Eric Koester – Zaarly 2 of 2

"The truth is that building a product is really about solving a problem for a person." Zaarly is a proximity based, real-time social marketplace for buying and selling.

Matthew: Are there any unique metrics or social proof about Zaarly that you’d like to share with the audience?

Eric: Yeah, we kind of look at a few core things that we think really show the communities that are happening. The interesting this about Zaarly is that each city, each location, each person becomes their own marketplace.

The name Zaarly actually came from the word, bazaar. The idea was when you open your phone, literally life around you becomes like a bazaar. Suddenly, you open your phone and there’s a rug salesman and someone selling food and someone who’s got spices and that kind of Moroccan bazaar concept, we wanted to take to today where you open up your phone, and suddenly there’s people selling stuff over here and you can try and buy something here.

So, that’s really where the concept came from. For us, we look at what communities are really, really embracing Zaarly. I think that’s one of the social metrics that we’ve seen and that already in a city like San Francisco in just a little over a month we’ve seen over $150,000 of transactions posted in here. Same thing in Kansas City which is where one of our other founders is from, we’ve seen the same thing. New York we’ve seen almost $120,000 of transactions posted. So, I think those are some things that we’ve seen in four or five communities in just a short period of time really start using this as a way to buy and sell locally.

I think that’s kind of been the metric for us. It’s been great. Another kind of interesting story about how we’re using metrics, we’re all over the place right now. We’ve got team members in nine different locations around the country right now, so we’ve really embraced this kind of distributed work force. But we realized we really need to focus our energies a little bit, so we’re going to actually pick our first regional headquarters, of hopefully many, but our first regional headquarters and we’re going to crowd source it.

We’re actually going to go to the community that is doing the most number of transactions, has the most users, and we’re going to open our office there and really use that as our test bed for really kind of growing this to scale. Which is kind of a new, fun thing, and I’m really looking forward to it.

We actually have a leader board where we track the cities that have the most transactions, and we’re using that as kind of our new way to see which market’s embracing the Zaarly lifestyle as much as possible and we’ll go there. End of the summer whichever community really is the most active, we’re going to go to that community and continue to run experiments together and see how we can take it from early growth to some real traction.

Matthew: Lots of people admire entrepreneurs because they appear to make starting companies look easy. We know it can be very challenging. We wanted to dispel some myths here so my question to you is: what skills or talents come easier naturally for you? What has been difficult, and how do you manage that?

Eric: It’s a great question. I think at the start of it, it is a lot. Founding a company is a lot harder than I ever anticipated, for sure. I think that one of the biggest challenges I’ve noted is my wife lives in Seattle, and now we’re moving to D.C. She’ll be a professor at Georgetown. And in the first four months of Zaarly, I was actually at home during the work day for seven work days out of a four month period.

I think that’s one of the things that’s been challenging is really figuring out how to manage all of these expectations and almost to step back a little bit. I think the easy things are really, in some senses, like thinking about big visions. It’s really easy to think, like, “Oh my God we can basically revolutionize commerce and make local buying.” That’s the easy stuff, those big dreams.

The hard stuff is getting tactical. How do you go door to door and put flyers on people’s doors to get them using Zaarly? How do you literally convince one person to download the app and use it? I think that’s what entrepreneurship really is. It’s not about these big visions. It’s really about taking those big visions and crystallizing it into, “What am I going to do today that’s going to have an impact?”

Ron Conway from SV Angels is one of our investors, and he tells us a really interesting story about Mark Zuckerberg early on in Facebook. He actually was supposed to meet with Mark for a meeting. Ron was supposed to meet with Mark for a meeting, and Mark was an hour late or so. Mark shows up and says, “Hey, sorry I’m late.” And Ron’s like, “It’s kind of a big deal; why are you late for me?” And Mark told him, “I’m doing something more important.” And Ron was kind of a little taken aback, as he tells the story. And Mark said, “I actually was out there putting flyers on bulletin boards so that we could help spread the word of Facebook to more and more students, to get more hires, more people using it.”

So, it’s that kind of hand to hand combat that I think really it takes to be a successful entrepreneur. We spent tons of time going to the core markets that we’re tackling and spent time actually meeting with people, being on the phone with people, actually physically talking to them saying, “Hey, we’d love if you’d use Zaarly.” And I think that’s what helped us kind of be in more markets than just one is because we’ve had to do that
hard work of day to day getting on the phone, sending an email, asking people just to use our product and not expecting that an article or a tweet is going to be enough.

Matthew: What’s the most important lesson you learned since launching Zaarly?

Eric: I think that it’s, for me, the most important lesson has really been just don’t think that because it hasn’t been done before that you can’t do it. I think that a lot of people told us before we launched, it’s not a good idea to launch, a nationwide launch when you turn this thing on. And we said, “We’re going to try it. We’re going to give it.” and just because no one’s done that before doesn’t mean that you can’t do it. I think that you have to, as an entrepreneur and as a founder of a business, be willing to say, “Listen, you may be thinking something different, but I’ve got to trust my gut here. I’m going to do some research, and I’m going to trust my gut.”

And so, I think that’s what, really I’ve had to learn is you just have to, at times, trust yourself because you know more of the information, listen to all of the advice and surround yourself with really, really smart people. Take that all in but at the end of the day you have to trust your gut because it’s your gut, it’s your company, and I think that takes you, hopefully, to success.

Matthew: What bit of advice or piece of information do you wish you would have known before you started Zaarly?

Eric: I think that I would have liked to know how to code, is one of the things that I would have most liked. As a non-technical founder being involved in a technology driven business, it’s amazing how much there’s this black box behind the technologies being created. For me, it’s been this learning curve to understanding what the difference is between Pearl and Java and Ruby and all these kind of things. I wish that I would have had the opportunity to know more about the actual technology pieces of it. I think when you’re in a technology business it quickly becomes all about the technology. So, understanding why you’re using one database versus another, how the relational pieces fit, what are you hosting, things like that.

I think one of the things that I did learn from was Startup Weekend. It gave me the chance to make these businesses in kind of like a small pocket window. You get that experience into it. I wish I would have known how to code. Really just even a little bit so that I could even be a little more dangerous. Because it’s amazing how much your business is driven based on technology.

Matthew: What mentor has played a significant impact in your development?

Eric: I have to say my father actually is probably the most important mentor overall. He’s always kind of been this entrepreneur, but really I never knew he was an entrepreneur. He was always self-employed, but I just thought that’s how it was. I think he was the one who taught me that it is about hand to hand combat. That really it’s about asking one person for something and not expecting that you can do it just based on a good product. I think he’s the consummate salesman and has taught me that you just need to be confident. Ask people, talk to people, really be out there. I think he’s been really a great one.

In addition, I think that I’ve also been fortunate to have a large number of mentors in my career who over time have really taught me to take those risks. I think that the combination of having a dad who taught me that it’s okay to get on the phone with somebody you don’t know and really sell something as well as a number of entrepreneurs and former entrepreneurs have taught me about the risk taking process. I think those two have really been helpful for me in my journey to think about how I get from, even leaving the legal profession, the stability of that and going out on a limb and saying, “I’m going to start a business,” and may not know where it’s going to go but take that risk. I think it’s been great.

Matthew: What advice would you like to share with our audience about launching a startup? If you have to distill it, what are the key elements?

Eric: I think that there’s actually three things. If I had to pick the three things that I think about in Zaarly but also in any business, I think it comes down to three things. I think the first thing is build something that tests what you want your business to become. They call it the minimum viable product or whatever you might, MVP. I think the core thing of a business is you need to test what is the piece or the really core element of what you want to build.

So, with Zaarly we’ve launched three MVPs. We launched an MVP at Startup Weekend, we launched an MVP at South by Southwest and then we rolled out a more, further along MVP when we did our launch in May. But each time I think you roll out little pieces of it. Because I think the truth is you have to test to understand what the audience is going to tell you back.

That’s come to the second point is, I really think that it’s all about listening, too. It’s not one of these situations where you have to tell people what it is, what you want them to do, but when we launched at South by Southwest we thought we knew what people wanted, and in some senses we got it right. But in other senses, we were off base. And we had to basically listen to that feedback really critically to understand how we could take our business from an idea and a concept that was interesting to something they would practically use.

The third piece that also kind of fits into that, so obviously start with an MVP and keep releasing MVPs because you learn each time and listen to that feedback that you get when you release it. The third thing is, the truth is it’s not about a product. It’s not about a technology. It’s not about a business. What it is is about solving something for a person. I think that when we stepped back a little bit and really focused on the people aspect of what we were building, it really helped us to kind of crystallize what was most important. That kind of came through this iterative feedback process. So, thinking about it in terms of people instead of technology or business, that’s what the most important thing was.

For us, we actually kind of stumbled upon this accidentally where we were trying to build all these communities before we launched, and we spent a lot of time talking to people to try and figure out about the communities, trying to learn about Boston and learn about Seattle and learn about Kansas City and about Dallas. We kind of did that as a research project, and as an accident we built these communities. It taught me that it really is about people more than anything. So MVP, listen, listen, listen and it’s really all about people. I think those are the three core lessons that I’ve learned in this process, and I think translate to business in general.

Matthew: Before we close, I would love for you to give our audience your vision for Zaarly and how you hope it will change the world.

Eric: We’re excited about where we are today. But I think as you asked, we’re more excited about what it could be tomorrow. I think that what we’ve realized is that Zaarly does change the way that people buy and sell. It is this way to take local in a real way that changes the way people think about things. For us down the road, what I envision Zaarly being is that when you think you want something, rather than going to the store for it, you ask people around you who might have that thing. So, maybe it’s a service. If you’re suddenly looking for someone who can do a service for you, you ask your neighbor.

It takes us back a lot to the old way of doing things where it was about asking the guy who’s your neighbor next to you to borrow your shovel. Well, we don’t talk to our neighbors that way anymore. At the end of the day, what I hope Zaarly can become is really the way that people buy and sell with people in their community. It’s about taking things local in a really different way.

And so, our hope is at the end of the day we’ve created thousands of micro-communities all over the place that suddenly buy and sell with each other. I think we’ll see it as a success down the road where people look at each other and say, “I need something. I’ll Zaarly it.” And that’s what we want to get to, is where it’s really the way you can buy and sell anything you might want with people around you. When we get to the point where people start saying, “I need lunch for today, I’m just going to Zaarly it.” I think that’s when we’ll know we’ve figured out a way to kind of help people really do something that’s never been able to be done before.

Matthew: Eric, it’s been a pleasure having you as a guest on FounderLY. We’re rooting for your continued success at Zaarly. For those in our audience who’d like to learn more and become a member of their community, you can visit them at

This is Matthew Wise with FounderLY Thanks so much, Eric.

Eric: Thank you.


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