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Hello and welcome to The Advice Line on How I Built This Lab.
I'm Guy Raz.
This is the place where we help try to solve your business challenges.
Each week, I'm joined by a legendary founder, a former guest on the show, Thank you.
All right, let's get to it.
Joining me today is Neeraj Shah, CEO and co-founder of Wayfair.
Neeraj, welcome back to the show.
Guy, thanks for having me.
Excited to be here.
You were first on the show back in 2018, a long time ago.
And it's an amazing story.
You told us about how you and your college roommate Steve, co-founded all these businesses together out of college, when you guys were in your 20s.
And then you came up with the idea... of launching hundreds of separate websites.
You had dinnerplates.com.
You had racksandstands.com.
You had justshagrugs.com.
You even told us about a website that you had where you sold birdhouses only birdhouses.
And then grandfather clocks.
Amazing.
Just all these different... businesses selling just those things.
That's kind of what led to creating Wayfarers.
We sort of ended up working our way through all of home goods, one category at a time.
We ended up with, as you said, over 200 websites.
And then we thought the big opportunity would be to be known as a destination for all those categories, rather than having them in separate sites.
Yeah.
And that's when...
10 years into the business, in 2011, we launched Wayfair.com.
And if you guys haven't heard that episode, we will put a link to it, the original episode from 2018 in the show notes.
It's really, really an awesome episode.
Nirj, we have not talked.
I don't think we've talked to you since or checked in with you in a bunch of years.
You are still with Wayfair.
You're still the CEO.
Steve, your co founder is also with the company's co chairman.
How do you guys make it work?
27 years of working together.
And I think you first met each other like a summer high school program, right?
Like a long time ago.
Yes.
It was a program actually at Cornell where we went to college between our junior and senior years of high school.
Wow.
Crazy.
Yeah.
What's the secret?
I mean why, you know, there's so many.
We've done a bunch of co-founders and we've done co-founder splits and you know, what do you think it is that makes it work?
Well, I think what we found is that we've both always been drawn a little bit to different areas of the business.
So Steve's always been very involved with the technology side of our business.
And we've always been very technology oriented as a company.
And then I've always been drawn a little more to the business side.
But then we both really respect each other's business judgment.
And so it's been a very easy partnership as we got into it.
Ultimately, you know you need to find somebody who's just a great partner, meaning you have to be interested in doing complimentary things.
But then you really need to trust each other's judgment and be a team that way.
And I don't know that there's always an entire science in figuring that out.
It's an art and science thing both.
And there's luck, too.
Exactly.
I wonder how you, I mean, you're a big brand.
Wayfair is huge.
How do you stay ahead of the competition, even not just from the big retailers and online giants, but from startups that are starting to scale?
So we try to combine what I'd say is the best of two worlds.
So one is we have enough scale to have, you know, a 2,500 person technology team.
And we have enough scale to have a 25 million square foot logistics network, that's warehouses and transportation delivery operations.
And how many warehouses all over the U.S.?
?
In our network, I think we probably have something like 17 or 18 warehouses that are like a million square feet each.
So these are really, really big facilities.
Then we have something like 75 smaller buildings, which are the transportation terminals, from which the trucks that would deliver the large items to someone's home go out from every day.
So I think what we're trying to do is combine the benefits of scale.
Those are like two examples of the scale.
The third would be the fact that we spend over a billion dollars on advertising a year, with what is a much more entrepreneurial – and sort of startup type mentality in how we drive the business.
And so when you can couple sort of the resources of a bigger business but with the agility and the ambition of a smaller business, I think you can get sort of the special thing which just lets you move fast and do big things both.
And then we stay focused on home goods.
So what we don't do is let ourselves get distracted by starting to do too many things, because home goods is over half a trillion dollars between the four countries we operate in.
And so then, all of a sudden, we have the specialist benefit versus the Amazons and the Walmarts of the world.
And we have the scale benefit versus the upstarts who maybe are focused on the same exact market as us, but they don't have the ability to do the same things for the customer when you talk about technology resources, or you talk about the logistics needs, et cetera.
You've done something interesting in the last, I think year, which is you opened your first brick and mortar store in Illinois, outside of Chicago, I think, and then you're planning on opening another one in Atlanta.
New York and Denver.
I mean, you were early online retailers back in the day where people were still scared to give their credit cards, you know, in the internet back in like 2005 and six.
Tell me about going into physical retail stores.
We're super excited about it.
So to give you a sense, like that's a very large format store.
And what we're able to do there is showcase all the product categories so that for customers, when they come there, they can see the entirety of what Wayfair can offer.
Yeah.
I mean, it's like, just to put it in perspective, that's like the size of a Costco.
Yes.
It's enormous.
It's very big.
But that's kind of what it takes to really showcase all the categories we're in.
And for the customer.
They want that type of experience because if you're buying a sectional, you need to see a variety of sectionals.
And then if you're looking at bathroom faucets, you need to see a variety of those.
And what we found is that the store works great because people know who Wayfair is, from the fact that we've been around for a while and we have scale and we advertise.
But the ability now to work with someone who can help give you design guidance, or if you want to pursue financing for a project, or if you want to work with a kitchen cabinet designer, we can do all those things in person.
So it makes the brand come to life in a whole new way.
And that's why, as you said, we have a pipeline of additional stores coming.
Yeah.
Neeraj, you ready to take some calls?
Absolutely.
Excited to.
All right.
Awesome.
Let's bring in our first caller.
Welcome to The Advice Line.
You're on with Neeraj Shah, co-founder of, of course, Wayfair.
Please tell us your name, where you're calling from, and just one line about your business, please.
Hi, Guy and Neeraj.
I'm Valerie Zweig.
I am calling in from Washington, D.C.
I'm the co-founder of CookStix, which is a new way to stock your pantry.
Our instant stock sticks replace wasteful cartons and chemical-laden bouillon with a clean, convenient and delicious stock option for home cooks.
All right, welcome to the show, Valerie.
So Cook Sticks, what is it?
It's a chicken stock?
Describe it.
Yeah, it's dehydrated chicken stock.
So we're calling it an ingredient line, because while we are starting with chicken stock, we will expand into other ingredients.
It's really just we're starting with three dehydrated chicken stocks.
Okay, so instead of buying the like box of chicken stock, if you, if you do use that, you just buy yours and you mix it with hot water and you've got the stock exactly.
We uh my co-founder and i, my cousin taryn pelicone and i started a chicken soup business about nine years ago in dc.
We have a chicken soup delivery business called prescription chicken.
We have uh, Chicken soup in national grocery stores as well.
And through our time, we spent a lot of time shipping liquid across the country.
Yeah, it's heavy, expensive.
All of that.
Not good for the environment, right?
No.
And we happen to also be avid home cooks.
And we know the importance of great chicken stock.
But we have a busy life.
And we would sometimes lean on those boxes of chicken stock.
And we would talk and both open our fridges and say, gosh Like, there's yet another box of chicken stock that I used most of it and it's wasting in my fridge.
And we said, you know, there's got to be a better way for this.
And so we said, you know, why does it have to come liquefied?
Why can't we just provide a product that you add water, use exactly what you need?
And Cooksticks was born.
And then make your risotto or make your soups or whatever.
And you can season vegetables, you can make high-protein vinaigrettes, like there's sort of all sorts of things that you can do.
Well, I'm a chicken stock maker and I would use this product because in a pinch, but I always have in the freezer, because I always take a chicken carcass and put it in my Instant Pot with water and then I've.
But this is a great solution for a lot of people, especially because that stock is sitting on the shelf in those cartons for who knows how long.
And, you know, it's watery.
It doesn't really have great flavor.
And bouillon right is a light format product but it's chemically and it's salty and it's not actually leaning on flavor.
Yeah, it doesn't taste real.
All right, what's your question for Neeraj?
So Cook Stix is an instant cooking stock, but we're discovering that retailers and shoppers are misidentifying how to use it.
So we'll hear people say, oh, is it a protein beverage?
Or, oh, you should have more protein in it.
Now, despite having the word cook in the name, they don't seem to get that this has been created as an ingredient for cooking.
And so we're a little stumped and would love tips on how we can message and educate both consumers and retailers that Cooksticks is an innovative ingredient.
So a new format for sort of a classic product and a replacement for the standard carton of stock.
Interesting.
Okay.
Neeraj, before we answer Valerie's question, thoughts, questions for her?
Well, one question I have is are there some specific things you tried that didn't work to help convey what it is?
Or is this a new problem you're just discovering now?
It's a new problem.
We just launched the product.
So we just got to market in late June.
We hit sort of Mid-Atlantic Whole Foods stores and Amazon.
And it is an interesting you know, reading a lot of the Amazon reviews and feedback, you know you start to sort of pick up things and it's like okay, our initial sort of Amazon marketing right.
We missed the opportunity to communicate to people, oh, this is equal to a box of stock.
And so we sort of went back to square one and made an ad that said you know, one stick equals one box of stock.
And that has helped in sort of the understanding of the product.
But the sort of default is like, oh, well, this is a beverage.
And it's like, well, it can be, but it's not.
That's a byproduct.
That's not the main point.
I have a question for you.
There are these packets, right, that are more like protein broths.
And I have used them because I, you know, trying to get more protein in.
This is not the direction you are headed or want to head in.
Or is it?
It's not.
So really, we are competing against the box of stock.
So the powdered protein beverages that are out there, they're not conducive to cooking, right?
They have to be something that you want to drink, right, to get your protein.
And so it has to be something that has sort of more of an aggressive flavor profile.
As you and any sort of person who cooks knows, chicken stock is not meant to be sort of the leader.
It's meant to be sort of that strong foundational cooking like salt, right?
It's going to help sort of elevate the rest of it.
And so we want to create something that is a better box of stock.
That is that thing that everybody uses in, I mean, every dish, right?
All right.
I have some – I've got a bunch of thoughts, but you are so creative with what you guys do.
Please, I want to hear from you first.
The best way to communicate it is to be literal.
You know, on the front of it, just saying, you know, add 16 ounces of water and you know your chicken stock's ready to go, or add 32 ounces or whatever.
Because the literal – what we found with marketing.
Sometimes, when something is novel, the literal explanation is the one that just becomes intuitive to people, and then you can then go with the imagination after that.
But if you don't start with the literal, it's hard to grab.
It can be hard to grab.
It's so true.
And it's funny, you know, when you start you work so hard on the branding and we want the imagery and we want to catch the eye.
But the reality is, is, you know, we need to shrink the cute little chicken on the front.
We need to increase the instant chicken stock.
So you're right.
Literal is the way to go.
Simple.
Just communicate clearly.
And your packaging does say cooking stock, instant cooking stock on it already.
It does.
It does have that there.
I mean, look, you know this.
We've had this too with lots of products where –
People introduce something new and they have to educate people.
I mean, I remember we did Guayaki Yerba Mate, which is now a massive brand.
It is a national distribution, hundreds of millions of dollars in sales.
They had to – for like 20 years.
Literally, they were going around door to door to festivals, trying to get people to drink Guayaki yerba mate, right until they, just they hit a tipping point.
This is easier because people know what chicken stock is.
But maybe, as Neeraj says, you have to hit people over the head with it, right?
Because you are, you You're teaching people how to use it every time they see it.
Maybe you create a tagline like, your carton of chicken stock, now on a stick.
Well, it's funny.
We were saying our tagline is think outside the stock box.
Which is nice.
It's cute.
But again, is that too clever?
It might be too clever.
It's very clever.
I mean, think like I'm not as clever.
I'm dumb.
So just I'm going to use literally like cookstick instant stock for.
Well, you say that on the package, but just something like that.
I also.
Have you guys been doing anything on social media around?
You know how to use it, or how you use it.
We have, yeah.
So we've been doing a lot of social media.
And it's interesting, right?
So we need to work more on us as founders doing our own education.
It's funny.
I mean, as a Chicken Soup product, we always sort of said, like, we don't want...
It's not about us, right?
Like this is about you and what you need.
If you're not feeling well, we have chicken soup for you.
We're not gonna make it about us.
However, in this type of product, it is a little bit more cooking focused.
And so we do need to lead the narrative in terms of this is how you use it.
This is what we use it in.
Cause it is about like just showing how easy it is to use and getting people to also adopt it and sort of communicate that with them.
Yeah.
Valerie Zweig, co-founder of Cooksticks.
Thanks for calling in.
Good luck.
Thanks so much, guys.
Awesome.
Thank you.
Neeraj, who does cooking at your house?
Well, I dabble, but I would say my wife definitely is the much better cook.
There's really no debate on that.
Yeah.
I'm telling you, chicken stock is like, it's like critical.
It's like a critical ingredient.
Seriously, you may have experienced this.
If you just boil rice in water, it's just rice in water.
And if you just boil it in chicken stock, it's like 20 levels better.
Exactly.
We're going to take a quick break, but when we come back, another caller, another question and another round of advice.
I'm Guy Raz.
Stick around.
You're listening to The Advice Line on how I built this lab.
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Welcome back to The Device Line on How I Built This Lab.
I'm Guy Raz, and today I'm taking your calls with Neeraj Shah, co-founder of Wayfair.
Neeraj, you ready to take the next call?
Absolutely.
Awesome.
All right, let's bring in our next caller.
Welcome to the advice line.
Please tell us your name, where you're calling from, and just a line about your business, please.
Hi, I'm Bree Van Leeuwen.
I'm calling from Orem, Utah, and I'm the founder of Daily Shade Sunscreen.
Daily Shade is redefining what true mineral sunscreen can look and feel like.
So we launched last year in 2024 with our flagship product called Babeshade.
It is designed for kids and it's the first true mineral sunscreen for daily use that disappears like magic on their skin.
So no little white ghosts running around here, guys.
Brady, thanks for calling in.
So the brand is called Daily Shade.
And I know this is a problem.
I use mineral sunscreen on my face every day.
And I have a brand that does a pretty good job, but it's hard because...
You know, the chemical sunscreens are great.
They just dissolve into your skin.
But of course, a lot of people are increasingly getting concerned about well, do you really want that absorbing in your skin?
And the mineral sunscreen sits on top of your skin, right?
And that's the difference.
It doesn't get absorbed by your skin as much.
Yeah, you know a lot about this, which is great.
So you're exactly right.
My daughter had a reaction to a very popular chemical sunscreen that was marketed for kids.
Quote unquote.
And she just, it was a terrible, terrible response.
She got blisters and it was awful.
So I started using, like you're saying, true mineral sunscreens, but either...
She would still react because it was a little bit of mineral, a lot of UV chemical filters and boosters which the FDA doesn't require them to list.
Or I would put on a natural zinc product, and the more natural, the more zinc it had, the whiter she got.
And I knew I wanted her to wear it daily, and I couldn't send her out the door looking like...
Casper the Ghost, right?
Yeah.
So I knew I had to fix it.
And the challenge is that if it's a true mineral sunscreen, it's like you know, it's like a 50s, like beach movie, right?
Where your face is just like...
You know, you get the white nose or whatever.
So it's hard.
It's really hard to make it disappear.
So how did tell me how you started this business?
Do you have a background in skin or in health?
I do.
Yeah, I'm a physician assistant by professional training.
So I practice medicine.
I've been practicing for 15 years.
I actually worked a little bit in facial plastic reconstructive surgery and these young girls would come in with these awful, awful scars on their face that we were trying to do some reconstruction on from melanoma, the most dangerous form of skin cancer.
Utah is the number one state in the whole nation for melanoma actually, and it affects a lot of young girls.
It's common cancer in women aged 26 to 30.
So when I saw this, I knew I wanted my kids to be protected, because such a large portion of sun damage happens during childhood.
Some studies even say as high as up to 80 of someone's sun damage during their whole life happens when they're little before the age of 18.
So I wanted my kids to wear something every day and protect their skin from the sun.
But the options were terrible, to be honest with you.
Mainstream sunscreens, the UV chemical filters did not work for my family.
And I couldn't find a cosmetically pleasing one that didn't make them look just completely silly.
Wow.
All right.
So you decided to launch your own brand, which you launched.
When did you launch it?
Last year, but it took us four years to create our product line.
So four years of development and R&D.
Sunscreen is a drug, so it has to go through the FDA.
And you financed this yourself?
Yes.
Yes, self-funded, super fun.
And tell me about where and mostly direct-to-consumer you're selling through your website, or do you sell in stores too?
Yeah, we're all on our website and we also sell on Amazon as well.
We're in about 28 doors across the country, but nothing in a regional or national distribution quite yet.
And tell me how the business has done so far.
I mean, you're small, you don't have the budget for mass advertising yet, but how are you doing?
We're doing great.
We sold through our first production run just about.
We have a few bottles left, which is great.
Great place to be in.
We'll be producing again this fall.
And we have two new product lines coming out, a sport line and a women's line, so we can protect the whole family.
And so have you broken like $50,000 in sales yet?
We have.
Thank you for asking.
We have.
Yeah.
Nice.
Okay, great.
And before I forget, what's your question for us?
Okay, my question is I am fortunate enough to have an in-house cosmetic chemist and that allows us to come up with products quickly, and I have a whole bunch of products I'd like to deliver to the world.
The challenge is the cost of production is very high, and...
At our current growth rate, I can only sustain maybe one or two product lines a year.
And then because I'm self-funded, the marketing budget is, of course, lower than I wish it was.
So my question is, as a founder, what are the key indicators I should be looking for to know when it's time to seek investment?
And give up maybe some equity, which I really don't want to do versus continuing to bootstrap and grow a little bit more slowly.
All right.
Great questions.
Neeraj, I want to bring you in.
What do you think?
I mean, she wants to expand this thing, but she needs the money to do it.
Yeah.
In terms of selling the items, you mentioned you sell directly on your own website.
You sell on Amazon.
Have you discussed with any major retailers potentially carrying it?
And what I was thinking there is potentially if you have someone who likes getting in early –
They might be willing to give you a purchase order for the kind of quantity they want.
Even if it's a modest test rollout, in their sense it could be quite a decent volume.
And those purchase orders from the larger companies you can get financing against.
That sometimes is a way, Kind of to get financing, but to your point, you're not selling equity.
You're not selling equity for that.
Yeah, that's a great idea.
I haven't explored regional or national distribution quite yet, because I frankly can't afford it quite yet.
I'm hoping my business plan is for 27.
That would be the earliest I would hope to be in some regional and national distribution.
And at this point yeah, I would have to either finance, take out a second mortgage, something like that bet on myself, which is a scary thing to do, or find someone who is willing to do it with a small, small piece of equity, which is pretty hard to find.
Yeah.
And there's also, I mean, I completely agree with Neeraj here.
I mean there's.
They make small loans, right, against a predictable sales.
And then SBA loans.
But back to something that Neeraj asked, which I think is critical.
If you want to scale, you know when you want to get into the targets and the Sephoras.
That's when you really need to raise money.
And if that's where you're headed, then it may be worth thinking about a seed round of friends and family.
Now, a small seed round, you know.
$300,000, $400,000, $500,000 to see what you can do with that money to sort of get you closer to the next level where you need to raise a lot more money at that point.
Yes, this is a good idea.
It's something that's crossed my mind on a very regular basis.
And with seed rounds, you're not giving equity necessarily?
You're just giving interest where you can choose?
Right.
And Neeraj, I mean, there are many ways to do it.
You can get convertible notes.
You can pay people back.
I mean, there's a bunch of ways to do it.
Normally, convertible notes just translate into stocks.
But Neeraj, what do you think?
Yeah, I think a convertible note is what I have heard of and seen as most common.
What that is is, instead of deciding at what value those investors are buying equity from you, they're giving you the investment.
They hold a convertible note.
And what that means is that when you raise your next round of capital, their money converts into equity, but at a discount to what that round ultimately gets priced at.
So if you're able to take the money from them now, you're able to invest it very productively and grow the business nicely and then ultimately raise around at a good price.
These investors get the benefit.
They're converting 20% less or 30% less than that.
So they're getting that value for being early.
But you're also not necessarily having to price the company based on your current sales and where you are now, because that would be hard if you just do it off your current revenue.
And if you start talking about the product pipeline and the vision you have, it becomes maybe a big debate as to what the price should be.
So a convertible note, I think, is often an easy way to do it.
And ultimately, those investors and the friends and family around.
They are going to get equity at a good price, but it makes it an easy way to raise the money quicker.
Okay, great.
And I know that you bootstrapped for a long time.
You guys didn't take investment money for a while, if I'm remembering correctly.
Do you have regrets?
Are you glad you did?
So we're glad we did.
So what we were able to do, and I do often recommend to folks don't take the money until you're really ready to.
And what I mean by that is...
For some reason there's a lot of prestige in raising money, but the truth is you'd rather not raise money if you can get to the next level without it.
And so even if that means you might move a little slower, often that's a better decision.
And when the time is right to raise money, it'll be because that money you have a very clear use for, that money that you know will get you to the next level.
And without the money, you're going to be unable to do the thing you want.
So in our case, we were able to bootstrap the business.
The big use of money that we were able to avoid in our case is we didn't buy the inventory and instead we drop shipped the orders from suppliers using their open stock inventory.
So we didn't buy the item until we had already sold it.
That's what let us kind of go a long way.
And then the reason we raised money, it was 10 years in, was we wanted to launch the Wayfair brand.
But we didn't have the ability to fund building a brand with the amount of cash we were generating for the business.
And so we then raised equity.
And so I think that's the tradeoff you need to balance.
Yeah, and I like the idea of waiting for the POs.
I feel like I can carry it until the POs come in but say I got a PO for 50000 units.
That would be probably the time to jump in and find some help.
Yeah.
And you mentioned that you were in some stores, right?
And what about just seeing if you can get the product in front of a Whole Foods buyer, for example?
I would love that.
You know anybody?
Send them my way.
Well, I mean, they've got, you know, regional buyers.
It would be worth cold, you know, going on LinkedIn and just finding someone's name and just cold emailing them because that's their job.
Their job is to find interesting locally made products.
We just did an episode on Poppy.
You know poppy soda.
It started out as a vinegar soda at a farmer's market in Dallas and it was picked up in the Whole Foods in Dallas.
That really does happen.
And part of it is finding we've had so many episodes in the show where people go to a Whole Foods buyer and And a regional buyer.
And then it gets into two, three, four Whole Foods and Whole Foods will work with you.
You know, they want you to succeed.
Oh, yeah.
You know, whether you can get purchase order financing.
There are also, as you know, there are these groups that will lend you money if you've got the orders.
Yeah, for the right percentage of return, they sure will.
Yeah.
There's plenty of people willing to give you money.
It just is trying to find the smartest way to go about that.
Yeah.
I think the issue here – you've got to bet on yourself.
That's the – right?
You're scared.
You're worried because it's scary.
It's big.
But you have a great – it looks like you have a great product.
So you've got an in-house – chemist, I mean somebody's working with you to develop this stuff.
You cracked the code on the, the white, you know, residue on the face.
I mean it sounds really promising, thank you.
Yeah, I quit my job.
I mean, I was a professor in the PA department here at my university, at Utah Valley University, and I quit my job in January and I'm all in on this.
So yeah, betting on myself for sure.
Yeah.
Any final words, Neeraj, for Bree?
I would say that just figure out what your next step is and don't worry about four steps at once.
And I wouldn't be scared of some of these larger national chains because a lot of them they want to find new innovative product and test it in a small local way.
And that could be an exciting thing to try while you're growing the existing distribution you already have with your two new products.
And so you can take things one step at a time.
Yes.
I love that very much.
Yeah, that's the dream that's on the goal board, right?
Whole Foods, Sprouts, Sephora, all the places.
Yeah.
Yeah.
For sure.
The brand's called Daily Shade.
Bree Van Leeuwen, thanks so much for calling in.
Good luck.
Thank you.
I love your show, by the way.
I think as a founder, it's so scary and so hard.
And sometimes when I'm in my dark moments, I turn on How I Built This.
And it does.
It helps you get through it and push through when you hear the story.
So thank you for all you do.
It's why we do what we do.
And thank you for saying that.
Good luck.
Thank you so much.
All right.
We're going to take another quick break, but we'll be right back with another caller.
Stay with us.
I'm Guy Raz, and you're listening to The Advice Line right here on How I Built This Lab.
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Welcome back to the advice line on how I built this lab.
I'm Guy Raz.
And my guest today is Neeraj Shah, co-founder of Wayfair.
And we're taking your calls right here.
Hello, caller.
Welcome to the show.
Hi, Guy.
Hi, Neeraj.
Thank you so much for having me on.
My name is Tess Millholen.
I am based near San Antonio, Texas, and I'm the founder of HerHouse.
HerHouse is an app community of solo women travelers who are background checked, who host each other for free, creating safe, affordable stays in a supportive network of women around the world.
Wow.
Cool.
Tess, thanks for calling in.
So, okay, so this is a website and an app, and it's basically designed for solo female travelers.
It's like a network where, if you're in it, you can connect with somebody somewhere around the world who's in this network, who will let you stay at their home when you're traveling around the world.
Yeah, you got it, guys.
So we have three ways to stay with each other inside of her house.
They can connect with other members and ask for accommodation while they're traveling and they're in a new city or a new country.
We also have opportunities to home swap with others and then a home sit for each other as well.
So there's three ways to stay, but we really have a wonderful, beautiful community of solo traveling women who are just looking for adventure.
But they don't want to be totally alone when they're out abroad.
And obviously, I'm sure the safety and all kinds of things are a big part of it.
Tell me how is it?
I mean, what's your business model?
How do you make money?
Yeah, so we are membership based.
So we have a monthly and a yearly membership.
And that gives the user like full access to the community and unlimited free accommodation within our community.
So basically, if you are a member, you also have to be willing to provide free accommodation for a solo female traveler.
Ideally, some of the women are like nomads and they actually don't have a home base and they're not able to host at the time.
But a lot of them are still willing to get together with you.
If you're coming to their city, you know, grab a coffee, go to the beach so that, like when you're solo traveling, you can go to another country and, you know, have an immediate connection and an immediate girlfriend in the area.
Nice.
How many members do you have right now?
So currently we have around 150 members across 20 countries.
And how did you get this idea?
I'm assuming it started with your own travels.
Yeah, so I solo backpacked through Australia in 2017 after I got out of college.
And while I was over there, I'm kind of a natural networker.
I'm really good at making friends.
So I was able to connect with a lot of women while I was over there. find accommodation.
And I found that as a solo woman traveler, people just opened up their homes to me all the time.
It was like this amazing experience of like, I didn't even know that people do this.
And I had all these amazing experiences with local people.
Like I really immersed myself in the culture.
And so when I got back to the States, My friends were like, how did you do that?
How did you find these people?
How did you know that they were safe?
And I was like, oh wait, like it was easy for me to do this, but maybe it's not that easy for everyone else.
So it's like wouldn't it be great if we had an app, you know, a space where we could all connect and we're all background checked?
It's all safe because safety is the number one concern for solo female travelers.
So that's where it all kind of stemmed from.
All right.
Interesting idea.
Tell us your question.
Yeah.
So I am a solo founder and I've been building this on the side of a full time job in software sales.
And I'm starting to realize that I cannot do both while also being a mom and a wife.
And my question is, when should a new founder make the jump to running their startup full time?
Is there a specific income threshold or signs of a healthy business that will give me the confidence to make that jump?
All right.
Interesting questions.
By the way, do you travel for that job?
Not a whole lot.
I work remote, so I handle all of my sales calls and stuff remotely at my house.
All right, so you've got a full time job software sales.
This is really your sounds like your passion.
But you need to know like, if you're going to do this full time, when?
What signs should you be looking for near edge?
I want to bring you in any questions before we tackle test this question.
Well, I have one question, which is Tess say the scenario was such that you could focus on her house full time.
Do you have a vision as to the activities you would then focus on full time.
That would kind of fill all that time and you feel like would have a high return.
Or is that one of the things you'd have to figure out?
It's like.
What would I then?
Instead of spending X amount of time, I can now spend a multiple of that.
What would I go do?
That's a good question.
I get up super early in the morning to work on her house for a few hours before I log in for my regular day job.
Whenever I need to stop working on her house, I'm like, I feel like I have so many things to do.
My to-do list just keeps compiling.
And I was like, man, if I could spend more time on this, would it really move more of the needle?
It's hard to say.
Like I feel like it would, but it's not financially in a place where I feel comfortable like putting my family in the place to.
I can't depend on it quite yet.
Yeah.
I mean, I would sort of start out by saying I don't think there's any quote unquote, right income threshold.
It's really it's such a personal thing. decision, right?
I mean, I'm assuming as a software sales rep, you're probably getting commissions.
You probably get benefits as well.
It's probably a pretty good job from that perspective.
Am I right or wrong?
No, you are right, Guy.
And that's also the hard thing.
I have a really good job and It's well paid.
I have great benefits.
So that makes it even more scary to try to like let go of something that I actually have worked really hard to achieve.
And I do like my job.
It's not like I don't like my job and I want to quit it, but I'm just feeling good, so stretched, so thin between my passion and my love for her house and wanting to see it grow, and then a very demanding job on top of it.
Yeah, Neeraj, I'm curious.
I mean, there's really no universal answer for when to jump ship.
I mean, there's some things I think people should pay attention to.
But like if people say, how do you know?
How do you know when to leave your day job?
Do you ever know?
You know, what occurs to me is there's sort of like two questions in there.
You know, so one is.
Have you been able to progress Her House to a point where you feel like it's worth the risk and the effort of making it your full-time vocation, where you feel like you have a vision of what you want to do and the odds of it working is high enough that you have that conviction that it would be a good use of your time and that it would progress things in the way you want?
And the second is that pragmatic financial question.
Are you in a position financially where you can afford to take that risk?
And if you can't And you still want to, then through a friends and family round or through some method can you financially bridge it somehow, where you could sell some equity and get enough?
And maybe it's not the same amount of money as you're making now, but it's enough that you feel like it's worth doing.
So I would try to break those two apart in how you think about it.
Focus on the first where you're not thinking about the money side.
You're just saying like hey, how much conviction do I have that this – if I put myself at this full time, I'm going to be able to get this where I want.
And if you say you're very convicted, then I would kind of try to think through the money piece and figure out if there's a path forward.
That makes it – I think of it as a no-regret decision, meaning even if it doesn't work, you'll be happy that you tried it.
Can you get to a scenario where that would be the right answer?
Because often if you don't pursue something you want, you'll have regrets.
But obviously if you do something reckless, you could have different regrets.
So you want to make sure it's not reckless as well.
But can she do that?
Because I agree with you, but I would say she should really try to do that, while keeping her job as tough as that's going to be.
Well, I think you've got to start there.
And then, if you're like hey, I just need X amount more time, I think one of the other questions I have which I was going to get into is You know, is there an in-between?
So often in something like software sales, where it's, you know, commission driven and it's outcome based, you know if you're doing a great job for the company.
If you say hey, you know, is there a halftime role or some such thing, you know if it's like that kind of variable comp type thing.
They might say, hey, we don't want to lose you.
So we might be willing to do that or something like that.
But yeah, I wouldn't give up the job too quickly for sure.
And then what I would guide to your point, like given the flexibility you have, it's remote.
You're not traveling for it.
Can you do both?
And then to a degree, you can't do both.
Is there something different than an all or nothing?
There's a thought I had, because I mean again, there's some things that they're sort of quote unquote green lights, right.
Like, do you have recurring revenue?
What do the renewals look like?
Like I do think it's worth asking those questions.
Are you know what kind of growth are you looking at?
Right?
Is what kind of validation are you getting from the outside?
But is there a way that maybe you hire a part-time community manager to do some things that you want to do?
That may be a modest investment of an hourly person helping you.
Is that something you've looked at or thought about trying?
Yeah, it's actually interesting you bring that up Guy, because I actually did hire a community and social media manager this year.
Actually, within this past month, because I was just like, I can't do all of this.
And I'm not present on social media.
And I just don't have time.
So she's been helping me quite a bit.
And I'm really trying to figure out ways to take these things off my plate that I don't really need to be directly involved in.
For sure.
Is that person also in San Antonio or are they remote?
She's remote, yeah.
She was a referral, but she's based in the Philippines.
I mean, look, it's a first step, right, is bringing somebody in.
Because, again, I think that...
You want to keep one foot in your day job as long as possible, because the money and the benefits are going to be really helpful.
And it may mean you're going to have to grind a little bit more on the other side.
But again, with somebody helping you out part time, it could be a game changer.
Yeah, exactly.
And especially with my current situation.
You know I can afford to have someone help me out with that, but I really can't afford to let go of my job.
But I really like your idea, Neeraj, about potentially going half-time or something in the future.
And I also think – you mentioned the person you hired in the Philippines through referrals, and it's just the last month or so.
So I think it's probably early in figuring out what type of leverage you might get from that.
So – there's things that, as you're working on this, I think you might start seeing.
How do I get some leverage while not spending more money than I can afford, but get the growth trajectory of her house up move in the right way?
And then to Guy's point.
You know, can it grow to a size where it can support what you need, and whether that's halftime or what have you eventually full time?
Awesome.
The brand is called Her House, Tess Milholland.
Thanks so much for calling in.
Good luck.
Thanks, guys.
Thank you.
Yeah.
I mean, it's kind of crazy because you guys are running such a big business, right?
But there was a time where you're you know you and Steve are just grinding it out just to getting through the day.
I mean, you probably still have long days, but it's different.
It's a different kind of experience at this point in your life.
Yeah, I remember those early years.
We were working effectively nonstop in the early years.
But it was interesting when Tess described, she's not balancing just a full-time job and her house.
She's also balancing being married and having a young child, I think she said.
So That's a lot you're balancing.
And so I think we had the good fortune.
You know, we ended up starting early, but there's all these, all these things you got to balance and trade offs.
And I do think the ability in her case where you're remote, that gives you some flexibility.
Yeah.
And so can you organize in a way that does give you that leverage to kind of advance it so that it does lend itself sometimes to creative options.
Neeraj, before I let you go, if you could go back to when you and Steve were just starting out, you know building these like just one product web pages, and you could go back and say, all right, you know, given what you know now, what do you think would be helpful?
What would you say?
What would you tell that person?
What would have been helpful for you to know back then?
I think, you know, nothing's ever linear and up to the right.
So, you know, sometimes when stories get told, you know, it's like all the high notes get told.
And so you just feel like it, geez, it should just string right along.
And I think when folks tell you the details of the story you realize there's real ups and downs and a real journey that ensued.
And I think that's the reality.
And so often I think folks can be in a rush to get to that success point.
And, I think, the journey.
This is why you need to do something you enjoy, so that hopefully, the highs and lows are still.
You're pursuing something you really love.
But I think just taking your time and how you go about it, and just being very disciplined in how you pick your priorities, what you do, that's the key.
And you just need to keep going and learn from the things that don't work well.
And often those learnings lead you to the next aha moment.
Because I think if you kind of go in with that mental model, it becomes clearer why you need to pick something you love.
And also from an expectation standpoint, you're trying to rush your way to the big win.
That's really not a thing, I don't think.
Yeah, for sure.
Neeraj, thanks so much for coming back on the show.
Thank you, Guy.
It was great to do it.
Nice to see you.
You too.
That's Neeraj Shah, co-founder of Wayfair.
And by the way, if you haven't heard that episode, go back and check it out.
We'll put a link to it in the show notes.
It's so good.
You've got to listen to it.
Here's one of my favorite moments from that episode.
So, all right, I'm going to read some of the websites that you guys launched, because I just think they're amazingly straightforward names.
Hotplates.com.
I'm assuming that sold hot plates.
Yeah.
Yeah.
Okay.
Allbarstools.com.
What do you think that sold?
Yes.
You're doing good.
You're doing good.
Mydinnerplate.com.
Nice.
That's a classic.
Yeah.
I love this one.
Everygrandfatherclock.com.
A very hot category online.
Painful to ship.
Who knew people were searching for that?
We did.
And the questions or issues that you're facing.
1-800-433-1298
Leave a message there and make sure to tell us how to reach you.
And we'll put all of this information in the podcast description as well.
This episode was produced by Alex Chung with music composed by Ramteen Arablui.
It was edited by Andrea Bruce.
Our audio engineer was Sina Lafredo.
Our production staff also includes Chris Messini, J.C.
Howard Casey, Herman Sam Paulson, Carrie Thompson, Catherine Seifer, Ramel Wood, Neva Grant and Elaine Coates.
I'm Guy Raz, and you've been listening to The Advice Line, right here on How I Built This Lab.
If you like how I built this, you can listen early and ad-free right now by joining Wondery Plus in the Wondery app or on Apple Podcasts.
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