Founder’s Lessons: Phoebe Yao, CEO of Pareto
By Taylor Fang via Medium
Phoebe shares her journey of dropping out of Stanford mid-pandemic, conquering self-doubt as a solo female founder, and building trust and relationships while fundraising and hiring.
Welcome to the eighteenth installment of Tsingyuan Ventures’ Lessons from Founders series. Every week, we publish an in-depth founder interview, ranging from early-stage entrepreneurs to successful businesses. Our conversations cover their personal journeys, the lessons that shaped them, their visions for the future, and their failures. We also learn more about their companies and about the challenges they try to solve. These insights and lessons are applicable to any entrepreneur — current or future.
Read past interviews here.
Pareto is building the first human API for business operations. Their women-led and operated virtual task force helps businesses automate day-to-day processes like lead generation, market research, and admin operations.
Phoebe Yao, 22, is a Chinese-American immigrant, Stanford dropout, and 2020 Thiel Fellow. She’s passionate about democratizing access to meaningful work. Phoebe founded Pareto after spending a gap year researching human-computer interaction at Oxford and building tech for emerging markets at Microsoft Research India. She enjoys hiking meditation, Neal Stephenson’s cyberpunk novels, and mentoring student startups.
Why we invested in Pareto: We invested in Pareto primarily as an early stage bet on an exceptionally bright founder, Phoebe Yao. In addition, the market for outsourced tasks is large and fast growing. Unlike many simple gig platforms, Pareto is building automation workflows from day one. The human-machine orchestration platform structures operations into human and machine components enabling seamless user experience at scale. They’re building a library of reconfigurable automations that not only serve a broad array of SME business operations, but can be connected to automate more complex workflows for SMEs and large enterprises.
Meet Phoebe Yao
“You have to be really transparent and very self aware about your own values and principles.”
Phoebe introduces herself
I’m Phoebe, Founder and CEO of Pareto. We’re building the human API for business operations.
I was born in China and grew up in a town called Zhenjiang. When I was 5, my family moved to St. Louis, Missouri. Neither my parents nor I knew any English. As immigrants, we started from scratch. My mom became a waitress and my dad became a truck driver — probably one of the few in the U.S. with a PhD in chemical engineering.
Why she started Pareto
At Stanford, I wanted to build technology that could help people around the world access virtual work opportunities rather than feel pressured to move for work and cut themselves off from family and loved ones.
In 2018, I took a gap year to travel around the world. I studied social computing at the Oxford Internet Institute and built tech for emerging markets at Microsoft Research in India. I also took a sabbatical to Au Pair in Guangzhou, China to learn Mandarin. These experiences gave me perspective into how talent is equally distributed around the world and how inaccessible economic opportunity is for people living in emerging economies.
That was the social impact mission that led me to creating Pareto. I came back to Stanford and saw entrepreneurs building great things, but realized they were all blocked by core business processes that could be automated with a human-in-the-loop system. I realized I could build the technology to help businesses scale operations while at the same time empowering people around the world with meaningful work.
Her journey to being an entrepreneur
For some time I actually wanted to be a classical musician. I played the viola in a lot of orchestras during high school and imagined myself pretty decent. Before that, I wanted to be a marine biologist. However, the competition and limited career opportunities made me realize that neither path was for me.
When I came to Stanford, I was open to anything. I saw computer science as an empowering tool for building something from nothing. That struck a chord in me because I was looking for a tool I could use to do something meaningful and impact people. But I didn’t realize I could be an entrepreneur until I started meeting role models in the Bay Area who inspired and encouraged me to go down this path.
I was looking for a tool I could use to do something meaningful and impact people.
How she finds motivation and why she decided to drop out of Stanford
I think many people intuitively understand why they’re unhappy. But they don’t do the work to make their dreams actionable. Turning my goals into concrete next steps is a huge motivator for me.
A mentor of mine introduced me to a helpful mental exercise: In 10 years, what are you going to regret not having done now in this chapter of your life?
If you’re going to regret not having done something, then you should just go for it. I used this framework during a weeklong reflection the summer before my junior year. The exercise helped me understand my feelings around taking a gap year. Once I made the regret super concrete, it was obvious that I had to go for it.
After my gap year, I was working on Pareto and on the cusp of dropping out. However, I chose to stay in school. I reasoned that there were still things I could gain from being at Stanford: getting more hands-on teamwork experience, having a safe, sandbox environment to make mistakes, and networking with VCs and industry professionals.
However, in reality I just lacked confidence. I knew I wanted to be working on Pareto for many, many years to come. But I didn’t have the guts to believe in myself and what I could accomplish. As a solo female founder, you don’t meet many successful role models.
In retrospect, I learned valuable lessons when I came back to school. But when COVID struck in March, the benefits dissolved, and I told myself to just go for it. With everything going virtual, I realized that it was time to take my shot.
On leveraging her network
As a student, you have so much unrealized potential. The world is your oyster and you can choose to build anything and become anyone. One helpful perspective to keep in mind is that industry professionals want to help students. When you reach out, they see you as someone whose very career decisions they might help shape. The potential positive ROI of them giving you 30 minutes of their time is very high. They want to help, so reach out.
Additionally, you have access to all the incredible young people in your classes, school year, and alumni network. Down the line, they’ll occupy roles at great companies. Understand that you go to college not only to learn, but to make friends, build deep relationships, and cultivate your network. Even acquaintances can lead to pivotal opportunities down the line.
For instance, I was introduced to Tsingyuan through a classmate I met after coming back to Stanford. I didn’t expect anything to come out of the intro, but Tsingyuan ended up leading Pareto’s round. That’s how powerful networks are.
How she approaches building trust
You have to be aware of your values and principles. First, understand who you are, what you care about, and the values that you stand by. Take these values and turn them into actionable principles. Ask yourself, what are the behaviors you need to adopt to uphold your integrity and maintain the trust of those who depend on you.
You have to be really transparent and very self aware about your own values and principles.
Being aware of my values helps me understand how I should behave in new situations. Consistency is key. If you align your behaviors with the values that you uphold, people will trust that you. They will trust that you are the person you say you are.
If you align your behaviors with the values that you uphold, people will trust you.
What she looks for in choosing people to work with
Competence and work experience are important, but culture fit is key. I look for people who are not only effective team players in the present, but who will be able to grow with the company to become the leaders we’ll need in the years to come. Culture fit is very hard to quantify; it’s more of a gut feeling. Other than trusting your instincts, one strategy is to start by signing three-month contracts with new founding team members in order to see how the fit develops over time.
On building culture
I took a class at Stanford called Principled Entrepreneurial Decisions taught by Scott Sandell, managing director at NEA. He’s a proponent of creating a culture where everyone knows explicitly what your company’s principles are and how to behave in a way that upholds them.
Pareto has a fully distributed team and our values were inspired by GitLab, a pioneer in remote work for startups. Their core values include transparency, mutual respect, diversity of thinking, open-minded feedback, and showing kindness and compassion for your coworkers. Effective communication across cultural barriers and time zones is incredibly important for remote teams and I think GitLab’s values are a great starting point for any startup looking into remote work.
How the startup journey has influenced her
The entrepreneurial journey is in essence a personal journey. You may think it’d be solely professional and capital-driven, but more than half the battle is about evolving to be what your company needs. In the span of a year, I went from an engineer building a side project, to recruiting Pareto’s founding team, to selling my vision to a group of investors. Each role required a completely different set of technical and interpersonal skills.
More than half of the battle is won if you can evolve as a founder to be what your company needs.
It was uncomfortable confronting my own limitations, figuring out who I needed to be next, and how I would get there. I was scared of failure and it got very personal. But whenever I was uncertain, I turned to my friends and mentors for support. I became very comfortable asking for help, integrating feedback, and learning from my inevitable failures. Overall, the journey has helped me become a much more thoughtful, patient, and compassionate person.
Her challenging experiences and failures
In the early days, I didn’t know what to look for and brought onboard team members who were not aligned with our company values and mission. When the working relationships didn’t work out, I was shocked. What went wrong? Though everything seemed to be going well on the surface, there were deep underlying alignment issues. The hiring mistakes cost me months of headache but also taught me a major lesson: how to hear past the words people say to understand actual motivations.
There’s also a part of me that doubts myself. Sometimes, I worry: Hey, are you really up for it? Meditation helps with this. Whenever I notice toxic thought patterns, I’ll go on a walking meditation to clear my mind and reframe my self-doubt.
Her vision for Pareto
I envision Pareto powering human-in-the-loop automations for businesses around the world. At the same time, we hope to help women around the world access meaningful economic opportunity, sharpen their critical thinking and problem solving skills, and experience working alongside a supportive, distributed community of boss female professionals.
The best advice she received
I had this insecurity about being a solo founder. Everyone in the valley told me that it was going to be hard and that I needed to find a co-founder. For the longest time, I believed them. In my rush to not be solo, I hired people who were not mission-aligned. When they didn’t work out, I’d end up back where I started. This was until I met Matt Pru, a startup advisor and angel investor, who told me: “You don’t need a co-founder. You can code, you can sell, you can recruit. You just need to hire people to help you.”
He was the first person who believed in me and what I was building. He helped me believe in myself as a solo founder. Matt later became Pareto’s most helpful advisor and was our first angel check. The support of people like Matt is so important, especially in moments when you doubt yourself as a founder.
He was the first person who believed in me and what I was building. He helped me believe in myself as a solo founder.
Her advice for aspiring college-aged founders
If you’re reading this and know that you want to build a company, then you’re probably smart enough to figure out the details as you go. The hardest part is taking the first step. So don’t think too much and just do it.
You’re probably smart enough to figure out the details as you go.
The journey is long, so make sure you care deeply about what you’ll be working on. You need a big network to be an entrepreneur, so start participating in your global and local startup communities. Read Paul Graham, Zero to One, and TechCrunch to prepare to navigate the startup ecosystem with its jargon and unspoken rules. Business is still fundamentally a relationship game. Ask the right questions to the right people and you will go far.
Business is still fundamentally a relationship game.
A book that’s meaningful to her
The Diamond Age by Neal Stephenson has been really influential in my startup journey and pretty much inspired Pareto’s social impact mission.
Her media recommendations
- Airbnb’s virtual classes: A super fun hour-long break from Zoom calls and you get to learn to cook a new dish with a chef.
- Global News Podcast The Daily
A question to not ask
If you’re a mentee and hear that question, you should be prepared to grab a hold of it and start brainstorming how the mentor can help. While this is hard to do if you’re more junior, if you’ve researched their experience and background, you probably have a few trailheads.