How I Built This with Guy Raz - Zola: Shan-Lyn Ma

Episode Date: April 18, 2022

In a way, Shan-Lyn Ma started attending business school when she was 11 years old and hasn't stopped since. She was hooked on entrepreneurship after winning her first business competition in grade school; and a few years later, she began accumulating lessons from the successes and failures she observed while working at Yahoo and other young companies. In 2013, she and a former colleague applied many of those lessons to their own startup: an online registry designed to make wedding planning easier and more personal. Still, Shan had a lot more to learn—starting with how to convince dubious investors that the world needed another wedding registry. Today, despite the gut-punch of COVID, Zola has grown into a robust wedding-planning platform, valued at $600 million in 2018.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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walking distance from so much of the city, made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb. Your place with all of its personal touches and its amazing location could make someone else's vacation even better. Your home might be worth more than you think. Find out how much at Airbnb.ca.com slash host. It turns out in the Zulu language, Zola is the word that roughly translates to love. And let me tell you, I'm so glad we picked that name because the runner-up names were terrible. What was it? What were they?

We were nearly called Dandelion. Not horrible? Aveque Moire. That's horrible. Thank God you didn't use that one. Well, then Nobu, who has a very innocent mind, wanted to call the company Wish and Blow in reference to a wedding cake, which could be taken in all kinds of ways. And so... Good idea.

That you moved on. Welcome to How I Built This, a show about an innovative. entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on the show today how Shanlin Ma took everything she knew about how not to run an online business and launched Zola, one of the most popular wedding planning sites in the U.S. When it comes to thinking up a new business idea, it's worth trying to forecast trends. For example, we know that America's population is stagnating, which means that senior citizens, people over the age of 65, will account for a growing share of the U.S. population by 2030. In fact, by 2030, one out of five Americans will be older than 65. Now, if you were trend forecasting, you might start thinking of a business that could serve that growing population.

maybe something innovative in health care or assisted living or even companionship, maybe a better dating app for seniors. But sometimes the trend lines don't always correspond with opportunities, or in today's case, a potential lack of opportunity. Because our show today is about the wedding industry. And if you look at the trend lines, at least in the U.S., fewer people are getting married. In 1990, 67% of Americans between 25 and 54 were married. Today, that number is just 53% of 14% decline.

So it might not be a great time to start a wedding business. And yet, this year alone, 2.7 million Americans will still get married the most since 1984. Now, a lot of this, of course, has to do with deferred plans, the pendent. kind of threw a wrench into the works, but still, over time, fewer people are expected to get married, which doesn't bode well for the wedding business. And yet, the sector is expected to grow by at least 6% every year for the next five years. And the reason why is simple. Even though fewer people will get married, those that do are spending more money on bridal gowns, venues, flowers, food, entertainment, registries. and it means that despite the trend lines, it's actually a pretty good time to be in the wedding business.

Shanlin Ma saw some of that potential nearly a decade ago. It was 2013, and that year she was invited to a lot of weddings, and in each case, she felt there was a better way, a better way to register gifts, to invite guests, to personalize the experience. And from that insight, she and her co-founder Nobu Nakaguchi, built Zola. It's now one of the biggest wedding planning sites in the U.S. And though 2020 was a rough year, Shandlin Ma used it to regroup and build out an entirely new business within Zola, homewares, which she'll talk about a little later. Anyway, Shan was born in Singapore, but grew up

in Sydney, Australia, in the 1980s and 90s. She says she was bookish and nerdy as a kid, but to get a real sense of who she was, all you had to do was look at her bedroom, decor. She had posters of three very different teen idols plastered on the walls. The first, pop singer Kylie Minogue. And the other two, actor Michael J. Fox and Jerry Yang. Yes, Jerry Yang, the founder of Yahoo. Well, you know, Michael J. Fox, let's just start with him. He was in this TV show, you might remember, called Family Ties. And his character, on that show, Alex Pete Keaton was. a hustler. He wanted, he was very ambitious in business and that was very inspiring and

romantic to me. And so that is why I wanted to be like Alex speaking. Right. Jerry Yang, I was and still am a huge fan of because he was the founder of Yahoo, which, you know, going back into internet history was really the first. company that made the World Wide Web accessible to anyone in the world. And on top of that, I spent a lot of time growing up in Australia, as many first-generation immigrant kids do, wishing that I was like everyone else. And that's all I wanted to be. I just wanted to be white and have a lunch that was like everyone else. And Jerry Yang kind of looked at. And I look at looked like me. And so here was someone out of college who was starting this company that

was impacting practically every single person in the world. Did everybody who knew you in high school know that you were obsessed with Jerry Yang? No, that was, that's our secret. So when you were a kid in Sydney, were the expectations from your parents pretty high high, did they expect you to do well? And was that also an expectation you had of yourself? They were, I would say, some variation of the stereotype of the Asian tiger parents. But more than that, I think I remember that my dad wanted me to read great books. And by great books, he meant Homer's The Iliad. And so it was kind of disturbing to him that all I wanted to do was read business books. But that was what led me to, you know, I remember a real turning point for me when

I was 11. I entered my very first business plan competition where students from different schools would all form teams. You would come up with an idea for a business. And for us, we came up with the idea of selling stress balls, where we would put balloons and fill them with rice. So I would would take these stress balls. I would go out in my neighborhood, knock door to door, and sell them every night after I came home from school. I wouldn't go home until I had sold out for the day. And at the end of that competition, we ended up being the company with the most sales in the state. And I was so proud of what I had contributed to that team. And from then on, I was hooked. When you were thinking about university, did you, in, in,

In your mind, imagine that one day you would be in the United States, that Australia wasn't where you were going to build your life. I had always had it in my mind. I think it was because my mother would say to me growing up, you know, one day you'll go to the US and you'll get your MBA and it'll all be great. And I have no idea how she got that in her head because we had never known anyone who had worked in the US. We had never known anyone who had gotten an MBA.

but somehow she had that as a dream for me. And you actually did that. I mean, you first went to college in Australia and Sydney, but after that, you went to Stanford to get an MBA. And I guess when you got there, this is like around 2004. So this is sort of like after the dot-com crash and people are still kind of sweeping up the broken glass in Silicon Valley. but things are just kind of starting once again to ramp up. Why you were there, I mean, one of the things you do, obviously, you want to get experienced during your summers between your time there.

You went to Yahoo, naturally, because that's, that was your sort of inspiration. Did you, when you were interviewing for your summer job at Yahoo, because I think your first was to be like a, to do like product marketing, I think. Did you tell them that you were kind of obsessed with the story of Yahoo? I don't think I said that I had a picture of Jerry Yang on my bedroom wall, but I definitely did emphasize how much I loved the company and the interviewers at the time. The comment to me was, oh, you can tell that you really want to work here, which is an understatement to say the least. I think I said yes, even before the offer was out of the person's mouth.

Were you nervous? Were you like, and if you were, how did you break through those nerves to get the internship? I don't think I was as nervous during the interview, but I was certainly very nervous when I was in meetings with all these very senior people who I thought knew so much more than I did. And I remember very distinctly I was presenting something I was working on to a group of executives. And it did not go well because I was stuttering. I was getting questions that I couldn't answer very well.

And I remember the head of the group at that time. He said to me, he pulled me aside after the meeting and he said, you are representing us all. and you need to essentially get it together next time we're in this same situation. And that was the best thing that anyone had ever said to me up until that point, because it made me realize it was not about me and how nervous I was. It was about me representing an entire team of people, and I could not let them down. So to this day, whenever I get nervous about something, what I do is I imagine the faces of the people, that I'm representing on my team.

And it makes me feel so much better. Like I have a gang on my side. And after you got your MBA, you eventually did get a job at Yahoo. Did you, I'm assuming at some point you managed to meet Jerry Yang, I mean, even though by the time you got to Yahoo was a huge company, probably with thousands of employees, that you did get to at least see and maybe even meet Jerry? Yeah, I think that was the most exciting day during the time that I worked at Yahoo, which was the day that I was in the head office and I walked past Jerry Yang in the corridor.

So we didn't quite meet, but we were in the same hallway. And I remember I was so starstruck when he walked past that I literally stopped in my tracks. and I had to take a moment to catch my breath. Yeah. Anyway, it's interesting because you were at Yahoo when it was still profitable. It was still powerful, but clearly the writing, you could start to see the writing on the wall. That Google was very rapidly coming after Yahoo, maybe even surpassed Yahoo in search at that point already, but was going to become a much, much more significant company.

And that Yahoo was actually already in decline at that point. Yeah, I think you could start to see that. And was that palpable that feeling? I mean, would people kind of, I don't know, quietly talk about that? Or was it just something, a sense that you think people had and kind of internalized? No, I don't think it was a general feeling because I think the leaders of the company at that time were still people that everyone admired because they were so talented and brilliant leaders. And I think the challenge that was frustrating to most people was how do we decide who is responsible for a given decision? Because it has an impact on so many businesses. So, you know, for example, we were talking about, hey, there should be an app for Yahoo Finance. But who's responsible for that and who makes the decision?

Is it the Yahoo finance team? Is it the mobile team? Is it the centralized team? There was just a lot of questions around how do we work together to fight this common enemy? And in a small company, you don't have to deal with that. And so I think just the innovator's dilemma problem was really brought to life, even though so many smart people there were really trying to make it work. And the lesson that I took from that was that actually it's never.

obvious what's going to happen in a business. Even at a big company, it's really incumbent upon the people to act as one team and feel like they're working in a small startup because that's who they're competing with. And that's the only way that you're going to win. So I guess around 2008, you wind up leaving Yahoo and moving to New York to work at a new startup called the it's called guilt group still around. And this was a fashion website that you you'd really liked, right? I mean, you used it yourself. Yeah. I was shopping on it every day. I was obsessed with that product, spending too much time and money on it. And one day, while I was thinking about all these other jobs in Silicon Valley, I happened upon the jobs page

on guilt and just saw right there, you know, and listening for my dream job. And, through my resume and through the website and ended up getting a call for an interview the very next day. Wow. Guil Group, I think a lot of people know where it is, but I think it started out as like a flash sales site, right, for like designer apparel, mainly women's apparel. And it was founded by this guy, Kevin Ryan, who we'll talk about later on. And he's just an amazing serial entrepreneur involved in like the founding of DoubleClick and Business Insider and a bunch of other companies. So, I mean, that, and it was a hot company. I mean, it's, I think, it launched in 2007, and it was like, I remember it was everywhere. Yeah, it was really the first time that you could buy designer brands like Valentino or Dolce and Gabana at 80% off retail for a limited time only through a beautiful website. Without having to line up outside of a store on a cold morning in New York City.

Yes. Right? Very important. Yes. When you started there, I think it was in the summer of 2008, it was still, I think, just a year after launch. So was it relatively small number of people, like under 100 people? Yeah. When I started a guild, it was probably less than 30 people in the business.

It had not been live yet for a full year. So it was still the first year of business. I think that first year, the business did something like $7 million in revenue. Right. And it was growing very quickly. And so I remember at the weekly all-team meeting every single week, the head of finance would get up and say, and yet again, we've had another record week. So you could tell that this was a rocket ship where the business was growing, the team was

growing, and the customers could not get enough. While you were at Gilt, you met somebody there who would become a hugely important person in your life, Nobu Nakaguchi, who is your co-founder at Zola, which we'll talk about Zola in a bit. But tell me about Nobu. So I first came into contact with Nobu when we were starting to think about building Gilt's first iPhone app. So as part of this project, we realized we didn't have anyone in the company that had experience designing mobile apps on mobile devices before. So we should go and find someone who had that experience. Anyway, we came across Nobu and we brought him in to work with us on designing the first ever

gilt iPhone app. He did such an incredible job. And that app turned out to be a hit right out of the gate. And it made Apple then come and ask us, could we be one of the first apps to launch on the iPad device when the iPad launched? And at that time, iPads didn't exist yet. But of course, they were building it in stealth. They wouldn't give us an iPad device because as a company, they're very secretive. And so, again, we went back to Nobu and said, can you please design an iPad app?

But by the way, we don't know really anything about this device. And what Nobu did to design this was he watched the Apple. There was one Apple TV commercial where they showed an iPad, and he would watch that commercial again and again and freeze frame it to kind of zoom in on what is actually possible on this magical new device. And then he had a cardboard cutout that was the dimension of the iPad that was coming out. And he would put his designs on this cutout and like tap and swipe the cardboard cut out to try to imagine how it would feel. And similar to the iPhone, it ended up being a huge beloved app by all the users.

So, all right. So guilt is is growing and diversifying. In fact, at one point, I guess they asked you to like head up this new like food and wine vertical that they built. But from what I gather, the growth kind of slowed down and guilt actually started run into some business turbulence. Why? What was happening? What was the company doing wrong? I think ultimately the business model of flash sales was one that was very hard to turn into a sustainable, profitable business.

Every single day, you had to find a large handful. of luxury brands that people love. Amazing things. Yeah. Yeah. Amazing products. Be able to offer it at deep discount, have enough depth of that product. So the fact that you have to buy so much inventory and do it every single day for a new sale means that it's not just inventory for one season. It's inventory for 24 hours. Wow. So it wasn't, so guilt wasn't buying, you know, wasn't sort of cutting deals with helmet laying and Versace and all these designers for their existing inventory. They were actually cutting a deal to buy a bunch of inventory and store it in a warehouse and then sell whatever they could sell off from that inventory.

Yeah, exactly. Everything was coming into their own warehouse. Wow. It's a lot of stuff to manage. Yes, yes, it was a lot. Because the costs that you have are not. just of that particular inventory, which is like a hard cost, there's always the soft costs around the photo shoots that you have to do, or the cost of the warehouse having to bring in and then ship out all this turn over this inventory every single day, the cost of a huge merchandising team to source and manage all this product. Just the number of people it required made it very hard for the P&L to ever work out.

And it made me very allergic to wanting to work in a business that took inventory in the future. I'm curious, when you, under that model, what percentage of the inventory do you have to sell to be profitable, like 60, 70 percent? Do you remember what that was? I don't remember exactly. I think it was something like 80%. Wow. Yeah. So you have to sell most of it.

Yeah. And at that time, there were also market forces that where the rest of the industry was starting to host their own sales and just sell it themselves. And there was also less excess inventory available to buy. And so it was both from the demand and supply side that it was getting much harder to maintain this model. Yeah, I think it was like early 2012, you know, because there had been talk about an IPO. And obviously Kevin Ryan had this incredible track record still does as an entrepreneur. But this is a challenging, I mean, the business that guilt was in is and was challenging. And I think in 2012, they had, you know, layoffs.

And I think even in your division and guilt taste that you were heading up, you had to hit to let some of the team go. Yeah. So the day that I had to lay off people from my team, that was one of the darkest days. I could feel a very real shift in the business from the first four years I was there. It was all about growth, expansion, innovation. And it felt like the shift was then starting to move towards profitability, towards protecting and focusing on the core business. I felt like I had done and seen a lot through those four years as kind of the equivalent to like 40 years. And so I felt like it was time to move on to kind of take those learnings and try to replicate the growth experience all over again. I mean, it sounds like you, you know, you kind of came to the realization that it was time to leave. if you were, you know, in your kind of early 30s and had been there for four years. And you are trying to figure out what to do. First question I have for you, before you even came up with an idea for what you wanted to do,

did you know that you did not want to do this on your own, that you wanted to do it with a co-founder? I had always, when I was at Gilt, I was working very closely with Nobu. we were like hand-in-hand partners because we really trusted and loved working with each other. And so we had always talked about one day we should start something together. And actually it was during the time that I had left and no one who had left Guilt to go and work at a different startup. And we met up for lunch as friends do. And this is what I now think of as my lunch of a lifetime. We were catching up and I was asking Nobu about what he was doing and he looked at me and he said,

you know, it's good, it's fine, but it's not as good as when we were working together. And I had this realization and I said to him, you know what? I feel the same way. And we said, we've always talked about starting something. Why don't we just do that? Let's both quit our jobs and start working on. the idea that we will then turn into a business and a startup to do together. And that idea was nothing at that point, right?

It was nothing yet. We did not have any ideas yet. The idea was let's quit our jobs first. When we come back in just a moment, how Shan and Nobu started Zola using the lessons they learned from other company's mistakes and how they discover that every happy couple is unhappy. about their wedding in basically the same way. Stay with us, I'm Guy Raz, and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Raz.

So it's 2013, and Shan has decided to quit her job so she can start building a business with her friend and colleague Nobunakaguchi, which is exciting, right? But there's just one small problem. They don't have any ideas yet. Nobu and I were meeting up together on nights or on weekends. We would go for walks. We would brainstorm different ideas of things we could start.

And the jumping off point was really, what are the apps and products that we use ourselves every day that we think we could make a lot better? So what were some of the ideas you were coming up with? Well, we had a whiteboard filled with hundreds of different ideas. And ultimately we kind of filtered the ideas down to three things that we wanted to do more work on to explore. One of the ideas was for a snack delivery service because we thought, you know, every day people sitting at their desks, you get hungry for snacks around 3 p.m. What if there was snacks that would just magically arrive based on your snack preference at your desk at 3 p.m. wouldn't that be cool?

Yeah, I'd like that. The thing was margins were very tight. Shipping was very expensive. Yeah, and also food is tricky because it goes bad. Yes. So we very quickly moved on from the snacks idea. The second idea that we were exploring in parallel was for an education app that would allow teachers and parents to communicate about the grades of their children. We were interviewing teachers, we were interviewing parents, we were talking to someone who had worked

at the Department of Education, trying to understand how it might work. And after a series of interviews, I remember Nobu asking me, are you still interested in this idea? And I said, you know what, I'd have such a big headache thinking about this. I don't know if I can think about this for at least the next seven to ten years of my life. And so then what? Then what was the next idea? So the third idea was in the wedding space. And that is what then became the idea for Zola. Around that time, 2013 was the year that all my friends got married at exactly the same time. And I was going to a wedding every single weekend. And I think we all have this year in our lives. And I remember I was complaining to know,

about one of my friends' wedding registries, and she had registered for silver forks and spoons and knives, and the only thing that I could afford on her wedding registry was one tiny teaspoon. Totally acceptable. Totally fine. I'm getting you this spoon. I wanted to get her something special that reflected our close friendship that reflected her passions, and this was not her at all. And so I was so. upset that I called her and I said, what is up with your registry? And she said, oh, my, it was such a pain to register at all these different stores. I couldn't handle it anymore. So I just told my mother she

could do whatever she wanted. And I don't even know what's on my registry right now. Yeah. So I was complaining to Nobu about how painful this was. And he's married. And so he said, oh, you think it's bad as a guest. It was just as bad from my point of view when Ange, his wife and Nobu were getting married, they got into huge fights about their wedding registry and every part of their wedding planning process. And he was complaining about how he had to use 20 different apps and products and services to plan that one day, that they nearly got a divorce before they were even married. But I mean there were, right, so this 2013.

I mean, there were, like, you could go to Macy's. You could go to Cretton Barrel. You could go to Target. I mean, you could. You could. There were registries. There's always been registries, right? So was the pain point like you had to kind of decide what you wanted and it wasn't

clear what you needed? And what was the problem? Yeah. The problem was that it had. changed in decades since the 1960s when they were first invented. It was like someone had taken a registry from the 1960s and just put it on the internet and hadn't touched it since. Yeah. You know, it was like everyone was registering for exactly the same things. It looked the same way. And yet people and couples are so different in terms of what they love, what their passions

are that couples today just wanted fundamentally different things. And for me, you know, as I was looking at my friend's registry, I thought to myself, I know her so well and this just isn't her. It looks like every other registry. It's cold. It's impersonal. And it feels like it was cut from the same cookie cutter mold. And yet, if I asked her what she actually wanted, she would give me a list of a hundred things that she would love to have. And that was what we set out to build. So what was the value proposition? Like if I was going to Sola, if I said, okay, Shan, tell me what I would get out of this thing.

What's he to manage? Yeah. So we came to the answer by asking so many different couples, what did they want to see? And what we heard time and time again was couples today, they really wanted. to register for not just products, but also experiences and cash and honeymoon funds. They wanted it to be personal, and they wanted it first and foremost, to be tied into the rest of their wedding, so they didn't want to have it feel like it was an island, which is what it felt like back then before Zola.

I mean, it's amazing because it's only, we're only talking about, what, you know, eight or nine years ago. And now, like, you think about weddings, and this is just, this is a perfect course. You know, people ask for downpayments or IVF funds, right? This is a thing now. And it's so amazing that, I guess I shouldn't be amazed, that that concept wasn't out there in 2013. Yeah, it's, it's, you know, I like to think that we have really contributed to the shift in what is possible. I always remember there were. one bride-to-be who we were showing our wedding registry product too, and she started to get tears in her eyes. And she said, is this possible? Am I even allowed to register for all these things?

Am I allowed to create a registry that even looks like this? And that was the aha moment. That was the moment that I knew that this was going to work. You had already worked for two e-commerce companies that had a model where they sold stuff through the website and made a profit and sent to the customer, but both didn't work. So you knew that there was going to be a challenge in trying to be a retailer, an e-retailer. How are you going to get around that? How are you going to make your business model work? If you already knew that having a bunch of inventory and then trying to sell it didn't work, or at least didn't work where you'd been.

What we did was when we were thinking about our business model, we thought about how can we build this in a way that avoids the inventory problem that we had seen, but also allows us to own and manage the customer experience without handing them off to another player where we don't know if, that other partner is going to maintain the high level of service that we want to give our couple. And by the way, you know, if we hand the customer off to another partner or retailer or seller through a registry, they might be handed off to five or 20 different sites. And so then it becomes very fragmented and a terrible experience.

So what we came up with was what if this registry was truly a combination of an e-commerce, or retail business model combined with a drop ship model where we don't take inventory, but we ship products directly from the brands to the home. Basically, you understood that having a warehouse full of inventory was a non-star. It just was not going to work. Yeah, and it's even more impractical in a wedding registry setting because by nature of a registry, you want to offer a very broad assortment. So you want as many brands and products as possible, but you need very little inventory depth.

And so that kind of model is just one that would never have worked from a profitability standpoint. All right. So it's 2013. You and Nobu land on this idea, and this is the one you're going to pursue. I'm assuming you had some money in the bank, probably not like crazy amounts of money, but you probably saved some money from your jobs. So at the beginning, did the two of you just kind of use your money to do what? Like, you want to, I guess you want to build a website and kind of prototype and stuff like that. How did you decide to allocate the limited funds that the two of you had?

You know, while we were developing the idea for Zola, it was really covering our own costs of living. Right. I took a lot of. zero interest credit cards out. I think I had a stack of zero interest credit cards. I also had balanced transfers that I would transfer from one card to the other. And I do not recommend this to anyone, but that was part of how I paid my bills during that time. All right. So initially, when the two of your meeting, are you doing this at, I don't know, at coffee shops at your apartment and Nobu's apartment, where are you kind of like, you know, kind of starting to build this thing up?

I remember Nobu would come to my apartment in downtown Manhattan. It's a tiny apartment. We're in my living room slash kitchen slash everything room. And all I have is a coffee table. So we're working on this coffee table. It's very low to the ground. It is still my coffee table, by the way. Nice.

And of course, after a few hours, of working and sketching prototypes on this table, our legs would start to get cramped. You would like sketch what the website would look like on a piece of paper? Yes, exactly. And one day, Nobu got so upset with how painful it was to work at this coffee table that he snapped. He bought a table from IKEA, and that became our working table. Wow. And we would take what we sketched on big sheets of paper.

we would paste it up on the walls of my living room. It looked like a scene out of homeland, but that was the early months of building the company. Right. Well, I'm curious about Nobu and your different skill sets. So first of all, clearly you got along. You liked working with each other, which is important. You have to want to like the person you're going to start a business with.

But what were the skill sets that you had that he didn't have, and what were the skillsets that he had that you didn't have? So Nobu, I think of as a product design genius in that he can take an idea and bring that idea to life on the screen in a way that you couldn't even have thought of. The thing that I would hope he would say I bring is that I enjoy thinking about everything else that goes around the product that has to support that design, whether it is do we need merchandise in that e-commerce store? Okay, what kind of merchandise? How are we going to get that merchandise? Let me go out and talk to the brands to get that.

And so that together, I think, is everything you need to build a product. How did you, Inobu, I mean, Weddings was not a thing that you knew much about. How did you educate yourself about it? How did you begin to understand the opportunity? because there could have been five or six other companies out there trying to do the same thing that you would have to know about. So where did you start to kind of learn about about this industry in this sector? We did what we've always done in any other job or company, which is we spoke to as many people as we could. So I spent a huge amount of my time tracking down anyone who had just gotten engaged or anyone who had just gotten married.

If you knew me as a friend, you knew that I wanted to talk to anyone you knew. You guys are engaged. You got to talk to Shan. I got to connect to Shan. Yes, yes, exactly. And then did you build like a spreadsheet with the data that you gathered? You know, that's a good idea in retrospect. I'm just wondering, like, how did you use that?

How did you kind of use that data? How did you organize it? We would, after each conversation, Nobu and I would go away and talk about what we just learned together. So I think we were really iterating with each conversation in real time. We were really listening for what are the themes that come up again and again and again in every conversation. And it was remarkable how consistent some of these themes were. What we heard was couples felt like they were almost like on this whitewater raft being shuffled down the same path as everyone else, where you had to register a certain way, you had to have your wedding invitation look a certain way.

And what they were looking for was permission to do the things they actually really wanted and to have a little bit of fun. So I read that one of the things that you did, that the two of you did while you were building Zola was very smartly, you told Kevin Ryan about this idea, this guy who had founded Guild Group and was a founder of Double Click and a bunch of other companies about this idea, hoping, maybe hoping that he would agree to give you advice. Yeah, and I remember still to this day exactly what he said, which was, oh, I love weddings. I've always wanted to do something in the weddings space. I'll give you the funding and we'll do it together. That's great. It's incredible. But whenever I tell any founder or entrepreneur this story, the response I get is always, wow, that's really lucky. You got funding within one second. That was so easy. But actually, it's the exact opposite. It's that Nobu and I worked our guts out 24-7 for four years nonstop to prove to Kevin that we were people worth investing in. Because he gave you presumably a small amount of, not small, but not like millions of dollars. Yeah, that first check was $250,000. So he was the first seed investor.

but more importantly, he also joined us as a co-founder and chairman of the board. And so brought not just the cash, but also his experience and advice. And with that seed money, I mean, it's only going to take you so far. You can't hire a professional CMO or, you know, there are things you can't do with that. But you can start to build out the infrastructure, the technical infrastructure to build a prototype, for example. Was that how you use that seed money? Yeah, it really went to salaries of, you know, the first nine employees, which was the size of the team that we had in order to get the product to launch. That $250,000 probably lasted, I would say, what, six months maybe?

Yeah, it got us to launch, which was around four to six months. And we actually raised our Series A round the week before we launched. By the way, how did you come up with a name Zola? Because when I first heard, I think of Emil Zola. I'm going to go there. This is going to sound horribly pretentious. Where does the name come from? It was in the months in the countdown to launching the site.

We still didn't have a name yet. We were brainstorming all day, all night. And one of our summer interns was also very passionate about helping us find the right name. So during these brainstorms, he was looking at, how do you say love in different languages? He was looking through the dictionary. He got right to the end to the Z languages. And it turns out in the Zulu language, Zola is the word that roughly translates to love.

And so he said, how about Zola? We put it on the whiteboard. We took a vote. And, you know, let me tell you, I'm so glad we picked that name because the runner-up names were terrible. What was it? What were they? Well, we were nearly called Dandelion. Not horrible.

Avecmoa. That's horrible. That's horrible. Thank God you didn't use that one. Well, then Nobu, who has a very innocent mind, wanted to call the company Wish and Blow in reference to a wedding cake. Got it. Could be taken in all kinds of ways. Good idea that you moved on.

Now, here's my question. So you're going to investors, and you've got this great idea. And it's 2013, right? Something like that. And I'm imagining I'm in the room. And you're pitching to me. And I'm going to bring out the elephant in the room, which is the knot. And we've had Carly Rooney and David Lou on the show a few years ago.

I love them. But I'm thinking, what's the difference between what you're doing and the not? And you must have been asked that question. Certainly early on. So what was your answer? I think there were products that couples were using online to plan their wedding. But we were trying to create a product that was truly all in one place. And what we saw existed was a product that required you still to be sent out to 20,

different other sites in order to plan that one day, which was extremely stressful and fragmented for users. And a business model that was primarily driven by advertising. And we saw on the business side, the opportunity was to create a business that was not relying on advertising so that we could keep the experience all in one place and build a truly kind of interconnected product. But the risk here was that because there was no advertised, it wasn't going to be supported by advertising or a fee, a user fee, because it's free. It was going to be free for a user to set up a registry, to set up a really nice site, and to invite people to that registry and have a story on it, your revenue was going to come entirely from taking a cut

of the product that you were selling. That's right. And I think the way that we thought about it was because we had experience in e-commerce, we could create this business model that was, felt like a retail experience. Yeah. But on the back end was a combination of a retail and a marketplace business model. But at the same time, another comment that I did hear from many investors was, we actually haven't seen a company in the wedding space that is a multi-billion dollar player. And maybe because there hasn't been a big multi-billion dollar company yet, there's just something about this industry that means that they can't be.

Which, again, it seems crazy because it is a huge market. It's a $100 billion market in the U.S. A million dollar market, right? Just the U.S. wedding business is not a global. $100 billion. And we know that there can be a big company built here. And so the push was really proved to us that this can be the winner. But still, you had trouble, even with Kevin Ryan, even with your product experience, you had trouble raising that first round?

Well, the Series A round was not the hardest round. The harder round was the next round, the Series B, where often it is the hardest round for many startups. Because you're not making money. you're not showing a clear path to profitability yet. You're at the teenage years where you have enough of a track record where you're making money so you can't just sell the dream of what's going to happen. But you're also not yet at maturity where you can show this is already a huge company. So as you grew and began to scale up, right,

I have to imagine like one of the most important, if not the most important things you have to do is raise more money because it's a cash intensive process, certainly until you reach sustainability. And, you know, you're dealing with all kinds. I mean, there's the technology side. There's the products that you're selling. You're dealing with returns. I'm sure that costs you, you know, that costs you money. So was that just stressful for you that you knew that, you know, you would have to focus on raising money for, you know, at least a few years. Yeah.

And it, in the world of startups, it sometimes feels like the process of fundraising never ends. Yeah. And that's certainly been true for us. And I think at the beginning, it was particularly stressful because I would take it very personally, every single no was a mortal blow to my heart where I thought they were, judging me and the company as a complete failure. Yeah. When in fact, now that I've done this for eight years,

I feel very differently about it, which is that investors like everyone else are just doing their job, and their job is to be in the business of saying no, 99% of the time. And so it's not personal. It's just what they have to do day in and day out. And each time they say no, they are sharing valuable information on why they think the business might not work. And so why don't we and I take that information and think about how can we address it in the business so we avoid that issue? But then also how can we adjust our pitch so that next time it is not an issue.

Yeah. All right. So I guess by 2015, you have 40 employees probably by the end of the year more than that. And in 2016, you hired Rachel Jarrett, who was like one of your mentors at Guild Group. You hired her as president and COO. Is she still at Sola? She is, yes. And having Rachel joined Zola was one of the best things that ever happened to the company. That was a fortuitous decision that she came on in January, I think, to help kind of ease your workload because you had been taking so much on because just. Six months later, you got in a really bad car accident that would put you out of work for a while.

I mean, I don't want to have to relive that experience, but can you talk a little bit about what happened? Yeah, I was flying home to New York from California. And upon landing in New York, I was in a car on the way home from the airport. in a ride-sharing car and the driver ran a red light and an oncoming car smashed into me into the backseat where I was sitting.

I was very badly injured in eight broken ribs, fractured spine, broken collarbone, injured lung, liver, bad shape. and was really not able to work for quite some time, for quite a few months after that. And I think, you know, every founder thinks to themselves, what would happen if I wasn't here anymore? What would happen to this business?

I actually found out when I got hit by that car. It was not one of those situations where I could run the company from my hospital beds. So I was forced to really find out. how amazing the team was that we had built. And these near-death experiences are true reminders of what's important to you. Because I remember in the moment that that car hit me, I was in extreme pain, and there were two thoughts that came to mine. The first thought was, Zola is not where it needs to be yet.

There's still so much I want to do. It's so much we need to do. I cannot go yet. And the second thought in parallel at the same time was I haven't yet had the chance to experience motherhood and I really want to. And so I cannot die yet. When we come back in just a moment,

how Shan gets through months of painful recovery and then has to deal with yet another big blow to the company, the year when in-person weddings pretty much disappear. Stay with us. I'm Guy Raz, and you're listening to How to How to that. I built this. Hey, welcome back to how I built this. I'm Guy Raz. So it's 2016 and Shan has just been in a serious car crash. She's badly injured to the point where she can't walk on her own. And she stays at home recovering for more than three months.

You can't imagine I was thinking about all the things that I had to do when I got back to my computer and little did I know it would be a long time before I could get back. to do those things. So you probably went through a long period of physical therapy, even after you recovered. Yes. Physical therapy. And are you able to, like, take a run today? I am.

I have, you know, steel plates in my body that make me feel like Iron Man, but, you know, even stronger because of it, I think. Wow. I know this is like such a cliche thing, but I think it's also true, which is. going through that is inevitably going to change the way you think about your life. What did you start to do? Was there anything that you started to do differently after that, after you recovered? The first thing I did was really during the recovery period when I was in a lot of physical pain and I couldn't really think about work, but I needed something to help me get through the day

that was not medical. And so started to write in a gratitude journal, just really three things that I was grateful for each morning, and then again at the end of the day before I went to sleep. And it really helped me get through that time. And now any time I'm going through a challenging period, either at work or elsewhere, I go back to one of the three things I'm really grateful for

today. During that time, often a common thing was, I'm grateful to still be alive. And I still feel like that every day. Yeah. So during that time, the company had to function without you. Even with that, I mean, you guys did a series, you went at a series C fundraise that year, closed to November of that year. So that, we actually started fundraising after I came back to work full-time. And so I was back in the office. We flew to Silicon Valley, hit Sand Hill Road, which is the road where all the VCs are on. And that was actually one of the most fun, fun-raising experiences because first and foremost, the business was doing really well. So it was fun to get to tell that story. But also, it was fun to just be alive and out in the world.

Yeah. Wow. And so, So thankfully, you recovered and at this point, you're actually able to raise like tens of millions of dollars during this period. And the business is growing. I mean, I think in mid-2017, you had something like 300,000 users. But, I mean, of course, you had to keep growing, right? And constantly think of new innovations, right? Because what makes the thing you're offering interesting and exciting is the, the ease of use and how you can create a great registry.

But that's not going to be enough. I mean, down the road, you want to, right, you want to be a one-stop shop for everything, for the whole thing, for your invitations, your car, your photographer, the flowers, the caterer. Can you do all that on the site? We can now. Here we've really been led by our couples kind of pulling the company out of us, which is they, at the moment we launched the registry, they were saying, We love you for registry.

If I could just add a few more details about my wedding to my page on Zola, it could also be my wedding website, and then it would be all there and I'd be done. And we kept hearing that again and again. It was the number one request. Wow. And finally, we did it. We launched the wedding website, and it took off immediately. And we thought, wow, that response was so dramatic.

We should probably do more products and do it faster this time. And let's go back to the list of requests and see what else the couples are asking us for. All right. So you, I think by 2019, you guys were, or maybe even 2018, you were the third most visited wedding site in the U.S. So you were clearly on the right track. And later that year, you put some ads on Hallmark TV. and they like pulled one of them because it was an ad for Zola with a same-sex couple in there. And you guys decided after that to just pull all of your ads off Hallmark,

which actually got you a lot of attention and support, right? People were like right on. People were super supportive of that decision. But that was kind of risky because, you know, there are lots of parts of the world where people would say seeing a same-sex couple. and a wedding ad is quote controversial. By that time, we had been doing TV ads for a number of years, and we had always had same-sex couples in all our advertising.

So Hallmark said we're not running these particular ads. And the marketing team, what I am so proud of is that they said, that is not okay. That is unacceptable. and they told the New York Times. And through that, it got picked up by many other news outlets, which then snowballed. And it felt like for a moment everyone was talking about this decision. We were on the Kobe show played the entire TV commercial from start to finish.

That is amazing. That's free, free attention. Yeah. So many celebrities. were talking about it, linking to the ad. And while it was a really incredible moment for Zol in terms of awareness, the thing that I am most proud of of this entire incident was that the team didn't ask permission to go and tell the New York Times.

They knew that the values of this company were that we support and embrace all couples and that of course we would agree this was the right thing to do. And of course, we will stand by the value that all love is valid and worth sharing. So you're entering 2020 on a high note. You got a lot of attention after that ad was pulled and what happened there. And it's going to be a huge year. But 2020, we know what happened 2020. The world shut down.

The wedding industry shut down. The food industry like cruises, vacations, travel, gone. Yeah. It was a scary time for us because one of the things we've always had is great visibility into what's going to happen in the business because we can see in aggregate all the wedding dates that hundreds of thousands of couples are planning through the solar platform. And when we had that first week of lockdowns during the pandemic, we could see all these wedding dates suddenly being moved to later in the year. And we had to very quickly move to both support our couples who were all suddenly calling us, asking for our help and support to change their dates, to communicate to their guests. And then we also needed to secure the business and make sure that we could survive the pandemic no matter how long it lasted.

And so we shifted both the product roadmaps and the business roadmaps very quickly. How quickly? I mean, 2020. Every wedding was canceled. Yeah. So, I mean, did you, first of all, did you have to do any layoffs at the beginning of that, of the pandemic? We did. And right, you know, in the first few weeks of the lockdowns, we had to do a round of layoffs, do a partial furlough.

People in the company took pay cuts. I'm curious. Just like, did you see just a precipitous drop in revenue from month to month? Because I have to imagine, like, all of a sudden, people are, like, freezing their wedding date. So people are not buying wedding gifts. You know, what was interesting was that certainly in the first four, three to four months, there was less wedding gifts being given. Yeah. But actually, there still was gifting happening, even though the weddings weren't happening.

And what also helped us during that time was that we launched our home store because we saw a lot of people coming to buy. from Zola, who weren't getting married, because, of course, everyone was at home and buying things for their home. Yeah. This is called Zola Home, I think, and you launched that, I mean, was that, like, was that idea already in the pipeline, or did you, in the midst of the pandemic, did you guys say, we better launch, we better launch another site focused on home goods? It was something we always thought we would do at some point in the company, but it was

never the top priority until the pandemic, until we saw people starting to buy from us. And at that time, I think a lot of people found us. They found us through word of mouth because that's what people were thinking about. They were thinking about their homes. Yeah. Well, 2021, I read, was your biggest year ever, which is like, I mean, now, of course, we're not surprised because 2021 people were sitting on extra cash and savings, but I did not realize that the wedding, I mean, I'm in California, so it's a little bit, you know, here it's a little bit, it's been a little bit kind of more intense around masking and things like that. But I did not realize that 2021 was such a huge bounce back year for weddings. Like, clearly I wasn't invited to any. But, so. It was an fantastic year because there was a lot of pent up demand of people who wanted to get married during 2020 that had. to reschedule into 2021.

Did you, well, I mean, I'm half joking because I did go to some weddings in 2021, but they were all virtual. And they were beautiful. I love the virtual weddings. I mean, it's easy. Everybody can go. You can be in your pajamas and watch it and just wear like that nice, you know, top, right? So you're on the screen.

But, yeah, I loved it. I mean, I always thought people should, I always thought everybody should get married at like the Chicago O'Hare, Sheraton or Hilton or whatever. Because everybody can fly to Chicago from wherever you are. It's a central airport. You fly there. Get out of the plane or the wedding. Get back on the plane and go home.

And it's easy. Everybody can get to the Chicago O'Hare Sheraton. You know, I don't know if people want to look back five, ten years from now and think about their most special day being at the airport. Right. Yeah. All right. Fair enough.

Anyway, were you able to, I mean, you had to do some laughs. at the beginning of 2020, understandably, have you expanded since then? Have you now grown your staff once again? We have. We are now back in growing the business. We are close to 250 people and continuing to hire. And while I think we are focused on continuing to expand into more and more of the weddings market. We want to continue to keep in mind the lessons that we learn along the way, which is how can we grow, but do it with the right business model. Yeah.

You mentioned that after the accident, right at that moment, you thought to yourself two things. One is Zola is not where it needs to be. And two, I want to be a mother. I think Zola is in a pretty great place. And two, you became a mom. I did. I had a baby girl. She's seven months old.

Being a single working mother has given me a whole new level of respect for working parents everywhere. Pretty much every day, I think to myself, this feels pretty close to impossible. And yet so many people around the world do it. And most people are not, you know, as fortunate as I am in terms of kind of flexibility and support. And so, you know, if other people can do it, I can do it too. Yeah. Is the company, I mean, now you're eight years in, right? In DeZola, almost nine years in.

And I think you're, I can't remember what was the, your last round, your series D? What were you guys valued at? Is it public? In 2018, we raised a series D round, which, valued us at 600 million. Wow. Obviously, you know, and I ask this question all the time, and I'm sorry because it's annoying. It's like asking an 18-year-old, where are you going to go to college next year? What ultimately is going to happen? I mean, it's either you get acquired or you go public, right? And that's definitely something that has to be on your mind.

It's something that is always on my mind. And yet, I think like many things, something that we cannot and should not rush into. And we're in the fortunate position where we are not forced to make that decision. And so let's build a company that is built to last. When you think about your journey from like, you know, kid in Australia to who you are, you're running a company value over $600 million, probably more, how much of that do you attribute to just your crazy hard work ethic and how much you think has to do with getting lucky? I think the luckiest thing that ever happened to me was that I was born to the parents that I was born to. And then the rest of it was thinking to myself, every day, the thing that's going to get

me to where I want to go is when I wake up, I work as hard as I possibly can. I go to sleep. I wake I do it again the next day. And if I can do that, I'll make myself proud. I'll make my team, my users proud, and ultimately make my daughter proud. And that is what I'm focused on. That's Shanlin Ma, co-founder and CEO of Zola. And by the way, Jerry Yang,

one of the heroes that Shan had hanging on a poster on her bedroom wall when she was a kid, he's actually now an investor in Zola. A friend of Shans met Jerry at a dinner and later introduced them. That is a real pinch me moment. Now I have a reason to talk to him on an ongoing basis. Amazing. And you could finally get your poster autographed.

Even better, I have a photo taken with him in the same room, same photo. Even better. Now you just need to hit up Kylie Minow on Michael J. Fox and you've got the tram for it. One day. Hey, thanks so much for listening to the show this week. If you want to hear the next episode of every show one week early, check out Amazon Music. If you want to listen one week early and ad free, subscribe to Wondery Plus in Apple Podcasts or on the Wondery app. Please do follow us on your podcast app so you always have the latest episode downloaded.

And another way to support the show is by filling out a survey at Wondry.com slash survey. If you want to follow us on Twitter or Instagram, our account is at how I built this. On Twitter, mine is at Guy Raz. and on Instagram it's at guy.org. This episode was produced by Alex Chung with music composed by Rumtine Arablewee. It was edited by Neva Grant with research help from Claire Murashima.

Our production staff also includes Casey Herman, J.C. Howard, Liz Metzger, Sam Paulson, Carrie Thompson, and Elaine Coates. Our intern is Margaret Serino. I'm Guy Raz, and you've been listening to How I Build This.