- The founders participated in the YC Fellowship in 2016 to figure out product-market fit for their company.
- They initially had a concept of a curated online marketplace for emerging brands, but it wasn't working.
- The fellowship allowed them to acknowledge this and try out multiple other concepts.
- They ran experiments every week for two months during the fellowship.
- One of the worst experiments was trying to sell handmade dishware to restaurants, which didn't work.
- After the fellowship, they realized that brands needed help selling offline rather than online.
- They started running outdoor pop-up markets in a parking lot to test this concept.
- The markets were a success, and they proved that brands wanted to sell in person.
- They then found a store and transitioned to a membership-based model, which was even more successful.
- They quickly filled the store with brands, some of which were from the parking lot markets.
- They found their first customers through relationships with brands they profiled on their digital magazine and through referrals.
- They also reached out to brands on other e-commerce sites that might be interested in selling in person.

- The company has had successful outreach with potential customers through events and sales
- They determined pricing based on what other brands were willing to pay in existing markets
- They aim to keep their membership fees accessible for emerging brands
- They have a wide range of brands in their stores, from small startups to those making millions in revenue
- The company plans to expand to new cities based on customer data and demand
- Real estate is currently in crisis, creating opportunities for the company to negotiate favorable deals
- Traditional retail stores are struggling due to changing shopping behavior and high costs
- The company takes advantage of short-term lease agreements and focuses on experiential marketing
- They have transitioned to long-term leases for stores that have proven successful
- Fundraising for the company has been similar to other startups, with some questions about the physical and real estate aspects of the business.

- The speaker mentions that WeWork's success in the co-working model shows that physical space is not a threat to businesses.
- The decline of department stores is attributed to the internet's ability to offer immediate access to a wide selection of products.
- Department stores lack tailored experiences, discovery elements, and cohesive product selection, making them less appealing compared to online shopping.
- The difficulty for department stores to renovate and innovate due to their large footprints and long history is highlighted.
- The speaker emphasizes the advantage of their own stores, which are experience-driven and built around a specific community.
- The selection process for products in their stores involves analyzing data from Instagram, sales, and previous performance.
- The stores focus on accessible price points and lower-priced products to create a more inclusive and enjoyable shopping experience.
- The founders offer advice for non-technical founders applying to YC, including being persistent, showing traction, and confidently explaining why a technical co-founder is not currently necessary.

- The speaker discusses the importance of creating a service or product that meets customer needs and refining it based on customer feedback.
- They advise having a technical co-founder when building software or tech products.
- The speaker shares their experience of building a retail real estate business and how technology was not a hindrance.
- They believe there will be a shift towards in-person interactions and community building in retail.
- The speaker emphasizes the importance of in-store employees for the overall store experience.
- If not working on Bulletin, they would be interested in store design or writing for a nonprofit.
- The most meaningful thing they learned at YC was the importance of focusing on the one issue that can affect the business.
- They also learned the ability to listen during their time in YC Fellowship and YC Core.

- The speaker learned the importance of listening during a pivotal time of growth and figuring out their main focus.
- Group office hours allowed for listening to each founder's problems and offering suggestions or help.
- The intense environment of quick decision-making and preparing for demo day made bouncing ideas off each other valuable.
- The experience of living and working closely together in a small studio was intense but rewarding.
- Choosing a good co-founder is important for success in programs like YC.

- Founders participated in YC Fellowship to find product-market fit
- Tried multiple concepts, including a curated online marketplace and selling handmade dishware
- Realized brands needed help selling offline, started running outdoor pop-up markets
- Transitioned to a membership-based model, filled store with brands
- Found customers through relationships with brands and outreach on other e-commerce sites
- Plans to expand to new cities, takes advantage of real estate crisis for favorable deals
- Traditional retail stores struggling due to changing shopping behavior and high costs
- Takes advantage of short-term leases and focuses on experiential marketing
- Selection process for products involves data analysis, focuses on accessible price points
- Advice for non-technical founders applying to YC, importance of customer feedback, and having a technical co-founder
- Importance of in-person interactions and community building in retail
- Importance of in-store employees for overall store experience
- Learned importance of focusing on one issue, listening, and choosing a good co-founder in YC.

Ali Kriegsman - https://twitter.com/alikriegsman - and Alana Branston - https://twitter.com/alanabranston - are the founders of Bulletin - https://bulletin.co

Bulletin is a platform that allows brands to share the cost of a physical store.

They currently have three locations - Flatiron, Nolita, and Williamsburg - and there are more to come.

Ali and Alana went through YC Fellowship and then the winter 2017 batch.

The YC podcast is hosted by Craig Cannon - https://twitter.com/craigcannon

So there were a bunch of questions about you guys kind of like pre-YC.

And I think maybe the easiest way to do this is like flow through from there.

So like before you guys were in YC and then fellowship and then core and then now.

So going all the way back, Phil Thomas asked, what did you learn from the fellowship and that you applied during the main YC Core program?

Yeah, I think so we did the fellowship in winter of 2016 when Kevin Hale was running it.

And so I think for us, YC Fellowship was all about figuring out product market fit and figuring out what we were, because we didn't know.

When we got in, the concept was this cooler, curated Etsy.

We would find these cool emerging brands, sell their product online and have a content element to it.

We had some brands selling with us, but there was clear problems.

And so I feel like fellowship for us was about acknowledging that this wasn't working.

So acknowledging that wasn't working, and then it almost gave us permission to just totally tear that down and try a million other things.

I think before we kind of got into YC and just got into that whole mentality, we were like, this is our company and this is what we're doing and we're gonna just keep doing this until it works.

And I feel like Kevin and like the program in general basically allowed us to be like, okay, this isn't working.

Let's try like literally 15 other concepts and see and get something with some momentum and go with that.

And so I feel like we basically used, I think it was 2 months that program and we were just ran like experiments every week.

So we're like, okay, what if we, and most of them were ridiculous.

was, so we were selling all of this like beautiful dishware and like home decor.

So it was all handmade, like emerging brands.

And Kevin was like, why don't you go to restaurants and see if they need help designing their stores and if they need a programmatic interior design solution or a way to replenish forks and knives and stuff.

So we spent the entire day, the 2 of us, bopping around to different Brooklyn restaurants and being like, how do you find your mugs?

And this is like a business where they have razor thin margins.

We're like, what do you think about if everything was handmade and way more expensive and probably breaks more often?

They were like, no, we would never use this.

Yeah, and we also knew nothing about the restaurant industry and like there are programs that they there some guy pulled out his phone and was like here's an app where I can order like 800 limes on demand yeah I need it like this has been figured out already and we're like yeah So that was definitely the worst 1 and the funniest 1.

Funny, and then like, so by the time you started working on your product as it is now, that was before YC core, right?

Well, there was a whole like chunk of time after YC fellowship where we had realized that this editorial magazine model wasn't working.

We in the spirit of YC asked our users, So we asked all of the brands that sold on our platform what they wanted and it turned out that they actually needed more help selling offline than they did selling online.

So they weren't really looking for another like multi-vendor online marketplace or another Etsy or anything of that nature.

A lot of them made boatloads of money doing like craft fairs and selling in retail environments or doing pop-ups, or markets.

And so what we did was we listened to that and we said, OK, what if we basically just started doing this as many times as we can, as frequently as we can, as inexpensively as we can, just to see if there's a there there.

So I'll let Alana take over how we found our 18,000 square foot parking lot.

But we basically, we ran outdoor pop-ups, pitch tents in rain or shine in this almost 20,000 square foot parking lot in Williamsburg for 6 consecutive months.

The idea was that we wanted to test this concept without spending a lot of money, and that's kind of what we did from the beginning.

And so we were just looking for the cheapest possible space to run these things.

The brands would pay a weekend fee, they'd come up in person and sell their product.

And so we looked everywhere and the first place we ran it was at a bar.

And so these brands, we had 40 brands a weekend on a good weekend and they'd pay like about $300 a weekend and that would give them a table and a chair that we provided.

They would basically come and like set up their product like a little booth and we would just like run a market for Saturday and Sunday.

So our weekends and our, like, it was just, this is all we would do.

And so we did it at this courtyard and then we wanted a bigger space.

So I found this like massive, like, overgrown, it looked like a toxic wasteland parking lot.

It's like this asphalt parking lot sitting on top of a swamp.

It's like you cannot develop on this property.

It was like in Williamsburg and Brooklyn,

And so we just called like the phone number on the parking lot, like gate.

We got it for super cheap where we could use it every weekend.

And yeah, we ran it from like April of 2016 till the end of October that year.

And it was a total nightmare because we were outdoors.

It was like rain, it would be like the middle of July in New York City

and like brands would just like text us and be like, it's 100 degrees, we're not coming.

it would be so hot and it would be like, to stand outside is probably inhumane.

But the good thing was that we were starting to actually make money and the brands were making money and we were starting to prove out the model and we could see, okay, we now know, we've proven that brands want to sell in person, they'll pay to sell in person.

There's definitely this lack of easy to access physical space.

And yeah, I feel like we were able to like prove that that summer.

And then, so at what point did you decide like, all right, let's do YC?

So at the end of October, we were like, this is crazy.

And so we started, we were like, what would be like a more long-term solution?

And so we started looking at actual physical retail spaces, like with like a normal inside.

And so we found a store, which we still have now, it's like a great store in Williamsburg.

And we basically moved to the same model, this like membership based model to the store.

And so the brands would pay this monthly fee, they'd get access to space, but the store was totally run by us, so they didn't have to show up and it allowed us to work with larger brands.

And so we really felt like that model was working even better, and we were onto something bigger, or this isn't just gonna be another marketable.

Like we had, I want to say like 35 brands paying the membership fee within 12 days of announcing that the store was going to open.

And so these are all people that were doing the parking lot version.

Some of them were, and then some of them were brands.

A lot of the parking lot people were like, Pete,

No, some of them were from the parking lot.

There are a lot of, honestly, I do want to call out, there are a lot of brands that have stuck with us from the

It was kind of open the door to other types of slightly larger brands that maybe wouldn't sell in a parking lot all weekend, but they're not carried in Sephora all over the world yet.

To put a finer point on that, Brian Chapel asked, how did you actually find your first customers?

Like, so you filled it quickly, but how did they even find out about you?

So to answer that, I'd say we, when we launched the digital, like shoppable magazine version of bulletin, we would just reach out to brands that we loved and be like, can we do a profile on you and a long interview and original photography and make this beautiful page for you?

They would see 0 sales on our website, but it was really like no 1 had anything to lose in this situation.

And so through just maintaining those relationships and then eventually moving into the market model, we reached out to those brands that had been on the editorial site.

They said, oh, I know these 2 girls that I worked with on this previous iteration of the company would recommend other brands to do the parking lot.

And it was honestly, we always had a great referral number.

And I think that that was how, and I think with opening the store, it was basically tapping the network of brands that had been doing the pop-up and then creating a nice little email and sending that to brands on other e-commerce sites that we thought might wanna sell in person.

We obviously looked at New York Now, Renegade, other sites that did this like IRL sales thing that we were trying and just always had very, I would say like very successful outreach with potential customers.

Yeah, and what was your strategy around pricing?

Like how did you figure that out once you opened the store?

As far as the membership fee and everything?

Yeah, I think we had an idea of what brands were willing to pay from the markets.

Like we could look at an existing market and see like, okay, this 1 is a massive 1 and they were charging a thousand dollars a weekend.

And yeah, I think we had an idea of what they would pay from that and then move that over to the store but like even now we keep that number like very accessible for brands like we like the idea of you know brands that are emerging to be able to Partake in this and you get like a very a wider range of brands that that would sell in the space which is kind of cool.

Okay because yeah I mean like what kind of scale are we talking about like what are do you even know the annual revenue numbers of a lot of these brands?

would say on the smaller end you have brands that have literally just started, like they maybe sell their products on Instagram and like they probably couldn't even tell you what the number is revenue wise, which I think is kind of cool to have like a certain percentage of the products in the store be like this very homespun vibe.

But there's, I mean, we have brands that sell in Sephora, we have brands that are like big brands that are doing, or I wouldn't say big brands, but maybe they're doing like 10 million a year in revenue.

So they're still, you know, out there building their brand, but like they have manufacturing figured out and distribution and yeah, just like a much more established brand.

So, Adora had a question for you about store expansion.

She asked you about a couple things, but 1 of which was store expansion So for you guys, like how do you think about opening up new spaces?

Yeah for us, so we have started in New York City, obviously, we have 2 stores here.

We'll be doing 1 more store in about a month, so we'll have 3 stores for 2017.

And yeah, I think we, it's tempting to wanna just do this very quickly.

We have so much demand from these brands that want to get into spaces.

There's real cost behind all of this, obviously.

So definitely trying to be careful there.

But I think now that we have these 2 successful stores, we'll have the third opening soon, It gets easier for us to look at the data to understand what's performing, what products are performing, what neighborhoods work best for us.

And I feel like even now, we have such a good idea of what a successful store looks like, like as far as square footage, as far as location, the types of neighborhoods.

And I think as the company grows, it's easier for us to actually look at things like customer data to understand what the next city is.

So we have our online business still, understanding where those customers are from helps us decide, okay, maybe LA is the next place that we're going, and yeah, just be smarter about it and not go crazy.

I will say when it comes to how we pick actual stores and the availability of stores, real estate is in crisis right now, in particular retail real estate.

And I mean, you can speak more to it, but we don't really have a dearth of real estate people like reaching out to us to have us help them make their spaces successful.

Which is really exciting that, you know, both ends of the marketplace when it comes to having a waitlist in Williamsburg and in Olita for our 2 stores and then also having this like pool of, you know, real estate folks that want us to open bulletin spaces for them and with them.

So can you contextualize that a little bit for people?

Because I don't think it's totally obvious.

Like, even in, I'm trying to think, like maybe it was in Carroll Gardens where there's just like strips on main drags of like stores just vacant.

And how are you guys making money off of that opportunity?

I mean, it's good for our business, but I think, yeah, I think everything started to change a little bit as people's shopping behavior has changed.

I think like Amazon definitely plays a role in it.

I don't think it's, you know, the entire reason that everything has changed so much.

I think people have less of a reason to go to the store for like their normal, like just utility kind of purchase.

And so I think those traditional retail stores do get hit because of that.

And then for us, it does turn into an opportunity because I think all of these property owners or brokers, they'll cut deals with us that we would have never gotten 9 months ago.

Like if we want to do a short-term license agreement and test out a location and do it at a discount with the option to renew, there's just so much that we can do now because of what's happening.

What's happening, meaning like a single store is just way too expensive?

Yeah, there's basically a mismatch between the cost of real estate and like how much it traditionally costs a brand to take on a lease.

Also restrictions around how long that lease should be.

Brokers and property owners want 5 to 10 year leases.

But for brands, you can see by all of the hundreds and hundreds of brick and mortar, thousands of brick and mortar stores belonging to big brands that have closed this year alone, that they're not, like, the store is not their profit center anymore.

And so it just, it surely does not make sense to, like, throw tens and tens and thousands of dollars behind a lease every month and, you know, do build out and staff and maintain it when there's, who's to say that that will actually yield crazy revenue for them.

Right, I think it's not obvious if you live in a big city.

Because like, what are you talking about?

All these stores are opening up everywhere.

And in reality, most of them aren't even making money.

Well, there's been a crazy spike this year.

I just read a report in how many stores are opening.

Like there are a lot of brick and mortar stores opening.

But I think that's only possible because real estate like players are realizing that the terms that they've set for their inventory to date is just not gonna fly anymore.

I feel like a lot of it comes down to like what brands are using the stores for now, I think, is what has really changed.

So rather than it being an old school retail brand signing a 10-year lease and being like, we want our customers to come here and buy a product, I think you see a lot of these newer players and direct-to-consumer startups that are using it as more of a marketing channel or as a way to interact in person with this massive digital audience that they've grown.

And so in those scenarios, it doesn't make sense for them to sign a 10-year lease.

If you are comparing it to like a Facebook ad or like some other kind of marketing you wouldn't buy like a 10 year Facebook ad or something.

Like you would, it makes more sense for it to be targeted and short term and something that is experiential and more on the marketing side than like, yeah, like your major profit sector.

But real estate, like hasn't caught up to that

Like, are you guys this like arbitrage right now until the market changes or is this always going to be an opportunity?

I think that you'll see a lot of these direct to consumer startups, especially the ones that have been around longer.

And you already see people like, where are we doing this where they have like more traditional longer term leases and, and I think that totally makes sense for them.

I think like it's nice for the customer to have this kind of influx of rotating stores and experiences.

But I think for like the smart direct to consumer startups that like nail the experience and nail like the purpose of their store.

It like you can kind of move into a longterm lease and that's actually like what we're starting to do with our business.

Like we started off with these 6 month license agreements where we would test out a space.

And in our Williamsburg store and our Nolita store, it works well for us, we've kind of nailed the experience, and so now we've moved to long-term leases there.

Yeah, and so we have much more reliable supply or we can book out brands months in advance and not be kind of like shuffling all over New York.

Exactly, it's like we don't want to be there,

Do you guys have, did you have to get fancy with your fundraising?

Because this is kind of non-traditional, right?

Is it different than a normal startup raising money?

I think for this stage, it didn't seem to be too different.

I think we definitely, you know, ran into a lot of questions about like, ooh, this is like a physical thing and a real estate thing.

But I think we had enough traction and data to show that like, okay, the unit economics of this like shared retail space works and that it is very scalable because of the membership model.

But yeah, I think anytime you're dealing with real estate or anything physical.

I feel like WeWork with their co-working model, granted, you know, they're light years ahead of where we are and it will take some time to get there.

But I think that given how well they're doing in their valuation and just how prolific they are and how many spaces they open up, it's like, oh, okay, physical space isn't necessarily like the scary devil like end all of it's not gonna kill us so yeah luckily we had them as as a roadmap

so speaking of killing Adora Adora asked why did old department stores like just die off like what's your

reason I think it's a few different things and Alana kind of touched on this, the way that the internet has just changed how we shop.

The internet will win at a series of things that stores will always fail at.

Like with the internet, you can get anything you need immediately.

You can toggle for a specific price in a specific location, a certain delivery date.

I think with department stores, that's what they still do.

It's like when you walk into a department store, it's just like a massive empty space with a ton of different product categories.

It's not tailored to a specific customer.

There's no experiential or discovery element.

There's like kitchenware with like maternity clothes, with baby clothes, with like fancy handbags.

And it's like, If I wanted to explore products like that, like if that's where my head's at, I'm just gonna go on Amazon or I'll go on the internet or I'll go on bloomingdales.com.

So I think department stores have failed because the things that they're good at are the things that the internet is good at and the internet will just always win because it's right at your fingertips.

I think the other thing that department stores aren't good at is just product selection and you know replenishing the store with fresh new product.

Oftentimes they're buying a ton of product up front.

They're doing like crazy flash sales to offload products that they can make way for new product.

But that just seems to cheapen the entire department store experience.

So I feel like they're just kind of stuck in this weird middle ground where the things that they're doing to try to Improve or actually hurting them

I don't know if you'd add anything to that

They have these massive footprints and these stores have been around for a long time.

So it's no easy task to be like, oh, let's just renovate hundreds of stores across the country that are massive.

And we're obviously at an advantage of being very new and having 2 small stores, but I think for us, we're able to see, okay, we know that we can compete with Amazon and the internet with experience and with these stores that are experience-driven and that are built around a certain community.

And so like being able to start from that point and build from there, it makes it a lot easier for us to do that for them obviously.

Like you're definitely picking people, picking vendors rather.

So how are you deciding like what goes in a store?

So Mike Malcow, I mispronounce everyone's name and I say it on every podcast.

How do you know what users want at these stores?

See all Y Combinator transcripts on Youtube

Making Physical Retail as Easy as Opening an Online Store - Ali Kriegsman and Alana Branston