Jaron Waldman is the cofounder of Curbside which develops a mobile application to find, buy, and pick up products from stores. The company raised $60 million before its acquisition by Rakuten. Prior to this Jaron Waldman founded Placebase which he sold to Apple.
In this episode you will learn:
- Learnings from failure
- How to deal with fundraising hurdles
- Validating new business models
- How to navigate acquisitions
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
ACCESS THE PITCH DECK TEMPLATE
About Jaron Waldman:
Jaron Waldman is a lifelong entrepreneur and product leader. Jaron previously founded Placebase, a Los Angeles based location technology company that was acquired by Apple in 2009.
Jaron spent over 4 years at Apple leading the Geo team which developed location-based services across the Apple ecosystem.
Fascinated with the potential of location technology in the era of Mobile commerce, Jaron left Apple in 2013 and co-founded Curbside.
As Curbside’s product-focused CEO, Jaron builds partnerships with retailers and develops technology that better connects their physical stores and restaurants to frictionless mobile commerce experiences.
Jaron holds degrees from UCLA and the University of Toronto and lives in Palo Alto.
Connect with Jaron Waldman:
* * *
FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we’re going to be interviewing someone that I find is really exciting because he’s done the full cycle of building, scaling, financing, and then exiting. He’s done the full cycle twice in the sense that both of his companies have been acquired by really big companies. I’m sure that during that journey, he learned quite a bit. What an incredible story, and he’s with us today sharing some of those lessons and what that journey has been like. Without further ado, Jaron Waldman, welcome to the show today.
Jaron Waldman: Thank you for having me, Alejandro.
Alejandro: Originally, Jaron, you were born in Toronto. How was life in Toronto growing up there?
Jaron Waldman: It’s a great place to grow up. It’s always been a great city. I’ve been gone quite a few years, and it continues to improve. It’s a place close to my heart. I love it, and it was a fantastic place to have a childhood.
Alejandro: And with both parents being teachers, so I’m sure you were not running out of knowledge at your house.
Jaron Waldman: Yeah, exactly. We were wealthy in education in my household.
Alejandro: How did you get into websites and developing that nerdy site of yours?
Jaron Waldman: Yeah. I just happened to be a nerdy kid. I think we got a PC when I was 11, and then I immediately started to spend a lot of time on it. I had an uncle who was involved in a company that was early on doing stock quoting. He got me into Unix systems. I probably shouldn’t have been in there, but I could dial-up, connect, and get into this world of Unix machines that were all connected. So, from my teenage years, I was interested in hacking around and building things, which ended up serving me well.
Alejandro: Very nice. Then, what happened? You started doing some contract work to make some money on the side, and obviously that later led into getting your first gig before you even started doing your studies at UCLA.
Jaron Waldman: Yeah. I was still in Toronto, and I was making money on the side by setting up websites for people. I learned how to set up Unix servers and serve websites off of them, which at the time was still a bit of an exotic skill set. Then, I ended up taking work at a company, which had bigger customers. This was the mid-late ’90s. They were setting up websites for the big Canadian banks. It was kind of a fun place to work. There were a lot of smart people and interactive in downtown Toronto. I learned a lot there about not just building websites, but setting up databases and building internets and doing all that kind of stuff. So, yeah, I learned a lot through that. But I left Toronto to go study at UCLA. There was a ton going on in California at the time, so it was exciting.
Alejandro: A ton going on so much that it even got you to drop out of school. So, what happened? Your parents were probably not very happy about that.
Jaron Waldman: Yeah, I put my education on pause for a little while. I joined a company that was founded by a group of people that had sold a company to VerticalNet. If you remember the days of B2B portals, that was the hot thing for a minute right in the 1999-2000 era. We were setting up a site for manufacturers to share their data and put it all online and for suppliers to be able to monitor what was going on. A lot of people hit the wall in 2001. I turned around and decided it would be a wise move to finish my studies. I went back to school. There’s a research institute at UCLA that was doing some interesting work around taking location databases and putting them online to understand patterns of change in neighborhoods. If a neighborhood is in trouble or if there’s some kind of gentrification going on or people are disinvesting, you could take a set of databases and overlay them on a map and get a good picture of what was happening at the neighborhood level. That fascinated me, and that got me started working in location technology, which, in a way, I’m still doing. That was the seeds of the initial businesses that I started working in the early 2000s.
Alejandro: Why did you decide a nonprofit versus a full profit?
Jaron Waldman: I was really committed to the idea that information could be a powerful motivator for change. I had the strong feeling that if we could understand what was going on at the neighborhood level, we could convince people to go in and have positive impacts on their neighborhoods, on their communities, etc. This was the Bush era, so it was a time when there were a lot of—they had come out with a bill called The Clear Skies Act, which got environmental regulations. There was a lot going on in the policy realm. I co-founded a nonprofit, and we felt we could bring information to bear and have an impact on policy. I think, looking back, it was a nice idea, but it was much more challenging to get people to look at these maps and understand the impact of policy on neighborhoods.
Alejandro: The idea didn’t pan out as you had expected, and there were some funding issues. Now, looking back, you were probably receiving some reaction from investors, like maybe some reactions that you possibly didn’t listen much to or patterns that you could have recognized now, looking back. What were you experiencing when you were going out there and trying to raise some money?
Jaron Waldman: There were a couple of things. We were primarily financed through a single foundation, 90-plus-percent of our funding. We were a new nonprofit, but the vast majority of our funding was coming through the Fannie Mae Foundation, which was one of the big foundations back then. They had some internal competition where they had some people that they were close with that liked our idea and were interested in building and expanding on it. One day, they came along and said, “We’re no longer funding your project.” It certainly was a lesson in having a diversified set of supporters and funders because I think we felt strongly that we had a good funding source, but really needed to have two, at least.
Jaron Waldman: One thing led to another, and they ended up wanting to build a similar project, but not having the technical chops or knowhow on how to do it. So, what ended up happening was, we rolled a lot of the team that was working on the nonprofit into a bootstrapped company that I started called Placebase. Our first customer was Fannie Mae for that. We were doing the same kind of stuff. We were taking data and information and putting it on maps. But rather than being a nonprofit construct, we were initially a custom development shop for getting your information on maps. That was the seeds of my first company.
Alejandro: Let’s talk about the plant actually coming out of the seeds and proving that there’s something there that was worth it from a business perspective.
Jaron Waldman: I think we were a bunch of tinkerers, and we were excited about working with data on maps. We were in a good spot because we knew that we wanted to turn it into a product. We didn’t want to build a consulting company around mapping, but we always had in mind that we wanted to create a product. We were looking at it, and we were experimenting with certain approaches to caching maps and tiles. Then Google Maps came out in 2005, 2006. We said, “Man, first of all, that’s awesome.” If you remember how maps used to be done before that, it was the MapQuest model where you get a map, and if you want to move it, you had to type in a new address or click on an arrow, and it was really slow. This vast cache mapping that Google came out with was something that we had been experimenting with. We looked at it and said, “There’s a product to be had here,” because Google as a consumer technology was very much one-size-fits-all. They were going to initially do a single map that served everyone. We had this base of customers who wanted customization and control over the display of their information and display of their maps. We took a gamble and jumped in and built a SaaS product. It was early, but we launched it in 2006 called Pushpin. It was one of the early SaaS mapping platforms where you could push your own location data up to it, visualize it on a map, and eventually, we offered the ability to customize your map. It was a very early version of what Mapbox is doing today, for example.
Alejandro: How were you guys making money there?
Jaron Waldman: If you go back to when we started the company, 2004, 2005, 100% of our revenue would have been from consulting, professional services development work. We launched the product in ’06. By the time we sold the company in ’09, we had transitioned more than half, probably 70% of our revenue was coming out of the product line. That was one of the really hard transitions that people make. I had been warned about it. It was an incredibly hard thing to do because you have to be very disciplined about not taking on additional product revenue and investing it all in the core product. We did that while we were bootstrapping. We didn’t raise any outside capital to do it. There were a lot of late nights and weekends. I think we learned discipline because there were always more consulting contracts out there, but we had to stop taking them and invest back into the core product.
Alejandro: It’s interesting because, on this journey with Placebase, you guys did it completely differently than you other company, the next one that we will be talking about in a little bit with Curbside. One thing that is interesting here is that you guys bootstrapped the operation. Obviously, on Curbside, you did it more the venture route where you raised money. Now, looking back and comparing bootstrapping versus raising money, especially for the people that are listening, what would be that learning that you got from going at it on both ends and what piece of advice or words of wisdom would you have to share with the people that are listening?
Jaron Waldman: That’s a great question. I’m glad that I’ve had the opportunity to do both, and I wouldn’t give either one up. We raised over 50 million. It’s a bit like rocket fuel. Things move much, much more quickly. It gave us a lot of things. It gave us more credibility than we had when we were in the bootstrapping phase. But it’s also risky because it’s rocket fuel and you’re going very quickly, but if you don’t have product/market fit, you can shoot past your target. That can be really harmful to a company. When you’re bootstrapping, you have no choice. If you don’t have product/market fit, you’re not going to make payroll the next month.
Jaron Waldman: They were really different experiences. I wouldn’t trade either one for the world, but when you have the luxury of raising a bunch of investor money, I think it’s easier to lose sight of the market. It’s easier to lose focus. I like the bootstrap experience a lot.
Alejandro: Got it. One thing that I’m seeing a lot now is companies that bootstrap and get to that product/market fit, and then when they have some leverage, and they’re able to control their own destiny, then they go out, and they raise some money from VCs.
Jaron Waldman: Yeah, I think that’s a super-smart and disciplined strategy.
Alejandro: Yeah. Now, going back to your story, when you were at Placebase, and you’re executing on the product, there is one call that changes everything in 2009. What happened?
Jaron Waldman: The call came from Apple out of the blue. It was a product manager, and they had noticed us or heard about us and knew that we had a mapping product. Their situation at the time was that the second iPhone, which had come in 2008, had added GPS capability. It was actually the photos team, which at the time was part of iLife. The iPhoto team had started to get a lot of photos that were being imported to people’s Max or into the Cloud that had geographic coordinates on it. They were looking around for a way to be able to say, “This photo was taken at the Eiffel Tower in Paris, France” based on the coordinates that were there. That was a product that we already had up and live and running in our suite in our SaaS product. That kicked off a great relationship with Apple. It was a great day. I remember. I was at a Cuban restaurant having lunch with a friend, and one of our sales reps patched through, and he was like, “Do you want to talk to Apple right now?” I said, “Yeah, I want to talk to Apple.”
Alejandro: Very cool. Obviously, that led into the acquisition. So, tell us about the acquisition. How did the acquisition happen?
Jaron Waldman: It was interesting. We worked hard and closely with them, and we set up the service and customized it to what they needed. It was basically every single time someone took a photo and loaded it into iPhoto, and it had geographic coordinates, it would come to our servers, and we would tag it with the location. Then it turned out they were selling a lot of iPhones, so the volume was off the charts, which was great. But also, what happened, we were working with AOL in MapQuest. MapQuest, at the time, had an older technology stack, so they were having trouble rendering, for example, maps of China with Chinese character sets or property maps or anything that was off the mainstream. We were in the background, rendering maps for them with our stack. In the process of Google Maps eating our lunch, they were interested in making some investments. They approached us about an acquisition, which triggered an obligation to notify Apple that we had an interest. Not a right of first refusal, but we had to tell Apple, “We got a letter of intent.” AOL’s sending us that letter of intent triggered us to have to tell Apple or want to tell Apple that we had some interest. Apple jumped in and got interested and ramped up their M&A machine. We got into an exclusive discussion with them. One thing led to another, and we folded into Apple in 2009.
Alejandro: Very nice. By any chance, did you guys negotiate with Steve Jobs at all?
Jaron Waldman: No. That was probably below his paygrade, I think. He was there when we got there, though, which was really exciting.
Alejandro: That’s amazing. This led you to move into Cupertino, and then you got to experience how a company so big works. Out of curiosity, during this time, what were your biggest insights on working with a company like Apple that maybe you got. What were those three that you told yourself, “In my next company when I’m building and take a growth stage, these are going to be some of the things I’m going to keep in mind”?
Jaron Waldman: One of the things I remember being shocked by, and I hadn’t worked at a big company before. One of the things that I found amazing and jaw-dropping was their planning horizon. They were thinking about things years ahead most of the time. Some things surprised them, but a lot of their planning is extending two, three years out into the future. As a bootstrap startup, particularly, it’s hard to think about six months ahead. It’s like you’re planning horizon is so much shorter. We, at least, were so much more reactive. It taught me a lot about how a well-run, large company works and thinks. That stood me well in my latest startup experience because we had these big enterprise customers. So just understanding how projects work, how things get green-lit was really great. The other thing, as a technology person was, to understand how products get developed at Apple, which is unique in the industry. If we had another hour, I could go into it, but the way that the human interface and design teams work with the engineering teams at Apple is amazing, and how they push each other to innovate and deliver a great product along the way.
Alejandro: That’s very cool. You were there for four years, so that gave you a lot of time to understand the assembly process and all of that of such an incredible company. Why did you leave?
Jaron Waldman: Yeah, it was a great four years. The growth at Apple during that time was amazing because the iPhone was exploding those years. I met a ton of people that influenced me that I love, so I wouldn’t trade the experience for anything. By 2013, I was running a larger team; my team had gotten over 150 people. My role had changed to one where I wasn’t as hands-on with building technology anymore, but I was doing a lot of management meetings. At some level, I had a thirst for getting back and actually being more hands-on with building products. Then combining that with an idea that I had for a startup that I just couldn’t get out of my head. It was like I had the itch to explore it, and it was clear that within Apple, that wasn’t the right place to do it. I had the urge to build something and something specific that I wanted to build. Those two things came together, and I said, “I have to leave.”
Alejandro: it’s interesting because ideas take time to incubate. They’re probably there in the back of our heads, and we don’t even realize that we’re shaping them up a little bit more here and there. How long would you say that it took you from that day where you came up with this idea to the moment that you gave your notice and said, “I’m going full-time on executing all of this.”?
Jaron Waldman: It was probably incubating for a year, but it was probably three months from when it crystallized to when I was like, “I’ve got to go do this.” Then, I gave notice, and they wanted to keep me around for a little while to finish some projects. It was probably three months until I gave notice and six months until I could get out and start working on it.
Alejandro: Got it. What happened next after you gave your notice, and then you went at it?
Jaron Waldman: What is interesting is, when you’re at Apple, you can’t talk about what you work on. I had relocated from LA to the Bay Area. I had a bit of a network in the Bay Area, but not a deep one. Then I spend four-and-a-half years at Apple, and I felt like I was totally siloed at Apple the entire time just because I was so busy. I knew I had this tremendous network inside of Apple, but my network outside of Apple was not super strong. It’s almost like you’re living in isolation inside this company.
Jaron Waldman: I went out and started having coffee, not knowing how it was going to go. What I found was that the Bay Area community was super-receptive. You could almost call anyone and be like, “Do you want to grab a coffee? I want to tell you about my idea.” Then one thing led to another, and we were very quickly able to raise a seed round, mostly on a napkin, my co-founder, and I.
Alejandro: How did you meet your co-founder, Denis?
Jaron Waldman: He worked at Apple, as well. He had also come into Apple through an acquisition. He had a company called Poly9 that was acquired by Apple. At the same time, there was a community of people in Apple. Apple didn’t do a ton of M&A at the time, but Siri had acquired in that timeframe. Adam Cheyer and the Siri founders, we got close to them. Anyone who had come in from a startup and was trying to make sense of this giant company, we were comrades, I would say.
Alejandro: What ended up being the business model for Curbside?
Jaron Waldman: Initially, we had a B2C and a B2B focus, which I was warned about. I would warn anybody about it. It’s not impossible to do, but at the same time, we were building a consumer app called Curbside, which we launched with. We were also powering mobile-order app programs for retailers with a SaaS business. The reason we did that, the germ of the idea was that we wanted to connect bricks and mortar store locations for seamless mobile commerce experiences, so you could connect into the stores and restaurants around you, order it ahead, and have it ready when you get there and save time and get it at the curb. But when we started the company, the state of the art in connecting stores for online, or particularly for mobile, was very basic. We felt that we had to build a consumer experience that showed the way that demonstrated, “Here’s the state of the art. If you want a really smooth consumer experience, it starts in a mobile app. It terminates in a physical store.” We had to put one out there, learn the lessons, and set the tone, which I believe we had a small influence, at least in how that’s done in retail today. And to show retailers that there’s a demand for it and that there’s an audience. We ended up launching a consumer app, which got up to over a million users, so we made a dent. The main business, increasingly over time, was providing SaaS for retailers to power all that stuff for their own platforms.
Alejandro: And it took no time here to raise money. Literally, one million and a half right away. How much money did you guys raise for the business?
Jaron Waldman: In total, we raised 57 million through four rounds.
Alejandro: What was the experience of raising this money? What were some of the expectations that you were encountering from the seed to the A round? You raised all the way up to the D. What were some of those experiences?
Jaron Waldman: The seed was a quick raise and was led by Jerry Yang, who is a really smart investor.
Alejandro: Founder of Yahoo. Correct?
Jaron Waldman: Yeah. Founder of Yahoo. We actually incubated out of his office. We had him, and OATV, and Chicago Ventures. Some great early seed investors who were really supportive. Then we quickly got to a launch, and our launch partner was Target. We launched in April of ’14, starting at a single Target store in Sunnyvale. Having that kind of marque customer on board was a big deal. Through a former colleague at Apple, we met the partners at Index Ventures, Mike Volpi and David Rimer. They were intrigued with the potential of the business, and they liked that it fit their investment hypothesis really well. Quickly after our launch, we raised our A. I would say those two rounds were not easy, but relatively low-friction for us to go out and raise and have the amazing benefit of working with some incredible people getting involved in the company. Mike Volpi went on our board, and Jerry also went on our board, which was a great experience for me to learn from people like that who had done the things that they had done and seen the things that they had seen. It got harder the more we raised, so we ultimately raised our B from Sutter Hill Ventures in San Pullara, who is also a super-smart great investor. That round took longer. That was about a three to four-month raise where I was starting to have that feeling that people talk about where I’m spending a lot of time on Sand Hill Road, and I got my other job to raise the round. Then our final round we raised was a strategic round where we had participation from the existing investors, but we also wrapped in CVS and some other folks in retail. The strategic round was really different because they asked a different set of questions and have a different set of concerns than an institutional investor would.
Alejandro: Obviously, the institutional is more thinking about the exit, and the strategic is more on what’s in it for me and a potential acquisition down the line.
Jaron Waldman: Yeah, exactly. For CVS, it was about—we were going nationwide with them. I think they were interested in keeping in the mix in case we were acquired, but also making sure that we had the support that was needed to roll out to 5,000 of their store locations, which it turned out was a very big lift.
Alejandro: Yeah. Obviously, there was a very nice outcome. The company was acquired by Rakuten. Before this, there was a failed attempt that put you guys almost over the edge. What happened?
Jaron Waldman: The toughest thing that happened to us along the way—we started working with Target in 2014, and everything went really well. We demonstrated a lot of momentum. At the time, they had about 1,800 stores in their chain and a fantastic brand. We rolled out with them. We went from 1 to 10 to 40 and ended up at 150 stores with them around the country. I had taken care to try to build as good a relationship as I could at the executive levels. Obviously, briefed their CEO Brian Cornell and had built relationships through the executive team. We had some strong support internally. They had, at one point, approached us and tested our interest in acquisition. We had a lot of momentum, so we were like, “Let’s talk about it later.” But they got a new CIO who came in, took a look around, and said—I think what happened was he said, “This looks really important and strategic, and this is something we need to do completely inhouse. We have to try to do it on our own.” We had a moment where we didn’t know this was going on inside the executive team, but we had a moment where they completely cut the program, and they were by far our largest volume of transactions at the time. That could have definitely killed the company had we not had some other good momentum with different customers at the same time.
Alejandro: Wow. Then how did the actual acquisition happen?
Jaron Waldman: The acquisition with Rakuten came about. Rakuten is headquartered in Japan, a global eCommerce company, but they have a business in the U.S. that was rebranded last year. It was called Ebates, and now, it’s just called Rakuten. We were talking to the U.S. group, which, at the time, was Ebates. They were interested in online to offline transacting consumers through brick-and-mortar stores. Most of their business today is done purely online. They were interested in getting into this O2O space as we were. We were having an interesting conversation about partnering with them to power some of that for their platform that turned into, “Maybe we could invest in you guys.” We were saying, “We’re not ready to invest.” One thing led to another, and they introduced me to the Rakuten founder, Mikitani, who I think he and I had a mind-meld where he’s been interested in how to expand in the U.S. market for a number of years and making a series of investments to replicate the ecosystem that they have in Japan in the rest of the world. That’s going to be a long-term project, but I’m impressed with how smart and strategic he is about how to accomplish that overtime. We have this piece where we can deepen the partnerships with merchants who have brick-and-mortar locations. It seemed like a perfect fit. There are all kinds of applications in Japan for the technology that we built as well that we started to roll out last year. It was a lot of excitement. We had a good situation because, at the same time, we had another party that was interested in trying to explore acquisitions, so we had two interested partners, but it was really excited and thrilled about the opportunities at Rakuten to grow this thing. So we folded in June 2018.
Alejandro: How long did it take from those initial discussions to the actual closing of the transaction?
Jaron Waldman: Eight months.
Alejandro: Wow. Very nice. How did it feel, that moment where those papers were signed, and it was done?
Jaron Waldman: Honestly, it felt fantastic. What I was nervous about at the time, we had that mind-meld, and both parties were going in with really good intentions. But I wanted to make sure that Rakuten was going to continue to invest in the technology and that we were going to have a certain degree of autonomy to continue to pursue our goals without micromanagement coming. I had done my diligence and talked to other folks who had pulled it in. I had a good feeling about it, but you don’t know at the moment you sign the papers. You’re sort of elated, but at the same time, there’s some trepidation about, “Is this actually going to pan out like we all think it is?” The goods news is that it has. Rakuten has continued to invest in the team and the technology. They have opened up all kinds of opportunities for us in Japan and has been really great about giving my management team the latitude to figure out the right way to get things done and hit our goals.
Alejandro: Very cool. One question that I typically ask the guests that come on the show, Jaron—your journey is amazing! You go from starting at a small shop. Then you do your own, which doesn’t turn out. Then you sell your first company to Apple, and now to Rakuten. If you had the chance to go back in time, and have a chat with that younger Jaron coming out of UCLA that has no idea or has never launched a business, knowing what you know now, what would be that one piece of business advice that you would give to your self and why before launching a business?
Jaron Waldman: I would counsel myself to be patient and to expect that things that are worth building towards can take longer and have more twists and turns than you initially think. I think back to myself in those days, and everything had to happen right away. I think with the passage of time, you start to realize that it’s worth investing in the longer term, and that you do have to be thinking a little bit further out. Sometimes, for example, markets take longer to mature than you might imagine, and that can be really dangerous, as we know as entrepreneurs. Looking back to 2004, I was excited about location and mapping because I had a sense that with Mobile, it was going to be absolutely key, but it didn’t change until four years later and until the iPhone came out with GPS. At the time, I couldn’t have imagined that the market would take that long to mature, but it did.
Alejandro: I hear you. For the folks that are listening, what is the best way to reach out and say hi, Jaron?
Jaron Waldman: Just email me: email@example.com
Alejandro: Amazing. Well, Jaron, thank you so much for being on the DealMakers show today.
Jaron Waldman: Thanks for having me, Alejandro. I love the show, and I’m really excited that we could do this.
* * *
If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic. And if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help, whether it is with your fundraising efforts or with selling your business, you can reach me at firstname.lastname@example.org.