Fund/Build/Scale KarmaCheck CEO Eric Ly on Customer Discovery + Early Product Development
Eric Ly is the CEO of KarmaCheck, where he’s tackling a problem he first noticed years ago as a co-founder of LinkedIn:
People don’t always tell the truth about themselves.
To address this, KarmaCheck — launched in 2019 — automates key aspects of the background check process. By reducing complexity, employers can speed up hiring, while job applicants experience less friction along the way.
“This is one of the first touch points with the employer: experiencing pain and frustration having to go through this process,” said Eric.
“For us to show up with something new and different and better was frankly a breath of fresh air for the employers, the customers that we work with.”
In this episode, we discuss:
- Jumping into a highly regulated industry with no prior domain expertise
- Why customer discovery should focus on patterns, not one-off insights
- The benefits of selling new features before they exist
- How to balance customer requests without losing focus
We also talk about stepping out of LinkedIn’s shadow, resisting the temptation to build for a single customer, and knowing when to say “no” to feature requests.
RUNTIME 40:20 EPISODE BREAKDOWN(1:37) “Several years ago, I became really interested in this whole concept around trust and trust online.” — How Eric first recognized the problem that led to KarmaCheck.
(3:22) Entering a highly regulated industry without prior experience — where Eric found the confidence to take the leap.
(5:30) A look back at KarmaCheck’s first hires — who they brought in early and why.
(6:47) How KarmaCheck convinced early customers to take a chance on an unproven solution.
(10:36) “Where employers don't even meet the people that they interview in person, there's an opportunity for the wrong things to happen.”
(12:21) “We identified a pain point in corporate America that people often experience frustration with.”
(14:34) How Eric used early customer feedback to shape KarmaCheck’s product strategy.
(16:11) The role of proof-of-concept programs in building customer trust.
(21:16) “Make sure that whatever you commit to in your product is going to be applicable for more than one customer.”
(24:47) When customer feedback leads you down the wrong path — how to recognize it and recover.
(27:46) Why it’s important to keep track of rejected product ideas.
(29:49) The lessons from LinkedIn that Eric chose not to apply at KarmaCheck.
(32:54) Advice for founders who want to step out of a shadow and build something completely new.
(35:54) How to find a mentor when you don’t have a built-in network — Eric’s tips for making meaningful connections.
(38:24) The one question Eric would ask a CEO if he were interviewing for a job at an early-stage startup.
LINKS- KarmaCheck
- Eric Ly
- KarmaCheck Raises $45 Million Series B to Modernize Background Checks and Credentialing (Press release. 6/27/2024)
Thanks for listening!
– Walter.