When it comes to decorating your house you can watch a lot of HGTV or camp out on Pinterest for days on end, or you can turn to the professionals at Havenly with the click of a button. With Havenly, founder Lee Mayer takes the guesswork out of interior design, making it straightforward and accessible to everyone. Mayer discussed Havenly and a whole lot more in front a standing room only crowd at the most recent Denver Founder’s Network meeting.
Necessity is the mother of all invention, or so the old adage goes. This is exactly how Mayer came to found Havenly. After relocating from New York to Denver, Mayer found herself in a new environment, and with an entire house that was in desperate need of a makeover. She ended up turning her personal need for interior decoration into a burgeoning startup.
So what prompted this former Ivy Leaguer (Columbia, Harvard Business School) to eschew her safe and profitable consulting career and start her own company? She witnessed others in the Denver startup community gain fulfillment from their projects and decided to give it a whirl for herself. Her initial bravado, “I’m young and arrogant enough to think I can figure it out,” quickly gave way to the type of humbling experiences that so many in the startup community know all too well. Besides, if things went belly-up she could always return to consulting, “which is soul sucking, but it pays well” said Mayer dryly.
But let’s not get too ahead of ourselves.
The Havenly Origin Story
Mayer’s transition from initial idea to launch deserves some dap as well. Prior to starting Havenly, Mayer had no programming experience. She gave herself a crash course in coding, courtesy of the internet, and was able to build Havenly’s initial platform on her own. She points out that “you don’t need to build a scalable product to start. It just needs to look good and work.” The tendency to want everything to be perfect at launch is a major inhibitor to many projects getting off the ground. She adds, “most companies don’t have huge technical needs from the get-go. Most people have trouble getting over that initial hurdle.”
In hindsight, she admits that the self-built approach might drive legitimate developers crazy down the line, but the positives outweigh the negatives. Mayer ruminated, “you can iterate quickly and you will know your system inside and out.”
— Rockethaus (@rockethaus) March 26, 2015
Havenly first launched about a year ago and Mayer assumed her customers would be people like her, women in their late 20s and early 30s. It turns out she was right, but only partially. Female customers proved easier to acquire than males, but men are more profitable. According to Mayer this is because men tend to have precise budgets and they are willing to spend it all. Predicting customer behaviour can be tricky and a large part of operating a startup is the ability to be reflective on what you’re doing, or as Mayer put it, “this whole journey is about learning after the fact.”
Mayer knew she was on to something special because she had customers paying for her service and her numbers were doubling every couple of months. Not bad for a company that is only about a year old. Most of Havenly’s initial growth was organic. This was, and continues to be aided by their referral program. Word of mouth proved to be a powerful tool for Havenly and has helped to bolster the company’s reputation.
Playing the Investor Game
Getting to a point where you can breathe a bit more comfortably as a startup founder is a major accomplishment. For many this sense of relief is tied to investor funding. In addition to talking about the nuts and bolts of what makes Havenly work, Mayer discussed the process of courting investors at length with the Denver Founder’s Network crowd.
One of the biggest challenges any entrepreneur deals with is the word “no.” Some “no”s are more deeply felt than others, especially those heard during fundraising. Mayer estimated that well over 100 potential investors told her no as she built Havenly. Although investors were not jumping to get on board initially, customers were; Mayer knew she was on to something.
On the plus side, her perseverance paid off, literally, as Mayer eventually managed to raise $1.5M through two rounds of funding, but getting there wasn’t easy. She points out that fundraising on the coasts is much easier because the pool of potential investors is much larger. In Colorado, there are only five seed funders that invest in Colorado startups.
Where are all the women in the startup scene?
Geography is a very real obstacle, but Mayer also touched on how being a woman in the high stakes investor environment created challenges of its own. To her credit, she did not belabor the point, discussing gender issues in a nonchalant way, but don’t confuse her dispassionate dialog with naiveté.
Mayer readily admitted that being a woman made it more difficult to talk to investors, who tend to me middle-aged, white men. “It’s hard to find people who look like me who have done this before,” says the Havenly founder. To use another old adage, birds of a feather flock together and this certainly echoes Mayer’s experience dealing with investors.
In discussing interactions with potential investors, Mayer labeled the male/female dynamic as “strange” and she was asked personal questions that no male would ever have to field. Inquiries about her marital status and about plans for children exemplify this “strangeness” and carry with them an implication that women are not as serious about seeing a project like Havenly through.
Mayer ruminated on why more women aren’t involved in the startup community. She admitted to generalising, but suggests, “the hardest thing for women is to take the rejection and learn from it. It feels more final. Most women don’t go back to the people who said no to them. I did because of circumstance; I was forced to.”
At the same time, there’s no joy in being someone’s diversity project. “It sucks having people invest in you because you’re a woman, but you do it because you have to,” says Mayer. Even then, the most common form of investment is convertible debt, which Mayers says is a “VCs way of kicking you in the balls.” Ouch!
All of this speaks to an imbalance in the startup investment world. Mayer’s experience illustrates how gender can make a difficult process, getting a startup off the ground, seem more like a Sisyphean task.
While other funding options exist, not everyone is capable of bootstrapping their startup. Perhaps it’s time to rethink the startup paradigm and utilize the broader Denver startup community as a laboratory to find alternative ways to get ideas to a stable state. There is nothing wrong with investigating ways to tilt the balance of power away from investors and creating a more collaborative eco-system between startups and investors. There appears to be little downside for founders in getting away from a system where investors “act like God.”
Mayer does not need to be cast as a victim or a martyr in this process. In fact, her success should be celebrated and used as an example to other women who enter this arena on how to succeed. Fortunately for Mayer she’s been able to use the gender imbalance in the startup scene to her advantage. All of Havenly’s employees are women. She says that being a woman makes it easier to hire people because women like to work for other women.
The desire to excel is nothing new to Lee Mayer, and she readily admits that most people who attend elite universities and work for top companies always want to be the smartest person in the room. Startups flip the script and even this Harvard grad confesses “the humility that comes with this job is a good thing for me personally.”
Humility and the ability to take feedback are important traits for any startup leader, and are common themes among Denver Founder’s Network speakers. What is the real secret to success according to Mayer? Having a good support system. “Having someone you trust who is willing to curse at you about your stupid decision” helps too, she claims.