by Y Combinator12/8/2017
Bulletin is a platform that allows brands to share the cost of a physical store.
They currently have three locations – Flatiron, Nolita, and Williamsburg – and there are more to come.
Ali and Alana went through YC Fellowship and then the winter 2017 batch.
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 Ali Kriegsman and Alana Branston. They’re the founders of Bulletin, which is a platform that allows brands to share the cost of a physical store. They currently have two locations, one in SoHo and the other in Williamsburg, and there are more coming. Ali and Alana went through the YC Fellowship program and then they later went through the Winter 2017 batch of YC. We ended up meeting up in New York to talk about what they’re working on. Alright, here we go. There were a bunch of questions about you guys pre-YC, and I think maybe the easiest way to do this is flow through from there. Before you guys were in YC, and then Fellowship, and then Core, and then now. Going all the way back, Phil Thomas asked, what did you learn from the Fellowship that you applied during the main YC Core program?
Alana Branston [00:53] – We did the Fellowship in winter of 2016, when Kevin Hale was running it. For us, YC Fellowship was all about figuring out product market fit, and figuring out what we were, because we didn’t know. When we got in, we were basically, the concept was this cooler, curated Etsy. Everything was online, we would find these cool, emerging brands, sell their product online, and have a content element to it. It wasn’t really working, we had some brands selling with us but there were clear problems, and so I feel like the Fellowship for us was about acknowledging this wasn’t working.
Ali Kriegsman [01:34] – Kevin actually force feeding us with the facts.
Craig Cannon [01:36] – Kevin’s good for that.
Alana Branston [01:38] – Yeah, he really is. Acknowledging that it wasn’t working, and then it’s almost kind of gave us permission to just totally tear that down and try a million other things. I think before we got into YC, it just got into that whole mentality, we were like, this is our company, and this is what we’re doing, and we’re going to just keep doing this until it works. And I feel like Kevin and the program in general basically allowed us to be like, okay, this isn’t working, let’s try literally 15 other concepts and see, and get something with some momentum, and go with that. And so I feel we basically used, I think it was two months, that program, and we just ran experiments every week. We’re like, “Okay what if we…” So most of them were ridiculous.
Craig Cannon [02:20] – What was the worst one.
Alana Branston [02:21] – Okay, there are so many bad ones.
Ali Kriegsman [02:24] – The worst one was, we were selling all this like, beautiful dishware, and it was all handmade, like emerging brands.
Alana Branston [02:34] – On our site.
Ali Kriegsman [02:35] – And Kevin was like, why don’t you go to restaurants, and see if they need help designing their stores, and if they need a programmatic interior design solution or a way to replenish forks and knives and stuff. We spent the entire day, the two of us, bopping around to different Brooklyn restaurants, and being like, “How do you find your mugs?”
Alana Branston [03:04] – This was like a business where they have like razor-thin margins. And we’re like, what do you think about, like, if everything was handmade and way more expensive and probably breaks more often. And they were like, no, we would never use this.
Ali Kriegsman [03:14] – Yeah, and we also knew nothing about the restaurant industry, and there are programs that they, some guy pulled out his phone and was like, here’s an app where I can order 800 limes on demand if I need it. This has been figured out already. And we’re like, “Okay, thanks bye.”
Alana Branston [03:31] – We’re not going to do this.
Craig Cannon [03:31] – We’re not going to do this.
Ali Kriegsman [03:33] – Yeah, yeah, so that was definitely the worst one, and the funniest one.
Craig Cannon [03:38] – Funny. And then, by the time you started working on your product as it is now, that was before YC Core, right?
Ali Kriegsman [03:45] – Yes.
Craig Cannon [03:46] – That’s what you applied with.
Ali Kriegsman [03:47] – Well there was a whole chunk of time after YC Fellowship where we had realized that this editorial magazine model wasn’t working. We, in the spirit of YC, asked our users, so we asked all of the brands that sold on our platform what they wanted, and it turned out that they actually needed more help selling offline than they did selling online. They weren’t really looking for another multi-vendor online marketplace or another Etsy, or anything of that nature. A lot of them made boatloads of money doing craft fairs, and selling in retail environments, or doing pop-ups, or markets. And so what we did is we listened to that and said, okay, what if we basically just started doing this? As many times as we can, as frequently as we can, as inexpensively as we can, just to see if there’s a there there. I’ll let Alana take over how we found out 18,000 square foot parking lot, but we basically, we ran outdoor pop-ups, pitched tents, in rain or shine, in this almost 20,000 square foot parking lot in Williamsburg for six consecutive months.
Alana Branston [05:03] – Yeah, it was the worst. We, the idea was that, we wanted to test this concept without spending a lot of money. It’s kind of what we did from the beginning, and so we were just looking for the cheapest possible space to run these things. And it works the same way it works now. The brands they pay a weekend fee, they come up, they’d come up in person and sell their product. And so we looked everywhere, and the first place we ran it was at a bar, there was a bar with a big courtyard. And so these brands, we had like 40 brands a weekend, on a good weekend, and they’d pay like about $300 a weekend, and that would give them a table and a chair that we provided, it was very luxury, and they would basically come and set up their product like a little booth, and we would just like run a market for Saturday and Sunday. Our weekends, it was, this was all we would do. And so we did it at this courtyard, and then we wanted a bigger space, and so I found this massive…
Ali Kriegsman [05:57] – Overgrown!
Alana Branston [05:58] – it looked like a toxic wasteland parking lot. It was totally overgrown.
Ali Kriegsman [05:58] – It’s like this asphalt parking lot sitting on top of a swamp.
Craig Cannon [06:09] – Oh, perfect.
Alana Branston [06:10] – It’s like, primo.
Ali Kriegsman [06:11] – It’s like, you cannot develop on this property.
Alana Branston [06:13] – Yeah.
Craig Cannon [06:13] – Oh god, okay.
Alana Branston [06:15] – But it was a very good location, it was in Williamsburg in Brooklyn.
Ali Kriegsman [06:17] – Right off the subway stop.
Alana Branston [06:19] – And so we just called the phone number on the parking lot gate, and so they, we made a deal with them, we got it for super cheap where we could use it every weekend. We ran it from April of 2016 until the end of October that year. And it was a total nightmare, because we were outdoors, it would rain, or it would be the middle of July in New York City and like…
Ali Kriegsman [06:42] – Brands would just text us and be like it’s 100 degrees, we’re not coming.
Craig Cannon [06:47] – Oh, really?
Alana Branston [06:49] – Just because it would be so hot and it would be like, to stand outside it’s probably like, inhumane. It was crazy.
Ali Kriegsman [06:55] – There were a few weekends that were inhumane.
Alana Branston [06:57] – But, the good thing was that we were starting to actually make money, and the brands were making money, and we were starting to prove out the model, and we could say like, okay, we now know, like we’ve proven, that brands want to sell in person, they’ll pay to sell in person, there’s definitely this lack of easy-to-access physical space. And yeah, I feel like we were able to prove that that summer.
Craig Cannon [07:21] – Okay. And then at what point do you decide like all right, let’s do YC?
Alana Branston [07:26] – At the end of October we were like, this is crazy, we can’t do these markets anymore. And so we started, we were like what would be a more long- term solution? And so we started looking at actual, physical retail spaces, like a normal, with an inside.
Craig Cannon [07:42] – Not swamps.
Ali Kriegsman [07:43] – No swamps.
Alana Branston [07:45] – And so we found store, which we still have now, it’s a great store in Williamsburg, and we basically moved the same model, this membership-based model to the store. The brands would pay this monthly fee, they’d get access to space, but the store was totally run by us, so they didn’t have to show up. It allowed us to work with larger brands. And so we really felt like that model was working even better, like we were onto something bigger, like this isn’t just going to be another market
Ali Kriegsman [08:14] – We booked it out in less than two weeks.
Alana Branston [08:17] – It was crazy, yeah.
Ali Kriegsman [08:18] – We had, I want to say like 35 brands paying the membership fee within 12 days of announcing that the store was going to open.
Craig Cannon [08:25] – Wow, and so these are all people that were doing the parking lot version?
Alana Branston [08:28] – Some of them were, and then some of them were brands–
Ali Kriegsman [08:30] – A lot of the parking lot people were like, peace, we’ll never see you again.
Alana Branston [08:36] – No, some of them were from the parking lot.
Ali Kriegsman [08:38] – Yeah, yeah, there were a lot of, honestly, I do want to call out, there are a lot of friends that have stuck with us from the very beginning, which is amazing.
Craig Cannon [08:44] – That’s cool.
Ali Kriegsman [08:45] – Yeah, yeah. But mostly it was new brands.
Alana Branston [08:49] – Mostly new brands. Because it was kind of open the door to other types of slightly larger brands that maybe wouldn’t sell in a parking lot all weekend, but they’re not carried in Sephora all over the world yet.
Craig Cannon [08:58] – Okay, to put a finer point on that, Brian Chapel asked, how did you actually find your first customers? You filled it quickly, but how did they even find out about you?
Ali Kriegsman [09:08] – To answer that, I’d say, when we launched the digital, shoppable magazine version of Bulletin, we would just reach out to brands that we loved, and be like, “Can we do a profile on you, and a long interview and original photography, and make this beautiful page for you?” And they’d be like, yes. We would do that, they would see zero sales on our website, but…
Alana Branston [09:31] – It was so pretty, though.
Ali Kriegsman [09:32] – It was a really, no one had anything to lose in this situation. And so just through maintaining those relationships, and then eventually moving into the market model, we reached out to those brands that had been on the editorial site, they said, “Oh, I know these two girls that I worked with on this previous iteration of the company, would recommend other brands to do the parking lot.” And it was, honestly, always had a great referral number. I think that that was how, and I think with opening the store, it was basically tapping the network of brands that had been doing the pop-up, and then creating a nice little email and sending that to brands on other e-commerce sites that we thought might want to sell in person. We obviously looked at New York Now, Renegade, other sites that did this IRL sales thing that we were trying, and just always had very, I would say very successful outreach with potential customers, and I think we still do.
Craig Cannon [10:36] – What was your strategy around pricing? How did you figure that out, once you opened the store?
Ali Kriegsman [10:42] – As far as the membership fee and everything?
Alana Branston [10:44] – Yeah, I think we had an idea of what brands were willing to pay from the markets. We could look at existing market and say, okay, this one is a massive one and they were charging $1,000 a weekend and so we started very low. We had an idea of what they would pay from that, and then move that over to the store. But even now, we keep that number very accessible for brands. We like the idea of brands that are emerging to be able to partake in this. And you get a wider range of brands that would sell in the space, which is kind of cool.
Craig Cannon [11:21] – Okay. What kind of scale are we talking about? Do you even know the annual revenue numbers of a lot of these brands?
Alana Branston [11:29] – I would say on the smaller end, you have brands that have literally just started, like they maybe sell their products on Instagram, and they couldn’t even tell you what the number is revenue-wise, which I think is kind of cool to have a certain percentage of the products in the store be this very homespun vibe. But there’s, I mean we have brands that sell on Sephora, we have brands that are big brands that are doing, I wouldn’t say big brands, but maybe they’re doing like $10 million a year in revenue. They’re still out there building their brand, but they have manufacturing figured out, and distribution, and just a much more established brand.
Craig Cannon [12:03] – Okay, got you. Adora had a question for you about store–
Alana Branston [12:07] – Hi Adora.
Craig Cannon [12:08] – Yeah, was she one of your group partners?
Ali Kriegsman [12:10] – She was. For Fellowship and Core.
Alana Branston [12:12] – Yeah, we love Adora. She’s been there from the beginning.
Craig Cannon [12:16] – OG. She asked you about a couple things, but one of which was store expansion. So for you guys, how do you think about opening up new spaces? How do you find them? Do you think it will work in every city? What are your thoughts?
Alana Branston [12:32] – Yeah, for us, so we started in New York City obviously, we have two stores here. We’ll be doing one more store in about a month. We’ll have three stores for 2017. It’s tempting to want to do this very quickly, we have so much demand from these brands that want to get into spaces. It is expensive to open a store, there’s real cost behind all of this, obviously. Definitely trying to be careful there. But I think, now that we have these two successful stores, we’ll have the third opening soon, it’s gets easier for us to look at the data to understand what’s performing, what products are performing, what neighborhoods work best for us. And I feel like, even now, we have such a good idea of what a successful store looks like, as far as square footage, as far as location, the types of neighborhoods. We’re getting smarter about it, and I think as the company grows, it’s easier for us to actually look at things like customer data, to understand what the next city is. We have our online business still, understanding where those customers are from helps us decide, “Okay, maybe LA’s the next place that we’re going,” and yeah, just be smarter about it and not go crazy.
Ali Kriegsman [13:44] – Yeah. I will say, when it comes to how we pick actual stores and the availability of stores, real estate is in crisis right now, in particular retail real estate. You can speak more to it, but we don’t really have a dearth of real estate people, reaching out to us to have us help them make their spaces successful, which is really exciting, that both ends of the marketplace when it comes to having a wait list in Williamsburg and in Nolita for our two stores, and then also having this pool of real estate folks that want us to open Bulletin spaces for them and with them, it’s really exciting.
Craig Cannon [14:33] – Okay, can you contextualize that for people? Because I don’t think it’s totally obvious. Maybe it was in Carroll Gardens where there’s just strips, on main drags, of stores just vacant. How did that happen and how are you guys making money off of that opportunity?
Alana Branston [14:54] – It’s good for our business but everything started to change a little bit as people’s shopping behavior has changed. Amazon definitely plays a role in it, I don’t think it’s the entire reason that everything has changed so much. People have less of a reason to go to the store for their normal, utility kind of purchase, and so I think those traditional retail stores do get hit because of that. And then for us, it does turn into an opportunity because I think all of these property owners or brokers they’ll cut deals with us that we would have never gotten nine months ago. If we want to do a short-term license agreement, and test out a location, and do it at a discount with the option to renew, there’s just so much that we can do now because of what’s happening.
Craig Cannon [15:45] – What’s happening, meaning a single store is just way too expensive?
Ali Kriegsman [15:49] – Yeah, there’s basically a mismatch between the cost of real estate and how much it traditionally costs a brand to take on a lease. Also restrictions around how long that lease should be. Brokers and property owners want five to 10 year leases. They want long-term leases. But for brands, you can see by all of the hundred and hundreds of brick-and-mortar, thousands of brick-and-mortar stores belonging to big brands that have closed this year alone, that they’re not, the store is not their profit center anymore. It just, it sheerly does not make sense to throw tens and tens of thousands of dollars behind a lease every month, and do build out, and staff and maintain it, when, who’s to say that that will actually yield crazy revenue for them.
Craig Cannon [16:42] – It’s non-obvious if you live in a big city. Because you’re like, “What are you talking about? All these stores are opening up everywhere.” And in reality, most of them aren’t even making money, they just look cool to be in SoHo.
Ali Kriegsman [16:53] – Well there’s been a crazy spike this year, I just read a report, in how many stores are opening. There are a lot of brick-and-mortar stores opening, but I think that’s only possible because real estate players are realizing that the terms that they’ve set for their inventory to date is just not going to fly anymore.
Alana Branston [17:14] – A lot of it comes down to what brands are using the stores for now, I think, is what has really changed. Rather than it being an old-school retail brand signing a 10-year lease, and being like, “We want our customers to come here and buy product,” you see a lot of these newer players and direct-to-consumer startups that are using it as more of a marketing channel, or as a way to interact in person with this massive digital audience that they’ve grown. And so, in those scenarios it doesn’t make sense for them to sign a 10-year lease. That doesn’t, if you are comparing it to a Facebook ad or some other kind of marketing, you wouldn’t buy a 10-year Facebook ad or something. It makes more sense for it to be targeted and short-term, and something that is experiential and more on the marketing side than your major profit center.
Ali Kriegsman [18:03] – But real estate hasn’t caught up to that yet.
Alana Branston [18:08] – Weird time.
Craig Cannon [18:09] – Are they catching up to you? Are you guys this arbitrage right now, until the market changes, or is this always going to be an opportunity?
Alana Branston [18:18] – You’ll see a lot of these direct-to-consumer startups, especially the ones that have been around longer, and you already see people like Warby doing this, where they have more traditional, longer term leases, and I think that totally makes sense for them. But I think you’ll see a mix of both. It’s nice for the customer to have this kind of influx of rotating stores and experiences, but I think for the smart direct-to-consumer startups that nail the experience and nail the purpose of their store, you can move into a long-term lease. And that’s actually what we’re starting to do with our business. We started off with these six-month license agreements where we would test out a space, and in our Williamsburg store and our Nolita store, it works well for us, we kind of nailed the experience, and now we’ve moved to long term leases there.
Craig Cannon [19:09] – Wow, okay.
Alana Branston [19:10] – And so we have much more reliable supply or we can book out brands months in advance and not be shuffling all over New York, which is not…
Ali Kriegsman [19:20] – Pack your bags, we’re going to Carroll Gardens.
Craig Cannon [19:24] – Exactly, we don’t want to be there, too bad.
Ali Kriegsman [19:26] – Yeah.
Craig Cannon [19:27] – Did you guys have to get fancy with your fundraising? Because this is kind of non-traditional, right, having all these leases and stuff. Is it different than a normal startup raising money?
Alana Branston [19:38] – For this state it didn’t seem to be too different. We definitely ran into a lot of questions about like, is this a physical thing, a real estate thing, there’s a lot of questions obviously, but I think we had enough traction and data to show that okay, the unit economics of this shared retail space works, and that it is very scalable because of the membership model. Anytime you’re dealing with real estate or anything physical…
Ali Kriegsman [20:08] – WeWork definitely paved the way. WeWork, with their coworking model, granted they’re light years ahead of where we are and it will take some time to get there, but given how well they’re doing and their valuation and just, how prolific they are and how many spaces they open up it’s like, oh, okay, physical space isn’t necessarily the scary devil, end-all, it’s not going to kill us. Luckily we had them as our roadmap.
Craig Cannon [20:43] – Speaking of killing, Adora asks why don’t old department stores just die off?
Ali Kriegsman [20:50] – Many reasons. It’s a few different things and Alana kind of touched on this, the way that the internet has changed how we shop. The internet will win at a series of things that stores will always fail at. With the internet, you can get anything you need immediately. There’s a wide selection, you can toggle for specific price and specific location, a certain delivery date. With department stores, that’s what they still do. When you walk into a department store, it’s just like a massive empty space with a ton of different product categories, it’s not tailored to a specific customer, there’s no experiential or discovery element, and it all seems kind of ad hoc. There’s kitchenware with maternity clothes with baby clothes with fancy handbags and makeup.
Alana Branston [21:42] – Just like this never ending…
Ali Kriegsman [21:43] – Yeah.
Alana Branston [21:44] – selection.
Ali Kriegsman [21:45] – If I wanted to explore product like that, like if that’s where my head’s at, I’m just going to go on Amazon or I’ll go on the internet or I’ll go on Bloomingdales dot com. I’m not going to physically show up. Department stores have failed because the things that they’re good at are the things that the internet is good at, and the internet will just always win because it’s right at your fingertips. The other thing that department stores aren’t good at is just product selection and replenishing the store with fresh new product. They can’t be super reactive, often times they’re buying a ton of product upfront, they’re doing crazy flash sales to offload products so that they can make way for new product, but that just seems to cheapen the entire department store experience. They’re just kind of stuck in this weird middle ground where the things that they’re doing to try to improve are actually hurting them, in a lot of instances. I don’t know if you’d add anything to that.
Alana Branston [22:43] – In a lot of cases, too, they have these massive footprints, and these stores have been around for a long time, so it’s no easy task to be like, “Oh let’s just renovate hundreds of stores across the country that are massive.” They’re in a very difficult position.
Ali Kriegsman [22:59] – Innovating is not easy.
Alana Branston [23:01] – Yeah.
Ali Kriegsman [23:02] – For them.
Alana Branston [23:03] – And we obviously at an advantage, I mean like very new and having two small stores but, I think for us, we’re able to see like, “Okay, we know that we can compete with Amazon and the internet with experience,” and with these stores that are experience-driven and that are built around a certain community, and being able to start from that point and build from there makes it a lot easier for us to do that. There’s the one advantage.
Craig Cannon [23:27] – It’s heavily curated, right. You’re definitely picking people, picking vendors rather. So how are you deciding what goes into stores? Mike Mahlkow, I’m mispronounce everyone’s name, and I say it on every podcast. It’s okay, how do you know what users want at these stores?
Ali Kriegsman [23:46] – Honestly, it’s a ton of data feeding into our selection process. We look at Instagram, we look at the posts that are performing well, not only on our Instagram but what is going on in the zeitgeist of Instagram right now. What is our customer looking at, what is she liking, what is she engaging with.
Craig Cannon [24:06] – Even just there, so you’ve segmented to female buyers.
Ali Kriegsman [24:10] – At this point in time, yes, for both of our stores. We obviously look at sales, like we, this successful store didn’t crop out of nowhere. As we’ve told you we’ve had markets that sold product. We had this initial version of the store before we turned it into this editorial theme that sold product. We have three years of data around things that have definitely not performed well, and then the things that have, have done pretty well. That information has been really helpful. And then, Maggie, who I mentioned earlier, basically goes through all that data and looks through the brands that are applying to sell with us, and she says, “Okay, this brand is great, but these are the five products that will perform best.” Or, we’re really low in this product category, I think it should be this aesthetic over this one, because last month, this crafty look didn’t do well across five different product categories. There is a lot of data being feed into the decisions, but we always have our own human touch on what we think, in ways we are our customer, so it’s like, not like what do we like, but we, you know, it’s a little bit of our taste thrown in there.
Craig Cannon [25:21] – Was there something that you both loved and didn’t do well at all?
Alana Branston [25:25] – A product?
Craig Cannon [25:25] – Yeah.
Ali Kriegsman [25:26] – I’m sure.
Alana Branston [25:29] – Oh yes, I can think of something. I was in LA for a period of time in 2015, during our editorial version of Bulletin, and there’s this amazing, amazing designer, his name is Andrew Haan, first name Andrew, spelled normal, Haan, spelled H-A-A-N. He does these insane, beautiful, hand-drawn geometric prints on graph paper. And I did this whole photo shoot with him, this long interview, he’s like the kindest, mostly lovely, unbelievable man in the universe. And we put his work in our Williamsburg store, and I think he sold, and granted they’re expensive, they take a lot of time, they’re around like $125 to $250 depending on the print. And he sold two, and that was that. And that was just kind of us loving him and loving, knowing how much labor went into these prints, and how detailed they were, and we thought they were absolutely stunning, and they just didn’t, they didn’t perform well.
Craig Cannon [26:40] – But has art performed will in the past?
Ali Kriegsman [26:42] – Prints do well, yeah.
Alana Branston [26:43] – I think what we learned with both of the stores and just in general, is these, the lower price point products work for us. And so we’ve kind of made the entire vibe of the store this very accessible price point.
Craig Cannon [26:57] – Like less than a hundred bucks, type stuff?
Ali Kriegsman [26:59] – Yeah, like our average order value right now is $40, and it adds to the experience of it, where like anyone that walks in can buy something, it’s not this exclusive, inaccessible place where you’re just looking around and being like cool, I literally can’t do anything in there. And so yeah, it kind of like puts a smile on everyone’s face.
Alana Branston [27:18] – Yeah, and knowing who are customer is and what her disposable income looks like based on her information I don’t think there’s a world in which at this point we’d ever create a store like that because that’s just not, she can’t shop with us if we do that.
Craig Cannon [27:33] – That’s funny. Going back to applying to YC. Both of you are non-technical, is that accurate?
Ali Kriegsman [27:38] – Yes.
Craig Cannon [27:40] – Okay. What is your advice, so Deepak asks what is your advice for non-technical founders applying to YC?
Ali Kriegsman [27:47] – I would say, I mean for us, we applied three times. We applied for Fellowship, we applied a middle time where we didn’t get in because we had just pivoted to the market thing, and then we applied the third time and we finally got in. But, I think to be able, to one, be persistent, and keep applying, but I think, for us, we were able to show a lot of traction every six months when we were applying. Even when we started, Ali and I were still working at our old job, but we had built all this stuff and built this whole editorial site. The second time we applied, we had this whole new model, and we had revenue, and it was, yes, we had just pivoted, but we had done a lot in a short period of time. And then I think the third time, the big difference was we had a ton of traction, we had been working on it for over a year, and I think we were finally able to make the argument that this is very scalable. And then, for the non-technical side, to be able to really explain and explain confidently that we didn’t actually need that at this stage of the business.
Alana Branston [28:52] – Obviously, most YC companies have a technical co-founder, and that’s a massive part of their business. I think for us, at that stage, we were really able to explain why we weren’t really at the stage just yet where we needed it, and we were approaching the stage where we were going to need it. And now we have a bunch of remote developers that are racing, kind of building everything for us. Yeah, I think we were just really able to show that for this stage of the business, we’re okay without a technical co-founder.
Craig Cannon [29:25] – Same advice for you, Ali?
Ali Kriegsman [29:27] – Yeah, I would say the same thing. I think definitely speaking confidently to why you don’t need that person. Something that we always really emphasized was that we were cobbling together pre-existing platforms that did what we needed at the time. For us, we’re focused on building a profitable business, and why should we spend time building a technology when we don’t even know what it needs to look like yet. We clearly, from telling you our story, we had no idea what we were building! And thank God we didn’t build anything, because it would’ve taken a ton of time and a ton of money, and Alana and I both, from the get go, were like, “We want to create something that from day one someone is handing us money to give to them.” We want to create a service, we want to create a product that we know people need from the start, and then refine the service and the product around that customer. Now, we’re building this platform after learning for the past two years what tech do we need to do retail as a service in this way? How will our customers work with us, more easily and more efficiently through this technology? What do the elements actually have to be? I guess the advice I’d give would be, I mean if you’re building a very, if you’re building software, get a technical co-founder. It’s really important to have someone by your side to go through the ups and downs. And if the product is going to be tech from the start, I don’t really know why you would outsource that. But otherwise, if you’re doing something unconventional
Ali Kriegsman [31:02] – like us, we were doing a retail real estate business, you know, just really going there, ready to explain why the tech isn’t necessarily first and foremost right now.
Alana Branston [31:16] – And I think we’d, like, by showing everything that we had cobbled together was kind of impressive on its own. We were like, well we have Squarespace doing this, and we have Shopify doing these, and there were like six different existing platforms that were really doing the job. Our biggest bottleneck was figuring out all these things about the business, about the next space in real estate. Technology wasn’t holding us back in any way, so I think proving that helped.
Craig Cannon [31:40] – That’s a really great piece of advice. Something that people, even on the technical side should consider. Because so often they’re like, whoa, should this be in Ruby or Python, and how much machine learning do I need before I apply to YC. And for the most part, no one is using their product. No one really cares.
Alana Branston [31:55] – Yeah you just need to get it out there, and see how people would use it. Yeah if we had spent a ton of money building some beautiful editorial platform and we’d be out of business, we would have run out of money already.
Craig Cannon [32:07] – This is the easiest way to find silverware for your restaurant. That’s so good. Do you remember what the actual numbers are? This is such a common question I figured I’d ask. What did your growth look like before YC, when you applied successfully?
Alana Branston [32:24] – Before we applied successfully?
Ali Kriegsman [32:25] – So like a year ago.
Craig Cannon [32:26] – Yeah.
Alana Branston [32:27] – This would have been October of last year. Our growth numbers were great then, because that’s when we started to do the markets every single weekend, and then we had just launched the store, so that summer our numbers, our revenue was like doubling every month, because we had more and more markets coming up, and all of those were fully booked out, and then we had just launched the store, so we had six months of space to book out for that and all of that’s prepaid, so our numbers looked really good because of that.
Craig Cannon [32:58] – Okay. Just kind of tangentially, do you guys have counterintuitive opinions about retail, that you, like, you think the market’s changing in a way that most people don’t?
Ali Kriegsman [33:11] – Everything swings like a pendulum. I don’t know, I think about the store that we’re opening for holiday for example, and the entire ethos of the store is like bring back the nostalgia of going with your girlfriends or your family to the mall and like…-
Alana Branston [33:30] – Getting these mall vibes.
Ali Kriegsman [33:31] – Walking out with a ton of shopping bags on your arm and piling it into the trunk, and I feel like, with so many things going on right now, with the state of our country and how the internet and like all of this attention being on the internet and all this time being spent on the internet has just kind of reached a tipping point where I feel like people are looking and being like, hmm, I don’t know if I want to be staring at my computer all day, or staring at my phone all day, or in this internet world twenty-four seven. I feel like there is going to be a pendulum shift away from this and toward interaction and being in person and connecting face-to-face, and so I don’t know when that’s going to happen, obviously these things happen in decade-long chunks. I hope it comes soon, and I think that that definitely informs how we approach retail and how we approach building our stores. In our holiday store, there’s going to be a lounge area, an activation area, where people can explicitly do events and do workshops, and do things where there’s community building and actual human interaction. I don’t know if that’s necessarily counter-intuitive, but I feel like a lot of people are figuring out, trying to figure out, like, “How do we make Instagram more shoppable? Or how do we make our newsletters more shoppable? Or how do we do this?” My greatest joy in life is walking by our Nolita store on an odd hour, on Tuesday at 3 pm maybe, and seeing that it’s packed. And being like, wow, there are like, we’re not wrong
Ali Kriegsman [35:03] – and there are women that actually want to physically show up in a store and they, the customers communicate with each other, and they all, I always get DMs on the Bulletin Instagram about how much they love our retail staff. It warms my heart, and it just makes me confident that this could be the direction retail is going in, and if so, we’re on the cusp of it.
Alana Branston [35:23] – I totally agree with that. You also see a lot of trends in in-store retail design right now, where people are getting magic mirrors, and these crazy screens in the store, and you can connect your online account, just all this technology in the store.
Ali Kriegsman [35:39] – Connect your online account
Alana Branston [35:40] – No literally you can, it’s cool in theory.
Ali Kriegsman [35:41] – No I know, I know, I know.
Alana Branston [35:43] – But, I think that’s something that we really shied away from. We really like the store to feel like this in person experience, and it’s not about kind of going back to the internet or somehow having a screen in your face again. I don’t know necessarily if that would be counterintuitive for us, to approach the store design in this new way where it is about the community in the store and about the experience in the store, and not about another screen.
Craig Cannon [36:13] – Yeah, is there a future of your store without any employees?
Alana Branston [36:17] – I don’t think so. I think that’s, for us, it’s such a big part of the experience. I think there’s some technology that we are thinking about that will ease the checkout process, where the point of the employee being there isn’t to ring them up, which is part of what they do now, so I’d like to free them up even more where they can just spend more time interacting with the customer. But yeah, I think the in-store team is such a huge part of the experience and makes up probably 50% of the positive feedback we get. We still need humans, I’m sorry.
Craig Cannon [36:49] – Unfortunately. Alright, cool. If you weren’t working on Bulletin right now, what would you work on? You could work on it together.
Ali Kriegsman [37:00] – Okay, would we have gone through Bulletin or would it just be like Bulletin never happened?
Craig Cannon [37:07] – Oh alright, alternate reality? No, so, today.
Ali Kriegsman [37:11] – Okay so literally today.
Craig Cannon [37:11] – Shit goes crazy somehow.
Alana Branston [37:12] – If Bulletin ended somehow.
Craig Cannon [37:14] – And it well, it’s still going on. Say you can’t restart it, you have to do something else.
Alana Branston [37:19] – Okay, okay. I don’t want to speak for you, but I feel like we’re both at a place where I don’t see us ever going back to a normal job, or like working for someone else again. I don’t know what I would do though. I feel like this is just, it’d be so sad if we couldn’t do it or I just haven’t thought about anything else in so long
Ali Kriegsman [37:41] – Lock her in an insane asylum.
Alana Branston [37:45] – For me, the most fun part about what we do is the store design and bringing life to these weird, old, New York stores. As weird as that sounds. Something with that, I could be happy doing. Maybe yeah, just designing other stores, so basically Bulletin, I don’t know.
Ali Kriegsman [38:08] – I would definitely be writing. I write a lot for Bulletin, across our email and our social, and the editorial site that we once had. It comes very naturally to me, and it’s one of those feelings, I know coders get this way when they code, it makes me high when I’m writing something. I don’t know, maybe I’d write a book or become a tech journalist, or, I don’t know, work for a good cause like a non-profit of some kind and handle their communications. That would be really fun.
Craig Cannon [38:44] – What was the most meaningful thing you learned in YC?
Alana Branston [38:49] – Do you have something?
Ali Kriegsman [38:50] – You go first.
Alana Branston [38:51] – I was going to say, I would say working, so Michael Seibel was our group partner, and I just feel like he was always so good about getting us to focus on the one thing that we should be focusing on. And so part of that was just him being brilliant and picking the thing we should be working on, but I think getting into that mindset of really, really identifying what your actual one issue is, and not worry, like, I don’t know, like YC is crazy, busy time and there’s so many things to be worrying about, like as it always is when you’re running a company, and I think just always going back to that and being like what is the one thing that you need to be working on and solving and the thing that can actually affect your business, and not getting bogged down with the millions of other things you could possibly be doing, and he’s so good about just, in his very soothing voice, getting you to focus on that one issue.
Ali Kriegsman [39:49] – Something that we learned in both YC Fellowship and YC Core, in both instances,we were working in isolation. During YC Fellowship we didn’t have a team, and then during YC Core our team was mostly based here, and we would go back and forth, but work together in San Francisco. I definitely learned, especially since it was such a pivotal time for us, and we were growing, and figuring out what the one this was. The ability to listen. I think in group office hours, just the way that that’s structured where you literally go around the room and listen to every single founder talk about the problems that they’re facing. You give suggestions if you have any stake in what they’re doing and if you have any expertise of ways that you can help, and I think just listening to each other. When you’re together all the time in that very pressure cooker environment, you have to make very quick decisions, you have demo day coming up, what are you going to present, what business are you building, what is going to be the thing that helps investors understand that this is the future, and they really shouldn’t be missing out on this opportunity. It was one of the best times of us bouncing ideas off of each other, and just, amongst a group of really intelligent people that were doing such different things. It made me a much stronger listener overall.
Alana Branston [41:16] – It’s such an interesting experience thinking back where you, I don’t know, it’s like the one time where everything else in your life really stops completely.
Ali Kriegsman [41:25] – It’s muted.
Craig Cannon [41:26] – Yeah.
Alana Branston [41:27] – It’s so crazy. It always feels that way in a sense when you’re running a company, but I think this was like the one time when we moved out of New York, moved out of our apartments and everything, and yeah, it’s just such an interesting experiment to go through, where it’s like what happens when I literally don’t do anything else, and when I’m living in a studio, like a 500 square foot studio with my co-founder, eating every meal together, and it’s just all you do, and all you think about. That level of intensity is just, really cool to do that. And I think coming back here and kind of like returning to normal life, that obviously stuck with us, but, I don’t know it was just like a cool thing to go through.
Ali Kriegsman [42:07] – Also, pick a good co-founder. Because if you end up doing YC, and even if not, like you’re stuck for a while.
Craig Cannon [42:16] – Well, seems like it’s going okay still.
Ali Kriegsman [42:18] – Yeah, yeah. No, I feel very lucky.
Alana Branston [42:21] – Me too.
Craig Cannon [42:22] – Alright cool. Thanks guys.
Ali Kriegsman [42:25] – Thank you.
Alana Branston [42:25] – Thank you.
Craig Cannon [42:27] – Alright, thanks for listening. As always, the video and transcript are at blog.ycombinator.com. If you have a second please subscribe and review the show. Alright, see you next week.
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