E351: Kristoph Matthews CEO & Founder of Boxbee-TWiST #E351

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Filmed at WeWork in San Francisco @jason talks with the winner of the #LAUNCH2013 Festival @kristophm of @boxbee.

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Show our guests some love!

Kristoph Matthews
http://twitter.com/kristophm
http;//twitter.com/boxbee

Boxbee pitching on stage at Launch 2013!
http://www.youtube.com/watch?v=cs1B2sJJWVg
http://boxbee.com

2:25 Hey everybody!

3:15 Summary of the show & how to approach him in public

5:30 Thank you to our partners at ShareFile by Citrix, request, send and receive secure files!

8:45 Background on Boxbee and Founder Kristoph Matthews meeting Jason during launch

9:35 How did you end up applying for LAUNCH?

9:56 Did you meet Angel List founder? Did he feature you?

10:12 What happened after you put up Boxbee on Angel List?

10:55 What is the idea for Boxbee?

11:05 What does the mean? How does it work?

12:11 Who are you competing against?

13:07 What would it cost me to fill a 18’’x18’’ inch box normally?

13:41 How much for Boxbee?

14:05 How do you make money? Minimum store time?

14:30 How did you decide to do this?

15:58 Tell us about your experience at LAUNCH Festival

16:36 What was the process like?

18:00 Take us through the rehearsals

18:40 What did you learn at the rehearsals?

20:05 What’s it like looking out from stage with thousands of people in the crowd waiting to hear what you have to say?

21:10 Do you think the practice and group practice helped?

21:45 What was the feeling like when you got such a tremendous response from the judges?

22:30 Did you know at that point that you had a good chance of winning?

23:08 You had investors come and say what?

23:40 What day did you present?

24:00 Thank you to our partners at Turnstone! Beautiful office furniture!

28:45 How do you leverage the next day and a half until the awards ceremony?

29:45 Talk about the dinners, what were they like?

30:55 How confident were you of winning? Team?

33:45 What was it like the day after the event?

34:50 Is this going to be a massive amount of infrastructure?

35:36 What’s the advantage of being lean and agile?

36:25 What were the key learnings?

37:25 How do you put trust into the fabric of the company?

38:15 You joined Angel Pad, how’s that been?

39:15 How does the process work day to day with them?

39:40 When are you doing the demo with them?

40:30 How do you maintain composure?

42:15 Why do you think more entrepreneurs don’t seek mentorship?

43:22 It has to feel good to actually be doing the initial work?

44:25 What do you think a year from now you’re going to be able to say is true if you execute?

45:44 Is there a classic rollout plan in the startup community?

48:25 Any messages for those out there sitting on the bench wondering if they can do it?

54:05 Thank you to our partners!

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Full Transcript

NARRATOR: Distribution provided by CloudSigma. The cloud that adapts to you. Visit CloudSigma.com/ThisWeekIn for a free $200 credit. Today’s episode of “This Week in Startups” is brought to you by Turnstone. More than furniture, we are an experience. Go to MyTurnstone.com/TWIST to learn more and receive 10% off your first order. And by ShareFile from Citrix. Secure file transfer built for business. Visit ShareFile.com, click on the microphone, and enter TWIST for a free thirty-day trial.JASON: Hey, everybody. Today, on “This Week in Startups,” the winner of the LAUNCH Festival in 2013 is here. Kristoph Matthews, the founder of Boxbee. We are going to find out how he came up with the idea, how he won the Festival, and what life has been like in the 60 days after winning LAUNCH Festival 2013. Stick with us. It is going to be an amazing episode. You are going to learn a lot about launching and winning the LAUNCH Festival. It is going to be a great episode.JASON: Hey, everybody. It is Jason Calacanis. This is “This Week in Startups.” You know the program. And you know what we do here. We talk to entrepreneurs. We talk to investors, angel investors, venture capitalists. We talk to founders, people who make products that change the world, people who create companies, people who try to put a dent in the universe, not the rice pickers in the field, just filling bellies with rice. No, the samurai who go out, and who take the city, and swords, and fighting, and just scratching, and toothing, and nailing for every inch, to make something new in the world. If you are passive, and you want to sit on the bench, if you do not want to be in the game, now is a great time to tune out, click over here on YouTube, and look at the most popular cat videos. However, if you would like to make a dent in the universe, if you would like to build that product that you have always wished existed in the world, then you need to listen to this show “This Week in Startups” every week, twice a week. This is your medicine. This is your training. This is like going to a personal trainer, because I have done it a couple of times, I am angel-invested in a bunch of companies, I know what I am doing, but more importantly I have access to the smartest people in the industry. And they come on the program. And they tell you exactly how they became successful. They tell you exactly how to do it today, and how was it done yesterday. I can tell you over 350 episodes of doing this program I have learned so much myself. I have had so many great entrepreneurs on here, who spill the beans and tell their secrets of how they do it. I realize that without this program, I would be a half of the entrepreneur I am today. And so many people come up to me in airports, at conferences, on the street, here in San Francisco, and Los Angeles, and New York, and say, “Hey. I listen to the program. I saw the interview with Naval. I saw the interview with Chris Sacca. I saw the interview with David Heinemeier Hansson. I saw the interview with Brian Alvey. I saw the interview with George Zachary.” Right down on the line. And they say, “I was inspired to start a company.” And to me, that is a greatest thing ever. So if you see me in an airport, if you see me, just if you think like, “Hey! Is that Jason?” Like, somebody saw me last night, and thought, “That was Jason,” and just yelled, “Jason!” And then, I turned around, we made eye contact, and you come over and say, “Hey! I am a huge fan of the program and here is my favorite guest.” That is the icebreaker. Do not be like that weird guy, who like just looking at me at the corner of the eye for the whole time, we are like at the urinals or in a bar. Just come over and say, “Hi.” Let us talk about entrepreneurship. Let us talk about building these companies. You are part of a select group of people that you have even made it to this moment, that you are listening to the program. Today is going to be a great episode. As you guys know, in the case, it is your first time here, I have been doing the LAUNCH Festival for six years now. We have had amazing companies’ launch. Companies like Yammer, companies like Dropbox, companies like Mint, companies like Fitbit, just the best companies in the world, Redbeaken, Room 77, Space Monkey, Brilliant.org. This year at a LAUNCH Festival, we had 5800 people come, thousands people were in the audience, and 50 great companies on stage. One of those companies was Boxbee. We are going to hear today from the founder how they apply to the event, the drama, the pageantry, and how they actually won. All of that is coming right now, right after these important messages from our partners.

JASON’S AD: Hey, everybody. What a great episode of “This Week in Startups” we are having. And we are having this great episode with the support of ShareFile by Citrix. This is a great program. It is sharing files, designed for business. You can send files of almost any size securely. Access them from your computer, your mobile device. We use it here, at ThisWeekIn, at LAUNCH, and all my companies. The reason I love it because you can request files. So, if you need a file from somebody, you can request it. They send it to you; they drop it into your ShareFile account. And here you can see the audit trail, all the different logs, and who used it. And did they create URLs? Did they edit the files? Or did they move the files? All those kind of great things. It is really detailed, granular ability to control who edits, and who uploads, who downloads, and see this… And that is really important, especially, when you are doing things like, “Hey! You are raising money.” And you have your pitch deck in there. You want to see, if people downloaded it or not. You have confidential financials, mock-ups, and all this kind of confidential stuff. You want to make sure it is secure. You want to make sure you know who is opening it and who is changing it, et cetera. And we do that here. Get email alerts, when somebody uploads or downloads a file. That is great because you are sitting there, waiting, “I wonder if the VC downloaded my business plan or not? I wonder if my sponsor, or my advertiser, or my partner uploaded that file.” You instantly know, and then you look responsive, like you are on top of it. Which is one of the great things about ShareFile. It is a super professional, made industrial strength service for file sharing. Secure file transfer, any size. And so, go ahead and visit ShareFile.com. And click on the radio microphone button. Visit ShareFile.com. Do it right now and click the radio microphone button. Use the promo code TWIST. That stands for “This Week in Startups.” There is no credit card required. And you get a thirty-day free trial. That is great. So go ahead and go to ShareFile.com. Click the radio microphone button and use a promo code TWIST. Thirty-day free trial. And hey! Here is a great thing we did. We took out of 350 episodes, we had to date, we found the ten best questions and answers on the program in those 350 episodes, we made a top ten, we made a video. You can get this video exclusively on ShareFile. All you have to do: you sign up at ShareFile.com by clicking the radio microphone button and using the promo code TWIST, then you just sign up for ShareFile, and then you just send us “a request the file link,” so you request a file link to ShareFile@LAUNCH.co. That is super easy to do in the interface. And you will get this dropped into your ShareFile account. Then you can look at it from your phone or from your desktop anywhere. You have that file. You have those great top ten questions. Thank you so much to ShareFile for supporting independent media like “This Week in Startups.” We could not do without you. And what a great product. We use it here. Everybody loves it. Thank so much @ShareFile by @Citrix. Go ahead and tweet that. They would love to hear from you. Let us get back to the program.

JASON: OK, everybody. Thanks for tuning in and thanks to our partner there for supporting independent media like “This Week in Startups.” It is not easy to do the show. We are up here at WeWork in San Francisco. Brandice Payne is here with me on the one and two cameras there, and the microphones, making sure we have perfect fidelity, and sound, and video for you, guys, out there on YouTube, or TuneIn, or Stitcher, how you listened to the show, probably, even iTunes. They are terrible podcasting at. They have to fix that. So, listen. When I met Kristoph Matthews during the process of rehearsals for the LAUNCH Festival and during the application process. We had over five hundred people applied. I do not remember exactly how I met him, but I do know immediately, when I met the founder, and I saw the product, and the concept, I thought, “Eh! He might win.” I told them that and he wound up winning the LAUNCH Festival, which had a pretty competitive class of companies this year. AdStage, as well, was in there. And the bunch of other great companies. Welcome to the program, Kristoph Matthews.

KRISTOPH: Thank you for the nice introduction, Jason.

JASON: Yeah. So you applied to the LAUNCH Festival or somebody told me about what you are doing. How did you wind up applying or just getting accepted to the LAUNCH Festival? I cannot remember.

KRISTOPH: I just remember getting a message from AngelList from you, in fact. I was not so familiar with you at the time. I am not sure if you just found Boxbee through AngelList, or Naval Ravikant had a conversation with you.

JASON: Naval, the founder of AngelList.

KRISTOPH: Yes.

JASON: Yeah. You met him at some point. And he featured you, didn’t he?

KRISTOPH: No, we just had a short conversation through AngelList. It was pretty brief.

JASON: You put your startup on AngelList and what happened next? You started getting followers. Are people interested?

KRISTOPH: It was just a few followers at first. I had been pretty new to AngelList and just got like a trickling of followers, and then started adding people to list, and just got more and more followers, and then AngelList soon found out about Boxbee, and they were really intrigued by the idea, they wanted to know about our traction. They realize we had a lot actually going in. And they decided to feature us pretty soon, if we could get that traction numbers off. Well. That was going on. I think I got the message from you.

JASON: Right.

KRISTOPH: LAUNCH just really accelerated things.

JASON: Yeah. Tell us what is the idea for Boxbee.

KRISTOPH: Boxbee really is cloud storage, but for your physical things.

JASON: So it is Dropbox for the real world.

KRISTOPH: I guess you can put it that way.

JASON: So you are leveraging the cloud storage meme. So what does that mean? How does it work?

KRISTOPH: It is funny you mentioned that because I think when I was on stage, one of the judges was actually confused. He took a little bit too literally and said, “So you like vaporizing the boxes and like 3D scanning them, and then printing them on the other end, or something.”

JASON: Yeah. Who was that guy? Was that Greg Tseng from Tagged or something?

KRISTOPH: He could have been. I do not want to name names. I do not remember who that was.

JASON: Yeah. We pull the video.

KRISTOPH: But it was funny. No. Actually, what it means is that we provide pickup, storage, and delivery, all from an easy website mobile interface. Like, you have too much clutter in your home. Like, you have some winter coats and boots, which you do not need in the spring. You just press a few buttons, and then we are there within a few hours to pick up your things. And everything can be categorized and inventoried, so that if you want those winter coats and your boots come November or July, if you are in San Francisco, just click on those things, and they come right back to your home, or wherever you are in the world.

JASON: How did people do this before? You could just click on your phone and have a box brought to your house, put your garbage and junk in it, or your very important stuff, and have it stored somewhere. How did people do it previously? Who were you competing against?

KRISTOPH: Well. It is typically with self-storage. There is self-storage, and then there is what is called mobile storage like PODS, and these types of companies, where they bring a storage unit on a semi, and put it in front of your door.

JASON: Oh! God. I hate those things. We get those in LA once in a while, and they just…

KRISTOPH: Really?

JASON: Yeah. And they stay for a week or two, that disgusting… What do people do? They just piled their stuff into those, and then they can take it in… Where?

KRISTOPH: Well. Who knows where. They do not tell you. They have places all over the place, but it is really time consuming. You have to get a permit from the city government. It is expensive. Like, what if you just want to store a few things, but they bring this giant keeping unit to your door.

JASON: Right. So if I had, let’s say, a backup hard drive and printouts of all my photos, and some old T-shirts that I had from when I was a kid, and I just said, “I do not want to keep them in the house, but I just want to have them off site, so in the case the house burns down.” What would it cost me to have you pick that box up, which is called a standard size box, like…?

KRISTOPH: It is like 18x18x18.

JASON: So foot and a half all around cube. I will fill it with the couple of hard drives, and couple things, and it weighs whatever, ten pounds, or twenty pounds. How much that cost to get it out of my house, and then to store.

KRISTOPH: With one of those, it is in the high two hundreds, if not like $300, not including a fuel surcharge.

JASON: Oh! You are talking about the POD.

KRISTOPH: Yeah. The POD per month. And the deliveries are like a hundred dollars each way.

JASON: Ah! You can fill one of those.

KRISTOPH: You could go to a storage unit and pay less, but it is still a lot.

JASON: Yeah. So what is Boxbee cost, if I want to just have that eighteen inch all around cube?

KRISTOPH: Well, pick up is free, and it is three dollars a month for smallest box size.

JASON: Wow! So that means you make $36 a year from me to store a box or something, to that effect, but you pick it up and drop it off. And that is going to cost you $10 each way or something. How do you make money then? Or is it like I have to keep it in storage over a certain number of months for to make sense for you, guys?

KRISTOPH: It is just like one month. I would say is our minimum. And we make money because people store things for a very long time. Some elect to have their things retrieved once a month, maybe three times a month, and they pay for the subsequent deliveries and pickups. Right? But the real money is made in the storage.

JASON: Got it. So you came up with this idea how? I mean, what was the inspiration for the idea? You have an Uber car one day and say, “God! This would be better if I Uber-fied my storage unit.” Why is storage worth paying for?

KRISTOPH: Uber is really nice. And at the time when I started, it was before they have the cabs, so I only use the town car, and that was really luxurious experience. I do not think that would inspire me to do something like storage, which is like the exact opposite end of the spectrum. What happened really was I stole the idea from my parents. My mom is from Thailand, and she decided to move back to Thailand, and my whole family moved there along with her. I go there every year to visit them during Thanksgiving, and all the family stuff comes out, and they had their rants and their complaints, and one of the complaints was, “God! I have to buy two or three flight tickets every year to go to California, where storage units are, just to retrieve a few items, and then fly back.” So this is why it gets really expensive. I was working on my laptop at the time, and I was using Dropbox as moving files back and forth. And then, the idea just hit me like, “Wow! In Silicon Valley, there is just this rave, this hubbub about cloud storage, but why has anyone extended that to the physical world? Why cannot your items just follow you wherever you go? And why should not you be able to manipulate and organize your items however you want to, virtually?”

JASON: Yeah. So tell us about the LAUNCH Festival and that experience. You got accepted obviously. I have thought the idea was great. I accepted it on the spot. Sometimes I find folks on AngelList or somebody whispers in my ear to check this out. So that was the case here, I found out about it on AngelList. I remember now. A lot of times I go on AngelList and I just look at the newest things. When I see a logo I like or a name I like because I am some kind of branding guy. I saw the name, I remember Boxbee. And it was a bee, and yellow, and it stood out. I thought it was a pretty good design, so I checked it out. But after you get accepted, take people through what the process is. And how it works? What was it like just getting on that stage finally?

KRISTOPH: Great. Yeah. Well, I met your associate, your editor-in-chief, Kirin. Here, in San Francisco, and went through the initial interview in person, and she really liked the idea, but then she told me as I was walking out like, “So you do not have any press, right?” I said, “Well, not yet.” And she says, “Well, make sure you are not talking to any press, and take your website down, and do all that stuff.” I was really excited, but then I was really reluctant to continue with the LAUNCH thing to be honest with you. For some reason, I just trusted my gut and decided to go with it. Like, fine, I will take my website down and put a splash page on there. This might pay off. Over the course of about two months or so, we had a series of rehearsals. I think you and I met maybe three, four times during that period. It was nice to work with your partner Tyler, the speaking coach, and producer. He was amazing in really dissecting the core of Boxbee, and turning that into some “wow” moments for the audience, really coached me on speaking, and delivering the idea, and the message. Then, we went under Sequoia Capital a few times to rehearse it, and you slash-and-burn few things in the presentation a couple of times, but it really came together quite nicely. I really think it delivered well on stage.

JASON: So take me through the rehearsals. First, you had to make that leap of faith that I am going to launch at the event on stage, and so I am going to give up the press for whatever six-eight weeks, that you would have gotten. And just for people know for background, the reason we do that is we want it to be new on stage, so that the press and everybody show up in the sense of excitement. So you take that leap of faith, you put everything behind a LAUNCH wall, you start collecting emails, so keep it stealth, but let’s talk about those rehearsals. What did you learn from the rehearsals? What was the key thing that Tyler, who is our coach and our pitch doctor who comes in, and myself, and Kirin, and watching the others, because you have to watch some other people, right? It was group rehearsals, so you do four rehearsals. What were takeaways for you? What did you learn from that process, from other people, from Tyler?

KRISTOPH: Yeah. Great questions. I learn something that I try to tell every other entrepreneur that I come across who is like trying to get the product out there, off the ground, and that is, like, know how to talk about your product. Learn how to say it in a few words as possible, so people just get it. And a lot of times, that means showing the product, rather than talking about it. I think that is something that you harped on a lot and Tyler did as well. It is not enough to have mock ups. It is not enough to have a bullet point list of what your product does and all the features. You need to craft the story, which represents your use case, and then show them how that works whether it is like bring up your iPhone, or like going through a web screen cast, whatever it is, they need to see it.

JASON: Yeah. And you told a really great story if I remember correctly. It was a couple that was going on vacation, and they want to put some things in storage, and they were dealing with all the problems of the POD, or having to drive there, and it got so much simpler, and they save so much time, and then the dinner party. You really showed a couple of use cases and exactly how easy it was to use the product. Showing, not telling, obviously, picture worth a thousand words. So you get on stage, and you walk up those steps, you get the bright lights on you. What it is like when you look out and you see thousands of people there ready to hear the next five minutes what you have worked on for six months?

KRISTOPH: I think it is different for someone like me, who is an introvert, and someone like you, perhaps, who is an extravert. Right?

JASON: Yeah.

KRISTOPH: For me, those people all become a blur, instead my focus being on them, it is just myself and what I am trying to say. It just feels a lot more comfortable that way.

JASON: And you deliberately do that, don’t you? You deliberately become introspective because of your introverted nature, you feel more comfortable with that.

KRISTOPH: I do not think it is deliberate. I think it is just an auto response really. I was surprised at that, actually. I took notice of that, because the couple of weeks leading up to the event, I was pretty nervous about going out there to be honest. I think I voiced some of the opinions to you, but about from an hour before I went on stage until I walked to those steps, it was just like Zen.

JASON: Yeah. You were very Zen. Do you think the practice and being in the group practice was a big part of getting you through that? I think that sort of Zen-ness.

KRISTOPH: Yeah. I think that it was three things. The group practice was one thing. Like, preparedness definitely helps. The second one was tired of being tired, or tired of being nervous rather. The third thing is like knowing there are people out there in the audience that are totally rooting for you, knowing that you and your team are really excited about you going on stage. That is really great.

JASON: And so, you give the presentation. And you get a tremendous response from the judges. What was that feeling like, when you get to the end of the presentation and you are starting to get really unanimous support? I think I ask the audience, “Who would use this?” And everybody raised your hand at some point.

KRISTOPH: Yeah. That was a pretty risky move. I was worried that you did that, but then the response actually turned out really good.

JASON: I would not have done it unless I knew. I was keeping statistics on it because I would ask everybody in the rehearsals, if they would use it. When everybody raised your hand in rehearsal, I knew there was no chance in the audience like that, that would not be a similar one. So I did not think there was any risk. It could have been, I guess. How many people would be using the product? Three people raised their hands. He-he. So did you know at that point that you had a really good shot of winning it? Was that like ultimate validation for you and your idea, do you think?

KRISTOPH: I suppose the emotion that I felt right after going upstage was more like, “I did it.” I did what I came out there to do. There were months of preparation that went into that, months of work with you, guys. I did what was there to do. Afterward, I got a really good response from people backstage. I actually had people coming over and throwing money.

JASON: Really? Literally?

KRISTOPH: More money than I have ever seen in my life. It was quite amazing.

JASON: So tell me about that. You do not have to say who, but you literally had investors coming to say, what?

KRISTOPH: Yeah. They would throw some amounts, like X million, thus what would you do with that today?

JASON: Really? What was the largest number thrown at you?

KRISTOPH: I would say two million. I did not accept that.

JASON: Just an investor came up and just said, “If I gave you two million, what would you do with it?”

KRISTOPH: Yes. There were some wealth funds from overseas that came over. They invest fast, as I have learned.

JASON: Right. They wanted to just immediately get those shares in an early stage company. What day were you on? One, two, or three? First day?

KRISTOPH: I think it was on the middle day, Tuesday.

JASON: OK. So what I want to talk about after we get back from the break is what happens after you get off stage. How do you leverage that momentum into getting in an accelerator, raising money, getting team members, getting the email addresses of people who might use your product? Right after we get back from this important message from our partners who make this very show possible.

JASON’S AD: Hey, everybody. What a great episode of “This Week in Startups.” What a great episode we are having. And it is brought to you today by our friends at Turnstone. That is right. MyTurnstone is the furniture I use here. It is the desk I am using right now. It is the gorgeous beautiful desk you see in front of you. We would probably do a side view, we do not have a side camera set up, but I love this. This is a tall stand up desk, so when I am working, I use this MyTurnstone. I kicked the chair out that I have here. I just stand up. You heard about this thing were standing up is great for you. So I am standing, and I have two or three my lieutenants, we are all talking, there are laptops. I love the MyTurnstone collection. Take a look at how beautiful this is. Put out my screen, please, Brandice, if you will. Gorgeous, gorgeous stuff! The great bookcase. The great desks. If you look to the side on the left, there you see a little nook. When you set up these big beautiful desks, you see everybody spread out. Did you notice how, like, everybody spread out in these photos? Really? Having a great time, doing their work with these two women at their desks. They have plenty of room. There is cable management in the back there. It is just a really great furniture, and it really sets a tone. Here, you see this beautiful little caddy here to put your laptop on. The beautiful integrated orange couch there and the planter. You get the monitors on arms all this kind of stuff is gorgeous. And you see this dude has the yellow couch next to him. It creates a certain tone. And it motivates employees to come to work every day and feel like they are just appreciated. And they enjoy these casual settings. That is what business is becoming. It is becoming more like a dorm room, more like hanging out, having a great time. MyTurnstone just sets this great professional, yet casual environment. That is how I will call it. So like, dress casually. And somebody wears a blazer and jeans. And it is like, “OK. They look smart up top, but they have casual jeans down below.” That is like MyTurnstone to me. It is like OK, there is a couch over here. We can riff at the couch. We can walk over to the stand-up desk, and do a stand-up meeting, do a scrum meeting, whatever it is. The developers use it. The designers use it. Everybody has a great time. Go to MyTurnstone.com/TWIST, and you get 10% off your first order. Now, listen. 10%, you think, “OK. That is nice.” This is on a physical product. You get 10% of software, which would be a gracious thing to do. This is 10% off of a hardware product. So this is extremely nice and generous of MyTurnstone. So everybody, go thank @MyTurnstone on your Twitter account. Really, a great team up there is making simple and smart furniture solutions for small businesses and startups. MyTurnstone is only for startups and small businesses. I mean, I guess if you are a big company, you can buy it too. It is a great deal. The value for a dollar is extraordinary, and I love the fact that the power is integrated, so you cannot see this on my desk here, but if they can move the camera, you should see there is like pop-up power at the edge. So you push a little button it pops up, and you can click it back down, so you feel like, “Oh. This is very well designed,” but it is not an outrageous price to get that kind of functionality. Previously, it would cost tens of thousands. This is hundreds of dollars, low thousands of dollars. OK. When you are thinking about how much is going to cost, we are talking a very respectable price, not cheap like some of those prefab things, which you have to put together yourself, and they always wind up breaking. It is not cheap, but it is also not absurdly expensive, that your VCs, your angel investors are going to say, “Hey, knucklehead, what are you doing? Don’t waste my money.” It is right in between. Just the perfect price, a couple hundred dollars per workstation, maybe, top out of thousand if you get all the stuff. I love it. I am a cheap bastard, you, guys, know that. I am not going to waste money on my startup, but I do think that investing and having a beautiful environment is absolutely critical to setting a tone, and having people enjoy their workplace because they may work ten-twelve hours a day there. They might be six days a week, like poor Brandice. I am just working really hard right now. All right. Listen. I can talk all day long about MyTurnstone. I love MyTurnstone. And this 10% offer, I am so grateful to them. MyTurnstone.com/TWIST. 10% off your first order. Let us get back to this amazing program. Thank you!

JASON: OK. Everybody, welcome back. And thank you to our partners for sponsoring the program. When we left off, Kristoph Matthews who is @KristophM on Twitter. You should follow him. He is the founder of Boxbee, B_O_X_B_E_E. Are you @Boxbee on Twitter too?

KRISTOPH: Yeah. We just got a Twitter handle.

JASON: Oh! Very good.

KRISTOPH: Full copyright.

JASON: Awesome. Yes. So you are just sending your copyright notice, “I own this. Please, give it back.” So you get @Boxbee on Twitter. Everybody, follow that. So when we left our hero that would be you, Kristoph. You had successfully launched, millions of dollars being thrown at you by several wealth funds. And you realize you get hit on your hand because when we ask thousands of people in the audience, if they use the product, you got almost everybody to raise your hand. You know you got a hit. What do you do then? How do you leverage the next day and a half between the second day of the three-day Festival you launched to getting…? What were those next whatever, thirty-six hours like until the award ceremony? What do you try to accomplish?

KRISTOPH: I wanted to learn as much as I could about the climate of Silicon Valley at that event. You had everyone there. Everyone who is who in Silicon Valley was there, and people flew in from all over the world. If there is one event in tech, that you should pay attention to it, it is probably LAUNCH. I just want to learn as much as I could about the investment climate there, like what is hiring like, which types of startups are successful, which are not, who should I get to know? And the various dinners that LAUNCH had arranged for the founders were certainly helpful in that respect. Just be able to walk around this massive conference center with all these companies there to give a good sense for what is out there.

JASON: Talk about the dinners a little bit, and what they were like, and whom you met, and how that worked.

KRISTOPH: Yes. I am thinking there were two dinners. The angel dinner, the first night…

JASON: The Sunday night, the day before, we had the angel dinner, which is 60-70 angels and 45 founders there.

KRISTOPH: OK. And what was the other dinner?

JASON: Then the Monday night is the Yammer Founder Party.

KRISTOPH: OK. That is right.

JASON: Tuesday was your own dinner. Do what you want to. And then, Wednesday was the winners’ dinner.

KRISTOPH: Right. Which was my favorite because of the place we were at.

JASON: 5A5 Steak Lounge.

KRISTOPH: Beautiful.

JASON: It was pretty amazing. We had an amazing dinner that night. Just for people to know, at the end, the winners, and there are about a dozen companies that win different awards, those dozen companies each get their own table at 5A5 Steak House and we sit other investors with them. At the start of the event, the angel dinner, which Naval hosts from AngelList, on Sunday, you get to meet 65 angels, but then you get like really great people to sit at your table and have a steak dinner at 5A5. Award ceremony comes around, you are in the audience, and you are seeing the awards take away. How confident were you? What do you think your chances were winning an award, let alone winning the Festival?

KRISTOPH: I do not know if I can attribute a number to the chances. I thought it was really…

JASON: What was your team making of that?

KRISTOPH: The team?

JASON: Yeah.

KRISTOPH: They are always behind me.

JASON: Were they confident that you win the award?

KRISTOPH: They were pretty confident about it. They thought I would win at least one of the awards. On the other hand, I was feeling great, when I walked off stage after the presentation, but there were some bullets going on. I do not know if there was on purpose or not that one-hour delay for the…

JASON: Oh! In the beginning?

KRISTOPH: Yeah.

JASON: Yeah. I do not remember.

KRISTOPH: No. For the award ceremony. I guess there was a heated discussion.

JASON: Oh! There was a very heated debate. The award ceremony took a long time. It usually takes an hour, but it went a little over. So people know, and a lot of people will refer to this for next year’s Festival at 2014 or 2015, there is a grand jury that sees every company. The grand jury votes on each of the awards, and it is a jury… So it is sort of like Sundance Film Festival modeled after, where it is not voting, it is a discussion of who should win each award, and then we try to not have companies win more than one award. If somebody wins Best Design, they are not going to win Best Technology. The Best Technology company is not going to win Best Business Model. We are trying to spread the love around as such, but there was neck-and-neck between you and AdStage, which was another winner. I think they won Best Business Model 1.0.

KRISTOPH: Yeah. They are a great company.

JASON: And they are great. I think some people wanted to take AdStage over you, guys, because one of them… If I can recap it for you, which I know I have not talked about publicly, but I think the handicapping was that AdStage probably is less risky because they are doing like a tool for ad buyers. It was a close race. It is less risky, but it is not going to get as big. Boxbee gets a lot more risk, but it could become Uber-like, multi-billion dollar business, every city, growing. I think that a lot of times in these events going for the bigger moon shot is what people vote for. I think it is just advice for people, “Go for a moon shot.” However, it does not mean both companies will not be tremendously successful and have great returns. In fact, I am investing in both. I can announce that, right?

KRISTOPH: Yes. Sure.

JASON: The LAUNCH Fund has been created. The Social+Capital Partnership and David Sacks were putting into $250k each, I am putting $100k, so we have $600k to invest. We might have one or two more partners to come in, so it could hit a million, who knows. But we are going to invest in Boxbee’s A round. And that is going to be fantastic. We have to keep working together.

KRISTOPH: I am very excited about that.

JASON: I was always sad to the postpartum of the event, leaving after the event. Was the event a peak? And then, you just shoot right down to a valley and have to get back to work, or was it subsequent peaks again? What was it like the day after?

KRISTOPH: Are you talking about the event or my health? He-he.

JASON: Yeah. Exactly. You must have been exhausted after all that.

KRISTOPH: My body was working really hard for that event, and then said, “OK. LAUNCH is over. I can give up now.”

JASON: The adrenaline had just worn you out. Ah?

KRISTOPH: Yeah. I have to give more credit to my team actually. They were working round the clock to have a live demo ready an hour before I went on stage.

JASON: You did a lot. And you insisted on that. You do not want to do anything canned.

KRISTOPH: Yeah. I just thought they would be really important because it is easy for people to look at Boxbee and say like, “It is too good to be true. Can it actually work?” I want to show people, “Now you can try it.” Today it is open.

JASON: And so you have done some tests and trials with it or internally. And what has the response been like?

KRISTOPH: It has been great. Yeah. We have been in business. Now, like, everything is working operationally. We have gotten hundreds of boxes in storage. People are really excited in San Francisco. We have people all over the world emailing in on a daily basis, “When are you going to start in our city, Australia, the Netherlands, the UK?”

JASON: Now, one of the questions that I came up is, “Is this going to be a massive amount of infrastructure, drivers to drop and pick stuff off, and building storage facilities?” But you had a really good answer for that. What is it?

KRISTOPH: Yeah. Well. We are in the time now, where a collaborative consumption is really the key. It works. And we are utilizing existing infrastructure right now, and we are taking advantage of the inefficiencies of underutilized capacity in storage locations.

JASON: So you are not going to have to build the big facility, you can just rent a portion of an existing facility as you go.

KRISTOPH: That is the strategy right now. Like, who knows what the future will bring, but we believe in a lean philosophy in starting out things in a quick, agile way, instead of investing a massive capital expenditures.

JASON: What is the advantage of doing that agile, lean rollout?

KRISTOPH: Well. As a startup, especially, if you do not have funding, like we bootstrapped a year before LAUNCH began. It is important to watch your cash flow. Not everything that you spend your money on will pay off, no matter how smart you are, no matter how good of a predictor your advisers are, whatever. You have to accept that something will not work. Not only is money a cost, but also time is a cost. I do not know who said, it might be even Paul Graham, or someone said like, “The objective of a startup is not necessary to make money. It is, but that is not the top goal. The main goal is to iterate as quickly as possible, so you can get through the learning process, so you can move up onto the next step.”

JASON: Right. What were the key things you learned with the product so far? What do you think is going to be at the core of this business? What is going to make it successful?

KRISTOPH: That is a big question. There are a lot of components to that. One is trust. We unlike most delivery services that are out there today, who were delivering food, or papers, or something, these are people’s things whether they are monetarily valuable or not, they mean a lot to people. So having trust in our branding, our marketing, our operations, having fail-saves at every possible corner is important for us.

JASON: Ah! So trust. Yeah. I mean, if my pizza gets delivered cold, the cost is, “I am a little perturbed.” If you lose my photos, or my hard drive, boy, or it gets water damaged, you are going to be slammed on Yelp in the review section, or something. People will make a website against you. How do you put trust into the corporate culture DNA? How do you make that the fabric of the company? I mean, that is one thing to recognize that trust is an important issue, it is another thing to make it in your DNA.

KRISTOPH: It is really easy. You recruit people who absolutely passionate about Boxbee. That means they care. If they care, they trust.

JASON: Got it. It is like hiring Brandice to do the show. She cares. When the audio is off on the show, nobody feels worse than Brandice. She was my first engineer, who was actually super crushed, when the technical problem appeared. She gets more crushed than I do. And to see her like, staring at her shoes, “Oh. My God!” This person showed up for the show with a pair of like bad headphones. And she is just, “Oh!” She takes out a samurai sword and shoves it in the gut, like seppuku. You joined AngelPad. Thomas Korte. And you are working with him. How has that been? Because he has just such a great reputation for being a tireless supporter of entrepreneurs.

KRISTOPH: Nothing short of amazing. Thomas Korte and his partner Carine Magescas have been absolutely amazing. As you have said, they have quite a reputation here in the Valley and I am honored to be with them. Unlike a lot of other incubators, they keep their class sizes really small so that…

JASON: We have six I think.

KRISTOPH: I think it is twelve.

JASON: Twelve? Yeah?

KRISTOPH: It is still really small, compared to someone out there. They really dedicate a lot of time to the startups, like we are talking to each other 6-7 days a week. As you know, they have come up with some pretty successful companies like Postmates, and Crittercism, and Pipedrive and I am really excited about building a big company with them. I am pretty confident about where this can go.

JASON: How is AngelPad manifested itself as a product? You have office space, and you are there every day with them? Do they do once a week like YCombinator? Is it some combination? How does it actually work on a day-to-day basis?

KRISTOPH: A great question. Yeah. We have an office location with them here in SoMa [South of Market], and we interact with them on a daily basis. There are conference rooms. There is desk space. Of course, they offer funding and stipends. They assist with the whole fundraising process.

JASON: Yeah. And so you will be doing their demo day, when? Is there a month from now or so?

KRISTOPH: Yeah. It is in mid May. I think on my birthday, actually.

JASON: Wow! Awesome!

KRISTOPH: I hope it turns put well.

JASON: What was it, May 17?

KRISTOPH: May 16.

JASON: 16. OK. We will all be there, rooting you on, as an investor, and as somebody who has to see you are really crushing. Now, you are a first time entrepreneur?

KRISTOPH: In a proper tech startup sense. Yes. I have run a couple of Internet businesses and stuff.

JASON: How do you make sure you are doing it right?

KRISTOPH: Good question.

JASON: You now have a lot of expectation on you. You have a lot of pressure on you as the winner of the Festival, as something that press absolutely went crazy for you. You have a ton of press, and you know this, and consumer demand. How do you deal? And you are introverted, right?

KRISTOPH: Yeah.

JASON: And a lot of the great entrepreneurs are. How do you maintain composure with all this pressure now?

KRISTOPH: It’s a lot. It is sometimes difficult to deal with, but I am thinking about it every moment of the day, like, I am even dreaming about it as the most entrepreneurs do. It is important to really take ownership of what you are doing. So that means you cannot blame other people if something does not work, you cannot blame your suppliers, you cannot blame Heroku for… I should not mention any product names, but any app servers for being down.

JASON: Now they all go down. That is fair. Heroku, EC2, they all going to have downtime at some point. If they do go down, you cannot say that my business failed because of that reason.

KRISTOPH: Exactly. But the point is like as things grow, these things are happening on a daily basis. And it is hard to deal with this sometimes. Something that entrepreneurs have to remind themselves every day, and this is something I do every day when I wake up, I say, “I don’t know what I don’t know. And today I am going to find out what are two more of those things.” If it takes going to other people, if it takes reading up on stuff, if it takes interviewing people, I do not care what it takes, I need to learn what those things are. So to answer your question like, “I have this pressure. What do I need to do to make sure I keep going on this trajectory?” I have to align myself with people who know more than I do because no one needs to reinvent the wheel. Like, Boxbee, it has looked like as this really original idea. I would like to think it is, but the components of it are not.

JASON: Right. Hostmates has figured out something, Uber has figured out something, AirBnB has figured out a lot of stuff in client subscription. You actually go out and seek out the mentorship. I have noticed that about you. You are active in that way.

KRISTOPH: I think it is critical.

JASON: I think so too. It is interesting. A lot of entrepreneurs do not do it. Why do you think that is? What do you think makes it easier for you to do that? Because I see some who do not actually take the time to go ask somebody.

KRISTOPH: I can speak from my personal experience, and I will admit it. There is a lot of pride in doing things yourself. It is sometimes hard to ask for help. People either want to say that they did it themselves, or they do not want to look like they are stupid, or they do not want to look inexperienced. I think you have to throw all those things out the window. I have had a lot of personal experience with storage. I moved 22 times around the world growing up and a few storages during those times. So I really understand the customer problem. As far the logistic side, the closest experience, which I have had to that, has been manufacturing background in semiconductors. So I do not come from that industry at all. My first couple of months operationally with Boxbee was renting a Zipvan, driving around, picking up boxes, and doing really unglamorous stuff.

JASON: You dogfooded yourself. And all of a sudden, they see this six-foot model come in. You were a male model at some point.

KRISTOPH: That is correct.

JASON: So the six-foot model comes and says, “Pardon me, ma’am, can I have your boxes.” And they are, “OK.” But you felt it was necessary to go door-to-door and experience that, put your hands there.

KRISTOPH: Absolutely.

JASON: It feels good, doesn’t it, when you are actually doing?

KRISTOPH: It feels terrible actually.

JASON: Really?

KRISTOPH: It is a lot of work, and it feels really risky. And you feel like you are venturing into the unknown. And this just really tight feeling in your chest like, “What am I doing?” Like, “What is going to go wrong?” I have not seen these customers before. I am just cold calling them or going right to their front door, I am going to ask them all these questions. I feel like I am taking something from them. I know I am doing customer research, it has all for the good, but there is…

JASON: That might be the introvert in you. I would love that stuff.

KRISTOPH: Yes. It is probably the introvert thing, but there is a lot of people like me, that have this problem. I just had to swallow it, and say like, “Look. This is for the greater good.” If I do this, I am ahead of the people, who are just going to Google search, and then think that they know all the answers because they have read somewhere.

JASON: …read a Quora question, or a blog post. Right? There is nothing like talking to those customers. Ha?

KRISTOPH: Yeah.

JASON: So you are going to be graduating. You are obviously going to have a pretty easy time with the angel round. What do you think a year from now, you are going to be able to say is true, if you execute perfectly?

KRISTOPH: I am about to make a big statement. I was actually thinking about this really recently like what are the big goals, the big intermediate goals for Boxbee? I would like to be in two cities by the end of the year, besides San Francisco.

JASON: Two more in business?

KRISTOPH: Two more. Yeah.

JASON: That is aggressive. And that means you have to get the rollout system perfect. You have to figure out how to pop up a city perfectly.

KRISTOPH: Yeah.

JASON: Wow!

KRISTOPH: We have the logistics in order right now. And we are iterating through different marketing channels and everything. And then, the end of the year is going to be about getting that rollout strategy right, and then we are just going to dip the foot in.

JASON: I think it is a great call with you. Is there a strategy for cities like, obviously, Los Angeles and New York, which have great density? So that makes them perfect, but they also have very demanding customers and a lot of them. Is there a best practice right now that you have researched for? Obviously, San Francisco is a perfect place, we are at, because people here are willing to do anything technically. I mean they will try anything. The guinea pig nature of this crowd is amazing, but is there a classic rollout plan that is emerging in the startup community?

KRISTOPH: I do not know the answer to that. The company that has done it really well is obviously Uber. They have what they called it like a “SEAL team 6” type of group that they deploy in these cities in Europe and on the East Coast. They have done it pretty well. So I think we would look to them for some guidance on that.

JASON: Yeah. I will put you in touch with Travis. I am also an investor in Uber, which was my most successful investment today, but this is going to be my most successful. I think you, guys, are going to do as well as Uber. I wish you a great success. I am assuming with all this great success, you are going to hire people who have a passion for building trust and solving this problem for people, correct?

KRISTOPH: Yes. Hiring has been really interesting. In fact, I would say that investment and some customers have come out of LAUNCH, like that is going to be a really good part of LAUNCH, but the other part has been like people looking for jobs. Some really interesting story I would like to share is this woman in France heard about Boxbee, she is watching the LAUNCH thing, and she made an entire website applying to Boxbee. I have tried to do some back URL searching to see if she did that with a bunch of companies, and I have read through the text, everything was hand-written.

JASON: Wow!

KRISTOPH: It was really authentic.

JASON: That is amazing.

KRISTOPH: There are some people who are really enthusiastic about working with us.

JASON: It is great, if you have that. They are early true believers. You do not have to worry about them caring. They are going to just come to it with just a level of passion and care. That is amazing. I mean we have that actually at “This Week in Startups” and at the LAUNCH Festival with Demant. Jason Demant, who is the CEO now. He used to run the Seoul Meetup for “This Week in Startups.” So I just met him for coffee one time. He is in town, and he had been running the Seoul Meetup, and he is like, “I am trying to figure out what to do next. I have always wanted to do startups.” “Why do not you work for me?” I was the CEO of a company.

KRISTOPH: It is really fortunate.

JASON: Yeah. The fans of your product can become the best employees. Well. Listen, Kristoph. I wish you the best success. Watching you improve the product week after week, it was just really inspiring. I think you have incredible potential to become a legendary entrepreneur. This is like one of those things where I think it is like the first and the last brand you are going to make. I think this is it for you. I think you are just going to build this for twenty years. I think it is going to become a huge legendary brand, like Uber is becoming, or Google, or Yahoo had already. Any other thoughts on the Festival? Any messages for people who are listening to the program and saying, “Wow! Maybe I have an idea, and I should try to get on that stage?” How does somebody become the next Boxbee? What is your message to those people, who are sitting on the bench, wondering if they can do it? To the other models out there doing the male modeling on the runway, who are, “I want to do a startup, instead of being a male model.” Now, what is your message to them?

KRISTOPH: They do not need to do male modeling anymore.

JASON: Yeah. Exactly. What is your message to those people?

KRISTOPH: Get inspiration from what you love to do, and think how you can make that really remarkable. And do not worry about what is hot and what is… Do not try to make another better location based app, or a better food delivery thing, or better… Those are really popular right now, but just making something better, is not really going to cut it. Think about intersection between one of the real problems out there, what are you passionately interested in? Like, what you find yourself “wasting time on” according to your boss, or when you are at home, and your spouse or your girlfriend says, “Why are you doing this? You should be doing that instead like…” I do not view that as wasting time. You are onto something. Like, trust your intuition. Trust what was just calling to you because there is something there.

JASON: So you make a vector between “What you are wasting time on?” In other words, “What you just natively interested in? What you are inherently passionate about?” And a good signal is when somebody says, “You are wasting time on it.” And then, what is the problem in that space? What is a big problem? Or how could it be improved? To me it sounds as such a good strategy because everything can be improved. Right? So little that we have done perfectly. I was eating a hamburger today at this place “Mayfair,” I think it was called here in San Francisco. I was like, “My God! They improve the hamburgers. It is so amazing.” The hamburgers have been around for a while. And look for the problems in the space, you are passionate about because as Mark Cuban said in that same vein, “If things become hard, at least you are passionate about it. So it makes it easier to get up every day, and get in there, and fight the war, and be resilient.” So I think it is very wise advice. If you are looking to work at Boxbee, you know what to do. Build a website with a great domain name like, “I love Boxbee” or “I think Boxbee is awesome.” I think this is such a great idea for people like, everybody complains, “I can’t find a job, whatever.” They show no passion on the way in. They show no chutzpah. It is like that woman. Next time you are in Paris, you are going to get coffee with her. That is like on your top five things to do, right? Like, the Louvre, Île de Ré, meet with this crazy woman.

KRISTOPH: Meet the crazy woman. Yeah.

JASON: Because you know what, the crazy ones are the people who change things. Take her to Île de Ré, and then go eat macaroons in the Louvre.

KRISTOPH: Great idea.

JASON: Like I said, this is a great company. I am incredibly biased because I fell in love with the idea, and obviously, I am going to be an investor in it. I am so proud to be affiliated with that. At Boxbee.com you can sign up with your email address now. Right?

KRISTOPH: Yes.

JASON: So if you want to become one of the early pioneers of it and if you are passionate about this idea. Make sure, hey, Brandice, that we have linked to early on in the YouTube to the Boxbee launch at demo. It is very clear. You can type “Boxbee and LAUNCH” into YouTube. I bet you that you find the video, but let us make sure we do an annotation early in the video, and right now, if you watch the YouTube video, to see him launch on stage, which was really great. Get involved in this startup because I think it is going to be really great. It is going to be transformative. And it is going to help people a lot. Especially, did you notice this trend of people talking about micro apartments?

KRISTOPH: Yes. They are building a couple a few blocks from here.

JASON: I think this is such a great idea. I mean it really plays into what you are doing, doesn’t it?

KRISTOPH: Yes.

JASON: It is going to be some affiliation, you can have with those folks, like, because…

KRISTOPH: You know, we are changing the concept of ownership to that of access. And this is the way the sharing economy is going right now. People do not need to own a lot of stuff, and just collect it, and hoard it. Because we are basically becoming a stuff management platform, we will enable people to share their power drill that they only used once. Right?

JASON: Then my friend asks if he can use the power drill, and I take on my iPhone, and they ship box number seven to their house?

KRISTOPH: It just sent it to them or shared it with them, it is not implemented yet. We are still developing it.

JASON: So I could share that box that they could pull it out anytime they want to return it?

KRISTOPH: Yeah.

JASON: Oh! My God! That is such a brilliant idea. Think of that…

KRISTOPH: So for micro apartments you probably have this room that we are into to live in. It is necessary to be able to access stuff, not just own and hoard things.

JASON: Got it. Yes. If I had a bunch of scuba equipment or golf equipment, and any of my friends on Facebook could then borrow my golf clubs, as long as they return them.

KRISTOPH: That is right.

JASON: Just think about how much money people are going to save, and how they are going to redeploy that capital. Just a bicycle, whatever, any of the stuff can be loaned out, and dropped off, because dropping off your golf clubs might cost $25 or something, or picking them up, I guess or whatever. It is a lot less than renting them. Wow! Such a good idea.

KRISTOPH: That is true.

JASON: Wow! You are blowing my mind again. I have never thought about that. You could actually share the boxes and inventory with folks. So brilliant. This idea is going to change everything. Continued success. And thank you to my sponsors on the program, my partners on the program. I do not know who they were because I did not read the ads here alive, but it is probably going to be somebody great like ShareFile, or GoToMeeting, or it could be SendGrid, or it could be New Relic, or it could be Hiscox, or it could be MailChimp, or it could be… God! So many great sponsors on the program, I cannot even remember all of them. It could be Resumator, who just joined. I love all of the partners on the program for making “This Week in Startups” possible, for giving me the opportunity to have this great conversation with entrepreneurs each week. Please, go to ThisWeekinStartups.com. Please type “This Week in Startups” into YouTube and subscribe, and follow @TWiStartups and of course, I am @Jason, just @Jason. That is me showing off my Twitter handle. Just @Jason on Twitter. Follow me to moot your thoughts about the program, who you want as a guest. Kristoph, we’ll see you next time.

KRISTOPH: Thank you for having me.

JASON: Cheers, everybody.

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