by Y Combinator8/14/2019
You can check out their furniture at LiveFeather.com and if you live in LA, SF, or New York you can try out the service.
Jay is on Twitter @jayjreno.
00:00 – Intro
00:20 – Opting out of owning furniture
6:00 – Feather’s prototype
8:50 – How much did he make from his MVP?
9:30 – How many products did they have?
11:45 – Legacy competitors
13:35 – Changing branding from RentFeather.com to LiveFeather.com
15:30 – Customer interviews and learnings
18:00 – Scaling a company with physical products
21:00 – Why expand to other markets vs focus on one?
23:30 – Who to hire and when in a logistics-heavy business
25:40 – Unexpected learnings from scaling Feather
27:25 – Feeling his role change over time
29:15 – Counterintuitive advice
34:50 – Advice for YC founders after Demo Day
Craig Cannon [00:00] – Hey, how’s it going? This is Craig Cannon, and you’re listening to Y Combinator’s podcast. Today’s episode is with Jay Reno. Jay is the CEO and Founder of Feather. Feather is a furniture subscription service. They were in the Summer 2017 Batch of YC. You can check out their furniture at livefeather.com, and if you live in LA, SF, or New York, you can try out their service. Jay is on Twitter @jayjreno. All right, here we go. Jay Reno, welcome to the podcast.
Jay Reno [00:30] – Thank you for having me.
Craig Cannon [00:31] – You are the Founder and CEO of Feather, which was in the Summer ’17 Batch, and Feather is a furniture subscription service. At the core of it is this idea that people don’t want to own things anymore. How did you come to that conclusion and why does it motivate your business?
Jay Reno [00:50] – High-level, I saw three things happening in my life. The first was I had moved seven times in the nine years I’ve lived in New York City, and that’s just above average actually. That’s not too far out of the ordinary. Each time I’ve moved, I’ve had a completely different life situation. I’ve lived with roommates. I’ve lived with a significant other. I then moved back in with one roommate. Then I lived with two roommates. Then by myself. Then with a significant other, and then by myself. At each phase of my life I’ve had completely different needs in my apartment. The space changes, the layout of the space changes place to place. The needs, the furniture needs in that space, change dramatically. For example, one roommate might’ve had the sofa we needed, but not a coffee table. He didn’t have a bed for me, so I had to bring my own bed and mattress, et cetera. Then when I moved to the next place, that stuff might not have fit physically or stylistically in the next space. It might’ve been like a modern apartment the first time, then I moved into a pre-war building in Brooklyn, and at each phase, you have completely different needs. One, I realized that moving is a pain. We’ve all experienced this so many different times. Two, the stuff that you have doesn’t necessarily fit physically or stylistically in your next space for all of the given reasons. Couple that with basically there being a massive problem of furniture waste in the U.S.,
Jay Reno [02:38] – so what people are doing to solve this problem today is buying, you know, Ikea, Wayfair, what you might consider disposable furniture, that can be assembled once, and set up once, in someone’s home, and doesn’t really transport very well, it’s not meant to be disassembled or moved. All of that stuff might not fit in your next space, so you have to throw it out, and then go buy new things. Then you move, and you throw those things out, and go buy new things to fit your space and your life. I got my master’s degree in climate environmental science. I care deeply about some of these big world problems, especially as they’re… to the environment, the built world, and realized that there’s a big opportunity to solve a couple massive problems. The third piece that’s kind of interesting is there’s a cultural shift happening, like you mentioned, away from ownership of stuff, and a high level where you see that going is, and where you see that taking shape is in the American dream changing. Sounds like such a big lofty thing, and maybe it is, but our parents’ generation cared about getting a house, and cars, and having a white picket fence, with things in their life, settling down. And our generation cares about totally different things. We actually aspire to have something very different, which is freedom and flexibility. Freedom and flexibility allows you to experience the world. It allows you to maybe be bicoastal, or just lean into whatever feels right for you at a given time, maybe that’s a job, maybe that’s a hobby, or where you live,
Jay Reno [04:36] – what you’re doing, and yeah, we just, we value something totally different. So that shift happening. With all of these other problems, just–
Craig Cannon [04:46] – Would you attribute that to the dollar not going as far and people being, like, “Maybe I can’t buy a house ever,” or maybe, “I’m going to push it back from like, age 30 to age 45,” or something. Is that a main factor? What drew that change out in the world?
Jay Reno [05:03] – I don’t think that’s a main factor. That’s a secondary factor, and you’re seeing that happen. You’re seeing costs of debt rising, you’re seeing, you know, greater student debt. People are unable to buy and own lots of things, maybe because they’re not as careful with their money, or they’re not saving, et cetera, or, in the front end, you may not have been given much money by your family, or anything like that, so that’s certainly an issue. We consider that accessibility. Feather does give people access to items that they may not otherwise would have purchased, and instead maybe would have purchased something disposable that’s cheaper. But the reality is, most people are using Feather, and companies like us, whether it’s Rent The Runway, or Uber or Lyft, or Spotify, et cetera, because they don’t necessarily want to own things, and have things tying them to a physical space.
Craig Cannon [06:04] – I find that really interesting. I was listening to a podcast with you, that you’d done a couple years ago, and you were talking about the fundraising process, and you were basically, you were talking to people at VC funds, who definitely have the means to, buy something from, you know, not crazy expensive, but, West Elm, and they were still buying Ikea, garbage. What did the prototype look like for Feather? Did you just, like, sell to your friends? How did you ultimately figure out that this was a product?
Jay Reno [06:37] – We started as a rental business. The prototype was, “Hey, ownership is the problem.” Today everyone buys their furniture and owns it, and that creates a lot of waste, because they have to be fully responsible for their thing. Yhey end up buying things and throwing them out. On the cheap end, that’s, I guess, kind of what you end up doing. Using VCs as an example, you know, they’ve got… Even analysts, associates, principals, they’ve got pretty decent salaries, and like you said they’ll still choose to purchase the disposable thing, and a lot of people do this. The reason is because it’s flexible, and it’s convenient. That is what Feather solves today, and so the prototype that we created was, “Okay, let’s get, let’s create a simple solve, an MVP, that allows us to say, would people prefer to subscribe to, or rent things, rather than buying them up front, and owning them and throwing them out.” I built that by myself, just at my apartment, and just tested it through friends.
Craig Cannon [07:55] – Okay, so, walk me through what it actually is, because people are so curious. They ask us about this all the time. What can my MVP look like? How do I really test out an idea? Is a form for one type of couch? What was it actually?
Jay Reno [08:08] – For this to work you kind of need to have a little bit of merchandising, you need to have a little bit of a visual aesthetic and appeal to see what furniture is, what the price is, et cetera. Thought maybe a spreadsheet would work and that’s just not enough.
Craig Cannon [08:21] – Didn’t work, okay.
Jay Reno [08:22] – It didn’t. But there are templates that exist to create web shops. There are a few if not many companies that do this. I used Shopify. I was paying $89 a month, I think it was, for what was then a Premium Plan. Not that much money on the face of it, and ended up, I have a bit of a background as a Product Manager, so I found a very inexpensive engineer who was living in India, and she was being paid, maybe 16 or $18 an hour, all in, to just build the MVP. I decided that I felt comfortable investing up to two or three thousand dollars, I can’t remember what it was, of my own personal money, so I said, “Great, you know, this could go nowhere. I’m just going to build that myself in the confines of my home,” and that’s how much it took to create it.
Craig Cannon [09:18] – How much money did you make off of that MVP?
Jay Reno [09:21] – It’s really interesting. I had it running as a side project while I was working my full-time job, and just sent out a blast to friends on Facebook to see if anyone gave a shit. It turns out some people did, and the first two orders were friends, the third order was a friend of a friend, the fourth order was a friend of a friend, and I was like, “Interesting!” Okay, that, you know, sample size of four doesn’t give me all of the confidence, but certainly gives me some confidence that people who I have no idea about, I don’t know, are actually using this thing.
Craig Cannon [10:01] – How many products did you have?
Jay Reno [10:03] – Ooh, we had enough, maybe we had four or five items per product category on the website, so as an MVP as well, the best way to test this hypothesis was to have the right selection of enough items, so it’s not just one bed, one chair, one mattress, et cetera, but to have just enough, so that you can actually accurately test whether people care, because that’s ultimately what it needs to look like. What I did was I put items on the site from a retailer who could ship me things just in time, effectively, so when a customer would go on our site, they would place an order for an item, or multiple items, for their home, and I would then in turn say, okay, great, they are committing to this furniture for 12 months, or whatever it was, I’m going to go buy it myself, and deliver it myself, and they are going to, I’m going to own all of this furniture up front, and I felt comfortable doing that, rather than stockpiling everything up front, and assuming that it was all going to go well.
Craig Cannon [11:16] – Okay, and so your model was based around the furniture earning itself out after one year?
Jay Reno [11:22] – Yeah, in the early days.
Craig Cannon [11:23] – Was there any margin you built in in the first year?
Jay Reno [11:26] – I wasn’t paying myself, so there was no delivery expense or assembly expense, but I went and had one other person go with me, who I’d usually find on TaskRabbit, who would have the truck, because I also didn’t have the truck. I’d be like…
Craig Cannon [11:45] – Lift a couch upstairs with you.
Jay Reno [11:46] – Yeah, “Will you lift the couch upstairs, and also deliver it for me, with me? I’ll be your helper.” I did that for the first number of orders. It was at that time that I realized it’s important to kind of get feedback from the industry as well, not just consumers, as to whether the industry who’s, by definition, been in the industry, thinks is a good idea or not.
Craig Cannon [12:15] – Well, yeah, because, to be clear, I wasn’t aware of this, but listening to podcasts with you, furniture rental is not new? Yeah, okay, so what’s the history of that market?
Jay Reno [12:26] – Furniture rental companies are not new. You have a few legacy companies that exist, and have been around for 40 years, like CORT, for example. They’re in all 50 states, you can get furniture rented, and delivered to your home. One, the furniture is not for our demographic, for people between going to college, and buying a home in urban environments. It’s meant more for corporate relocation. It’s super old and steely looking, it’s like–
Craig Cannon [12:59] – Meaning, like, really high end, or just, like, not the aesthetic? Or, like, all of the above?
Jay Reno [13:03] – Not as much all high end, they have a range of prices, but yeah, the aesthetic is not appealing. The brand is just not appealing to the demographic at all. The UX is very different, it’s very hard to pay them, separate conversation there. This rental market does exist, but we came out and said, they’re not addressing the massive opportunity, which are people who are currently buying furniture, thinking they want to buy furniture, but in fact, what they actually want is, the flexibility to be able to subscribe to furniture, and subscription sits somewhere between rental, which is implying short-term rental, and implying you’re going to return it, and purchasing the items, which is full commitment, you own it, it’s yours, and it’s your responsibility.
Craig Cannon [13:59] – We should talk about that nuance, which is super interesting, because when you, when you went through YC, it was rentfeather.com, and now it’s livefeather.com. From the outside somewhat subtle, but can you, like, go through that thought process, and then how it actually affected your bottom line as a company?
Jay Reno [14:18] – We were Rent Feather at the beginning because we assumed that rental was the correct solution, that ownership was the biggest problem, which in fact is true that people don’t necessarily want to commit up front. But it’s not that they should never own something, it’s that you shouldn’t commit up front, you shouldn’t commit to ownership today, because you don’t know what’s going to happen in your constantly changing life, you know. You just moved to New York, you are in a relationship, anything could happen. I am knocking on wood that that goes quite well for you, and you might think that this apartment is perfect for you guys for the next year, two years, five years? You might hate the neighborhood though, and move to a different neighborhood, because you like this new neighborhood, so you’re going to have to move. Point being, committing to ownership of things up front is what we’re really addressing. We’re saying, instead of committing, just pay monthly, have access to it, your monthly payments on your furniture go towards owning the items. You never pay more than the retail price of that item, but if you don’t want to own it, you can return it at any point. The evolution of the company went from rental, definitely don’t own, it’s wrong to own, to, “hey, why don’t you just make the choice later?” We evolved the way we communicate that to people from a rental company to a subscription.
Craig Cannon [15:55] – Right, so you kind of just defer the choice? And so, how did that become obvious to you down the line? Were you doing, like, customer interviews? Like, how did you figure that out?
Jay Reno [16:04] – You have to talk to people. You have to look them in the eye. It’s not enough typically to just do user interviews over the phone. Video is helpful, you can meet people in person, or, like I did, do the deliveries, and see the people who are using your products, see the living situation they’re in, and see the furniture that they’re choosing. You get a lot more, so that, just going there, asking a couple questions, them not necessarily knowing that I was the founder of the company, was quite valuable.
Craig Cannon [16:37] – Okay, interesting. I always figured it was, because I met you right before you did your interview, right, and I always figured that furniture was an expression of self, and it doesn’t seem to be, for a lot of your… some elements are, but can you just walk me through how you realized that? Because I figured that was core to someone’s apartment and their life.
Jay Reno [16:59] – You know what, you might think that, and to some degree the style of the thing is, but not necessarily the color. Furniture, the overwhelming majority of people purchase furniture, and the overwhelming majority of people purchase colors that will go well with the pops of color that they have in their art, and their rugs, and their pillows, and their, the things that they got on their trip to Africa, or wherever they traveled and got a really cool thing, or from the store down the street, and so the furniture is… It’s an expression of you, it needs to be comfortable, first and foremost, it needs to fit whatever the aesthetic is of your place and of your own personality, so some people like modern, and some people like mid-century modern, and they’re quite different in aesthetic, and it says a little bit about a person. But aside from that, you don’t actually really need to have so many different colors and shapes and textures. Or yeah, it comes through is in the–
Craig Cannon [18:04] – The little accessories, and all that kind of… It was just really surprising to me. Because I browsed your site like two years ago, and then I browsed it this morning. I was like, “Oh, this is very different,” but also not like infinite choice. It’s actually fairly curated, and so it’s not all that different from your MVP, just a much more legit back end.
Jay Reno [18:25] – There’s a lot in the back end that we’ve been building over the last two years.
Craig Cannon [18:29] – That’s something I want to talk about too. You’re in multiple markets, and you’re also dealing with physical products. What is it, what have been the key takeaways, scaling something where you’re delivering real things to people?
Jay Reno [18:45] – There’s two important points to mention. First is you have to respect logistics and respect operationally intensive businesses. I think there have been a lot of venture-backed companies that have very high demand, that should exist today, but they maybe ran too quickly, and didn’t necessarily respect the logistics or the complexity of building an operationally intensive business. In order to do this effectively, you just need to step back and respect it. The other point is for a business that relies on software, on people, on unique inventory management systems, on a complex reverse logistics process, you have to heavily rely on software. It’s fundamentally a data problem that we’re solving on the back end, and the software that we’ve created over the last few years allows us to effectively deliver furniture to people’s homes. From the outside you can look at a company like us and say, hey, well, I mean, in the early days, didn’t you and your TaskRabbit just throw the furniture in the back of a truck and deliver it to people’s houses, and, yes, that’s true–
Craig Cannon [20:14] – But those were probably negative margins?
Jay Reno [20:15] – Those were negative margins, those were proof of concept, those were… We weren’t optimizing our routes efficiently, we didn’t know how much revenue each product had generated, we didn’t know which product categories were doing well or not doing well, we didn’t have the ability to have route optimization, oh, which I said already actually, there’s just so much that you need to deal with on the back end.
Craig Cannon [20:45] – How much of your stack at this point, several years in, is yours, versus third parties?
Jay Reno [20:53] – Almost all of it is ours.
Craig Cannon [20:54] – Really?
Jay Reno [20:56] – The software that our business needs doesn’t exist off the shelf. Shopify did, as the front end template, this furniture company did to help me get the thing off the ground.
Craig Cannon [21:10] – And does that go all the way down the for instance warehouse, yours, trucks, yours, all the way down? Employees, full-time employees delivering furniture?
Jay Reno [21:19] – Almost all, yes.
Craig Cannon [21:20] – Okay, now how many markets are you in?
Jay Reno [21:23] – We’re in three.
Craig Cannon [21:24] – Okay, so New York, SF, LA?
Jay Reno [21:24] – And LA, yup.
Craig Cannon [21:27] – LA, okay, why not just dominate New York first?
Jay Reno [21:34] – Good question. I think I was, so I got into YC, it was just me with the company. We, I, flew out to San Francisco, we hired our first employee, who stayed in New York, and then I said, “You know what, I’m in San Francisco, there’s a big opportunity to service a lot of the people who are YC, and there’ll be a very good use case for us to test and learn that is just there right off the bat, so why not effectively open that market, with very low overhead?” I did that, you know, it was a, I think it was a good move, ultimately. We learned a whole lot, and it’s a market that does very well for us.
Craig Cannon [22:29] – Well, because like with an operations heavy business, I think you could make an argument for the other side quite easily, right? We scaled too fast, we want to own the whole stack, we fucked up, and like, went to San Francisco, and it was a total mistake. So in terms of learnings for you guys, how similar are these markets?
Jay Reno [22:48] – That’s a great. This was two years ago that I flew to San Francisco with my suitcase to go to YC and had nobody on the ground there, and decided to open that market effectively, with no one on the ground there. Fast-forward to today, two years later, we’ve only launched one more market. To your point, there’s, one, plenty of room to scale within the markets that we’re in, two, it’s a logistically complex business, and we wanted to make sure that we had that honed in in the markets that we were in. We also felt it was really important for us to launch a new market so that we could effectively have a new market playbook that we had been testing and iterating over time and then launching, and so now that we’re in three markets, we launched LA back in May, we have a very healthy playbook for growth.
Craig Cannon [23:46] – Okay, so now you’ve raised a bunch of money. You’ve scaled to a company of a pretty substantial size. For other founders who are doing an operations heavy business, how would you order the employees that you hire?
Jay Reno [24:06] – Depends on who you are and what you are good at, I think is really the first place to start. For me, I know I’m good at selling, I’m good at operations, I’m good at building, I’m good at understanding the customer, and I’m good at product. Early on, we brought on someone onto our team who was a very good balance to me, didn’t know it at the time, but then this person sprouted into becoming the COO of the company quite quickly after bringing them on in a very different role. Knowing that this person was just incredible at the things that I was less than incredible at, it was a very important place for me to put this person. I was also a solo founder, so I wasn’t able to create the perfect founding team with the best, like, all of the things that I don’t have, right? It was just me in the early days. Now, I’ve brought on some amazing and talented people in the early days. Our now CTO who joined me out in San Francisco for the summer, I needed somebody to help build and iterate on the product that I had very terribly put together with my engineer overseas–
Craig Cannon [25:32] – But arguably that’s not the most important part of your business, especially in the early days, right?
Jay Reno [25:37] – I would agree, yeah. But all of the back end infrastructure to power the company was incredibly important. As you start getting to even a moderate level of scale, and complexity in this business, which gets more complex every single month, you need very critical pieces of software in place to make all of that happen.
Craig Cannon [26:00] – Totally, so what else has been, I don’t know how else, but, like, unexpected as you’ve scaled this company? You said you really like product, but now you’re managing all these people. How’s that going?
Jay Reno [26:15] – There’s a balance of having to continue to learn on the job all the things that you were not necessarily good at, or things you didn’t even know at all, to get better at those things, while also leaning into the places that you are most comfortable and do the best work. It’s easier said than done. You’re getting pulled from both ends, so my role now has, it is still somewhat, like, difficult to understand. A lot of what I do is, I’m sort of like the snowplow out in front of a line of cars, getting all of the snow off the road and saying, “Okay, cool, this is a good path, let’s go down this path,” while also having to look back and be like, “All right, let me work with all of our team leads, department leads, to help answer questions, and provide vision based on what I’ve seen out in front.” Two totally different skillsets, but you either have to lean into both of them, and get really good at both of them, and continue doing both of them, or at some point pass the baton onto somebody who can do one or the other more effectively, because you just have an infinite, or I’m sorry, a finite number of hours in the day.
Craig Cannon [27:47] – What I’m most curious about is, how does that make you feel as a founder? Who’s someone who’s like, you’ve worked on startups before, before Feather, like, even on small teams, like hacking stuff together obviously, you hacked the beginnings of Feather together, like, you know, what does it feel like to have this thing that you wanted to exist, like you will it into the world, and then it completely changes in terms of what you actually do day-to-day. What’s that experience been like for you?
Jay Reno [28:15] – I’ve loved every minute of it. I’ve loved the first two years of just grinding, and growing the company, and I think the first couple years of a startup is all about heart, mission, dedication, and grit, and intensity, and once you start to hit product-market fit, you have to, and your company is starting to scale, you really need to start focusing on process, on improvements in the way you lead, improvements in the way you do everything, and, you know, there are more things happening on your team that need addressing. You don’t know what’s going on at the company, so you need to be a bit more structured in how you are meeting with team leads and providing them value, and also giving opinions. And so, yeah, we’re right now at a very interesting shift in that trajectory of the company, where we’re sort of building process for scale, while also, like, shedding all of the heart, the, like, just grit and get it done until it’s done mentality.
Craig Cannon [29:27] – Yeah, kind of that shitty, buggy code that you write in the beginning to get it done, and now it has to be functional and work as well.
Jay Reno [29:33] – Totally, totally.
Craig Cannon [29:35] – Interesting. In terms of scaling the company, management-wise, has any advice, or any learnings you’ve picked up along the way, been completely counterintuitive that you would be willing to share?
Jay Reno [29:50] – At least in the earlier days, it’s really important to focus, sure, to be very focused on a particular thing, and drive towards whatever that goal is. But at the same time, in the early days, you need to be seeding as many opportunities as possible, so that you can hope that one of those 10, 20, 30 seeds you put out into the world, or a few of those 10, 20, 30 seeds you put out into the world, will sprout, and become an opportunity, so for example, when it was just me, prior to getting to Y Combinator, I wanted to, I was mentioning earlier, meet with some people in the industry to get their take on this as an opportunity, and I ended up cold-emailing the CEO of West Elm, as one of the people, he got back to me right away, and was like, “Oh, this is fantastic, I love this, do you want to come in and meet?” And I was like, “Whoa.” Yeah, great, and after two meetings with him, he said, “This is incredible, we’d love to partner with you. I don’t know how many millions in revenue you guys are doing, or how many people you have on your team,” and I was like, “Oh, yeah, yeah, no, we’re great, it’s going real well.” We probably had, you know, 10 orders at the time, but because I planted all of those seeds, it got me into the position where I was able to get feedback from the industry that said, “Yes, this is a good opportunity,” feedback from customers, that said “Yes, this is a good opportunity.” The day I left the West Elm meeting, I said, “Okay, now is the point where I believe that this,”
Jay Reno [31:40] – I had conviction, “I believe this company could exist, should exist, and I really want to pursue this.” I went online, and I looked at applications to various startup accelerators, and the first one I went to was Y Combinator. And as it turns out, the deadline was that day. Not kidding. I took that as a sign to sit down at a cafe, I was actually at a pizza shop, and I was tremendously sick, and fire out an application. But it wasn’t, it wouldn’t have happened if I hadn’t spread a bunch of seeds in different places that could randomly turn into opportunities or luck that I could then grab onto and continue going.
Craig Cannon [32:30] – Just to be specific there, because I think that’s potentially dangerous advice.
Jay Reno [32:35] – It is counterintuitive advice.
Craig Cannon [32:36] – It is counterintuitive advice, but, I just want you to clarify, like, how much energy did you put into planting each of those seeds? Because I know a lot of people, like, half-ass 30 things and do nothing, because they’ve half-assed all that stuff.
Jay Reno [32:50] – You have to be focused on what you’re seeding, so you have to be clear, and understand what the intention is there. They should be very high risk, but high reward, and assume that, like a seed investor for example, you know, only one or two of the 20 will ever even come to fruition, and if they do then, magic. If you seed all of those different things, with some of your time, not all of your time, yup, to be clear, it can produce something very magical in the form of opportunities or luck, whatever you’d call it.
Craig Cannon [33:27] – Well, I think what’s cool about Feather is it’s basically the product you imagined in the beginning. It’s basically, this is it.
Jay Reno [33:34] – With tweaks along the way. Getting to know people, understanding what resonates with them, how to message people, and what they truly care about, but largely, it is very similar to the way we conceived of it nowadays.
Craig Cannon [33:51] – And in terms of interacting with industry in the beginning, I think that’s also counterintuitive. I know a lot of people who would advise you to probably not do that, because they’re going to say no to you. Did you get a lot of nos, or did you, have to learn to tweak your pitch to get them to say yes? How did that process go down?
Jay Reno [34:07] – Just a bunch of non-responses, which is typical.
Craig Cannon [34:09] – Okay, default.
Jay Reno [34:11] – And then, most of the people I talked to really thought it was a great idea, which, you know, you normally hear that, people don’t really get the best ideas, I don’t know where that leaves us. Maybe we’re a terrible idea.
Craig Cannon [34:28] – And where it–
Jay Reno [34:30] – But it seems to be working and people are very happy with it.
Craig Cannon [34:33] – Were you concerned that people were going to try and copy you immediately, like, “Oh, West Elm’s going to grab it,” and do that?
Jay Reno [34:38] – Not at all, no. Understanding the level of complexity of our business, and how different it is from everything that exists in the market, the software needs, the delivery and last mile logistics, needs that you’d need to operate this business at scale, you know, I never felt worried that a big company would copy us. This day no large company has even remotely copied us. Only small upstarts, people who saw us, and decided to do the same things as us.
Craig Cannon [35:13] – Yeah, same deal. Okay, so, it is now August. We are about to have Demo Day next week.
Jay Reno [35:19] – So exciting.
Craig Cannon [35:20] – Yeah, it’s super exciting. You’re going?
Jay Reno [35:24] – I am going, I will be there, I’m flying out in a couple days.
Craig Cannon [35:27] – Nice. For the founders in the batch, I know it’s a tough transition to go from this, really cool group dynamic, tons of pressure, with your peers, a clear goal in sight, they’re going to raise money, most of them. What is your advice to the founders who raise money, it all like, you know, a month from now, Demo Day’s over, and then they’re just kind of on their own. How do you prepare yourself for that?
Jay Reno [35:55] – Totally. I think especially within the first year after YC, you should keep that exact same mentality going, which is, set weekly goals, maybe monthly goals. We set weekly goals, and made sure we stuck to those weekly goals at all costs. That showed growth of the business, that showed that this was a clear opportunity, and if we weren’t hitting our goal, we, as in our CTO and I, would stop what we were doing, and go figure out how we were going to hit our 7% week over week growth goal. Every single week but one in the summer, we hit it. It’d be like, at the expense of building the software, to power the business, but it proved that there was latent demand, and that we were able to go find it. Post-YC, immediately post YC, definitely reset. It’s a little like coming down from a high, I think, where you’re at Demo Day, and there’s so many people there, and they’re all there to see you, and all of your batchmates, and there’s just so much buzz. Then imagine you raise the seed round that you were looking for, and you’re off to the races, maybe you’re in San Francisco, or like us, we flew back to New York, and then there was a calm after the storm. We sat there and we were like, all right, okay, well, the energy is what it is in our office. It’s just us, there’s no longer this nurturing support system around us. We’re in the real world. Coincidentally, I actually gave my graduation speech on this, on entering the real world, and how different it is from being in the support system, and it’s like,
Jay Reno [37:42] – actually the same thing as college, except like a condensed college, like condensed startup college where you’re getting some money, which is the opposite of college. It’s like–
Craig Cannon [37:53] – Way better than college.
Jay Reno [37:54] – Way better, way better than college. Yeah, and that first month was, you feel the blues a little bit, even though you might’ve, you know, we raised three, three and a half million dollars of funding from great investors, and had tons of support. It’s just a little, felt a little slow or quiet. Take that time to just reflect, and reset, and set your strategy for your next six months, year. That’s my best advice.
Craig Cannon [38:23] – That’s awesome. All right, man, thanks so much.
Jay Reno [38:25] – Yeah, you bet. Thanks for having me.
Craig Cannon [38:28] – All right, thanks for listening. As always, you can find the transcript and video at blog.ycombinator.com. If you have a second, it would be awesome to give us a rating and review wherever you find your podcasts. See you next time.
Y Combinator created a new model for funding early stage startups. Twice a year we invest a small amount of money ($150k) in a large number of startups (recently 200). The startups move to Silicon