Nov. 12, 2023
How to (Accidentally) Build a Unicorn
Mark (CEO GoBolt) didn't set out to build a billion-dollar company. He just solved a problem other university students were facing. And then he constantly "made the best decision possible at each moment in time". To be honest, that's how most unicorns are made. Send me a message to let me know what you think!
Mark (CEO GoBolt) didn't set out to build a billion-dollar company. He just solved a problem other university students were facing. And then he constantly "made the best decision possible at each moment in time". To be honest, that's how most unicorns are made.
00:08 - Scratch your Own Itch
04:59 - How to Leverage Niche Markets
06:23 - Mark's Insane Focus
08:09 - Create Zero Feedback Loops
WEBVTT
00:00:00.000 --> 00:11:52.975
So I spoke with Mark, the CEO of Go Bold the other week and few observations, thinking back through that episode. The first one, just starting at the beginning is how he came up with the idea. We've talked a bit before about kinda the four frameworks to, to come up with an idea. And one of them probably the most popular amongst, I would say, first time founders, especially young first time founders, is scratch your own itch . And that's exactly what he, what he did, right? He started a company that would help university students store their furniture over the summer. The reason he started that is 'cause he, it was a problem he had, it was a problem that he saw other people around him have, and none of the solutions in the market were any good. And I think there's something tied into that because the , the other thing I wanted to mention on that same tangent is that what he starts is really not a tech company. I mean, it's, it's a services company, right? I mean it's a storage, you know , moving slash storage type company. I think there's something to that, especially for young first time founders, especially on your kind of first company. Because the thing about services is that you don't actually take that much demand risk, right? So if you start, let's talk about global world specifically. He starts a moving storage company. There's already other storage and moving companies that service the market that he's going after. So you know that there's demand . What you need to go out and do is just build something that is materially better. And it could be customer service is better, it could be marketing's better, it could be the actual product itself is better. Could be that all of them are , are better, but that's really the risk that you're taking is can you, can you make one of those things at least materially better so that you attract the demand versus your competitors? I think that matters because it's a simpler proposition than starting a tech startup, especially a tech startup that's gonna go after like a completely new market. While it seems a little bit less ambitious and honestly, in a way, it is, the thing you gotta remember is just like anything else when it comes to startups, practice matters. And so if you're gonna go and you wanna build like the next Airbnb or whatever, it's not a terrible idea. In fact, I would say it's a pretty good idea to start with something that's simpler, that is maybe not going to be the next Airbnb, but is going to get you into business, is going to help you learn all of the d the different aspects that it takes to actually make a sale, get customers, retain customers, market to customers, all these sort of things that you can then apply to your second vector , your third venture. This is a long road, right? If you wanna be a founder for life, this is a very long road. Now look, if you find something that is worth building tech for and, and it comes to you and things work out, like that's great. I'm not saying you , you can't, you know, obviously there's many, many examples from Mark Zuckerberg to Airbnb to whatever , um, you know, bill Gates, whatever that started effectively with tech companies. First, there's no problem. But if you kind of have this feeling that you want to be a founder, you wanna start something but you don't have an idea yet, rather than come up with these like grant visions, these business plans, these pitch decks and like pitch accelerator after accelerator. Think about looking at your local market and ideally in a space that, that you happen to know. But it doesn't have to be, you know, in my, my example, I started, my first company was a tutoring business and that was because I was a tutor like for the last year of university. And it was exactly this, right? Like my co-founder Lee and I, we had come up with business plan after business plan after business plan applied to many different competitions. Some of them, you know, we, we , you know, we're finalists this and that, but at the end of the day, there were no business ideas that felt good enough for us to like go after. And yet we wanted to build something that was ambitious. We wanted to build something big, but more than anything we wanted to build something. And so by the time that university ended, we decided, well why don't we create, you know, I'm doing the tutoring thing, why don't we just create a business route it, make it as tech enabled as possible? All these sort of things. And it worked. It didn't work in a massive way, but it did work. Like it paid our bills. It was a real business. It was a great first step, right? Because it got us going. That's something that many more founders should consider doing. And that's exactly what Mark did . Now in Mark's case, he started there and then Cobolt itself became the massive success that it now is. They've got a thousand plus employees over a hundred million dollars in revenue, over $150 million raised. He was able to actually turn this , this services company into more of like a tech enabled services company that was, let's say tech enough to attract big VC dollars and more importantly to truly scale and to become a massive company. But he didn't know that at the outset. And the most important thing is that he started off and he said that he spent like a few hundred dollars in marketing and within a few weeks he had generated $20,000 in revenue. And that's the power of going after services. I know many founders who started in the services game and were able to become like real entrepreneurs as a result of that versus spending sometimes many years literally just pitching and pitching and creating decks and ultimately not finding product market fit . One of the things that Mark mentioned was how being in a niche market was so important. If you recall, he's focusing just on university students. He said he, so here's their direct quote. We had the benefit of being able to target just university students just in these specific postal codes. So the frequency of somebody seeing our as was super high. This is something that I don't think is, is well understood. Like we talk a lot about starting with niche markets, but there's a reason why. And the reason is that you can focus a hundred percent of your efforts on tailoring the message specifically for that customer type. And so in his case, you're talking about storing things over the summer for students. I mean that's how specific it gets. It's not just, it's not self-storage, which is a much bigger world. It's not moving, which is a much bigger world. It's you're gone for the summer months, you go back home and you've got a few months with a few things that you need stored. That's the problem set . And then you know exactly who you're going after. So you know where they are, you know what they read, you know every single thing about them and you know what's gonna resonate with that market, which they were right. When you're bootstrapped, that's critical and that's a huge reason why if you start broader because you wanna become bigger, you're actually more likely to get nowhere at all. Whereas when you start with something small, even though it seems like less ambitious, you're way more likely to deliver a message that resonates and you're gonna have that like message market fit that's just so much easier to get right. And then you're gonna get market pull . And once you've got market pull , that's something that can take you into bigger and bigger markets over time organically. Now , I've mentioned many times that some of these founders that I spoke with are insanely focused, and I used the word insane because the things that it drives 'em to do are truly insane. Mark tells a story where the way that they structured this company is they weren't actually moving furniture around. They outsourced that they were effectively like a marketing machine and they would outsource the actual logistics to a third party. And he's still student . So like during exams, he gets a call that this , his moving company for whatever reason was not going to be able to do the deliveries that day. And they had, like he said , I think like 40 deliveries. And so he writes his exam in like 10 minutes and then he and his co-founder rent one of the few trucks that was still available. This is like peak moving season. So everything's rented and they drive from literally 11:30 AM until 4:00 AM they do all the deliveries themselves, which is insane. I mean, I think how many other people would've just said, okay, there's just nothing we can do. Let's cancel all these deliveries, let's cancel like half these deliveries, let's try to move them. But he said that if he failed to do that, he felt his whole brand was gonna go out the window. And that's the reality of startups is you're, you're so close from success but also so close from death, any given point, especially in the early days when things are just so fragile. It's not about just celebrating like the insanity, but it's more just about pointing out this is sometimes what it takes. Another example of this is that he's . He's telling me that he has a one 800 number and he's picking up calls whenever they ring . He tells me an example where he picks up a call at 2:00 AM and he closes the sale from two to 2:30 AM Again, it's insane, but it's insanely focused. Clearly the only thing he cared about was delivering incredible quality and consistency of service. And that's what he was doing. And that's obviously a huge reason why his brand took off. What are the concepts that came outta this episode that I thought was particularly interesting is what he calls a zero feedback loop. And so he tells me that first of all, to this day, he'll spend some time driving trucks himself and spend some time like in customer service, like in a bunch of different parts of the organization. He'll drop in for like a day just to see the day-to-day of that job and more importantly, to be that close to the end customer. And he says every single time he's done that and he has a thousand employees, he's still doing that. Every single time he does that, he comes back with pretty, pretty game changing ideas. In fact, it reminds me, so the, you know, Uber, today's a hundred billion dollar company, thousands and thousands and thousands of employees, 140 million monthly platform customers. And Dara, the CEO will still spend time every now and then as a driver because he wants to experience the day-to-day of what a driver experiences. And there's just no substitute for that. This is called small data. We're all obsessed about big data and kind of taking data from a bunch of different systems and analyzing in a bunch of different ways. And that's important. But you also need to go at the other end of the spectrum and think about small data, which is going in and getting as close as you can to your customers, to other people in your organization, to your employees and what they see day to day . Because as ACEO, you don't wanna lose touch with the day-to-day reality. And what you're gonna see coming outta that oftentimes can be game changing. And so what he created was this zero feedback loop because back then he wasn't just dropping in , he was doing it all. He was customer service, he was marketing , he was operations. You could argue it was too much. And even he said, you know, maybe I should have hired some kind of generalists earlier. But there was upside to it because he saw every single thing in his business and he had a zero feedback loop between all of the , these different parts of the business. Instead of having a VP operations, a VP customer success, a VP marketing who each are going to see their kind of silos, and then you hope once a month you bring 'em together and you brainstorm and whatnot and share information that's obviously way slower. And in the early days it's not about perfection, it's about speed, it's about agility. So tightening that feedback loop and making sure that what one part of the organization sees is quickly available to other parts of the organization means that you're able to adjust and react much faster. And he observed that he had created that. I don't know that it was on purpose, but I think looking back, he realized that he had created that. And this is where again, being small has an advantage. Because if you get too big too fast and you hire too many people, you can get them to do more things, but you can't get them to react any faster. You're actually going to react slower because again, the feedback loops, the overhead increases, and the feedback loop actually lengthens, it loosens up as you add more people. So keeping the feedback loop tight in the early days is probably more important than just getting more things done. One of the final things I'll leave you with is that by the end of it, he, he said this to me, he said we could tell the story in a different way and make it seem like it was all planned and purpose-driven and sounds super Harvard , MBA McKinsey esque . But the reality is we just made the best decision possible in that moment in time. I think that's particularly important because it's very easy. Most founders are smart, they're high IQ types. And the problem with high IQ types is high IQ types are very good at creating narratives. And that's a skillset , but it's also a problem because the person who's most likely to believe that narrative is yourself. And the more that you share that narrative, the more you're actually convincing yourself that it's true. And so when you make these kind of long-term visionary plans and you start believing them, you effectively put blinders on and you stop noticing when your plan actually might be dead wrong. The more precise you are, the the higher the risk of being precisely wrong. And so what he did instead, it was full organic. He was just, he started with services,
00:11:53.384 --> 00:13:35.875
He started delivering value to a customer, said that he understood well, and then that led him to a bigger market that led him to a bigger market. But he didn't plan that. He didn't say at the outset, you know, this is my smart , my marketer students, and then I'm gonna grow to this bigger market and then I'm gonna grow to this, you know, enterprise market. He just, he didn't have that planned out. It just happened sequentially and organically. And so my point isn't like, don't plan at all. Don't have a vision. It's more so that it's just not that important. What really matters is how much value you're actually delivering today. And really to think in steps like the reality is that next step does not get unlocked until you solve this step. And so all that really matters is crushing it today, right now, delivering value to your current customers and spreading word of mouth so that you even have an at bat at getting to the next place. If you listen to this episode and the show and you like it, I have a huge favor to ask for you. Well, it's actually a really small favor , but it has huge impact. But whichever app you're listening to this episode on, take It Out, go to a product market fit show and leave a review, please. It's going to help. It's not just gonna help me to be clear, it's going to help other founders discover this show because the algorithms, whether it's Spotify, whether it's Apple, whether it's any other podcast player, one of the big things they look at is frequency of reviews. It's quantity of reviews. And the reality is, if all of you listening right now, left reviews, we would have thousands of reviews. So please take literally a minute, even if you're just writing like great podcast, or I love this podcast, whatever it is, just write a few words. Obviously the longer the better, the more detailed the better. But write anything, leave five stars and you'll be helping me. But most importantly, many other founders just like you, discover the show. Thank you.
00:00:00.000 --> 00:11:52.975
00:11:53.384 --> 00:13:35.875