Nov. 6, 2023

Mark Ang, Founder of GoBolt | How to Pivot to Product Market Fit

Everyone tells you that you need to start with a niche, a beachhead market, and then grow from there. But how does that actually work? What does that really look like? It looks like Mark's story starting and growing GoBolt.

Mark started off storing items for students over the summer. He expanded to storing all things for all people. He now provides logistics for enterprises. He's raised over $150M and has over 1,000 employees. But it wasn't pre-destined, it was 100% organic.

What really matters is finding a problem that you're acutely positioned to solve and then solving that problem. If you have real demand, and you stay close to your customers, things tend to take care of themselves.

Send me a message to let me know what you think!

02:47 - How it all started

07:19 - Fundraising and Serendipity

10:14 - Going all in

13:27 - Niche Markets First

15:40 - Being Close to Your Customers

17:43 - When small, act big

20:19 - Revenue in the First Years

24:04 - The Next Tier of Customer

30:51 - A Big Pivot

33:48 - Tech-Enabled Logistics Company

35:54 - The Details Matter

44:13 - One Step at a Time

46:43 - One Final Piece of Advice

WEBVTT

00:00:00.005 --> 00:02:16.125
I think this is actually one of the best examples. They talk about how you need to start small, right? You need to start with a niche, a beachhead market, and then grow from there. I find the issue sometimes is people take that strategy, and they try to make it a bit too formulaic. They try to say, okay, this is my beachhead market, then I'm going to expand to this market, then I'm going to expand to that market. It's fine to plan, but the reality rarely works out that way. I think in this episode, what you're going to see is just, even though that is many times what happens, is that somebody goes after a niche market and grows from there, the way it happens, it's much more organic than you would think. Mark, ultimately, he starts off, he's a student and he sees that when summertime rolls around, students have all this furniture and they need to store it for the summer, and so he just solves that problem. He didn't have some massive idea about where things were going to end up. He just literally starts solving that problem, and demand pulls him and it pulls him. What Mark does that is very, very smart and resourceful, is that he stays very close to the data. He stays very close to the customer, and so he learns, and he's able to evolve from there to a broader storage company, and they rebrand. They were called Second Closet back then. They rebrand to GoBolt and go after this kind of broader storage play. Then from there, he then notices a different segment of customers, business customers that are using his business in an entirely different way. He shifts again, at this point, the company was much bigger, to this much larger opportunity. He didn't see these phases at the outset. He just went with it and really saw the opportunities because he was so close to the customers. He saw the opportunities every single time, and he leveraged them as much as possible, and it worked. Now, GoBolt's raised over $150 million. They have over a thousand employees. They're a massive enterprise, but it didn't start out this way. I think listening through this episode and understanding how things really evolved will help you understand that what really matters, at the end of the day, is finding a problem that you're acutely positioned to solve and then solving that problem. If you have real demand, things will take care of themselves. Welcome to the Product Market Fit Show brought to you by Mistral, a seed-stage firm based in Canada. I'm Pablo. I'm a founder turned VC. My goal is to help early-stage founders like you find product market fit. Well, Mark, welcome to the show.

00:02:23.115 --> 00:02:24.245
Yeah, thanks for having me, Pablo.

00:02:24.425 --> 00:02:39.925
Let's start at the beginning. You now have a company called Bolt, but you started off and it was called Second Closet. I'm sure things have changed quite a bit. That entire change, we'll be diving into today, but maybe to set context, if you could tell us about the time when you started Second Closet.

00:02:46.895 --> 00:03:33.444
We've actually undergone three rebrands, so we're not Bolt anymore, we're now GoBolt which is the official trade marketable name. We're happy to be finished our rebranding journey. When the business started, as you pointed out, we were called Second Closet. We were a totally different business than what we are today, but the inner workings of it are much the same. Second Closet was a valet storage company that would pick up, store, and return people's stuff. We started by breaking into the international student market because every summer, students needed to store their things when they went back home. This was very common practice, and it was a pretty niche and lucrative industry. We decided to attack that just because we were university students at the time and understood it really well. Eventually, it evolved to start storing things for people like you and me. Seasonal wardrobe, seasonal items, and eventually typical storage applications.

00:03:38.875 --> 00:03:48.044
Take us back to those early days, pre-Second Closet. What's going on? Are you in this mindset of like, you want to start a business and you're looking for the thing, or how do you even come up with that first idea?

00:03:49.525 --> 00:04:28.425
It was a very much go-with-the-flow moment in time. My co-founder, Heindrik, and I both had full-time jobs lined up. I was supposed to be a management consultant. He was supposed to be a product manager at a large health tech company. We were just doing Second Closet as a side hustle to make more money on the side. The problem was that with $500 invested into guerrilla marketing, and by guerrilla marketing, I mean we used U of T printing credits, which were free, Vista Print business cards, which are super, I don't even know how they make money, it's super inexpensive, and some really targeted Facebook ads geographically confined to campus, so $500 in total. We generated 20k of monthly recurring revenue in two weeks. We said, holy shit.

00:04:32.685 --> 00:04:37.665
How cheap were those Facebook ads? Each one is supposed to be at least $2, $3 to get an actual event. No?

00:04:38.935 --> 00:05:47.785
Well, let's keep in mind this was back in 2017 when the times were good. Before any kinda iOS changes. We probably had the benefit of some of that tailwind. We had the benefit of being able to target just university students, just in these postal codes. Our frequency of someone seeing our ads was super high. It built a lot of trust in the brand that they've never heard of before. Then seeing our flyers inside of bathroom stalls and in front of urinals, I don't know if that added or detracted, probably how the hell did these things get in here, but in any event, people had high frequency in their dorm buildings and then we slipped the business cards under people's dorm room doors when we broke into all the buildings somewhat illegally, but we were technically students, so it was okay. All that to say, we had a very targeted campaign with very cheeky messaging because our audience were students. We said, "Hey, summer storage made sexy, use code wrap it up for $10 off bubble wrap," knowing full well that no one actually even would redeem that code because they don't really need to use bubble wrap. Just cheeky messaging like that caught their attention, and then they went to our site and ended up booking a ton of orders. It was a bit of a crazy moment for us when the orders started to roll in because they were fast and furious.

00:05:51.245 --> 00:05:59.444
What even led you, this is when it was already kind of a side hustle and this was your growth hack, let's say, but how did you come up with the idea of helping people store stuff for the summer?

00:06:02.394 --> 00:06:49.855
Yeah, I think my mentality in general is obstacle, solution, obstacle, solution. In this case, the seed was planted when I had moved out of our family home as a 17-year-old with my brother and we moved into a tiny condo in Liberty Village. Really only started working on the idea much later in 2016, built a website with a team overseas that was super inexpensive, launched with that website, and some tweaks thereof. It was a personal experience that drove it. The ultimate application of what it was, the beachhead market was a lot different. It was just a good moment in time to revisit the business and push it out. We did that and saw that really early success, and shortly after that big push, we raised the 500k seed round a day before I was supposed to start full-time on June 1st and rescinded our offers with two weeks' notice technically, but in advance of starting, and I've never looked back.

00:07:01.463 --> 00:07:16.404
I'm curious. We will jump into that in a second but you talk about this obstacle, solution, obstacle, solution, which I think is a pretty common frame of mind amongst founders. That's what makes them builders. Was this your first business, or was this the first one that worked? I'm curious if you had a bunch of other attempts prior to that.

00:07:19.564 --> 00:08:20.935
I had an e-commerce brand that was a watch company. I had built a prototype, kickstarted it, built another model, kickstarted it. Always aiming, as a broke student, use as little as possible upfront to then build into something great. That's where Kickstarter was awesome for product-based businesses. A $300 prototype ended up garnering a 250k-a-year business for me that helped me pay my way through school, and build a small stock portfolio that would help me pay for some of my living expenses with dividends. That was the business before. It wasn't a smashing success. I probably should have raised money for that business because, at the time, Facebook ads were even cheaper. This was like 2014, 2015. Then on top of that, a competitor was just starting out called Movement, which ended up getting sold to Movado for $100 million a handful of years later. That was the first brush with business, of starting something from scratch as a product-based business based online. This was a service-based business based online so a lot of the marketing knowledge was helpful, but running a service business, totally different than a product business.

00:08:32.115 --> 00:08:37.695
How did that early fundraising go? Was that from VCs, angels? Did you already have kind of a network at that point?

00:08:38.514 --> 00:09:42.664
No, no network whatsoever actually. A lot of this was just a stroke of luck. I ran into an angel investor named Michael Hyatt at a startup career expo where we were advertising our business for student ambassadors. It was an engineering thing. Selfishly, we wanted to get the brand more exposure and have them book storage with us, but then the byproduct was that we might also find some really good early talent. We kind of got both in the end. That's actually where I met Heindrik for the first time, my co-founder and our CTO. Michael ended up saying, "Hey, this is a really cool business." Gave us a small convertible note, eventually just abolished that agreement, put it into a full-blown 500k seed round a few weeks later just because the success was so quick. He asked a question, "How much of the money is left," after we'd grown to the 20k a month. We're like, "Substantially all of it." In fact, we've grown it now to 30k or 35k based on the fact that we weren't really spending much. Everything that we did at the time, by the way, was fully outsourced to a file storage company. They would pick up, store, and return the stuff for us. All we were is a marketing company and a customer support company, and everything else was totally outsourced.

00:09:50.105 --> 00:10:09.384
By the way, I think there is a story there in the sense that you have to be ready for when it comes. I think a lot of these early rounds, these first few hundred thousand dollars that are from angels are less methodical, like a series A or a series B will be, and a lot of serendipity, but it's 80%, 90% of the business and the people, that's got to be legit so that when you meet a Michael Hyatt, there's something to be impressed about.

00:10:14.254 --> 00:11:15.565
Yeah, there was preparation there, right? We were already in market, we were already advertising, we were at a startup career expo. All these things sort of culminated to create these subconscious snaps fires that were helpful in the end, I think. Look, the business was supposed to be asset-light. We became very asset-heavy and we now have tens of millions of dollars invested in physical infrastructure. We had this partner that was supposed to be great. On April 28th, our busiest day of the student storage season of our first year, they called us up at 9:37 AM. Our first appointment was to start in 23 minutes, and they said that, "Our guys are refusing to work. You're completely on your own today." This was problematic because Heindrik was already just entering an exam at 9:00 AM and I was supposed to go into my final exam at 11:00 AM. We would not overlap. This was hugely problematic, and again, this was like getting slapped in the face as a founder. The option was, cancel all these orders and tell them to figure something else out, or do the unthinkable and just figure out a way to spin up logistics that 15 trucks were going to do for us with a small team of two.

00:11:23.745 --> 00:11:29.365
To be clear, what you have to do at this point is go to a bunch of different places and pick up a bunch of different furniture and store it.

00:11:29.514 --> 00:12:26.044
Yeah. Aggressive. I think on that day, we had about 84 appointments, and at the time, most trucks were doing 8 to 10 a day themselves. Okay? We now have to do 10 times the normal volume that 10 trucks would've done in one truck, and this is the end of the month. If you've ever tried to move yourself and get a U-Haul at the end of the month, unless you book it two weeks in advance, you're fucked. We had to send Heindrik an hour out of the city to get the only U-Haul left. I remember writing my exam in like 10 or 15 minutes, getting out, starting to move people's stuff down, and then see Heindrik roll up on St. George Street in the tiniest U-Haul you've ever seen. It was the 10-foot box truck. I'm like, "Oh my God," but beggars can't be choosers. In this case, we had to do way more runs back to their warehouse to drop off the product. Then I ended up using my dorm on campus as a staging ground as well, which was filled with these green totes. We worked until 4:00 AM that night and then we did it again.

00:12:32.433 --> 00:12:34.764
From when to when? Like noon to 4:00 AM ish? Something like that?

00:12:35.565 --> 00:12:52.404
Yeah, it was like 11:30 AM until 4:00 AM, and then we did it again the next day and the next day. Then we said, holy shit. If we're going to do this business, we have to do it full-time. We had just started negotiating terms with Michael, and we said, okay, let's close this round, and let's quit our jobs and let's do this full time because I think we have a real business here.

00:12:53.664 --> 00:13:22.485
That's an amazing story. It's very prototypical of the founder DNA, right? When you boil it down, I like to think about some of the best founders are insanely focused, and they just have one goal in mind, whatever that goal is. I think here, it's like, make the thing work. I say insanely because the thing that happens is actually insane. Two people driving around for, whatever, 16 hours or so, moving boxes. It's just insane, but at the end of the day, it was either that or you return everybody's money, which was unacceptable, so you did it.

00:13:27.085 --> 00:14:33.085
Well, the reputational hit, we would never have recovered, ever. We have this mantra that like every single stop, every single customer needs to be successful. It was that maniacal focus, one of our company values right now is sweat the small stuff. Every single customer mattered, but of course, we had to compromise, right? You're constrained and everyone had these time slots and we said, to hell with the time slots, we're going come to you and we tell you we're ready, and we're going to now bundle all these customers together. If you're at 110 St. George, be ready at this time. In fact, if you can bring your stuff down for us, that would also be very much appreciated. We just communicated to all these customers and said, we're going to be here and make it work. We're sorry. Like we're inundated with a crazy amount of work. We're apologetic. And you know, students to their credit are a special breed of consumer where they just wanna get it done and the service might be choppy, but as long as like the outcome is what they wanted, they're gonna be okay. And so we were very fortunate to start in a pretty like, you know, soft , uh, consumer environment and then move into more high demanding kind of , uh, quote unquote adults that are very discerning with what they pay for and what they get in return.

00:14:33.195 --> 00:14:36.284
What was the alternative? What were students doing before Second Coset with their stuff?

00:14:37.245 --> 00:16:01.955
They were using a very longstanding incumbent called Store Your Dorm that would charge four to five times what we would charge to do the same thing. Taking a step back, that is probably why we were inundated. We did a great job getting our name out there, and of the people that saw us, they booked with us. Then the next year, our student rush was way bigger than we saw in 2017 just because we had plastered the subway with our ads and built more credibility and so on and so forth. The moment we exited consumers, and students, I should say, we went to the typical storage consumer, which was someone that lives in a home or a condo that needs excess space. I remember we graduated from the U-Haul to a Mercedes Sprinter van, and we're like, oh, this is a Mercedes. It's super high-end. In reality, it's just a big minivan. We didn't wrap it because to wrap it would cost $3,000 and fuck that, that's way too expensive. We only raised 500k. Let's be frugal, but as we still did all the pickups ourselves, and I did all the customer support myself, all the sales, and all the inbound management, I could feedback loop what consumers were saying on the ground, what they were complaining about to support, what they wanted to see, and so on. I remember doing a pickup one day and the husband and wife, we were picking up their sofa, the wife was whispering because we were just in Nike athletic gear and shoes and we thought that that was nice but obviously, it wasn't branded and —

00:16:07.034 --> 00:16:09.914
You got the Mercedes-Benz, you got the Nike gear, you're good to go.

00:16:10.264 --> 00:17:09.993
Yeah, big ball. We probably should have thrown on spinners on the truck as well just to really wrap it up, but they were like, "Oh my god, is this a scam? They're going to steal our furniture?" I just remember thinking like, shit, we do not do a great job. We have this little clipboard with this poorly colored printed manifest that looks like shit. I'm like, if we're going to take possession of people's things and be in their home, we need to show up a lot differently. The next week, we had this really cool truck wrap designed, slapped it on the truck, $3,000 later, we went to the cheapest screen printing shop to get Second Closet shirts printed. In the end, we ended up getting a look and feel that when we showed up, that never happened again. It was a micro pivot of how we invest capital because now, those people might go tell other friends like, "Hey, I had a great experience with this branded business and it was super legit. Stored our stuff, they brought it back. Same people, same experience." I just think that we were very receptive to those little things over time that ultimately helped us build a business that was highly recurring revenue and had a high referral base.

00:17:20.055 --> 00:17:39.835
They talk about how you have to be close to your customers and it's examples like this that bring out what that really means. Small data is so important in those early days. Obviously, as a founder, you hope you're not the one doing the deliveries, you're not the one doing customer support, but in the beginning, it's critical that you do because you get these little tiny nuggets that have such outsized impact.

00:17:43.815 --> 00:18:36.565
One of the things that we learned was that people wanted to book their logistics in storage whenever they wanted and on their schedule. We had a wide range of demo, young families, single people, our oldest client was 94 years old. I had to convince her to give me her credit card over the phone, and she was like, "This is a scam." I'm like, "No, it's not, here's a link to the Toronto Star. Click it and you can read about us." She's like, "Oh, okay. I know the Toronto Star, and you're in it so that probably is legit enough." I remember taking a call at 2:00 AM. We use Grasshopper as our 1-800 line, and it's the cheap, again, having a 1-800 versus a 416 or 647 number totally changed the game because it made you look bigger. We hired this British voice actor to do our intro because it sounded nice and sophisticated. We did little things like that that dressed up the experience, and of course, it was available 24/7. I was the guy that was answering the call. At 2:00 AM, I get this call, and I'm groggy.

00:18:46.605 --> 00:18:49.125
Is that normal? You get calls in the middle of the night and you just pick it up?

00:18:51.005 --> 00:20:09.204
If my phone rang, I would pick it up whenever because it could have been a sale. I was like, we want to be available for the customer. They're like, "This must be a big company. They're answering the phone at all hours of the day." I would always be available and have a notebook to take down orders, or have my computer with me so I could pop it open and hotspot, and then book the order, and that customer ended up booking at like 2:30 after I had told them about us and what we're doing and that sort of thing. I would never tell them who I was. There was multiple Marks in the business. There was a Mark in the office and a Mark on the road. I remember just going through crazy, crazy stories where this one Russian lady that we went to was trying to convince Mark the mover that Mark in the office agreed to free storage for a certain amount of time. I'm like, I don't think he did, but let me go call him. I'll have him call you. I would go to the van, I would say, "Hey, Mark, I need you to call." I would wait five minutes because there has to be an interaction between the Marks. Then Mark from the office would call the client, and then obviously, Mark from the office, he needs to call Mark from the van back, and then Mark from the van would go back and talk to the client and be like, "Hey, did that clear things up?" Little things like that to just make sure that we were always punching above our weight class just from a look and feel perspective was important. Look, experiences like that and being on the ground, I would not trade it for the world. We were doing moving and driving for the first year of the business, and our investors eventually were like, "What the hell are you doing? Hire people and start to grow." We were growing, we had filled up a ton of space.

00:20:12.434 --> 00:20:17.214
How much did you grow, that first year you hit 20,000 I think in a month or so, where were you a year later?

00:20:19.315 --> 00:20:31.414
Our first year, we did a couple hundred thousand in revenue. The next year, we did 1.6 million. It was like an 8x, and it has grown considerably since then. We're fortunate to be doing over nine figures of revenue now.

00:20:35.095 --> 00:20:39.575
I'm just curious, were the margins a challenge back then? What kind of margins were you looking at, and did investors care?

00:20:42.224 --> 00:23:13.795
Margins were actually really good. I really liked data. I really like playing around with the look and feel of things. Tying the analytics behind marketing to this bootleg Photoshop instance that I had, to change our copy and our visual look, to drive conversions and A/B test things, anyone can get into that pretty easily. The tools are pretty straightforward. We were able to get our customer acquisition cost down considerably to what the lifetime value was. That made our marketing cost, which traditionally is the biggest thing for a D2C business or a consumer business, really low. Then logistically, we had very good margins on storage because we were selling by the piece, but we could co-mingle them in our warehouse. It was really, really high margin once we had the product in our warehouse. That's why we offered free moving initially. We just wanted to be frictionless. Move your stuff into storage for free and we'll bring it back to you. We wanted just people to convert. Over time though, I think about a year and a half in, we started to hire a lot more movers. We had a lot more trucks. I was like, we really should recuperate more of this cost and try to cost recover. We said, what's a nice easy, approachable price? We said, let's just try charging a dollar per minute per mover while on-site at the customer home. This way, they're not paying for travel time or gas or truck fees or insurance. Just a dollar per minute per mover while on-site. Sounded simple enough. We're like, great. No one batted an eyelash at it. That line of business started to generate tens of thousands of dollars a week, a month, et cetera. We scaled it up, and because there was no pushback to me, Mark the CS guy, or Mark the mover, when we did that, we said, okay, why don't we try to increase the rate one more time? We said $2 a minute is probably too high per person, it'll be $120 an hour. Let's go halfway, let's go $1.50. Totally like FMA. We got a little bit of pushback but we were able to sell against it and demonstrate that it was still valuable. It was at that moment that we knew that we had reached a place where the market would clear, it was a good equilibrium price, and because consumers were happy with it in the end and they should feel like they're paying for a premium service. We knew that we had a good price point. That was the first evolution of our pricing, I would say a big pivot in how we started to generate revenue. That line ended up growing to be in the teens of percent of our overall revenue on a consistent basis. As we got up into like 400,000 a month, 500,000 a month plus, back when we were Second Closet, that was pretty meaningful. It was a big revenue driver.

00:23:20.743 --> 00:23:27.035
That was how you increased the pricing I think on the moving side. Then how did you price for the actual storage side of it?

00:23:28.375 --> 00:23:59.565
As we got more noticed and people were talking about us at their dinner table and amongst the friend groups, we did this massive TTC campaign that garnered like 300 million impressions purportedly. That thrust us into some spots on TV, and this, that, the other. The mainstream consumer storage customers started to come to us, but they're used to buying space. They're like, "How the hell am I supposed to tell you how many items I have? Then you're going to price it per piece, $6 for this box, and $29 for that sofa, and $18 for my mattress. What the heck? That's way too complicated."

00:24:04.483 --> 00:24:08.724
That was born out of the students, which kind of knew like, "Okay, I'm in a little dorm, I've got three boxes."

00:24:09.765 --> 00:24:57.684
Three boxes, a mini fridge, and a mattress, take it away. That was approachable. Then we said, okay, shit, we need to start to pivot because now, we're in this next tier of customer and if we're going to price discriminate, we should cater to people that store more stuff, they might store longer, they're going to be more expensive, or more valuable clients to us, and obviously, have a more expensive storage bill. We said, we're going to have an item plan, which is classic, pay by the item for just what you need, and we're going to have a space plan, storing a lot, this is your solution. Now, we have this extra dimension of consultative sales talk. We introduced space plans, 5 x 5s up to 10 x 30s. That was the next S-curve that we rode from a customer acquisition perspective, and we were able to start to pull people away from self-storage, and that was big. Then we started filling up warehouse that were hundreds of thousands of square feet at that point.

00:25:06.025 --> 00:25:10.605
Are these customers that you think, before, they actually could have been buyers, they just weren't buyers because of this space thing?

00:25:10.924 --> 00:26:05.365
I think so. Let's zoom out and think about if this was a "bigger business." You'd have a marketing leader, you have an operations leader, and they may get together strategically at best, once a quarter, but realistically, probably once a year, to actually sit down and be like, "What the hell's going on?" You hope that that operations leader would've pulled insight from his movers or her movers, and you hope that the marketing leader would've been talking to CS and understanding the conversion funnel and how customers dropped off, to be able to marry the two things together. That doesn't happen, unfortunately. People aren't that entrepreneurial in major corporations such that, unless they're incentivized in the right way, or they're groomed or hired and conditioned to be that way, certainly in a storage company, probably not the pedigree that you would expect, not for anything to do with the storage company or the brand, but they often outsource marketing, and their operations as you come to us. We were doing it differently, and we had the benefit of having the tightest feedback loop possible. I was CS, marketing, and operations.

00:26:14.243 --> 00:26:15.005
Even still at that time?

00:26:15.474 --> 00:27:55.125
Even still at that time, even in 2018, yeah, up until mid-2018, and even later, I would still hop in a truck every now and then, and still do today to stay close to the business. It's a fundamental principle that I believe, and I can touch on that in a sec. We had a zero feedback loop and it's what I strive to maintain today. That's why I dumpster-dive different areas of the business to pull out insights. Every time I zoom into the company, I'll leave with a month's worth of insights of things that we can do better for our customers. At the time, it was just very rapid, very rapid iterations. To go from $0 moving fees to $1 to $1.50. It allowed us to resource our moves in a better way. We didn't have to have really big time windows to optimize our routes. We could have really tight time windows because we made enough revenue from that. That insight would probably have taken a year to go back to the ops leader and marketing leader of a bigger company, and then they might iterate and have a plan for the next year hopefully, or maybe not. That, I think is a very special thing in small companies. I think a lot of the time, people try to specialize early team members quickly. Actually, I'm in favor of, try to be as general as possible for as long as possible because yeah, sure you might lose the production on the Model T if someone's doing an end-to-end as a custom build, but that's what they did before they had enough volume to production line it, and then they started to do okay, you do the chassis, you do the steering column, you do the tires, you do the doors, fine. Holding out as long as possible will let you cross-functionally share more insights, and not cross-function in terms of department heads, but department functions. Then you've got way more seasoned leaders that know more about the business so that you can grow faster when you need to start specializing.

00:27:56.075 --> 00:29:06.244
It's one of the hardest things I think to get right, which is this balance between you want to be adaptable, but you also want to be focused. If you're not focused, you don't have enough resources, you're just not going to do anything well enough that it matters, but if you don't stay adaptable, you might miss, you're kind of ramping up this hill and there might be an even bigger hill over there if only you would've seen it. I think this thing you're talking about, which is these tight feedback loops, which is staying really close to the customer, small data, right? Seeing these little things helps you navigate that, right? You've got the whole business on, let's say, the original ricing model, right? You've got the whole business on free delivery, free delivery matters. This is just how we do it, but because you're also kind of in the business, right? You're doing all these little pieces of it, you're seeing all the little insights, until you realize, wait a second, what if, right? Wait a second, there's people that just can't resonate with this pricing model. What if we tried this space plan thing? That's the adaptability piece. Going back and forth between those two, I think is really hard, as you say, if you almost scale the team too fast, right? If you professionalize and polish everything too fast, then you're going to the hierarchy that a big company runs at, and you're missing out on the adaptability that you need.

00:29:09.555 --> 00:30:46.484
Look, I love to cook. I'm going to use a food analogy. I can cook a mean steak, a killer vegetable side, and some awesome potato bravas, and have a good meal. I don't need to specialize in just searing and cooking steak, and I don't need another specialist for the potatoes. I don't need another specialist for the vegetables. It's good enough to have one person put that whole meal together and see that project through end-to-end and have an enjoyable meal for you and a buddy or friend. You don't need a Michelin star-grade line cook set up to have a good outcome. Early days, 80/20 rule needs to apply. You don't have the resources to seek perfection. I think that's a problem with sometimes early founders think that, "Hey, this is my personal brand, everything needs to be perfect because I'm being graded against these other companies." If you wake up and smell the coffee, these other companies, they don't always get it right either. In fact, you're probably going to do a much better job just because you care. I just remember all the things that we used to do in the early days, whether it was, we had a negative Google review, we'd call the person right away and say, "Hey, we're going to make this right, we're going to give your credit on your next month storage, we're going to do this that the other." They're like, "Oh my God. I was just writing this to vent, but the fact that you took the time to call me and respond and do something about it and change a policy or do some training, that means so much to me. In fact, I'm going to change my review to a five-star." We have like 7,000 five-star reviews on Google now, and we continue that practice even in logistics, which is the hardest thing to maintain positive reviews with. It's important to understand 80/20 rule is very real in the early days. In fact, it's probably more aggressive and that it doesn't need to be perfect. Good is probably good enough in that regard.

00:30:51.904 --> 00:31:09.565
At this point, it sounds like everything's going pretty well. You've expanded your market step by step. You've made these pivots, the micro pivots, really, these tweaks, really, these optimization tweaks along the way to change your pricing, to expand your market, and so on, and demand seems to be flourishing. I'm curious, how do you go from there to such a big pivot or rebrand?

00:31:15.115 --> 00:32:17.474
Yeah, it's a really good question. Things were generally going well. We had raised another $2 million seed round extension, and we expanded to Vancouver. We actually achieved cash flow positivity, and then we started to notice that our power users were using us an insane amount. We had people that were using us consistently, but going to downtown addresses or commercial addresses, and we're like, what the hell is going on? We picked up the phone and called them, and these were actually businesses, the people that use us for their personal life that had a really great experience and said, "Hey, we want to use you for our company." Whether it was Chanel, WeWork, or BMW, the decision makers at those businesses used us on a personal capacity and said, "Hey, I had such a great experience, I want to use you for my business. Can I do that?" They started to use the service and hack it to solve this business logistics problem. What turned us on to doing more of that or exploring it more intellectually was, well, if a consumer stores and picks up their stuff once every 12 months or 18 months, but these people are doing it frequent, like many times a week or many times a month.

00:32:20.795 --> 00:32:24.115
Take BMW or take any of these examples. What exactly were they doing?

00:32:25.315 --> 00:33:34.644
We work with storing their excess furniture because Instagram didn't want 20 desks in this little room. They wanted five and they wanted some sofas, but then Pinterest wanted at this other location, two more desks and two chairs, or this chair was broken, so take it away and dispose of it and put this one in. They were using us to manage physical stuff, and it was all digital. They had photos of their stuff, QR codes to everything. You could literally just go online at 3:00 AM and click everything you wanted to have happen, and then it could happen as early as the next day. For them, it was magic. It was super simple. That simplicity is something we've carried forward to how we kind of operate today for our customers. For instance, just to go down a rabbit hole for a sec, we allow you to schedule your time slot in as far in advance as two months. If you are doing a little reno, but you ordered some stuff that we're delivering, you can book 1:00 PM to 4:00 PM on Saturday, November 13th, 2023 if you wanted. Then on the day before, we're going to send you a real-time truck tracking link with a prediction down to the minute of when we'll arrive. You now don't have to be shackled to your house for this delivery slot. The industry today just tells you the day before, whether you're an AM or a PM delivery, and it's like a six-hour window.

00:33:36.444 --> 00:33:44.845
Yeah, by the way, how are you doing that? Actually, we just bought a home and so we bought a bunch of couches and it's like, delivery, it's tomorrow seven to seven and we'll give you a four-hour window hours before. I'm like, are you serious?

00:33:48.355 --> 00:35:48.644
Yeah, it's terrible. In short and honestly, Pablo, and I need to get that as a testimonial later, but we use technology. We do our own route algorithm and machine learning and big data evaluation internally. We make predictions because you and me as a team might deliver faster or slower than the next team, and that impacts the chain of events that happen throughout the day. Let's say we assume an appointment's going to take 9 minutes, but it takes 15, well, that has a downstream impact on all the other appointments for the day, but you don't want to keep updating the customer on that happening at every single appointment. What if you're doing 20 stops and stops 1 through 19 go terribly, and stop 20 is like, "Oh, sorry dude, you're being rescheduled to tomorrow." That's not a good experience. We use ML and data to plan in advance and assign drivers in an intelligent way. When we say we're a tech-enabled logistics company, it's not because we're using iPhones to run our driver's app and we have everything digitized, that's very table stakes. There's more to it to manage. Now that we've implemented an EV fleet, there's even more variables to manage around battery range and weather and traffic patterns, et cetera. Are you on a highway or a city street? All this impacts battery range. Again, another pivot in our software is now managing that new reality and adapting to the change. I think that's probably just been a very consistent theme over this conversation and over our business is that you have to be able to adapt to change quickly driven by the market. It's great that we move from $0 moving fees to $90 an hour moving fees, helped us grow and scale a logistics division. It's great that we really execute every single time because then, these consumers use it for their business. Then now, we started to store, fulfill, ship, and deliver product at scale for big brands, whether it's an IKEA, or a Rove Concepts, or a Lululemon. These are now the businesses that we are fortunate to be able to handle their logistics in some capacity. We take that very seriously because we were a consumer-facing business before. We still view ourselves as one today. We just happen to do it in partnership with these fantastic businesses. That culture has always stayed the same.

00:35:54.465 --> 00:36:58.844
The details matter, right? Even in your case of how you're predicting, it's because you're going down to the team-level unit and all these other things. I have to share the story. I think a lot of big brands don't actually get that, I forget who said this to me, but the experience doesn't until the item gets into your door, right? They feel like the experience ends. I go to the store, I buy a couch, they treat me well, shipping date's set up, and okay, sale done, but I don't have my couch yet. My experience is not done yet. I had a couch delivered, so it was one of these, right? Oh, it'll be tomorrow between seven and seven, right? 7:00 AM 7:00 PM, okay cool. It's like 6:30 PM, they're not there. I'm like, what's going on? I call them, like, "Oh, sorry, things got delayed." They didn't call me, "Things are delayed. We're going to be there at 9:00 PM. Is that still fine?" "Fine, okay, let's do 9:00 PM." 9:00 PM rolls around, they're not there. I ended up getting my couch at 11:30 at night and it was like, if you don't take the 11:30, it's going to be Tuesday. It all reflects bad, I don't know who the delivery company is. It just reflects bad on the brand as far as I'm concerned. I don't want to buy from them again because they just didn't serve me as a customer properly.

00:37:01.394 --> 00:39:08.644
It's so true. A very powerful example of how we've tried to be very boutique but at scale is whenever we're doing reverse logistics for one of our box mattress companies, and we were still doing the deliveries in those days, we'd always ask the customer like, "Why are you returning your mattress? What did you not like about it? Why are you returning this piece of furniture? What did you not like? What could we have done differently as a team?" We would feed that info back to our customer, and it was incredibly valuable to them because, as you say, they're selling digitally, how do we be their eyes and ears on the ground and feedback info and data that is valuable for them to do product development or market better or target the right customer. I think it's just about being extremely customer-obsessed and driven to provide value, and caring enough to sweat the small stuff, and doing that in the way that exemplifies the most amount of ownership possible. Those coincidentally are three of our six values. Customer-obsessed, sweat the small stuff, and to act like an owner. I was someone that would dismiss the need for values and vision back in the day. It's like, you come to work, you know what you're doing. If you're a CS, provide incredible service, but you need to clearly articulate values to your people so that they know how to react in specific moments and that they can self-police each other when they're not acting in the right way. An example of this today that makes me proud, and really understand that it's working is, when we're making big decisions that impact our merchant or the shopper, it's like, is this the most customer-obsessed way we can do it? Are we over-indexing on acting like an owner and seeking cost reduction, and we're not balancing these other realities that we want to be as a business? For our team to start having an intellectual debate without my presence, around our values and how we want to show up as a company, that's when you know you've hit some product market fit with the talent and the people, and in many ways, GoBolt is a product to an employee base and a team base. That, to me, is like, you are buying into what we're selling, and you're able to then use it to manage decision-making. Another reality that I came to probably a bit late to the party on was the need for those things and how it can help drive the seeking out of product market fit at various levels and continue our acceleration as a business.

00:39:17.485 --> 00:39:49.244
I don't know if you listen to a lot of podcasts, but David Senra talks about this, which is like, the best companies are really the founder multiplied by 1,000 or 10,000. I think culture is the way you do that. It really becomes the values that obviously you believe in, but how do you put that in a way and instill that so that everybody's acting, not obviously exactly like you, but at least at a high level, is aligned? I think that's incredibly important. Going back to the main storylines, sorry, took us off on a tangent there. BMW and big companies are kind of hacking it. WeWork, you mentioned, was hacking it. Take us back there. You started to see this as interesting. Where'd you go from there?

00:39:57.364 --> 00:42:31.164
Yeah, I found it interesting since I was also our bookkeeper. I was like, "Oh, these are like really good accounts." I was like, we need to do more of this. We assembled a sales team of one person and we said, let's go knock on doors, and let's go drum up some last-mile logistics business, because we had trucks, we had warehouses, we had movers that were capable and drove great experiences. Let's do more of that. This is like 2019, we started to build software specifically for fulfillment. We got our first e-commerce pick-and-pack business that year. We started doing delivery and reverse logistics for local furniture companies and brands. Then, our biggest development was when we started to integrate with IKEA. This is advance of us having a formal MSA at the time. This was December of 2019, and we finished the integration end of January 2020, and this thing called COVID hit. When everyone was at home, they started buying a lot of stuff, and they wanted their backgrounds to look good, and have a painting like yours, and do all these little things to their place to make it more homey. IKEA's volume skyrocketed and they need more logistical support. We were able in the right moment to say, okay team, we're now going to help deliver commerce in the moment where the world needs it most. We're going to help people enjoy their space that they're confined to for obviously health reasons. We took our entire Toronto fleet and turned it into a last-mile delivery team that was one of the best-performing teams in the country. It was a really fast pivot, and as things gradually opened up, and people needed more logistical support, we were able to capitalize on that and grow, and support all these businesses in a moment of need. We were also able to keep our team fully employed and actually grow that team over that period. We had an aerospace QA engineer delivering for us, and crazy stuff. We were very lucky because some of those people, we pulled into management, and as we grew, they've grown with us as well. That was late 2019, I would say H1 and H2 of 2020, super pivotal for the business. We're where we are today because of the events that happened then. They were just listening and reacting to small things that we pulled from the day-to-day. I was in an IKEA meeting, we were talking about reverse logistics and helping with their buyback program, which still hasn't launched in Canada yet. Then we talked about our sustainability ambitions, and that really kind of piqued everyone's interest because we were probably the only company in the country that said we want to be fully electric one day. It just so happened that IKEA also had internal goals to do that, which are now super public. That was able to start a relationship that's led to further growth and an investment from Inca, the parent company.

00:42:41.585 --> 00:42:43.644
What do you do with Second Closet during this time?

00:42:44.585 --> 00:43:25.025
Second Closet, I mean the nice thing with storage is it just kind of keeps tolling. We just had all this high gross margin storage revenue in our warehouses that let us finance all our software development and builds for this new B2B business. They were all still in our warehouse, bearing in mind that when you are using your last-mile fleet, it's not touching the warehouse largely, right? It's just they're dormant and collecting revenue, which is the great thing about the business model, but also the thing that we, as founders, weren't super excited about anymore, it's just literally collecting dust. If our success is going to be measured by how much dust is on top of a pallet, that's a really shitty measurement of success. Let's go do something that's way better from a consumer experience perspective, and let's go create cool experiences for brands that sell online.

00:43:31.085 --> 00:43:33.505
What percent of your revenue now is the last-mile delivery GoBolt piece?

00:43:36.085 --> 00:43:50.304
Our business breaks down almost perfectly. Roughly half of it is warehousing and everything to do with our fulfillment business, and the other half is our last-mile business truck and parcel. It's almost half-half between warehousing and transportation.

00:43:52.744 --> 00:43:56.545
The warehouse is not fueling self-storage, it's fueling the delivery, the commerce piece.

00:43:57.574 --> 00:44:09.105
Yeah, exactly. We'll store hundreds to thousands of pallets for brands that store things like water bottles or couches or work. Yeah, it's a totally diverse storage base now.

00:44:13.135 --> 00:44:32.989
It's funny how if you try to predict looking forward from 2017 or whatever year it was, storing things for the summer, to becoming a fully integrated third-party logistics provider for some of the biggest brands in the world, you could never predict it, but looking backwards, it all fits, right? It all makes sense. It was one step at a time.

00:44:34.704 --> 00:45:15.045
Yeah, we could tell this story in a different way and make it seem like it was all planned, and purpose-driven, and sound super Harvard MBA, McKinsey-esque but the reality is we just made the best decision possible in that moment in time. We are so lucky that the big decisions ended up working out for us. Tons of small decisions that went to shit, but the big ones worked because we were trying to be thoughtful. Looking back, they all kind of stitched together nicely. Now, what I challenge myself to do is look forward to the future, 5 years out, 10 years out, what does the world look like? We're too big now as a business and we have too many people that are super smart, capable, ambitious, to not have a rudder and not have a North Star.

00:45:21.045 --> 00:45:21.724
How big are you now?

00:45:22.565 --> 00:46:13.704
We're over a thousand people. I think we were six people in 2017. It's grown a lot, and everyone deserves to know what we're here to do and what they're here to help us do, right? That's the product that GoBolt offers our team, and people join us because they want to help make logistics way more sustainable than it is today. That is a core reason why some people choose to join GoBolt. Other people join because they're tired of the way these big old logistics companies operate, and they like that we're a Nuvo tech-enabled business, and they can have an impact and fingerprints all over our growth. Now, I think more about what we will be when we grow up than ever before. It's important because that's about understanding how do we fit into the market in five years' time, because what we've built so far has legs to run that journey and we might need to reinvent ourselves a couple more times in five years to really have good staying power.

00:46:19.885 --> 00:46:38.545
That's great. Let's stop it there. Let me just finish off with the two questions that we always finish off with. The first one is if you could go back, having learned everything that you've learned over the last six years or so, if you could go back to Mark starting off Second Closet with one piece of advice. What might that be?

00:46:43.534 --> 00:47:47.844
That is a great question. It's so tough because the butterfly effect is real, and if you change one thing back then, does it maybe change the trajectory of where you're going? The one piece of advice would need to have accelerated where we ultimately got to. I would say ironically, I would say, where a hundred percent of our time then was one foot in front of the other, I would probably want to have dedicated at least 10% to thinking a bit further in the future because that would've probably inevitably moved us in the right direction sooner. The other thing I would say is that hire help faster because to do everything yourself only works for so long. Probably hiring a generalist sooner would've been better because, I was like, "I have to choose between finance and CS and sales. That's not great." If I had hired another generalist or a young business grad who was just looking to learn, you could probably have resourced the team equally across divisions and done better. I would say, it'd be, dedicate some more time to think about the future and bring on more generalists sooner.

00:47:53.264 --> 00:48:03.405
I think this is really important, so I'll deep dive on this one. What's the profile of the right generalist? You're a pre-seed or seed-stage company. Are we talking a year out of school, five years out of school, 20 years, gray hair? What's the perfect profile?

00:48:05.804 --> 00:48:34.664
I don't think it matters. I was in school when we came up with Second Closet. It doesn't matter. I think it's more so about are they curious and are they going to run through a wall for you? That is it, because curiosity will lead you to come up with random crazy shit that you need to then run through a wall and execute on. You need both those things to be true. Someone that will run through walls for you time after time needs to be told which walls to run through. Someone that's just curious is probably just theorizing what needs to happen. You need someone that will do both. That could be a 17-year-old or an 18-year-old, that could be a 22-year-old, that could be a 50-year-old.

00:48:38.784 --> 00:48:44.905
That makes sense. Then the last question, when was the first time that you felt like you had true product market fit?

00:48:48.125 --> 00:49:38.824
It was when we started to look at, we used to have paper manifest before we had a digital driver app. In our very first year, in the early part of the year, we filed our paper manifests chronologically. A small folder would be a full month's worth of manifest. Then over time, a fat folder would be a week, and then a fat folder would be only a day. Then one time we needed multiple folders for a single day. Then that's when I was like, holy shit, you can see a visual progression and this filing cabinet was five drawers deep and super wide. This is it. If we charted this out, the growth is literally exponential. That super simple stupid reality made me feel like the momentum is clearly here. Obviously, I probably could have just looked at a data table and figured out the same thing, but it's different. It's different when you're signing all those manifests and you're processing them physically. It's cool.