have to share a room with him,” says Nanxi. (She sleeps on the floor while he gets the bed.) “Zach is like the good kid: really clean, super neat. If I ever make Zach sign anything, he reads every word.”

The biggest reason to live with your cofounders, says the Enplug team, is motivation. “A lot of the work in a startup is just building a mentality: telling yourself you’re gonna make it. That’s the job of the cofounders,” says Nanxi. “My job and Alex’s job is to keep everyone motivated. First we said, we’re going to be the top startup in our incubator. Then we said, we’re going to be the top startup in L.A.” The company is growing fast, but Nanxi says there will be no more hiring for about six months: “The dream is safe, for now.”

Link: The Startup Slumber Party: How Living With Your Cofounders Can Save Your Company

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