Max Rhodes left Square to start his own company, Faire, which connects local retailers with makers and helps them discover and stock new products. Faire aims to solve the problem of retailers mitigating inventory risks by moving the market online and reducing their risk. In the past five years, SMBs have undergone significant changes in their operations, driven by the adoption of social media platforms and cloud-based point-of-sale systems. Faire has utilized this data to develop machine learning algorithms that predict sales and improve inventory management. Faire is a wholesale marketplace that offers free returns to mitigate inventory risk and uses return data to make smarter buying decisions and recommend products to retailers. Max Rhodes envisions Faire as a platform that levels the playing field for small retailers, accelerating the shop local movement. Finding product/market fit involves early signals of market fit, scaling challenges, and experimenting with different value propositions. The switch to a "try before you buy" model has had a profound impact on companies' success, leading to overnight success and significant increases in sales. Great companies constantly push against their vision and try out multiple strategies until they find what works. Scaling as a CEO involves building strong relationships with employees and fostering open communication. Calming down as a founder involves tactical strategies like morning meditation with the team to develop self-awareness. Faire's first hires and executive hire played crucial roles in the company's growth. Fundraising advice includes starting early, finding a partner quickly, and choosing investors who can provide meaningful help. Max Rhodes studied history at Yale because he believes that history repeats itself and understanding patterns can help predict the future. Square Cash became a successful app due to its focus on user experience and building a strong network.
Max's intro
Max Rhodes, founder and CEO of Faire, discusses the early days, scaling, and fundraising/partner selection of his company.
Key points:
- Faire's early days and how it started
- The challenges and strategies of scaling the company
- Fundraising and partner selection process
Leaving Square and coming up with the idea for Faire
The most profound aspect of the text is that Max Rhodes left Square to start his own company and eventually came up with the idea for Faire, a platform that connects local retailers with makers and helps them discover and stock new products.
- Max Rhodes left Square to start his own company, Faire.
- He explored multiple ideas before settling on the concept of Faire.
- One of the ideas they explored was selling dental drills from Brazil, but they realized it wasn't what they were passionate about.
- They decided to focus on building software, which they were experienced in.
- Max had previous experience with the wholesale market and saw the opportunity to create a platform that would make it easier for local retailers to access products.
- Max attended trade shows while working at Square and realized there should be a better way for local retailers to do business.
- Local retail was actually making a comeback, contrary to his initial skepticism due to competition from Amazon.
- Max conducted customer interviews and found that local retailers struggled to bring in new products due to the risks involved.
- This insight led to the development of Faire, a platform that connects local retailers with makers and helps them discover and stock new products.
- Faire aims to solve the problem of retailers mitigating inventory risks by physically touching and feeling products by moving the market online and reducing their risk.
Changes to SMBs in the past five years
In the past five years, SMBs have undergone significant changes in their operations, driven by the adoption of social media platforms and cloud-based point-of-sale systems. These changes have allowed SMBs to access valuable data about their inventory, social media presence, and customer demographics. Faire has utilized this data to develop machine learning algorithms that predict sales and improve inventory management. The shift in the SMB landscape has been influenced by insights from companies like Square and Riaan, highlighting the importance of both online presence and the ability to manage inventory risk.
Key points:
- Adoption of social media platforms and cloud-based point-of-sale systems has transformed SMB operations.
- SMBs now have access to valuable data about inventory, social media presence, and customer demographics.
- Faire has leveraged this data to develop machine learning algorithms for sales prediction and inventory management.
- Insights from companies like Square and Riaan have influenced the shift in the SMB landscape.
- Online presence and effective inventory risk management are crucial for SMB success.
What is Faire?
Faire is a wholesale marketplace connecting small retailers and makers through an online platform. It offers free returns to mitigate inventory risk and uses return data to make smarter buying decisions and recommend products to retailers.
- Faire connects small retailers and makers through an online platform
- It offers free returns to mitigate inventory risk
- Return data is used to make smarter buying decisions
- Faire recommends products to retailers
Max’s vision for Faire
Max Rhodes envisions Faire as a platform that levels the playing field for small retailers, accelerating the shop local movement. Faire provides data optimization, lower supply chain costs, and free returns to small retailers, eliminating the advantages of big-box competitors. Rhodes believes that the future of retail lies in local, community-driven shopping, and aims to use technology to support this revival.
Finding product/market fit
Finding product/market fit is a challenging journey that involves early signals of market fit, scaling challenges, and experimenting with different value propositions. Key points include:
- Early signals of market fit can be positive customer interviews and making the first sale.
- Scaling the business can lead to doubts and challenges, such as a slowdown in growth and decreased conversion rates.
- Experimenting with different value propositions, such as changing payment terms and offering discounts, can help find the right fit.
- Trade shows can present difficulties, as customers prefer to touch and feel products rather than order online.
- Going back to the "try before you buy" approach can be a successful strategy in finding product/market fit.
Switching to try before you buy
The switch to a "try before you buy" model has had a profound impact on companies' success, leading to overnight success and significant increases in sales. Key points include:
- Founders initially struggled to find the right value proposition and supply for their product.
- Implementing the "try before you buy" model resulted in customers spending hours on the site and placing big orders.
- Sales increased from $100,000 to $1 million in just three months.
- Safeway, a grocery store, experienced significant impact from switching to this model.
- Mike Moritz from Sequoia had a positive impression of the "try before you buy" model.
What separates the great companies
Great companies are separated from the rest by their constant application of force, pushing against their vision and trying out multiple strategies until they find what works. As they scale and achieve product-market fit, their focus shifts to scaling people management, including the CEO's ability to scale themselves.
- Great companies have a vision and constantly push against it
- They try out multiple strategies until they find what works
- As they scale, their focus shifts to scaling people management
- The CEO's ability to scale themselves is crucial
Scaling as a CEO
Scaling as a CEO is about building strong relationships with employees and fostering open communication. Trust and accountability are crucial for employees to feel comfortable speaking up and being held responsible for their work. A strong relationship with employees enables effective feedback and implementation. Hiring an executive coach and reading "Radical Candor" can help navigate challenges and transform leadership approach.
Calming down
Calming down as a founder involves tactical strategies like morning meditation with the team to develop self-awareness. Stress and existential dread hinder performance, but as the company grows, stress shifts from survival to growth. Letting go of fear of failure and being resilient are crucial. Embracing failure publicly and loving one's job despite failures are important for dealing with failure in scaling and fundraising.
Faire's first hires
Faire's first hires were a founding designer named Katie and Olivia, who came from a management consulting firm. Olivia's experience in local retail filled a key missing ingredient in the team's knowledge. Olivia, as the first product manager, doubled the company's growth rates through Facebook advertising. The importance of the first 10 hires for a company is discussed, highlighting the unique story of each company's early hires.
Faire's first executive hire
Faire's first executive hire was a customer support specialist who quickly scaled the team, resulting in improved NPS scores and customer satisfaction. The hire also unlocked a new growth channel and saw a significant increase in sales. The executive later took on warehouse management and successfully hired a strong team. Despite going on maternity leave, the executive's hires continued to improve Faire's metrics.
Fundraising and fundraising advice
Fundraising advice from Max Rhodes of Faire:
- Start thinking about fundraising early on and raise capital before having a product.
- Find a partner quickly and efficiently, rather than getting caught up in a lengthy fundraising process.
- Take advantage of momentum in your business and raise funds when you have a lot of momentum.
- Have a clear vision for building a big business in the long term and articulate it to get investors excited.
- Choose investors who can provide meaningful help and with whom you enjoy spending time.
- The brand name of investors matters for recruiting and creating hype around your company.
- Raising a lot of capital from the right investors can help with hiring and building a competitive advantage.
Ryan McCarthy asks - Why did Max study history at Yale?
- Max Rhodes studied history at Yale because he believes that history repeats itself and understanding patterns can help predict the future.
- Studying history gives a better understanding of the present and where things are headed, which is important in investing and entrepreneurship.
Why does Max think Square Cash became a successful app?
Max Rhodes believes that Square Cash became a successful app due to its focus on user experience and building a strong network. The team prioritized details and made changes to enhance the user experience. They also implemented an aggressive referral program to attract more users and leverage network effects. Square Cash tapped into a different network and offered a unique experience, allowing it to succeed and potentially surpass Venmo in size.
- Square Cash's success can be attributed to its focus on user experience and building a strong network
- The team made changes, such as app color, to enhance the user experience
- An aggressive referral program was implemented to attract more users and leverage network effects
- Square Cash targeted a different network and offered a unique experience compared to Venmo
- It is now on track to surpass Venmo in size