TitleFounder, Chairwoman, & CEO
CompanyCare.com
When most entrepreneurs are seeking inspiration, they study Steve Jobs or Bill Gates or Mark Zuckerberg. Sheila Lirio Marcelo, founder, chairwoman and CEO of Care.com and a self-proclaimed lover of superheroes, finds her muse in the likes of Katniss Everdeen and Superman. Superheroes, she points out, are often underestimated and even overlooked, but they all display an inner strength that wins the day. For Marcelo, a young woman born in the Philippines, the road to entrepreneurial success was marked by moments of doubt from skeptics and life challenges that were often hurdled with action hero-like efforts.
Launched in 2007, Care.com is an online web portal for connecting families, caregivers and employers for child care, senior care, housekeeping, pet care and more. Today, more than 14.1 million members in 16 countries are turning to Care.com to solve their caregiving needs. Having raised more than $110 million in private venture funding, Care.com used its cash on marketing and acquired four companies in an effort to expand and grow, prior to going public in January 2014. The challenges are many for the tireless Marcelo who is running a public company still in its growing stages. But she would not have it any other way.
Born to entrepreneurial parents who ran a variety of businesses, the precocious Marcelo was curious at an early age about business processes and asked endless questions about the work environment. When the family moved to Houston in 1977 and opened one of the area’s first Asian grocery/restaurants, the seven-year old Marcelo, in flawless English, was put to work answering the phone and taking messages. “I’ve always enjoyed the way business gets conducted and the scrappiness with which my parents managed their different businesses,“ she said. “I was always intrigued by that.“
With pressure from her Asian parents to pursue a law career, Marcelo applied to Harvard Law School but deferred her acceptance. She wasn’t sure she wanted to be a lawyer and instead she took a litigation consulting job that would keep her in the field and address her doubts about the law. A chance to work on a technology-based project triggered two results: she became intrigued with technology and realized that business, not law, was her calling.
Marcelo decided to pursue a joint JD/MBA degree and was accepted at HBS in 1995. Unlike most young graduate students, Marcelo arrived at Harvard with a budding family. Having married Ron Marcelo when she was just 20, Marcelo had her first child during her sophomore year of undergraduate studies at Mount Holyoke. Both she and her husband were accepted at HBS but they arrived with the increased pressures of a young immigrant family with no relatives in the area as backup support.
Nonetheless, the entrepreneurial fervor struck her at HBS while taking classes with Lynda Applegate, Bill Sahlman and Myra Hart. ““I realized this was becoming my passion,”“ she said. She wrote her first business plan during her last year in the dual-degree program but she also became pregnant with her second son and her startup dreams were put on hold. While at Harvard and during her summers in between the JD/MBA program, she worked for Monitor, a consulting firm, and later joined startups Upromise and TheLadders.com. In 2006, she also did a six-month stint as an entrepreneur-in-residence at Matrix Partners, a venture firm in Boston. There, Marcelo received mentorship and a place to think about startup options.
But Marcelo, intent on her own startup, was on a mission to find the right idea. That idea, it turned out, came to her while she was working at Upromise. “It was actually when my dad fell ill,“ she said. “I was working on a marketplace business plan for real estate—Lynda Applegate was my advisor on that—and I’d shelved it because I got pregnant. When my father got sick, I was struggling with childcare and had been for years. And now I needed senior care. I started to use the Yellow Pages. I thought, `Wait a minute. How about this care thing?’“ But Marcelo was not yet ready - “I didn’t feel like I was ready to go start a company since I didn’t have any experience,“ Marcelo said. “Upromise was sort of my general management tour of duty and TheLadders allowed me to further my leadership training.“
After TheLadders and with support from Matrix, Marcelo wrote her business plan. She scoured the landscape for competitors, finding what she considered smaller more focused startups, none of which addressed a bigger picture. “I ended up with childcare, senior care, pet care and tutoring because they were my needs,“ Marcelo recalled. In fact, she was very clear about a vision that leveraged technology, marketing and assets to build something that could be expanded beyond a single niche.
“From day one, because of my learning at Upromise, where it was my job to lead the building of that product, I had to learn about scale and platform. So from the beginning, I knew that we were working on something massive at Care.com,“ she said. Even though she did not have a beta or even a full team, the partners at Matrix were impressed with Marcelo and her new concept and provided the first A round of financing of $5 million. “They wanted to give me more money in the beginning,“ Marcelo said.“But I said, `Let me just get this launched and then if I need more, I’ll come back.' I think if you get too much cash, you overspend.“
She brought a team of 12 people from Upromise to join her, including her three co-founders, a move that enabled her to get out of the gate quickly with Care.com.
“We got together on October 30, 2006 and we launched the first test website in January,“ she said. “We launched the entire business that May. The only way were able to do that was because we had all worked together before, we shared the same values, and we knew how to launch a product. “ From the beginning, Marcelo built a company grounded in purpose - ““I realized the importance of articulating mission, vision and values from day one,”“ she said. “I learned how important transparent goal setting is and also that testing and iterating is crucial so you can fail and learn and get back up.”“
By doing deep “smoke-testing“ and analysis of the marketplace, Marcelo knew there was huge demand for a service like Care.com. From $400,000 in revenue in its first year, Care.com grew to $4 million a year later. Marcelo has never looked back. The IPO raised $91 million and the stock price jumped 43 percent on the initial trading day. In a business in which people are so crucial to the equation, Marcelo has found no lack of prospective employees “starving for companies with a mission and a social purpose “a combination she says is tough to find in most businesses.
Her HBS experience imparted the importance of outcomes, but while Marcelo continues to emphasize the tangible results, she has embraced the greater value of relationships in the quest to be an effective leader. Becoming a better leader at this stage of her career is built upon what she called “The Journey of Me to We.“
“If you stop thinking about yourself because you’ve done a lot of the self-analysis you need to and you know what your issues are and your insecurities, then you start to get over yourself and not take yourself too seriously, “she explained. Then you can actually lead other people because you can focus on them instead of yourself. The We is the Holy Grail, the aspirational Gandhi-like moments where you are not only impacting the people you touch directly in your life, but the broader community. You can think about what you are doing to impact the world and billions of people’s lives.“
Katniss Everdeen couldn’t have said it better.