Back in 2011, Apu Gupta and Nick Shiftan raised $750,000 in seed funding to start Storably, a company they claim to have envisioned as the “Airbnb for parking and storage.” The startup got plenty of press attention, but three months after going live, the site was doing only a couple of dozen transactions a month. Storably was a major bust.
Investors gave them one month to pivot drastically and come up with a new business using their remaining funding. After generating 70 ideas and testing seven, they pivoted into Curalate. Today, the Philadelphia-based company has 80 employees, has raised more than $12.5 million in funding and helps hundreds of global brands market using images on social platforms such as Pinterest and Instagram. Interestingly, Curalate was the 63rd idea they came up with.
Gupta reports a lot of learning around the Storably-Curalate metamorphosis. Among the lessons was the importance of benchmarks. When they began to seriously wonder whether Storably was going to work, Gupta and Shiftan went to their investors and asked what kind of traffic and other goals the startup needed to hit in order to keep their backing.
“They told us the number, and those numbers were 10 times greater than the numbers we were putting up,” Gupta recalls. “That was the single most important question we asked at Storably. We now had a goalpost.”
Gupta points out that it can be easy to fixate on a business idea and then just keep iterating on it, hoping for improvement, until you run out of cash. The goalpost made that approach hard to justify. “We said there’s no way we’re going to hit those goalposts before we run out of cash," he says. "It was simple math. We knew at this point that any more time spent on this idea was wasted.”
Starting Over
They were pleasantly surprised when they gave their investors the bad news. “We thought we were going to get yelled at,” Gupta says. Instead, backers expressed confidence in the team and appreciation for their honesty and rejected the entrepreneurs’ offer to return the remaining funds. Instead, the startup team was encouraged to request even more backing—assuming they could come up with a viable new business plan in the next 30 days.
The Storably refugees created a collaborative online spreadsheet and started packing it with ideas each developed independently. It was classic brainstorming, no criticism allowed in the early stages. Looking back on the Google Doc, which they’ve kept around for posterity’s sake, Gupta says they saw an interesting progression of ideas.
“When we first started coming up with ideas, they were complete and utter garbage,” he admits. “After we got past idea 20 or so, we started coming up with decent ideas. There were a number of other ideas on that list that became companies, got funded and got pretty big.”
Of the 70 ideas they wound up with, seven seemed worthier of further investigation. Their investigative approach focused building minimum viable products and testing them with real customers. For instance, one idea called DrinkedIn was going to help connect small groups of business professionals for after-hours beverages and discussion. Based on LinkedIn profiles, the startup would use an algorithm to match complementary people. But rather than take the time to write an actual algorithm, they just had an intern print out profiles, which they manually sorted to do the matches.
DrinkedIn ultimately didn’t make the cut, but Gupta claims they kept focused on the idea of getting something they could test, very quickly and cheaply. “Whatever product you think is the smallest you can build, you can probably build smaller,” he says. “That thinking helped us.”
The Aha Moment
The Curalate idea was to help brands understand how they were appearing on image-intensive social media platforms such as Pinterest. The entrepreneurs reasoned that social media were increasingly important for marketing, that images were increasingly important in social media, and that existing online marketing analytics did a poor job on images, as opposed to text.
To test it, they did some basic analysis of Pinterest posts, then contacted some companies with large brands to tease their interest. A typical contact might tell a brand manager how many times the brand had showed up on Pinterest, then ask if they’d like to know more.
“To our shock, 95 percent of those people responded that they’d love to talk,” Gupta says. Marketers for some of the world’s largest brands were calling, setting up appointments and, soon, volunteering to pay for the service before anyone even had any idea how to price it. “That’s when we knew we were on to something,” Gupta says.
The first Curalate sales happened in early 2012, and now they are up to 600 clients. They’ve gone through three rounds of financing, have three offices and big plans. Gupta is hiring PhDs to work on computer vision, with the objective of building a large company that's a key part of how companies market to the image-intensive Web.
The company has clearly come a long way from being a comatose startup to a vigorously growing enterprise. Gupta credits their combination of persistence and flexibility, and realism and imagination for the turnaround—along with a great measure of good fortune at coming up with the right pivot at the right time. “It’s been an incredible journey,” he says.
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