Think one startup is hard? Try running six of them.
Feed the Need
Although you might not have heard of Need/Want, you’ve probably heard of the stuff they make. Top sellers include: Peel, thin, unobtrusive cell phone cases; Mod Notebook, paper notebooks that sync to the cloud; Smart Bedding, sheets and duvet covers that are designed to stay in place while you sleep; and Emoji Masks, which you probably saw someone sporting last Halloween.
But there’s more! In 2014 Need/Want acquired virtual personal assistant Jarvis, which it later spun out as “smart assistant” Second. More recently the company launched Minimums, a digital publication documenting “the most interesting possessions of the world’s most interesting people”. (Check out their recent issue with Silicon Valley’s T.J. Miller and his wife Kate.)
That’s a lot of products for a company that just celebrated its two-year anniversary.
“From the outside it looks like we’re maybe fairly unfocused,” Marshall Haas, Need/Want’s CEO and co-founder, admitted. But the diversification actually works in their favor, he said – their products all use the same systems for support, marketing, customer acquisition, and fulfillment.
The other benefits are more obvious: “You really hedge your bets,” he said. The “breadwinner” of Need/Want has changed over time, he told us. At first it was Smart Bedding. But after raising nearly $60,000 on Kickstarter the company had problems with their manufacturer. The income from Peel and Mod sales helped the company during that “tough time”.
While Haas came up with Smart Bedding, Peel was the brainchild of Jon Wheatley, the head of product and also a cofounder. Wheatley previously founded Dailybooth, a photoblogging website which was later acquired by Airbnb. Need/Want’s third cofounder, David Myers, leads design operations.
The company’s name was chosen because Wheatley owned Needwant.com, among many other domains. But the name fit the company, said Haas. “Everything we make is something you will either need or want or both,” said Haas. “So I convinced him to let us use that domain.”
From the outside it looks like we’re maybe fairly unfocused
Despite the tech trappings, Need/Want’s business model is old-fashioned – it makes a physical item that can be sold and invests profits back into the company. The company is on track to make $2.5 million in revenue this year.
The Need/Want operation has been largely bootstrapped, but they did recently raised $280,000, from angel investments. But, Haas emphasizes, “we totally operate under a bootstrap mindset.”
“Most people that raise money, you raise enough to give you about 18 months, and then you raise more money,” Haas said. “That’s not our plan. We’re definitely profitable and can grow off our own revenue now.”
It helps that they have physical items to sell.
Although the co-founders have technology backgrounds and met online (Wheatley and Haas “met” on Twitter and didn’t meet in person until they shot a promo for Smart Bedding months after they began working together), their products are physical, a rarity in Silicon Valley where apps and tech reign supreme.
“Most guys in tech they won’t touch physical products with a ten-foot-pole,” said Haas. “If you have a problem in tech, you change a line of code and in physical products if you have a problem, you have to do a massive recall or whatever it is.”
Most guys in tech they won’t touch physical products with a ten-foot-pole
The Need/Want guys aren’t like most tech guys. For one, they aren’t based in Silicon Valley. The company is based in St. Louis. They had no deep connection to the Midwest, Haas said. The Founders hail from the UK, Dallas, and New York. But Haas was familiar with the city after having received a grant from St. Louis-based Arch Grants, while at his previous company, Obsorb, a project management app for small businesses that was purchased by MetaLab.
“Quite frankly, we just ran the numbers and realized it was just going to be really, really tough to base it out of San Francisco,” Haas said. “While there’s a lot of really awesome smart people there and a lot of connections that you can make being there. It didn’t equal what the costs were for us.”
Haas’ co-founder Wheatley wrote a blog post on the move where he argued “we’re an internet company. We don’t need to be tied to a specific location.” The post got the attention of the Los Angeles Times and unsurprisingly the St. Louis Post-Dispatch. The Post Dispatch noted that Wheatley “spent $3,900 a month for a one-bedroom apartment in San Francisco. Here, he pays $1,200 for two bedrooms.”
The company originally paid just $300 a month for space in an incubator downtown but has now graduated to their own offices and has hired staff.
A new product is in the works, said Haas. But “we don’t have some sort of strict plan like we need to launch one new thing a year or anything like that,” he said. “It’s just if something really resonates with all of us we’ll pursue it.”
“Really what our plan is to continue what we’ve been doing.”
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