I too saw your talk at startup school, wish I had the opportunity to speak to you both personally; but I'm glad you all are here answering questions. I found some of the examples given on how to solve the chicken and egg issue very interesting and helpful to the dilemma I'm currently facing with my company. Do you mind sharing additional failed and successful strategies to gain and balance customers within the AptDeco marketplace?
I'm glad you found it helpful. We've tried so many things, I don't know where to start. From flyering, to direct mail, to Craigslist and other sites.
Balancing the chicken and egg is definitely a big challenge. My advice to you is if you can find one side of the market easier to attract then initially focus on that. If you're just starting you'll need to figure out how to get supply (or hack supply). Then spend time on getting demand. Then, repeat.
Thanks for sharing the lessons that you learned and evolution of AptDeco. Great presentation with sound advice. Typically, a VC will go all in one category with one company. That company in this space seemed to be MoveLoot at the time. What did VCs miss in their analysis of AptDeco vs. MoveLoot? And, what do you think the key differences were between AptDeco and MoveLoot?
Great video! I just watched the presentation and it was really insightful. It's always interesting to hear how others solve the chicken and egg problem. It'd be nice to see a resource similar to Founders at Work just for chicken and egg problems and solutions. If anyone knows of something like that that already exists, please let me know!
When growth started coming in quickly, how were you able to distinguish between good and bad opportunities? Such that ones that would result in big revenue growth, but didn't fit your core values?
I wish I could tell you there was a magic formula. The reality is we tried a lot of things, most didn't work and a few worked really well. So we doubled down on the things that worked. Before writing any lines of code or spent money on acquisition we tried to build a "hack" version of an idea to validate it. If we saw that customers were responding to it then we'd start thinking about scaling it.
What advice do you give to startups who are early and are looking to get to profitability as quick as possible (~12 months)? What should they be doing and focusing on?
Look at your expenses very closely especially customer acquisition costs and LTV. Are you acquiring customers who will come back and use again? Will they tell their friends about you? How long before you pay back the money you spent on the customer? If your payback period is quick then you're on the right track.
I think one of the more important things is finding channels that organically help you to scale without having to spend a whole lot of money on acquisition. Hyper focusing on getting referral/organic growth is a great way to get to profitability.
Finally, really think hard about hiring. We grow our team very slowly and it helped us keep our burn relatively low.
kalam and I both have experience building and managing large teams. Also, we both managed pretty significant partnerships. However, we didn't have starup experience perse nor experience in the furniture industry but it so happened that both enjoyed decorating our apartments.
Glad you enjoyed our talk. We still don't know how the van exploded. After months of investigation by our insurance company and van manufacturer, the root cause is still unknown.
saw your talk at Startup School - you guys killed it. One question kept coming to mind... sounds like you're focused on profitability but not hypergrowth (smart). Do your investors ever try to push you to value growth more than profitability?
First and foremost we had to focus on what made sense for our business. Initially we were trying to grow super fast without looking at our bottom line. After a lot of introspection we decided what made sense for our business is to grow (still fast) but focus on getting to profitability - for us this meant we shouldn't be "buying" customers who will use us once and never come back. Healthy, sustainable growth made sense for us.
Ultimately you'll need to partner with investors who align with your vision and that's what we did.
Profitability although good can be deceiving, companies get killed if they don't grow as fast(10x) as the competitors. Should one be careful about being "just" profitable?
It's definitely a balance. Now you don't want to grow slow enough where you're not seeing any growth month over month or year over year. The perception these days is that profitability = slow growth. That's not the case at all. We've continued to grow fast but made it a priority to control expenses in order to be default alive.
There are many ways to become a large company. You only hear about the hyper fast growth with zero concern for the bottomline.
As far as competitors are concerned, you can't control what your competitors do but what you can control is building a business that will stand the test of time. Competitors come and go, so if you pay too much attention to them you'll end up losing focus.
The problem comes when the hyper growth competitor becomes so huge that even your current customers start flocking to those. I do not know the solution to this, perhaps this is rare.
But the hyper growth company also have a risk of dying because of no funds.
