AMAs January 6, 2020

Hi, I’m Jay Signorello. I co-founded and grew a company to profitability, then sold it to Zillow Group. Ask me anything!

Jay Signorello @JaySignorello

Hello Indie Hackers! My name is Jay Signorello, I’m an entrepreneur, software engineer, woodworking hobbyist, husband, and father of 3. I love learning, so I’m mostly self-taught in engineering, business, and marketing.

The beginning of my career is similar to most people in tech. I worked at a few different companies as a software engineer. After a long tiring day working, I’d come home to work on my side hustles. I dipped my toes into a few different businesses (two consulting businesses, one ecommerce store, and many side projects). Some were successful, most weren’t. I learned a lot of valuable lessons about business and life from those initial years.

In 2009, I co-founded Naked Apartments, a NYC apartment search site, which was on a mission to drastically improve the apartment hunting experience for New Yorkers. To get the company started, we took on a very small amount of funding from friends and family. We decided early on that we wanted to stay lean, build a great team culture, and have a fully distributed team. We took the plunge and worked entirely remote, never having a physical office.

A year in, we almost went bust, but pivoted just in time. The following year we hit profitability (Yay!) and pushed ourselves to invest those profits back into the company. In 2016, we sold the company to Zillow Group, making Naked Apartments Zillow’s fifth consumer brand. I worked at Zillow Group for a little over 3 years, most of which I was VP of Engineering for all NYC brands.
Like many founders, working at a large company had drawbacks. I went from being home with my kids and wife all the time, to the extreme opposite of rarely spending any quality time with them. And of course, that pesky entrepreneurial itch just wouldn’t go away!

So last summer, I left Zillow Group to take a breather, work from home again, and start a new company. The last decade has been an emotional rollercoaster ride. They’ve also been the best years of my life. I plan on sharing many stories of my best and darkest days, lessons learned, and my new journey on a blog that I’m working to setup right now.

I'll be here on Tuesday 21st of January at 10am EST. AMA!

  1. 1

    So it seems like being a really niche site (Apartment finder for New Yorkers) really helped you identify your market and users.. so how did you get New Yorkers to adopt into your site? How did you convince Land Lords to post rental openings? It sounds like the chicken and egg problem where you have to create the community, because land lords won't waste time posting there if no one is using the site, but no one is going to use the site if there aren't a lot of listings..

    So how did you do it?

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      You’re right, it was the chicken and egg problem. I believe we were successful in overcoming that problem, because we put the renter (i.e. consumer) first. In other words, the renter experience had to be excellent, including have listings for apartments available day one on the site. Did we have comprehensive coverage for NYC? Absolutely not, that took a year or more to accomplish.

      Here was our general strategy.

      1. We built an MVP of the site for both sides of the marketplace (renters and real estate professionals)
      2. Scheduled a soft launch of the site (i.e. no press or posting on media sites)
      3. Prior to the launch, we made partnerships with some real estate firms that could give us data feeds and real estate agents who would be our early adopters. There was no magic trick to this. It took one of our co-founders a lot of cold calling and meetings to accomplish this.
      4. When we made a partnership with a company, we bent over backwards to make it work. For example, when they provided us with less than ideal data feeds, we didn’t complain. I worked around any technical issues.
      5. On the day of our soft launch, we started to pay for traffic to come to the site (adwords). This allowed us to start getting feedback on the site and start the process of making improvements to our MVP.
      6. After about 6 months of improving the site from user feedback and adding listings, we put a lot of effort into a public launch, which got featured on TechCrunch. This allowed the broader audience to see a more polished site that was actually vetted by real users.

      During the first two years, we did reach out directly to a small number of landlords who were the largest ones. That is, the landlords who had thousands of units. Real Estate firms were our primary focus for the first few years of business.

      Initially, we solved the traction problem with money by paying for it, but that doesn’t work forever. We got traction later on organically by listening to the feedback of the users we brought to the site through paid channels. Our MVP lacked a lot of features. We got some things right and a lot wrong. The first year was incredibly difficult. I can’t even remember anyone thanking us for the site or providing positive feedback. It was really all negative in nature. Instead of giving up, we leaned in. When renters came to our site, they only used it for a short period of time (2-4 months), until they find their new home. So it was important for us to turnaround requests very quickly on the product development side.

      As we improved the site and delighted users with our quick responses to their pain points, word started to spread organically about our site and brand. At the same time, we also had been working on our SEO strategy, which also started to work.

      Once the SEO traffic started to flow in and word of mouth was spreading, our site was actually very polished and feature rich enough for most people.

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        First, thanks for taking the time to respond, you gave me a lot of great feedback.

        So you focused on building an MVP, and then focused on getting people on to give you insights? Sounds like it worked out well for you!

        So with that MVP, for the first year, you had a lot of negative feedback. But instead of tossing the idea, you leaned into the negative feedback, took the feedback and changed your site / company around to serve their needs / wants better.. Congratulations on selling the company and getting a startup off the ground!

        That's something I've really wanted to do for some time-nice work!

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          @ryanshumzilla thank you so much for the warm comments. I'm glad it's helpful for you!

          Yes, it turned out that the negative feedback was the best thing to happen to us, because we learned quickly what was wrong with our ideas. I should say though that throughout that initial year, we did have analytics that showed users were getting value out of the experience, which helped us lean in to the negative feedback. It's always nicer though from an emotional standpoint to get the positive feedback early on as motivation, but it doesn't always happen. So you kinda of need to set exceptions early on that you won't get it.

          And you'll get there too if you want it badly enough. It takes time and patience. You may find a comment I made on a different post also useful (link below). It describes how I prepared myself for being an entrepreneur to increase my chances of success.

  2. 1

    Hi Jay! Whats your #1 tip in terms of growth for an early stage startup? Doesn't have to be super in depth, just a quick tip. Thanks for your time!

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      Find the distribution channel that works best for your product and then optimize the heck out of it. One channel will provide you somewhere around 80% of your traffic. Only after you find the primary channel should you then invest your efforts into other channels (i.e. the other 20%). As your company matures, your channel distribution will start to become more diversified, but you should have a team in place to handle the increased complexity.

      For my company, our main channel was SEO. We did purchase paid ads in the beginning, but it was for short term gains. Getting traction and then finding out what keywords we should focus our efforts on for SEO. Once we had those two things, we put all our effort into SEO.

      Many people make the mistake of trying all the channels at once. They’ll do a little SEO, social media marketing, blogging, etc. The problem is, as a founder you don’t have a lot of time to do a great job on any particular channel, so everything becomes mediocre. Trust me, there will be time to tackle the other channels as you grow.

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        Great advice thanks Jay!

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          No problem, glad to hear it was helpful!

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    Can you talk a bit about your new company? What does it do?

    1. 1

      I've been running experiments in the medical, insurance, and fintech industries based on ideas I've had. Most recently, it has been narrowed down to insurance industry. The company is early stages, so no official name, etc. I'm fleshing out a business plan and deck now to present to investors.

  4. 1

    Hi Jay, I am curious how you find time to juggle between a full time job, family, two consulting businesses, one ecommerce store, and many side projects. How you decide what to hang on to and what to kill when you are handling so many things (and most probably not profitable in the start)?

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      Let me first clarify that I didn’t do multiple consulting business and an ecommerce store all at the same time. However, you are correct in that I’ve juggled a lot of different things at once. While running Naked Apartments, I was also starting out as a first time landlord (3 unit building), doing some consulting, and starting a family. It was hectic and also some of the best years of my life, as I grew a lot as an individual.

      I jugged everything by scheduling my time, keeping a todo list, and constant prioritization. And most important rest.

      Here is a more tactical view of how I accomplish that:

      1. At the beginning of each year, I reflect on what is most important to me right now and what I want my life to look like in the future. I then set goals to get myself there.
      2. I map out in a rough schedule what a typical week might look like. What hours do I need to work my day job, quality time with family, side projects, and rest.

      Full-time job = M-F 10am - 5pm, 7-8pm
      Family time = M-F 7-8am, 5-7pm; Sunday
      Side projects = M-F 9-10pm; Saturday
      Exercise = M-F 8-9am
      Rest = M-F 9-10am, 8-9pm; Sunday

      1. Every month, I set sub-goals to work towards the yearly goals
      2. Each Sunday night (or Monday morning), I create tasks to reach those my monthly goals and set due dates.
      3. Life happens and roadblocks are a fact of life. No matter how well I plan, things don’t go perfect. That’s fine! I prioritize my work to ensure I get the things done that matter most.
      4. I give myself time to rest. Rest is extremely important for your mind and body. If I need more time to rest on a day when I’m supposed to be doing a side project, I don’t beat myself up over it.
      5. I practice self-compassion. Nobody is perfect. We all have flaws and make mistakes. It’s important that we don’t beat ourselves up when we make mistakes.

      Goal setting and prioritization help me reflect on what is important in my life. Create tasks and assigning deadlines makes it easier to accomplish those goals, while also holding myself accountable. Naturally, when you’re passionate about what you’re doing, none of this feels like a chore. It’s actually a lot of fun.

      In terms of determining what to keep and let go of can be difficult. I’ve found “The Dip by Seth Godin” to be helpful in that regard. In addition, early on in my career I use to evaluate this sort of thing in my mind exclusively. Your mind will play games and trick you. I now have gotten into the habit of writing down my thoughts of why I want to keep going or quit something. It helps me refine my thinking, plus gives me a chance to step away from my thoughts for a period of time, then come back to check if what I previously wrote makes sense.

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          Thanks Jay! Will look into the book. Also really like your way of thinking - breaking yearly goals into months and weeks - though it's kinda an obvious answer but hearing it from someone who put it down into paper, numbers and action puts another layer to this. Gonna try this!

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            Sometimes the simplest approaches are the best 😀. I found this approach through trial and error. All the books I've read on goal setting usually leave out how to actually execute on them. Glad to hear this was helpful for you!

            If you have any further questions, don't hesitate to reach out.

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    This comment was deleted 9 months ago.

    1. 2

      Thank you for the kind words!

      Having a budget of zero is a challenge for sure. That said, it can still be done. What matters in the end is that you find early adopters to whatever product you’re building so you can get feedback. We all have confirmation biases, so the larger the group of people you can test your product with, the better off you will be to removing biases from the equation.

      To accomplish that on a budget of zero will mean that you need to use your time to find those early adopters. If you’re lucky, you might have friends that serve as those early adopters. If that is not possible, I’d suggest using your personal network next.

      When you have exhausted your own network, then look for people you believe will be your target audience. For example, if you’re building a crowdsourcing platform for technology folks, then start “cold calling” tech people on LinkedIn or other communities.

      And don’t worry about getting paying users right away. What you should be interested in is learning about improving your product and getting product market fit. The money will come later if you do a good job.

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    This comment was deleted 4 months ago.

    1. 2

      When Naked Apartments launched, we hoped to be the of apartment search. A renter fills out a profile and then a real estate professional would connect with renters that match certain criteria. We’d expected to charge real estate professionals every time they wanted to connect with a renter. Seemed like a reasonable business plan at the time.

      At first, we thought the system was working during our soft launch of the site. As we got closer to our public launch and then directly after, it became clearer that this business model would never actually make us profitable. It just caused too much friction for renters, whom we always put first in our strategies.

      While the business model was broken, there were parts of the site that worked just fine. We had built a way for renters to search listings and contact real estate professionals. So we realized it was time to pivot.

      For a few months, we toyed with an idea around giving rebates for renters who told us they successfully rented an apartment and then charge the agent. We started to build infrastructure to support it, but luckily learned that there would be legal issues with the approach before we got too deep into development.

      At that point, we had around two months of money left. After brainstorming and reviewing data, we landed on a SaaS model, which we figured would provide a good foundation in revenue to build upon later on. At least in the short term, it’d help us get to profitability.

      So for the next two months, we built a SaaS billing system, incorporated it into the existing site, worked on marketing materials, and mapped out a plan to get all existing users to migrate over. When we flipped the switch, it was a terrifying moment. We wondered, had we created enough value that we’ll get paying customers in this new model?

      Thankfully, the answer to the question was yes. It wasn’t an overnight success however. We realized that we needed to dedicate the next 6 months or more to build additional value for our subscribers to make sure we retained them. Some of the things we built actually came out of ideas we got from our customers during the first year. For example, agents wanted to “Feature” their listings. We had three tiers, so the top two tiers had credits to feature a certain number of listings.

      We did keep the concept, but just limited it to agents who paid the top subscription plan. Some agents loved the feature and could contact as many renters as they wanted, since we removed the friction from the process. Many renters enjoyed it as well. Some didn’t, so we allowed renters to opt out.

      The only mistake we made during that time was giving subscribers “unlimited” plans. Real estate professionals can be fickle, so we wanted to get them excited about our offerings. I think we could have been a bit more aggressive in hindsight. That mistake ended up causing some other issues later on. That’s a story in itself.

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        This comment was deleted 4 months ago.

    2. 1

      +1, I have the same question. What didn't work before? and What works after pivot.

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        Replied to the question above!

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    This comment was deleted 4 months ago.

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      Congrats, that’s exciting to hear!

      Distribution (marketing & sales) is just as important as building your product as you probably already know.

      I believe you’ve got two paths when building a company initially.

      1. Find a co-founder who specializes in marketing/sales to partner with. This has worked very well for me. While I know a good deal about marketing, it is no where near the depth my partner has, so the value he brings has always been worth it.

      2. Learn yourself. This is a hard road to take and it will test you mentally and emotionally. You’ll need to invest a significant effort in education and trial & error. To expedite your learnings, I suggest reading books over internet articles. Internet articles are usually lower quality and don’t provide enough depth. Take what you learn from the books and start experimenting. Make mistakes, reflect on where you went wrong, and try again.

      What either you or your partner will be looking for is the distribution channel that works best for your product. What most people don’t realize is that 80% of your initial growth will come from one channel. So it’s just a matter of finding what channel will work best for your product. Long term, you’ll need either a co-founder or a full-time employee dedicated to diversify those channels. That’s a great problem to have :)

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        This comment was deleted 4 months ago.

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    This comment was deleted 9 months ago.

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      Thank you for the congratulations and asking a question!

      Yes, everyday. It can be an emotionally taxing battle that you have with yourself. Worse, friends and family will likely not understand what you’re trying to do, seeing it as highly risky. So, they’ll encourage you to quit.

      Thinking back, I’d say the first year was the absolute worst. We received, almost no positive feedback from users, just feedback on ways we needed to improve the site. At the time, it felt like we were doing everything wrong. Deep down, we knew that the alternative was much worse, which was Craigslist. So instead of giving up, we pushed ourselves to just fix any problem that was reported that seemed like a reasonable request and fit into our vision for the future. It was a great way of coping with the stress and emotional pain.

      The other thing that helped me personally was talking about it and not keeping it bottled up. My wife was especially amazing to discuss the hardships with, even just to just listen. Ruminating on something is not healthy, so venting with my wife was a good way to clear my head.

      I also found that taking breaks to go for walks during the day to clear my head and side projects at night allowed me to channel those emotional ups and downs into something productive.

      Finally, there was one situation that really tested me. I was offered $250/per hour for a contracting role, which would likely lead to a higher paying role. It felt like a crazy amount of money. I certainly thought about taking it. If I had asked any family members or friends, they would have told me to take it in a heartbeat. What made me not take it was it went against my personal goals and my vision for what I wanted my future to look like. I wanted personal and financial freedom. A contractor role is the complete opposite. You’re giving away your most valuable asset (time) for money. Best decision I ever made.

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