Two-Sided - The Marketplace Podcast

In business school, Emmanuel Nataf and his friends were bored. They were more interested in startups and tech than studying, and so they decided to start a company: a marketplace around services for self-publishing books. Had any of them ever published a book? No! Did that prevent them from becoming successful? Also, no!

We talk a bit about that journey, how they found content & SEO to be their best channel, and how they doubled down on that. We also discuss how Reedsy built a community to support the business and some interesting thoughts about financing your startup.

Sjoerd Handgraaf: [00:00:15] Welcome to two-sided, the marketplace podcast brought to you by Sharetribe.

Sjoerd Handgraaf: [00:00:23] Hi, I'm Sjoerd CMO with Sharetribe and I'm your host. I'm actually very excited today because this is the first time that I can say to at least some of you welcome back because we dropped the first few episodes last week and the response has been absolutely amazing. And if you're one of the people who heard those and came back, thank you so much.And also thank you for the fantastic response we've gotten so far. Now let's dive into the episode. So in this episode, I'm talking to Charles Armatage. Charles was actually a doctor and training to go into emergency medicine, but then decided to radically change his career to start a marketplace for independent nurses and elderly care.

Well, Charles will tell us all about that. And it's a very interesting story, but he'll also show us the importance of talking to your customers before actually building your huge product. You know, spoiler alert, their first version failed hard and how to build relationship and have trust in such a delicate Margaret.

Again, I've only had fantastic episodes so far, and this one is no exception. So sit tight and listen to Charles story

Charles Armitage: [00:01:27] about Florence.

Sjoerd Handgraaf: [00:01:36] Hi Charles. Welcome to the show.

Charles Armitage: [00:01:38] Thanks very much for having me.

Sjoerd Handgraaf: [00:01:39] Hey, I checked out a little bit of your background. I saw that you're trained as a doctor and well, I think we'd like to know a little bit more about you. So can you tell us a little bit about what you did before you ended up at Florence?

Charles Armitage: [00:01:51] Sure. So, uh, absolutely. So it was a, a doctor in the UK and a number of different specialties, but it kind of was settling in on emergency medicine and then laterally surgery. So was pursuing a career in trauma surgery, but still relatively, kind of early on in that journey. It takes quite a long time to get to.

You know, the end of being a trauma surgeon, but yeah, so worked in a lot of places, worked in London a lot on the South coast and up in Scotland and then some other funny places around the world, like South America and Africa and places like that.

Sjoerd Handgraaf: [00:02:21] That was too boring for you or what was the reason why were like, Hey,

Charles Armitage: [00:02:25] sure.

I'm sorry. Is that something that was a bit boring actually. So I could talk about this forever, but the thing about medicine is that, um, you know, you get moments of absolute, huge adrenaline rushes and amazing thrills. Also punctuated by quite a lot of time, grinding your head against quite a challenging system.

And you can spend a lot of your time doing paperwork and filling out. You're not necessarily having a massive impact. And certainly that the impact you're having isn't exactly scalable. You were kind of an equals wide and there's only so much you can do really to make a change. And so

Sjoerd Handgraaf: [00:02:54] were you always into tech that you're like, I'm going to start a startup for like, maybe you can tell us a little bit into the origin of Florence.

Charles Armitage: [00:03:02] Yeah, for sure. I mean, I've always been kind of interested in tech and I was like new shiny things, but essentially, you know, learn more and more about myself. And my drivers is kind of my goal and the journey, but essentially I just like new things and maybe I've got a slightly short attention span. So always kind of looking for something new on the horizon.

And I was working in. London at the time in emergency medicine and was really enjoying their job. But at the same time, it was kind of investigating things on the size. And one of the things I noticed and it's kind of a pervasive problem throughout healthcare in the UK and actually most of the world is, you know, the biggest challenge is staffing.

And how do you create a solution to some of the biggest challenges we face as a society, which is, you know, looking after an aging population and providing the staff to do that in like a safe and high quality way. So I was messing around with some ideas in this, any department, trying to kind of build an app for me and my colleagues to swap shifts and, you know, work more effectively between us.

And obviously like couldn't build it because I'm not technical. And it started kind of the idea going and didn't really come to much. And then I met my cofounder, Dan, who is from the military, but I guess comes from the other side of the fence as well. He manages a care home group. Well manage the cat and group in London.

So it was having challenges, finding staff to look after their residents. And we met, we were introduced by a mutual friend and kind of started bouncing some ideas around. We both had ideas in the kin...

TS_Michael_Master

Michael DeGiorgio: [00:00:00] And I kind of, in the back of my mind, thought, "If nothing else, you know, this'll be a platform that we can transact on ourselves if people didn't want to use it."

Speaker 2: [00:00:13] Welcome to Two-Sided, the marketplace podcast, brought to you by Sharetribe.

Sjoerd: [00:00:24] Hi. I'm Sjoerd, CMO at Sharetribe, and I am your host. For this episode, I talked to Michael DeGiorgio, founder and CEO of CREXi, a marketplace for commercial real estate. This is an area, uh, [laughs] as you'll hear, which I knew absolutely nothing about, but it turns out to be an actually fascinating industry which was ripe for some serious disruption, as you'll hear.

I talk with Mike about how to build productivity tools for one side of the marketplace and also about how, instead of getting rid of the middleman, which is something that you often see when marketplaces enter a space, CREXi actually embraced the middleman. This is a really intriguing talk, and I think there are some great insights in here for anyone building a marketplace business. Enjoy.

Hi, Mike. Welcome to the podcast.

Michael DeGiorgio: [00:01:17] Hey, Sjoerd. Really nice to be here. Thank you so much for having me.

Sjoerd: [00:01:19] Yeah. I really appreciate it. Hey, before we dive super into the [inaudible 00:01:23] world of CREXi, can you tell the audience a little bit about who you are?

Michael DeGiorgio: [00:01:27] Yeah. My name's Mike. I was born on the East Coast of the United States. Started my career about 11 years ago now in commercial real estate. I started it at a company called Auction.com, where we were trying to change the way people bought and sold both residential and commercial real estate.

Uh, I was one of the first people on their commercial division, so I was really trying to take commercial real estate transactions online and to online auctions, uh, where I got a pretty good sense of the ecosystem, the software available in our space, and some of the deficiencies in our space.

Uh, I spent about four years there, had 10 different roles while I was there, did everything from broker deals to be an auctioneer on auction day, and oversaw multiple different teams, uh, during my run there. And then, left about five years ago to form CREXi.

Sjoerd: [00:02:11] All right. So there was already effectively a marketplace, Auction.com?

Michael DeGiorgio: [00:02:15] It was really just a different way to transact. It was, uh, taking the traditional process, which is, you know, very manual, and bringing it to an online auction. Auctions were still, at the time, were a known way of transacting commercial real estate and residential real estate, typically for distressed real estate. Uh, what we did was really just bring that auction part online. The rest of our process was, uh, still very much like a broker.

Sjoerd: [00:02:39] All right. Yeah. Was it a big operation?

Michael DeGiorgio: [00:02:41] So when we started, I was, you know, maybe one of the first five people on the commercial division. My, after being there for about three years, we had raised a large round from Google Capital. We raised $50 million at a 1.2 billion valuation. The company grew to 1,000 plus people [inaudible 00:02:56] during my time there. And then, I left. So got big over time.

Sjoerd: [00:03:00] Yeah. And so, you left, and then immediately after, you started CREXi? Or did you leave really to start CREXi?

Michael DeGiorgio: [00:03:07] Left to start CREXi. I was pushed by a former mentor of mine, uh, over drinks one night, to kind of, threw a, lobbed a question at me asking what I would do if I could go kind of out on my own. And I responded by telling him, "I think there's a way to bring, really, everything about commercial real estate, leasing, transacting, data, online in an intuitive way that's not out there, and I would go start that company." And he became my first investor, and I left my career behind about a month and a half later to go start CREXi.

Sjoerd: [00:03:36] All right. So basically, you are this, well, let's say, hardcore real estate veteran. And during your time at Auction, you were just thinking, "Ah, we could do this so much better." Is that what happened?

Michael DeGiorgio: [00:03:48] Yeah. I think especially, you know, at first, I was very bought into the vision. I think over time, as I learned how the transaction works for real estate really well, I probably sold 600 commercial real estate properties during my time there.

Sjoerd: [00:04:00] [laughs] Wow.

Michael DeGiorgio: [00:04:00] As I kind of st...

Sometimes, the story of the founder can be just as interesting as the story of the marketplace.

In the case of Trisha Bantigue, this is certainly the case. Trisha was born in the Philippines, raised by her grandparents, immigrated to the US at age 10, and paid her way through college by competing in pageants.

Today, she is the CEO and co-founder of Queenly, a marketplace for formal dresses. Queenly is backed by prestigious investors such as YCombinator and Andreessen Horowitz.

Though Two-sided does not focus on founder stories, Trisha's journey is pivotal in the story of Queenly. The idea behind the platform comes from Trisha's own pageant experience. And marketplaces in their early stages need non-scalable tactics; in other words, perseverance. Trisha had that in plenty.

In the latest episode of Two-sided, Trisha tells Sjoerd how Queenly got to where it is now:

• Launching the app and getting absolutely no traction for months.
• The difficulty of estimating your own worth as a first-time founder.
• The challenge of talking to investors in a way that makes them understand your vision and punctures their preconceptions.
• How to deal with incredible setbacks, and turn them around for the better.

Overall, a truly inspiring story for all of the marketplace founders listening