Category : Entrepreneurship

Entrepreneurship

How to Rapidly Scale Your Marketplace With Bribery and More

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At Gymsurfing, we were huge fans of Paul Graham’s do things that don’t scale” essay. The lesson is, in short: when you are a young startup, you will have to do things that you could not reproduce on a larger level, namely: personally recruiting customers, or building features by request. As we were building a two-sided marketplace that involved small-to-medium-sized businesses (SMBs), we also faced the common challenge of how to scale supply before demand, which should honestly be your primary focus as an early-stage marketplace startup.

I am routinely contacted by fledgling fitness apps who have the same basic question: “How did you grow to 200 gyms in 5 months? Most of them won’t return my calls.” We had this problem, too. We built our product, did a great job, and hit the phones, hard. The cheapest thing was my time, I thought, and my only real limit is how many phone calls I could make in a single day, or how many gyms I could visit. Without other gyms on the platform for social proof, however, nobody wanted to say yes, and managers would also frequently block me from meeting with the owners. We overcame this, though, and here’s how.

Step 1: Bribe The Manager

One of the many jobs of a manager at a gym is to prevent you from pitching the owner on random fitness services and equipment. Fortunately, most of these people do not make much more than the average salesperson at a gym, and would like to eat steak for dinner once in a while. Give them money, straight up. This will get you a meeting with the owner.

There are two ways to couch this: one is a “pre-payment for gym passes.” This is obviously a less shady, more sound way of growing your business and is basically predicated on a bet: the negotiated price will bring benefit to both your company and the gym, and you think you can move X passes. We’d typically buy 100 passes for $5-10, which cost us $500-1000 to get a gym online.

The other way is just handing them an envelope of cash in exchange for signing the contract, aka a “signing bonus” aka a bribe.

You may ask yourself, is this really the smartest way to spend my startup’s scarce cash? The answer in our case was absolutely. For two solid months, I pitched gyms, hard, and got very little out of it. During that time, our cash burn was greater than the cost of bribing 7 gyms. We ultimately chose 7 strategic gyms to be our “first on the platform,” gyms that were well-respected in the local area, and the pitch became dramatically more effective with that social proof.

2. Make a Self-Serve Signup Tool

I can’t count the number of SMB marketplaces that do not have a self-serve signup tool, and basically require the business to be called, or fill out a Docusign, or e-mail the startup if they are interested in joining the marketplace. No. You want your signup process to be as simple as Airbnb: able to filled out by somebody who is not tech-savvy in as few clicks as possible. My cofounder Dustin deserves massive respect for his focus on Apple-like simplicity when he was building this tool, and everything else he does.

3. Scrape Yelp

This next step I outsourced on Upwork, but depending on what you’re doing you might be able to automate it fully. I had an Upworker go on Yelp and find the gyms in the first 10 cities we wanted to be in, put the relevant info in a Google Spreadsheet, and call them to ask how much a 1-day drop-in pass was to the gym. This was a very important data point for our product, which allowed people to buy day passes to gyms. The other thing I would have them do is look for e-mail addresses and manager names on the website, and put this in the spreadsheet as well.

4. Mail Merge

A full Mail Merge Howto is beyond the scope of this blog post, but once you have a spreadsheet with names, e-mails and gym names, you are well-positioned to send a bunch of e-mails to small businesses. The call-to-action is for them to sign up to your marketplace via the self-serve tool, so the link to get there should be obvious. You should also include a phone number, and let them know they can call you with questions.

5. Close

Some businesses cannot be closed this way, but it should be enough to get some desperately-needed social proof to close bigger businesses. The best use of your time is closing deals that will yield multiple locations, but do not waste your time going after fish that are so big that they will be too slow-moving to say yes to you in a short period of time. Good luck out there, and if you are building a fitness day pass, I salute you.

 

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Entrepreneurship Personal

On the Occasion of my 29th Birthday

Today I am turning 29. Here in Canada it is almost Thanksgiving, so I thought I would take a moment to give thanks for the incredible year that was my 28th.

Love

I am incredibly blessed to have shared a fourth year with my wife and the love of my life, Marie. This summer we bought our first RV, painted it like a giant zebra and had an incredible road trip from California to Burning Man to Idaho and back. Marie is my favorite travel partner in the whole world and before the year is over, we still have Dubai, Thailand, Tokyo, New York and San Francisco to hit up 🙂 We are now in the planning stages of our wedding celebration and we are having the dress made in Thailand.

Work and Play

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Earlier this year, the company I co-founded, Gymsurfing, was acquired by fitmob. A few months later, fitmob was acquired by ClassPass, thus bringing to an amazing conclusion a journey I began in 2012, with all the insane ups and downs in between. There were times we were certain of failure, and those surprising moments where we turned it all around. I owe our amazing team, especially Dustin, a huge debt of gratitude for this.

Newmindspace also continues to see its biggest numbers yet, 10 years after we started this crazy mission of turning the city into a giant playground. This year we had our biggest pillow fight ever (and donated the most amount of pillows to homeless shelters ever!) our biggest bubble battle, and our biggest lightsaber battle, ever!

Marie and I are planning a new small business that we couldn’t be more excited for. I’ll keep the details scarce for now, but think “Palm Springs by the Bay.”

Happiness

I also consider myself incredibly blessed to be surrounded by the most amazing bunch of friends and family I could ask for in New York, Toronto, and San Francisco. Every night out is an adventure, every party is next level, and every moment is so surprisingly good. The standard by which I measure my life: If the afterlife were real, and I got to look back at each day I’ve lived, would I consider it an excellent life? The answer, for my 28th year, is “absolutely” – and the reason is the people who make up this crazy tri-coastal life of mine. Thank you, and for you, my friends, I am eternally grateful.

I will not take this moment to offer any trite advice, although if you are interested in stories of life hacking, travel and entrepreneurship, watch this space: I hope to blog more often. And if you really do want some trite advice, do yourself a huge favor and read The Four Hour Workweek by Tim Ferriss. No book has taught me more about how to think and how to live in order to maximize my personal happiness.

I’ve gotten here partly by working hard, partly by working smart, and in a huge way, a lot of dumb luck. 29, here I come.

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Entrepreneurship

Thinking of doing a startup? Try Airbnb first

They say there is no “school” for startups, and that no matter how many blog posts or Paul Graham essays you read, you can only learn how to do a startup by experience. I disagree – if you want to see if you’re well-suited to running a startup, set up a profitable Airbnb first.
 
Airbnb? Startup? What does one have to do with the other, you ask?
 
By running an Airbnb, you will learn the following skills: assessing markets, hiring people you trust, customer service, cutting costs, growing revenue, legal compliance, copywriting, contract law, and hustling hard. If you are doing an Airbnb in New York, for example, you will have to aggressively negotiate with everyone from your landlord to shady contractors to mattress wholesalers.
 
It doesn’t necessarily need to be your own apartment; in fact, it’s better if it’s not. Rent an entirely separate apartment and treat it like a business. Incorporate a legal entity (for tax purposes) and track your revenue and expenses. Hire somebody to clean it between stays or do that part yourself. Learn how to systematize guest checkin (Keycafe or a Master Lock Key Box) and how to deal with guest complaints. Rent multiple rooms or Entire Apartment rentals. You will learn a ton about business.
 
The major upside of Airbnb is that it is not nearly as hard as a startup, and won’t take much time after it’s set up. Airbnb is growing rapidly, and as long as you’ve chosen your location correctly, you will become profitable in two or three months. There is a big safety net, the tools are already built out, and you should be able to afford the startup costs with your own money or the help of a relative. If you can’t make money off Airbnb, you have no business running a startup.
 
And here’s the thing: after running a successful Airbnb, you may realize, “Hey, this is pretty sweet” and not want to run a startup. You may actually be more suited to running a lifestyle business, which is a great gig if you’re cut out for it. Quit dreaming of raising capital and read The Four Hour Work Week and subscribe to the AppSumo mailing list instead. If all you’re dreaming of is “being your own boss” and generating a recurring monthly revenue that frees you up to do the things you love, DON’T DO A STARTUP.
 
However, if you decide that yes, you will still commit yourself to quitting your job, building a product, raising money and everything else, keep the Airbnb – you’ll need it when you’re broke. If you don’t think you could go broke running a startup, you almost certainly will at some point. The Airbnb money will increase your “personal runway,” meaning even when times are really tough and you’re living off ramen and sleeping on couches because raising money has taken a lot longer than you thought it would, you will have an advantage over other startup guys in your situation. Hell, you may even be able to make a pretty normal American salary on Airbnb in just your spare time, and be able to test out a few different ideas for your startup instead of saying, “This one has to work.”
 
So before you decide to double down on a single startup idea and risk it all, see if you’re really cut out for it, and give yourself a safety net, by trying out Airbnb first.

 

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Entrepreneurship

Gymsurfing has been acquired!

In November 2013, we were two guys sleeping on couches in two opposite corners of North America, wondering what our next product should be.

We needed to work out to keep ourselves sane, but realized that when you try to go to a gym where you aren’t a member, you almost always have a bad experience. Thus, Gymsurfing was born to help you work out wherever you are.

In just 6 short months from our launch in May 2014, Gymsurfing had created the largest network of gyms of any fitness pass app, totaling over 200 gyms in 18 states and 2 Canadian provinces.

We are extremely excited to tell you that we have been acquired by fitmob! Fitmob is an unlimited fitness program that gives you access to all the best gyms and studios around America. It is currently available in San Francisco, Seattle, Portland, Dallas, Austin and Philadelphia.

Soon your favorite gyms from Gymsurfing will be live on fitmob, and you will be able to work out as many times as you want for one flat price. After seeing fitmob’s amazing growth and culture, we couldn’t help but feel that it was a perfect home for Gymsurfing and we decided to join the team here in San Francisco.

fitmob is normally $99/month, but because you’re a Gymsurfing user, you can have your first month of fitmob for just $1. Click here to sign up for fitmob for $1 per month. 

Check out the full story on TechCrunch. Thank you for everything, and we can’t wait to keep helping you work out wherever you are.

Kevin and Dustin,
Gymsurfing

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Entrepreneurship

How I Quit My Job, Moved to California, E-mailed Tim Ferriss, and Got Angel Investment

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Don’t Quit Your Day Job

There’s a depressing old adage: “Don’t quit your day job.” It has the same ring as “You can’t fight City Hall,” it seems specifically designed to prevent people from trying.

I loved my job in Manhattan. I was an account manager at a Flatiron marketing agency called Mirrorball with a really awesome team and a great culture. It was a “work hard, play hard” ad shop with cool clients and fun coworkers. Then one weekend in May of 2012, I read Kill Your Inner Wantrepreneur and it got some gears turning. I had an idea for an event marketplace called Speakeasy. In retrospect it was really just a clever event ticketing idea, but I was determined.

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A New Startup Idea

My roommate Anthony and I quickly covered the walls of our loft with post-it notes. We designed every screen, every feature, and every little use case we could think of. We were on to something, we thought. Anthony was a newly unemployed developer and I, a sales and marketing guy. I figured I could work nights and weekends, and maybe get somebody on oDesk to build the MVP and we’d see where it went. Anthony disagreed and said you never get any good work from freelancers, and we should work on it full time.

Each day at work the idea grew on me. I pitched anybody who would listen, and eventually I convinced myself this was such a great idea I should devote myself to it fully. Within a month I had given my notice at work, and committed to living on my savings for however long it would take.

The decision to leave New York was not hard. New York is kind of like a daily punch in the face, I am from there originally, and I was eager to check out the west coast.

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Before our first investor meeting at First Round Capital. They said no.

 

Heading West

Two weeks later, we moved to California. We stayed with a friend in Potrero Hill while we were getting ourselves situated, and started emailing investors constantly. We must have emailed about 300, got lots of warm intros, taken some calls, had some meetings, but were always met with a polite no.

Bringing Them to Us

We remembered another old adage: “Work smarter, not harder.” With all Paul Graham’s advice about “hacking non-computer systems,” it occurred to us we just needed to do something that would get investor attention and make them come to us instead of emailing all of them.

We brainstormed for about a day before we came across the Dressrush deck, aka “the pitch deck heard round the world.” We had the idea of making a funny parody of the deck, but with even fancier javascript effects. They used impress.js, so we used a library called jmpress.js that allowed you to map your slides into 3D space. The resulting deck was pretty spiffy (broken link sorry) and kind of hilarious if you had seen the original deck.

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Sending it Out

The next day, we wrote a blog post about the process and about our deck. Among the people I decided to send it to was Tim Ferriss, with whom I had a mutual friend, but it was still a pretty cold e-mail. I said something like, “Hey Tim, I heard you do some angel investing. Check out our deck and let us know if you’d like to chat.”

Tim replied about 6 hours later. He said he was going to pass. My heart sank a little until I read the rest of the e-mail. He said really liked the deck, and he tweeted about it.

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What happened next was pretty surreal. Tim had about 500,000 followers at that point and this definitely got us attention. We received calls and emails from investors all over the country. One of the investors was from Southern California and he asked for a meeting the following week. We rented a car, drove down, and shook on it. The deal closed two weeks later.

Conclusion

As an aside, my biggest regret is that I didn’t read The Lean Startup before I quit my day job, but otherwise, the old adage is true: Work smarter, not harder. Use your time efficiently, find clever shortcuts, and you will be able to achieve the same tasks in a fraction of the time. I have no doubt we could have gotten investment the old fashioned way eventually, but when it comes to standing out from the crowd, this is the kind of hacking you should be thinking about.

h/t to r/startups for inspiring this blog post!

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Entrepreneurship

How Living Out of Suitcases Became a Fitness App

The story of Gymsurfing begins in June 2013, around the time we found ourselves increasingly at a loss for which was the best city to locate our startup. On one hand, we had pretty deep networks in New York and Toronto, but on the other hand, San Francisco is startup central for many billions of good reasons.

We've been all over

Pulled to these cities by a combination of friends, lovers, business connections, and equal helpings of good and bad advice, we found ourselves on planes, trains, and buses all the time. We were living out of suitcases, bouncing from sublet to sublet, and disguising our metropolitan attention deficit disorders as “travel.”

Friends remarked, “Wow, your life is so cool, you travel all the time!” Secretly, we wanted somebody to reveal to us the answer of where we should live. Life was becoming, as we say in New York, a schlep.

Eating healthy is pretty challenging when you’re on the road, but getting to the gym is even harder. When you finally have time, you sign up for a free gym trial, pretend you’re going to join, use up your 3 days and move on to the next gym. The onboarding process at gyms is positively frustrating. I can appreciate what they’re trying to do, of course, and many of them are talented salespeople, but I got pretty tired of lying to them and started telling the truth: “I am not going to join. Just let me work out.”

Done this like 20 times

Then one day after a workout at Goodlife in Toronto, I found myself on HotelTonight (because my sublet was not suitable for bringing a date home.) For us two startup guys, the two thoughts together seemed so logical: HotelTonight + gym = the perfect solution for people like us. A way for the impulsive, itinerant, or otherwise non-committal to book a hassle-free workout with a few taps on our iPhones.

#dolo

An ideal use case for Gymsurfing is this: a young woman, eating lunch in Dolores Park with her friends, excuses herself to get back to her office for a conference call. When she gets to her office, she gets an email saying the call is postponed. She opens Gymsurfing, books a workout around the corner for the price of a burrito, grabs her gym bag, and the rest is history.

Gymsurfing: HotelTonight for fitness. Grab the beta here.

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