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CFO-turned-entrepreneur Erik dreams of a world in which clueless men don’t have to guess what jewelry to buy for their partner, as their beloved has already called ‘dibs’ on their preferred items. So he’s laying the groundwork to commercialize this simple but profound concept, with an app called “Dibbsi” that lets you lay claim to a bounty of consumer goods. As Marc counsels him, though, the first step is figuring out what the market’s appetite truly is for solving this problem.
Episode transcript
| Speaker | Timecode | Transcript |
|---|---|---|
| Marc | 0:05 | That big market dynamic only happens when something is so compelling that people are willing to use it, even though it sucks. |
| Erik | 0:12 | Right. |
| Marc | 0:13 | And believe me, it's going to suck. Everything sucks at the beginning. It sucks because you don't have time to build up the features. It sucks because you're rushing things to get something out there, but it has to be so good, because there frankly, is no other way to do this. |
| Marc | 0:27 | Hey everyone, I'm Marc Randolph. And welcome to That Will Never Work. I've been an entrepreneur for a long time. Netflix, which I co-founded, it was actually my fifth startup. And since leaving there, I've had the opportunity to work with scores of early-stage companies, and talk to thousands of aspiring entrepreneurs from all over the world. On this podcast, I speak with folks who are at every stage of building their own businesses, whether they're leaping from side hustle to self-employed, or are already generating revenue, and ready to take things to the next level. My goal is to draw out their biggest challenges, and then try to nudge them a little further down the path toward realizing their dreams. If you've been told that we'll never work as much as I have, you've come to the right place. Together, we'll prove the naysayers wrong. |
| Marc | 1:17 | Erik has been developing his business idea, Dibsy, a social media powered wishlist app for almost a decade. He's hired an app designer and even joined an incubator to get himself to the next level. But my question to him is a fundamental one. Does anybody care? To answer that, I'm going to suggest he take the old school route. Stick around to see what I suggest. |
| Marc | 1:46 | So, Erik, well, thanks so much for joining me today. I'm really kind of curious to hear what you're up to. So, maybe the best thing to do is just to jump right in. And why don't you give me a few minutes on what it is you're doing, and what you're struggling with? |
| Erik | 2:02 | Sure. So, I've had this business idea for about eight years. It's called Dibsy. It's a app. It was originally designed as a website, and it is basically a social consumer shopping app that people can use to populate what they want. So, the tag phrase is, "Everybody wants something." And this application, I developed when I was actually a CFO at a jewelry retailer, and we would often have men come into the jewelry store, not knowing what to get for the woman in terms of clarity and metal type and whatnot, what kind of engagement ring. And so, usually they'd have to steal a ring, or they would have to bring the woman in for one of the sales associates to feel the hand. And so, that's where I had the idea, it would be great if women had a social consumer app that they could populate their style of wedding ring that they like. As I've worked through it through the years, could actually really apply it to anything from jewelry, to wine, to shoes, to purses, and so has a pretty broad consumer application to it. |
| Marc | 3:06 | You mentioned a couple of things. First of all, the customer could come in, and one of the options is to steal the ring. I never heard about that feature. That would certainly be a pretty compelling proposition for a jewelry store. But, the other thing I picked up, as you said through the years, so have you been just dreaming about this for years, or have you actually been working on it for years? Give me a sense of where you are in this project? |
| Erik | 3:28 | Right. I've been working on it with friends and tried finding developers in the past. I haven't found a co-founder yet. It hasn't worked out with anybody with a technological background to help me build the app. So, I struggled with that, but I'm currently going through that program. And so it's for entrepreneurs and goes through the MIT process for entrepreneurship. So, I've been going through that this fall. |
| Marc | 3:48 | So, basically you're still in the conceptual stage of trying to figure out what this app might be, whether it would be successful or not. I imagine, they're having you do some kind of minimal viable product exercise or some sort of market research study. Is that right? |
| Erik | 4:03 | Right. Yeah. So, I have to interview customers, and I've actually worked with a developer over in Pakistan and hired somebody off of Fiverr to start developing the app on a low budget, just so I can get familiar with building apps. |
| Marc | 4:17 | So, why don't you share with me what you've actually done to try and validate whether this is a compelling idea or not, not just in your head, but what have you done to give yourself some confidence that people want this? |
| Erik | 4:29 | Really, it's been a lot of conversations over the last eight years with people in my everyday business practice, as well as a CFO on interacting with customers, trying to figure out what they want, how us, as a company can figure out what the customer wants and be able to close some of those barriers to make a sale. So, it has been lots of personal interviews with people. |
| Marc | 4:48 | So, certainly you're familiar that most, I shouldn't say most, but that a lot of the shopping sites do offer a kind of a wishlist feature. I know certainly Amazon, which probably dominates some huge percentage of online shopping allows people to create a wishlist. So, how is this different or better than what they're doing? |
| Erik | 5:10 | So, this is actually an app on your phone that you would have, and you would be able to download the app. You'll be able to take a picture of what you'd like. You'd be able to list it on your profile and call Dibsy on it. The product's called Dibsy. So, you'd be able to call Dibsy on the products, and then friends and family can log in as well and have a profile, and actually claim the item in the background without you knowing it and then be able to. |
| Marc | 5:32 | Do you think this is kind of an original idea? |
| Erik | 5:35 | I believe it's original. I haven't seen anybody go across Amazon into other retailers, particularly the local retailers. |
| Marc | 5:45 | Well, let's try and split those two things apart, because there's actually an interesting thing here. You don't see anyone doing it now, that's one piece you said, right? |
| Erik | 5:54 | Right. |
| Marc | 5:54 | But do you believe that you're the first person who's thought of this? |
| Erik | 5:59 | I don't believe I'm the first person that's thought of this. |
| Marc | 6:01 | So, now we have an interesting setup. We have an idea that probably other people have thought of, but yet doesn't exist. Why do you think that might be? |
| Erik | 6:12 | Potentially, because of the development required for that technical application itself and probably the budget. |
| Marc | 6:19 | So, I'm going to go out on a limb here and say, I'm not convinced of that. Generally, and if not just in startup world, but pretty much anywhere, usually the simplest explanation is the most likely to be right. And certainly, the simplest explanation is that yes, many people have thought about this, that probably many people have tried it. And that the reason it doesn't work is that there is some fundamental flaw in the idea that you just don't know about yet. |
| Erik | 6:48 | Right. |
| Marc | 6:48 | So, I'm not saying it's not a good idea. I'm just saying that in the form you envisioned this, there probably is some reason it doesn't work. And we can both sit here forever and guess at what that might be, but that probably may not be the most constructive use of time. But your challenge now is not necessarily to say, "Let me go and find out something that someone else has found out, but let me see if I can figure out what went wrong in the past. Or let me see if I can figure out some methodology to get out there as quickly as I can and figure out what my failed assumption is." |
| Marc | 7:22 | Now, listen with the caveat of course, that I could be completely wrong, and that either no one has ever thought about the idea of letting people make a list of gifts they may want to receive, that people can then go ahead and buy. But wow, that would be pretty hard for me to really believe that's original. And it's pretty hard to imagine, because it's not like you're saying you have a whole new way to make MRI machines more efficient, which in order to test or build is millions of dollars. You're talking about something which people could throw together, as you're talking about doing pretty quickly, I'm using kind of off-the-shelf stuff. |
| Marc | 7:55 | So, I suspect there's a bunch of things here that you just don't know. And this is the classic story that if you don't know the mistakes someone has made in the past, you're just going to make them all over again. And I'm not sure that's really how you want to spend your limited amount of time. So, the question really then is how do we go about figuring this out or getting something going more quickly? Let me ask another couple of quick questions here. How would the fulfillment piece of it happen? |
| Erik | 8:24 | I am an accountant, and so there would need to be a ledger within the app itself that would have an inventory of one when somebody uploads the picture, and then when a friend or family member claims the item that goes to a zero and it's grayed out for the other users, and the original user doesn't know the difference. |
| Marc | 8:41 | So, you don't have anything to do with actually purchasing the product. You're just a place you can go and say, "Here's I want it." And someone says, "Okay, I'll get it for that person." |
| Erik | 8:51 | Right. Not the original phase. |
| Marc | 8:53 | What do you anticipate the economic model forward will be? |
| Erik | 8:56 | That's where brands and companies can become strategic partners, and be able to tag the location and potentially have an inventory system within the app that can update via API for them to keep an inventory on hand for the app for fulfilling. |
| Marc | 9:12 | So, in other words, once you establish this traction where tens of millions of people are all coming back and forth in your app, picking things off the app, people will want to advertise their products on there as potentially great gifts with all kinds of amazing synergies. |
| Erik | 9:29 | Correct. |
| Marc | 9:30 | Is there not a wedding registry app someplace? That's even more astounding to me if that doesn't exist, seriously. |
| Erik | 9:37 | Within websites and within individual retailers, there is, but there isn't one where you can take a picture, tag the location, or have social influencers bring items or promote items to the consumers of things that they would consider, or AI to suggest items. |
| Marc | 9:54 | This long pause is me just thinking about where I would go next with this. Okay. Gosh, I see a lot of holes, but you to get this thing, you've had this dream in your head for eight years, and you've probably had several 100 people tell you how amazing this is. And you of course, have already, probably bought that little vacation house up in Maine already with the IPO proceeds. And that's almost dangerous, the fact that you've spent so long thinking about it. Because I really suspect that once you start it, you're going to bump into all kinds of stuff. |
| Erik | 10:34 | Mm-hmm (affirmative). |
| Marc | 10:34 | And you've got to get off the pod here, and find out what's wrong. |
| Erik | 10:38 | Right. |
| Marc | 10:39 | I'm not saying it's not an interesting category, because there is certainly a lot of heat in this area. There's lots of people who buy stuff. So, you have no shortage of people who buy stuff. There's no shortage of people who want stuff. |
| Erik | 10:55 | Right. |
| Marc | 10:55 | There might be a little bit less people who want to buy stuff for other people. In other words, you're not doing something which is so obscure. You have an unbelievably huge total addressable market, as they refer to it. So, you'll be able to get some cycles going, but I know you're going to bump into all kinds of stuff. So, you've got to get going on it. And I'm not even sure that you need to have spent money on building an app. Have you ever explored doing it longhand? |
| Erik | 11:21 | I haven't yet. |
| Marc | 11:22 | Do you think the app is the magic? |
| Erik | 11:24 | That's so far I've leaned towards that, because of the emergence of Facebook and Instagram and Twitter, whatnot. And so being able to have it social or having influencers help it bring in users. |
| Marc | 11:35 | Yeah. I just would hate to see you go through all the effort and expense of building the app, because I think what's going to happen is you're going to find out that it's a one and done exercise. So, I think what you're going to find is that, A, there's no repeat business here, that people will come on and it'll be all exciting, and they'll maybe make a list of things they want, but that will end up feeling futile if there's no one there who actually buys them the stuff. And conversely, the reason that somebody would actually go to the website is because they think that someone's hinting broadly, that they want something. So, maybe it's a birthday app, maybe it's a Christmas app, but again, it's got to be so much more better than me going to my wife and broadly hinting that I'd like a new pair of bicycling gloves, which is way faster and easier than both of us having to go to an app. |
| Marc | 12:29 | And the reason is I'd love you to begin to really understand the dynamics about how people actually would go through this, about how many of them would put these lists into the ether without knowing there was this huge crowd of people who actively hungered to buy them something, and weren't sure quite what to buy them. And conversely, people who are all willing going, "I'd love to buy someone a gift," and going on and going, "Oh, I wish they had given me a list." It's going to be a really hard thing for you to create that in any kind of meaningful volume. And I think what you've got here is this classic imagine if you will idea- |
| Erik | 13:05 | Mm-hmm (affirmative). |
| Marc | 13:06 | ... where it's so easy to go, "God, I imagine how compelling this is when you've got hundreds of thousands of people on here. Just think of all the cool things we'll be able to do. Just think how amazing it is when everyone I know can come to find my list and find things to buy." Yeah, that would be amazing, but you have an unbelievably hard path to get from zero to getting to the point you have that big market dynamic. And that big market dynamic only happens when something is so compelling that people are willing to use it, even though it sucks. |
| Erik | 13:37 | Right. |
| Marc | 13:38 | And believe me, it's going to suck. Everything sucks at the beginning. It sucks because you don't have time to build up the features. It sucks because you're rushing things to get something out there, but it has to be so good, because there frankly, is no other way to do this. "Oh gosh, I've got my wedding and I've got all my stuff, and how do I let everyone know what to get me for my wedding [inaudible 00:13:58]." Well, there are those things, they do exist. Or, "I'm a celebrity. Here's the list of things people can buy me." Those exist too. You've got to find something that does not exist in a way that's so compelling, people will over list all these things. So, let's get back to it. Let's spend a few minutes then, let's brainstorm some of the stuff you could do. So, in your incubator, they're having you kind of build a simple app, which does exactly what you're kind of talking about, is that right? |
| Erik | 14:22 | That wasn't part of the requirement. That was the additional item that I've been working on. So, we are actually going through the process of total addressable market and our marketing and our sales, as well as being able to raise capital, find a co-founder, those types of items. |
| Marc | 14:38 | Oh, God gag me. What an unbelievable waste of time to be worrying about those things now. You could probably reef those off in five minutes. Maybe I'm being too harsh, but wow, you've got a fundamental, is there a they're there problem. And most of your effort right now should be to go, how do I figure out whether there's a, they're there, whether people will actually do this thing that I'm talking about? And I don't mean people who are telling you, they would do it. Next time someone says to you, "Oh my gosh, this is a great idea." Go, "Fantastic. I'm fundraising. Can you write me a check for $1,000?" And you'll see them backpedaling like Lance Armstrong here. You want something so compelling, they'll go, "Oh my gosh, that's unbelievable." So, you've got to get something out there. |
| Marc | 15:25 | And normally, I'd encourage someone like yourself to fake it, which is to say, let's be clever and go, is there a way to fake it on social media with you being the logic behind it all? You're literally keeping spreadsheets in your office with what everyone has asked for, and everyone who's comes in looking for what that person wants. And then maybe you can promote that. So, send out a quick post to everyone on your social and everyone on your email list, and every friend you go, "Hey, as a service to everybody, even though it's late, I'll be the matchmaker. Dibsy is the matchmaker. Everyone send me your list of what you want. And everyone say who you're thinking about buying for." And then you can take the people you think are buying for, go out to them and go, "Hey, I got somebody who wants to buy for you. What do you want?" And you can even tell them, "Take a picture, send me a link, highlight it on [inaudible 00:16:16]." And see what happens. |
| Marc | 16:18 | And you're going to find out so much by tomorrow, that'll inform everything you're doing. It will inform your app design. It'll inform what you fill in in your a little three-page worksheet about how you're going to market. I'm Sorry, dripping with disdain about this. You'll find out so much more tomorrow, because you'll have collided it. And the first thing you're going to find out is first of all, well, no, one's going to email you back. And that will certainly tell you something about how great your ideas is, or you're going to be flooded and you're going to go, "Oh, shit, I'm going to be up until two in the morning," but wow, then welcome to startup land. That would be great. And then you're going to go, "Gosh, I've got all these people who mismatch." And then you're going to take the people who have the wishlist and go, "Who should I send? Give me the emails for all the wishlist." And they're going to go, "I don't want to give you those names." |
| Erik | 17:06 | Right. |
| Marc | 17:06 | Well, then you've learned something else. You've learned, you have a big privacy concern. Or they're going to be happily share those names. You'll understand that all the logic you're thinking about building into your app, you can do using some kind of manual labor or using some combination of Facebook or Instagram or LinkedIn or Twitter or email or telephone or texting. Now, is it repeatable and scalable? Well, absolutely not. You'll drown if you actually get some volume, but that's not what you're looking for here. You're looking to prove that this thing you've been telling everyone is an amazing idea, and that you've convinced yourself as an amazing idea is in fact, an amazing idea. |
| Erik | 17:47 | Right. |
| Marc | 17:47 | And let's assume this works phenomenally well, okay? That this is awesome that you're matching people left and right, and you're sending them out that Joe wants this. "And if you're not going to buy for him, tell me because I've grayed it out conceptually on your list." But again, you got to work all that out, and you're also going to find out, now you got me on a roll here. So, now you're going to find out the person's grays them out and then doesn't follow through. Now, you've learned another thing that maybe I need to brainstorm some new methodology, some waiting lists to by this person this or whatever. You're going to learn all those things. |
| Marc | 18:20 | All right, now I'm going to jump to another one of the problems you've had for eight years, which is finding a technical co-founder. One of the reasons is because everyone's going, "Oh God, another business guy with an idea he wants me to build," which is that they all say. Maybe it's because I'm the business guy who is always trying to find people to make my ideas real. So, you're in good company. But the most effective way to get past that is not by sitting them down and going, "Imagine if you will," it's by going, "Oh my God, you've got to see what I've been doing." And look at what's happening. This thing is totally out of control. |
| Marc | 18:54 | And I swear, you'll sit that person down in front of all your spreadsheets, and she or he, or whoever is, this tech person will be going, "Oh gosh, this is really cool. I could do this, and we could do this." They will become inspired, because there'll be solving a real problem. And there'll be jumping on something that has real traction. And then goes even triple for some point down the line and you go, "I'd like to raise some seed money here, just to kind of get myself accelerated, to be able to promote it, so coming into wedding season or Easter or whatever, the big gifting season next is, and then I'm in a good place." Or, "That I can want to experiment." We're doing it in the wine category, you're doing it in the flowers category or whatever it is. The same thing goes. |
| Marc | 19:38 | These days, you cannot go into anybody and say, "Fund me." And just imagine if you will, no one cares. What you have to go in and hopefully your incubator is telling you this too, you have to go in and say, "Here is how I know that I'm onto something. I've been doing this manually, staying up until three and four in the morning, every night for the last three months. I have a really good sense that when I get someone who does it for Christmas, they come back for birthdays. Every single person who I get to join, tips me off to four other people." In other words, you can lay out these specific metrics for an investor, that'll make them start drooling onto their keyboard. |
| Marc | 20:12 | As opposed to saying, "I think this will be very viral." You'll say, "This is unbelievably viral." Imagine saying, "I can imagine there being a tremendous lifetime value to this." For you to say, "Look at the lifetime value I have. And this is me doing it with none of the technical innovation that I think we can bring to this." |
| Erik | 20:31 | Right. |
| Marc | 20:31 | Now, before you get too excited. I just did a version of the imagine, if you will, we're picturing this thing taking off. That's probably not going to happen. You're going to bump into some stuff quickly and go, "Ooh, that's not what I expected," but that's even better. No idea ever survives into adulthood looking the way it did as a child. |
| Erik | 20:50 | Right. |
| Marc | 20:51 | Zero. I guess these last two or three weeks, literally three different companies I've spoken to have all kind of gone through their big revolutionary moment, including having to change their name because the thing they built doesn't work because the market they imagine didn't exist. But lo and behold, the thing they built does something else really well. And you saw of course, what happened with Slack, that started off as a gaming product and the product Slack was the product that they used internally to communicate. That's what happens all the time, but you never find those things until you start it. So, my number one advice is always to start, but you're in a perfect place to start because my God, you've been going on it for so long. |
| Marc | 21:31 | And I applaud the fact that you said I'm going to do the incubator because that at the very least means you're going to put real time behind starting some of the painful, boring things that you have to do when you're starting something, as opposed to having your ideas safe and sound and comfortable in your head where it can grow into this amazing superstar without any external reality. |
| Erik | 21:55 | Right. Right. |
| Marc | 21:56 | Well, I'll take a breath. |
| Erik | 21:59 | Excellent advice. Really good. |
| Marc | 22:01 | Yeah. I love the idea, but I've also gotten kind of cynical on my old age, because I've just seen how many of the ideas, which always seem good don't work and it's fine. But I've also realized that the exercise of us saying, "Is that a good idea or a bad idea?" It's just an unbelievable waste of time. The only thing you really can do is just try it. And you're in a great spot because your idea is not a CAT-scan device. It's not an MRI. It's not something like that. It's not a new drug, not a new banking product. It's something that you absolutely can fake really easily with your friends and family and find out some stuff. |
| Erik | 22:34 | Thank you, Marc. |
| Marc | 22:35 | Well, I hope I'm encouraging and not discouraging, but the good news is rather than if you do take my advice and say, "I'm just going to sit for a day or so and figure out a way that I can fake it," that you'll be in business in a week rather than having to wait three or four months to actually start seeing how that works. And even though you're a little bit late, right now, every single person you know is thinking about what do I get? In fact, probably, maybe I'll call you on December 24th, as I usually need help right about that day. And of course, listen, you've got the opposite problem that rather than everyone telling you, "That'll never work." They're all telling you, "You're a genius. That's going to work amazingly." And so I hate to be the guide who says be careful. But anyway, stay positive. The real skill, the entrepreneur is not the idea. The real skill is the figuring it out when the original idea starts to bump into problems. |
| Erik | 23:31 | Thank you. |
| Marc | 23:31 | You're very welcome. You work for a wine company, you said? |
| Erik | 23:34 | I do. I work for King Estate Winery here in Eugene, Oregon. |
| Marc | 23:37 | Fantastic. Wow. That's great. Well, I'll have to call you up one of these days for some wine advice, perhaps. |
| Erik | 23:43 | Absolutely. |
| Marc | 23:43 | Well, good luck with everything. What you do owe me is that, at some point in the future, once you have a little bit of learning, I do want to follow up with you and find out what happened because that's always what's so fascinating to me. |
| Erik | 23:54 | Certainly, Marc. |
| Marc | 23:54 | Good luck. Thanks for your time and go get them. |
| Erik | 23:58 | All right. Thank you. |
| Marc | 24:03:00 | Erik's a sharp guy who's looking to solve a problem he's observed in the real world. Bumbling would-be husbands trying to make their fiances happy. And the solution is an intriguing one for sure. But to understand why no one's cracked this nut yet, he'll have to roll up his sleeves and do the hard but necessary work of finding out why a customer would want to use a service like Dibsy. If he follows through, I'm confident will uncover a bunch of insights, which will put him on the best possible path forward. But before we go, I'm curious what you thought about Erik's idea and my advice to him? So, I'd love for you to join me, Erik and your other fellow listeners on my website, we'll be discussing this episode. You'll find this congregated at marcrstaging.wpengine.com/podcasts. Just click on the appropriate episode and scroll to the bottom. |
| Marc | 24:56:00 | If you want to discuss your business challenges with me, I'd love to hear from you this. Just visit me at marcrstaging.wpengine.com or call me at 1-888-MarcPod. That's 1-888-627-2763. Together. We'll figure out your best next steps. In the meantime, if a 30-minute podcast is too much for you, you can check out my short form ramblings on Twitter @mbrandolph or see them all pretty it up on Instagram at thatwillneverwork. You can also follow me on LinkedIn, Clubhouse, TikTok, Facebook, and YouTube, but I'll leave it to you to figure out how. Thanks again for listening. I've got a bunch of great new shows coming up. So, if you're new to this podcast, don't forget to follow me so you don't miss an episode. Either way, if you like the podcast, don't forget to smash that like button and leave me a review on Apple Podcasts. If you didn't, well, thanks for listening to how I built this. No, I'm kidding. I'm kidding. This is the That Will Never Work podcast. Thanks again, and I'll see you next time. |
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