“You’re borrowing time now to get more time later.”

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Danielle Morrill practices radical candor. “I got into Y-Combinator as a solo female founder, probably with the only launched product that had revenue. So I was like feeling like a bada** motherf*****. But then it turned out that [referrals] is a terrible business.” She closed down her YC-backed startup, Referly, 11 months after getting into the program. Now the CEO and co-founder of Mattermark, a research tool for doing due diligence on companies, Morrill has faced failure, vanquished it, and is prepared to talk very openly about how much it sucked: “If you make your identity about the startup, it’s really, really painful when it doesn’t work out because then it’s like your identity is in question.”

During a fireside chat with Matter’s Managing Partner, Corey Ford, in San Francisco, Morrill shared the story of her early introduction to entrepreneurship, being a Y-Combinator rebel, her B2B software eureka moment, and the trials of raising VC money for a product catering to the VC market.

Morrill was born into an entrepreneurial family. Growing up, her parents had their own company — her dad started a consulting business for pensions when she was about 10, having previously worked in startups, and later almost went bankrupt. He had no intention of working with anyone else ever again, and managed a few billion dollars of assets solo out of the family home. “There was a lot of drama in our household related to the rollercoaster ride of entrepreneurship,” Morrill says. Her software engineering career started in 8th grade. She began as a “data monkey,” helping her father to automate some core data manipulation processes. She taught herself to code, at first in Visual Basic, and all on the desktop — “my first five years of software engineering were completely disconnected from the internet”. Later she built websites and got paid for it.

“I always downplay the fact that I built software and I don’t really mean to, it’s just that I’ve been doing it for so long.”

Morrill started to show up at high school less and less as she made more money. By the senior year, she was earning enough to move out of her parents’ house, even if only down the road. She says she was “extremely rebellious,” isn’t 100% sure whether she technically graduated from high school (due to missing all her P.E. classes), and then didn’t really want to go to university anyway. Her parents weren’t prepared to support her financially unless she stayed in higher education so she went to community college, then left to do an internship with a Fortune 500 global logistics company, Expeditors International, and learn about the world of shipping containers, air freight, and trucking.

She loved working there and rose through the ranks over three years but as her interest in coding for the web grew, she knew she’d need to leave a company that was “super backwards” with technology. After an 18 month stint at a friend’s startup, the mobile check-in app Pelago, which eventually sold to Groupon, it was time for a fresh challenge.

Morrill met Jeff Lawson at a tech event in Seattle when he was an early technical PM for Amazon Web Services. She was running Seattle 2.0, a tech blog for the Pacific Northwest, and, at a table with a bunch of other founders, told him all about why containerized shipping and virtualized servers are similar. “He was like, you’re weird. We should definitely continue to talk” she quips. He later emailed to explain that Twilio — the cloud computing company he co-founded — couldn’t manage all its support tickets because its developer community was growing so fast. She came on board to create “helper content” for users, and later became employee #1 as the Head of Marketing.

Morrill started at Twilio in February 2009, right after the economic crash. When Lawson moved to San Francisco with his wife to be closer to his co-founders, Morrill came too. She has fond memories of that time, before friction had built up between tech workers and the long-time inhabitants of San Francisco. The Twilio team worked out of coffee shops and then Pier 38, which was a condemned building about to collapse into the Bay. In those days she rented a room in an apartment for $600.

“I don’t think most people work that hard in their 20’s. I basically aged myself 10 years. I think that’s what it takes to build a company like Twilio.”

She worked like crazy, had no social life, and calls this aspect of startup -building “time travel.” Entrepreneurs, she posits, are in the business of trading time: “You’re borrowing time now to get more time later. You’re taking these 20 waking hours that you’re using and you are turning them into something where you’re going to get to be with [your family and friends] later.” But by May 2012, the trading had taken its toll, and she was completely burnt out. She’d moved to London to open Twilio’s European office, which was “very isolating” work, and wanted to take some time out to code and focus on her side projects, some of which were already profitable. She quit Twilio with no real plan. Within weeks she had launched Referly, an online product referral system that paid people for recommendations.

She says she was very skeptical of Y-Combinator but listened when a trusted friend said she should apply. Minutes before the deadline, she did, and after a “brutal” interview, was accepted. She asked whether the 7% was negotiable. It was not. She called her husband, and co-founder, to ask whether she should take the place, because she wasn’t interested in being part of the club purely as a status symbol. Once again, as part of YC, her rebellious streak came out. “I didn’t like it when people just took things the partners would say as the law without asking why.”

“The best way to remind yourself that you’re in control is when you build things.”

Referly didn’t last long because it was a “terrible business”, says Morrill. It sat as “the middleman to a middleman,” helping people get affiliate commissions from Amazon and other programs. She knew they’d always have a 10–15% margin business, that affiliate programs would cap them as a percentage of their total revenue, and that they could only get so big before Amazon would become the only e-commerce business left to support them. “If you’re building a venture-backed startup, there’s promises you’re making to people,” says Morrill. “If you know six years earlier that it’s not going to happen, why would you wait six years?” In February 2013, she closed down Referly and went back to what she knew best: coding.

She took some time out with her two co-founders. The three of them went up to Seattle to her parents’ house to hide away and reaffirm their values. “After going through YC and failing, I didn’t want to be in San Francisco,” she says. “I didn’t want people to ask me what I was working on now, since I didn’t really know. It felt like being an awkward teenager, so hyper-sensitive about people noticing things that in reality no one actually cares about.”

Something that people do really care about, she later realized, is their time. She describes a come-to-Jesus moment in a Mexican restaurant in Seattle at 4 p.m. on a Tuesday. Morrill commented to her mom on a high-spirited group who had just come in, and her mom reminded her that for some people, work is not the most important thing in their lives. For them, being able to go home mid-afternoon and have drinks with friends or do homework with their children was top priority. Morrill, who had previously written off B2B as boring, decided that building tools that could help working people do their jobs better would be changing the world in a small, incremental way. She says she thought for the first time about how B2B software can have “a really meaningful purpose.”

“It was the first time someone had said to me the words that really describe why to build B2B software. You’re literally giving people their time back to go do the thing that’s actually important to them.”

The former Referly team had the idea of building an automated newsroom to support journalistic efforts — a kind of data-driven TechCrunch competitor. They thought data would help them to identify companies blowing up that journalists could then write about. “I had always wanted to recreate the Seattle 2.0 Startup Index for all startups in the world, and I was pretty convinced there were tons of under-appreciated companies to cover,” says Morrill. They started to play with ranking startups and VCs, based on publicly available data from sources such as Crunchbase.

When they launched a project called Zombie VCs, which tried to tackle the information asymmetry plaguing founders seeking to raise venture funding, it caused a stir. In a blog post, Morrill revealed which Silicon Valley VCs was zombies, i.e. hadn’t made any new investments in the last 6 months (and who were thus probably fundraising themselves). She calls it her “mischief” and enjoyed the heated debate that ensued. The next task was to rank Andreessen-Horowitz’s portfolio, and she was shocked to one day receive an email from Marc Andreessen himself, asking for the data.

“We f****** killed it. It was great. It was really fun. Sometimes you just build the right thing.”

After they showed one of their own investors at New Enterprise Associates what they’d built, NEA immediately asked to license it for themselves. She offered the full team access to all the data for $50,000 a year, and they agreed. Within 6 weeks her team went from the Zombie VC blog post to their first $50K commitment, and from there to the first $1M in recurring revenue within 6 months. Mattermark was born. “Sometimes you just build the right thing,” says Morrill, proudly, before explaining how much grunt work was required to clean up the data and build a slick product. Her husband coded the back end while she coded the front end, often hopping off a sales call to fix a bug. In a very design thinking-inspired way, she was deeply in tune with the behavior of her customer, and able to make product tweaks on the fly to build a solution that more closely fit their needs. Of course, at scale, that easy feedback loop breaks down — and Morrill says this is something the company is still working hard to perfect.

Fundraising for Mattermark was really difficult, says Morrill and so they did it piecemeal — the company has technically had something like 47 different closes. She really wanted to raise VC funding to “force herself to build something big” (but now wonders if it can have the reverse effect). She recommends either doing a convertible note with just one committed investor or avoiding them altogether. And she has a lot of contempt for the advice given to founders about their fundraising process.

“You’ll hear, ‘make your list of A and B investors, run a tight process, meet with some of your Bs first to test your pitch. Put a three week window on it. Tell them the date they are going to get term sheets.’ That’s a bunch of bullsh*t. No one runs that process except for, like, Stripe, when they’re valued at a billion dollars.”

Morrill’s next big goal is making the company profitable within a year. Most of her spend, she says, is office and headcount, and there are few savings left to be made. “It’s always about working out how to make money faster than we spend it.” These days, Morrill says, more than half of Mattermark’s revenue comes from its non-investor customers in sales, biz dev, and marketing, even if her early VC teams still give the most vocal and passionate feedback. They’ve been working to almost double the number of companies they cover, from 1.6 startups globally to almost 3 million. 5 years in, there’s still a lot to do. In fact, a big lesson for her has been taking the long view. Most people have the perception that they’ll be working on something else in 3 years, but, she counsels, building your own company means you need to be prepared that it will consume you for much longer.

She gets up at 5 a.m. every day, walks about an hour to work, and tries to leave the office no later than 6 p.m. Her meticulously-scheduled days are spent “blocking and tackling” issues that come up for her executive team, and hiring. She says she was warned that hiring would take up all of her time, and that’s completely true, but nothing is more important. “If you don’t you will pay. Reality will come in and charge you the price for not caring and having somebody else do it, because you will end up having to fire someone and you don’t know why they were there in the first place. And that to me is like the ultimate failure.”

The Drunken Walk is a series of live fireside chats, blog posts, and podcasts from Matter Ventures, the world’s only independent startup accelerator for media entrepreneurs. We dive into the personal stories of founders, experts, and innovators in media to uncover the moments in their careers that changed everything. Our goal is to inspire and empower the next generation of media entrepreneurs to get from “A to B” without a map.

Applications for our next class, Matter Seven, open on February 8th. Apply on our website.