July 7, 2016 – Manish Chandra is founder and CEO of Poshmark. As a serial entrepreneur, he also founded Kaboodle in 2005, one of the industry’s first social shopping sites, which was acquired by Hearst, and prior to that, he served in executive roles at several foundational technology companies.
On this episode of Chat with Champions, Navin Chaddha welcomes Manish to discuss his journey from IIT in India to Founder and CEO of Poshmark. He credits his summers with his grandfather in his wholesale shop in the bazaars of India for his entrepreneurial tendencies. He had been through two enterprise software IPOs and an acquisition on his journey to founding two consumer-facing companies. Manish talks about his biggest learnings, why culture is key and how critical authentic engagement is for consumer platforms.
The full transcript is below.
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Manish on his entrepreneurial process:
It was intimidating actually to begin with. The process I used was what I call a kitchen sink cabinet, which is I got a bunch of people together and brainstormed, and really created a prototype. We had almost eight people working who had a lot of trust and faith with each other; and through that process, created both the knowledge around consumers but also technology.
Manish on what have been his biggest learnings:
First, no matter what you do, you have to persist with the process. There are severe ups, severe downs, and major challenges as an entrepreneur.
The second thing which I always say is that sometimes when you look at a cup of coffee, somebody sees a coffee shop and the other person sees a Starbucks. The opportunity is not the coffee cup. It’s really how you think about that coffee cup.
Manish on what it’s like to build a social movement:
I think there is a little bit of science, a little bit of art and a little bit of luck in anything you do. The science of it is that as you discover new interactions and behaviors, you have to make sure that they’re scalable. They don’t just remain manual and organic. The art of it is that you have to put your heart in it. You can’t do it without being authentic and genuine. The luck of it is all of the pieces magically working. The same things put together may or may not work. That’s something you never know until you put it out there.
Manish’s key advice to entrepreneurs:
I think the best companies are always started in the worst of environments. It’s always true because it shapes you in the best possible way. I think if you’ve got a real idea, real belief, do it. If you’re only partially committed, don’t do it. Surround yourself with great people. I think at any cost, at any price, you have to have great people around you because they’re the ones who are going to watch out for you in the ups and downs. There’s no business, no company ever that doesn’t go through really, really deep downs no matter how straight-line your trajectory is.
|Navin:||Welcome back to Chat with Champions. I have the pleasure of hosting Manish Chandra who is founder and CEO of Poshmark with me today. Manish is a serial entrepreneur who founded Kaboodle in 2005, one of the industry’s first social shopping sites that was acquired by Hearst. Prior to Kaboodle, he served in executive roles at several foundational technology companies. Manish’s big idea with Poshmark that got us excited to partner with him in 2011 was to build the first mobile fashion marketplace. Since then, Poshmark has established itself as the leader in resale fashion and is now expanding into retail and wholesale fashion. Manish, welcome to the show.|
|Manish:||Thank you, Navin. Thanks for having me.|
|Navin:||It’s a pleasure. Let’s start with your entrepreneurial journey. You started at IIT in India and then came to the US. Let’s go through a little bit of history and talk about your different experiences in this country both as a student, then as an employee, executive and then as an entrepreneur.|
|Manish:||Sure. In some ways, I credit my entrepreneurial tendencies to really spending a lot of summers with my grandfather and being in his wholesale shop where he was selling wholesale pharmaceuticals at 9 or 10 years old and hanging around all day. Those are the good times. You had a lot of roaming around freedom without any parental supervision. That being in the bazaars of India and getting inspired was the trigger. It took me 25 years after that to start my first company.|
|In between, I have a degree in computer science. Then I got my MBA from Cal right here in California and built out a great experience with a bunch of enterprise software companies. The idea for Kaboodle really emanated from doing a home remodeling project and the challenges of doing the home remodeling project were all around collaboration, shopping, remembering what we shopped for and just discovering and discussing.|
|The challenge was, at that time, I had no consumer internet background, really had never built a consumer company. I’d been through two IPOs of enterprise software companies and even worked with a couple of entrepreneurs and had a small software company get acquired. It was intimidating actually to begin with. The process I used was what I call a kitchen sink cabinet, which is I got a bunch of people together — some of them are actually with me even as we built Poshmark through the last five years — and brainstormed, and really created a prototype. We had almost eight people working who had a lot of trust and faith with each other; and through that process, created both the knowledge around consumers but also technology.|
|Kaboodle very quickly, as we launched the company, partnered up, got some angel funding, we saw the opportunity in the fashion space. We ended up focusing in fashion with the primary consumer being women. We started to coin the term social shopping which, at that time, in 2005 – 2006 was something that people didn’t latch onto, and soon grew and became number one in our category. Today, you would hearken Kaboodle to be more like Pinterest where you’re collecting information and collaborating.|
|The company got acquired by Hearst Corporation as part of their magazines and interactive group in 2007. I spent a couple of years growing that business for them, but then obviously started to see opportunities. One of the things that the community was doing was buying and selling fashion in the community but it wasn’t built for that. The dream I had was to create something which was magazine-like, community-like, had simplicity and really empowered every woman to be able to sell fashion. Technology wasn’t ready in 2008, 2009 so we kept looking at different things. In 2010 when the iPhone first came is when the idea fully fleshed out.|
|During that part, if you remember, you and I were spending a lot of time together and incubating. In fact, my co-founder Tracy was introduced by you and Mayfield to each other. We bet very heavily on social. We bet very heavily on mobile but with a core vision that it would be open to each and every woman with the vision to empower them. That’s how Poshmark got started in 2010, 2011 time frame.|
|Navin:||Got it. What would you say have been the biggest learnings along the journey you’ve had?|
|Manish:||I would say two things. One is that no matter what you do, you have to persist through the process. There are severe ups, severe downs, and major challenges. In Kaboodle, just as I was signing our series A term sheet, my co-founder, the lead CTO, went through a life-changing accident. He fell off of a cliff and I had to immediately disclose to all the investors that this had happened. Fortunately, they were supportive and went through the closing anyway. Then he came back miraculously eight months later and helped us build the company and was with us. Conversely, when we started Poshmark, very quickly we actually had one of the core team members decide to leave. That happened a month or two after we started the company. If you remember, we were talking through it, you were very supportive in terms of transitioning, and we survived that and we made it through. So persistence is key.|
|The second thing which I always say is a learning through Kaboodle, especially seeing how big we could have maybe scaled that business, is that sometimes when you look at a cup of coffee, somebody sees a coffee shop and the other person sees a Starbucks. The opportunity is not the coffee cup. It’s really how you think about that coffee cup.|
|Navin:||What is the importance of culture for you as you build these companies? Do you set it early on, or the culture evolves, or how does the whole process around culture happen?|
|Manish:||Culture is very key. Culture ends up helping you through the tough times and certainly becomes exciting and also becomes a level-setting thing in the good times. For us and for me in particular, culture is super important. The result for culture for us is, for example, we’ve had no churn in our executive team over five years. We’ve had no churn in our engineering team. All of our investors are still with us together. My co-founders are there. All of that is really building something where people believe in a certain mission, their certain core values and really going back to it and staying true to them.|
|Navin:||Got it. One of the other beliefs I have is an entrepreneur needs to surround themselves with excellence because companies are made by people. People make products, products don’t make people. What do you look for in people as you bring them in as co-founders, or as employees or executives?|
|Manish:||One of the things for me which is really important is why are they here? What are they all about? What do they believe in? Compared to maybe many other enterprises, we focus very much on: do you believe in what we are doing? Is your focus about building something great, doing something great, impacting something in a big way? And how well do you play with other people? Given that we are a community-focused platform, collaboration is really key.|
|Obviously, we go through the skill analysis and doing a business plan, or technical problems, or what have you. But it’s really the mission that is very critical. Again, one of the amazing things of that is that even as we’ve gone through our ups and downs, the core team and the key executives we brought on have not only been with the company, but helped us scale and have gone through each of these periods. For example, we brought on three major executives at a point in time that we were running really low on cash. There was phase of our time and we are in full disclosure so we actually tell everything to the executives. I think if you can focus on the mission, believe, and really connect with people who are both amazing but also amazingly believing, then you build something which is long-lasting.|
|Navin:||There are a lot of buzzwords floating around in Silicon Valley like network effects, communities, marketplaces. Do you think to build a movement like what you have done, is there a science to it, or is it like an art, or is it like an organic phenomenon that just happens? What’s been your experience?|
|Manish:||I think there is a little bit of science, a little bit of art and a little bit of luck in anything you do. The science of it is that as you discover new interactions and behaviors, you have to make sure that they’re scalable. They don’t just remain manual and organic. The art of it is that you have to put your heart in it. You can’t do it without being authentic and genuine.|
|The luck of it is all of the pieces magically working. The same things put together may or may not work. That’s something you never know until you put it out there. For us, we were lucky. After six months of internally working, alpha/beta testing, when we released the product, very quickly, within the first couple of weeks we saw the engagement metrics which were 20 to 25 minutes that day. Four years later, they are the same.|
|Engagement is the hardest thing to build in a consumer platform because you can grow. you can scale, you can do everything, but engagement is either there genuinely or it’s not.|
|Navin:||Switching gears, let’s talk about some of your personal experiences. Can you share a learning from a difficult experience that has shaped your journey and that you’re glad that you went through?|
|Manish:||We’d been growing Kaboodle and we’d reached a point where the growth was extraordinary, but we had not hit that next major milestone. We were very frugal but our cash was dwindling. Literally it reached a point where we could not meet the next payroll. There was really no money in the bank. At that point in time for an entrepreneur to reach that point, and you have a team functioning, you have a business that feels it’s healthy and growing, and there’s really no money in the bank, is a pretty crazy feeling.|
|I was in my freshman class of CEOs. It was the first time I was CEO so I didn’t even know how to react. It was something that you can’t really share with a lot of people. Having experienced that and then actually having survived it, and I’ll tell you how I survived it in a second, I feel like it’s really shaped fundamentally my ability to deal with the real downs that come through this process. There were other personal things but literally running out of money to zero is the worst possible thing you can have in an entrepreneur’s journey.|
|We didn’t have any major investors. We had a consortia of small investors. I drove through Silicon Valley and collected checks which were $5,000 or $10,000 each and combined them to make payroll. We did it. We made it.|
|Then on the heels of it, we closed a follow-on round. Eight months later, it was acquired by Hearst. From there, it went to an amazing journey. We had most of the capital left at that point in time. Understanding, managing cash, being able to take the plane to the ground, et cetera, are all things you learn. Even though you think that at a different point in time you don’t hit these things, the lessons apply to so many very tough moments that you go through as an entrepreneur.|
|Navin:||Got it. Got it. Having been a serial entrepreneur, you founded two companies, you worked at a couple of startups, have your learnings been the same through each of these or are you learning every day through each of these companies that you’ve been through?|
|Manish:||I think you constantly learn new things in the process. That’s part of the excitement, by the way. I think “serial” feels like you’ve mastered everything but really if you have, then you’re probably about to make a big mistake. When I was starting my second company, I actually went and talked to a bunch of mentors, investors and other entrepreneurs who have done it a second time and really tried to understand why a lot of entrepreneurs fail the second time after the first success.|
|One of the things was that the first time people are challenging you constantly. They’re always questioning you, which is a pain but it at least keeps you on your toes. Second time, nobody questions you. You have the emperor is naked phenomenon where you have to really be pretty self-critical. Then for Poshmark, we’re hitting milestones that I haven’t seen hit in a company I’ve been in for a long time. Suddenly, I have to scale my thinking in terms of being able to scale it beyond a certain point in time, and so you have to challenge. You have to destroy.|
|The other thing which I’ve learned that in every business, every company I’ve been in, to grow beyond certain points in time, you always had to destroy a sacred cow in the company. You have to undo something that you really believed in, whether I go back to Versata days where we did a massive distribution deal with IBM and that was the scaling point, but then we had to destroy it to get to the next level. Or at Kaboodle, we were looking at distributions and partnerships that major companies like Conde Nast and eBay. We had to kill all of them to build a destination site. Or in Poshmark where we had certain myths around shipping and business that we had to destroy to scale the company.|
|Navin:||Got it. You talked about mentors. It seems that’s been very important for me and for you over the years. Can you share the best piece of advice you have received over the years?|
|Manish:||I was thinking about that the other day. There’s different dimensions to the advice. I don’t know if I could point to one piece of advice that has happened. I would say there’s probably three different things. One is around strategy that has been very key to thinking about how do you persist through the various pieces. That has been around being able to identify one big thing that you’re focused on at any given point in time. It sounds very banal and common but it’s very easy for an entrepreneur to forget it.|
|A variation of that advice is something called the YAFO which one of my mentors talks about, which is Yet Another F-ing Opportunity, which is the way entrepreneur’s mind works — and being able to really focus is hard.|
|Then the third thing is being able to really bring on great people, and how do you interview them, and think about them. That’s still, I would say, a skill in training for me.|
|Navin:||So you have worked with a lot of investors, whether angel investors or individual VCs over the years; what’s your view on the ideal role or relationship between an investor and an entrepreneur-CEO?|
|Manish:||I think it’s three things. One is resources. Obviously an investor, beyond money, is bringing resources. Any company needs a tremendous amount of resources — not just money, but people, advice, guidance, different kinds of resources. A great investor is bringing them whether it is supplementing marketing or supplementing growth, or whatever it is. I think the second thing is being able to give advice in a way that the CEO is able to receive. Each CEO has their own thought process. If you don’t give them that feedback in the right way, they’re not able to advise which means they’re not able to grow. The third thing is encouragement. I think being a CEO is a lonely job. You certainly get a lot of criticism. It’s rare that you get encouragement.|
|A great investor of course will give you feedback, which is both positive and negative, but at the right time they’re encouraging. That’s I think very critical. It’s something that people underestimate in that whole process. To me, the combination of great advice, great resources and at critical junctures, encouragement, is what distinguishes a great investor from someone who’s just giving you money.|
|Navin:||I think I agree with some of the experiences you’ve had and I’ve seen you grow over the years. I think we’re almost running out of time. I have a final question. What’s your key advice to entrepreneurs, especially in the current environment as they think about starting new companies?|
|Manish:||I think the best companies are always started in the worst of environments. It’s always true because it shapes you in the best possible way. I think if you’ve got a real idea, real belief, do it. If you’re only partially committed, don’t do it. Surround yourself with great people. I think at any cost, at any price, you have to have great people around you because they’re the ones who are going to watch out for you in the ups and downs. There’s no business, no company ever that doesn’t go through really, really deep downs no matter how straight-line your trajectory is. I’ve been lucky personally to be surrounded by you, by many other great people, who have helped us through extremely difficult times that the company has gone through and survived. I’m sure there will be more in the future.|
|At the same time, when we started the company it wasn’t trendy. It wasn’t something that people are betting on. It just turned out that mobile and marketplace and all of those things were trending. Neither of them were the reason to start the company. So it isn’t that right now, “artificial intelligence is hot so we’ve got to do something in AI” or it’s “on-demand is hot.” That, to me, is never a sign of a great journey. You’ve got to believe in a problem that you see and focus on it. Then you can create something amazing.|
|Navin:||Great, great. Thanks a lot for taking the time and being available for the podcast. I really appreciate it, Manish.|
|Manish:||Thank you, Navin. Thanks for having me. It was wonderful sharing the journey and I look forward to continuing to work with you.|