Molly Goodson: The Go-to-Market Genius
Ms. Goodson on...
Her untraditional path to an $800,000 seed round
Leveraging network effects for a successful go-to-market launch
The design trade-offs that create a more human experience
How to staff a team to run a thriving hospitality brand
The importance of brand guidelines to inspire your team's best work
This conversation took place on April 12, 2019 at The Assembly in San Francisco’s Mission District. It has been edited for brevity and clarity.
Underwire: Tell me about your journey to The Assembly. You came out of content world as the VP of Content at POPSUGAR and then co-founded a startup called Spright.
I left my job at POPSUGAR at the end of 2014 and I didn't know what I wanted to do, but I knew that I needed a break from the constant content creation world that we live in. I was helping to manage a team of 70 women creating 500 pieces of content a day. The world had changed a lot from 2007 when I started there and 2004 when I started writing online and I didn't quite realize how burnt out I was.
I really wanted to think about health and wellness because what I saw was that women, especially those who are leaders in all things, were really seeking different ways of being talked to about their own self care, health, and wellness. They were thinking about it differently, and that the way that they were being messaged to wasn't really keeping up with the reality.
I knew that there was something there, but I didn't know what it was. At that time I had been approached by two guys, one of whom I'd sort of known and one of whom I was a complete stranger to. And they were like, "Hey, we're fundraising for a health and wellness content startup. We know we need a content person. Do you want to come be our third co-founder?"
The two other co-founders had started down a fundraising path already. They both were well connected to the fundraising world and had a main investor lined up. They just needed the last puzzle, which was me. So my first experience with fundraising was coming along to meetings and answering a couple questions about content strategy and how to think about it, but the legwork had already been done.
Was that for a seed round?
Yes. I was brought in fairly late in the process. I knew going in that I was getting much less equity than they were.
For two years, myself and the co-founders, along with a small team, we built a health and wellness app called Spright. It was in the app store. It was like The Assembly in app form. It was small group conversations. It was trying to make coaching and other sorts of health and wellness type things accessible to groups.
Eventually we decided to wind that down. And we made the decision to shut that down at noon on election day in 2016 when the world felt a little different than it did even that evening.
So we went back to the investors and said, "We still have some money in the bank, but we just don't think...this is not the thing. We'd like to let the team go, give them severance and then there's still some money in the bank which we can give back to you."
And they said, "How about you do the first two things, let the team go, give the severance, and then go take a break. Go walk around for a couple weeks. Think about this, and if you feel like you guys have another thing in you, together, and you want to do it, come back to me and pitch it, and we can talk out it. And if not, sure, let's call it.”
So it was right after the presidential election, and I spent about six weeks thinking this is a wake-up call for a lot of people in this country, myself included, and it coincides with me reckoning what felt like a huge failure. And it was, Spright was a failure. I thought, what does that mean for myself? What does that mean for me as leader? And what does that mean for me as an entrepreneur?
When I was wandering around, I was seeing that there’s a whole world of women moving throughout this city just trying to figure out where they're supposed to be going in the middle of the day.
Women are at coffee shops. I would talk to women who would sit outside their own homes in their cars for hours on end because the kid's inside with the nanny and she can't go inside because the moment she goes inside she can't get any work done. Or there are women who would rent motel rooms for the day just for themselves to have one business call.
I would ask, “Why wouldn't you join a coworking space?” They're like, "That's not for me. I don't need that. I'm a designer, I just have a couple interior design clients. I don't need a space, but I do need a place to get some work done."
And I realized, whatever narrative's existing is not talking to these women, myself included. I went to WeWork, I was like, this is not for me.
And the places where people felt really happy, the yoga studio or Soul Cycle, but those business models are not made for you to stay and hang out there afterwards. They're like a revenue per square foot, butt on bikes kind of thing, like how many people can we cycle through this place within one day?
And so I started thinking, is there a business I could do that brings these things together? Can I do it in a way that feels really good, that's nonjudgmental, that is all the things I dream that a health and wellness space could be, and have a business model that appeals to the woman who just needs a place to go and get stuff done for a couple hours?
So, I went to my co-founder from Spright and said, "I think this is it. I have this vision for this thing and this place." He said, " If you feel that way so strongly you know this better than anybody. You're the customer and you know how to market to women. You know how to do this. Let's do it."
So we went back to the investor and told him we wanted to open a physical building. He said, "That's outside of our purview but you can use this money to get yourself started. We're going to drop our shares to common shares so that you can fundraise more easily in the future. We're not coming in again. We're not giving you more money, but we'll maintain a small ownership in this, and you can use the money for your new thing."
Who was that original investor?
Gus Tai, from Trinity Ventures, which is a big VC firm.
So we used that money to sign a commercial lease. We had no background in commercial leases. We are not people that landlords want to sign a commercial lease. And as far as the landlord to this building saw, he's like, "I see you yahoos over here who have never opened a physical space before, and you're coming off of a failed business. Why would I ever rent this place to you?"
So with the money that we had from Trinity, we paid for a whole year of rent up front.
I bet that was scary.
That was the largest check I've ever written in my life by far.
We signed a three year lease. We paid for a year and he gave us 14 months for the cost of 12. And then all of a sudden we had this building. And it was July of 2017 and we had no money to do the rest.
At the time, the deal that my co-founder, Carnet Williams, and I made was that our partners, my husband and his wife, supported us enough over the past two years and we didn’t want to put in our own money. So we decided to go out and try to raise money elsewhere.
Over the next eight months we raised another $800,000 on the same terms, because technically it's the same entity that we raised for in 2015.
Is that unique? The situation with Trinity letting you keep the money sounds rare.
It is unique. Which is why I told the whole backstory about fundraising. Thankfully the things that Trinity did made it easier for us. Although most companies, when they're at our stage, are doing price rounds.
So, we raised $800,00. That was a mix of one really lovely, supportive micro VC, Charles Hudson, who’s firm is Precursor, and then a lot of hustling from angels. It was me out trying to pitch this dream, to get into an angel community. I was not hyper connected, even though I've been here in San Francisco for a long time.
Pitching to angels
What did you learn about pitching to angels?
I know this is controversial to say... and I completely understand why it is... but when I was going out first pitching to angels, and more seasoned investors, I was told by many people that you're going to have a harder time with women than with men. And I have seen that to be true.
For women I think they're so worried about the standard that they're even being held to that I think that they are, in some ways, more risk averse than men. I've met women who don't want to do consumer stocks because they don't want to be seen as, all women do consumer only, and who just want to stick to really tight guidelines of what they invest in.
Since we've been open that's shifted a little bit. We actually have a probably 10 or 11 members who've become angel investors just because they love what they have here and they believe in it. I think they're inspired by seeing the other female entrepreneurs in this space and thinking about us breaking down the barriers of what you need to do to be an angel investor. You don't need to be anything to invest. You can just be someone who is passionate about an entrepreneur that you meet.
We have work to do on supporting each other, especially when asking another woman for money. What have you noticed about the female-to-female dynamic?
There was one meeting in particular, and, again, I still am very new at this. I still work on my own confidence in these conversations, work on my own abilities to say with a straight face, "This is a billion-dollar company." That's hard for me. At a point about a year ago in an investor meeting, when a question came up about the financials, I let my male co-founder answer. I'm the CEO and I know the answers as well as he does, I sometimes defer to him in those things. Because in our dynamic, yes, he is the one who is sort of managing the financial model. Not that I don't know it in and out, but, you know, that is something that he's doing.
And I got a call from that investor who was like, "I was going to invest in you, but you deferred to your male co-founder on all the financial questions." And she walked.
How did that make you feel?
It made me feel terrible. It reinforced my insecurities in a lot of ways. It made me feel like both, yes, that's a great learning moment, I should be better about that. Since then I've made a point to not bring my co-founder along to a lot of my initial meetings. Not because we don't have a great relationship but because I need to not have a crutch. And as a first time CEO I need to be able to answer those questions. And I can, and I could then too, I just didn't in that moment.
It taught me a lesson about how fragile any of these things are and also that you have to be able to move on. You can't dwell on that stuff. It stung and it was painful, and it's someone who I still have a relationship with.
Why do we feel that imposter syndrome?
It just is so hard to verbalize that billion-dollar thing because I'm so practical and real. I've got a real business that is working and makes, and yet, just getting the words out of my mouth is impossible. I don't know if guys are just conditioned to be slightly better bullshitters or they just don’t worry as much about those things. We'll go into meetings together and he'll be like, "Come on, let's get amped up. It's going to be amazing." And I'm always over here having an anxiety attack.
Because you’re attuned to the practical side of things…
Yeah, totally. And knowing full well that I am running a healthy business. It’s still, to this day, a real challenge to do that sort of big picture thing. Even though I see it and I want it and I can tell you the pieces of it, but still.
Did you open The Assembly while you were still raising?
No, we closed that round before we opened because we felt this place would have more value as soon as we opened, so let's at least give investors some advantage to having gotten in early. We closed the round in the very early days of January 2018 and we opened two weeks after that.
That is an interesting segue into your launch. The Assembly is a thoughtful, carefully designed place to work, exercise, connect, heal or just hang out. Like the best ever women’s clubhouse. You’ve done a phenomenal job of marketing this business. Did you have a clear plan of attack for your go-to-market strategy?
Thank you. Yeah, I knew that our launch plan was centered around two main pieces.
One was the fitness, health, and wellness part of it. I think that instructors and teachers are incredibly valuable, and even if they don't have giant “followings,” they have an incredibly loyal local group of people.
That was a strategy that no one else was looking at. So I knew if we had strong classes being taught by strong teachers it would bring people to the building. When people come into the building, they will want to stay in the building. That I know.
And then similarly with the artists, the second piece is that we chose to work with women to create artwork for the space, and they in turn shared along the way.
Having it centered around the wellness and the space, that was my strategy to create early buzz, not leading with the co-working.
That is wicked smart to get contributors to share out organically. That’s the benefit of having a content and brand marketing background.
A lot of our earliest press led with coworking because people are going to lead with whatever framework is trendy or feels like it's on point, but I wanted to be sure those other messages were getting out there.
In our social media presence, we knew that Instagram was going to be our main lever from the beginning. We made sure the images were an equal division of community people, beautiful space design, and movement. The design here definitely brings a lot of people to the door. And it’s important to see all sorts of bodies moving. We keep those three drum beats going.
I also knew there was going to be a newsletter that came from me that was going to have my own voice and vulnerability to it. It is very real and personable and relatable. That is something that has resonated a lot with folks. It's increasingly challenging to get myself to write it, but as, you know, newsletters…
All too well, that makes me ache, it's so time-consuming to do a newsletter. Way more than you think it will be. You have to carve out big chunks of time to write.
Yeah, exactly. But that was a big piece of it. And just thinking of the programming or every event we have here, that's the storytelling part of it, not me out there telling people what we are. Because we are not what we say we are, we're what people experience when they come in here and go out and tell other people. Your brand is not what you say it is, it is what other people say it is.
So how do we take a month of programming and think of it a magazine? What is your cover story? What is your editor's letter? What are the different pieces of it that tie in?
Some of them are recurring features that you have every month. You have this, this, and this, and then there's the other exciting things that you put in. So coming at it from that mindset is also different.
I've been in a lot of coworking spaces and hearing your background and how you're treating it like a magazine is really fascinating. I think that's a lesson that a lot of women could use. Even if a tech company were to think about their marketing in that way.
I talk to a lot of women who open coworking spaces and the work part is fantastic but it more of a byproduct for me. I love that people are building their businesses here, or just working here, or having meetings and all of that stuff. But the actual product is really the design, the feelings, and the experiences of The Assembly.
Investment in design
Hallelujah! We human crave structure, utility and beauty, the essence of good design. I’m so glad you created this and think of the experience in this way. I wish more startups would invest in design. What trade-offs did you have to make, because I know it's not cheap to create a space like this?
We did a lot of it ourselves. The trade-offs that we made, primarily, were we did not try to cram as many seats in here as humanly possible to get as much money out of people as humanly possible. I think most spaces that are work centric, their goal is to get as many people working in there as possible.
It’s hard now that the space is full, until we get our second space open, that people come in and they wonder, "Why don't you just put more tables in the middle of this room?” Well, we're not going to put more tables in the room. That's been a struggle in trying to get people to understand and it's definitely a trade-off.
It also is a delicate space. Stuff breaks. People knock over the tiny cactus plants every single day. One of our big, very well-funded competitors, well, all the plants in their space are fake.
I get it. When your business is churning these things out as quickly as possible to get an Instagram worthy vibe, but not have to staff up as much, right? I mean, that's my assumption.
It's a pain in the ass to have literally hundreds of living plants in this place, but I believe that being around living plants is incredibly important and makes people feel healthier. You breathe easier and you feel lighter, and you know, no one else has to take care of them. You don't have to have as many plants in your home. We'll have all the plants here and you can spend time with them.
You were building out the space before you closed your seed round. How did you pay for it?
We had a lot of money on credit cards.
That's how we do it. We juggle. And hold our breath.
Juggling, yeah. A lot of money on credit cards, we deferred some payments on those. Definitely by the skin of our teeth.
Thankfully we had a design team that knew how to make things look nice even if they're not expensive things. The main area is a mixture of things from World Market and others completely made by women artisans in San Francisco. It's a real mixture of things.
This is a vibrant, busy space. There's a full schedule of classes in the downstairs studio. There's a kitchen with helpers. There's an outdoor patio. There's the main space. And I know you do a ton of events. With so much going on, how is your team organized?
Realistically, we are running three different business here in a pretty robust way. We have a fully running fitness studio, we've got a coworking space, and then we have an event business. So it takes a lot of bodies.
We think a ton about hospitality. When we originally made our financial model, we had some assumptions about how much staff we would need in the space, and we definitely have way more people than we thought we would.
Team structure is probably my biggest day-to-day thought exercise. We've experimented with a couple different things over the past year to figure out what's right, and what both sets us up for growth but is also reasonable for us at the current time. We’re running a seven day a week, twelve hour a day operation, and we put on thousands of events last year, literally almost two thousand, including our classes.
So for the operations of the building, we have a general manager who sits at the top. Below her there are four assistant managers, and then there's hourly staff. That team manages everything that happens in the building. That's scheduling the maintenance guy, making sure it's set up for events, all the different pieces of it. Getting the studio ready between classes. We have a cleaning service that comes at night that for day-to-day maintenance of the space.
That's the team that's probably way bigger than we thought it was going to be. They also give tours. They’re also close to the members. So they also do the selling, basically.
That is a switch that we made halfway through since those are the folks that are having the most front-line interaction. If we arm them with the information to give all the tours and take people who are walking in off the street and all that stuff, they can they be the ones to take it all the way over the finish line. That's the operational side of things.
On the other side of, I've got myself and my-founder, so technically there's really the CEO, COO, and we have a woman who's our chief people officer. She does all the HR kinds of things. She comes from that background but also membership. Like health of the membership. What does attrition look like? What are people saying? What's going on?
Then we have a programming team. There are a couple women who are programming. One is more centered on fitness, one is more centered on the health and wellness side of things, and one is more focused on anything that comes in that feels like a partnership.
And there's another person who focuses on food and beverage in events or in the kitchen, the snacks, and then any sort of like catering that needs to happen for events. We bring in a ton of food for different things. And also event execution.
We also have one engineer, because we built our entire digital system ourselves. So our booking, our member portal, the sign in you signed in when you came in here, that was all built in house. And we have a product manager who's in Seattle and works remotely.
What about marketing?
We have one woman who just came back from maternity leave who is content with me. She and I worked together in the past. So that's, what is our social voice? What is our newsletter voice? What do the signs say in the building?
We don't have anyone who's squarely on marketing, which is definitely a hole in our business. In the beginning I was thinking I can handle some of this. It's something that as we think about the future, it's definitely about who is the right hire? Is it somebody who is really growth-marketing centric? Is it somebody who's more on the creative side? I'm still figuring that out.
The importance of brand guidelines
And you’re setting the vision and the voice?
Yes. We've got a pretty intense style guide. Like everything, the more guardrails you put up the more that frees people to play in the middle, and the power people feel when they know they're not going to mess it up because they're all staying within guidelines. I tell that to people a lot.
I learned that from my content days. If you give people a lot of freedom and then you constantly tell them that they're doing it wrong, it's a really messed up dynamic. Because yes, I have a very clear and precise editorial vision, and it only is detrimental to everyone if I don't express it as much as I possibly can. In a kind and encouraging way of course, but people want the guidelines.
That explains why The Assembly’s brand it so solid from the physical to digital to intangibles. I'm a brand marketer and I preach the power of brand guidelines. That is a discipline I wish more startup founders would embrace.
Totally. You know, we had a guy who sort of helped us build our website and do some initial branding concept where he made the logo for us and things like that, but we didn't go hire some big branding agency.
You don't need it early stage IF you come from a background like yours. Look at what you've created with just your vision and expertise in content.
Yeah. Sometimes I feel like when I'm listening to other people's stories I'm like, “Oh is that the way to make anything work? You just hire some big branding agency?”
I used to run a branding agency. Even when we would work with startups we would try to find a way to do it bare bones, but to shape the bigger vision of the brand. It’s often hard for founders to link their vision to a higher order purpose, like you have with the emphasis on hospitality. For instance, when I walked in, a lovely woman made me feel welcome by asking in a genuine way about how my day was going. She asked an open-ended question. She embodied The Assembly brand.
And fortunately we have enough people to do that. We prioritize that. It's in the way that we train, it's having enough people so that someone can walk around and literally touch tables and say, "Hey, do you need a refill?" or whatever it is, to have that feeling of being taken care of.
It's not a luxury country club, but what we've seen is that when the folks here, members or nonmembers or visitors, when they feel like they have that little bit of humanity from us, they treat the space with human dignity. People put their own dishes in the dishwasher. They don't leave stuff on tables. They do treat it nicely because they are free to, like you're walking into someone's home.
Solidifying our brand of hospitality has been our biggest secret advantage. We don't have a front desk of a woman just sitting on her phone just checking you in. But there's the ask, "How are you?” or "How's your kid?"
I also think that the way you're pulling people into the space from downstairs is revelatory. Frank Lloyd Wright believed that you use architecture to evoke feeling. His spaces were notorious for compression and decompression. Upon entry, he used low ceilings to compress the breathing and help you transition from the outside. Then he’d lead you into a high-ceiled living space that’s open and light for an emotional expansion. You have that going on downstairs at The Assembly. It's a little bit dark, but a lovely neon sign pulls the eyes up, then you wind up the stairs and the space expands. I felt my neck and shoulders release when I walked into the main hall.
Yeah, you know it's interesting. That was a definite design challenge when we came to the space. We knew that the upstairs was going to be that focal point, that magical moment, but we thought, okay how to we get someone in off the street? There's no place for a desk down there, no one's getting checked in downstairs. They're alone, right? Like, you're alone for a minute there, and you're going to ring a doorbell.
It's a building that you're confused by when you walk in and you walked by it a million times and you've never noticed it and it doesn't have a big sign out front, and so just that experience of sort of like, okay, when they walk in and they're alone for a second, how do we make that a calming moment and not an anxious moment? And how do we gently guide them upstairs, and have them figure out what to do?
And if you choose to linger or pause, you notice little details. That attention to detail often gets skipped in a startup budget.
There are little affirmations written in secret places downstairs too, if you look close enough.
Visit The Assembly’s website to learn more about this unique place.