Building a Unicorn from Used Goods
Nick Huzar, CEO and Co-Founder @ OfferUp
Startup Grad School Stage
Ascent Conference 2020
[00:00:05] All right. Hi, everybody. It’s great to be here today. Wish you could see everyone face to face today. The topic we were going to dig into is building a unicorn from used goods. I’m Nick Huzar, founder and CEO of Offer Up. And I’m going to talk a little bit about the origin story of offer up and driving through crazy economic times. And then I’ll go ahead and give you some tips on things I’ve learned over the years. If you’re an entrepreneur building your company, just things I’ve learned over the years. So before I die, then I wanted to say that offer up is really seeing some interesting numbers given that pandemic. And I’ll explain kind of what we’re seeing, you know, in a few minutes. We use the product a lot. I use the product a lot. This is my favorite purchase on offer up. It’s one of these spring free trampolines and got a really screaming deal and the guy actually delivered it for me.
[00:00:59] So it’s just a good example of what I’m doing to keep my kids busy during a covid.
[00:01:05] So, you know, why did I start this company? So, you know, offer up actually was started during the housing crisis. It was a really rough time to actually raise money. But, you know, one of my biggest learning lessons that I’ve had is you can’t control the macro level environment. You know, if you have a passion for a company, do it. You know, I don’t care what time it is and what the what the market looks like. The best time to start is just just to get going. But it was really interesting, you know, as we started and why I started this company, that I just felt like value was stuck. It was stuck in our homes. In fact. Twenty five percent of US households with a two car garage can’t park in their garage. Our homes are about 30 percent larger than they were in the 50s. But we’re actually having less children. So, you know, we have a lot of stuff and it’s just kind of stuck in our homes. In addition to that, if you look at small retailers, especially right now during covid, there’s a lot of interesting things in small merchants all around us. I think one of the biggest challenges, again, is how do we know that these things exist in these stores unless we walk into them?
[00:02:09] So it offer up. I always like to say we want to be these super at 4:00 local. We really want to focus on trading at frictionless local experience powered by these mobile devices that are now, you know, in all of our pockets. And we just feel like there’s a huge opportunity to continue to reimagine commerce as we know it locally.
[00:02:30] So here’s just a quick look at our mission and our vision. We’ve constantly been refining these over the years, but with the rapidly changing situation with covid, I’d say these two tenets are becoming even even a more important part of our lives. And when you think about our mission is really to be the largest, simplest and most trustworthy local marketplace, I think, especially now more than ever, that’s really showing up. And again, I’ll share in a minute, you know what how we’re seeing this and some of our as some of our data and our vision is to empower people to connect and prosper. And I think especially now, unfortunately, so many people have lost their jobs, know we’re seeing people turn to offer up to maybe sell something in their house to make ends meet or people are looking for value to get get a really good deal on something as they’re trying to kind of drive through these these challenging times.
[00:03:27] And with that, I’ll show you, I think, some popular kind of talk about a little bit about some of the popular categories and why people turn to offer up. You know, I think at the end of the day, especially early on, we really focused on the number one KPI, which was liquidity. You know, we’re sellers finding success on our marketplace were buyers finding success. And, you know, we obsess over every little bit of that experience to make sure that the buyers and sellers were finding success in our marketplace. Because at the end of the day, if you have a marketplace that is not driving liquidity, you’re not going to last very long. So that was a very important metric. And it still is probably our top KPI to this day. And then each market, you know, within different markets also has different drivers, so we have and we’re very local, so essentially we’re creating marketplaces every time we entered into a market, whether it’s Seattle or Florida or L.A. So understanding those differences is really important as well. About seven about seven categories that make up over 50 percent of all the items posted on offer up in the top 14 represent about 75 percent of our activity. So you can literally buy and sell anything on offer up, but there’s definitely going to be things that people buy and sell more often on our on our marketplace.
[00:04:52] What are the top categories? Not surprisingly, is our Ottos business.
[00:04:57] We are literally facilitating millions of car and truck transactions every single year on offer up. This is something that really started to just take off organically over the years. But I think buying and selling a car is a very local experience.
[00:05:12] And that’s something that’s really, you know, we continue to see a lot of growth in over the years and you can buy anything on offer up.
[00:05:20] I’ve seen everything from tanks to party busses to Lamborghinis.
[00:05:25] You can pretty much find any type of vehicle on a marketplace. And the other interesting trend during covid is how are people you know, how they’re starting to buy more vehicles during this time? And you might think, well, why are people doing that?
[00:05:40] But I think people are more skeptical to get on public transit, a bus or train they’re finding they’re turning to offer up to actually buy some some cases their first vehicle to avoid the overall crowds.
[00:05:57] And here on this slide, I really want to kind of just talk about the overall equation, you know, kind of the offer up equation, and this is something, you know, very early on in our evolution that we really, you know, spent a large part thinking about was how do we drive success, you know, in the marketplace? And, you know, a few sides that I really talked about. Liquidity is a really important metric. But I think there’s two other pillars that we knew we had to build this company on. And, you know, going back to kind of the opportunity, it was, you know, why is value sitting? Why is it in merchant, you know, small stores? Why is it in our garages and storage units, in fact, 10 percent of the US population right now. Right. Storage units.
[00:06:37] And, you know, I think that the biggest aha moment we had when we looked at the smartphone was we thought we could really reimagine local buying and selling by removing as much friction in that experience. And a classic example would be, you know, if I want to take a picture and sell something historically that required, you know, tethering a camera to a machine and then posting online, that would take 15 minutes versus, you know, with offer up and our app, you can simply just take a picture from your pocket and in 20 seconds that items discoverable. So, you know, removing friction not only in posting, but how people communicate, suggesting where people can meet up. Those are all elements of friction that, you know, again, my view is that’s why historically values have been sitting all around this. The other large pillar that we built this company on was trust. And we realized that, you know, we’re very different than a lot of marketplaces where people are buying and selling goods online. We’re actually bringing millions of people together every month face to face. So who are you dealing with? You know, what is their profile? Do they show up on time? Have they do they have a bunch of ratings? Do we have friends in common? Is the item that they’re selling really the item that they’re describing? And so we’ve we’ve invested a lot over the years to invest in trust to make sure that equipping our users with as many tools as they can so they feel confident when they meet someone that it is going to be a trusted, trusted transaction. So these are really the three legs of our stool. And, you know, we’ve been constantly refining these over the years. And I think that’s why we continue to grow so quickly and explain here in a minute kind of, you know, some of the numbers that are reflective, a kind of wear offer up is today. So if you look at offer up today where the number one mobile marketplace in the United States, we’re also the number one shopping app in the App Store under again, under shopping, as I mentioned before, we’re facilitating a lots of meet ups over 60 million times a year. People are connecting on offer up face to face. We have over 20 million monthly active users that are actively using offer up and well well north of six hundred thousand items posted every single day on the offer of marketplace. We’ve now we’ve officially crossed one hundred million app downloads and we’re only here in the United States. So again, going back to my previous slide, I do not think we would achieve these numbers had we not really got clear on what mattered in our marketplace and just obsessing over driving out friction in the experience of creating trust and in that transaction and really making sure that we’re connecting buyers and sellers. So it’s been great to see how fast we’ve been growing and kind of taking off and supporting our customers, especially during this crazy, crazy covid time.
[00:09:41] And then most recently, not familiar. We also just acquired and partnered with Lego, and that’s been going extremely well as well. And, you know, this is a battle that I’d say that we’ve been kind of fighting over the last number of years. And what became really clear to us was we had strengths in many markets and they had strengths in different markets as well. So by coming together, we were able to grow the combined marketplace significantly more. And at the same time, you know, one of the unique features that offer up provided was shipping. And that’s something that Lego didn’t didn’t offer at the time. And so by coming together now, the combined marketplace just has, you know, even even more liquidity. So, you know, we’re seeing this in a lot of our data as well, that, you know, during times of social distancing, people are a lot happier to just click and have something delivered to their doorstep versus meeting face to face.
[00:10:44] And I thought that would be interesting for this audience to kind of also share, you know, some of the interesting stats and the, you know, that we’re seeing during covid. So, you know, since March, we’ve actually seen a 3x increase and people buying video games. And if you’re a parent at home, you know what I’m talking about. You know, finding ways to keep your kids stimulated and excited right now is really challenging. We’ve seen one hundred and thirty percent increase in searches for home exercise equipment. And I think that is also, again, a byproduct of people not wanting to go into gyms. You know, I think, unfortunately, a lot of friends are struggling. So, you know, people are trying to find ways to be active and and staying fit at home. We’ve seen a tax increase in the activity for people buying computer equipment. You know, I know I’ve seen this at home as well where, you know, maybe I have a home office and I was not nearly spending as much time as I am now. There, you know, been buying things like monitors and additional laptops for your kids schools, a lot of a lot of cameras. These are definitely things we’ve seen people buy more during covid. And a 40 percent increase in buyers using shipping. I mentioned this a little bit earlier, but I think, you know, you know, people trying to get supply that they may not be able to get locally or simply the fact that they don’t want to meet somebody necessarily, you know, face to face. And the last interesting stat I share, this is always mind blowing to me that we’ve seen a thousand percent increase in searches for puzzles. So people are clearly trying to find ways to continue to be mentally stimulated during covid. So if you have some of those old puzzles that are collecting dust in your closet, I suggest you try to post those you never know. We might be able to make a bunch of money on your old, you know, your old puzzles.
[00:12:38] The other thing that I’d make sure to share for anyone that’s building a company are thinking about starting the company, you know, sometimes people often think about when’s the best time to start. And, you know, I mentioned this earlier. I think my view is just go because you cannot predict the overall climate. You can’t control that.
[00:12:57] And I think on this slide, what’s really fascinating, what I try to call out here was, you know, some of these big changes, you know, in the market. We had the dotcom bubble in 2000. We had the housing crisis in late 2008.
[00:13:11] And then clearly, if you look at it recently, we’ve covered.
[00:13:16] So this is just a look at Nasdaq, you know, over the years. And I think, you know, really interesting companies are often birds in these times of change, as I mentioned, offer up a started during the initial housing crisis. You know, while I think access to capital is really challenging, it gave us an opportunity to talk to people. You know, I used to walk out and talk to local merchants. I’d walk into the store and I get to meet the owner. I get to understand how we can be supportive and helping them. And that was one of the one of the advantages of not being very busy during that time was I could go out and do research and people were pretty generous with their time. So, you know, the thing I’ve learned over the years as we started was really, you know, visualizing I was thinking of a North Star. And I think that was extremely helpful because, you know, if anyone’s building a company, especially a big, ambitious idea, there’s going to be a lot of hurdles day in and day out that you have to face. And I think if you keep that North Star in mind, you will continue to persevere. And so I like to I really believe in the power of visualization. So I think if anyone’s out there thinking about what they want, I always say, just be careful what you put in your head, because I find that if you do that long enough, things tend to manifest and become true over time. And the last thing I’d leave everyone I’d like to just just anyone else building a company and just some learning lessons that I found, you know, over the years. So whether you’re starting a company, you have a company, there’s a handful of things that I’ve sort of been really valuable for me. And I figured at least I’d share those here for people that are maybe on the same same journey.
[00:15:03] So I think the first thing is really the team and I’ve learned a lot of painful lessons not only in this company, but my previous company as well. You know, the investors and the leadership who’s on the bus with you really, really matters. And I think, you know, clearly when I was younger and maybe less experienced, I think I there’s too many people on the bus that I thought were OK. And I just felt blessed to have people helping us. And then I realized over the years that we needed to move people out, maybe much faster than I than I anticipated. And so, you know, given that I think, you know, if you’re building a company, you have to be in a constant state of recruiting.
[00:15:43] If I look back at the last week and a half, for example, I’ve done about 19 interviews. I’m really focused right now on helping my leadership team to scale, given all the opportunities that we have. And so, you know, recruiting is is a is a constant effort.
[00:15:59] And if somebody is not in a player, somebody is not really helping to drive the company, then you’re not helping them and you’re not helping the company. So it’s critical to make sure you’re moving. You’re developing people up or moving them out. Another interesting anecdote is we’ve actually hired one hundred and twenty people since coveted started, which is really fascinating to onboard so many people during this unprecedented time.
[00:16:27] The other thing that I that I I think have learned over the years is success is definitely not a straight line. You need to be very agile in approach and how you’re going to attack it. Make sure you keep kind of that North Star in mind, but just know that it’s not going to be a straight path there.
[00:16:42] So control the controllable. There’s so many things that are out of your control. And I think sometimes people tend to obsess over that. I think you have to just really focus on what you can actually impact and continue to be persistent and keep driving towards that North Star. You know, I think about this recent partnership with Go is a good example of that. Know, we’ve been battling the market for years and we could have been rigid and said, hey, their competitor never wanted to talk to them. And then over time, you know, it just made sense for us to partner with them. And as a result, we’re all stronger together. I think when it comes to developing a culture, I think just keep shaping it, you know, it’s never done. I’ve had a lot of people that say, well, what is the culture at offer up? And I can describe what it is today, but I can also describe how it’s evolving over time. And, you know, I think this is something that you can never do too early. You know, I think we’ve had some growing pains over the years, especially when we kind of had a pretty big hiring ramp early on in our growth. And I used to refer to it as the offer up. Do we would bring people in from Google and Microsoft and other startups and they would bring their best practices to offer up which which was great. However, if you combine these different cultures, you tend to have a lot of clashing. And so we definitely had a lot of growing pains. And, you know, it really caused us to get clear on what matters in the halls of our what are the norms you want to keep reinforcing. And it’s not really telling people how to do their job jobs. It’s more of just getting very clear on what are the boundaries, what are kind of the guidelines in which you want people to operate during during the workday.
[00:18:29] I think the other thing that’s pretty unique during covid is we start to think about more ways to reinforce culture.
[00:18:37] And so, you know, in the halls of the company, there’s all these concentric circles of managers and all hands and ways to to connect.
[00:18:45] We’re trying to find more ways to do that during covid.
[00:18:50] And, you know, I think this goes without saying, but you get used to rejection, I can’t tell you how many times people told us we were crazy, it was never going to work. People are never going to shop from their phones. So I would say that, you know, take take feedback with a grain of salt, learn from it, but just keep driving towards that north star. And then lastly, I think the last thing I’d leave you with, it’s really always just always remember the customer. I think in many times, you know, I’ve heard other leaders and people talk about this CPI’s these metrics. I think good leaders just tell stories. They talk to customers and they share their stories with employees. And they they bring those stories into meetings. And so if you’re building out a company, you know, while the metrics matter, just make sure that you’re constantly in a state of storytelling and remind your employees why the work they’re doing matters and always remember the customer. So hopefully you found this time interesting and insightful and thank you, everyone, for having me. And hope hope you have a good day.
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