The following interview is a conversation we had with Sophie Novati, CEO and Founder of Formation, on our podcast Category Visionaries. You can view the full episode here: $9 Million Raised to Build a Virtual Fellowship Program for Software Engineers.
Sophie Novati
Brett, thanks for having me. Super excited to be chatting.
Brett
Yeah, no problem at all. So can we just kick off with a quick summary of who you are and a bit more about your background?
Sophie Novati
Yeah, sure. So, as you said already, we’re Formation. We’re an adaptive learning platform for software engineers. And I guess to kind of just go through my background, I started off as a software engineer myself. I was at Facebook, and I was at nextdoor for many years. I was one of the super active kind of interviewers. So I’ve done many hundreds of software engineering interviews. And when I was at Nextdoor, I was also pretty involved in kind of some of the diversity hiring efforts, trying to get more people from underrepresented and nontraditional backgrounds into tech. And during that time, I was just seeing the many ways in which people were just not prepared for the interview process.
Sophie Novati
And I spent a good four years actually mentoring in a bunch of different training programs, trying to see how we can bridge the gap before eventually founding Formation to try to solve this problem at scale.
Brett
Nice. And I’m sure you learned a lot from your time at Nextdoor and Facebook, but if we had to just pick one of those companies and then just choose one lesson, what would that lesson be that you walked away with from.
Sophie Novati
Know, one of the kind of general themes I kind of carried forward with me from Facebook and Nextdoor was just how to solve problems at scale using engineering and product, which was just a type of thinking that I felt like was very kind of missing when it comes to the world of education, which was very ironic for me, working with these programs that are trying to teach people to better software engineers, but the programs themselves are just kind of entirely devoid of technology. One of the things, actually, I should have mentioned earlier in the quick recap, is the thing that Formation does very differently is we don’t have a static kind of curriculum, per se. What we do differently is every lesson, every class, every assignment that every student does is dynamically computed by our technology based on each person’s performance in the program.
Sophie Novati
And that type of kind of engineering and product driven type of problem solving is, I think, one of the things that I learned from my background.
Brett
And what was it like when you decided to leave Nextdoor to start your own company? What was going on inside your head? And did your friends and family think you were crazy? What was that journey like for you?
Sophie Novati
To be honest, I had no idea that when I left next door that this kind of venture capital landscape was something that existed. So I wasn’t one of the founders that decided that I was definitely going to be a Founder. And for me, it was something that I really stumbled into, to be honest. So, actually, after leaving Nextdoor, it was two years before I started Formation. And during that time, I was essentially running my own coding boot camp. It was just a complete one person show. I ran all of the recruiting, all of the instruction, I did all of the grading, et cetera. And it was almost two years of doing this and actually pouring my own savings into this company to pay the rent, essentially to run this company.
Sophie Novati
And long story short, I eventually found venture capital through exposure to communities like Y Combinator. And I learned that people with an idea can just go and raise funding to try to build a company. To answer the question about what did my friends and family think, I think that my parents probably thought that I was even crazier than most parents of founders thought, because not only was I leaving a job to start a company, I was also spending all of my own money trying to fund it. So it was like I was paying to do a job. So, yeah, it was definitely an interesting time.
Brett
Nice. That’s awesome. That’s funny. Now, a couple of questions that we like to ask just to better understand what makes you tick as a Founder. First question is, what Founder do you admire the most and what do you admire about them?
Sophie Novati
I am sure you get this all the time, but it’s incredibly challenging to pick just one. I see so many admirable traits in so many different people, but I was thinking about this, and one of the people that stood out to me was Melanie Perkins. I don’t know if you’ve heard of her. She founded, I guess. You know, I always just kind of respect a badass woman Founder who is just able to kind know, defy the odds to make something happen. I think it’s hard enough to be a Founder of, honestly, anything. Respect to every Founder ever. But I guess on top of that, having to overcome all the biases with being a woman.
Sophie Novati
And if you’ve ever heard her story, she had literally no network in traditional, like, Silicon Valley when she came over here on a plane ticket with literally no real established pathway and somehow managed to get funding for her company. And one of the things that I think she does particularly well is just, like, simplicity and focus. I’ve heard her speak on a number of occasions, and I think what she’s able to do repeatedly is just repeat some of the same messages and drilling home the idea of making design, which can feel complex and difficult to making design simple and delightful. Anyway, I think there are so many founders to look up to, but I’ll name just the one, I guess.
Brett
Yeah, I think most people come on the podcast have a very hard time narrowing it down to one. But Melanie’s awesome. I followed her story a little bit. Wasn’t it something to do with kite surfing? And I can’t remember who the vc.
Sophie Novati
Oh, my God. Yeah.
Brett
What was that story? Do you remember?
Sophie Novati
I honestly can’t remember exactly, but I might misquote it. But I think that she basically used this kite surfing event as an excuse to basically say that she was already going to this event and to meet an investor that she was interested in meeting.
Brett
Yeah, I think so. And isn’t it a husband and wife team there, too?
Sophie Novati
They are, yes.
Brett
Nice. So interesting.
Sophie Novati
I think that’s been growing as a trend too, in the pandemic time. I feel like people spend a lot of time just at home, and a lot of people have started founding companies. Obviously, they preceded this before. It was cool.
Brett
And speaking of husband and wife teams, I see your husband is your Co-Founder and CTO. What’s that like for you?
Sophie Novati
I get asked that a lot, and I honestly cannot imagine doing it another way. Honestly, I’m sure this changes a little bit over time, but when you start a company, it is just absolutely all consuming. And to me, the idea of pouring all of my time and energy into a company and then at the end of the night, still try to make more mental energy to talk about other topics feels exhausting to me, where it’s like, I just really want to continue thinking about all of my problems. And it’s like, if I had to be like, how was your day at work? What are you doing? That just feels difficult. But I think it’s just been a tremendous advantage for us because we obviously know each other fairly well. And we’re just really able to be all in on the company.
Sophie Novati
I do see ways in which there are disadvantages, though. When there’s stressful things that happen at the company, it kind of impacts both people, as opposed to having one person who can be like the stable, emotional person, and there’s things like that. But all in all, again, I haven’t experienced founding a company a different way and honestly have a hard time imagining.
Brett
It as you called out. I do think it’s a growing trend. I’ve had quite a few founders on in the last couple of months who. It’s the same setup, and they’re navigating those same complexities. What I always ask them is, like, what are the rules? Is there, like a rule of, like, hey, no business talk after 06:00 p.m. Do you have any funny rules that you’ve had to put in place?
Sophie Novati
Honestly, I’ve heard many people attempting this, and I don’t know of a single couple who’s successfully implementing it. And to be honest, I don’t know if this is. Sometimes I feel like I’m setting a bad expectations for this, but I personally, at least for the current phase of my life, I don’t love having strict boundaries. I feel like if I’m going to have a creative moment where I have a great idea and I’m really energized by it, I always just want to capture that moment and talk about it, then if that’s the time that feels right. And to be honest, also, fortunately or unfortunately, that tends to happen actually during off times when you’re not in a meeting, you’re just sitting around doing nothing and something comes to you.
Sophie Novati
So for us, we haven’t even attempted to do this because I feel like that’s just setting ourselves up for failure. But everyone needs a different balance in life, so this phase also may not last forever for us.
Brett
Interesting. Yeah, it makes a lot of sense. And what about books? Is there a specific book that’s had a major impact on you?
Sophie Novati
So I’m a pretty big reader. This one might even. Which one is harder, one book or one Founder? As you look up to? Both are very hard. I feel like books are also contextual. I feel like a lot of books build on each other. Reading a book at a certain time in your life will have a different impact depending on what you’re dealing with and previous books that you have consumed. So it’s really hard to pick one book because each book has had a different impact on me at different points of my time. But one recent one that I guess comes to mind is this book called black box thinking. And it’s really a book that talks about failure and how to think about failure and how to learn. And it starts off as a book.
Sophie Novati
It compares the airline industry with the medical industry, which are both industries that have very dire consequences when things go wrong. Right. So it’s an interesting case study of dealing with failure, and it’s just very different, the cultures of how to deal with it, where I don’t know if you know, but there’s something like 200 to 400,000 deaths every year as a result of medical error, which is absolutely insane, as opposed to it’s almost, nearly zero for the number of commercial airline deaths. And anyway, the book is talking about how the medical industry is very. It covers things up and there’s a lot of incentives in place with how insurance and various things work versus the airline industry has a black box, and every accident is recorded and openly analyzed, and there’s no culture of blame.
Sophie Novati
And this has created a culture where every time there’s been an unfortunate incident, they have created new practices that have prevented countless future deaths. And I think the reason I like this book is I feel like I actually really lived this culture when I was at Facebook and next door building product. It’s all about iterating, right? Like, no one assumes when you launch a product it’s going to be successful. But I have actually liked this book in the value that it has served to others when I’ve recommended it. So I often recommend this book to team members who join and it kind of communicates better than I can the value of failure. And I think that the ability to really rapidly and repeatedly learn from failure is, I think, probably the single most important habit of any Founder or builder.
Brett
Nice. Yeah, I read a lot and I have not heard of this book, but I just checked it out on Amazon as you were talking through it, and it sounds awesome and looks awesome. So I’ll check it out. And thanks for sharing a book. That’s not the hard thing about hard things. 80% of founders.
Sophie Novati
I’m glad I can went a different direction.
Brett
Nice. Very cool. Well, let’s dive a bit deeper into Formation now. So let’s just say I’m a software engineer. What’s the pitch to get me on board, and what’s the value that’s being offered to me?
Sophie Novati
So to summarize it into one number, I’ll say it is $100,000. So what we do, the first thing is we don’t generally work with people who are zero to one. So if you’re just starting to learn to code, we’re not the right resource for you. So our program works best for someone who people often have gone through nontraditional backgrounds. So maybe you got started with a boot camp, or self learned, or went through a traditional pathway and has had a job already for maybe a couple of years. Our average incoming salary is somewhere in the range of maybe 80 to 100k, which is definitely not anything to look down on, but not the types of salaries you see in big tech. And we work with you and we work with you unconditionally until you have a signed offer letter in hand.
Sophie Novati
And so in 2022, our average compensation increase was the 100,000 that I just mentioned. So I guess that’s the pitch.
Brett
Wow. And then how long does that program take on average?
Sophie Novati
So on average, it’s somewhere in the six to eight month range. But I think that varies so much. I oftentimes like to say that we are selling people better jobs, not six months of training. And so it really varies quite a bit depending on the person’s incoming skill level and kind of their target companies, as well as their availability and how kind of picky even they are on the job hunt.
Brett
Right?
Sophie Novati
Like, there are certain people who will only accept very narrow set of jobs versus people who just want to change. And so it’s more of an average between people who take two months all the way up to people who take twelve to twelve plus months as well.
Brett
And just to make anyone in our audience who’s not a software engineer depressed, and to make them question their life choices, what does an average senior software engineer make at a big Silicon Valley tech company?
Sophie Novati
Well, we often place people at places where they’re making 150 to would say that’s actually kind of mid levelish senior, might be two to 300k range. And to be honest, coming from a small town in Massachusetts, I had no idea these types of compensations existed. But when you get to staff, principal and beyond, you could definitely get into the seven figures in terms of annual compensation.
Brett
Wow, that’s crazy. And good motivation for anyone listening who maybe sees not going down that path.
Sophie Novati
The thing is, though, that usually the people who get to that level aren’t thinking about the compensation day in and day out. They’re just really focusing on becoming a better software engineer and solving interesting problems. And the compensation is like a side effect, a great side effect. Just a little note.
Brett
Yeah, that makes a lot of sense. This show is brought to you by Front Lines Media, a podcast production studio that helps B2B founders launch, manage, and grow their own podcast. Now, if you’re a Founder, you may be thinking, I don’t have time to host a podcast. I’ve got a company to build. Well, that’s exactly what we built our service to do. You show up and host, and we handle literally everything else. To set up a call to discuss launching your own podcast, visit frontlines.io podcast. Now back today’s episode. And on the site it mentions mentors. So can you talk me through that? Who are these mentors? How do you get them on board? And are they just doing this because they love supporting the community, or are they being compensated in some way?
Sophie Novati
They are compensated per kind of session that they run, but I will say that their hourly rate is nothing compared to what they make on their day jobs. And so the absolute number one kind of driving motivator for mentors to be on the platform is to have a meaningful impact on the careers of our fellows. I mentored for four years, as I mentioned, before starting Formation, and a big part. So I have a lot of empathy for what makes a mentorship experience really rewarding. And I think one of the things that I have found challenging about a lot of mentorship programs is that it’s like a lot of mentorship programs, they’re a little bit too, I don’t know, loose, structured.
Sophie Novati
So there’s a lot of mentorship where it’s like, hey, share your path or your life experience and kind of just talk to people, right? And there’s oftentimes like a one one. Hey, we’ll check in on you once a month. But honestly, that isn’t super tangible. You need some amount of that for kind of networking or for motivation. But for our mentors, I think they’re really here to make a tangible impact on someone’s skill levels and preparedness as a software engineer, both in the interview process as well as on the job. So the way that mentorship works is you basically fill out a calendly like interface. You kind of mark the hours that you’re open to taking sessions, and then there’s one kind of manual step where we approve you for certain session types as well as certain topics that you’re able to speak to.
Sophie Novati
And then from there, our algorithm will dynamically schedule you for sessions based on your availability and your expertise. And when it comes time, we will schedule you for a session. There will be three to four people, typically maybe a little bit more, and we’ll kind of provide a prompt, like a problem for mentor to work through with their group of three to four students. So they’re working through a concrete problem. And this problem is actually assigned because the students that we selected to be in the session may have been struggling with this exact topic, like maybe a few days before. So it’s kind of like just in time. Mentorship. Yeah, I don’t know if that makes sense.
Brett
Yeah, that makes complete sense. And because you’re working with established engineers here, do most of them tend to be in Silicon Valley or where are they typically based location wise?
Sophie Novati
They are really all over the place. I mean, that’s been one of the trends recently is just people moving or working from anywhere. So definitely not like physically in Silicon Valley. But you might have been referring to it in the metaphorical sense. And generally, yes, I would say they are generally senior engineers that are currently working at some of these top have, you know, people at Microsoft, at Airbnb, at OpenAI, a lot of top companies. Yeah.
Brett
And what’s the business model look like then? Are the engineers paying to be part of this program, and is that the primary model, or is it like a recruiting model where you get paid for placing them? What does that look like?
Sophie Novati
Yeah, so we actually experimented early on when we first launched the company, different pricing or payment and business models. So right now we are primarily, students pay directly for their training, and we offer a number of different payment models that range from, you can pay directly upfront as well as we offer deferred payment options where you start paying once you have been placed into a role. Although more recently, one of the changes has been that we’re starting to work more directly with some of the companies that are hiring our students. So most recently, we just launched a partnership with Netflix as part of their diversity hiring initiatives. So they are actually paying for the training for people in their diversity hiring pipelines to help them better prepared for the interview process.
Brett
And what’s the hiring market like today, and how has that changed from, let’s say, twelve months ago?
Sophie Novati
It has definitely changed significantly in the last, I would say even few months. So I’m sure you’ve also seen the news, although the news cycle, I think, kind of exaggerates even the situation that it is, but the situation has definitely changed. We’re in a market right now where people just need to be a lot more prepared for the interview process. And there’s a lot of people, as you know, likely that from a lot of these big tech companies that are kind of unexpectedly on the job hunt and may be rusty and not prepared for the type of market that we’re facing today. So we’re seeing our students have much longer job hunts and the kind of recruiting cycles take longer.
Sophie Novati
And historically, when certain students may have expected multiple competing offers from a lot of the top companies, we’re seeing students get far fewer offers. The good news is that the compensation has actually held fairly stable. So once someone gets an offer, it is pretty comparable to what they have gotten in the past, but it takes just more time and more preparation to get to that point now.
Brett
Got it. That makes a lot of sense. And in terms of rising above the noise, what do you think you’ve gotten? Right.
Sophie Novati
Okay. I think the biggest thing that we’re able to do, that no other training program can remotely do because of the way we’re set up, is offer unlimited technical training until you have a signed offer letter. So most training programs, they have a fixed schedule. There’s like 1216 weeks of training, and the classes are scheduled at a fixed time. You go through the training program, and once it’s done, it’s very hard for a program to dynamically offer support. So usually, even when they say, we support you unconditionally, or until you have a signed offer letter, that oftentimes looks like just a call with a career coach every so often to have someone to talk to, which is not entirely unhelpful, but you may need just a lot more support than that.
Sophie Novati
And so for us, every single week, we are dynamically scheduling your classes based on your current performance in the program and your traction on the job hunt. And so you basically continuously talk to mentors, get mock interviews until it is that you are successful on the job hunt. And so I think in the current market, where people are not sure how long things will take and just have more uncertainty, I think that’s been one of the things that has been really resonating with people.
Brett
And if we look at your go to market so far, are there any specific challenges that you can think of that you’ve experienced, then overcame?
Sophie Novati
Well, to be honest, I think that the biggest challenge is constantly changing, and so you just have to be hyper observant and adaptive. I think this is going to sound possibly a little silly, but since the very beginning, we have just had a team of people that have just been crazily attention to detail, wanting to create a great product. And a lot of our student support staff, they come from higher education, they care a lot about what they’re doing, and we have always delivered a fairly, I would say, outstanding student experience, to the point that we have had just incredibly positive reviews everywhere on the Internet. So much so that people were giving us feedback that they thought our program must be a scam because there wasn’t a single thing they could find that was negative about us.
Sophie Novati
And we jokingly even said, like, maybe we should go out and just plant some slightly negative reviews so that our kind of presence is more legitimate. But anyway, that wasn’t the actual problem. The problem was we did have a phase more recently where people did start. And the thing with the Internet is that a few voices can be incredibly loud. So if you have hundreds of people and most of them are having an incredibly positive time, and even if it’s just one or two people have a negative time and decide to post about it on the Internet, it can very quickly overtake kind of and become noise. Right. And so we had our first experience with negative reviews that kind of blew up on Reddit, and the team was absolutely devastated.
Sophie Novati
I think people were literally crying on our team just thinking that we had failed. Anyway, Reddit is like a crazy place. We have a lot of competitors where I’m not going to name any names, but when we post, we can tell that a bunch of people are just creating, like, one time fake accounts and basically responding. And I know Reddit’s algorithms attempts to counteract this with a bunch of their algorithms, but it’s not perfect, and they’ll downvote and upvote each other’s comments to kind of get traction. So we had this thing where Reddit was just going really kind of blowing up, and it was very tempting to kind of just have the same strategy where let’s like, okay, well, we create some accounts and we’re going to respond back and we’re going to upvote our things.
Sophie Novati
And basically, this is maybe not as spicy of a story as maybe, I don’t know if you were hoping. But ultimately, we decided not to play into any of that. And we’ve constantly been very middle of the road neutral in terms of our stances, applauding our competitors in ways that they are doing things well and fairly firmly pointing out areas in which they are not doing a good enough job. And we do the same thing for ourselves. We know there’s a lot of things that we don’t do well, and we try to openly kind of admit that as much as possible.
Sophie Novati
And more recently, we had some people on Reddit who actually commented and know, we noticed that you guys do this and have noticed kind of, like, the longstanding track record of the fair comments that you have posted in light of some pretty ridiculous kind of attacks or various ways. And so, yeah, maybe I’ll just point to that one as a fairly recent example. But as I mentioned, challenges come up every single day. It’s a roller coaster.
Brett
Nice. It’s an interesting story, and it makes sense. I feel like that’s almost human nature, right. With negative reviews. I catch myself doing that with restaurants where I’ll look on Yelp and they can have, like, 200 positive reviews and I see one negative review and it’s like, oh, I can’t eat at this place. It’s like, no, that’s like the wrong way of thinking. But I catch myself doing it a lot. So I can see how that would happen here as, yeah. And what are these Reddit communities? Is it just like general software development, or are they more niche like elite engineering? What are the sub communities that you’re really active in and part of? Or is it Formation Reddit?
Sophie Novati
No, it’s generally, there’s communities of a lot of boot camp kind of students. There’s also kind of communities of, I don’t know, I’ll call it leak coders. There’s like a big kind of preparing for the technical interview, leak code, grinding community, whole culture that we’re trying to fight against. It’s kind of focusing on the wrong points of great software engineering, but there is a lot of communities that are just talking about every day. There’s like a new and better list of leak code questions that you can go down to make yourself the best software engineer. There’s a lot of communities like that.
Brett
Nice. That’s awesome. And last question for you before we wrap, let’s zoom out into the future. What’s the three or five year vision for the company?
Sophie Novati
Yeah. So I guess taking a step back to kind of think about what we’re doing is we’re training software engineers, but if we even think bigger about why we’re even doing that, I would say that fundamentally, we’re here to build a more diverse, a more equitable and more inclusive workforce. Right. And I think that the reason we choose to train software engineers is that we think the highest leverage action that we can take to make a dent on this mission is to really remove the barriers of access in terms of education. And we’re not just thinking about building the highest quality education possible, which, of course, we’re doing, but we’re also thinking about building it in a scalable way such that we can offer it to as many people in the world as possible. Right.
Sophie Novati
And that’s why we’re so invested in AI, in adaptive learning and automating pieces of the education experience so that we can unlock the ability to scale effectively. And so today we’re using this technology to teach about 400 active learners on our platform. But if we’re successful at our longer term vision, we want to open up our platform more and more. And the kind of long term vision is to have an entirely open platform, free to use to start to absolutely anyone who needs training to be able to get started on the platform right away. And so instead of 400 students, we would be looking at getting all 12 million of the software engineers in the world on the platform and eventually could reach beyond software engineers as well.
Brett
Amazing. I love it. Well, unfortunately, that’s all we’re going to have time to cover for today. Before we wrap. If people want to follow along with your journey as you continue to build, where should they go?
Sophie Novati
Yeah, well, you can follow us. We’re very active on LinkedIn. We’re on formation.dev. And yeah, I guess there we’re also on Twitter, on Instagram and Facebook, all the normal channels.
Brett
Awesome. Well, thank you so much for taking the time to share your story and talk about what you’re building. This has been a super fun conversation. I really enjoyed it, and I’ll be wishing you the best of luck in executing on this vision.
Sophie Novati
Awesome. Thanks for having me, Brett.
Brett
Yeah, no problem. Keep in touch. This episode of Category Visionaries is brought to you by Front Lines Media, Silicon Valley’s leading podcast production studio. If you’re a B2B Founder looking for help launching and growing your own podcast, visit frontlines.io podcast. And for the latest episode, search for Category Visionaries on your podcast platform of choice. Thanks for listening, and we’ll catch you on the next episode.
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