Jay Reno of Feather, a Furniture Subscription Startup

Jay Reno: Welcome to the podcast.

Interviewee: Thank you for having me.

Jay Reno: So you are the founder and CEO of Feather, which was in the Summer '17 batch. Feather is a furniture subscription service. At the core of it is this idea that people don't want to own things anymore. How did you come to that conclusion, and why does it motivate your business?

Interviewee: Yeah, high level, I think I saw three things happening in my life. The first was I had moved seven times in the nine years I've lived in New York City, and that's just above average. Actually, that's okay, not too far out of the ordinary. Each time I've moved, I've had a completely different life situation. So I've lived with roommates, lived with a significant other, then moved back in with one roommate, then I lived with two roommates, then by myself, then with a significant other, and then by myself again.

Okay, and at each phase of my life, I've had completely different needs in my apartment. You know, the space changes, the layout of the space changes place to place. The needs of the furniture in that space change dramatically. So, for example, one roommate might have had this sofa we needed, but not a coffee table. He didn't have a bed for me, so I’d bring a bed and a mattress, etc. Then when I moved to the next place, that stuff might not have fit physically or stylistically in that next space.

So it might have been like a modern apartment the first time, then I moved into a pre-war building in Brooklyn, and at each phase, you have completely different needs. So one, I realized that moving is a pain. It's just, you know, we've all experienced it so many different times.

Two, the stuff that you have doesn't necessarily fit physically or stylistically in your next space for all the different reasons. Couple that with basically there being a massive problem of furniture waste in the U.S. So what people are doing to solve this problem today is buying, you know, IKEA or Wayfair, what you might consider disposable furniture that can be assembled once and set up once in someone's home and doesn't really transport very well. It's not meant to be disassembled or moved, and so all of that stuff might not fit in your next space.

So you have to throw it out and then go buy new things. Then you move, and you throw those things out and go buy new things to fit your space, your life. I got my master's degree in climate and environmental science, and I care deeply about some of these big world problems, especially as they relate to the environment and the built world. And I realized that there's a big opportunity to solve a couple of massive problems.

The third piece that's kind of interesting is there's a cultural shift happening, like you mentioned, away from ownership of stuff. High level, where you see that going, and when you see that taking shape, is in the American dream changing. So it sounds like such a big lofty thing.

Yeah, and maybe it is, but our parents' generation cared about getting a house and cars and having a white picket fence with things in their life, settling down. Our generation cares about totally different things. We actually aspire to have something very different, which is freedom and flexibility.

Freedom and flexibility allow you to experience the world. It allows you to maybe be bi-coastal or just lean into whatever feels right for you at a given time. Maybe that's a job; maybe that's a hobby or where you live, what you're doing. And yeah, we just value something totally different.

So that shift is happening in culture. But yeah, there's other problems. Just what would you attribute that to? Just the dollar not going as far and people being like, you know, maybe I can't buy a house ever? Or maybe, you know, I'm gonna push it back from like age 30 to age 45 or something? Is that like a main factor? What drew that change out in the world?

Interviewee: Yeah, I don't think that's a main factor. I think that's a secondary factor. You're seeing that happen. You're seeing the costs of debt rising. You're seeing you have greater student debt. People are unable to, you know, buy and own lots of things, maybe because they're not as careful with their money or they're not saving, etc. Or, you know, on the front end, you may not have been given much money from your family or anything like that. So that's certainly an issue we consider that accessibility.

So Feather does give people access to items that they may not otherwise would have purchased. Instead, they would have maybe purchased something disposable that's cheaper, right? But the reality is most people are using Feather and companies like us, whether it's, you know, Rent the Runway or Uber, Lyft, or Spotify, etc., because they don't necessarily want to own things and have things tying them to a physical space.

I found that really interesting because I was listening to a podcast with you that you've done a couple of years ago, and you were talking about the fundraising process. You're basically talking to people at VC funds who definitely have the means to like buy something from you—not crazy expensive but like West Elm—and they were still buying IKEA garbage.

So what did the prototype look like for Feather? Did you just like sell to your friends? How did you ultimately figure out that this was the product?

Interviewee: Yeah, you know, we started as a rental business. Okay, so the prototype was, hey, ownership is the problem today. Everyone buys their furniture and owns it, and that creates a lot of waste because they have to be fully responsible for their thing. So they end up buying things and throwing them out, and on the cheap end, that's, I guess, kind of what you end up doing.

Yeah, someone like a, you know, using VCs as an example. You know, they've got, even, you know, analysts, associates, principals—they've got pretty decent salaries, and like you said, they'll still choose to purchase the disposable thing. A lot of people do this, and the reason is because it's flexible and it's convenient.

Yeah, that is what Feather solves today. And so the prototype that we created was, okay, let's create a simple solution, an MVP, that allows us to say would people prefer to subscribe to or rent things rather than buying them upfront and owning them and throwing them out?

So I built that by myself just at my apartment and just tested it with friends.

Jay Reno: Okay, so walk me through what it actually is because people are so curious. They ask us about this all the time: what can my MVP look like? How do I really test out an idea? Is it a forum for, like, one type of couch? What was it actually?

Interviewee: Yeah, for this to work, you kind of need to have a little bit of merchandising. You need to have a little bit of a visual aesthetic and appeal to see what furniture is with the prices, etc. Yeah, I thought maybe a spreadsheet would work, and that just did not work.

Okay, but there are templates that exist to create web shops. There are a few, if not many, companies that do this. I used Shopify. You know, I was paying $89 a month, I think it was, for what was then like a premium plan. Yeah, so it's not that much money on the face of it.

And I ended up, I have a bit of a background as a product manager, so I found a very inexpensive engineer who was living in India, and she, you know, she was being paid maybe $16 or $18 an hour, all in, to just build the MVP. I decided that I felt comfortable investing up to like two or three thousand dollars, but it was of my own personal money.

Yeah, so I said, great, you know, this could go nowhere. I'm just gonna build that myself in the confines of my home, and that's how much it took to create it.

Jay Reno: How much money did you make off of that MVP?

Interviewee: It's really interesting. I had it running as a side project while I was working my full-time job and just sent out a blast to friends on Facebook to see if anyone gave a—you know, it turns out some people did. The first two orders were friends; the third order was a friend of a friend.

Okay, the fourth order was a friend of a friend, and I was like, interesting, yeah, okay. That, you know, sample size of four doesn't give me all of the confidence, but certainly gives me some confidence that people who I have no idea about are actually using this thing.

Jay Reno: And how many products did you have?

Interviewee: Ooh, we had enough; maybe we had four or five items per product category on the website.

Okay, so as an MVP, as well, the best way to test this hypothesis was to have the right selection of enough items. So it's not just one desk, one chair, one mattress; it's to have just enough so that you can actually accurately test whether people care because that's ultimately what it needs to look like.

What I did was I put items on the site from a retailer who could ship me things just in time effectively. So when a customer would go on our site, they would place an order for an item or multiple items for their home, and I would then in turn say, okay, great, they're committing to this furniture for 12 months or whatever it was, okay, I'm gonna go buy it myself and deliver it myself, and they're going to—I'm gonna own all this furniture upfront.

And I felt comfortable doing that rather than stockpiling everything up front and assuming that it was all gonna go well.

Jay Reno: Okay, and so your model was based around the furniture earning itself out after one year?

Interviewee: Yeah, okay. In the early days, was there any margin you built in in the first year?

Interviewee: No, okay, it was—I mean, you know, I wasn't paying myself, so there was no delivery expense or assembly expense. But I went and had one other person go with me, who I'd usually find on TaskRabbit, who would have the truck. Yes, I also didn't have the truck, so I really lived a couch upstairs and also delivered it for me, yeah, with me. Now I'll be your helper, yeah, so I did that for the first number of orders.

Okay, it was at that time that I realized it's important to kind of get feedback from the industry as well, not just consumers, as to whether the industry, who by definition has been in the industry, thinks this is a good idea or not.

Well, yeah, to be clear, I wasn't aware of this, but listening to a podcast with you, furniture rental is not new.

Interviewee: Yeah, yeah, okay, so what's the history of that market?

Interviewee: Yeah, so furniture rental companies are not new. You have a few legacy companies that exist, yeah, I've been around for 40 years, like Court for example. They're in all 50 states; you can get furniture rented and delivered to your home.

One, the furniture is not for our demographic—people between going to college and buying a home in urban environments. It's meant more for corporate relocation. It's super old and steely looking. It’s like meeting really high-end or just not the aesthetic at all.

They have a range of prices, but yeah, the aesthetic is not appealing, the brand is just not appealing to the demographic at all. The UX is very different; it's very hard to pay them—separate conversation, okay. Anyway, yeah, so this rental market does exist, but we came out and said they're not addressing the massive opportunity which are people who are currently buying furniture thinking they want to buy furniture, but in fact, what they actually want is the flexibility to be able to subscribe to furniture.

Subscriptions, it's somewhere between rental—which is implying short-term rental and implying you're gonna return it—and purchasing the items, which is full commitment; you own it, it's yours, and it's your responsibility.

Yeah, we should talk about that nuance, which is super interesting because when you went through YC, it was rentfeather.com, and now it's livefeather.com. So it's like, from the outside, somewhat subtle, but can you go through that thought process and then how it actually affected your bottom line as a company?

Interviewee: Yeah, so we were Rent Feather at the beginning because we assumed that rental was the correct solution. Yeah, that ownership was the biggest problem, which in fact is true—that people don't necessarily want to commit upfront.

Yeah, but it's not that they should never own something; it's that you shouldn't commit upfront. Yeah, you shouldn't commit to ownership today because you don't know what's gonna happen in your constantly changing life. You know, you just moved to New York, yep, you are in a relationship, yep, anything could happen.

I mean, I am NOT gonna would that goes quite well for you, yeah, and you might think that this apartment is perfect for you guys for the next year, two years, five years.

You may hate the neighborhood, though, and move to a different neighborhood because you like this new neighborhood, and so you're gonna have to move. So point being, committing to ownership of things upfront is what we're really addressing. We're saying instead of committing, just pay monthly, have access to it—your monthly payments on your furniture go towards owning the items. You never pay more than the retail price of that item.

But if you don't want to own it, you can return it at any point. So if the evolution of the company went from rental to definitely don't own, it's wrong to own, to hey, why don't we just make the choice later?

So we evolved the way we communicate that to people from a rental company to a subscription, right? So you kind of just defer the choice.

Jay Reno: And so how did that become obvious to you down the line? Were you doing, like, customer interviews? How’d you figure that out?

Interviewee: Yeah, I mean, you have to talk to people. You have to look them in the eye; it's not enough typically to just do user interviews over the phone. Video is helpful; you can meet people in person or, like I did, do the deliveries.

Yeah, and see the people who are using your product, see the living situation they’re in, and see the furniture that they're choosing. You get a lot more from that just going there and asking a couple of questions— them not necessarily knowing that I was the founder of the company—was quite valuable.

Jay Reno: Okay, interesting. Yeah, because I always figured it was them. I mean, because I met you right before you did your interview, right? And I always figured that furniture was an expression of self, and it doesn't seem to be for a lot of—I mean, some elements are, but like can you just walk me through how you realized that? Because I figured that was like core to someone's apartment in their life, you know.

Interviewee: You know, what you might think that to some degree is, but not necessarily the color. Yeah, so furniture—the overwhelming majority of people purchase furniture, and the overall majority of people purchase colors that will go well with the pops of color that they have in their art and their rugs and their pillows and the things that they got on their trip to Africa, right, or wherever they traveled and got a really cool thing, yeah, or from the store down the street.

And so the furniture is like, it's an expression of you. It needs to be comfortable first and foremost. It needs to fit whatever the aesthetic is of your place and of your own personality, yeah?

So some people like, you know, modern, and some people like mid-century modern, and they're quite different in aesthetic and it says a little bit about a person. But aside from that, you don't actually really need to have so many different colors and shapes and textures. Where that comes through is in the little accessories and all.

Like, yeah, it was just really surprising to me because I've, you know, I browsed your site like two years ago, and then I browse this morning, it's like, oh, this is very different.

Yeah, but also not. Like, it's not like infinite choice. It's actually like told fairly curated. Totally. And so it's not all that different from your MVP, just a much more legit back-end. It's like there’s a lot in the backend.

Yeah, yeah. So that's something I want to talk about—so you're in multiple markets, and you're also dealing with physical products. What would have been the key takeaways scaling something where you're delivering real things to people?

Interviewee: Like, there's two important points to mention. First, you have to respect logistics and respect operationally intensive businesses. And, you know, I think there's been a lot of venture-backed companies that have very high demand that should exist today, but they may have ran too quickly and didn’t necessarily respect the logistics or the complexity of building an operationally intensive business.

And in order to do this effectively, you just need to step back and respect it. I think the other point is for a business that relies on software, on people, on unique inventory management systems, on a complex reverse logistics process, you have to heavily rely on software.

It's fundamentally a data problem that we're solving on the backend. The software that we've created over the last few years allows us to effectively deliver furniture to people's homes. You know, I think from the outside, you can look at a company like—saying, hey, well, I mean, in the early days, didn’t you and your TaskRabbit just throw the furniture in the back of a truck and deliver it to people's houses?

And yes, that’s true, but those were probably negative margins. Those were negative margins. Those were a proof of concept. Those were—we weren’t optimizing our routes efficiently. We didn’t know how much revenue each product had generated. We didn’t know which product categories were doing well or not doing well.

Yeah, we didn't have the ability to have route optimization already, actually. Yeah, there’s just so much that you need to build on the back.

So how much of your stack at this point, like several years in, is yours versus third parties?

Interviewee: Almost all of it is ours, really.

Jay Reno: Okay. Yeah, it doesn’t—the software that our business needs doesn’t exist off the shelf. It's like Shopify did and as the front-end template, like this furniture company did to help me get the thing up and running—does that go all the way down? Like for instance, like warehouse yours, truck scores, all the way down employees, full-time employees delivering furniture?

Interviewee: Almost all, yes.

Jay Reno: Okay, now how many markets are you in?

Interviewee: We're in three.

Jay Reno: Okay, so New York, SF, and LA?

Interviewee: No.

Jay Reno: Okay, why not just dominating New York first?

Interviewee: Good question. I think I was—so I got into YC, I was just me at the company. We flew out to San Francisco, we hired our first employee who stayed in New York, and then I said, you know what, I'm in San Francisco. There’s a big opportunity to service a lot of the people who are NYC, and they’ll be a very good use case for us to test and learn that, you know, right off the bat.

So why not effectively open that market with very low overhead? So I did that. You know, it was a—I think it was a good move. Ultimately, we've learned a whole lot, and it's a market that does very well for us.

So yeah, so just try—well, because like with an operations-heavy business, I think you could make an argument for the other side quite easily, right? Like we scale too fast, we want to own the whole stack, we up, yeah, and like went to San Francisco, and it was a total mistake.

So in terms of learnings for you guys, how similar are these markets?

Interviewee: That's great. So this was two years ago, yeah. I flew to San Francisco with my suitcase, yeah, go to YC, and had nobody on the ground there and decided to open that market effectively with no one on the ground there. Fast forward to today, two years later, we've only launched one more market.

To your point, there's one—plenty of room to scale within the markets that we’re in—it's a logistical, complex business, and we wanted to make sure that we had that honed in in the markets that we were in. And we also felt it was really important for us to launch in a new market so that we could effectively have a new market playbook that we had been testing and iterating over time and then launching.

And so now that we're in three markets, we launched LA back in May. We have a very healthy playbook for growth.

Jay Reno: Okay, so now you've raised a bunch of money. You've scaled a company to a pretty substantial size. For other founders who are doing an operations-heavy business, how would you order the employees that you hire?

Interviewee: Depends on who you are and what you're good at. Look, I think is really the first place to start. Okay, so for me, I know I'm good at selling. I'm good at operations. I'm good at building. I'm good at understanding the customer, and I'm good at product.

Early on, we brought on someone to our team who was a very good balance to me. Didn't know it at the time, but then this person sprouted into becoming the CEO of the company quite quickly after bringing them on in a very different role and knowing that this person was just incredible—the things that I was less incredible at.

That was a very important place for me to put this person. I was also a solo founder, yeah, so I wasn't able to, you know, create the perfect founding team with, you know, the best, like, you know, all the things I don't have.

Yeah, it was just me in the early days. Now I brought on some amazing and talented people. In the early days, our now CTO joined me out in San Francisco for the summer, and I needed somebody to help build and iterate on the product that I had very terribly put together with my engineer overseas.

But arguably that's not the most important part of your business, especially in the early days, right?

Interviewee: I would agree, okay, yeah, but all the back-end infrastructure to power the company was incredibly important as you start getting to even a moderate level of scale and complexity in this business, which gets more complex every single month.

Yeah, you need very critical pieces of software in place to make all that happen.

Jay Reno: Totally. So what else has been, I don't know how else, but unexpectedly as you've scaled this company? Like you said, you really like product, yet now you're managing all these people.

How's that going?

Interviewee: Yeah, I think there's a balance of having to continue to learn on the job all the things that you were not necessarily good at or things you didn't even know at all to get better at those things while also leaning into the place that you are most comfortable and do the best work. It's easier said than done.

Yeah, you're getting pulled from both ends. So my role now has—it is still somewhat difficult to understand. A lot of what I do is I'm sort of like the snow plow out in front of a line of cars, getting all the snow off the road and saying, okay, cool, this is a good path. Let’s go down this path.

Okay, while also having to look back and be like, alright, let me work with all of our team leads and department leads to help answer questions and provide vision based on what I've seen out in front—two totally different skill sets.

Yeah, but you either have to lean into both of them and get really good at both of them and continue doing both of them, or at some point, pass the baton on to somebody who can do one or the other more effectively because you just have an infinite amount of things to do and a finite number of hours in the day.

But how is that? I guess one of the most curious about is like how does that make you feel as a founder? You know, as someone who’s like you’ve worked on startups before, before Feather, like you've been on small teams, like hacking stuff together. Obviously, you hacked the beginnings of Feather together.

Yeah, like, you know what does it feel like to have, you know, this thing that you wanted to exist like you willed it into the world and then it completely changes in terms of what you actually do today? What's that experience been like for you?

Interviewee: Yeah, I mean I've loved every minute of it. I've loved the first two years of just grinding and growing the company. And I think the first couple years of a startup is all about heart, mission, dedication, and grit and intensity.

And once you start to hit product-market fit and your company is starting to scale, you really need to start focusing on process, on improvements in the way you lead, and improvements in the way you do everything. And you know there are more things happening on your team that need addressing. You don't know what's going on at the company, so you need to be a bit more structured in how you're meeting with team leads and providing them value and also giving opinions.

And so, yeah, we're riding out a very interesting shift in that trajectory of the company where we're sort of building process for scale while also shedding all of the heart, the grit, and get it done until it's done mentality.

Jay Reno: Yeah, kind of that like, shitty buggy code that you write in the beginning—you get it done; no, it has to be functional and work well.

Interviewee: Yeah, interesting.

Jay Reno: Okay, so in terms of scaling the company management-wise, has any advice or any learnings you've picked up along the way been completely counterintuitive that you would be willing to share?

Interviewee: Yeah, I mean, at least in the early days, you know it's really important to focus or to be very focused on a particular thing and drive towards whatever that goal is.

But at the same time, in the early days, you need to be seeding as many opportunities as possible so that you can hope that one of those 10-20-30 seeds you put out into the world, or a few of those 10-20-30 seeds you put out into the world will sprout and become an opportunity.

So for example, when it was just me prior to getting to Y Combinator, I wanted to, like, as mentioned earlier, meet with some people in the industry to get their take on this as an opportunity.

And I ended up cold-emailing the CEO of West Elm. He’s one of the people. He got back to me right away and was like, oh, this is fantastic. I love this. Do you want to come in and meet? I was like, whoa. Yeah, great!

Yeah, and after two meetings with him, he said, this is incredible, we’d love to partner with you.

I don't know how many millions in revenue you guys are doing or how many people you have on your team. I was, yeah, yeah, no worries, but you were great.

It's going really well. We probably had, you know, ten orders at the time, yeah, but because I planted all of those seeds, it got me into the position where I was able to get feedback from the industry that said, yes, this is a good opportunity; feedback from customers that said, yes, this is a good opportunity.

The day I left the West Elm meeting, I said, okay, now is the point where I believe that this company could exist, should exist, and I really want to pursue this. So I went online, and I looked at applications to various startup accelerators, and the first one I went to was Y Combinator. And as it turns out, the deadline was that day. Not kidding.

And I took that as a sign to sit down at a café. I was actually at a pizza shop and as tremendously sick and fired out an application. But it wouldn’t have happened if I hadn't spread a bunch of seeds in different places that could randomly turn into opportunities or luck that I could then grab onto and continue going.

So just to be specific there because I think that’s potentially dangerous advice—like it is counterintuitive advice, but I just want you to clarify it—like how much energy did you put into planting each of those seeds? Because I know a lot of people like half-ass dirty things and do nothing because they have fast all that stuff.

Interviewee: So you have to be focused on what you're seeding, so you have to be clear and understand what the intention is there. They should be very high risk but high reward.

Okay, and assume that like a seed investor, for example, you know that only one or two of the two will ever even come to fruition and if they do, then magic, right? And so if you see all of those different things with some of your time—not all of your time, yep—to be clear, it can produce something very magical in the form of opportunities or luck.

Jay Reno: Yeah, well, I think what's cool about Feather is like it’s basically the product you imagined in the beginning is basically this is it.

Interviewee: Yeah, yeah, with tweaks along the way.

Jay Reno: Yeah, getting to know people, understanding what resonates with them, you know how to message people and what they truly care about, mm-hmm. But largely, it is very similar to the way we conceived of it, you know.

And in terms of interacting with industry in the beginning, I think that's also counterintuitive. I know a lot of people who would advise you can probably not do that because they're gonna say no to you. Did you get a lot of no's or did you have to learn to tweak your pitch to get them to say yes? Like how did that process go down?

Interviewee: Just a bunch of non-responses, which is very typical, and then most of the people I talked to really thought it was a great idea. Hmm, which, you know, you normally hear that like people don’t really get the best ideas.

So, but it seems to be working, and people are very happy with it. And were you concerned that people were gonna try and copy you immediately? Like, oh, West Elm's gonna grab it and like do that?

Interviewee: Not at all.

Jay Reno: Okay, no, I mean understanding the level of complexity of our business—yeah, and how different it is from everything that exists in the market—your software needs, the delivery and last-mile logistics needs that you’d need to operate this business at scale, you know, I never felt worried that a big company would copy us, and to this day, no large company has even remotely copied us—only small upstarts. People who saw us and decided to do the same deal.

Okay, so it is now August; we're about to have demo day next week. Yeah, it's super exciting! You're going?

Interviewee: I am going; I will be there. I'm flying out in a couple days.

Jay Reno: So for the founders in the batch, I know it's a tough transition to go from this like really cool group dynamic, tons of pressure like with your peers, a clear goal in sight—they're gonna raise money—most of them.

What is your advice to the founders who, you know, raise money at all, like, you know, a month from now, demo day is over, and then they're just kind of on their own? Like how do you prepare yourself for that?

Interviewee: Totally, you know, I think especially within the first year after YC, you should keep that exact same mentality going, which is set weekly goals, maybe monthly goals. We set weekly goals and made sure we stuck to those weekly goals at all costs—that showed growth of business that showed that this was a clear opportunity.

And if we weren't hitting our goal, we, as in our CTO and I, would stop what we were doing and go figure out how we're gonna hit our seven percent a week-over-week growth goal.

And every single week but one summer, we hit it. It’d be like at the expense of building the software to power the business, but it proved that there was latent demand and that we were able to go find it based on where we looked.

So post-YC, immediately post-YC, definitely reset. It’s a little like coming down from a high, I think, where you’re at demo day and there are so many people there. And they're all there to see you and all of your batchmates, and there’s just so much buzz.

And then imagine you raised the seed round that you were looking for, and you're off to the races. Maybe you're in San Francisco or like us, we flew back to New York, and then there was a calm after the storm.

You know, we sat there, and you’re like, alright, okay, well, the energy is what it is in our office. It’s just us, you know. There's no longer this nurturing support system around us or in the real world. Coincidentally, I actually gave my graduation speech on this—on entering the real world and how different it is from being in the support system.

And it’s like actually the same thing as college except like a like a condensed college—like condensed startup college. Yeah, get some money!

Yeah, it's the opposite of college. It’s like lands a way better than college. Yeah, and that first month was—I didn’t feel the blues a little bit, even though you might have, you know, raised three, three and a half million dollars of funding from great investors and had tons of support.

It just felt a little slow or quiet. So take that time to just reflect and reset and set your strategy for your next six months to a year—that’s my best advice.

Jay Reno: It's awesome. Alright man, thanks so much.

Interviewee: Yeah, you bet! Thanks for having me.