Bill Smith seems to consistently be ahead of the curve when it comes to starting companies. After selling one of his ventures for over half a billion dollars, he is taking on something even bigger.
During our interview on the Dealmakers Show, Bill shared how he was starting businesses even before entrepreneurship was cool. He’s done mobile, fintech, delivery, and is now reinventing renting. We talked about the best process for validating your startup ideas, his trip to the grocery store that was worth hundreds of millions of dollars, and raising money even when you don’t need the cash.
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From Birmingham To The Bay
Smith grew up in Birmingham, Alabama. He had the great advantage of growing up with a father who was a lifelong entrepreneur. He got to see his dad building businesses throughout his childhood. Including getting into wireless in the 80s, when Bill was still just two years old.
By five years old his medical transcriptionist mom brought home a computer. He was instantly drawn to it. He started tinkering with it and learning to write code. That ended up having a big impact on his career.
By 11 years old he was already working. Before he had the chance to go to college he found his first business while still in high school, and has become an incredibly successful self-taught entrepreneur. That would eventually take him to California’s Bay Area to raise money for one of his startups.
His first business was as an authorized agent for T-Mobile. He began selling cell phones for them while still in high school. It was putting thousands of dollars in his pocket each month. So, he decided to take the next step and open his own store, and then another. A few years later he sold that business.
Then he did it again with an early fintech company Insight. They issued payroll cards. It was bootstrapped from the ground up. After achieving national distribution Insight was bought by Green Dot, a public company, and the largest in the space at the time.
Going through that full-cycle experience again definitely made it easier to see the high-level view of startups. Though, in this case, he was most pleased that the acquirer kept the brand and his employees.
The Life-Changing Trip To The Grocery Store
One Sunday afternoon Bill headed to his local Publix supermarket with his one-year-old and newborn baby. You can imagine how much fun it was. If that hasn’t been you, then you’ve seen the experience in action. The crying, the meltdowns, the juggling of everything, and just wanting to get back home.
That was the moment he decided to do something about it. He was going to find a way for people to get groceries delivered.
Validating Your Business Idea
Bill says the first step in validating a startup idea is to prove the demand.
The big trap that novice entrepreneurs fall into is relying on people to agree that their idea is nice. No one wants to hurt your feelings. Yet, as experienced founders know, there is a world of difference between this type of yes, and real customers actually willingly parting with their money to buy your product. The real test is whether they will give you their credit card number.
So, Bill set a goal of getting 1,000 sign-ups for a full year membership, before even considering writing a line of code.
They hit the streets with a cheap video to get these signups. They landed them, and three months later they were going live with Shipt.
After putting $3M of his own money into Shipt, Smith went out to Silicon Valley and raised $65M. After using just $35M of that they had created a $500M in revenue business.
If that was validation enough, he returned from vacation to hear about Amazon’s acquisition of Whole Foods. Shipt started getting inbound offers. They even turned down offers worth hundreds of millions of dollars. They rejected them.
It wasn’t until Target called with a $550M acquisition offer that they finally agreed to sell. It wasn’t just the price that moved him. Bill said the deal enabled the company to continue to fulfill its mission of serving a variety of players in the market, and remain independent.
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After the acquisition, the company continued to grow to $1B a year in revenue.
Always conscious of his spending of time and return on time, Bill says he began looking for a large and exciting new opportunity to work on.
Recalling the pain and complexity of trying to rent an apartment in San Francisco, when out fundraising on the West Coast, he decided to take on the real estate industry.
Four weeks after leaving Shipt he was working on his latest venture Landing.
Landing is a Living as a Service startup. $199 a year gains you access to Landings’ thousands of apartments across 80 cities.
Now with an app, you can pick a new apartment right from your phone, skip the rental deposit, and just show up at your new place.
They even provide fully furnished all-inclusive rentals with Wifi and utilities, styled after the Four Seasons experience. Membership comes with the ability to continue moving within the company’s portfolio whenever you want to try a new city or take a new job.
The company has raised over $145 million from top-tier investors which include Greycroft, Foundry Group, Maveron, and Abstract Ventures.
Storytelling is everything which is something that Bill was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
Listen in to the full podcast episode to find out more, including:
- Choosing your investors wisely
- Raising money when you don’t really need it
- The future of living
- The advantage of naivety
- Bill’s top advice for other entrepreneurs
- The struggle of working with big companies as an entrepreneur