- The interviewee is the co-founder of AppDeco, a marketplace for buying and selling furniture based in New York City.
- They saw an opportunity to improve on Craigslist by creating a trusted community of users, easy pickup and delivery, and secure payments.
- Market research showed that adding delivery to furniture listings on Craigslist increased interest and that furniture was one of the most popular categories on the site.
- The co-founders were frustrated with their own experiences selling furniture on Craigslist and saw the success of companies like Airbnb and Uber as inspiration.
- They decided to pursue the idea of AppDeco full-time, even though they had stable jobs and student loans.
- The co-founders applied to Y Combinator and were convinced that they should pursue their business idea after receiving an interview request.
- They had positive feedback from the market when they offered delivery with a furniture listing and had a successful transaction on the first day of launching their site.
- The co-founders saw their solution as practical and tangible, and they are still working on communicating their business idea to friends and family who may be skeptical or worried.

- The speaker's parents have a conservative mindset and value stability in employment
- The speaker's family in Sudan has a tradition of entrepreneurship due to the lack of large corporations in the country
- The speaker's decision to start a business was initially met with skepticism from their parents
- The speaker's business education provided valuable skills in financial modeling and analytical structure
- Establishing a business culture and managing people are important aspects of running a startup that are often overlooked.

- The speaker emphasizes the importance of structure and regular meetings in a startup team.
- They mention weekly meetings, team meetings, daily standup meetings, and a weekly team KPI meeting as examples of regular checkpoints.
- The speaker also discusses the use of 1-on-1 meetings and performance reviews for conflict management and feedback.
- They highlight the importance of transparency in performance reviews and the need for constructive feedback.
- The speaker mentions the importance of addressing performance issues early and being transparent about changes in the company that may affect roles.
- They discuss the learning process of determining margins and pricing in the early stages of a startup.
- The speaker mentions negotiating prices with a moving company and later running A-B tests to determine price sensitivity.

- The company has determined the right mix of products and delivery fees to make their business model work
- The willingness to pay for delivery varies across cities, with people in New York likely willing to pay more due to lack of cars
- The seller base is older with higher disposable income, while the buyer base is younger and aspirational
- The majority of sales come from top brands like IKEA and West Elm
- The company acquires customers through various channels, including Facebook, Instagram, and word of mouth
- They initially acquired customers through subway advertising, which had a significant impact on their traffic
- The company had to learn about delivery operations through trial and error, but has since hired someone with experience in the field
- The company's model involves same-day pickup and delivery across multiple states, requiring complex scheduling.

- The company has built a unique model for scheduling and delivery of furniture consignment
- They did not use open source routing software, but built everything themselves
- They chose not to warehouse items because it is cost prohibitive and limits scalability
- They tried various features that did not work, such as offering cleaning services and photographing for customers
- They eventually found success with Facebook and Instagram advertising, which took time to figure out
- They use analytics tools like Looker to track and analyze data, which has transformed their operations

- The speaker discusses the importance of analyzing data to understand consumer behavior and make informed marketing decisions.
- They mention using dashboards to visualize data and make conclusions about trends.
- The speaker also talks about the value of participating in a program called YC, where they received advice to talk to customers and the benefits of doing so.
- They recommend taking all suggestions and ideas seriously and putting in 100% effort.
- The speaker emphasizes the importance of setting up regular meetings with mentors and being accountable for completing tasks.
- They mention that some advice may be specific, such as creating a blog for SEO, while others may require further clarification.
- The video concludes with a mention of the company's website, appdeco.com, for those interested in trying out their product.

- AppDeco is a marketplace for buying and selling furniture based in New York City.
- The co-founders saw an opportunity to improve on Craigslist by creating a trusted community of users, easy pickup and delivery, and secure payments.
- They applied to Y Combinator and received positive feedback from the market when they offered delivery with furniture listings.
- The speaker's decision to start a business was initially met with skepticism from their parents.
- Establishing a business culture and managing people are important aspects of running a startup.
- Regular meetings and performance reviews are used for conflict management and feedback.
- Determining margins and pricing was a learning process for the company.
- The company acquires customers through various channels, including Facebook, Instagram, and word of mouth.
- They have built a unique model for scheduling and delivery of furniture consignment.
- They use analytics tools to track and analyze data for informed marketing decisions.
- Participating in the YC program provided valuable advice and mentorship.
- The company's website is appdeco.com.

Reham Fagiri and Kalam Dennis are the founders of AptDeco, where you can buy and sell used furniture. They were in the YC Winter 2014 batch and you can find them at https://www.aptdeco.com/

***

Topics

0:00 - What is AptDeco?

0:45 - Why did Reham and Kalam start it?

2:30 - Were they considering other ideas?

4:45 - How did they prepare to start AptDeco after business school/the corporate world?

6:00 - Getting over the fear of starting

9:00 - Communicating that they're starting something to friends and family

14:00 - Starting a startup after business school

17:00 - Helpful learnings from a more traditional business education

27:00 - Early models of AptDeco vs today

31:30 - AptDeco's customers

33:45 - Brands and customer acquisition

38:25 - Learning how to do delivery

41:45 - Deciding not to warehouse furniture

43:30 - Ideas that didn't work and some that worked on the second attempt

48:00 - Analytics

50:30 - Being a NYC company in YC

51:50 - How to make the most of YC

All right guys, well thanks for inviting me to your amazing office.

AppDeco is a marketplace for buying and selling furniture based here in New York City.

We take care of essentially the whole process from pickup and delivery to payments and everything in between.

So basically, we kind of took Craigslist and just said, if you get a trusted community of users, if you can make the pickup and delivery easy between 2 people and the payments between 2 people, you'd have something useful.

And so that's essentially been the premise since we launched.

And what made you convinced that this could be a fully fledged product?

Because I've seen all kinds of blog posts about the fragmentation of Craigslist, right?

And some have succeeded as products and others haven't.

What gave you the impression that this could be a thing?

Well, I mean, we started out of our own frustration, just having a really bad experience trying to sell our furniture on Craigslist.

But realizing it's a big opportunity was, we did a lot of market research to sort of test if this is something that people would be interested in, sort of the premise of the solution.

So for example, we would go on Craigslist initially and test, hey, with delivery, we'll actually just copy somebody's listing and just add delivery and see how people react to it.

we saw that, oh, there's definitely a big opportunity there because people seem to be a lot more responsible when you just add the delivery word to the listing.

How could you know that if you hadn't created the original listing?

The other thing when we did our research we saw was the fifth most popular category on Craigslist.

Furniture was the fifth most popular category.

And then when we created like an MVP, And when we actually had launched the site the first day that we had the Frankenstein of a site in 2014, we had a transaction the day that we launched it, and this was with no earthly idea of really what we were doing.

I just think all those signs kind of pointed to it.

And then when we applied to YC and ultimately got into YC, I think that's when we were like, you know, shit, this is real.

Because the, yeah, like the market research thing is much more of the business school approach.

And it's a less common approach within YC startups, right?

So were there other ideas that you were considering?

And, you know, I just, Raham and I had wanted to work together for a long period of time.

And, you know, quite frankly, it wasn't really that scientific.

And we weren't, I don't think we're the traditional founders in the sense that, you know, we were in like serial entrepreneurs.

We, you know, come from very traditional business background, but we were like, we took a lot of inspiration from Airbnb and other companies, we're like, this seems very obvious.

And that we kind of just took it and ran with it?

Yeah, I mean, I think for us, our experience, we were so frustrated with what happened to us when we were trying to sell our furniture on Craigslist.

And we started kind of really, frankly, obsessing over, like, this just is really, really bad.

That, frankly, I don't think either 1 of us was ready at the time to start a business, but we stumbled upon this idea.

was ending business school and Column, it was sort of like happened all at the same time.

I was finishing business school, coming back to the city to start a job at a startup, not start my own company.

And so I was trying to sell my furniture, and I just had a really, really bad experience.

And Colm, at the same time, was also trying to sell a piece of sofa, and he also had a bad experience.

And so we were just talking about it, and just like, why is this so bad?

Airbnb had just taken off, Uber had just taken off, and everybody's now doing this sort of quote unquote sharing economy.

So why couldn't you do that with furniture?

And we just kept on talking about it all the time to the extent where we're like, hey, let's just do this.

Now is the time, we don't need more experience.

So that's really kind of how it happened, I would say.

How did you psychologically prepare yourself to go off that ledge and not have the steady Goldman paycheck?

Because you also from business school, do you have loans?

I mean, I don't think anything prepared us for what we got ourselves into.

I think that we were just kind of at the point where, You know, I think when we had kind of gotten to the interview point of YC, and quite frankly, I was still kind of moonlighting.

So I was still doing my, I was like doing this in the evening and then doing, working at L'Oreal.

I'd never worked professionally anywhere else.

So it was, and I was very quite frankly very happy at L'Oreal.

It wasn't like I was, you know, I'd always had like upper mobility and I loved working there.

I was very happy in that corporate environment and had a lot of experience and upward trajectory.

But I think that we just saw this as an opportunity.

And then we said at the end of the day, if we fail, it's not like We couldn't go back to corporate America or go somewhere else.

And we always were kind of confident in our skills.

But this is super interesting to me because I 100% agree with you.

And I think that's true for most people at these super competitive jobs.

They're talented enough to get the job, they could get it again.

But how you flip that switch to get over the fear.

You know, I think when we got into Y Combinator, that's when we were just like, okay.

Actually, when we got to the interview point, Then we were just like, okay, if we're getting to YC, we gotta do it.

Like he had already given his, Callum had already given his notice before we even got to, We had received the interview request, but we hadn't been to YC yet for the interview.

So we didn't know we were in, but I had already, I decided not to take the job that I came to New York for, and ended up just doing this full time.

And Colum was moonlighting and essentially health financing it.

So while he was working at L'Oreal and then doing this at night and on weekends.

But you know, I think, I mean, I think like we just saw a problem that we became very intimate with and also the solution for the problem, we experienced it during the same time.

So when we had this really bad experience trying to sell our furniture on Craigslist, I moved back to New York and I had my truck.

And Colm borrowed my truck for that 1 day, listed back his listing on Craigslist saying, 1 day only free delivery in New York City.

And that same day, someone gave him the full amount and showed up immediately, did not cancel, did not flake, was not sketchy.

And so we're like, wow, this is how you do it.

You have to offer delivery, you have to take care of everything, you have to make it simple.

And so we saw the solution, and that really helped us sort of, it fast forwarded our process of deciding whether we should do this or not.

Because we had the problem and the solution at the same time and we're like, okay, we've got to do it.

so you had that kind of positive feedback from

And I guess we just felt it was a good kind of common sense solution as well.

I think it's found as like we're very, we're probably more practical than most.

And we're probably, you know, we're probably kind of 1 foot in front of the other type of founders.

Versus, you know, like, you know, I don't know, like kind of in the clouds type.

Yeah, we're very, I think we're very practical in the sense, and I think that we saw this as a very, seeing it with our own eyes and seeing the opportunity, we thought of it as a very practical kind of solution to something that, you know, everybody has furniture, it's kind of a big problem.

So I think a lot of those kind of things were, you know, kind of fit, I think, within our – if I have to think back about it now, fit within our warehouse, like this is something very tangible and something that could be really useful.

And then how did you communicate that to your friends and family from these like prestigious jobs and schools and stuff?

Like, for the first time, I actually sat down with my father.

And we've been kind of in these conversations with investors recently.

And I'm just trying to take him through the investor deck.

And I'm like, you know, and it's such a strange thing to talk about, you know, raising a few million dollars or doing this and that.

It just, you know, a lot of times, quite frankly, I think it's just like, you know, you're talking.

I mean, it's very hard to make it very tangible, you know, for, you know, we're saying we're practical, they're uber practical, you know, so.

I think when we first did this back in 2014, I think there's a lot of, I wouldn't say just skepticism, I think it was just like worried.

Just worried, you know, like don't give up like that good job and don't, you know, don't, you know, a bird in the hand.

A bird in the hand is definitely I think the philosophy that my parents have and I think probably most people probably that generation.

And I would guess, and Rahama can speak on it, you know, you speak on that, is that, you know, if you have an immigrant story, it's like, you know, you're gonna find a good job at a good company and you'd stay there.

And so this is, I think it was just so foreign.

They were skeptical and worried, but then at the same time kind of supportive.

Yeah, my parents, so I'm from Sudan, I came to the US for college, and so my parents still live in Sudan, And so for them, the golden ticket is to have a job at Goldman, you know, not start a company and, you know, just work crazy hours.

The whole thing has just kind of been crazy for them.

So they're like finally, I think, wrapping their heads around it.

But I mean, pretty much almost every phone call I have with my parents is like, so when is this going to be over?

Also, they don't live here, so they don't see the impact we're making.

It's a completely different world for them, so they just don't really understand it.

But they're supportive, which is the important part.

There's not a kind of an entrepreneurship narrative in Sudan?

All my family members have their own businesses because the way the economy is structured there is there are no large corporations.

But most people are just small business owners.

My aunts and uncles, most of them have, you know, either like their own medical practice or engineering firms or architecture firms or what have you.

But I guess because probably they're business owners that they know how hard it is to run a business.

Like if you have a job that pays well and you don't have to worry about covering everybody else's salary, why are you doing this to yourself?

I actually think, and my parents are probably, even working at L'Oreal was like a leap for them.

They're more like a stable government type of job.

So I think that they're like uber focused on stability.

I was never interested in those particular type of things.

I was always interested in business and wanted to work in a company that was exciting and innovative.

And even for them, I think that kind of seemed like kind of like fluff.

And so this was like even another level of like really off the league.

generational thing because you would assume that even like being from California, at least they'd like, oh, you go work at HP or something.

He did, and so, and my mom worked for like the railroad, Southern Pacific, so I think, you know.

And so, Even a company like L'Oreal or Goldman Sachs, Goldman Sachs still has a process where they let go, I think their bottom 10% every year or something like that.

And L'Oreal is an extremely lean company or corporation, so it's not a company where you can hide around and skate by.

You can't coast, you know, and so, which that's never been the type of thing that I was interested in anyway.

And did you go to business school as well?

is a historically black college in Atlanta, Georgia.

And I got recruited for L'Oreal right out of undergrad.

Okay, and now how do you get in, were you getting into startups in business school?

Like how did this happen amongst your friends?

Because I know that's been a pretty big shift from like 15 years ago, if you went to HBS, it was like private equity or like consulting, right?

But now it seems like more people are going to the Googles and the Facebook type companies, right?

So when you were in school, was that coming up or

Yes, it was definitely coming up sort of.

There was definitely a shift where more I went to Wharton and there were more my class or more people talking about tech versus going into banking and finance.

So, like, the market had crashed a few years before, and, you know, a lot of people are just sort of exhausted from the financial industry, and they were looking for something else.

When I started business school, I mean, I knew I was always going to do something, actually, 1 of my essays was about building a social enterprise.

But I didn't know what kind of social enterprise.

I always thought it would be connected to Sudan or connected to Africa in a way.

But I always knew that I was going to start something at some point, but I didn't think, straight out of business school, I'm ready.

I needed more experience, and that's why I wanted to join a startup.

So when I was at business school, I saw this shift where a lot of people were asking me questions, people who came from finance, about tech, because I'm an engineer.

And everybody wanted to like, OK, well, tell me more about tech.

And like, how do you be a product manager?

All these people are asking me about tech, and I'm trying to get out of tech.

And so I really started digging deeper, but I did definitely do a lot of startup sort of business plan competitions when I was in business school.

Talked to a lot of people who started their own businesses and just sort of realized, wow, all these people are, I mean, I feel like I'm smarter than, as smart as them.

They can do it, I should be able to do it.

And that really helped me, and I think get further.

And I think I was, you know, I think we were very, I was very fortunate to, for Rahama to kind of work on this, work on AppDeco kind of at that time because she was being immersed to kind of the startup world where I think I was quite frankly, like very removed from it.

When I think about kind of where we are now, when I think about pre-YC versus post-YC, you know, and just the tech environment, particularly in the Bay Area.

We're like, man, I was light years away from that particular world.

And if it wasn't for Y Combinator kind of giving us like a significant immersion into kind of the startup world, I don't think that, you know, I don't think we would have had the progress that we've had.

Like definitely not, because there's so many things that, I think when we started, we said, listen, we have a lot of business experience, we work at great companies, we've worked at great companies, we can just apply that knowledge and start this company, and this is the furthest thing from the truth.

I mean, we, Just what it takes to get from 0 to 10 is a totally different, 0 to 100 is a totally different skill set than what we had acquired during our professional years.

What were the outstanding learnings from a classical business education?

Because I think there's this common trope that business school is a waste of time and even like business education in a lot of the startup culture, right?

And so people fall back on, you know, whether it's like PG's essays or kind of like lean startup things.

But I'd be willing to bet that there were super valuable courses that you guys took.

And so if you were talking to other startup founders, what would you pressure them to learn?

I mean, 1 of the things that I always think and I always joke with the team about is financial modeling and just being able, you know, I've become pretty crazy with, it's not even financial modeling, but just modeling.

How do you model, how do you build projections, how do you think about business scenarios and, you know, sort of as you think about your next big project, like how do you map that out?

I think that's like probably the biggest thing that I still use every day here.

I think for me, just analytical structure.

How to structure looking at numbers in a way that makes sense, you know, I mean, that's all I did at L'Oreal.

I did my whole entire professional career.

And so, you know, at first, it was not as applicable.

Like, So, you know, when you first have a startup off the ground, you just gotta like just do shit and throw in, see what sticks, and then do more of it.

And then listen, you can analyze it later down the line.

But at first, it's just like, you just gotta do a whole bunch of stuff, not in a scalable, manageable way.

Well, you were doing the deliveries on your own,

We were going to people's homes, buying furniture.

Like, we're doing all kind of crazy stuff, you know?

And, you know, at the instruction of the YC partners.

And then you figure out how to take those kind of crazy, zany ideas and to make them into kind of scalable, practical models of things that are repeatable in a scalable way.

But after that, once you do that, you have to know how to view your analytics, set up a strong foundation to really be able to look and say, did this work, did that not work?

The other thing too, I think is that people don't talk about enough is Just the establishing a business culture, how to team management, people management.

That's a huge pitfall for startups is that they don't know how to manage people.

They implode because they don't know how to deal with conflict.

They don't know how to talk to 1 another.

They don't know how to, you know, manage dynamics if there's conflict amongst 1 another.

And so I think that's probably 1 of the biggest things that people don't talk about enough.

It's just, you know, conflict management and people management is something that I think that we've been able to deal with hiring, firing.

All those things are things that we've had experience with that are very tangible and very relatable to start a quote.

And like even creating structure, I would say.

So, you know, early on, sure, you're a tiny team, maybe you're like 3 or 4 people, and people sort of dismiss the idea of, oh, we don't really need structure, we can just talk to each other all the time.

But having regular checkpoints, like weekly meetings, and those type of things actually make a big difference, or even team meetings where everyone comes together and talk about whatever's happening next week or what have you.

People dismiss that and these are the things that come from business school, come from sort of our traditional work experience, that these are things that we've done every day when we were there, right?

And so we've been able to instill that from an early, early, early on in sort of our business.

And I think it really helped, Helped sort of calm things down to some extent because it's crazy being in a startup anyway.

So if you can create a bit of sense of stability, it goes a long way for the rest of the team.

Say a founder approached you and this is how you should structure your check-ins or whatever it might be.

We meet with our direct reports once a week.

More if need be, but once a week to just talk through just what are the strategic projects that they're working on.

We just have our project list sheet that's public for everyone to see.

So we have a project list sheet, and Google Sheets, simple stupid.

And we have all of our strategic projects that people are working on.

We touch on those projects, and we have kind of tentative due dates.

Sometimes you'll finish ahead, sometimes it'll take longer, It's more than you expected.

We also have daily standup meetings where we just have a quick kind of touch base in regards to what we're working on to keep the team kind of engaged and collaborative.

And then we have a one-time-a-week team KPI meeting where we review the overarching numbers for the company.

So that could be unit sales, dollar sales, refunds, returns, positive and negative Yelp reviews, you know, all those things that we have about once a week.

And when it comes to conflict, well, actually just dealing with conflict, not conflict avoidance, like how do you do is that through the 1 on ones?

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Starting a Startup After Business School - Reham Fagiri and Kalam Dennis of AptDeco