[Everest] Getting $100K deposits from college students
Build sustainable habits by joining challenges with friends, making a bet on yourself, and earning money.
Ever since I dreamed of starting a company one day, I believed I should make my way to the Bay Area. Having lived my entire life in South Korea, I made a life-changing decision to enroll at UC Berkeley in 2019. Finally being in the bay, the place I had aspired to be for years, I was eager to start my company as soon as possible. This is my journey of starting Everest, my first startup-like side project, documenting how it started and how I shut it down.
How it started
One month into Cal, I noticed that Cal Hacks, the world’s largest collegiate hackathon hosted at UC Berkeley, has a fellowship program. This program served as an incubator to help top teams from the hackathon start their own startups. It seemed like the perfect opportunity to start my first company, so I recruited three friends I had met at Cal to join the team, and we applied for Cal Hacks 6.0.
After grinding for two days without sleep, we managed to create a functional prototype that secured our place as one of the top 8 hacks out of thousands of participants, earning us admission into the Fellowship program (Devpost link to our project). The idea was simple - you bet on yourself to motivate you to build sustainable habits. Participants would join 2-week-long challenges such as “waking up on time” and put down a deposit. If they failed to meet their goal, they lost the money. If they succeeded, they received their deposit back along with a monetary bonus from the pot collected from those who didn't meet their goals.
We named this “Everest“ because we believed everyone has their personal aspirations that are seemingly unreachable like conquering Everest. However, after passing a series of basecamps, the goal becomes far more reachable.
We wanted to become people’s basecamps in their journey of climbing their respective Everest, to reach the unreachable.
How it grew
This marked the beginning of our journey. Initially, our app was unstable, so we used Messenger chat to moderate challenges. We would make a Facebook post in the UC Berkeley student group (yup, Facebook was still a thing) and create a messenger group for those who reached out to us to participate in challenges.
Encouraged by the active participation, we devoted the entire winter break to learning React Native from scratch and refactoring the Swift app.
When the Spring 2020 semester started, we started actively recruiting users. While we didn’t drop a dime on marketing, we consistently attracted new users with each Facebook post. It was rewarding to see students from other colleges like Cornell or Purdue joining our challenges, as users in Berkeley referred Everest to their friends.
Challenges
In early 2020, I was planning to grow Everest beyond a side project, as my first startup. Initially, we all considered ourselves as co-founders, holding equal equity. However, as time progressed, I noticed that the contribution to the project among the 4 of us was increasingly becoming different. I found myself continually having to motivate the team. When discussing summer plans, I intended to dedicate my entire summer to Everest, whereas my friends were looking to secure internships and work on Everest on the side.
At the same time, I understood their situations as well. We hadn't joined the hackathon with the explicit goal of founding a company. However, after several months, we came to the realization that it would require a considerable amount of time and tremendous effort to get Everest off the ground and build a successful company, not to mention the possibility of having to drop out of school. After several discussions, we acknowledged our different priorities and decided to part ways. Consequently, I became the sole developer of Everest.
Shortly after this, the COVID-19 pandemic started, and I was forced to return to South Korea. With the majority of our users based in the US, I frequently found myself pulling all-nighters to accommodate the time difference. Usage began to decline as users didn’t want another uncertainty in their lives during this tumultuous period.
Nonetheless, I kept trying to grow. After a few weeks, the cumulative deposits made to Everest's challenges exceeded $100K. Considering that our user base primarily consisted of college students, I am still proud of this milestone. I managed to encourage students to deposit $100K, led them to wake up on time more than 500 times, and motivated them to work out for over 400 hours.
I was keen to raise capital and elevate Everest to the next level. However, there were two obstacles. The first, and relatively minor one, was finding a co-founder. I applied to Y Combinator S20 batch and was invited for an interview, but I was rejected as my co-founders had left, and I was the only one working on the project. Although the pandemic made it more challenging to find co-founders, this was not the primary reason for shutting down Everest. The second, and more substantial issue, was my impending military service. As a South Korean citizen, I was required to serve in the military for two years in the near future.
This came as a huge risk to me. Who would back a founder destined to be off-grid for two years shortly after launching his company? It was a difficult decision to make, as postponing military service would definitely increase the opportunity cost. I didn’t want an external factor (e.g. funding) to decide my path, so I set a challenging KPI (for revenue and growth) that I aimed to achieve within two months to decide whether to continue on Everest. Unfortunately, after falling short of the KPI, I made the tough decision to shut down the project and started my mandatory work in lieu of military service.
What I learned
Apart from learning new technical stacks or becoming better at managing a team, here are some key takeaways:
1. Importance of aligning incentives
Some ask me if I have any regrets about shutting down Everest, given its traction. I do think the core model is still valid - Challengers, a Series A company in Korea, is helping people build sustainable habits with a similar bet-mony-on-yourself concept. Forfeit, a YC W23 company also motivates people with the same model.
While I wish the best to these promising companies, I don’t regret shutting it down. The major unsolved issue was the misalignment of incentives. Our project aimed to generate revenue by taking a portion of the money collected from those who failed to meet their goals. However, this business model conflicted with our vision; if all users achieved their goals 100% as we desired, we would not generate any revenue. We considered charging a participation fee instead, but it didn’t work well. Challengers seems to generate most of its revenue through B2B deals, enabling other companies to host challenges on the Challengers’ platform.
While most participants aimed to build sustainable habits, some exploited the platform to earn pocket money by faking photos. It was challenging to validate whether the user was successfully building a habit even if they posted the correct picture for verification. Moreover, a more fundamental issue revolved around fostering internal motivation. Users of Everest were typically unable to build sustainable habits without external motivators, such as the potential loss of money. It was unclear whether Everest was helping users build internal motivation or making them rely more on the fear of losing money. As users developed sustainable habits, they would leave the platform, which also led to lower retention.
While this wasn’t the deciding factor in shutting down Everest, it was certainly a contributing factor as I couldn't identify a sustainable and long-lasting business model. B2B companies like Stripe have a high alignment between their business model and their customers' interests. By maximizing their customers' revenue, Stripe naturally maximizes their own as well. In most cases, aligning incentives in B2C is more complicated, but it is crucial for building a long-lasting company.
2. Creating a team of independent thinkers
I learned that the blocker to creating a generational company is not the number of good ideas but rather the number of high-quality teams (i.e. having great co-founders).
I also learned that as much as the raw talent or the complementary skill of the co-founder, “being serious“ about doing a startup matters a lot when choosing a co-founder, if not more, especially in college. I have encountered many intelligent and talented college students with aspirations to become founders, yet they are hesitant to take a leap of faith. Certainly, you should validate the idea before leaving a full-time job or college to work on it full-time. However, if you are consistently thinking about creating a better safety net while founding a startup, it is hard to build a high-momentum team.
If I were to describe this as a characteristic, I would describe it as “independent-mindedness.” It's difficult to be a conformist if you don't know what you're supposed to conform to. Independent-minded individuals are more likely to pursue an unconventional path and create a successful startup, as successful startups often originate from ideas that most people perceive as bad.
3. Importance of being technical
My first year in college was my first time learning the joy of programming. It was also my first time building a service used by other users. Being technical confers a significant advantage - it empowers you to single-handedly create and scale the software of your dreams. After building Everest, I continued to hone my technical skills, dedicating most of my time to learning AI/ML and working on research projects. With the recent Gen AI boom, the technology may eventually help non-technical founders. But in the short term, being technical is essential, as startups are more likely to be building than using such AI tools.
Parting Thoughts
Recently, a friend asked me about my favorite thing that I've built. So far, I would choose Everest as my favorite because I devoted the most time (almost a year) to it, and it was my first major project that I aimed to grow into a startup. This experience is one of the most memorable I had at Berkeley.
You can still find the Everest flyer stuck on the wall inside the men’s restroom at UC Berkeley’s Soda Hall (Computer Science building). It's hard to believe that four years have passed since we started building Everest. I am looking forward to the next four years of building and creating.