Pete Koomen ('06 M.S. Computer Science) understands startups from three sides — the founder, the coach and mentor, and the investor. The University of Illinois Urbana-Champaign student-led nonprofit Build Illinois and the startup accelerator Y Combinator brought Koomen to campus to talk to students considering their own entrepreneurial journeys. Students from The Grainger College of Engineering packed the house and eagerly absorbed his advice.

Koomen co-founded Optimizely, which helps companies create and optimize digital experiences across all channels. He helped Optimizely grow from inception to $100M+ in annual recurring revenue before its acquisition in 2020. He also co-authored the book “A/B Testing: The Most Powerful Way to Turn Clicks into Customers.”

He now serves as a General Partner at Y Combinator. The highly competitive and sought-after opportunity for startups includes financial investment as well as mentoring, education, building connections and more. The Y Combinator companies that have worked with Koomen are worth a combined $1.3B.

“Business isn’t that hard. It really comes down to finding someone with a problem and solving it for them.”

–Pete Koomen

Q & A with Pete Koomen

Koomen knows firsthand the highs and lows of startups plus the grit founders must possess to succeed. After his talk, he spent a few minutes with Grainger Engineering offering additional insight.

Question: Let’s start with a little background. Tell us about how you became interested in computer science and what attracted you to studying at U. of I.?

Answer: I have been excited about computers since I was a little kid. I got into the Ph.D. program here, and it’s one of the best departments in the world. I couldn’t be happier that I went. I think coming from a smaller engineering school, just seeing the level of rigor that everybody was used to here … the bar was a lot higher, and I think it made me a better engineer.

Question: What was the biggest challenge you faced while building Optimizely?

Answer: It [building Optimizely] took almost eleven years of my life. I spent a lot of time tonight talking to students about the first year, where we didn’t really have a good idea and we spent a lot of time building products that didn’t work. The hardest thing was building something someone wanted. It sounds so easy, but it’s really hard.

Question: What’s the biggest difference in how you evaluate startups now versus before becoming an investor?

I have learned since starting at YC that a lot of people think when you invest in a startup you’re trying to predict the market size or look at how much revenue they have and make some sort of projection. That’s not what’s going on, at least at the early stages.

What you’re trying to do is make a bet on the founders. You’re trying to bet that these are the super smart, relentlessly resourceful founders who are going to realize their idea is probably bad and keep at it and find another one and find another one until they find something that works. And then it becomes huge. It’s a bet on the people more than anything else.

Question: AI is a new buzzword. Do you think there are any sectors in AI that are underexplored?

Answer: We’re at a strange moment in time where the frontier models now are generally intelligent. It’s a historic moment for humanity, and yet most people are not using this technology to do their jobs. That means there’s a long way to go to build products that normal people can use. I can’t think of a time when there’s been more good ideas lying around for founders.