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This month marked the nails in a coffin for a business idea I was validating and researching and I’m publishing this post such that I can continue to learn in public. Like many people who work on these projects I structured my approach and meticulously took notes in a document which I collaborated on with other people I respect the objective opinion of. This post is effectively a narrated version of the document. If you wanted to replicate the way I structure my thoughts I have attached the document at the end of the post. If you can find a fault with it, please let me know in the comments or on Twitter. More on that later. A bolt of lightning? No. It didn’t come to me like a bolt of lightning. In truth I wasn’t looking for a new business idea. Those close to me know I am still bruised from my last venture (Flex) and when I feel like I have discovered a problem/product that simply must be built - my initial reaction is reluctance. I will note, that I don’t think this is a bad thing. Bad business outcomes can permanently damage people but I find the result of this reluctance is a need for high signal in whether to persue a new business and a deep strategic look at the area such that if you take a shot and miss you may still build a business which provides the sweet sweet freedoms we all seek. Here’s the problem story (those of you who get my update email may remember this). My wife and I picked up a handmade King bed in on Facebook but we were unhappy with the paint job.  The maker had used a cheap sticky feeling paint of a colour that my wife tells me (I’m colourblind) was pretty gross. As we managed to find this gem from my influence and not buy a new one I agreed to meet my wife half way and to strip and stain the bed. How hard could it be? No more than a day of work right? Now to set the scene we also live in a 900sq for apartment in the heart of mountain view. We are also fortunate enough to live on the ground floor. This means that for a must job such as stripping and staining a bed we have some space to do it on but a you’ll see in the pictures below. The bed pieces touched both sides of our patio basically. The main point being that we had space, we wanted more, most people in apartments have no space. And so what does a strip and stain entail? Youtube had me believe all I needed to do was apply paint stripper, wait a few hours and the paint would effectively fall off. Maybe add a tiny bit of sanding and we should then stain - modern day staining products allow for a very simple 2 coat stain and seal. Steps planned:
What really happened? Well - what I didn’t realise was that these YouTube guides were made circa 2017/2018, and there are literally hundreds of them so I think it’s fair everyone would make this mistake. If the guides had been for 2019+ they would have noted that the active ingredient in paint stripper was outlawed in California for health and safety reasons. Meaning that paint stripper is now effectively paint gooper. It turns sold paint into play dough smushed onto wood.  To remedy we had to manually scrape off the goop without scratching the wood. When dry we then had to sand down the entire bed with a grainy sandpaper and a fine sand paper. Oh this isn’t too bad - I thought. We had reluctantly bought a cordless power drill in the month before to help put furniture together and pictures on the wall. All I would need is a sanding head. 3 taps later and I bought this one on amazon.  The sanding disks came the next day and we were back at it. Now you may see what’s coming. (A) the disk tool is too small and (b) the cordless drill kept running out of power. Every hour the drill ran out of juice and it took about 5 hours to charge. We needed more/better tools.I don’t however like buying a bunch of stuff which is going to gather dust in some storage closet. (I know - how un-american of me). I scoured google looking for maker spaces, tool rental, used tool sales. I found nothing. Back in London we have a widely adopted rental marketplace called FatLlama which I’ve written about before. I would have been able to rent local power tools in a jiffy if that was as widely adopted in the US. As it turns out - I did find this guy. He never responded to my query though.  Resisting the urge to buy more tools we discovered that a Home Depot 30 mins away allowed for tool rental and so thought we could solve everything with a handheld sander. Pick up was smooth although it definitely took more time to get there and rent a sander for $20 than I had hoped. You have to remember at this point we’re 3 days in, making a sizeable amount of noise in our apartment block courtyard and the end does not really appear in sight. We stopped by Walmart on the way home to get several sheets of sand paper for the sander, really much more than someone should need to get the job done and went home. Well the sander didn’t do the trick. The sander was worn out so as it picked up momentum, it would leave a 5mm divot in the bed when you moved it. This also caused the sanding paper to repeatedly tear, and most annoyingly as it wasn’t a belt sander the sand paper clogged up with paint goop every five minutes. We spent another day going at the bed with the sander/drill combo (I had recruited my wife full time by this point). At the end of the day we knew we needed to drastic action to get this done. After searching through Facebook marketplace some more I managed to agree with a guy in the town over that I could have his masonry drill and accompanying drill bits for $20 if I went then and there.  Did I want a masonry drill? No. Did I want more tools to store? No. But I wanted to use a tool which could be plugged in and had the power to get this done. Upon returning the sander the next day, we picked up a few sanding disks and the related attachment for the masonry drill and went at it. Another 2 full days of sanding later - the bed was free from goop and smooth as glass. This took us to 6 days.  Count one more day for staining - which - went off without a hitch, however by this point every neighbour had walked by our patio to enquire what the noise was and the management told us that there could be no more. This was a residential area not our own garage. Oh and staining had to be done during daylight hours as the patio light is weak. That took the total to 7 days.  Now that was a really long anecdotal but real problem story which led me to kick off my research into a new product. The bed came out incredible, I mean seriously we’re dying in this bed. We have the most beautiful bed i have ever seen. But I couldn’t help obsessing over how much time an energy that took up. What could we have done differently if we had to do it again? What would we have done if we didn’t have the patio? How many other people have experienced this? In America’s DIY community what do people who live in apartments do? The way i like to formulate my V1 thoughts on this is to list out all of the problems and then list out all of the possible solutions and evaluate. Not every problem needs solving. Not every problem needs product. And I never start with a product in mind. Problems I identified:1. I ran out of sandpaper repeatedly 2. I ran out of paint stripper 3. Paint stripper was useless 4. The sanding tool I bought on Amazon was tin and not great 5. Cordless power drill ran out of power constantly 6. Not a lot of space, luckily had a small patio to do it - but very noisy for neighbours 7. Clean up was not easy as patio was not ideal workspace 8. I had to borrow tools from friend - got very lucky but a logistical headache 9. I had to rent tools from home depot which were not cared for properly 10. I rented wrong tool from home depot 11. I ended up buying a drill - now need to store paints, brushes and drill in small apartment.. Possible Solutions: 1. Fedex kinkos for DIY. - Go somewhere and use all the tools brand new in a purpose built studio. 2. Home Depot studios. How can I not work at home depot itself. Like right there. they clean up. buy supplies right there. don’t buy any tools. This is a no brainer to me. 3. Rent tools from neighbours. If dense enough - much easier to pick up and use a neighbours tool than get to home depot. 4. Rent tools from stores. Home dept does this but annoying to travel to and poor quality assurance. 5. Rent tools from apartment building itself. Usually one small tool box of things in each complex. 6. Rent workshops from neighbours. Just go there and use their tools and workshop. Pay a daily or hourly fee. Good use of space for short term. Can make open for evenings/mornings in theory. Can have a kitty that stores leftover materials. Can sell add on materials. Possibly sell storage too. Maybe even sell classes/experience. AirBnB for Garage workshops Solution evaluation: 1. Large capital outlay - high Quality Assurance needed 2. See 1 & branding. Good add on sells. Good brand. Still need to travel to workshop. 3. See fatllamma - need to be SEO good for distro. Would need travel buddies. Doesn’t solve space issue. 4. Weird Quality Assurance. Have to travel. No space to do the work. 5. No space to do the work. Weird Quality assurance. Incentive misalignment, apartment complexes don’t actually want their residents to be doing DIY. 6. No capital outlay. Possible Quality Assurance issues. Would need big SEO/distribution partnerships. Ongoing liability risk. Good add on. Solves most problems, fullest. which lead me to think - renting someones unused garage doesn’t sound all that unplausible. If you risk your life sleeping in someones house on Airbnb where the kitchen, roof, tv could be faulty. Surely you can mitigate the risk with waivers, certification and insurance. This was also compelling to me as Americans over litigate so there is definitely a structural issue to keep people on a platform and stop them from going around you. Secondly - this product/model starts with excess capacity. We wouldn’t need to create supply and the unbooked state is the same as before the product existed. Supply wouldn’t be losing money if unbooked. (these are core foundations to any good marketplace *Thanks for sharing Tony*) Cart before the horse. The popularised lean startup would now tell me to run and test the idea. However, personally, I have found great objective power in (a) doing market sizing and (b) customer development first. This order allows me to:
Customer development I posted the idea in a few DIY Facebook groups and reddit threads and here were some highlights of the response. u/cloistered_around “Just fyi, I met someone whose city came over and fined him because he kept sweeping all his sawdust to the curb. It was clogging up the public water system and now he is never allowed to have a workshop at that home ever again. So I really don't suggest anything like a coin wash either. That's just someone who hasn't been caught yet." Emotion Silvestri “know you're looking for apartment folks to talk through their needs, but as a homeowner with a sizable workspace, the income potential and company sounds interesting to me. If this was an option, I would have lengthened the time I took to go from apartment to house” Casey Marie “I think I would want something where I can store my project for a period of time too. I do a lot in my basement and need to let things dry, get back to it another day, etc.” Levi Warr “This is a very interesting idea. As someone who has a ton of good quality woodworking tools that rarely get used it seems like a win win for me. Although I would be interested to know about the insurance part. Someone in my garage running my table saw scares me.” Ryan Hanlon “(1) I don’t have adequate space for a workshop at home; (2) I would prefer to have shared access to certain tools that I might not otherwise be inclined to purchase on my own; (3) I’d appreciate the sense of community and camaraderie interacting with other DIY’ers; and (4) I could see the benefit of having knowledgeable staff members to provide tips and guidance when needed.” Molly Lumbard “I just remembered there was a job where me husband was considering renting a self storage unit and doing the work in there. It’s pretty economical to be honest!” Thomas Zimmermann “I have to do DIY work on the public pathway up to my building. Please build this.” There was a warm response from both renters and rentees. A number of people also asked if they would be able to rent out their art studios & mechanic shops that they had built in their garages. Pulling on this thread further identified 2 really interesting segments that felt pains in this space the most: (1) People who live in large apartment complexes (2) People seeking financial independence who want to fix/build their own stuff but don’t want to buy tools. Rental stockThis lead me to think of this garage platform potentially listing:
More customer developmentWith these four markets in mind I went out and spoke to people I know fit in them. It was fascinating. One guy had gone so far as to invest $2000 in a hydraulic lift in his garage so that he didn't have to take his car to the mechanic and he reckoned it saved him +$10,000 over a 10 year period. A new friend in SF kindly invited me to experience an art workshop she hosts in her SF loft so that I could try and put my feet in the shoes of a renter and understand the core jobs a new product would need to fill. Thanks Hannah we had a blast!  Is the market big enough?I then tried to run some top down and bottom up numbers. Macro Trends I imagined that this platform would sit at the intersection at a few of these markets:
Market supply size
Demand size
These numbers look smaller than I thought they would be. Either my numbers are off or the TAM isn’t venture back-able. At this point this wasn’t looking like it was going to be the unicorn I had hoped. I was making some very heavy assumptions on the uptake of the product to reach those revenue numbers. To take any significant piece of the market:
Competition A small look at competition shows that this is a problem have tried to address several times over, but with no indication of success. Hackerspaces https://wiki.hackerspaces.org/List_of_Hacker_Spaces (Map shows coverage)  Techshop: http://www.techshop.ws/ Men’s Sheds: http://menssheds.ca/about-mens-sheds/?fbclid=IwAR0iZ-R4ilJ8b0iYeSiKNepAXemurC93mkKzpfnFgivshJ8RZxjz1crRJCQ Flex Space: https://pioneerflexspace.com/?fbclid=IwAR1-NNXR5kXLYrNDw6eQmyiPEkO3o8t-VecunuLIfAOp8L2pQjZbfwLFkF4 GarageTime: bookgaragetime.com All of them are either useless - timing is a nightmare, they are too sparse, or they have gone to address too much of the market. I didn’t think competition would be an issue. Marketing Opportunities
These are high level but nothing is a glaring slam dunk. By this point I was very skeptical of this idea. I wanted to talk to at least 3 people who were qualified to help me with my mental models in the space before I tried to validate the product. This would give me a very clear lens to look at the validation results through. Fantastically the network made it happen and I was fortunate enough to talk to 2 marketplace founders and someone from the woodshop as a service industry. Adam previously of the marketplace Thisopenspace said:
Dave formerly of the marketplace Pivot Desk said:
Delanie of craftsman and apprentice said:
ValidationAt this point I had clarity. Real clarity on how to validate. San Francisco is a city of 880,000 people who are creative-maker types, who pay way too much in rent, and who should be the prime audience for this product. I should be able to get enough city coverage with craigslist listings that in one week, 10 listings should receive 100 inbound requests to use some dummy, made up garages. Ambitiously, 100 listings = 10 rentals a week. Assuming a 40 week year with demand seasonality - 400 rentals a year through solid craigslist coverage in a 880k city = $4000 - $10,000 in revenue across a year. That would be in one prime city, on one solid channel. I went to flickr, searched garage workshops and borrowed peoples personal images of their workshops. I pulled up a list of San Francisco Zip codes and chose 10 that on a map looked like great coverage. Next I created 9 posts and one paid ad.  And after a week - I had 6 inquiries.   The first inquiry made me jump. I was excited. The same for 2 and 3 through 6. But after week of looking as just those 4 inquiries. It was clear:
And so I killed it. ConclusionAbrupt ending Matt! Yeah I’m working on that. Look here’s the key take away. There is a market here, there is value here. Someone with a distribution network I don’t know of could come in here and build a great company with a nice chunk of revenue. It just won’t be me. The marketplaces that work, are built on excess capacity which Americans definitely have. If you’re reading this and you want to give it a shot - reach out. I’ll give you all my thoughts. Here is a copy of the working document I used to structure thinking and research. This wasn’t a solo effort and it wasn’t done in the darkness.
Thanks to all these people for letting me rant, ask you questions and for ideas: Tony E Hannah F Sarah T Craig C Delanie H Adam B Dave M Joseph L Pascal W Petr B Radha K Ned D Foti P Theresa BG Irene M Ryan K And to my wife who correctly said this one was a non starter from the beginning.
3 Comments
Jae Seok An
27/2/2020 12:47:31 am
awesome post. Thanks for documenting it all. Wish you best in your next journey.
Kibet
1/5/2020 10:27:45 pm
Great post and walk through your journey. Especially liked your approach on starting with customer development and market sizing first. Thanks for sharing! Leave a Reply. |
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