The words “entrepreneur” and “dropout” are often associated; think Mark Zuckerberg, leaving Harvard for bigger things, or the young people goaded and funded by Peter Thiel. It’s easy to imagine a college student planning to drop out of school to join Y Combinator; rarer, though, is the person who has gotten his startup into that famous accelerator, only to abandon it.
Yet that’s what Noah Ready-Campbell did. He and his business partner, Calvin Young, both ex-Googlers, joined the Y Combinator program in the summer of 2011. Within a week or two, they dropped out--becoming, so far as they’re aware, only the second team to ever do so.
Not long after withdrawing their micropayments company from Y Combinator, the team decided to further pivot into a completely different business, a secondhand clothing marketplace for women called Twice. We caught up with Ready-Campbell to learn a few lessons about pivoting and trusting your gut.
If The Shoe Doesn't Fit, Ditch It
Ready-Campbell and Calvin didn’t bail on Y Combinator because of any real animosity for the program; it just wasn’t the right moment, nor was it the right fit. Their micropayments startup, alternately called Minno and BuySimple, had received a seed round before getting into Y Combinator, so they had already been on the fence about joining the accelerator to begin with. And right around the time of joining, they hit a wall with a major aspect of their business, finding it difficult to form a few key partnerships they needed to grow. “We felt like there was a lot of time pressure to get something up and running by Demo Day,” says Ready-Campbell, “and since we had already raised a seed round, we felt like there was a higher bar.” The confluence of the good luck of the seed round and the bad luck of the failed partnerships made things awkward: “We didn’t think there was time to both regroup and make more progress than what was expected from an average seed-stage Y Combinator company.”
There was something else that irked them a little about Y Combinator. Ready-Campbell and Young had left Google to be their own bosses; at YC, they began to feel like they were being foisted into a “cookie-cutter approach” of how to build a company. “Maybe Calvin and I are more stubborn than most people, but we didn’t love that aspect of the program either.”
Ready-Campbell says that Paul Graham--whom he calls “one of the smartest people I’ve met”--did briefly try to convince the team to stay in the program. “But I think he saw it wasn’t a good fit for us, and that was the end of it.”
Investors Invest In Teams, More Than Ideas
Soon after dropping out of YC, Ready-Campbell and Calvin decided to shutter their micropayments idea. At this point, they had reason to fear dropouts of another sort--dropouts among those who had invested in them. But the duo went back to their investors to pitch a new idea, a secondhand fashion marketplace called Twice.
“No one dropped out,” Ready-Campbell says of their investors. “They didn’t invest in a micropayments startup--they invested in a team of two friends and roommates with engineering and business degrees, who had worked at Google and were passionate about building a business.” Again and again, investors had told them, “We’re investing in teams. We know things are going to change, but we think you guys are going to hang in there and make something happen.” Several investors were actually relieved to see the duo get out of micropayments, a difficult space; a few got even more excited about the new idea, and deepened the level of their investment.
Finding The Right Fit
As if dropping out of Y Combinator and shuttering their first idea weren’t enough to strain their credibility, Ready-Campbell and Young had another tough sell: These two men were going to get into women’s clothing. Specifically, their interest was in secondhand clothing--both had grown up in non-moneyed families, and knew a thing or two about bargain hunting--but as they studied the market, they realized that they’d have to begin with the women’s sector of the pie, which dwarfed that of either men’s or children’s secondhand clothes.
A couple of bros were going to sell cute dresses online. A good idea?
In fact, yes. Ready-Campbell and Young took their tech and business know-how and focused on operations, removing pain points from traditional ways of reselling clothing. Twice invites women to clean out their closets and ship their clothes to Twice for free; Twice then evaluates the clothing and makes an offer, later reselling the clothes at a 70-90% discount off retail prices. (You can reject Twice's offer, if you feel low-balled, by paying a $5 fee to return the clothes.) Twice developed technology in-house that streamlines the process of photographing garments and cropping and applying filters to the resulting images. A process that takes other companies 15 minutes takes Twice just two minutes, claims Ready-Campbell. And by centralizing operations and taking measurements of all garments, Twice hacks one of the central problems of online clothing purchases--that of fit.
Ready-Campbell and Young were smart enough to know they needed to hire people with expertise in women’s fashion; their first hire, Erica Setness, had run a vintage clothing store online for several years. Of Twice’s 26 employees, 20 are women. (Twice did $8,000 in revenue in its first month; it has since grown to over $100,000 in revenue per month, and recently closed a $4 million Series A funding round.)
Still, under the theory that you can’t truly know your audience until you walk a mile in their shoes (or dresses), Ready-Campbell and Young delighted their employees this Halloween, when they decided to dress up in samples from Twice’s inventory.