A First-Time CEO Navigates a Downturn

A conversation with Aline Lerner, CEO, Interviewing.io

Aline Lerner founded Interviewing.io to fix software engineering hiring. Like many businesses, the company found itself facing a steep revenue cliff in 2020 during the heart of the pandemic. We talked about leading the team through a downturn, feeling like a wartime CEO, and raising a Series A while pregnant.

Before we get started, I'd love it if you could introduce yourself.

Sure. My name is Aline Lerner. I am the CEO and founder of a company called interviewing.io. Been at that for the last seven years. Before that, I worked as a recruiter and had my own recruiting business. And then before that, I was a software engineer for about five years. So my whole life has been about engineers and hiring engineers for over a decade. And it probably will be for a very long time to follow.

What does interviewing.io do?

At the end of the day, we're trying to fix software engineering hiring, perhaps other kinds of hiring as well. We are first and foremost an interview prep and practice platform. Software engineers can come to us and book anonymous mock interviews with senior engineers from companies like Google, Facebook, Amazon, Dropbox, and a whole bunch of others. I think we are the only platform that's really doing anonymous mock interviews at scale. With us, you can get somebody within 24 hours and you'll get dropped in an interview with them. They'll give you feedback about what you need to do better, and you do that over and over until you feel good. 

We also do hiring. So if you do well in your mock interviews, no matter who you are, no matter how your resume looks, you can get in front of great companies like Amazon and Dropbox, and bypass a lot of the process. So instead of having to talk to recruiters, apply online, or have a friend refer you in, you just press a button and you're like, "I want to interview at Amazon tomorrow." And then you can interview at Amazon tomorrow. And it'll be a technical interview. It's still anonymous. So all of our customers who hire through us don't know who the candidates are until after they've interviewed successfully. What that means is that about 40% of the people we've placed have come from non-traditional backgrounds. Many of them were rejected by the same company when they tried to go through the front door.

Is that why you've made it anonymous?

Yes, it’s one of the main reasons. The second reason is for candidates to feel safe, right? Mock interviews are hard. Real interviews are hard. We want to create an environment where you don't have to feel stupid or worry if you fail. Everybody fails at least one interview in their practice process. Many great people fail more than one. We want it to be okay to fail. Just pick yourself up and you keep going.

Let's go back to seven years ago. How did you come to start this business? Did you start it by yourself, funding?

It was the culmination of a windy path. I had been an engineer for a while and toward the end of that, I was dealing with hiring for my team. It was really hard. It was much harder than I thought. I thought you just put an ad out and good people came to you because I'd never done it before. I was like, "Oh no, this is convoluted and bad." I got interested in that problem enough to say, "You know what, let me see if I can work as a recruiter. That's not something I necessarily want to do long-term, but let's try it, and see how it feels. Let's see if I can do a good job and then I can learn that business. So that's what I did.

I started moonlighting as a recruiter. I ended up running recruiting at a couple of companies including TrialPay and Udacity. Then I started my own recruiting business. I was just following the momentum, just doing things I thought were interesting. I'm very fortunate that I could do that. 

When I was running my recruiting business, I started to notice some things that were very frustrating about hiring. The first one was that it's really hard for candidates to get in front of companies. So I had my lineup of candidates. I had already started offering them mock interviews. I would do them myself. I was like, "Hey, I want you to look good. And I want to make sure you're good. So before I can introduce you to my clients, why don't we do a technical interview? If you do poorly, no worries. I'll tell you what you need to work on. And you come back in a few months. And if you do well, then great. When I send you to my clients, I can say, 'I think this candidate is really good.'"

I thought that would work, but it didn't because I would submit this person's resume and unless they went to one of a few schools or had worked at one of a few companies, recruiters would not engage with these candidates. They're like, "We don't care if you think they're good. Our mission or the guidance we've been given says we hire from these schools, and these companies, and that's it." So that was really frustrating.

And I saw how much my candidates liked having practice. Right? And that just wasn't a thing they could really get. So I was noodling on this for a while, and then it just clicked for me. I'm like, "What if we have a platform that does this? People can practice." If they do well, we won't give companies a choice, right? We're not going to show companies their resume. We're just going to say we know these candidates are really good. They're just going to book interviews. The idea just came out of me noticing stuff that wasn't working when I was doing this by hand.

What a great origin story. I want to fast forward a bit. Where was the company in the life cycle in March 2020?

By the time COVID came around, we had raised three rounds of funding. Originally, I was a solo founder. I raised a pre-seed round, then I brought on a co-founder. I brought on a team. Then we raised a seed, and then we raised a seed two. So we were pretty deep in it. I think at the time we had over 10 people, maybe 11 or 12. We were doing a few million dollars in run rate. It was really scary because we started seeing the writing on the wall maybe even at the end of January 2020. People could kind of tell something was up. Companies had started slowing down hiring. At the time all of our revenue at that time came from employers. So we would get paid when we made hires or some employers would pay us on subscription, but everything was free for engineers. Practice was free. You come on, use the platform, and then you are essentially the product. We will try to place you with your permission. Some people just used us for practice, but a lot of people used us for hiring as well.

So companies started slowing down. They could tell something was happening, and maybe they weren't really sure what it was. But to be safe at best, we started seeing hiring freezes. At worst, we started seeing a trickle of layoffs. And then was it March 17th when the quarantine started? It all came like a deluge. All of a sudden, a few companies are pausing, pausing, pausing. We went from 30 or 40 active customers, many of whom were enterprise, to like five. That happened in a matter of weeks. So we went from a few million dollars to a few hundred thousand.

My heart just dropped.

It wasn't fun to live through. I mean, if you look at our revenue graph, it kind of goes up steadily. You can tell exactly when the pandemic started.

How did you grapple with this?

I'm a first-time CEO, so one of the hardest things about it was realizing that you're in war mode. I think it is Ben Horowitz who talks about peacetime CEOs versus wartime CEOs. I had never been a wartime CEO before.

Being in war-time mode is a mental adjustment, the speed of decision-making. You have a culture where you're taking a lot of input and ideas are coming from everywhere and all of a sudden it's like nope. Nope, nope, nope, nope. We're just doing this. We're not talking about it. 

Having lived through that now I'm much more comfortable doing things abruptly and speeding everything up but at the time I agonized over what to do. The obvious thing which is what we ended up doing was starting to charge engineers for mock interviews. Some folks on the team had been pushing for that before COVID. It's something that I always said no to and vetoed repeatedly, even though I thought it would be a good revenue stream. When you create friction for users, you're going to get a different user composition. Those might not be the people that you necessarily want. It's complicated, right? I'm not sure if that was the right decision to not do it. I'm still pretty sure it was the right decision to not do it until COVID hit. But when the pandemic hit, we had on our site, that we're free and we always will be. It was in big letters on our marketing site.

We had an engineer start on the first day of the quarantine, and his first task was removing all references to the product being free on the marketing site, if you can imagine how shitty that must have been for him. So just making that decision, I was talking to my boyfriend who's also a founder. "I don't know if we should do this." He's like, "Start doing it now." He's like, "You can change your mind. Just go, go, go, go." I was like oh God, this is the speed that I'm not used to working at. But okay. Yeah. Okay. "We're doing this. Spec this out, guys."

We had no idea how to price anything. We had never taken payments on the platform before. This was just a completely new business line for us. So I was just emailing users that were on our waiting list, because we were still in beta at the time, even though we had been around for a while being like, "Hey, you can get off our waitlist if you're down to pay for interviews. If you're down to pay for interviews, we're taking payments through PayPal. Click this link." It probably looked shady.

Did that cobbled-together solution convert?

Yes. The fact that it converted with that crappy of an experience was telling, right? I'm like if we do something this janky and suspicious and people are still willing to click that link and give us money, we actually have something here that people really want. That was encouraging.

I think that I am a better writer than I am a talker. So one of the things that I leaned on pretty heavily too was just writing memos to our team and writing to our users explaining, just being transparent, being like, "Why are we doing this? I know we said we were free. We know this is really shitty. But if we don't do this, the company shuts down and then nobody gets mock interviews. So sorry guys, this is why we're doing it." Our users understood. There were some people that of course were angry with us understandably. When people joined interviewing.io prior to COVID, I think everybody got three interviews to start. So if people hadn't used those, we didn't take them away. We just said, "Hey, they're yours. They're in your account. They're yours forever. If you joined after this date, sorry. We're drawing a line in the sand."

We were transparent. We told users what was up. I spent a lot of time writing, writing, writing, and explaining things. It's hard to communicate nuance verbally sometimes. If you control your messaging a little bit, you'll do a better job. But I think the hardest thing was just, "Okay, now we're in a different setting. We're in a different mode. Our priorities have shifted. The way we communicate internally has shifted." That happened basically overnight. I was fortunate because the people that we probably would've let go ended up quitting before we had to let them go. Fortunate, because you never enjoy it. It sucks. Right?

Letting people go is one of the worst things a leader has to do.

There are also some excellent people that I never would've wanted to leave that we lost, and our head of product was one of those people. I'm shocked that most people stayed, or half the people stayed because it was a dark time. If I were betting, a betting woman, I would've bet on us failing. But somehow we pulled it out. We started charging and doing these PayPal experiments in March. We actually rolled out the full product in May.

That’s fast.

It was very, very fast. Another person who ended up leaving afterward was our head of engineering. To his credit, he pulled us together, Esteban is amazing. He ended up leaving after that. Because for many reasons, I think he was burnt out after basically doing this Herculean task. But yeah, it was really tough. We would've had to let people go if people hadn't lost faith in what we were doing and left themselves first.

Under almost any circumstance letting people go is just terrible. And, it's a fact of life when you are a small business. As a leader, how was it for you? Did you doubt yourself?

Oh yeah. I wish I had kept a journal during that time. That's one of my regrets. I didn't. I'm so used to experiencing self-doubt and imposter syndrome that it's always there, but you just learn to ignore it. Right? You just don't have the luxury of wallowing in it because you have work to do. So do I think I'm qualified to run this company today? No. Do I think I was ever qualified to run this company? Absolutely not. Do I think I'm doing a good job? Absolutely not. There are times, there are moments when I feel very proud of myself. But generally, I don't. But that's just how you feel. Right? That's part of the job. That's why you get a lot of equity in your company. That's why when there is a success, you have a meaningful stake in that success. It's because every day for seven, to 10, to 12 years, you feel like shit. I think that that's just the experience. If you embrace it, it hurts a little bit less. There’s a quote about war that it’s like long periods of boredom punctuated by moments of sheer terror. I think startups are similar. 

Startups are like long moments of frustration, self-doubt, and sometimes boredom, right? Punctuated by either moments of sheer terror or moments of sheer ecstasy. It's one or the other. You learn to manage the ups and downs.

It's a great way to describe the experience, especially when you're in wartime if you will.

You were embarking on a whole bunch of new things, you had to do something you said you were never going to do, charge for practice interviews. What kind of mental shifts did you have to make?

Yeah. I think in some ways not ever having done it was an advantage because I wasn't burdened with competence. I had no priors on any of this stuff. I have generally learned through doing this for a while that it's okay to make mistakes. And this is the nice thing about making software, right? Unless you are a giant shit to your users or you do something that makes them lose their trust completely, or you're unethical, everything else people will probably forgive you for and you can change.

Our users have been very gracious and forgiving. We rolled out all sorts of stuff, and we saw that it didn't work. Then we rolled it back. So with pricing, I was like let's just get something. Let's get something later. We know it's not going to be the right price. No matter what price we set at the beginning, it's going to be wrong. So let's just take the pressure off, get something out, and then just start iterating on it.

It is hard to price things low and then raise prices. Certainly, it's easier to start high and then start lowering. But it's not that hard to raise them if you have to. Users will complain, you should be courteous to them. One of the things, I called out our firm or head of engineering by name. Liz, our head of user operations has been a star throughout all of this. Dealing with people's questions, dealing with their feedback. It fell to her and her very small team, now fortunately it's bigger.

Our one core value as a company is no matter who's paying our bills, we put candidate experience first. So if you have that as your north star, right? No matter what, we're going to treat our users with dignity. We're going to be honest with them. Yes, we're going to mess up our pricing. We're going to raise prices. We're going to lower prices. We're a business. We have to do stuff. We have to try things. But as long as you're not a dick or a bad person, I feel like there's very little you can do that will permanently alienate your users provided that you're adding value. If you're continuing to add value while you're kind of mucking around and making mistakes, they'll forgive you.

I'm building a product right now and I do not know how to do product pricing. And I'm terrified.

Yeah. It’s hard. You're like, "People bought this, I guess it was too cheap." Okay, let's keep raising it until nobody buys. And then it's too expensive. And then you lower it again. Then you find the equilibrium point. But you won't know until you do it. Anybody that gives you advice about pricing is probably not that useful because so much of this is nuanced and specific to your business. And a lot of getting pricing right is about optimizing. Once you see that people are paying, okay. We can change our margins a little bit and we can tweak this. Maybe we can do a 20% improvement here and a 10% improvement here. But that's not going to make or break the business, at least not at this size. That kind of optimization matters later. It doesn't matter when you're starting out or when you're trying to survive. Your prices will be optimized. It's a given. You will be wrong. You'll be wrong for a long time. But as long as you have momentum and things are improving, that's all that matters I think.

I think a lot of leaders and founders struggle with perfectionism. The pressure and being on a stage can be hard for them. It sounds like you’re not afraid of making mistakes. Being open to trying things and if it doesn’t work, trying something different.

I'm trying to think what one of my employees would say about this. And I think they probably say that on a big-picture level, yes. I'm very, very down to try stuff, make mistakes, and roll things back. But one of my  flaws is that I tend to get hung up on details. I'm like, "Why is there a typo here? I don't like how this sounds. How did this go out? Why is the padding here missing?" 

I also think that copy is the way you communicate to your users, and some of this stuff does matter. Hopefully, over time, you find a way to impose standards, and then people are doing this themselves. You don't have to be the jerk that swoops in and disrupts everything that everyone's doing and be like, "Stop what you're doing. There's a space missing here." That's an extreme example. I hope I haven't done that, but I wouldn't say that I am great at being chill about everything. There are a lot of things that I tend to micromanage and be annoying about.

I love that transparency, and that you know yourself. And, when it really mattered, this perfectionism went out the window. I’m not surprised because the responsibility, the pressure, and the real results fall on you, especially as a CEO.

Yeah. It falls on you. One of my friends is a restaurateur. And earlier in his career, he was very intense. He would scream. It wasn't like Gordon Ramsay, but it wasn't that different. I asked him why, and he's like, "Look, my name is on every plate that goes out. It's my name, not anybody else's." And I'm like, "Yeah, yeah. There's some truth to that."

I want to go forward a bit. So you started making some changes and then you raised a $10 million series A. Had you been planning to raise? And how did you go from the cliff to raising $10 million?

Yeah. Charging users for practice was — I don't want to say it was the best thing we ever did because it came with its own set of challenges, and it did change our user composition and changed a lot of things about the product in a way that moved us away from hiring, which was our mission. But certainly, for our revenue, it was the best thing we ever did. 

We were growing steadily. Then COVID happened and there's this huge nadir. Everything just went downhill. Once we started charging and built it out, our revenue graph looked like the perfect up into the right VC hockey stick. When I started to see that happening, I started to see that grow. I was like, okay. We're just not going to worry about our hiring business. We're not going to worry about anything. We're just going to single mindedly drive revenue for as long as it takes. Then we're going to raise a series A on the back of that. We'll be transparent with investors that we're a practice platform. I think we're the market leader for mock interviews. We're certainly not the market leader for hiring, but I got into this to fix hiring, not to be the world's best mock interview platform. That's a means to an end. We were transparent with investors that our long-term mission is to fix hiring. But for now, we're just putting everything in the business on ice really, except driving up our revenue from practice. That's what happened. I'm glad that that strategy worked.

I think it was hard on the team because you're a mission-driven company, right? And then all of a sudden the CEO is like, "Fuck everything. Revenue, revenue, revenue, revenue, revenue, revenue. Optimize revenue, go, go, go, go, go. Nothing else." But I think that was the right thing to do. 

When you have a hockey stick like that, you can raise. Raising gave us the capability of starting to rebuild our hiring business when hiring came back, and start landing more enterprise customers bringing back some of the customers that had paused in the wake of COVID. 

One of the nice things about our business I think now is that we are, I don't want to say recession-proof because that's hubris. Now a lightning bolt is going to come and strike me down in this, I hope not. But in some ways, we're resilient because we can change up what our revenue composition looks like, and we can charge candidates more in some scenarios and charge employers more in some scenarios, and align with market conditions. So we started moving the slider over and trying to get more and more of our revenue to come from employers again and to start giving away free stuff to our users again. We were in the midst of that transition and then a bunch of startups and tech companies started laying people off. And it's like oh shit, it's happening again. It's not as bad as a global pandemic, but it's happening again. And that brings us to the present day, we're right in the thick of it.

I want to go back for one second before we talk about the present day. When were you raising your Series A?

I started pitching in March of 2021 and we got our first term sheet in May of 2021. It was fast. I was trying to do it quickly because I was seven months pregnant when I started pitching, which worked out, but I would not recommend it. I really meant to start earlier, but I hate fundraising and I just kept putting it off and putting it off and putting it off. And the thing that sort of started all of it is Brent Murri from M13, who's now our board member because we ended up going with him. Reached out to me cold over email. I was like, "Yeah, I'm not really ready to raise, but I'll talk to you. I don't know." And then I talked to him and I was like, "Okay no, I think we're doing this now." So that just started everything. And I'm glad it did when it did because I really couldn't have put it off for much longer. I wanted to raise the round before I had to give birth.

So you’re super pregnant, running a company, and raising a round of funding. How was that as leading a company at that time?

I mean a lot of it is a blur. I was just trying to keep my head down and work. It was hard. The thing I remember really well is when you're in the late stages of pregnancy, and I'm not sure if I'm going to get all the medical reasons for this right. But basically, the fetus is kind of pushing on your sternum. There's stuff that's happening that makes it hard for you to catch a breath. So I would be in these pitches. And I just felt myself huffing and puffing. And it was really frustrating because it sounded in my ears like I was nervous or unsure. And I'm not nervous or unsure. I just can't catch my breath.

There’s a baby shoving up against my lungs.

Yeah. And I wasn't sure when was the right time to tell investors we were pitching that I was pregnant. I wanted to do it before we signed a term sheet as a courtesy, but I didn't want to lead with that on the first call either. And I got a lot of conflicting advice about when the right time was. All of it was hard. I think I view it as a blur because it was a pretty traumatic and difficult experience.

I can imagine. You’d just come out of a downturn. And then you rebuild, and then you're pregnant, you're getting funding and you’re leading a company.

Yeah. I mean credit to my leadership team. When you're fundraising, right? And this is why being a solo founder is hard. I ended up parting ways with my co-founder three or four years ago so it was just me. Normally there's one person that's dealing with the day-to-day running of the company, and one person who's off fundraising, but I didn't have that luxury. So I had to lean on the leadership team, and they pulled it out. It was a little touch-and-go. I entered the hospital unexpectedly, and I remember our head of operations was texting my boyfriend because I wasn't answering my phone. She's like, "Did I Aline payroll?" I was like, "Yeah, yeah, yeah. It's okay. No, I ran payroll. It's cool."

When you have a great team behind you, these things are a lot easier. And it was also great because it was the first time when I was really disconnected for a good amount of time. I think it brought to the surface some issues we needed to fix. But mostly, I think it puts everybody in the team in a position of being empowered. When I came back, things were different because of that and better.

How long did you take off after you had the baby?

I think it was a week, two weeks. I don't remember. Not very long.

Yeah, that's fast.

Something like that. I mean, I was sort of off the grid for about six days around the delivery and things. So there were some complications with blood pressure and stuff like that. I think I maybe took another week off and then back.

I think it would have actually been okay if I weren't. I don't know what to do if I'm not working. Take that if you will. This has been my life for so long that I'm not trying to say that if I weren't there, things would've fallen apart. I don't think so.

How soon did you have the baby after signing the term sheets?

I had the baby before I signed the term sheet if I remember correctly. And I was still in conversations with a few other folks. It was complicated, but basically, my laptop and phone were taken away from me to keep my blood pressure managed. I was like, "Give me my fucking phone." And my boyfriend's like, "Nope."

It's like a movie scene where the phone gets ripped out of their hand.

Yep. He's like, "You're going to die. You don't get your phone." So that's why he was getting texted about payroll. It was a movie scene. It was exactly right. There were a lot of funny things that happened over those few days. So I think I signed the term sheet after I was back on the grid if I remember correctly. I don't really trust my memory. It was around then.

Where are you all today in terms of the number of people and however else you want to define it?

Yeah. So today we're 18. We are in a much stronger revenue position than we were a year ago. Things are a little bit touch and go, right? We are very clearly affected by what's going on in the world. When Google and Facebook slow down their hiring, we feel it because so many of our users are preparing for interviews at Google and Facebook. Certainly, we've had a good amount of pausing from our employer customers as well where they're either doing layoffs. Or again, they have hiring freezes. We have a plan for how we can wait this out. Fortunately, we're in a much stronger position than we were during COVID. We do have that investor money that gives us a nice war chest. 

I have no idea what's going to happen in the world. I am hopeful that over the next few months, we kind of saw this happen in 2020 as well, right? People will hunker down and stop looking for work when they see all the news and the press about layoffs. I do think the press is doing a lot of fear-mongering around engineering layoffs. They tend to use the words tech and engineering interchangeably. But we crunched the numbers. We looked at layoffs.fyi. And that's not the be-all and end-all, but it's indicative. And according to layoffs.fyi, only 50 engineers have been laid off in the U.S. in 2022. Though thousands of people overall. And it's really, really sad. Some teams are affected disproportionately. Recruiting is often the canary in the coal mine. Whenever there's a downturn, recruiters are the first to go.

Marketing goes early too.

Right. Some operations roles. So those are getting affected disproportionately. So far, engineering has not been. I think what's going to happen is people will hunker down. And then in a few months, they'll be like, "Oh wait, hiring isn't going away. Critical roles are not going away. All right. Let's get back to it." Right? So we're prepared to wait it out and see what happens. I hope I'm right about that.

What advice might you have for a leader who's facing a downturn and has to make some difficult decisions?

I think one of the best things that I did this time around that I didn't do in 2020 was to create what I called a recession mode FAQ which I sent to our employees and also to a subset of our investors where I talked about, "Hey, how long do I think this downturn is going to last? Is there a world where this downturn can be good for us? How does this affect our strategy? How are we going to cut our burn rate? How much runway do we have? What does this all mean?" Right? Just kind of getting ahead of all the questions. People in both camps, employees, and investors might have. And answering them honestly. I think just circulating that among the team was great.

In uncertain times people want to see that leadership is actively working. Thinking about their concerns. Not trying to paper over difficult things. When I was less experienced I tried to create certainty where there wasn't certainty. That's such a mistake. I don't like uncertainty any more than anybody else. But if you're a leader and you can't say that you don't know you're going to be wrong, then next time people just won't believe you. 

You just have to say, "I don't know." The team has asked, "Will we do layoffs?" And I'm like, "Guys, I'm really sorry. I hope not. I don't know." We're working through our projections. We're trying to cut costs in 50 different ways. "But depending on how long the dip that we're seeing in revenue is going to last, yeah we might have layoffs. Come talk to me if you have concerns or you have questions, and I will be honest with you." It sucks to kind of have that hanging over people. And I don't like that.

I think it's important to say you don't know but to say, "Look, even though I don't know, these are the five things that we're doing. These are the hypotheses, this is why we're doing them. And then depending on how this turns out and this turns out, we're going to know."

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