Summary of Episode
#34: Fran Maier joins Annaka and Ethan to chat about BabyQuip, a baby equipment rental service designed to help families travel without the hassle of lugging around all the baby essentials. Fran walks us through her experience joining the startup team, raising funds, and pitching BabyQuip on Shark Tank.
About the Guest:
Fran Maier is the CEO and founder of BabyQuip, the Airbnb of baby rental equipment. Having been a co-founder for Match.com, Fran is no stranger to the startup world. In fact, Fran has been involved in starting numerous enterprises and continues to invest in other startups. Fran encourages founders to differentiate their business from the market and talk with customers in order to establish a successful brand.
Podcast Episode Notes
The Airbnb of baby gear [2:55]
Building trust for a national brand [4:19]
How Fran pitched herself and joined the BabyQuip team as the CEO [15:58]
How Fran went on to form Match.com [20:44]
The importance of having confidence and asking for help [26:47]
Understand the motivations of your board in order to make sure everyone is on the same page [32:18]
Using crowdfunding to raise money for your startup [34:48]
You will hear many Nos, and for Fran, a lot of her first investors were people she knew personally [39:52]
Fran’s story pitching BabyQuip on Shark Tank [42:03]
Up next for BabyQuip — expanding into new markets and launching a mobile app [47:41]
Focus on differentiation in order to grow your business [51:34]
Go interview people and talk to your target customers [53:11]
Fran’s advice “ A good idea today is better than a good idea tomorrow. Just do it!” [54:50]
Full Interview Transcript
Annaka: Hey everyone, and welcome to Startup Savants. I'm Annaka.
Ethan: And I'm Ethan.
Annaka: If you're a returning listener, welcome back and if you're new, this podcast is about the stories behind startups, the founders who run them and the problems they're solving. Today we're joined by Fran Maier of BabyQuip. Hey Fran, welcome to the show. How's your day going?
Fran Maier: So far, so good. Thanks for having me on.
Annaka: Absolutely. I am very excited to get into this. If you could start us off by telling us about BabyQuip and the problem it's solving.
Fran Maier: I didn't ask you this before, do either of you have children?
Ethan: Not that I'm aware of.
Annaka: Unless you count dogs.
Fran Maier: Well, perhaps you know that traveling with babies and all that baby gear, car seats, strollers, et cetera, is really, really hard. And families, especially millennial parents, really want to travel, want to take their kids, want to take those photos, want to have those Instagram memories, want to spend time together, and of course, especially now, post-pandemic. And what we do is make it easy for families to, what we say, pack light, travel happy. And so what we do is we deliver all the baby gear that they need to the airport maybe, or meet them at their vacation rental hotel or even grandma's house so the family could have a better vacation. They don't have to lug all that gear. Maybe their baby is sensitive and wants a full size crib or SNOO or something like that. So what's really important on vacation is everybody being able to have a good night's sleep and have a good time. We even deliver toys.
Annaka: That's amazing. Yeah.
Fran Maier: So, the way we do this is we're kind of like the Airbnb of baby gear. So we have a network of, now, 1200 people. They're mostly moms, we call them quality providers. They actually own the gear and they're the ones who deliver and set up and clean and do it all over again for families on the go. Now, this is more than just sharing your extra crib or car seat. Most of our quality providers have lots of gear, lots of car seats, lots of cribs, different kinds of strollers, high chairs, toys and so on. So what's exciting to me is they're really building a business on our platform.
Annaka: Yeah, I mean, I don't have children, but I have tried to break a stroller down before and I was like, this is literally horrible and I've...
Ethan: Hand delivered, then they can show you how to do that.
Annaka: Right. Or do it for me.
Fran Maier: Yes, yes. And they're mostly moms, so they know about the gear and in fact, we have a very active community, private community on Facebook where they share ideas and every day there's a question, should I buy this piece of used gear or should I buy this stroller or that stroller? And it's really kind of amazing.
Annaka: Yeah. So you mentioned that Airbnb sort of has a similar business model to BabyQuip. Gig economy companies kind of require the trust and accountability of two separate parties, right? The consumers and those providing the service. Did you run into any roadblocks building trust with either group?
Fran Maier: So from the very start, I knew that trust was the number one thing that we had to deliver on. And when I looked at the market back in 2016, it hasn't changed that much. There were a lot of regional brands, there were mom-and-pops, but nobody was building a nationwide brand. And another word for brand is trust, right. And so we put a lot of investment from the very beginning in developing trust, and the obstacles were big. I'll tell you one of them was getting liability insurance. So we're the only baby gear rental platform that truly has liability insurance that covers not just the company, but our quality providers, the moms and dads and grandparents who are delivering the gear and they really need to have the insurance that there's some coverage.
Now here to date, knock on wood, we've never had even a claim, but babies and families, this is a high trust place. So we did a lot of things to not only get the insurance, but to ensure safety and quality. So we train our quality providers. They don't go live until they actually go through some steps of training and prove to us that they understand. We tag every piece of gear. So if there was a recall or a safety concern, we could pull it very, very quickly. We trained them on how to clean the gear and of course we have the insurance and other things to reinforce it. We regularly have webinars and things about different things having to do with the gear and safety and cleaning as well as hospitality and social media and so on. So we're pretty committed. But I'll tell you the thing, we have this private community, as I mentioned earlier, and we talk about our brand values, which include safety and cleanliness and trust. And the community reinforces it because they're moms serving other moms and they get a lot of gratitude by families having a great vacation.
Annaka: Yeah, it's just, I say this a lot, but I'm a little bit mad I didn't think of this myself.
Fran Maier: Well, we hear this all the time. All the time. Yes.
Annaka: Well, and it's like, I don't know, I don't have any strollers or anything, but it's like, yeah, I think that would work out for me.
Ethan: There are lots of these different types of services as well. If you've got a fenced in backyard, there's a service that allows you to rent out your backyard for people to come and let their dogs run. It's just like there's so many of these-
Annaka: Or park and RV.
Ethan: ... really cool things that people can create these platforms on. So let me ask you one quick question. On this type of platform, I think that one of the problems that the business owners tend to see is that, in your case, these quality providers, the people that are on the platform providing the service, if they are not properly incentivized, then there's a possibility that they will try to work with the end-to-consumer and bypass the platform in keeping the lion's share of the revenue for themself. How do you think about that? Is that a problem that you've run into, one that you've solved, and how do you think about those incentives?
Fran Maier: Yeah, so disintermediation happens in almost every platform, and I think our best defense is the insurance coverage, because God forbid something were to happen. If they take the order off platform, and honestly customers ask them to take the orders off platform, but the quality providers majority of the time, say no, we can't do that because they want the insurance coverage. I'd say another thing is they're mostly ethical people. We are very transparent, unlike some other platforms, about how much they keep and what we do for them. They see that we're doing the marketing for them, they're getting the leads. I like to think that they're an ethical bunch. Now we can search the messaging and look for words like Venmo, Zelle, and PayPal, and occasionally we do find some people who are taken off our platform, but it's not really a big problem for us.
Annaka: Yeah, I think I agree with you that the insurance coverage is a huge selling point. Same kind of thing with Rover. No one really wants to eat liability insurance on their own when they have someone else's pet or child or grandparent that they're responsible for.
Fran Maier: My attitude is we're earning it. We're earning it by giving them the leads, we're earning it by giving them a back end where they can really manage their inventory, so if they take it off platform, then it changes their inventory management, makes it more complicated. We take the transaction, they don't have to deal with Stripe. In many states, we pay the sales tax or whatever tax for them on their behalf, so they don't have to worry about that. So I think we're earning it.
Annaka: Oh, absolutely. Yes. And I kind of poked around the platform and you said earlier that a brand kind of equals trust. And initially I was like, well, how do you build trust through a brand and I think y'all do an excellent job. You list everything that a consumer would be concerned about, cleanliness, reliability, things like that. When you were building the brand, were these questions at the forefront of your mind?
Fran Maier: Absolutely. From the very beginning we were thinking about that. So for example, one thing is you could go to another rental platform and rent a car seat, let's say. But for us, we have guidelines about the car seats. They can't be bought used, we have to know where they've been. If somebody is in an accident with a car seat, our terms of service require them that they tell us and we'll replace the car seat, okay. So there's no incentive to lie to us about the car seat. These are things that, and there's a lot of examples. That's one that we did recently, the car seat replacement program is a recent one.
Our model is not so product centric, but quality provider centric because we assume you want to look at the quality provider who is accountable for making sure that you get the gear at your destination. And so you can look by quality provider, you could see their reviews, of course you could see what gear they have because you know you want those five things in your basket. The quality providers generally improve their inventory as they stay on the platform, but they're the ones that are accountable for not just delivering it, but making sure it's clean and safe. And that's a little bit of a different model than just renting a car seat or renting a stroller.
Annaka: Yeah, I would totally be the one that goes to get the BMW of strollers and I'm like, you can try it. Just try it.
Ethan: You need to put premium gas in this.
Fran Maier: Yeah, for sure.
Annaka: Premium stroller gas. Okay. And so you started this company with your son, Joe, who is now the CTO of the company. Was this something that you would recommend, starting a fast growing company with your kid?
Fran Maier: Well, first of all, he didn't join in until late 2017, so it was after the gal in Santa Fe decided to leave. At that point, my son was working at Accenture and both my sons, not surprisingly, because they lived in a household that had a serial entrepreneur as mom, both my sons have computer science degrees and they were looking over my shoulder and I remember one Christmas, we got a certain level of orders during the holidays and they were like, this is amazing because the tech really needs work. So when the original founder of the company, the predecessor company to BabyQuip left, I called my son and before I finished the sentence, he was like, “oh yeah, I'm in.”
And so we've been working together since 2017. I think one of the highlights was that we were on Shark Tank together, which made it so much more fun for me. I mean, this is a family thing, mom and Joe, and guess what? There's not a lot of mom/son things. So, would I recommend it? Well, if you have a tech-oriented person that you trust in your family who are interested in doing it, yeah, why wouldn't you? My level of trust is really, really high. I don't think he's going to ever leave me high and try. At some point he might decide to leave, but he's in it right now.
Annaka: Yeah, don't do Joe.
Fran Maier: Yeah, no, we're fine. Now there's certain things, like he calls me Fran, not mom, in meetings. And sometimes personally he calls me Fran, because now he is used to calling me Fran. I couldn't call him Joey anymore. I had to totally move to Joe. That was kind of a bummer for me. And now I don't slip up. I can't micromanage him. That would just end everything. So we have found, I think, a good equilibrium. And there's occasional times I've had to call him and say, step up here or back off there or whatever. But I think it's worked out well and I think our team could have concerns, but they don't, at least I don't know about them.
Annaka: Yeah, yeah. Of the parent and child kind of combos that we've had so far, everyone's just said yeah, do it. Or the family kind of run companies, they're like, do it, it's great. Our bond is excellent. We get along really well. Everything's been fine and dandy and I'm just, I'm so impressed.
Fran Maier: Yeah, we did have to establish some ground rules going into it, but none of those were any sort of deal breaker.
Ethan: So we've got you at the head at CEO, we've got Joe in the CTO spot, and you mentioned the gal from Santa Fe, and we're going to let people behind the curtain here for a second. We were asking you some pre-interview questions before this interview started and you were telling us about a story. We asked you what the scrappiest thing you did to get your startup going, and you told us a story about a meeting with a gal in Santa Fe. Could you give us that story one more time for the lovely audience?
Fran Maier: Sure. So just to provide a little context, this is 2016. I had left my last startup officially, kind of, in 2012. I left that board in 2014, and in those years between 2012 and 2016, I was doing a lot of different things. My house in San Francisco that I moved to in 2012 was in Potrero Hill up the street from Airbnb. I mean literally one block over, five blocks up. So Airbnb was in the air. Within six months of buying my house, mid 2012, I started renting rooms in my house on Airbnb. And I did it kind of as a lark and I didn't even tell people because I didn't want them to think, oh, like those old English novels, here's a middle-aged woman down on her luck, has to bring in borders.
So at first I was kind of doing it on the down low, but I started to make some real money and I started to look at, well, where else can I do this? So I bought my first house in Santa Fe in 2013, and I bought another one in 2016 and I was making good money, which gave me the opportunity to advise startup founders. I was able to take a board seat, I was doing all kinds of things. But by 2016 I was getting a little itchy. I was talking to all these startups and looking at what they were doing, and I think I wanted to get back in. And one of the things, and the reason why I bring up Airbnb is when there's a big change to a market, and this was a change not only in terms of the way people travel, but the whole gig economy or sharing economy, the way people work.
And so I was kind of looking around for startups or ideas that kind of leveraged that change. And so I go to Women's Startup Lab, like a pre-accelerator for female founders, and this gal Carey was there and she was from Santa Fe. So I was like, for sure I'm going to meet with her. And in the first meeting she lays out her pitch deck. And I'm thinking to myself, I don't think anybody's looking at this category. No guys with hoodies are looking at the baby gear rental business. I mean, let's face it. I mean, at that point there were a lot of companies doing property management and cleaning services and those kinds of things, but this one, there was nobody else doing it at any sort of scale. And so she goes through her pitch and I say, hey, I think I should be your CEO.
And that was kind of ballsy. And of course to her credit, she didn't say yes right away. But over the next few months we had lots of discussions and I basically had the gut feeling that this is a startup that I knew I could make successful. And again, there wasn't really a whole lot of competition, nothing national. I know how to build trusted brands and I have a lot of, at that point, four startups behind me, a good network of people who could potentially invest in us. And I did get some really good investment really early that honestly I don't think she would've been able to get.
Ethan: So are you happy with that decision to just fire away on the first meeting or do you think you'd go back and change it?
Fran Maier: No, I'm very happy with that decision. It worked out well. And I think she's happy with that decision, even though she's no longer with the company, she still owns a fair bit of shares and certainly is rooting for our success.
Ethan: That's awesome. And so you mentioned a bunch of different things. You're really preempting my questions, which I appreciate. You're just setting it up for me.
Annaka: Makes the job easy, I swear.
Ethan: So you said you've had four startups prior to BabyQuip, you mentioned that you're good at building trust in business. So I think that all of the audience out there, if they've ever had a TV anywhere near them, have probably heard of your first startup, and that is Match.com, which you founded in 1994, which is a totally different era than what we're in now. I mean, I think that the word startup maybe wasn't even a huge thing back then. So can you tell us the story of founding Match and then how that kind of progressed through the years?
Fran Maier: Yeah, so yeah, we're talking almost 30 years now. So I've been at this for a long time. So I was living in Alameda in the Bay Area. I was working, I had worked at Clorox Company and Brand, and then I was at AAA doing membership marketing. And I went to my Stanford Business School reunion in 1994. I think that was our five year reunion. And the internet is starting... While I was at AAA, I had my first AOL account, saw the web for the first time. I'm a marketer, that's my background. And I was like, this is going to change everything. Again, change is where things happen. And I connected with this guy Gary Kremen, who started Electric Classifieds and the idea for Electric Classifieds was to put classified advertising on the internet, and Gary had bought auto.com, this.com, that.com, including Match.com, and he wanted somebody with a good marketing background to lead Match.
And we started talking. Now I'll tell you, I was kind of scrappy. I kind of wanted it. I knew I wanted to leave AAA, I knew I wanted to be in the internet. I knew Gary and crazy guy, but we always got along. I ended up going to the startup offices where they were just starting. And one night I brought pizza, another night I bought Chinese food and just hung out with them. And then of course I eventually got the job. So I was co-founder of Match.com. And you can imagine this is really different than now. So for example, people were accessing the internet on dial up. I was on a podcast interview recently and somebody asked me what is dial up?
Fran Maier: Right. So for some of your listeners, dial up was the only way you could get on the internet was through your phone line and it was really, really, really slow. So when we launched Match, again, there were a bunch of competitors pretty much going after personals. We were the only ones who sort of focused on brand, and what we focused on was appealing to women because we figured if we got women, the men would follow, and we were the only ones with that strategy. I take credit for a couple of things. So remember we only had five or six matching questions at the beginning. And because it was dial up and in 1995 when we launched, people didn't have digital cameras. So there were no photos. So we asked questions about ‘how do you look?’ What color are your eyes? What color are your hair? And one of my claims to fame, and I've asked this and maybe you guys have done online dating ever?
Annaka: Oh yeah.
Fran Maier: Okay, okay.
Ethan: Not me.
Fran Maier: Now, have you ever-
Annaka: I'm a veteran.
Fran Maier: ... had to put in your weight in pounds?
Annaka: Not that I... Well, no, not that I can think of.
Fran Maier: Well that's because of me. That's because of me.
Fran Maier: Because when we were coming up with those questions, the engineer came in and said what are our weight ranges? And I'm like, oh no, we're focusing on women. We're not going to ask weight. No, we're going to do body type.
Annaka: Yes. That's what I was going to say.
Fran Maier: And that was the kind of thing that kind of made a difference. The other thing was we launched with a membership model. Well, when we turned on the paywall, which was a little bit later, probably in 1996 or so. We did it membership. And again, the proposal on the table was to charge per contact. And I was like, no, that's stupid. Let's do membership, because really women don't want to be charged per contact or who contacts them. That's kind of icky. But also membership and subscription models just are really right. And to this day, that is a primary model for online dating apps. There's some variations on that. But those were two of the kinds of things that I think my input and my experience really made a... And the membership model, I knew so much because of AAA.
So we were sort of out of the gate in the number one position because I think we focused on brand. Our three words were safe, anonymous, and fun, anonymity being a little bit more important in the early days of the internet. And yeah, we were charging and making money and it was pretty fun. And I meet people all the time who met on Match or online dating of some kind or another.
Ethan: And you built it, you started it.
Fran Maier: Yeah, yeah.
Ethan: When somebody says that to you, what's the feeling that you get?
Fran Maier: Oh, people ask me for photos or things like that and I get a nice warm feeling. But the downside is, though, is that they think I must be filthy rich and that's not really the case.
Ethan: All right, so clearly Match.com is still a website, it's still active. I still see commercials for it. People are still using it every day.
Fran Maier: Well, they own OkCupid and Tinder, and they're more than just Match at this point.
Ethan: So you were a co-founder and you are not currently at Match. What happened? What was the parting of ways?
Fran Maier: Yeah, it's kind of a bummer. I was once at a conference and 2000 people, one of these Renaissance Weekend conferences, plenary panel, and the title of the plenary was basically Here's My Biggest [redacted] Up, right and I had to admit that we sold Match in 1998 for less than $8 million.
Fran Maier: Okay. Now, Match is a multibillion dollar brand company, and it really wasn't all my fault. It wasn't my fault at all. I fought it. But as I mentioned earlier, Electric Classifieds was trying to get the classified business from newspapers. And Gary, the guy who started it, was already kicked out, okay. And during my time at Electric Classifieds Match, I went through four or five different CEOs. But all the money came in on this vision for… not for Match, but this vision for classified advertising. Because back then online personals were considered kind of sleazy, mostly because prior to that newspaper personals were 900 numbers where people, they'd get paid by how many minutes they're on the line. So they were, the sleaze, porn and sleaze always is number one in any kind of new media, right.
Anyway, so the board wasn't really into it and they thought they had a big opportunity. And you guys have never heard of Electric Classified, and you've totally heard of Match, right? So the board decided to sell Match to generate money to support the Electric Classifieds business. And I kind of fought it. I mean, we were number one in our segment. We were making money. In fact, we were making money. They made me make sure that we weren't losing money on Match. Now, think about that. Match is basically a social network. Most social networks did not have to prove that they are profitable in their first year of existence, right?
Ethan: Oh my God, yeah.
Fran Maier: But we were cash flow positive. I mean, it was crazy. I had to make sure that we weren't losing any money. So we sold it and I got a couple hundred thousand dollars, which made a difference to my family at the time, I'm not going to deny it. But it was very disappointing, and I think because, looking back on it, and I knew this pretty soon after, because a year later Match was sold to IAC for about $70 million. So within a year of selling Match to Cendant, it was then sold to Barry Diller, which eventually became IAC, and for 10 times as much.
Ethan: Oh my gosh.
Fran Maier: And I realized unfortunately too late that I probably could have led the investment and bought it with some investors from Electric Classifieds. And the lesson here was I probably didn't have enough confidence, I didn't ask for help. I think had I really reached out into my business school network and some other people I knew, somebody would've said, “hey, you can do this.” And that's probably all I really needed to hear. But I also think had I been a guy, somebody would've said, “why don't you lead it and take it to the next level?” And so while I'm very proud of what we did initially to build that brand, to build it into the number one position, it is somewhat, it's very disappointing that I didn't really take it to that next level and also gotten the money that I probably deserved for it. Now, a few years later, I had a do over.
Ethan: When you say a do over, what do you mean?
Fran Maier: So you very rarely get a do over, and what happened was, in 2001, I joined a nonprofit called TRUSTe, it's now called TrustARC and it's all about trust and privacy policies of companies and privacy. So you've probably seen the green and black trust mark all over the internet.
Ethan: I think so. Oh yes, I know what you're talking about. Yes.
Fran Maier: Yeah, it says TRUSTe. And in about 2005, I started a strategy and it really was obvious to me that we needed to go for profit, that we needed more technology, we needed to be able to scale. We had a good brand, we had a good book of business. And this time I told the board, I'm going to go ahead and raise the money and take it for profit because this is really the way that we'd have a positive impact on privacy. And I did raise money. I raised 10 million from Accel in 2008, and the company converted from not-for-profit to venture-backed for profit and I got a decent ownership position of this. So it was a good do over.
Ethan: Yeah, it sounds like it. So if a founder came to you and said “hey, I'm having trouble with my board, they're trying to push us to make this decision that we don't want to make,” what would be the advice that you would give to them?
Fran Maier: Boards can be tricky. And the trickiest board I had was TrustARC, I mean, putting aside the Match.com board, which I was a couple of levels away from, but at TrustARC or TRUSTe, I was CEO and Executive Director and I was on the board. You really have to understand the motivations for the board and the conversion from not-for-profit to for-profit was a tough one for this nonprofit board. And the example I'd share is I hired, not bought, a nonprofit board consultant to help the board really understand, well, what is our purpose? And the purpose isn't to be self-perpetuating, the purpose is to have impact. And once they understood that, I was able to demonstrate through another process, a strategy process, that the biggest impact that we could have would be to be able to scale, to have better technology and so on. And that was how it happened.
Now, there were a lot of fits and starts in that, and in the end, I had two venture capital firms go out to DC to meet with the board and pitch. And some of the board members were going for the one I didn't want most of all. So it was really good that I had a really important board champion, and she was the only other woman on the board, and she basically told the rest of the board, Fran's the one who brought up this opportunity, she's the one that's making it happen, her choice is this and that's what we should do. And that made a big difference.
Ethan: That's a really good note there. I think getting that advisor on board and really going back and setting those first principles of what's your role and what's your goal really puts everything in perspective. It also puts things in alignment that ensures that, yeah, exactly what you're saying. We're here to make an impact. That's awesome.
Fran Maier: Right.
Ethan: Let's move out of the prior and move back into BabyQuip and talk about funding. So BabyQuip was bootstrapped initially, is that correct?
Fran Maier: Yeah.
Fran Maier: Yeah, by myself, and also team not taking salary for quite a while.
Ethan: How do you convince people to work for free?
Fran Maier: Yeah. You can't convince too many people to work for free.
Annaka: I was going to say, that would be a hard sell for me.
Fran Maier: I could convince myself and my co-founder for a bit, and there's usually equity involved and things like that. But it's not self-sustaining. But the most important thing, I think, is you have to be confident that you're going to get funding. And if you're not confident you're going to get funding, then everything falls apart.
Ethan: Right, and that makes total sense. So one of the other funding methodologies that you used was equity crowdfunding.
Fran Maier: Yeah.
Ethan: Can you tell us what equity crowdfunding is and what made you decide to move in that direction?
Fran Maier: Right. So we had raised some money from angel investors from some institutional, and I've done two crowdfunding campaigns, both with SeedInvest, and they're different, so bear with me. The first one was under Reg D, and that meant that I was crowdfunding only with accredited investors. And that was a little bit easier because you don't have to have as much due diligence because, it sounds counterintuitive, but when you're going to the crowd, unaccredited investors, you really have to have a lot of due diligence because you're going to less sophisticated, potentially, investors. But when you're going to accredited investors, their sophistication level does not require the same level of diligence. And that worked out really well and I kind of thought it would get us in front of more potential investors and also as a consumer brand.
Consumer brands especially, I think are well suited to crowdfunding because these are people who invest in brands that they like or brands that they know, or they say to themselves, I should have started that, but somebody else did and I believe in it and they can get behind it. So I think it should be part of every startup's toolbox. Other things are; do an accelerator, do some crowdfunding. And the first one in 2019 worked out well. And then I did it to the equity, to the non-accredited investors most recently with our raise earlier this year. And part of that motivation is I have all these quality providers who wanted to invest in the company, they believe in us so much, and so I wanted to give them and some of our customers the opportunity to back us. And that was a little bit of a harder thing to do because you're getting smaller amounts, so you have to get a lot more volume. And like I said earlier, the regulatory and the due diligence aspects are pretty heavy. So I'm not sure I would tell everybody to do that, but-
Ethan: So what you would tell everybody to do is the accredited crowdfunding.
Fran Maier: Yeah, for sure.
Ethan: Okay. That makes sense.
Fran Maier: Yeah. And I think the crowdfunding, I think that's called Reg C or Reg CF rather, crowdfunding, it is good to get your community behind you. So I don't really regret it, I just wish I had thought through it a little bit more.
Annaka: So speaking of getting your community behind you, and you mentioned needing just more volume, how do you build that kind of momentum when you're a new company?
Fran Maier: Yeah. So see, that's the thing. I think it's hard to do it when you're brand new. I think you really have to have the proof points, the growth, the momentum, the community. So I think a lot of people, I think there's a few myths about fundraising. I think a lot of people think that the crowdfunding is available to them early, and I don't think it really is. I think you have to be fairly well established. I think another myth, especially for female-led companies, is that all these female-led venture capital firms are going to help them early on. And again, that's not really true. They'll help you, and I've gotten some great funding from How Women Invest, but I got a lot of no’s because unfortunately, I think more of the female-oriented angel groups and investors, they're a little bit more risk averse. So they really don't really pop in early on. Some do, but it's hard.
Annaka: Yeah, it's a little gambly.
Fran Maier: Yeah. Yeah.
Annaka: Yeah. And you're an investor yourself. So, how and why did you become an investor?
Fran Maier: Oh, because when you're a startup founder, I would go to all these pitch events all the time, and I'd listen to some other pitches and I'm thinking to myself, well, that's a [redacted] good idea. But I'll tell you, I do a little less of it than I did before because, and actually I'm batting okay. Being an angel investor, you have to almost assume that 90% will not make it. And I think I'm 50%, so I'm doing better, right? But I've decided now to put whatever extra cash I have into limited partnerships with some of the venture partners I already have, because they're really better at it than I am, and they could spend more time on it.
Annaka: We talked to someone who said, you kind of just need the first person to say yes, here's your money. And then it's almost easier to get more funding, or at least it's like, all right, look, I got this one person who believes in me. You can too. I promise you.
Fran Maier: Yeah. But it's really, really hard. I don't know that anybody else could have gotten funding for BabyQuip. And I'm not saying that just to toot my horn. I'm just saying that a lot of investors are men, they don't necessarily get it. Even up to recently, people didn't believe that the market size was all that large. I've run into so many no’s, hundreds of no’s. And ultimately many of my investors are people that I knew personally, or some of those first checks were really from there.
Ethan: So Fran, you and Joe, I believe it was in 2019, took the plunge into the Shark Tank. Can you tell us a little bit about how you were included in that show, and what the actual day that you made your pitch was like?
Fran Maier: Yeah, so it was very early in 2019. Apparently somebody associated with the Shark Tank team used our service in Rochester, New York. I never knew exactly who it was, but they said, “hey, you guys should apply for Shark Tank.”
Fran Maier: And so of course we're going to do it. And it's a long process. And all along the way, there's no guarantee that you will be chosen. There's no guarantee that you will, if chosen, if you will film and once, if you film, whether or not you will ever air. And there's certainly no guarantee that you'll get any funding. But we knew that going on Shark Tank is a really big credibility booster, as long as they don't call you a roach, and that that would probably really help build our business. And so we went through the process, it was Joe and I. So for me, doing this with my son really was exciting. And we worked with the producers and we had to work on our initial pitch and we had to practice it again and again. And Shark Tank came up with the idea that we should have a pack mule, like a real live mule on the stage, so that we could say in our initial pitch, you need a pack mule to carry all this gear.
Now in Los Angeles, maybe other places, you can actually rent a pack mule for the day. And of course, that comes with all kinds of, you know, you have to have a trainer, you've got to have all these liability releases, you have to have special people. And the attitude that Joe and I did was we're going to say yes to whatever the producers ask us to do. And we also thought the pack mule would make for some fun and good visuals and so on.
So we finally get there, it's June of 2019, early in the morning, we're at the studio. But again, like I mentioned, there's no guarantee that they're going to call you up, but the pack mule is there. And we're waiting and waiting and around lunchtime, the pack mule does his business, and apparently the producers heard that the pack mule had done its business and said, let's get them on with the pack mule, because the last thing they wanted to do or have happen is a pack mule [redacted] on the stage, right?
Fran Maier: So the pack mule came in handy in making sure that we were filmed anyway, so that was kind of fun. Other things I could say, we were in there for 35, 40 minutes. I get mixed up on terms of what I said and what was actually shown. We did go back and it was a little disappointing that I had really targeted Barbara Corcoran, because I thought she would really get it, and unfortunately she wasn't there that day. We had a funny exchange with Mr. Wonderful, so I'll just say it's season 11, episode 14 so if you want to watch it.
Annaka: I'm going to go home and watch it.
Fran Maier: Yeah.
Fran Maier: And then here's the killer. It did air, it aired on March 6th, 2020.
Ethan: Oh, of course it did.
Fran Maier: So we're all ready. We got everybody ready to... The business is just going to flow in. This is spring break and Easter time. Let's just go for it. The servers are ready. And sure enough, we did get a lot of traffic, but within the next week, because of the pandemic, we had so many more cancellations. And March and April of 2020 were a little bit rough. Actually, all of 2020 was a little bit rough, but we survived it. And they say that startups who come out of a body blow of one kind or another and emerge from it are often in a better position afterwards. And I think that's certainly the case. I mean, last month we did, or I guess July, we did over 7,000 orders across the platform. Yeah.
Ethan: What doesn't kill you makes us stronger, right?
Fran Maier: Yeah. That's what they say.
Ethan: So do you feel like the experience of preparing, going, recording, getting a pack mule, I mean, do you think that the overall experience of Shark Tank was worth it for your business?
Fran Maier: Yeah, I certainly would've made the same decision. Absolutely. Even if I knew that there would've been a pandemic, it was still worth it.
Fran Maier: Yeah.
Ethan: Right. Okay, cool.
Fran Maier: And it's a gift that keeps on giving. I mean, every once in a while, my LinkedIn or my social will start to explode and it's like, oh, we must be on a rerun somewhere.
Ethan: I love that. It's got staying power.
Fran Maier: Yeah, sure.
Ethan: All right. As we're moving close to the end here, let me ask you, what is next for BabyQuip?
Fran Maier: Well, we really had a very strong summer, and as the pandemic receded and families got back on the road, we really, really saw a lot of business. And we think we're gonna get the same amount of business and more going through the holiday season in 2022 and into 2023. So we're going to be introducing a mobile app. Believe it or not, we have a responsive app, but we don't have a dedicated mobile app. And we're extremely excited for that. We're also expanding into some new markets because we want to be where our customers are traveling, wherever they're traveling. So we're in most of the markets of the United States and in Canada, we're starting to get into Mexico, we're in parts of the Caribbean, and we're looking to Australia because it's a market very much like our own. It's just like adding another Texas or Florida or California for us. And that would be pretty huge.
And one of the things I haven't mentioned, we did launch during the pandemic BabyQuip Cleaning. So this is to clean car seats and strollers mostly, high chairs for local families. So this was to give another opportunity for our quality providers to make some money. But families, when they look at those car seats that they might have at home, they're disgusting. I mean, truly amazingly horrible. So every once in a while, a deep clean like a detail is really called for. And we're making partnerships with other hospitality brands. We have a good promotion going on with Destination Hotels by Hyatt. We had a partnership with VRBO, introducing BabyQuip to VRBO hosts so that they could make some extra money, and we're really looking at forming more of those partnerships. And those are the kind of things that are really what I would call moats that would be hard for other companies without our scale to get.
Ethan: I feel like I didn't know that I was going to have lots of follow up questions from this, but oh my gosh, you've given me so many directions that I could go in. Let's quickly touch on one and then maybe we'll have time for the second. You said that you hadn't built a dedicated app until now, you were running on a responsive app. I hate to assume, but was this just like a “we don't want to spend the resources until, because we're able to run on this thing that we already have?” Or was there another reason that you chose not to build the app until now?
Fran Maier: Yeah, I think we wanted to get to a point that it would be expected of us. And before this, we were still sort of small and so on. And I think now it's become table stakes, you kind of have to do it. It's really hard to know what the impact of the app will be. We have a really good business, but I'm thinking it's going to be a pretty big impact, but we won't know for a bit. Now, again, I think, given that we're in travel, that what it's really going to do is get us those last minute, more of those kinds of business sales, and it'll be easier for people to close the order with an app. It took a while. I mean, even though we're now doing the front end, we've been working on the backend for quite a bit.
Ethan: Right. Right. And your business was successful without this. This just might be another little press on that accelerator. That's really awesome.
Fran Maier: Right. Right.
Ethan: All right, so since you got me into two things, I want to ask about moats. When should businesses start to think about building those moats?
Fran Maier: Immediately.
Ethan: Immediately, right off the bat.
Fran Maier: Yeah, right off the bat.
Fran Maier: Right off the bat. I mean, one of the first things that you do when you start a business is you try and get a sense of where the competition is, where the competition could emerge, and how you could differentiate. And differentiation is really where I think you start to see the acceleration of the business.
So I talked about… for Match, and part of differentiation I think is really understanding who your customer is and who your target market is and what are their real needs. And so I spoke a little bit about Match that we went after women, they were our bullseye because we thought if we got the women, the men would follow. And we had detailed personas of who she was, what were her issues, and that got us to the differentiation about anonymity and safety and fun. Similarly with BabyQuip, mostly millennials, traveling families looking for great experiences. This was the time for this business to emerge to address the different travel and experiential habits of today's parents.
Annaka: How do you learn more about your user in that situation? Your target market, how do you find out about them and then how do you kind of narrow that down?
Fran Maier: You go interview people, you do surveys, you talk to customers, you read their reviews. I mean, when you read a review, you really learn that, for example, the baby slept well, everybody's happy.
Annaka: That's so true.
Fran Maier: Right. So the inside of the importance of quality cribs and different kinds of cribs, that Pack 'n Plays, which is basically what hotels do, aren't necessarily good enough. So it's really kind of understanding. And in a two-sided marketplace, also, you need to understand the supply side and the quality providers. And we do regular surveys, we talk with them, we have this community, we know very much what's on their mind.
Annaka: Yeah. And from what I've heard, parents and millennials who open that up, are not a silent audience.
Fran Maier: No.
Annaka: We're interactive.
Fran Maier: Right.
Annaka: Yeah. We'll let you know. All right. Excellent. Now we're really getting into the wrap ups here. What is your number one piece of advice for early stage entrepreneurs?
Fran Maier: Well, I think I just talked about it. Understand your value proposition to your target market really, really deeply. But I do have a couple of little sayings that I say, because being a startup entrepreneur, especially early on, you're seeing a mountain of challenges, right. And one of the things I like to say is don't solve tomorrow's problem today. Don't get caught up in all the stuff that could go wrong, because you'll just, it hurts, you'll be in inertia. And then another one I like to say is a good idea today is better than a good idea tomorrow.
Ethan: Makes sense.
Fran Maier: Just do it.
Ethan: Do it.
Annaka: Yeah. Nike that out.
Ethan: Yeah. All right, cool. Well, Fran, this has been a whole lot of fun. I'm sure that we could have done a three hour episode of just you telling us stories about the things that you've seen in startup land.
Fran Maier: Yeah.
Ethan: And unfortunately we didn't have that time today, but we'll work real hard on getting that time for next time, so we can just have ‘Story Hour with Fran.’
Fran Maier: Be fun to come back.
Ethan: So where can people find you online and how can our listeners support Baby Quip?
Fran Maier: People can find me online at LinkedIn, Fran Maier, M-A-I-E-R. Of course, they can find BabyQuip at B-A-B-Y-Q-U-I-P. We have a special promo for your listeners, babyquip.com/savant, S-A-V-A-N-T. And that will give them a 20% discount. So we'll give that to you to send out to your listeners today.
Ethan: All right listeners, you heard it. You've got a job. Go support BabyQuip. Go tell your friends. Go get 20% off.
Fran Maier: Yeah, tell all your friends.
Ethan: Rent from BabyQuip. Yep. All right. So listeners, you heard it, you've got a job. Go out and tell everyone you know about BabyQuip.
Fran Maier: Thank you so much.
Ethan: All right. That is going to be it for today's episode of the Startup Savants Podcast. Thanks for letting us borrow your ear space. Hey, you know where a cool place to hang out is? LinkedIn. Side note, Reid Hoffman, if you're hearing this right now, let's chat about getting you on the show. But seriously, LinkedIn seems to be the platform where founders hang out most often. I'm there too, but let's be real. This is about them, not me. So head on over there and give us a follow. You can accomplish this simple task by searching for Startup Savant and clicking the big blue follow button, easy peasy. And we will leave the light on there for you. For tools, guides, videos, startup stories, and so much more, head over to truic.com. That's truic.com, T-R-U-I-C.com. See ya.
Annaka: Bye, everybody.
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