Matthew: Hi, this is Matthew Wise with FounderLY. We empower entrepreneurs to have a voice and share their story with the world, enabling others to learn about building products and starting companies.
So, it’s with great pleasure that I’m here today with Eric Koester, who is the founder of Zaarly. Zaarly is a marketplace that helps you buy and sell anything with people nearby.
With that said, Eric, we’d love for you to give our audience a brief bio.
Eric: Sure, so I’m actually similar to yourself. I’m actually a recovering startup lawyer. I spent the last five years before really jumping feet first into the start-up world as a startup lawyer. Before that, I spent a few years in corporate finance and worked for a biotech company. But really I think the start of my entrepreneurial journey was as a startup lawyer.
It’s very interesting to be a startup lawyer and really seeing all these passionate people working on their projects and getting the opportunity to hit these milestones, be it funding or an opportunity to launch their product, get traction, get acquired, IPO. And starting to see those things as a start-up lawyer you almost kind of start drooling a little bit, seeing all these opportunities and these smart people and being passionate.
I think it really almost awakened the entrepreneur inside me. So, from that my experience as a startup lawyer, I left about nine months ago from now to join one of my clients that is in the marketing automation space and really got my first taste as being on the executive of a venture-backed company, got to really learn a lot of things.
Then, I had the fortunate opportunity to found Zaarly which was something I wasn’t looking for and maybe broke all the rules of what I’d learned as a startup lawyer, but yet that turned into Zaarly. Today we’re kind of the opportunity of growing fast and really seeing some nice traction across the country.
Matthew: What is Zaarly? What makes it unique? Who is it for, and why are you so passionate about it?
Eric: Zaarly actually came out of a challenge that a number of us had. It was actually co-founded with two other individuals, Bo Fishback who is a former VP of entrepreneurship at the Kauffman Foundation which is the world’s largest entrepreneur focus foundation and Ian Hunter who is a long-time saavy tech individual and he’s our CTO.
And really, all of us had talked about, there’s not been a great opportunity to really connect with people right around you for things you want to buy. So, what Zaarly really does is it allows you to say, “I need a service, a good, an experience or a task run for you.” And it really syndicates the community around you and helps you get that filled.
So, I think the experience that I had where it kind of made Zaarly whole for me was, I was living in Seattle at the time and I kept getting parking tickets, and my wife was about ready to kill me. The reason was I’d be doing something, focused on something else and I’d forget about the fact that my car was parked a couple blocks away. And so I thought, “God, wouldn’t it be great if I could just say I would pay someone $10 to run out, put some money in the meter so I wouldn’t get my car ticketed or towed.”
And so, that’s kind of where this type of idea came from is that there is just, like, this ability to crowd source life, and I think that’s what Zaarly really does a little bit. It just really takes the people around you and lets those people buy and sell, trade experiences, kind of work with each other in a way that’s not been done before.
I think that’s what we’re excited about is the ability to use social, mobile, commerce, all of those things in one package and really start to take commerce local is what we love about Zaarly. I think it’s amazing, we have had our expectations even beaten. We’ve seen over $1 million in 30 days was posted on Zaarly and it just blew us away that people all across the country were using it.
That’s what’s exciting to us, it’s like people are getting things from a tree house built or a little kid’s space suit for a costume party, or we literally had someone who needed a wedding singer for a late night event that was cancelled for their reception and they posted on Zaarly, and found someone.
Stories like that, I think, are what get me jazzed because there’s never been a way for you to quickly, just crowd source the people around you to help you with something and also to use as a way to make money. That wedding singer was able to make $250 just because someone else needed them. They never would have connected if it wasn’t for Zaarly.
Matthew: What are some of the technology and market trends that currently exist, and where do you see things developing in the future for your space?
Eric: So, I think that when we think a lot about Zaarly, I don’t think that the space, this person to person commerce space, really could have been possible two years ago, maybe even a year ago. I think that the explosion of mobile devices, the real way that social media and interpersonal communications through things like Twitter and Facebook has exploded, as well as just the real ability now to do mobile payments through your phone.
Those three trends right there really helped Zaarly be even possible these days. I think that what we’re going to continue to see is more and more people using tools that help them communicate in hyper local spaces. So, we’re just going to see more and more people using tools like Twitter, using tools even in the workplace like a Yammer. All that kind of explosion I think at the same point as we’re seeing more and more people using mobile payments and easier ways to pay and pay with each other.
I think one of the things that we’ve seen that’s amazing is that, so McDonald’s is an example of how we’re going away from the cash economy to really a true plastic economy, plastic card economy. McDonald’s has the average transaction price is less than $4, but somewhere between 80 and 90% of all transactions at McDonald’s, at this small price point, are done on credit cards. So, you’re really seeing people going away from handing each other a dollar back and forth.
Now, we’re seeing people want to pay with credit with their phones, whatever that’s going to be. I think that’s going to be a trend that’s going to help us continue to help people buy and sell locally and kind of make their own business, just be themselves. So whether it’s a service they provide or a good, being able to trade those back and forth from your mobile device is going to be the real way of the future, we think.
Matthew: We’ve covered your background and overview of your market. We’d love to dig in the details of the Zaarly story. So, can you tell us how you met your co-founders, who they are and what qualities and attributes and skills were you seeking in co-founders?
Eric: So, I think the Zaarly story is it tells a little bit about how you can break all the rules and still wind up figuring out how to do things together. We actually broke one of my core cardinal rules was you always should found a business with people you know. I actually had met one of my co-founders the weekend we founded Zaarly.
We actually decided to, the story starts where a friend of mine, Bo Fishback, who was the VP of entrepreneurship of Kauffman and I, were both on the board of Startup Weekend which is a non-profit organization that really helps bring entrepreneurs together for these weekends.
So, I told Bo for my birthday that I wanted him to fly down to L.A. where neither of us were from, but to fly down to L.A. and do a Startup Weekend together. Just have a fun time. We weren’t even planning on participating. But we went down there and listened to the ideas that were pitched that evening. The way that it works is you pitch ideas on Friday, the top ten or so ideas are selected and teams are formed around them. You work on that project over the weekend, and then on Sunday you launch your prototype or a beta version of what you want to do.
So, we went down there on Friday, had some food and got together on Friday night and listened to the pitches and weren’t really inspired by any of them in particular. So, Bo got up and pitched what became Zaarly. And so, we decided to work on it for the weekend.
I’d been to several Startup Weekends before so I knew that one of the core ways to succeed was to actually find the best talent in the room. So, I went to the organizers and said, “Who is the best developer and who is the best designer in the room?” And so, they looked around the room and they said, “Ian Hunter, he is the best developer in the entire room.” and so beelined over to Ian Hunter and actually had him join our team.
The story of Ian Hunter even being there is ever more interesting. Ian actually had done about a year-long journey where he had been based in L.A. where Startup Weekend was held. He’d been based in L.A. for about three years and decided that he wanted to kind of start meeting other people in the technology communities around the country.
So, he started on a nine month journey where he left L.A., went up to San Francisco for a while, went up to Portland, to Seattle, to New Orleans, to D.C. and ended up settling in New York. And he was in New York for a few months working on a contract gig. During that time, he’d actually left his car in L.A. So, he had a gig in New York where he was going to be doing the website for all of Ford models. He had 11,000 models and he was putting their website together. Took this contract, was ready to get started.
He flew back for the weekend and just came to the co-working space to kind of reconnect with some old friends. He flew back to L.A. to pick up his car and drive home to New York and happened to found Zaarly that weekend. And so, it totally shuttered all of his plans to actually go back to New York.
Next thing you know Ian joined our team at that weekend, and we wound up working for the weekend together with Ian, Bo and myself. We built our basic prototype in one Startup Weekend. And one of the benefits of Startup Weekend, that weekend, was that Ashton Kutcher actually was one of the judges for Startup Weekend.
So, he was at the event and seemed to like our idea quite a bit. We started talking to him afterwards, and he led our seed round after that weekend. So, that was really how we kicked it off. But it broke all of our rules. I didn’t even know where Ian was from that weekend when I decided to found a company with him. It’s a funny thing when you tell your wife you’re leaving your job to go found a company and she asks questions about your co- founders and you’re like, “I don’t know. Leap of faith.”
So, that was the start of Zaarly and from there we went to South by Southwest, did a very simple experiment and did, like, $10,000 of transactions in 48 hours and realized we were kind of on to something. Really then just put heads down, made the product more efficient and rolled it out in May. And so, we’ve been live about a month and a half now.