October 6th, 2023

Braid Is Dead, Long Live Braid

A dispatch from the wild, vicious world of consumer payments

On the day I chose to start writing this, I went to an afternoon showing of Oldboy at Alamo. There’s a quote that’s repeated at least three times:

Laugh, and the world laughs with you;
Weep, and you weep alone;

I’d been trying to write a pithy summary of my last four years in consumer payments, and here it was, served up on a giant screen. Luck is critical for startups, even in death.

Braid was a consumer payments company that was around from 2019-2023. We designed and shipped a brand-new multi-user financial account called a money pool, and raised ~$10mm in venture capital from investors that I’d looked up to for years. It took us ~2.5 years to find product-market fit, and after that we grew sustainably and quickly. We’d made software that people seemed to want.

A few months later, we were dead.

The thrash happened fast, and left a sea of heartbroken customers, employees, investors, and partners. The thing that broke us wasn’t a stronger blow than any of the others, it was simply the last one we could tolerate. The company shut down in September 2023.

That’s not the end of it, though. We ran an auction for our IP and there was a single bidder: me. You see, fintech is far from over.

Tolstoy was right: successful companies are all alike; every failed company fails in its own way. Failure is a cocktail of loneliness, grief and shame, which is why these stories are not told often. But every failure is also a playbook for the next obvious, effortless success, so it’s critical to share.

I hope our story is helpful.

Braid’s empty office on Harrison St. in SF

What’s Below
I’ve included a timeline of the company’s life, along with one lesson/myth from that time period.

1. Road to Product-Market Fit, 2019, 2020 and most of 2021.
Myth: Your Early Adopters Are Your Best Customers

2. Then, It Worked, Late 2021 to Summer 2022.
Myth: With Great Metrics You Can Always Raise

3. The Ice Bath, Summer 2022.
Myth: Ruthless Dedication to Compliance Will Save You

4. We’re So Done, We’re So Back, We’re So Done, Summer 2022 to Spring 2023.
Myth: The Answer is AWS for Fintech

5. Shutting Down, Summer 2023.
Myth:Failure is a Learning Experience for Everyone

This post is for those who still dare to dream and build in fintech. We do not do this work because it is easy. We do not spend our days trying to make origami out of tissue paper to simply quit and go home. Consumers deserve a financial system that is no less than excellent, and someone needs to do the work to make that happen.

I still blame myself wholly and completely for Braid’s demise, but this post isn’t about me. It’s about what happened.

Road to Product-Market Fit, 2019-2021
Myth: Your Early Adopters Are Your Best Customers

We had an initial concept for the money pool right away, though it had many different names over time. A multi-user bank account was painful to build and difficult to operationalize for a bunch of reasons, which meant we had very few competitors. But for most of these years our metrics were flat. With consumer products it either works or it doesn’t. We iterated constantly for ~2.5 years.

But there’s nothing like a hot market. In early 2019, the neobanks were taking over Europe, and in the U.S. Stripe, Coinbase, Robinhood, and Chime were ripping.

We heard “yes” a lot in those years.

We built the software that we’d wanted to use ourselves, and eventually others started to use it and love it, too. We rode the roller-coaster all the way up, and got high enough to kiss the clouds. But this took a long time.

There are two types of product-market fit for a fintech company: fake PMF and real PMF. Many fintechs, including us, dupe themselves into thinking their PMF is real when it’s not. All the signs are there: enviable early traction, organic growth, and real payment volume. It’s easy to look at the numbers and say, wow, there’s such demand for what we’ve built. We’ve found our cohort of wildly passionate early adopters.

Unfortunately, these people are criminals. They were there to steal our money. They’re early adopters because they’re fraud sharks patrolling coastal waters for fresh meat. And our little payments app? Well, you can guess.

You know who doesn’t move $500 into a brand-new app they’ve never heard of, within 10 minutes of signing up? Real consumers. They need time to learn about the product, build up trust, move $1 or $10 in and out, and make sure everything works.

For the first few months, or few years, fraud can feel all-consuming because it is. I’m thankful that there are many great companies working on this problem (Sardine, Sentilink, Alloy, Unit21, Socure, and more). But in the beginning, it was crushing and time-consuming to handle.

The bright side is there are a lot more real consumers than there are fraudsters. If a product resonates, eventually it all flips. I drew the following graph the day we figured this out, and it’s still up on my wall.

Then, It Worked
October 2021-July 2022
Myth: With Great Metrics You Can Always Raise

When we finally found our groove, our payment volume grew ~5% a week, most weeks, for nearly 22 straight weeks in H1 2022. We went from processing less than $10K a day to having multiple $100K+ days, in the span of around five months. We were on track to pass $10mm in monthly volume by Q4 2022. We’d figured out who our customer was, why people wanted what we’d built, and how to find more of them for very little money.

We’d get asked a lot about use-cases – who was using it, and for what?

The most concise explanation of the multi-user opportunity was this: there are financial accounts for 1 and 2 consumers, and there are financial accounts for businesses. But there is no financial account for n consumers. Joint accounts are insufficient, outdated, often (but not always) capped at two, and not a product priority for most banks. A money pool could serve a customer base for which there was no existing product, only clunky workarounds.

There were myriad buckets of n users who loved having a financial account designed just for them. A few examples from our own data: coparents, houses, art collectives, extended families who get along, teams, people who share livestock, churches, punk bands, weekend hustles, extended families who don’t get along, wiccans, and our team’s personal favorite, firehouses.

The use-cases that didn’t work well for us were short-duration social events: group travel, bachelor parties, etc. The “split payments with friends” meme, we found, was a red herring and a fallacy. Opening a standalone financial account for a one-off event makes no sense. These use-cases had massive churn, low relative volume and created little sustainable long-term value. Use Venmo!

Instead of the usual hockey stick graph, here’s a video of a fireman from Alabama talking about how they used Braid:

I called one of our investors in early October 2021 to report that we’d figured it out, that it was going to work. He said, “great, raise money immediately, the time is now.” This advice was excellent, prescient, and correct.

I fought him. I said, “if our numbers are great and consistent, we can always raise, let’s wait it out a few more months.” I believed this, too. But this was the moment I got greedy. I’d like to blame it on anything else – companies raising huge rounds off zero traction, ZIRP, whatever. I’d been building software since I was in my early 20s, and felt that, finally, the rest of the world now understood the magic of software business models. Of course these multiples are warranted, I thought to myself – this growth has no ceiling, the TAM is “unlimited” and this is our new reality. The revenge of the nerds is happening in real-time, and gosh, it fucking rules.

But if I really take a hard look at that moment, it was about me, and my ego. We’d processed eight-figures of payments at that point, and over the next few months, we grew consistently and fast. But venture capital is not for companies that are good, or even companies that are great. It’s for companies that are so excellent that they produce outsized returns at the right time, in the right market. We timed this completely wrong and it hurt us.

Every dollar a startup can raise is a gift. For a time I lost sight of this, and I won’t make that mistake again.

The Ice Bath
July 2022
Myth: Ruthless Dedication to Compliance Will Save You

We’d finally found a delicate equilibrium balancing the many mouths we had to feed: consumers, banks, networks, regulators, employees, investors, vendors and fraudsters.

But that balance got ripped apart fast. Our sponsor bank’s behavior changed suddenly. They stopped replying to emails and became noticeably cagey on phone calls. When they did reply, it was usually with an urgent demand for something they hadn’t asked us about in years. We’ve never heard the full story, but this bank isn’t in the fintech sponsorship business anymore, with us or with anyone. Eventually, we had to move to a new bank. We had to offboard and cash-out all our customers in the summer of 2022.

It felt like a bucket of ice got dumped over our heads. Here is a highly realistic AI-generated image of me in that moment:

In fintech, it’s easy to pit the technologists and the regulators against one another: fuck around on one side, find out on the other. But we knew better than that. Our product was not in any sort of legal gray area (e.g. crypto) and fit within the bounds of existing law. From the day we started until the day we shut down, we’d spend millions of dollars to build a best-in-class compliance program to sit alongside our offering. For every hour that we spent on engineering for a consumer-facing feature, we spent another hour on compliance, and a third hour on fraud. That meant everything took 3X as long, but there wasn’t another way.

What we didn’t understand at any level of depth, is that even the most robust compliance program would only get us so far. We were taking on indirect risk from every fintech in the bank’s portfolio, as well as the bank’s relationship with its regulators, which is highly protected and confidential. Fintechs sit adjacent to regulators, not directly under them, so mission-critical information affecting multi-million-dollar companies is often delivered via backchannel whispers and a messy game of telephone.

Yet, one observation about sponsor banks is how much they care about supporting new products. The community-oriented mindset is pervasive among bankers. Many see their bank as a place to help their community members live the lives they want. I continue to go back to this quote from a Credit Union executive from February 2018:

People don’t want a mortgage, they want a house…They don’t want an auto loan, they want a car to get to work. They don’t want a savings account, they want a way to buy the things they want.

This is encouraging, but banks do not answer to their fintech customers, they answer to their regulators. If the regulators come down on the bank, as the fintech there’s nothing you can do about it. A regulatory rug pull can and will outstrip any early traction or compliance gold stars that you think might save you.

Put another way, as a startup we were a tiny rivulet downstream of the ocean that is the U.S. financial system. When the dam broke, we learned very quickly that no one cared about our perfect, squeaky clean BSA audit.

We’re So Done, We’re So Back, We’re So Done
July 2022 – April 2023
Myth: The Answer is AWS for Fintech

The company was effectively in a coma from July 2022 to January 2023. It was bleak – we were a payments company processing $0 in payment volume. Eventually, we found a new bank that wanted to work with us, and we were eager to get the product back online. We worked for ~six months on the migration, and Braid came roaring back to life in January 2023.

We started from zero and processed over $1mm in the first ~30 days of our relaunch. It felt like we’d get back to where we left off quickly, as if no time had passed. In the spring of 2023, we signed a term sheet for a new round of funding. It looked like we might make it through, after all.

The euphoria didn’t last.

Six weeks after our relaunch, SVB imploded, and right after, Hindenburg Research’s Cash App report dropped. The market kept getting worse. Rates kept going up.

The nail in the coffin came soon after. A critical third-party informed us that they’d changed their mind on a key technical decision. All the players in our ecosystem had not fit together perfectly post-migration, and we’d been dealing with a long list of technical problems.This change was going to break all our software. We had two decisions: rebuild over from zero or shut it all down. It didn’t feel right to take additional capital knowing that we’d have to rebuild, again, so we called off the round.

This should be a separate post, but I wanted to note how much my feelings about fintech software changed over my four-plus years at Braid. Initially, we thought leveraging third-party software would help us move faster and focus on our core offering.

What we found, instead, was every additional partner had the potential to break big, important parts of our stack. Building a multiplayer offering meant we had to be as close to the metal as possible, because a lot of our UX didn’t really exist off-the-shelf. After several painful migrations, our distaste for contractual and technical lock-in grew dramatically. By the end, if there was something we could build ourselves in Retool, we did.

In addition, building mostly in-house was the only way our unit economics worked. There’s a lot of great fintech software out there, but if that software eats your entire margin, you’ll end up dead regardless.

Once we decided it was over, I spent the morning sitting in my Herman Miller chair that would soon be sold, zooming from one end of the office to the other. Could I put it off, just one more hour? The dread and loneliness in that moment is hard to overstate – sending out a final email to customers, laying people off, selling everything, telling the investors.

I’ve been lucky to have started four software companies. Every time they end, whether it’s “a good outcome” or “a bad outcome”, it’s universally devastating.

Finally, we told everyone it was over, and cashed-out our customers for the second time.

Shutting Down, IP Sale
June-September 2023
Myth: Failure is a Learning Experience for Everyone

The team was gone by June, and I spent the summer winding everything down. The first note I wrote down after we shut down was: when you win, you win together, and when you fail you fail alone. Our failure felt like a lesson, a “case study”, for everyone but me. For me, it was a punch in the gut. In my experience, the best quote on failure is from Parker Conrad:

‘Failure is really, really, really awful,’ he told me. ‘People describe it as, ‘Oh, you learn so much from failure.’ I don’t think that’s true. I think the only thing I learned was how much failure sucks and how soul destroying it is.’

It was important to write up these lessons for everyone else. But for me, the biggest takeaway was that I never, ever wanted to fail again.

Braid shut down almost exactly three years after we wrote the Multiplayer Fintech essay. To this day I still believe everything written there – the soul of the product didn’t change much over all the years we worked on it. We swapped features, changed banks, processed thousands, then millions, then tens of millions of dollars.

We ran an auction for the IP, and in the end, there was only one bid: from me. This happens more often than people realize. Payments software has enormous overhead (compliance, fraud, regulatory, etc.) so the software on its own has little inherent value. All our major investors approved the sale, and I’m extremely thankful and grateful they did. Braid’s second act is currently a Substack email list (sign up!), a Github repo and a blinking cursor in a brand-new Google Doc.

Will it be different next time? Yes. Absolutely. So much has changed about the product, market conditions, and business model over the years. Every startup is an amalgamation of thousands of data points that are changing in real-time, and no two are the exact same. The through line is making something people want. This is the most sacred thing of all, and one thing that will never be a myth.

Braid’s second act will be just as tumultuous, I’m sure. Consumer financial needs change faster than our financial system can evolve to meet them. This is a fact. There’s an enormous opportunity here to build excellent software that solves a tangible problem, and that’s what makes it worth it to keep going.

And, I hate to lose.

Special Thanks
I want to thank all our customers for taking a chance on us, even the ones who churned, Braid team members past and present who worked hard and shipped, even when our numbers were flat, and every investor who wrote us a check of any amount, even when the market was ice cold.

Finally, thank you to Rajiv Ayyangar for your thoughtful essay about Tandem, which provided the inspiration for this post.

Solitude
By Ella Wheeler Wilcox

Laugh, and the world laughs with you;
Weep, and you weep alone;
For the sad old earth must borrow its mirth,
But has trouble enough of its own.
Sing, and the hills will answer;
Sigh, it is lost on the air;
The echoes bound to a joyful sound,
But shrink from voicing care.

Rejoice, and men will seek you;
Grieve, and they turn and go;
They want full measure of all your pleasure,
But they do not need your woe.
Be glad, and your friends are many;
Be sad, and you lose them all,—
There are none to decline your nectared wine,
But alone you must drink life’s gall.

Feast, and your halls are crowded;
Fast, and the world goes by.
Succeed and give, and it helps you live,
But no man can help you die.
There is room in the halls of pleasure
For a large and lordly train,
But one by one we must all file on
Through the narrow aisles of pain.

December 27th, 2015

Awaiting the Next Hottness in Consumer Technology

Sometimes tech turns a corner and it is so weirdly tangible.

Perhaps it’s the company I keep, but lately I’ve noticed a malaise that attaches itself to some conversations. There is visceral uncertainty about the next great wave in consumer tech and it is making us all rather uncomfortable. We all like to have Our Thing, the one that some people see but others don’t (Twitter 2008 or Pinterest 2010 for example), and I am struggling to find one right now.

Social has matured, though I am certain there are many many more great messaging companies and apps to be made. The Tier 2 On-Demand Economy is feeling the heat of actual operational overhead, and there is nothing more unsexy than a balance sheet full of red and negative unit economics (“we’ll make it up on volume”). The app gold rush has stalled, mostly. Social gaming and viral news came and went once facebook plugged up all their newsfeed and advertising holes. The Internet of Things is growing, but slower than anyone might like because hardware is hard and especially brutal for startups. Mary Meeker’s slides show massive numbers, but on all the metrics and scales we already know. There is thirst for a new metric.

All the up-and-up companies are now just plain large, or acquired, or hit their “now it’s time to make money” threshold and the faucets aren’t pouring out gold coins like everyone said they would. Or they are and it’s not yet public knowledge.

As someone who is often accused of Pollyanna-like opinions I am feeling lost. One super-interesting company right now is Slack, but it’s an enterprise software company in consumer clothing. I struggle to think of the Series A and B consumer companies that I know in my heart will go to the moon. The ones that show glimmers of real creative change, massive, sticky reach, and something that is genuinely new, or at least enough of a repackaging (there’s the “nothing is new” argument to be made) that it feels new-ish.

Perhaps it is these dull moments that are in fact the most relevant, as it’s time to pursue ideas that aren’t necessarily bankable or worthwhile or sure-things. The weird stuff. A Satoshi 2008 Moment.

I have been mourning the dormant state of this blog, but as I sit here waiting patiently for something new to be pumped about, I want to return to more writing in 2016. Looking back (as one does in December), it’s the best record I’ve got of those moments of excitement that now seem too fleeting.

January 18th, 2015

An Update on the Blog Archives

Thanks to some magic from an awesome friend, all of my old writing from “Save Me From B-School” is now here, available on this blog. The databases have been merged so the posts flow back seamlessly all the way to January 2009.

August 4th, 2014

Is “Yo” Stupid Brilliant or Stupid Stupid? Let’s explore, shall we.

My favorite app right now is Yo.

It is deliciously controversial, and watching the evolving dialog about whether it is “stupid brilliant” or “stupid stupid” is endlessly entertaining.

For the uninitiated, Yo is an app for iOS/Android where you can send people a “Yo” via push notification. There’s hardly an interface or even an in-app experience. It’s all about the push, quite literally. Do yourself a favor and download it, and you too can be part of a tiny moment in tech history.

Let me be clear: I am not a Yo power-user. I love the app, but in that way where you love something because of what it stands for, not because you actually love it. Like Starbucks, for example. I can take or leave the drinks, but oh wow that Howard Schultz “third place” philosophy still to this day gives me chills. Point is, if you send me a Yo I may or may not return the courtesy.

But that isn’t what’s important.

I would like to thank Yo for getting everyone excited about notifications again.

You see, the historical attitude toward push notifications has been an interesting one. They are often seen as an afterthought, rather than a core part of the in-app experience (gaming is an exception) and are treated as such. They have been derided as too invasive to be useful, or simply a tool to drive DAUs. Their implementation is technically non-trivial. And on and on.

There are very VERY few apps that have centered their entire existence, and core interactions, around notifications. Similar to Yo, I too am a believer that notifications are their own kind of canvas. See Wut for another example. This is the #1 reason why I think Yo is exciting.

Think about it this way: most messaging is very invasive. It’s active and distracting. There is an implied counter-action. You text me, I text you back. You email me, I email you back. I post a photo/status/tweet/snap and sometimes you comment, like, heart, reply, favorite, etc. Even though you don’t react every single time, every system relies on your participation. You get the idea.

Can there be a platform where counter-action is not only discouraged but impossible? Where consumption is truly meant to be passive? It’s very hard, if not downright impossible, to create network effects when there is no implied counter-action. I’m open to ideas here, and in fact would love to hear some.

Let’s take a look at an effective use of Yo.

Through the magic of the internet, I stumbled on “Product Hunt, Yo!” which is an app that uses the Yo API to alert the user when a product reaches over 100 upvotes on Product Hunt, an amazing new community for product discovery. Simply add “PRODUCTHUNTED” to your friends list and that’s it. The alert is simple and light. Here’s what it looks like:

There isn’t any social contract to reply, or even any way to jump to the site.

It simply is.

Although this interaction is delightful and elegant, I struggle to figure out how this translates for humans. I think the potential is more something like IFTTT but about 100x more simple and consumer-friendly. I’m not sure how sending someone a “Yo” really has any utility at all (sorry), because my hope for digital communications among people is that they evolve to become MORE nuanced, not less. This does not contradict the need for a product centered around extremely simple notifications, however. I’m just not sure they are meant to be among people. And that, I think, is the main challenge for Yo. They haven’t yet solved this issue.

If I were to pick a side, though, I would still say that Yo is stupid brilliant. To expose the potential of notifications in a novel way is admirable, though IMO they are at the point where they have figured out that selfies are a thing, but haven’t yet created Snapchat.

Though someone will, no doubt.

July 15th, 2014

Our Government is Failing Us – Thank You to Comcast Man for Pointing That Out

Sometimes the world/internet serves up an undeniably amazing set of events that one can’t help but stand in awe.

The Net Neutrality debate has been a topic of much discussion amongst the tech cognoscenti lately, but it has been difficult to find a real-world example that illustrates why it’s so important. That is, until last night. I sat, biting my lip, and listened *twice* to this very painful customer service call between a Comcast rep and a customer who just wanted to cancel his service (but as a former journalist was smart enough to record the call).

I’m not sure if you sat and listened to the entire 8 minutes, but it is worth it.

As Americans we should be allergic to monopolistic bullshit like this. Our high school history teachers, at least mine anyway, promised us that Standard Oil would not happen again. That we had learned. And yet here we are, a few generations later, and our government is so paralyzed by dysfunction and lobbying dollars and a categorical and fundamental misunderstanding of technology (healthcare.gov, etc.) that promises like these linger and get lost.

Even in the age of 24/7, push-button documentation, this company is allowed to be essentially a monopoly and brazenly act as one.

Think about that for a second.

Painfully disappointing acts and proposed acts of governance with regard to technology continue to be served up on the regular. They are failing us, and we are innovating around them. Make no mistake: there is currently no one more hungry and more willing to work endlessly than a newly-minted tech entrepreneur with a dream. New York Magazine’s Wash-and-Fold fairy tale should make this painfully obvious to any dissenters. Pair this with the fact that government-regulated industries are often so technologically backward that, when looking with opportunistic eyes, you cannot help but see a vast, lush meadow of open space.

In what has proven to be an extremely prescient (if rather long) set of essays from 2012, Venkatesh Rao, points out the following:

The key is to ask: where are there still significant unfair advantages to be found, for entrepreneurs, that investors cannot easily neutralize? The answer should not be surprising to those who know their history: politics.

It seems to me that as we continue to create technology innovations that chip away at expansive government inefficiencies, which btw is working out kind of splendidly so far, we now also must fight on a much broader level for our own right to create such things. I know that it’s much harder to understand the “why” behind taking action on a more generalized issue like Net Neutrality (esp. with the lame-ass branding) because it’s certainly not as visceral as something you can relate to on an everyday-experience level.

This is where Comcast Man comes in.

Thank you to Comcast Man for giving me a reason to take action. For reminding me of my nearly 18-month effort to get internet service at my house from your BFFs over at Time Warner (long story for another time). For giving me the inspiration and courage to once again pick up the phone and call all the people I support with my tax dollars.

Maybe you should too.

–
You have until midnight tonight to file a public comment with the FCC about Net Neutrality.

October 6th, 2013

The Long Tail of Hardware

I often think about that Forbes piece “Why Best Buy is Going out of Business…Gradually” that was published nearly two years ago. You probably read it too; as of today it has around 3 million views. The emotion that author Larry Downes generated with that prescient article was overwhelming — like a collective “we can do better” echoing through the internet.

Two years later, and Downes is more right than ever. Through Grand St. I’ve had a front-row seat to the emerging hardware movement, and the big realization I’ve come to is that it’s not just Best Buy that’s going to fade away, it’s our entire notion of “Consumer Electronics”. It will be gradual, but there are already signals that indicate a shift is happening.

It’s a tailwind that’s supporting a growing long-tail of hardware and a new kind of creator.

As to what’s causing it, here are a few thoughts:

1. Hardware as an outlet for creativity
There have always been people that have used electronics as out outlet for creativity — people who made custom modifications and took devices apart just for fun. With the rise of open-source hardware, channeling that creativity has become easier and much more structured. Not limited to the devices already available, now you can invent new devices from scratch depending on your whims. It’s also significantly cheaper as well.

2. The notion of “core devices” is disappearing
For the foreseeable future everyone will likely have a smartphone and a laptop, but the number of miscellaneous ancillary products that people are buying is growing like crazy. There’s a flood of these creative devices that are invading our lives and our homes and even the most traditional products are becoming pieces of technology.

3. People starting hardware companies
My friend Adam is making an awesome new bluetooth speaker called the “Bongo”. It looks amazing and I can’t wait to get mine. He is an example of the new kind of hardware creator – someone with a great idea but not necessarily decades of experience.

4. Rush of money
In the past two years, money going to crowdfunded hardware projects has spiked 10x **per year**. Investors are starting to get in the game in a very real way, but the real money is coming from consumers hungry to buy.

5. The role of the smartphone
The ubiquity of smartphones is contributing in a big way to long-tail hardware. By leveraging thriving platforms (Android, iOS), hardware producers don’t have to start from scratch when building software for their devices.

What this means for the future of CE as we know it now is pretty interesting…it’s simply no longer a commodity game that revolves around price, further complicating Best Buy’s future. As costs come down further, and more creators enter the market, we should see a whole range of hyper-customized devices that address all kinds of niche and mainstream markets.

At Grand St. we see awesome new devices every single day, and they are only getting better.

April 2nd, 2013

Hardware is Real: Living it at Grand St. and Growing Up (Just a Little)

Today we announced the Grand St. seed round. We are incredibly excited to be working with some of the smartest investors in hardware, commerce and digital communities around and are delighted to have the opportunity to grow the company and build more dope internets for our community. Much love to our earliest users, customers (!!) and friends for all the support so far.

In a way this moment in our (admittedly short) history has made all of us painfully aware of how much we want to accomplish. The hardware revolution is truly just beginning, and there is much to be done. This financing will help us grow our team (now at 7!) and continue to make the experience better. 

Since December

There’s so much amazing innovation happening around new hardware, and our sole goal at Grand St. is to build a store that is just as innovative and delightful as the products we sell. 

We launched Grand St. v0.1 on December 14 to the few thousand people who were on our email list. One of the best moments in the life of any small company is the moment when someone who is not your mom or your friend or your cousin buys something. Here is a random stranger who decided that you built something legit enough to hand over their credit card information (which btw is VERY SAFE TO DO thx stripe) … little do they know that four people are crouched around a computer screen cheering and mostly doing this. That day, we sold many thousands of dollars of creative technology to people across the U.S. and realized that maybe we weren’t the only ones who wanted a site like Grand St. to exist.

Creative Technology is Real

The democratization of hardware/consumer electronics is very real and should not be underestimated. Think about the number of really fantastic products that have launched in the last 12 months. Over time, that number will grow aggressively and the number of new products available not the market will become more and more impressive. 

We feel privileged to work with so many independent (and even a couple of established) inventors. Putting together our April Fools roundup, I realized that 10 years ago it was an unthinkable fever-dream to try and launch a new electronics product. In the same way that the music industry has transitioned from top-down to bottom-up, the same thing is happening with consumer electronics. 

The Future

Though by now we have had many customers who aren’t our friends or family, each and every new product sold is still exciting for us.

The future of Grand St., though, and the most profound thing for me (and Joe and Aaron too) is our fast-growing team. We are excited to show up every day mostly because everyone is effing genius-level talented and inspires all of us to work harder and better.

Like Phin said, we hope “…technology makers can focus on crafting experiences and utilize platforms to dramatically reduce the friction in their businesses. This means more craft and less commodity activity for the maker and it means more choice and creativity reaches the consumer.”

In some ways, we all know we have always been living in the future, and now we can get paid to do just that.

October 24th, 2012

The Electronics Store of the Future and Grand St.

photo credit: Dustin Kerstein

I spent about a month last spring working on a hardware concept with a few friends. There was this energy around hardware that was becoming so palpable – pg called it “The Hardware Renaissance” in a recent essay.

After talking to many friends going through the same process we realized that for all the opportunity and excitement around hardware, there’s a lot of pain too. But when you work in startups, you begin to see pain as real opportunity.

For all the excitement around new connected devices that remind us all that we live in the future, why are we still buying this stuff at Best Buy (slowly imploding), and Amazon (the best, but too much of a general store)?

Surely our generation, filled with tinkerers and device-makers and digital natives, could do better.

And so we changed things up. Got back to work. This time on a store, built from scratch, that would sell these devices in a way that was just as awesome as the devices themselves. Something that was constructed to be digital first, screen-agnostic, and mobile, that would tell the stories of these devices in a way that the existing retailers aren’t doing.

What we realized as we started talking to hardware producers is that the incentive structure around retail agreements isn’t great — it’s a brick wall on both sides. Customers get almost no information about how, where and who made this product they are buying and why it’s great. And producers get hardly any data on who is buying their products, where they live, who they are, etc. Coming from the data-obsessed world of software, this made very little sense.

In an attempt to crowdsource some feedback: I’d like to know, internet peeps, what you would like to see in a new kind of electronics store? Is it really still about price and specs? I feel like we’ve moved on from that.

We are doing a pretty small closed beta and we’d love some rando testers who aren’t our moms (who we <3) to tell us what they love and hate. Be way harsh, we can handle it. Sign up at GrandSt Dot Com, please enjoy our snake game, and we’ll email you.

If there really is a hardware/connected devices/electronics renaissance that’s coming, there has to be a place to tell its story and, you know, sell THE THINGS. Excited.

October 14th, 2012

Why DVF Putting Google Glass on Runway Models is Significant

Last month Diane von Furstenberg included Google Glass in her New York Fashion Week showcase. The photos showed supermodels in fancy and fashionable clothing catwalking around in Glass, the now not-secret but not yet publicly available Google product.

And although there was a lot of commentary around the event itself, I kept waiting for a discussion to pick up around what the union symbolizes for the future of gadgetry in general. It’s certainly not the first time that the fashion and tech paths have intersected, but the significance here, regardless of your feelings on Glass, is potentially larger than simply an entertaining pairing. Instead, I see it as the beginning of a merging of paths – gadgets are becoming stronger identity markers like clothing, and as such the two industries will begin to overlap in new and interesting ways.

It reminded me of that part in “The Devil Wears Prada” (2006) where Meryl Streep chronicles in ice-cold terms the path that Anne Hathaway’s bargin-basement marm sweater took from runway to mass market. For someone who knows next to nothing about fashion, this point actually made sense. It was the technology adoption curve, just for clothing. And it’s also the best scene in the movie:

Actual lifecycle of fashion trends and cerulean history aside (another topic for probably a different blog than this one), the point of the rant is clear: “you think this has nothing to do with you”. Many of us who stand firmly on the technology side of this worlds-colliding trend believe a pairing like this is perhaps comical but otherwise insignificant to us. That this move from DVF doesn’t imply more fashion/tech pairings in the future or a general uptick in technology as differentiating accessory.

And after giving it some real consideration I think that’s wrong.

There has been some overlap in the past but the lines were always clear – fashion on one side, technology on the other. Get together when it’s lucrative to do so, otherwise keep to yourself.

Never before though, has there been as strong an impulse around gadget as identity piece — from your headphones to your smartphone case to your laptop stickers, electronics personalization is becoming more and more mainstream. Look at the indicators in the market. Personal electronics are cheaper and easier to make, and cheaper and easier to personalize. Urban Outfitters has transitioned most of their front section away from random liquor-related knick knacks to electronics. Beats by Dre is a $500m business and they are *everywhere*. Case and accessories companies are growing like weeds. The Internet of Things meme means we’ll have more connected devices than people as soon as 2020 (7.6 billion vs. 50 billion), and that study didn’t come from crazies but from Cisco and Ericsson. And on and on.

The proliferation of devices means more opportunity to differentiate and be creative in all sorts of ways that don’t involve specs and pricing — things like customization, storytelling, software, etc. Couple that with the fact that barriers to entry in consumer electronics are coming way down as the market becomes more democratized. This is going to create an explosion of new creativity in consumer electronics.

So the lines will continue to blur. There will be more collabs and more overlaps in either direction, and either personal technology will become more fashionable or fashion will become a little geekier, though I wonder if we look back at this particular collaboration in a few years and look at it as an indicator of change to come. Regardless of your feelings on whether that’s a good thing for either industry, change like this always has interesting and unpredictable results.

And the video that they made with Glass was undeniably pretty awesome:

September 23rd, 2012

Like the Supercomputer It Is

In a fit of early-morning delirium I approached the head of the line at the Soho Apple Store just before 8am on Friday. They gave me a card and asked if I had any questions. So I asked about cases, because no one drops phones like this girl.

The guy in the blue shirt said no cases. I replied that I guess I would have to be extra careful.

And then, in a moment of unscripted wonderful, the Apple employee stared back at me and said:

“…you should treat it like the supercomputer it is.”

Although my first reaction was to roll my eyes and dismiss his comment as fanboyishness at its best, it got to me.

Two days go by and people ask what I like about the new phone, wondering if they should upgrade. And I can’t quite come up with an answer. Sure, I am happy to pass on kind words about the speed and cameras and features and LTE and weight and what-have-you, but that’s just not really it.

The public reaction has been overwhelmingly positive (except for the maps mini-fiasco). Even @dhh was impressed. His normally snark-tastic Twitter stream featured a rather genuine and eloquent reaction to the device:

Fast forward to Saturday, when I am at the Bruckner Blvd Home Depot in the Bronx (the largest HD in the five boroughs, nbd). I am sitting at the picnic tables outside, drinking cherry coke and trying to not blatantly eavsdrop on the people next to me. It was a 15 year-old explaining to his older uncle/brother/dad/cousin about a new app for odd jobs. The younger one pulls up the website on his brand new iPhone and walks through the app – explaning that you can segment jobs by type and location and walking through how you can place bids on the jobs you want. They found one that looked good, and placed a bid right then. It was really great to see TaskRabbit in the wild, but even more awesome to see this entire series of events happen at a picnic table outside Home Depot in about 3 minutes.

Mostly when people have their phones out in public they are looking at photos or playing games or listening to music or reading. There’s just not a lot of transactional behavior happening, so it was really neat to see.

While all of us tech-lovers have been celebrating smartphones for years and years, I think it’s worth the reminder that the mobile economy is so incredibly nascent and only going to become more interesting. After a brief brainstorm the other day, the only mobile-only billion dollar companies I could name were Instagram, Square and Rovio (add more in the comments if you have any). Surely there will be more epicness to follow.

Perhaps it’s that most futurist types live so far in the future that they miss out on the moment when the *real* shift happens for the rest of the world.

And so I keep thinking about the supercomputer comment. The idea of a powerful machine in my pocket sounds trite at this point, but still really isn’t. Smartphone penetration passed 50% just this year (2012). What will the world look like when it’s at 70%? 90%? Perhaps that’s what I like best about the iPhone 5 – that it, even more than any other iPhone launch IMO, sits so perfectly at the intersection of the future and the present.

#ButUGotThatiPhone5Tho…right?!