Before Anand founded Trusted, he was the co-founder of Threadflip, which lost out, in a sense, to Poshmark.
Reflecting on his time there, after Poshmark’s IPO, Anand realized that he and his team had always been relying on product to move the needle.
“It was always based on some small signal and sometimes there’d be some marginal improvements. But we weren’t fundamentally understanding who our users were and listening to what they needed. For a marketplace that was heavily designed for a female demographic, we needed to really get into the weeds a lot more than just marginal product improvements. You can be the best product in the world, but I don’t think you can quite get the big hits unless you know how to realistically build a company. There’s a difference between building a product and building a company. And I think we weren’t a great company.”
It was a lesson Anand took to heart in building his next company, Trusted, and it is an ethos that fuels his obsession with customer acquisition.
Day Zero: A date night app 0 to 0.5: Cracking the nut on customer acquisition 0.5 to 1: Serving customers and expanding to corporate benefit customers Anand’s Key Pillars For Founder Success
Day Zero: A date night app
Trusted actually started off as a date night app for married couples, called Bliss. It started because Anand started to realize that he wasn’t spending as much time with his wife as he would have liked since they had welcomed their daughter to the family. The app planned and set up dates for busy couples for a subscription fee. After six weeks, he and his cofounder, Vivian, a friend from his early days at Microsoft, found that 4 out of 10 couples were churning.
As experienced founders, they knew to immediately ask why.
“We learned that couples were thinking, ‘We know where to go. We know what we want to do. We just can’t get out of the house frequently enough, because childcare becomes a problem. There’s no trusted network for us to leave our children with.”
Aha! They had found the true underlying problem.
0 to 0.5: Cracking the nut on customer acquisition
At the time, Anand was the primary caregiver in his household. It was this role that granted him his unique insight into the caregiving space.
“I started to spend a lot of time with other caregivers, because I needed my daughter to socialize with other children. My learning from this was that tooling for caregivers was missing. They didn’t know how to clock hours or find clients.”
So, Anand and Vivian started building that tooling, creating a SaaS product that helped caregivers to manage their schedules and other logistical aspects of being a paid caregiver, such as qualifying for overtime, upskilling, where to get help, where to get background checks, and the like.
To acquire their first set of caregivers, they got creative.
“We did not want to spend on customer acquisition. That was our goal from out of the gate,” Anand says. “If you’re really deep in the space, sometimes you can find some distribution hacks that others who are out of the industry are unaware of.”
That distribution hack for Trusted was partnering with nursing sororities in universities around the country.
“We noticed that a lot of nursing students had a lot of credentials. They loved caring for people. A lot of them used to watch children before they got into nursing school. So they became sort of a natural fit for us, and we didn’t really need to even interview them. They found great jobs and would bring all their friends in, so it became a really interesting viral loop.”
It was that relentless focus and discipline around customer acquisition strategy that continued to drive Trusted’s success, as they went on to launch the parent side of the app and become a marketplace.
“We literally had this chart, and even today, I could refer to this chart. It starts with ‘How are we going to get our first 10 users?’ And then we would go from 11 to 100, then from 101 to 500, 501 to a 1000, and so on. It was methodical and specific. Vivian and I really challenged each other on this, on both sides of the marketplace, asking, ‘What are our core assumptions here and how are we thinking this is gonna work?’ That gave us a holistic way to think about customer acquisition.”
0.5 to 1: Serving customers and expanding to corporate benefit customers
Of course, the founders were also constantly iterating on the product to make sure that it engaged and served their customers. One of the biggest early decisions the team made was to switch from a flat rate pricing model to a flexible rate, after they saw caregivers churning from the app to collect payment directly from their clients.
“Caregivers were asking, ‘Why are you making 25 and I’m only getting 17.50?’ And it was hard to explain that we were a software platform or for-profit business and all this stuff,” recalls Anand.
Anand and Vivian designed a flexible pricing model where there would always be a floor price that a caregiver would be able to make based on skill set and number of hours on the platform, but that number could always go up based on demand. As the caregiver started to accrue more hours in the platform, they could naturally command a much higher rate.
“That was a big moment for us, because we introduced a transparent pricing model and caregivers felt better. They were happily staying on the platform and continued to grow with us.”
To this day, some of the caregivers who Anand and Vivian had hired back in 2014 are still on the platform, working and bringing in good income — some have even stayed moving between markets, from San Francisco to LA to Austin.
On the client side, Anand and Vivian began selling to companies as a corporate benefit, ultimately leading to their acquisition by care.com, a company rapidly growing in the space.
Nowadays, as an investor, Anand is learning to flex his startup brain in different ways.
“When you are building, you go a mile deep and it is sort of an inch wide. You’re very much siloed in your problem space. As an investor, you have to go a mile wide and inch deep. That’s the biggest difference that I’ve noticed,” he observes.
Still, Anand is full of advice from his 0 to 1 days, and he’s been inspired by his new work.
“In spite of all the issues that humankind has faced, there’s some really ambitious founders, solving some really big problems and that’s very encouraging. We had a vaccine for a crazy virus that came out in a year, and that’s unheard of! I think that kind of progress is something that I’ve never seen.”
Anand’s Key Pillars For Founder Success