Ep. #1118 - Taking On Airbnb At 25
In today’s episode of Startup Hustle, we will highlight a young entrepreneur taking on Airbnb at just 25 years old. Matt DeCoursey says hi to John Andrew Entwistle, CEO and founder of Wander. Their insights can help your business grow as you prepare your pitch and strategic moat. And they also give practical advice on how to build a product that your customers will undoubtingly pay for and enjoy.
Covered In This Episode
Airbnb is a giant in the homestay and hospitality industry. But John Andrew is fearless in tackling them.
In this insightful episode, he talks about Wander and the company’s strategies with Matt. The founders also share their thoughts on raising capital, getting support and funding, and having a moat.
You shouldn’t miss their discussion. Get practical advice and tips from this Startup Hustle episode now.
- John’s entrepreneurial backstory (03:07)
- Wander’s strategy; getting support and funding (07:28)
- Tips on delivering the best customer service at a lower cost (10:15)
- Talking about booking platforms, property management, and asset management (12:04)
- On being asset-light and still in control (13:39)
- The importance of having a moat (18:23)
- About raising capital in your mid-20s (22:04)
- The best advice for someone who hasn’t raised capital before (28:54)
- Why “everything you do” needs to be the best (32:17)
A lot of entrepreneurs candidly screw up in that they build a feature versus a platform. Or they build something reliant on some other company’s decisions.– John Andrew Entwistle
Investors are going to look at the progress you’re making while they’re thinking about it. And use that as a gauge of whether or not you actually have what it takes.– John Andrew Entwistle
Here’s the thing: a confused mind almost always says no. So if you come in and confuse the people you’re talking to, you’re trying to sell to, probably it’s game over.– Matt DeCoursey
Onboard the best software development team for your project. Work with testers, developers, and leaders from Full Scale. With Full Scale’s stringent vetting process, the skills and experience of their professionals are indeed top-tier. Moreover, Full Scale also specializes in long-term teams that only work for you. Why don’t you check out the recruitment platform today?
Are you also looking for other business services? Our Startup Hustle partners can assist you with that.
Following is an auto-generated text transcript of this episode. Apologies for any errors!
Matt DeCoursey 00:01
And we’re back! Back for another episode of Startup Hustle. Matt DeCoursey here to have another conversation I’m hoping helps your business grow. And early on, as an entrepreneur, I got the advice that you might not want to take on the giants. The person I’m having a conversation with today ignored that advice if they ever heard it because they are taking on giants. And that’s okay because if you have a great offering, you might be able to pull it off. I’ll get into the sentiment as to why that advice was good and, maybe, also why it was ignored by today’s guest. Before I introduce today’s conversation, today’s episode of Startup Hustle is powered by FullScale.io. Hiring software developers is difficult. Full Scale can help you build a software team quickly and affordably and has the platform to help you manage that team. Go to FullScale.io to learn more. If you’re not aware, that’s my company. We love talking to Startup Hustle listeners. So once again, go to FullScale.io. It really does only take about two minutes to fill out the form, and we’ll be able to match you up with some great people that can help you out. Joining me today is John Andrew Entwistle, and he is the CEO and founder of Wander. You can scroll down to the show notes and click the link for Wander.com. That’s w-a-n-d-e-r.com. Straight out of one of the weirdest and most self-admitted weirdest cities in America, Austin, Texas. John Andrew, welcome to Startup Hustle.
John Andrew Entwistle 01:29
Thank you so much for having me. I’m stoked to be here.
Matt DeCoursey 01:31
Yeah, I’m glad to have you join me now. You can confirm Austin is still trying to keep it weird, right?
John Andrew Entwistle 01:38
Austin is definitely still trying to keep its weird places. Bumping lots of people. Moving in. Yeah, it’s a solid place to be.
Matt DeCoursey 01:45
I’ve never been to another city that had a slogan on billboards that said things like Keep Austin Weird. So I embrace it. I like it. Alright, so, you know, let’s start the conversation with a little bit about your backstory. And if you don’t mind, include a little part of, you know, I started the show by saying that some of the best advice I got early was to not take on giants. You’re taking on Airbnb with Wander. And that’s a big undertaking with Airbnb. A couple other things. Now, you’ve developed, quite accumulated, a war chest to do that. But yeah, I’m curious about what made you want to head into that battle?
John Andrew Entwistle 02:27
Yeah. So to quickly share my story, I grew up in New York, just north of the city. I became an Internet kid pretty early. I started my first company when I was 1314. This little game company did pretty well, like low six figures. And I like to joke that I was not focused on my homework, as you’d imagine. It’s interesting you sort of talked about taking on giants. I remember, in that company, we had filed a trademark for a claim that was infringed on, like one of the big five tech companies. And so, at 13, I ended up in this email chain with, you know, 14 lawyers from this massive trillion-dollar company. And I had no idea what was going on, right. Fortunately, my pops is a lawyer, and so I kind of seed him in, and then he realized very quickly that, you know, I wasn’t looking at pictures of girls or whatever on the internet, but I was working on something else. And, and, and yeah, sort of, has always been part of the story is, you know, taking on like those big, big competitors and going big. But yeah, from there, I built a few other small companies throughout high school. Out of high school, I started a company called coder, which basically moves the development environment where a software engineer writes code to an organization’s cloud infrastructure. Ended up being pretty successful and raised about $45 million from ggV Founders Fund red point, said Robert, and a bunch of big customers like Palantir and Goldman Sachs. So I ran that company as CEO for the last five years, and then somewhere between committed to following 30 under 30, all that cool stuff and stepped down as CEO earlier in 2021, my co-founder stepped into the role, and I was like, Alright, I’m 23 not done building yet. Like, what’s, what’s next? And yeah, had rented this cabin out in Colorado to get away from thinking about the world. And the whole experience was super broken, you know, the place didn’t look like the photo beds were uncomfortable. And it was bad. And, you know, I had this idea where, if you could verticalize if you could own the platform, the property management, the asset management if you could take this very low net promoter score industry that’s highly fractionalized, and combine those assets. Could you develop a strategy that delivers a superior guest experience? And so that’s really what Wanderer is and the thesis we started with, and, yeah, now here we are 2020-ish months later. And it’s starting to work, which is always very fortunate and startup land.
Matt DeCoursey 04:57
Yeah, I’ll expand a little bit on The story, so my first book that came out balanced me a realist guide to a successful life. I interviewed or had a conversation with, I should say, a guy named Daryl Hall, and Lirael was the founder of car star, which is now the largest auto body repair chain out there. And literally, it’s one of those guys. It’s kind of like talking to Yoda or the Oracle, you know, you have to almost take what he says and, like, mull it over, piece it together. You might not always know the answer right after, but I asked him to describe himself as an entrepreneur. And he said, Well, actually, I’m really kind of a coward. And I said, Alright, you’re gonna need to expand on that. He says, Well, I really like to go do things that no one else is doing. And I find a place to do it, where everyone will leave me alone. And he said, You know, so not taking on the Giants then hit was his method of doing stuff. And you? And it’s honestly pretty good advice. I don’t think most I don’t think as entrepreneurs, we’re often like, Hey, I’m a coward. I don’t, I don’t say that. But it’s good advice. Like that cowardly approach. Now with Wander, you’re obviously taking on some big things. Now, you’ve raised over $132 million of capital available for various things. So obviously, you’ve got some, some backing in that regard. But you know, when you look at it, there are a lot of things in life that are broken. And sometimes I just accept the fact like, while I use Google, I’m not gonna probably take on Google anytime soon because it’s easy to get crushed underfoot, you know, like, you can have a great idea, a great concept and just kind of hard to get things off the ground. So like, Was that difficult when it came to Wander when it came to funding, Wander? And when it came to getting support from people?
John Andrew Entwistle 06:48
Yeah. So I think the thing that you have to look at is, what is the existing strategy that the large players are sort of taking? And are there any sort of critical flaws? And so, when starting the company, I mean, first of all, you know, the company’s purpose wasn’t, hey, we’re gonna go disrupt Airbnb or VRBO, or VA is, the purpose was, customers have an issue with consistency and quality, with these vacation rentals, there’s bad support, there’s just lack of communication. There are all these issues. And if you look at, like, how could you fix that, you end up having to come to some type of verticalized approach where the platform and the property manager and the asset manager are all the same entity, so that they can communicate with each other and deliver a good experience. And so, you know, from my point of view, it was really all about solving that customer problem. And that’s, that’s where the strategy is sort of hyper different, right? So even though we’re competing with, let’s say, an Airbnb from a, you know, user action perspective, from a business model perspective, it’s sort of radically different. And so I would say that that’s sort of like, the first thing you need to look at is, what is the general strategy that’s sort of being taken there? And how can you create your own that is hard to disrupt? And I think that’s something that a lot of entrepreneurs candidly screw up is that they build a feature versus a platform or they build something that’s reliant on some other companies’ decisions. And the moment you do that, then you kind of cap how large of a company you can build versus when you say, Hey, we’re going to basically build this closed ecosystem, then it’s just a question of Do customers want it and then of course, can you grow it.
Matt DeCoursey 08:35
I’m at Wander.com right now, and you know, right here on your wall semi banner, book a Wander smart home with inspiring views, modern workstations, restful beds, hotel-grade cleaning, 20 24/7 concierge to the vacation home, but data now, I’m gonna do it, man, because I don’t actually use the those of your competitors for that reason. Like, it’s like, Hey, here’s a key or the keys under the mat, or in a lockbox or something, and then kind of on my own, you know, past that, and for me, when I travel, you know, I’ve got 300 employees in the Philippines, and you know, Airbnb and some of that other stuff over there, but I don’t use it because I stay on there for two weeks. And you know, I’m on day four, I’m like, needing towels, and it smells like shit in my room, mainly because it’s hot and sweaty there. And it’s just I don’t know, it’s just like, you know, I get it. So, yeah, so I’m into it. So that is the main difference. That is that the differentiator is that extra level of care?
John Andrew Entwistle 09:35
Yeah, I mean, that’s really when you sort of look at our users and sort of give some quick statistics. Wonder has been operating at about a 93% customer satisfaction rate. Yeah, I think birthdays in the US are like 89%. So it’s something we take a lot of pride in. And when you ask them like why do you love it? Why do you come back and book so DRA? Really, it boils down to consistency, quality, and then just the level of care. And there are a lot of things that show up from the strategy that I think people don’t necessarily see until they start to spend a little bit of time thinking about it. So for example, when you arrive at a property and Tesla is there for you in the garage, it’s like, okay, cool. That’s a nice feature. But then you realize that the only way that’s possible is if the booking platform is integrated into it, where you can sign the Tesla agreement and do your insurance. It’s basically like turbo right through the app, or even small things like the guests before you left a comment saying, hey, it’d be really cool if there were some more kids. And then we can actually go and implement that versus, you know, obviously, if you tell, you know, some operator at a short-term rental, I’d love it if there were smart kids. It’s not like they can deploy smart kids across the entire, you know, Airbnb or VRBO portfolio. And so you start to have these like incremental improvements. And it’s all around this idea that perfection is possible when you own the hardware and the software. That’s sort of like the approach that Apple has taken, is this idea that when you control the platform, you can really iterate towards perfection.
Matt DeCoursey 11:19
It’s not that perfection is easy, but the idea is, at least, that you’re in enough control to be able to move towards it. Is that the actual target? The objection is like the objective is perfection.
John Andrew Entwistle 11:24
I mean, the objective is to deliver the absolute best customer experience for the lowest cost that we can while still building a profitable business. So yeah, that’s the goal. It’s really at the end of the day, all about the customer.
Matt DeCoursey 11:38
So are the proprietors of the properties. Those are individual people. That’s not you, right.
John Andrew Entwistle 11:44
Oh, no, that’s us. Okay. Okay. Yep.
Matt DeCoursey 11:47
Okay, so you’re, you’re a real estate investment. Yeah. So and, and you Okay, I got it. So yeah, that’s where the level of control becomes, because the question I was gonna ask is, how the hell do you get quality control implemented like this? I don’t know the problem with people as people exactly like trying to get people to do stuff. And that’s the issue. It’s like, like you said, it’s I don’t know, man, trying to get a bunch of people to conform to brand standards or something like that just sounds. Yeah. It’s just not not not great.
John Andrew Entwistle 12:19
Yeah, it’s just simply not possible. So the cool thing with wonder is, we just launched our REIT, which is the first vacation rental REIT. And that allows for really anyone to get access to these sort of institutional grade vacation rentals. And yeah, the cool thing is, we’re the asset manager as well. So we’re the booking platform or the property management and where the asset manager, so it really fully virtualizes allows us to keep control allowing guests to become owners in the product, as well as enjoy it.
Matt DeCoursey 12:57
And as long as we keep doing a good job, then the end product is just incredible so it allows you to keep a little more of the margin as I would imagine.
John Andrew Entwistle 12:59
Yeah, no, absolutely. I mean, that’s the other key thing, right? Is that you need, you need a strategy that is scalable, and, you know, cash flows correctly. And otherwise, while of course, being asset light, and still having all the control. And so the idea that wonder can be as asset light as Airbnb, but have complete control of the entire experience end to end. It’s really like the key underlying thesis around the whole idea of warming.
Matt DeCoursey 13:25
Yeah, you know, also, we did the same thing at Full Scale, it’s that people often want to compare us to, you know, Upwork, or places like that, and we’re not those are there are employees, and always will be because the level of control and quality assurance that we can provide is significantly higher, and other things too, like you just look at, like intellectual property control, you know, like, it’s, that’s it would be impossible to do, regardless of what these marketplaces say, that’s impossible to enforce across hundreds of countries this forget about and it’s not going to happen. So, you know, being able to do that. Yeah, there you talk about asset light. I mean, yeah, there is a liability of having a bunch of employees, it’s also having the ability to kind of do things the way that you want. And I think there’s a lot to be said about that. Yeah.
John Andrew Entwistle 14:19
Yeah, it’s interesting, so I always go back to this interview that happened a long time ago with Jeff Bezos. And the interviewer was asking him, he’s like, he owned a bunch of warehouses, etc. So it’s not a pure internet play. And Jeff Bezos goes, like, I don’t, I don’t know if I can curse. He says, like, you can’t, I can’t tell her like her scope for quote. Anyway, So he says, like, I don’t give a shit. If, if you know, it’s a pure internet play, the only thing that I care about is if I’m delivering the best product to my customers. And I think that dynamic gets lost a lot of times. Now, that’s not to say that entrepreneurs should ignore whether or not your strategies are available, or whether or not the positive economics are scalable. But like, you do need to think about what, like, what is the customer actually buying? Because it’s very easy to come up with the most scalable, like model in the world. But like, no one wants it. Yeah. So there’s sort of a balance there. And then you also have to ask yourself to like, what is your time horizon? Like for wonder, like, we think that if we do this correctly, it can be a really impactful company over the next few decades. And so when you have a longer term vision, then the idea of having that control, having that quality building that community building that brand, you know, is something that’s really, really critical, especially to the point of competing against giants. I mean, if wonder just went out and launched another short term rental marketplace, like it’s like, so what, but the idea that we’re able to deliver something that’s radically better and higher quality and better for guests, like, that’s, that’s what’s making people excited.
Matt DeCoursey 16:00
So it was, so you mean, really what this is, and I’m not trying to continue to shell Full Scale here. But we tell people right away, we’re like, we’re a premium service provider, if you’re looking for the cheapest thing out there, that’s not us, you know, like, it’s a little more white glove. And well, what are we paying for you’re paying for the fact that we only hire one in 35 applicants, you’re, you’re paying for the 34 people we didn’t choose? You know, and some of that is, and there’s a lot, I found that there’s a lot of people that there’s a huge segment of business that b2b and b2c transactions is, that’s what they want. I’ve kind of I tried to not sound super bougie here, but I mentioned at the beginning of the show like that, I kind of have that same experience that you had before you started the company, it’s kind of like, what am I doing here, you know, like, you’re in this place, it’s just empty, there’s no help, there’s no services, it makes me want to go back to the hotel. I don’t personally agree with the approach of the Law of the Sea, and companies have to do that whole asset light or asset zero kind of thing. Because, I mean, I’m sitting here listening to you talk about this, and I’m thinking man, this place is gonna own a billion dollars in real estate in 15 years, it even takes that long. And when you look at, you know, all of the turmoil and different things that have gone on and VC and funding and whatever, well, you know, software inputs, Silicon Valley Bank gone now, there are people going to get a loan for an emerging software company, because banks don’t want to give money to people that don’t have assets, and they don’t look at code and a server as assets. They look at revenue minus expenses. And that’s where you’re at. So there could be some pretty specific advantages to that.
John Andrew Entwistle 17:43
And yeah, the key is, I mean, a lot of these companies, like I said, like they prioritize the business model, and then what you end up with is a company that just lacks a moat. And I think you see a lot of that, right? I mean, how many companies have we seen gone public over the last two or three years that are down 90 plus percent? Because there’s no moat? Right? It was just an idea solid distribution, then all of a sudden, like, that idea was proven. Competitors enter the market or like existing larger, I think that also goes back to your comment around competing giants. They look at an industry and say, like, how can we crush this? And so you need to have a real strategic moat. Like in Wanders case, right? The beautiful thing is, at the end of the day, someone can copy our brand like copier booking platform property management, they can go and launch a REIT, they can do all these things. But at the end of the day, the homes themselves, each run in Oregon, etc, are only going to exist on the water platform. And so you need to have some type of control and your use case. It’s your team, right? It’s the employees like those people who are only at your company. And so I think that that’s what a lot of founders make. And so I think if you can build an asset light business that has that control and moat, great, go for it. But if you don’t, then you’re just sort of, you’re building a house of cards, candidly, and at some point, you know, it’s gonna get windy out. And this is a great example from a market perspective of, you know, what happens when it’s windy.
Matt DeCoursey 19:05
Yeah, I want to take a second and for those that are listening and might not be aware of what moat means that is your, the distance that you are away from the competitors that are nipping at your heels, basically. And you’ll look at you know, if you look at publicly traded companies, and a lot of companies like that, you’ll see that they’ll often have a little tag when you scroll down and look at their market cap and a bunch of other stuff. A lot of it’ll say, you know, moat, and who has a wide one and who has not. So yeah, that’s, that’s a good thing. So we’re not actually talking about something that alligators swim in and we have a drawbridge that comes down, but well, you can kind of even visualize it like that, right?
John Andrew Entwistle 19:45
It’s the defensibility of your business and when there’s like a war raging outside of your kingdom, like is that going to affect your business? Yes or no? And there are lots of different types of modes: Fran modes, strict Dziedzic moats, distribution Moats. And so the more of those that you can stack up, then the longer your business is going to be able to last.
Matt DeCoursey 20:07
Yeah. And so well, I’ll give you an example. So there’s Google, you know, high moat companies like apples on the list. Yeah. Like, that’s a good example. I mean, I’m a good example, I’m using a Mac, I was calling on my iPhone earlier, my kids have an iPad, they have all the other generations and like, that’s the thing is, it’s almost like, you know, I, when I go to shop for a phone or computer, I’m not out looking at Windows machines.
John Andrew Entwistle 20:30
I’m conditioned, yeah, it’s an ego.
Matt DeCoursey 20:33
I’ve assimilated already.
John Andrew Entwistle 20:36
So yeah, it’s great I mean, when you think about it, like, Steve Jobs was always big into this idea of owning the hardware and the software, right. And if you can do both, then you’re able to control the quality, you’re able to control the ecosystem. And then what you also came up with was this idea of distribution, which Apple has really leaned into now, right, in terms of distributing Apple TV, and Apple Music, and all these different services, because now they have that distribution moat beyond just the strategic and ecosystem one. And so that’s really what we’re trying to model Wander off of as well is that we own the hardware, the actual homes, we own the platform, so we’re able to integrate the two. And then what you end up having is a lot of, you know, customer data, that you’re able to then distribute products and services to the, you know, so far 150,000 People who have signed up for wonder, and so like, I think that, again, tying together all those modes is is really critical. If you sort of want to go big if you want to create a billion dollar plus company.
Matt DeCoursey 21:34
Yeah, I agree. I have a couple questions about raising capital at your age. Before I ask those questions, finding experts, software developers doesn’t have to be difficult, especially when you visit FullScale.io. Or you can build a software team quickly and affordably. Use the Full Scale platform to define your technical needs and see what available developers, testers, and leaders are ready to join your team visit FullScale.io for more. All right, so you’re in your mid 20s, you sound like you got after it at an early age, I don’t talk to a whole lot of people that launch companies in their URL as they became teenagers. I would imagine that probably helped. But you know, when it comes to raising the kind of capital that you’ve raised, you know, what? What did you have to go through to do that? Did you find that your age was a benefit or a drawback? Like, what was that? How was that? What’s the unfiltered version you once again, you can swear because I think raising capital usually makes people swear, so does entrepreneurship. That’s why we just mark every episode explicitly. Trying to get through an episode and not dropping F bombs is tough.
John Andrew Entwistle 22:43
But yeah, so I mean, when I started coder with my co-founders, we were 17. Right? What did that do?
Matt DeCoursey 22:51
What was that platform?
John Andrew Entwistle 22:53
That’s the one that basically it’s a cloud development platform. So it moves the development environment, basically like the engineer’s computer to an organization’s cloud infrastructure. So basically, like, rather than coding on your local computer, you’re coding on this remote machine. There’s a whole bunch of benefits to that. It’s like developer security, productivity, all that sort of cool stuff. Yeah, when we started that company. I mean, we obviously had no idea what we were doing. We had like the basis of scrappiness and entrepreneurship, just because we had been working together online since we were 13. Sort of how we, how we met Kyle, Kyle was kind of like I’ve met and hired him as an engineer. And then Omar was our system administrator. And then we kind of like, even though we’re 1000 miles apart, just like spent our youth building. But yeah, in terms of raising capital for that, for that company, you know, we had like, basically, like bootstrapped friends and family, like a little team built the initial idea. And then I was like, okay, like, we need to raise capital, because it was a very hard and big idea. Especially when you look at the customer set, right? If you need to build a product that’s going to be consumed by Goldman Sachs, or Palantir. It has to be good. It has to be institutional grade. And so yeah, I mean, candidly, like I didn’t have a network, didn’t have a LinkedIn, sorry, my pop was like some Silicon Valley VC, you know, he’s a single dad lawyer, like, you know, top tier guy, but wasn’t in that world. And so yeah, it was really cold emailing every single person in the valley. We used Google Cloud at the time, and I harassed our Google Cloud sales rep, to introduce us to Google Ventures, which like kudos to him like he actually got it done, which was wild. And so really, it was just like a pure hustle. Like just running around meeting everyone could emailing everyone, like putting together materials trial by fire. And of course, you would imagine tons and tons of stories about folks being like that Yeah, just kind of like, you know, like an episode of Silicon Valley like, just like shitting on us. Like I remember one. I remember one meeting, Amar and I went up to San Francisco. So we flew into San Francisco, went to the top of this massive tower. So we were shocked, right, like, 17 year old kids, like, we’re like, wow, this is crazy. Sit down with the VC. And Amar at the time. His laptop ran Linux, like, and it was like, like, we constantly ran out of battery, because like, the power management with Linux is just, it’s just not meant for like, you know, throwing it on a laptop. And so we start the demo. And a Mars laptop just dies, like mid demo, right? And it’s funny, because we’re pitching this whole new idea of cloud development. And so it’s like, you know, hey, like, like, you know, your developments in the cloud. But yeah, it’s like, if your computer goes out, like, you can’t, you still can’t help. And that VC, like, just kind of like, tore us apart. As you would imagine. But yeah, we ended up getting the round put together. So we, the product after like three months of fundraising. And we actually, like, we’re running really close to the sun, we had, like, I don’t know, maybe like a few months of burn left, like it was like, you know, have to get something done. Actually, I remember, like, just laying in my bed at night, just like, scared out of my mind. Like if we were going to be able to, like, continue building the company. And, and we did, we launched the platform, and people loved it. And all of a sudden, like VC started, take notice of the fact that like, these kids were just pulling ridiculous hours and like actually making a real product that people are really excited about. And we gave up raising our seed that was led by Redpoint and uncork. But yeah, it was, I mean, it was hard. I mean, like, we would fly back from San Francisco after a VC pitch landing at three in the morning. And we’d have a list of questions that they wanted to answer. And we would flip the answers to them at five in the morning, we just wanted to sleep. And then like, who would start work the next day in the office. So it was a huge lift, and we had to prove ourselves and keep proving ourselves like, that’s the, you know, obviously, like, that’s just the start, right? And then you need to build the company and do it all by your employees. And I think that’s like, why, you know, when I started to wonder, I was so lucky that, you know, all of the coder’s investors were very keen to work with me again. I think it’s because they, they, they recognize that, like, I take it super seriously when someone invests it’s like you’re a fiduciary like you, like they’re giving you their hard earned money, like or their LPs, which could be like, pension fund or otherwise. And you see so many founders who, like, don’t recognize that, right? They just go and book like first class on their corporate credit card to like Bora Bora. And it’s just not correct. And obviously, again, like talking about what happens when it gets windy, like those companies just don’t make it.
Matt DeCoursey 28:14
So when it comes to raising capital, what’s some advice you could give to someone who hasn’t done it before?
John Andrew Entwistle 28:20
I mean, that’s the best advice, candidly, is that you have to, you have to ask. Like, I think a lot of people get tied up and sort of like planning and thinking and putting together a pitch deck and like, Okay, we’re going to start on this date. Like, you really just need to start the process. And so, throwing together materials creates a shortlist of the people that you want, or could even be a broader list. And just start, start pitching. The other thing that you have to do as well as recognize that it’s probably going to be a two or three month process. And so you also need to make significant progress in your business. While that’s happening, because investors are going to look at the progress you’re making while they’re thinking about it. And use that as a gauge of whether or not you actually have what it takes. So that would be my advice. And then there’s some other optimizations you can do like, like I mentioned, Google Ventures was one of the first firms that we pitched. And as you would imagine, it was terrible. It was a terrible pitch. And so it’s like, you know, maybe practice on like, you know, some other folks before you, like, take the meeting with Sequoia or Google Ventures or something like that. But that’s more like optimizing. That’s, that’s a little too strategic, especially if it’s your first time that I’m gonna point out a couple things for people listening here.
Matt DeCoursey 29:37
Because, you know, some of that sounded super simplistic, like, hey, practice your pitch. It’s amazing how many people don’t? Yeah, you know, like, I mean, that’s one of the things I’m in Kansas City and one of the things that I’m associated with is the Kansas City Economic Development Corporation, which gives away a bunch of life $50,000 grants every year and I actually coached that. So they do demo day and they get a minute. And they send all the cohorts through for a day of coaching with me, and I’ll tell you what that pitch in the morning is a lot different than it is by the end of the day. And at first, it’s kind of funny, because if any of you folks are listening, remember, I’m making the statement out of love, and nothing else. But your pitch sucked when it came in. And some of the people, they’re a little like, they’re a little defensive about it, you know, and I’m like, You have one minute. And you know, and that’s not a lot of time. And you know, some of that, it’s like, you gotta lead with the need, like, get people’s attention right away, you’re gonna be room and that particular case, they’re in a room of like, 200 people that are there talking to each other, you’ll get that attention right away. They’re just off to the bar, the bathroom, they’re fucking around doing something else. But yeah, I ended up with, you know, sometimes having to fight through that in the beginning and end up with a bunch of thank yous by the end of the day, then I go to the actual event, and I’ll see all of them. And they’re like, Oh, my God, I’m so glad I did that. Because you can actually see faces pointed back at you as opposed to like, then there’s always a couple people that didn’t show up to the coaching. And then sometimes their pitches are good, but sometimes, so yeah, the practice thing.
John Andrew Entwistle 31:15
It’s yeah, exactly what I mean, it’s like everything that you do, right? It’s like, you can’t be asking for millions of dollars for your company, and not have your shit together. Right. Yeah, exactly. Right. And it’s also, candidly, representative of what’s actually happening, as well. It’s like, you know, if you’re, if your pitch is in Polish, then is your product polished? Is your customer more polished?
Matt DeCoursey 31:36
Like, are you polish? Yeah, exactly.
John Andrew Entwistle 31:37
What can I expect from you as an entrepreneur? So, yeah, it’s important. I think a lot of folks kind of write it off. But I mean, the way to think about everything that you do needs to be the best. And when you’re asking for money, or asking for customers, or anything like that, like, you know, anything, but the best is, it’s just not gonna get you there. It’s hard. It’s hard work.
Matt DeCoursey 32:00
There are just no shortcuts. Yeah, but I have a couple more comments while we’re on that subject. So first off, get to the point, assume that you’re talking to type people like, you know, I got a buddy, that’s a DC. And he’ll tell me here, like, if they have 10% of my attention, they’ve done pretty well, you know, so you got to get that attention right away. And then you mentioned earlier, the difference between creating a feature and creating a platform. And that is kind of a trigger for me, because one of the things that I think a lot of people don’t understand is no one buys your features, they buy the benefits. So be prepared to explain what the benefit of whatever it is your belt has for the users why that’s valuable. Why is there a large total addressable market? And don’t be afraid to sell people on your big vision. Like if you go and meet with a VC and you’re talking to you, hey, you know, we’re we want $50,000 Like, I know, dude, I don’t even know a lot of people that write checks that small, and you know, some of those sell on that big vision and honestly, have your shit together. Be prepared to keep it moving and I don’t know, dude, I see you’re, you’re a fellow in the Thiel fellowship and a bunch of other stuff. Like when you hear a nice tight pitch, and it’s right to the point. And it’s like, short, do you kind of say to yourself, you like, Thank you for not making me sit here for 20 minutes and wonder what the pocket is that you actually do?
John Andrew Entwistle 33:26
Yeah, I mean, I would say that. My favorite thing is that, because I’m invested in probably like 3030 different startups, mostly, like friends, companies, people, I mean, and my favorite thing is when I can figure out what they do before I talk to them, like, that’s the dream, right? It’s like, you can actually go to a website, you can take a look. And it’s like, easily understandable. And yeah, you have to, you have to speak clearly. I mean, don’t use, you know, $50 words, when a $5 word is going to work perfectly fine. Talk about what the product is very simply what the customer wants to your point. And then have a vision. Because especially when it’s an early stage company, like that’s, that’s what people are really investing in as well. They’re investing in you as an entrepreneur in the market and the thesis, but then they also want to hear a vision and how you get there. And so, like, if you don’t have a vision, like think about it. Yes, it’s super, super important.
Matt DeCoursey 34:29
Well, yet another good point, you know, investors are investing in you as a founder and your ability to figure it out. Yeah, and be a leader. And just be a little bit different. You know, you mentioned Silicon Valley earlier this show and that’s got there’s so many fun and interesting lessons that you can take out of that series and some of it you know, they’re talking about standing out and you know, Erlich Bachmann’s kind of known for for that, but you remember the guy now a lot, maybe not for the reasons that you But, but yeah, that’s the thing is, you know, be memorable and stand out. I think if you show up with a meek you know, energy, and I don’t know, if people want to see you be confident in what you’re doing, and also at the same time not be so confident that you’re not that you’re going to refuse any kind of input.
John Andrew Entwistle 35:24
Yeah, that’s a, I think it’s like in the early stages of a company, and for early investors, they’re also betting that you’re going to be able to raise capital in the future. Oh, yeah. And that, you’re gonna be able to hire a great team, and you’re gonna be able to convince that one executive to come and join your company. Like, there are a lot, there are so many variables for an early stage founder that the boxes need to be checked. And if you don’t have an existing track record, you have to show that to them. And you have to like, it’s not like even one pitch candidate is going to get it done. Like maybe there’s enough interest for them to like, take a second look. And then maybe there’s enough interest after that for you to get a diligence list of questions. And then maybe there’s a reference call. And then like, maybe there’s some customer interviews, like it’s a real, in depth process, and you need to, you need to show up.
Matt DeCoursey 36:09
I mean, it’s, I don’t just upload my 60 page business plan and get a check back in the mail a couple of days later. That’s not how it works.
John Andrew Entwistle 36:17
Although, that seems to be the storyline that light never discovered. Like, maybe like maybe one out of 100 companies.
Matt DeCoursey 36:27
That’s like the funding story. Don’t you think it’s more like one out of 10,000 Yeah, candidly, unless you are so proven that it’s just like, hey, like, you know, people are? Yeah, because my point is, no one wants to see your 60 page anything. Yeah, the one pager, you can’t, if you can’t clearly define what you want to do, what you want to get done and what you need on the front of a piece of paper, then it might be too complex man.
John Andrew Entwistle 36:52
Yeah, absolutely. The other thing that I would leave people with is, when you get questions during your pitch, that means that, like they’re interested or well, they’re interested. But I would also say that, like the goal is to answer the questions as they come into people’s mind. Like, ideally, you finish up a slide. And then like, someone has a question in their head. And then the next slide is the answer to that. Your voiceover helps tell that story so that at the end, people are able to ask questions about the future and exciting ones, as opposed to these like nitpicky objections. And so that’s really critical. And the other thing I would say is that, like, don’t just focus on answering the questions, understand the questions, because there’s a very good chance that one of those questions is actually what goes and kills your company. And so if you can identify that risk now and fix it, I mean, that’s, that’s cold.
Matt DeCoursey 37:45
My advice is to listen to you talk about reps and practice and input. And let’s just say you give 10 pitches, if there’s an echo, like the same question is getting asked again, and again, the same objections, the same everything, then you need to go into a presentation, a lab in handling that objection and getting that right out? You know, it’s like, so just to use Full Scale as an example, people ask all the time, they’re like your employee, your developers are in the Philippines. And so one of the most common questions that we get is, do they speak English? So we say we just tell people that right away, you know, and this isn’t the same as I mean, a pitch to a prospective client isn’t a whole lot different than to an investor in regards. You’re trying to state your case about why you’re providing value. And that’s an example of like, and there’s like three or four things that five years later, people just keep asking. So a good presentation, as you mentioned, either handles that in the next slide, or you can just get it out of the way to disarm these objections, like immediately, because here’s the thing, a confused mind almost always says no. So if you come in and confuse the people you’re talking to, you’re trying to sell to probably game over.
John Andrew Entwistle 38:53
I think that’s a candidate, one of the most powerful quotes that I’ve heard in a long time that a confused mind is most likely going to say no, yeah, I’d love to take credit for writing that myself.
Matt DeCoursey 39:01
But I don’t. I don’t know who wrote it, but someone else did. I picked it up along the way. Because while I used to be a sales trainer, like way back in the day, and I look back to the I’m old now, man, those are 20 years ago. But yeah, that was the thing because I actually worked in the music industry. And a lot of people that work at it, it was I worked for Roland and they make musical instruments. So like, five, 6 billion a year, no big deal, right? But people would come in the store, like a mom would come in looking for a guitar for their kid and some dude, that’s like, like 10% of a rock star on the weekends is just blowing this mom away with like, all these things that an amp will do. And these pickups do this and she’s like, I just want to get the Kevin guitar last. Yeah, you know, so they talk their way out of the sale and complicate things talk over the buyers head. And just like I don’t know, it’s back to those features and benefits. Like what that lady wants to hear is that the kids are going to enjoy it. It’s going to be affordable. that it’s what they need when they show up to day one of lessons, that it’s not going to be a money pit, you know, a bunch of stuff like that. And you know, that’s the same kind of stuff. Alright, so we’re here at the end of another amazing app. So this has been a lot of fun man, I really enjoyed this. Before we do the founders freestyle, I like to give all my guests that are founders a chance to make their closing remarks or statements. Before we do that quick reminder that says episode Startup Hustle is brought to you by FullScale.io. Hiring software developers is difficult and Full Scale can help you build a software team quickly and affordably and has a platform to help you manage that team. FullScale.io There’s a link in the show notes as well as a link to Wander.com w a n d e r.com. So for your version of the founder’s freestyle, what did you do that stood out in our conversation? What advice do you want to give? Is there something you forgot to mention? Or say it’s your freestyle? So you can rock it however you want?
John Andrew Entwistle 40:58
No, I think I think this was a great conversation. I think we covered a lot of really fascinating topics, from the moat to preparing for your pitch to thinking about the strategy for your startup. And ultimately, I think the most valuable piece was really around the idea of, you have to build something that customers actually want. You’re not. You’re not necessarily building just a business model. You’re building a product that folks can love and enjoy. And yeah, hopefully, that helps some of the listeners out because, yeah, I certainly wish that I had heard this podcast early in my entrepreneurial career.
Matt DeCoursey 41:35
So we specialize in realism here. Just say, Yeah, you know, a couple of things on the way out. I think there was definitely some great input about raising capital. And for those of you that are regular listeners, it’s a recurring theme. I mean, that’s the same people that have raised a lot of cash giving the same kind of input and advice. There’s your Echo, as my point in regards to we talked about taking on giants, I think sometimes. So you kind of are, and you aren’t at the same time, because it’s easy to look at something like Wander and say, Oh, is this just an Airbnb competitor? Now Oh, man, that’s after this conversation. It’s fundamentally very different. You talk about, like, I’ve never been an Airbnb, that gives me a charge Tesla. I’m into that because I own two Teslas already, like the idea of having a familiar car. I’m also pretty green in life. I like that. And then that idea of just a little bit more of a premium, white glove-ish experience is better, because like, the last thing I want to do when I go on vacation is going out grocery shopping. On my first day, or like, hope that there’s pots or pans or like, I don’t know, man, it’s like anything. And you know, that’s not for everybody, you know, so that’s fine. But as a startup founder, and a business, decide on it, make a decision about who your potential clients, customers, and users are, and make a move for that. If there’s something different, like, I mean, you’re very aware that not every user, like a lot of the people that are on Airbnb, they want the $32 a night lucky. That’s not your user. That’s okay. That’s okay. Know who you’re trying to sell to and cater your service offering or your product to who those people are and continue. I agree and disagree with the perfectionism thing because every time I take a personality assessment or get in there, like you’re a perfectionist, I’m like, Thank you, and I’m sorry. Yeah, so there’s like, you know that your strength and your weakness often hold hands when they walk down the street together. So just accept that. Absolutely. Congrats on all the success, and yeah, man, I’ll make it down to Austin sometime. I’ll book a Wander. Yep. And then we’ll stop by and say hi, man. So thanks again for the time. I’ll catch up with you down the road. Wonderful.
John Andrew Entwistle 43:52
Thank you so much, sir. Pleasure.