A Product Market Fit Show | Startup Podcast for Founders
00:00:00 · Pablo Srugo
[00:00:00] S0: 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.
00:02:03 · Pablo Srugo, Mark
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] S1: Yeah, thanks for having me, Pablo. [00:02:24] S0: 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] S1: 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.
00:02:46 · Mark, Pablo Srugo
[00:02:46] S1: 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] S0: 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?
00:03:38 · Pablo Srugo, Mark
[00:03:38] S0: 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] S1: 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, VistaPrint 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] S0: How cheap were those Facebook ads? Each one is supposed to be at least $2, $3 to get an actual event. No?
00:04:32 · Pablo Srugo, Mark
[00:04:32] S0: 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] S1: 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.
00:04:38 · Mark, Pablo Srugo
[00:04:38] S1: 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] S0: 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?