Martin Permin of Pelion

Martin Permin is the co-founder and CEO of Pelion, a marketplace for talented individuals to receive mentorship in return for Income Sharing Agreements. You can follow Martin on Twitter @purrmin.

Prior to starting Pelion, you were the first employee at Hive and before that, you joined Airbnb right out of high school, that's impressive. What were some key takeaways from those experiences?

I generally think that most people overestimate how well experience transfers. Context matters a lot.

To some extent, I had to unlearn a lot of things when I joined Hive from Airbnb.

When I left Airbnb the company was already on an inevitable trajectory. Working on growth there was very forgiving. In contrast, Hive was fresh out of YC when I joined and had pivoted the week before demo day. Shifting to the more inquisitive selling style needed pre-product-market fit took time and wasn't easy.

A lot more experience transferred from Hive to Pelion. Particularly how to operate well with limited resources. Resource constraints can be empowering; they shrink the decision space to essentials. Being hyper-focused in roadmap decisions is one manifestation of this.

People often say they want to start companies but don't, how did you know that it was time to make the jump?

For starters, I was a bit burnt out and largely unemployable. My co-founder Holger was in the opposite position and was drowning in job offers. Both of us wanting to start this company, in spite of different opportunity costs, inspired confidence.

"Increasing the number of high leverage work years in talented people's careers is something we'd been thinking about for years"

On the Eric Ries/Keith Rabois Continuum of Startup Strategy™, we lean towards Rabois, so we wanted to start a company only once we had a strong non-consensus vision for how to solve a large, fragmented problem.

Working in a market with obvious demand is like taking the moving walkways on your way to the airport gate. Sure, you might make the flight by running next to the walkway, but your odds are better if you run on it. We want to make our flight.

One of the hardest problems that marketplace businesses face in the early days is solving the chicken-and-egg problem. Which side (supply/demand) is your priority right now and why?

This is our biggest challenge right now.

Every day, my inbox is full of users asking for help finding the perfect mentor or mentee. Since our supply is very non-homogenous, we often have to scramble. We're blessed with top-line growth, but missing the supply-demand balance means letting down users.

We navigate this problem by optimizing for match rate rather than user growth. We keep matches as our Northstar, and constantly re-evaluate where the bottleneck is.

Network businesses are often built on the backs of other networks. Airbnb on Craigslist, Facebook on colleges, LinkedIn on email, and so forth. Currently, it looks like our version of this is Twitter, but we're still experimenting.

Describe a typical mentor and mentee. For example, is a mentor a seasoned guy with 10+ years of experience or a successful peer around the same age?

We have high variance in our user profiles for both roles. Highly experienced professionals with 10+ years experience sign up to find a mentor, and recent college grads sign up to be mentors. It's too early to tell how much of this is

explained by the Dunning-Kruger Effect, but perhaps the less experienced mentors are valuable in some non-obvious way.

It does thus far look like more experienced mentors provide more value. Perhaps because they're better networked. However, I suspect that the career distance between mentor and mentee shouldn't be too large, as this creates an unworkable inferential gap.

Our user base definitely skews towards tech, though we're also growing in management consulting, and finance. Within tech, one interesting tidbit is that most users are technical.

What do you consider to be Pelion's MOAT (or sustainable competitive advantage)?

It's important to differentiate between moats and competitive advantages. All moats are competitive advantages, but not all competitive advantages are moats.

Moats are what makes it hard for new entrants to capture our market share; it would be dishonest for us to speak confidently of those quite yet. We do have a strong vision for where we can build moats if we successfully execute.

Network effects create flywheels that can be hard for competitors to keep up with. Of course, all network effects are not created equal. We've recently seen assumed winner-take-all markets split amongst multiple companies (e.g messaging).

We will need to supplement network effects with a strong reputation system and great matching. Differentiated inventory helps here too. Switching from Pelion to a competitor is more costly than switching from Lyft to Uber.

Handling ISAs is another area where we can escape competition. Since tools to handle this aren't yet commodified, we have to build in-house, providing another hurdle competitors have to cross. Handling more ISAs will let us improve our tools, which will let us handle more ISAs, and so forth. Of course, this is a double-edged sword.

In terms of competitive advantages, I'll speak to the founder level. We've spent the past 18 months talking to hundreds of people looking to develop their careers. I‘m confident that we have a better understanding of our target users’ needs than anyone else. We've also both had non-traditional career paths, thanks to wonderful mentors.

Mentorship has been around since human existence, yet, it's still hard to find a valuable mentor, why is that?

I'm glad you bring that up. I believe that the best way to build a billion-dollar company is to take an ancient human desire and remove steps (h/t Ev Williams).

Finding a mentor is hard on three levels:

  1. It's hard to identify who the right person to mentor you is

  2. It's hard to get in touch with that person

  3. It's hard to convince that person to invest serious effort in you

The third point is the hardest to solve. Mentorship is investing time in others, so it's costly for mentors. Mentors expect a return for taking a risk, whether in the form of social capital, better employees, recognition, or a financial instrument.

Since most mentors rely on warm intros to mitigate risk, mentees have a cold start problem. This is especially true for mentees further from opportunity.

Our marketplace lists potential mentors, and incentives them to take an extra look at mentees who reach out. The ISAs provide an easy way to formalize the exchange of value.

Why is right now the perfect time for Pelion?

I believe that most startup ideas work out over a long enough timescale.

Market timing is everything.

We're capitalizing on a few trends in consumer behavior:

Educational credentialism is increasingly being met with skepticism. Coding bootcamps, the Thiel Fellowship, and Triplebyte are manifestations of this. Further, technology makes experience less important to output. We have a 17 year old employee with the same output as someone with 17 years' experience.

Secondly, there's renewed focus on new coordination mechanisms. ISAs and crypto are both examples of this. I don't think society, on the whole, is getting more Hayekian, but I do think we're getting more comfortable turning social subtext into overt markets.

If I wanted to learn more about this space, what should I be reading and who should I be following on Twitter?

Following Pelion is, of course, your best option! Julia Freeland Fisher also has a lot of interesting work on her blog at the Christensen Institute, though primarily focused on success in an academic setting. Julie Zhuo recently had a good Twitter thread that describes mentorship very concisely. In a corporate setting, I think what Alice Bentinck and Matt Clifford are doing with talent investing at Entrepreneur First is super interesting (full disclosure: EF is a Pelion investor). First Round's mentorship program is also interesting. Whitnie Narcisse who runs it is a worthwhile follow. Here's a good writeup.

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