Paperless Post: James and Alexa Hirschfeld

In 2007, when James Hirschfeld got the idea to start an online invitation company, the first person he turned to for help was his older sister, Alexa. Together, they were inspired to create a brand that combined the ease of digital correspondence with the beauty of paper. Along the way, the founders faced myriad challenges: convincing investors that people would pay for virtual paper, settling on the right business model, and—worst of all-- the existential threat of Covid. 15 years after launch - Paperless Post has sent over 650 million invitations, and has even been parodied on Saturday Night Live. This episode was produced by Kerry Thompson with music composed by Ramtin Arablouei. It was edited by Neva Grant, with research by J. C Howard. Our engineers were Robert Rodriguez and James Willetts. You can follow HIBT on Twitter https://twitter.com/HowIBuiltThis & Instagram https://www.instagram.com/howibuiltthis and sign up for Guy's free newsletter at guyraz.com http://guyraz.com/. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

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• 0:46Guy Raz?

  build the prototype, analyze the market, maybe even come up with the idea, what separates the people who actually build something from everyone else? I don't have a clean answer yet, so I've been sitting with it with Claude. There's hope in hard questions. Ask yours at claude.ai/hibt. We get support from U.S. Bank. A question I love asking founders. What's the one decision you almost didn't make? The one that changed everything? Because it's never the obvious stuff. It's never, I decided to start a company. It's the small, boring, Tuesday afternoon decision you barely remember making until you realize it's the reason everything after it either worked or didn't.

• 1:32Guy Raz?

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• 2:16Guy Raz?

  on gas and EV charging, office supply stores, cellphone service, and restaurants. You pick up an extra $750 cash back as a bonus. And you've got a low APR on purchases and balance transfers for 12 months while you're scaling. Same business, same expenses, two completely different outcomes based on one small decision. Visit usbank.com/business to learn more. The creditor and issuer of this card is US Bank National Association, pursuant to a license from Visa USA, Inc. Some restrictions apply. If you travel often, you'll want to hear about this unprecedented offer. For the first time ever,

• 3:00Guy Raz?

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• 3:45Guy Raz?

  or bring a guest to the Delta Sky Club. Make every trip feel more rewarding with the car that upgrades your travel. Apply today at delta.com/cardsocial. Offer ends November 4, 2026. Minimum spending requirements and terms apply. Flights are fulfilled as flight certificates valid for Delta Comfort or Delta Maine to select domestic destinations. Book 21-plus days in advance. Up to $80 per person and taxes and fees apply. Other restrictions apply. When I pull up to a gas pump to fill my car, I'm not thinking about chemistry or engineering. I'm thinking about getting in, filling up, and getting on with my day. And it reminds me a little bit of the founders I talked to on this show, because the best

• 4:27Guy Raz?

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• 5:10Guy Raz?

  Hey, really quick before we start the show, we have an announcement about a really exciting new thing we're launching: a newsletter. And like our show, the newsletter is designed to be interesting, informative, inspiring, and most importantly, fun. It's 100% free, and to sign up, just visit guyraz.com. That's G-U-Y-R-A-Z dot com.

• 5:43Speaker 01

  During COVID, we had a lot to lose. The stakes were much, much higher.

• 5:50Speaker 02

  Yeah, it was pretty catastrophic. I mean, our mission is to help people gather in real life. And gathering in real life was something that people didn't do for about a year and a half. But it took us back, probably in terms of our sales volume. We were probably back to where we were in 2009 in sales.

• 6:12Guy Raz?

  Wow.

• 6:13Speaker 02

  Yeah.

• 6:13Guy Raz?

  But with a staff of how many people? 100?

• 6:16Speaker 02

  100 and plus. 120, yeah. So our main concern was to get through it without ruining our company.

• 6:35Guy Raz?

  Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 6:45Guy Raz?

  I'm Guy Raz, and on the show today, how James and Alexa Hirschfeld convinced investors that people would pay for virtual paper and built a brand that, since launch, has sent out over 650 million invitations.

• 7:03Guy Raz?

  You may have heard the saying that entrepreneurship is a marathon, not a sprint. And if you consider the journey from start to exit, that is often very true. Just like in a marathon, there are certain mile markers that are painful and brutal, the moments you want to collapse and die. But there are also moments when the wind is at your back. The only thing we can all agree on is that a marathon is really long. But when it comes to actually starting a business, getting it off the ground, yes, there are marathoners, but there are also sprinters. If you've listened to this show long enough to the hundreds of founders we've interviewed over the years, you will have heard both.

• 7:46Guy Raz?

  The sprinters have an idea, start to build it, and work to get it out into the world fast. And if, in a short period of time, the idea isn't gaining traction, they pivot or abandon the idea and start all over. The marathoners, on the other hand, have an idea and then start to spend months and even years carefully building out a plan, doing all kinds of careful market research, talking to hundreds of people, making incremental progress every day until, finally, they're ready to launch. Today's story is very much about the latter example. Alexa and James Hirschfeld spent about two years building out a careful plan

• 8:29Guy Raz?

  before they launched Paperless Post in 2008. Now, at the time, the idea, at least to investors, seemed kind of crazy. Get people to send out fancy, high-end invitations in digital form and pay for it. But if you think about it, wedding invitations are really expensive. If you get one in the mail, just know that the person sending it probably spent between $5 and $10 on your invitation alone. So James wondered, what if you could cut that cost down to just 10 or 25 cents per invitation? It was an idea that came to him during college. And soon, he contacted the person who he thought might be the best business partner for him,

• 9:14Guy Raz?

  his older sister, Alexa. It would take many years for the business to gain traction. And there were times, especially during COVID, when Paperless Post almost went under. But not only did it survive, the brand is now one of the leading online invitation businesses around. And recently, it branched out into custom party supplies as well. Alexa and James were very close for as long as they can remember. No fights, no rivalries, just really good pals despite the two-year age gap. They grew up in New York City. Their parents were both lawyers and they were raised in a home with both Jewish and Greek traditions.

• 9:54Speaker 01

  So I think people who diaspora, people who leave their country, not necessarily wanting to, but having to, tend to retain their culture. And that is the case with my mom's family. We went to Greek school to learn how to read and write early on and we, we learned how to speak Greek as well.

• 10:15Guy Raz?

  Wow. How's your Greek today?

• 10:17Speaker 01

  It's good.

• 10:18Guy Raz?

  So you can just like go to Greece and talk to people?

• 10:21Speaker 01

  Yeah. And I can read and write.

• 10:23Guy Raz?

  That is, that's probably way more than the average Greek American kid who went to Greek school.

• 10:29Speaker 01

  Maybe, yeah, it might be.

• 10:32Guy Raz?

  Tell me a little bit about you guys as, as brother and sister. I mean, you're two years apart.

• 10:39Guy Raz?

  You know, Alexa is your oldest, older sister, James. I mean, did you guys get along pretty well from, from the time you were kids?

• 10:47Speaker 02

  Yeah. So for the first four years of my life, it was just the two of us. And then our, our younger brother came along. I think, you know, we had kind of a normal relationship when we were sort of under 10. We, I mean, I was pretty obsessed with my older sister because she was older and, you know, you know, I looked up to her a lot.

• 11:11Guy Raz?

  Yep.

• 11:12Speaker 02

  But she wasn't as obsessed with me, I think, in those times. You know, we had a common enemy, which was our parents.

• 11:18Guy Raz?

  Yeah.

• 11:18Speaker 02

  Forcing us to go to Greek school, forcing us to, you know, go to sports practice and do our homework and stuff like that, grounding us.

• 11:26Speaker 02

  But we also, as we developed into individuals, realized that we were friends. We each had great admiration for the other. And as a result of that, we, we were talking about doing something together work-wise from a very young age. Like, I think.

• 11:43Guy Raz?

  I mean, that's crazy. Alexa, what were you guys talking about doing together when you were teenagers? About, about a business in the future? Like, what, what would that have been?

• 11:54Speaker 01

  I don't know that at the time it was a business. I think I recognize that James was talented. He was always.

• 12:05Speaker 01

  Doing art projects, uh, he was learning how to do photography or sculpture. And when I would show my friends paintings or photographs or sculptures that James had done, I would always get a really positive response, like, wow, that's amazing.

• 12:24Guy Raz?

  So, so by the time you guys were in high school, I mean, were you sort of inseparable? I mean, did you have the same kind of social, like, groups of friends and hang out together?

• 12:34Speaker 02

  Yeah, we, we were two years apart in, at the same school. So we went to the same parties. We had, um, like similar friends. You know, Alexa was very good with people. She was very popular. Um, more extroverted than I was. I would say we were pretty inseparable. Yeah.

• 12:52Guy Raz?

  All right. So Alexa, for, for college, you, uh, end up going to Harvard, um, where I guess, I guess you studied, um, classics. And then James, you actually started at Harvard a few years after Alexa and you majored, I guess, in comparative literature, but, um, but I want to ask you, uh, James, when, when you were in college, do you remember if, if any part of you was thinking about, you know, maybe starting a business or, or, or not really, like, not yet?

• 13:19Speaker 02

  So I would say at the time, um, when I got to Harvard, I wasn't sure that I wanted to be an entrepreneur. Both of our, our parents are professionals, um, and

• 13:31Guy Raz?

  They're lawyers.

• 13:32Speaker 02

  They're lawyers, exactly.

• 13:33Guy Raz?

  And lawyers are risk averse. Let's be honest.

• 13:35Speaker 02

  Exactly, exactly.

• 13:36Guy Raz?

  Not, not knocking lawyers, but they just are risk averse.

• 13:40Speaker 02

  They believe in educate, you know, go deep on education, get a stable job. You'll always have a, a career. The funny thing about Harvard, though, at the time was that, um, you know, it was sort of, it was 2006, 2007.

• 13:55Speaker 02

  There was a huge entrepreneurial spirit on campus. You know, Mark Zuckerberg was in Alexis's class and he had obviously dropped out because of this tremendous success with Facebook. And I was surrounded by these incredibly ambitious people who were kind of weaving business ventures into their kind of their classwork and their social lives. And I joined a club that was full of people who were starting tech companies. And, you know, none of these people really were engineers. They were people who were, they were studying politics or philosophy or economics.

• 14:38Speaker 02

  But there was this kind of can do mentality that, you know, starting a tech company was really possible.

• 14:48Guy Raz?

  So, all right, so let's, let's get to this story. How, how does this begin? I mean, I mean, the sort of the apocryphal story, and I'm sure there's a lot of truth to it, is that you were planning a party, basically, for you, for yourself.

• 15:03Speaker 02

  Yes. So it was actually, it was 2007 and I turned 21. And I was having a great time in college and I wanted to have a party for my 21st birthday with my best friend at the time, who's turning 20. And I had never really had a big party before. I hadn't had a bar mitzvah, I hadn't had a big 18th birthday party. And, and I kind of had this vision. It's really cold in Boston in the springtime. My birthday is in March. Everybody's like freezing and I wanted it to feel like summertime. It was like a beach themed party. And I kind of, I filled this, this, this place with palm trees that I, that I bought

• 15:48Speaker 02

  and then returned to Home Depot. You know, in hindsight, they were probably like the kind of potted plant that you would just put in an office, but I thought of them as palm trees and I thought it was really atmospheric and people like brought their A-game and they came dressed up as like lifeguards and sailors and, you know, beach bums. It was really fun. And when it came time to inviting people, I wanted to send the message that this was going to be a great party and I wanted to show how much thought and care had gone into the planning of the party.

• 16:20Guy Raz?

  And so what kind of invitations did you decide to send?

• 16:24Speaker 02

  So, you know, the options at the time were to print paper, which would have been, you know, out of budget for me and really impractical because, you know, I didn't have my friends' mailing addresses. People didn't really use physical mail. Or to use, you know, one of the first generation, you know, online RSCP tracking websites. And those were riddled with ads and not very beautiful. And you couldn't really achieve the, the sort of self-expression or the design value that I was going for. And I think what I

• 17:02Speaker 02

  ended up doing was sending an email, but it got me thinking that consumers, you know, could have another option, which would marry the, the, the beauty and the, and the personal feeling and the customization of paper stationery, which is like incredibly, can be incredibly expressive and beautiful, but difficult to attain with this sort of functionality and the practicality of digital communication. And, you know, no one had done it before, but I believe that we could do it. Not having any background in, you know, any formal training in software engineering or web design, but I believe that we could do it.

• 17:41Guy Raz?

  Okay. So, all right. So you have this, so James, you have this idea to, you know, do something around digital invitations and

• 17:52Guy Raz?

  And immediately or early on, you're thinking, I need to call my sister and get her involved in this thing?

• 17:59Speaker 02

  Yeah, exactly. So I had the idea. It was very, very crisp in my mind's eye. I had done some research on kind of the paper stationery industry. And so the first call that I made was my sister. I think she was a little skeptical, but I think she got on board pretty quick.

• 18:18Guy Raz?

  Alexa, I'm curious, when your brother called and said, I have this idea, what was your response? I mean, you had a pretty good job in TV at that point. I think you were, I think you were working on the CBS Evening News with Katie Couric. So what was your reaction when James called you?

• 18:34Speaker 01

  So we had been talking about some other kind of ideas. And the way that he described this one was very specific and very visual. He was saying, you know, you could see the texture of the paper and we'd use the most beautiful fonts and colors. And I was thinking back to those friends of mine and the moms of the friends of mine responding to the artwork that I would show them, like the paintings and sculptures. James is being very humble about that.

• 19:15Speaker 01

  But I was thinking, if we had a platform where it was his vision and his eye and style, but it was being offered to many, many, many more people like my friends, I believe him. I actually do think that people would use it. I wasn't sure if they would pay for it, but we had very little to lose. So at the time, I was 23 and...

• 19:47Speaker 01

  I understood that I would probably never have less to lose than I did then.

• 19:53Guy Raz?

  You could take the risk.

• 19:54Speaker 01

  Yeah.

• 19:55Guy Raz?

  James, when you, I mean, you're a student at Harvard at this point, and I guess you convince your sister to kind of help you start working on this thing. And this is 2007. Tell me how you, what you guys started to do. I mean, you had done some research around like the category and the industry and you looked at like stationary and then there were, I mean, there was Evite was out there and, you know.

• 20:22Speaker 02

  Facebook events.

• 20:24Guy Raz?

  Facebook events was out there. What did you do? What, how did you start?

• 20:28Speaker 02

  Yeah, so we, we had very few tools at our disposal, but we really needed to try to figure out how to use the ones that we had. So I was a, you know, a kind of an amateur designer. And my sister started reading a lot of books around product design, user experience design. So I started designing what I thought the invitations could look like. I was truly, I was the first designer and I could see it. So it was, it came easy to me. I learned how to use Photoshop. I started creating kind of example invitations. And so we tried to lay it out ourselves. We got kind of far, but it was, it wasn't really actionable.

• 21:09Speaker 02

  So we began to bring other people into the project who had, you know, deeper expertise around the things that we couldn't do.

• 21:17Guy Raz?

  And how did you, how were you financing that? How were you paying for them?

• 21:20Speaker 02

  So we were very scrappy. We were kind of hard negotiators, but we, you know, the first people we brought in were a design firm in Boston that kind of helped us create wireframes and a flow. And we paid for that with the savings that, you know, my sister and I had, which was a little bit of money that our grandparents had given us or had left us when they died. About. You know, not a ton of money. So we use a design firm to kind of create the first wireframes. We used those wireframes, which looked really polished and kind of gave a better picture of where we were going, to hire some backend engineers who were CS students at Brown

• 22:01Speaker 02

  University, who were friends of friends, who had some time over the summer to work with us on setting up a database and beginning to build this application. And then they were great and we kind of, but then they had to go back to school.

• 22:16Guy Raz?

  Yeah.

• 22:16Speaker 01

  And I was still at my job. So I was able to take some of the money I was earning from my job and put it into the business and working nights and weekends on the business. So that was another way that we were able to pay some of the bills.

• 22:33Guy Raz?

  Well, and I'll just say it took about two years before you launched, we'll get to in a bit, but you kept your, you kept your day job.

• 22:41Speaker 01

  Yeah, I kind of stopped seeing friends, not on purpose, but there just wasn't enough time in the day to do both.

• 22:50Guy Raz?

  You know, it's interesting because I think there are two kinds of entrepreneurs. There are marathon entrepreneurs and then there are sprinter entrepreneurs, right? And so the marathon entrepreneurs have like a, they model out a plan and they come up with a, you know, sort of a, a set of things that they have to do over a period of time, knowing it's going to take a long time. And then every, you know, it's like, it's like Candy Land. You're kind of following the boxes and then every few boxes, you stop, you assess, you adjust. And that's an amazing way to, to start a business. The other way is a sprint, right? Which is you just go for it and if you don't get momentum quickly, you just drop it and you move on. And both approaches can work really well. You guys are marathon runners. You're doing a marathon here.

• 23:32Guy Raz?

  And I wonder, James, first to you, like during this time, you know, working with contractors and anybody who could help, classmates and software developer, anybody, how did you keep the passion and the momentum going when there was no product yet, there was no business yet, it was just this thing that you were working on?

• 23:52Speaker 02

  It's a really good question. I think, you know, I look back at that time and think about how.

• 23:59Speaker 02

  How little we were working with in terms of prowess, know-how, resources. The one thing, well, we had a couple of things. We had each other, which was great because I had a co-founder that I was very aligned with. But I also, I had a very, very strong conviction in the product. It didn't exist yet, but I could see it. And when I say I could see it, I mean, I could literally see it.

• 24:26Speaker 01

  Yeah, I mean, I loved having this goal that was, by the way, secret from almost everybody that we knew. And what we found as we were doing the research on what was out there was making us believe more in the potential. It is very exciting to feel that you're on to something and that if you can just get it together to get it out there, that people are going to realize that they've been waiting for it.

• 24:59Speaker 02

  Yeah, and I'll just add to that. There was a lot of logic behind this project, too. I think we are millennials. We grew up in a time in history where we saw basically all forms of written communication be digitized, from casual chatting to business communication. We watched that all move online. And it made sense to us that that was kind of the progress of history, was that written communication was going to be digitized. And yet, back in 2007, if you can remember, there really was a limit to, there were certain types of events where you could not use an online product to communicate. It was not legitimate.

• 25:43Speaker 02

  And being kind of products of our generation, I think we felt that this type of communication was going to move online and that that was, for all the obvious reasons around efficiency and cost efficiency and the environment, and that the company to do that just hadn't yet been built.

• 26:01Guy Raz?

  I want to dive into this idea because... Just being, you know, having instincts around your generational perspective is often right. Sometimes it's not, right? It's not always right. Sometimes it's wrong. And I know that, you know, during this time, you guys started to seek out outside money, outside financing, because this was a time, I mean, it's so funny, we're talking, we're only talking about 2008, like it's ancient history, but it was much more expensive to build a website and to build the backend than it is today. But I have to imagine there was a lot of skepticism around this idea when you went to them.

• 26:39Speaker 02

  There was a lot of skepticism around the idea from investors, especially kind of, you know, tried and true Silicon Valley venture investors, I think.

• 26:51Speaker 01

  Well, at the time that we were going to, that we needed to raise money, we had like very, maybe $4,000 in the bank account. We were kind of in a precarious situation.

• 27:04Speaker 02

  Totally.

• 27:04Guy Raz?

  How did you even get into the door to some of those places? Just kind of like through the network of college, university, and just talking to anybody you could?

• 27:12Speaker 02

  Yeah, we were such hustlers. I mean, I think we might, I was thinking back on it in advance of this, you know, this conversation. I think I must have been a really annoying person at this time, because we were so focused on, on bringing this idea to reality. We were so focused on succeeding. I was really working every angle. I don't know. Our uncle lives in San Francisco, so we were trying to make lists of everyone that we knew that could potentially know someone who was a VC or who could be an advisor. I was coming back and forth from, from Boston to go to meetings and try to get on the radar of these investors. And, you know, the feedback, VCs often are, they're trained to recognize

• 27:56Speaker 02

  patterns and to invest behind patterns that have been successful. And the product that we were building really broke from all of the kind of conventional wisdom of the time.

• 28:07Guy Raz?

  Right. Here, you guys are saying, yeah, we're not going to have advertising. You're just going to have to, you know, we're going to have these cards. You can make them, but if you want to send them out, you've got to pay, you know, a few cents for each one. That was your business model. I mean, I'm just curious, like, again, when you went to investors. You're pitching them and I have to imagine them saying to you, "No one's gonna pay for this. You already have Evite out there. Like it's, you can just do this for free. No one's gonna pay for this."

• 28:37Speaker 01

  But the really, at the time, demoralizing part, but I think it fired us up even more. But the really interesting part was that for some people that we were speaking to, it wasn't just that people wouldn't pay for it. It was like, why would people want to use that?

• 28:56Guy Raz?

  Right.

• 28:56Speaker 01

  What is different about that than just, you know, a webpage?

• 29:01Guy Raz?

  And what would you say? What would you say? Because you got that question again and again. You had to repeat the answer again and again.

• 29:07Speaker 01

  It's the design. It's the, the look. It's the, the self-expression. It's the soft messaging. Not everything needs to be communicated in like plain, you know, UTF eight format text. Like there are ways of communicating that, that are visual that people have been doing for centuries and they want to continue to do it, even if they want to do that online. So there was this really, um, a lack of value placed in design, but also an opportunity looking back.

• 29:41Guy Raz?

  So on the one hand, you had the so-called experts pushing back. And again, I think in 2008, and I say this with a lot of love because in 2009, I believed early on, my wife and I used paperless posts for the birth announcement of my son.

• 29:57Speaker 02

  That's amazing.

• 29:57Guy Raz?

  Born that year. So like, we were early users.

• 29:59Speaker 02

  That's so nice.

• 30:00Guy Raz?

  I think I would have been skeptical in 2008 if I had the money to, you know, if I was an investor with a bunch of money. Because I would have thought, again, like who, people are gonna pay for a card because a card is tactile and it's letter pressed and it's, it just looks so impressive and you can see all the money and time somebody invested in it. And a digital card, like, you know, people might just think, oh, they're cheapskates. Now, of course, there was a period of time where you would have to convince people that that was not the case.

• 30:34Speaker 02

  Yeah. I think, I think that we needed to think hard about the business model and I, I wanted it to be a premium product from the outset because the kind of incumbent competitive options were free and ad-supported. And I thought that there was, it was a really bad idea. To try to monetize an invitation product, which by definition-

• 30:57Guy Raz?

  They just looked chintzy. You had like ads for your, like, your used car dealership on your-

• 31:02Speaker 02

  Exactly.

• 31:03Guy Raz?

  Your wedding invitation.

• 31:04Speaker 02

  But not only that, I think, you know, understanding the way that a lot of, I mean, events by definition are special. I mean, whether it's a backyard barbecue or a wedding, it's a moment when somebody is generously taking time out of their life, putting resources into creating an experience for the people that they care about. They don't happen every day. They are expensive, no matter, I mean, even a casual event, you're spending money. And, you know, it felt to me like if we could create a product that was worth paying for, that would make this event more special, people would be willing to spend a tiny fraction of their budget on an invitation, even if it was digital.

• 31:49Speaker 02

  So if that invitation was more private, if it wasn't covered in ads, if we weren't selling your data and your guest data to Carnival cruises like our competitors were, you know, people would pay a tiny fraction of their $500, you know, summer party budget.

• 32:07Guy Raz?

  Yeah.

• 32:08Speaker 02

  And we believed that the largely women who were buying paper stationery that was custom printed would be really, really excited to be able to design really equally special invitations and communication and send them out for pennies instead of, you know, dollars. And, and, and what was interesting was that a lot of these, the, the investors that we were pitching were actually not the target user for the product. And so people really looked at us like we had two heads when we said we wanted to build this business.

• 32:44Guy Raz?

  When we come back in just a moment, how James and Alexa finally prove that they're on to something, but then learn a hard lesson about staying in their lane. Stay with us. I'm Guy Raz and you're listening to How I Built This.

• 33:08Guy Raz?

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• 33:53Guy Raz?

  judgment, and control. Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com/built for 30% off a Framer Pro annual plan. That's framer.com/built. Rules and restrictions may apply. AI isn't just opening new business opportunities, it's changing the way businesses get work done. The questions they ask, the decisions they make, the routine tasks they can hand off. That's the idea behind NetSuite Next, the next generation of NetSuite with AI woven into the tools your business already relies on. NetSuite Next surfaces insights exactly when you need them,

• 34:38Guy Raz?

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• 35:23Guy Raz?

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• 36:08Guy Raz?

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• 36:43Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's the fall of 2008, and Alexa and James are still trying to convince investors that there's a market for digital invitations. So they roll out a beta version to see how it goes.

• 36:58Speaker 01

  At this point, by the fall of 2008, we had gotten this, what we thought was a beta product. It was probably really like an alpha prototype that was out there in the real world with real users using it. And we, from the very beginning, we saw that real people understood the product and were so happy that it existed. Despite, you know, it was early, it was rocky, there were bumps, it wasn't perfect. There were bugs, but, but they got it. They really understood it. And so on one hand, you'd have this very powerful kind of like internet personality or investor telling you, you are wrong. And on the other hand, you'd have real mainstream people trying to get into the product, trying to get a login,

• 37:43Speaker 01

  using it, asking you if you'd seen what they made and don't you think it looks cool? And you, I really, I think the reason it was energizing was because it showed we were on to something that was not obvious to everybody else.

• 37:58Speaker 02

  Yeah, I think that's right. I think, I think we, we still kept on hitting walls with most investors, but our first investors came to us through the product. Our first, the lead investor of our, of our seed financing round. This was a, a, someone from a, a fund called Moose Partners. And he received an invitation and he just got it. He saw this invitation, he clicked it, it opened up like a card on his desktop and And he just never seen anything like it. And he called me and he said, you know, I'd, I'd love, I'd love to give you some feedback on your product. And I was so used to getting feedback on the product. I, I was like, okay, here we go. You know, okay, what are you complaining about? And he did Your temperament is really, you guys have even keel temperaments, man. Thank you.

• 38:42Speaker 01

  Thank you.

• 38:43Speaker 02

  Yes. Yeah. Marathon runners here. Okay, keep going. So he's like, you know, so he's giving me, he's, he's giving, some people, you were giving some really tough feedback. You know, his feedback was kind of softball feedback. He was, he was like, well, you know, I think that you, you, you don't have all the fonts that I would like to use, or I think you need more options that speak to this type of thing. And I was like, okay, this is softball feedback. I think this person actually really likes the product. And, you know, he had this thick French accent. I was like, okay, maybe it's because he's foreign. Anyway, the end of the call, I said to him, well, we're, we're trying to raise some money so that we can, you know, take this out of beta and really, and really launch the product. And do you know any investors? And he said, um, I don't know any investors, but I am an investor myself.

• 39:26Speaker 02

  And, you know, maybe you want to come to my office and we can talk about it more. And all of our investors were, were, and we're lucky to have a lot of supportive investors and they all in their own way, I think, really get it.

• 39:39Guy Raz?

  And what were you looking for? How much?

• 39:40Speaker 01

  We were-

• 39:41Guy Raz?

  Like a million, half a-

• 39:43Speaker 01

  We, yeah, we raised about eight hundred thousand the first time.

• 39:47Guy Raz?

  Which was in 2008, a lot.

• 39:49Speaker 02

  We thought it was a lot of money. I mean, now you see these like, you know, pre-launch, like forty million dollar seed rounds. But back then, we were super proud of raising eight hundred thousand dollars.

• 39:58Guy Raz?

  It's a lot.

• 39:59Speaker 02

  Especially, you know, in 2008 during the financial crisis.

• 40:03Speaker 01

  Yeah, we ended up getting great early investors. You know, they're basically angel investors and family offices. But the truth is that I think every entrepreneur knows a dollar from one place buys you the same as a dollar from another place. They're not different. You don't, I think if you really want to succeed and support your company, you don't need to be too picky about, you know, where the funding is coming from, as long as you trust the investor and you want to partner with them through ups and downs.

• 40:43Guy Raz?

  Yeah. All right. So you were able to raise about eight hundred thousand dollars. And how long was, I mean, given that, I think, again, and I don't mean to like, project something on you that you're not, but I think, I think the marathon runner is an apt analogy. Like, I think you built a plan and you started to kind of methodically follow it, even though you would have to adjust.

• 41:05Speaker 02

  Right.

• 41:05Guy Raz?

  How long was eight hundred thousand gonna, gonna last?

• 41:09Speaker 02

  At the time, we were a pretty small team. We were probably like four or five people. And we had a revenue model, but it wasn't, it turned out not to be the revenue model that we have now. And Alexa came to me and said, I think, sort of while we were in beta, I think this product should be free for consumers. And I think that we should have a different business model where we allow, you know, 501(c)(3)'s and organizations that are selling tickets to events, to sell tickets through our platform, and we'll take a commission on the transaction because-

• 41:44Guy Raz?

  Huh. That's an interesting idea.

• 41:46Speaker 02

  Yeah. And by the way, it's a great business model. And obviously, Eventbrite is an amazing public, public company. Yeah, exactly. So it was, it was a good instinct and we built it.

• 41:55Guy Raz?

  Yeah.

• 41:55Speaker 02

  So we raised money on the back of this revenue stream around ticketing. But the organizations that were using us for ticketed events were harder to acquire and much harder to serve. You know, you would help them. They needed a lot of handholding. They needed a lot of, you know, custom support. And then you'd invoice them after the event, and it was hard to get them to pay because they were small charities and stuff like that. Whereas our consumer business was like taking off like wildfire. People were like batting down the door to try to get into our private beta. So we had to, we had a very difficult conversation. And I look back in hindsight, I can't believe-

• 42:34Guy Raz?

  Who did? You and your sister?

• 42:35Speaker 02

  Alexa and I, yeah.

• 42:36Guy Raz?

  Okay.

• 42:37Speaker 02

  And I think our partner Lucy, who was, you know, the first person to join us, the gist of the conversation was that I felt that we needed to focus on monetizing the consumer business because these consumers were so much easier to serve and to acquire, and they were so passionate. And I thought we should get rid of the paid ticketing business because it was distracting and difficult.

• 42:59Guy Raz?

  But it sounds like in order just to kind of validate the questions that potential investors had, you had to show some revenue. So you made the decision to try this thing out, prove it out, and but you needed to do that in order to gain the confidence of investors.

• 43:18Speaker 01

  We, I thought it was a good idea at the time. I think I should have listened to James's instinct, which was always originally to actually charge for the product itself. But the truth is that because we were able to see the value that the users were getting, it gave us this confidence that, you know what, we're gonna have to figure out a way to charge consumers who are valuing this product.

• 43:39Speaker 02

  You know, killing this business model pre-launch was a massive decision, and it was incredibly disruptive to everything that we had invested in to that point. But it was also, as a matter of survival, it was just such an obvious thing to do. And it really set us on the right path. And I remember after that, we had to think, okay, so how are we going to get consumers to pay for this product in a way that is palatable to them?

• 44:06Guy Raz?

  Yeah.

• 44:07Speaker 02

  And our initial instinct was, or what we landed on was the idea of people buying stamps. So you would buy like a packet of stamps, and you would use, one stamp would send one invitation. And a stamp was probably like 25 cents or 15 cents or something. And our product has evolved, the credit system has evolved since then. But you know, it was very scary. We thought hard about how to charge. And I remember in 2009, in the spring, six months after we raised money, I was studying for my final exams. I was in Widener Library where I was supposedly studying, but I was refreshing the tracking page that we had to show, you know, activity on the site. And I remember we launched this stamp product.

• 44:50Speaker 02

  We had no idea, you know, whether our user base, our tiny user base was going to revolt, you know, whether they were going to hate it. And I just remember refreshing and seeing a $7 purchase and within about 30 seconds. And I just remember thinking, okay, we've got one customer. So if we've got one customer, we can, we can find more. And, and I remember going to a party that night and someone saying, oh my God, I love these stamps. They're so, it's what a cute idea. And so I was like, okay, I think we're on to something here with this payment model.

• 45:24Guy Raz?

  So the basically initially you could design the card, but then to send them out, you would, you would buy these virtual stamps.

• 45:32Speaker 02

  Correct.

• 45:33Guy Raz?

  Like you guys are doing early virtual currency, basically.

• 45:37Speaker 02

  And it's true. It was an early virtual currency. It was early, you know, digital goods. You know, the, the invitations aren't physical, but the design is real and the relationships that you have with the people you're inviting to the party is real and the party is real. In fact, it might be the most important thing happening in your life in the next three months. So I also think that we had, this was an area where not being, kind of having a atypical background, you know, not having been product marketing managers at Facebook or Google, or, you know, not having gone to Stanford Business School. Or, you know, we, we were coming at this really almost as like naifs.

• 46:19Guy Raz?

  But the other thing I wonder is, You guys are in New York City. I mean, this is like the, at least the capital of America for parties, you know, every company has a party and there's so many events in New York every day. And how much, how important was being in New York to getting the right kind of influential people to use this early on?

• 46:45Speaker 01

  I think it probably helped. The way that we grew was through, you know, it was two parties that in the first weekend of September in 2008, one of them was kind of a Fashion Week jewelry party. It was like a, you know, professional event. And the other one was our friend, Halsey, who sent her 23rd-

• 47:09Guy Raz?

  Halsey, the singer?

• 47:10Speaker 01

  No, no, a friend, a different friend, not, not, not the Halsey.

• 47:14Guy Raz?

  She was like a baby at that time.

• 47:16Speaker 01

  Yeah, exactly. Our Halsey, just a friend. And she sent her, she had kind of been, yeah, hounding me about when she could get into the site because she needed to send out her 23rd birthday invitation. And, and she was so proud of what she'd made afterwards. She called me to ask if I'd seen what she made. And then that's how we grew is through all the people that were invited to her birthday and to the jewelry party. And actually, really quickly, we heard that the outgoing administration in the White House, somebody had used it and we were, people were writing us to see if they could get logins. And it would have sounded so naive when we were telling people that we thought it would grow virally, but it did.

• 48:00Guy Raz?

  I, I read that in the first full year, you had like 150,000 invitations sent out. But I'm wondering, I mean, I can't imagine, because, you know, it was not expensive to do it. And certainly far less expensive than sending out printed invitations, right? Like, you know, you're, you're paying maybe 20 cents per invitation, 25 cents per invitation. So what was your, the revenue situation like in that first year?

• 48:27Speaker 02

  I remember it being excited. I remember in December of 2009 that we did $100,000 in sales. So we

• 48:37Guy Raz?

  In one month.

• 48:37Speaker 02

  In one month, yeah. So we launched around like April of 2009. We opened up our beta. We allowed anyone to register. And by December of 2009, we were doing $1,000 a month, uh, $100,000 a month, rather. But I remember, you know, I remember when we did $16,000 in sales in a month, I was so excited. And I remember reporting to a family friend and she just rolled her eyes at me like, when are you going to give up on this thing? Like 16,000, $16,000. Like, you know, what the hell are you talking about?

• 49:12Guy Raz?

  That's a very small business.

• 49:13Speaker 02

  It's a very small business. Yeah.

• 49:14Guy Raz?

  But I mean, $100,000 a month is still a small business, but obviously it's showing significant growth.

• 49:20Speaker 02

  Yeah.

• 49:22Guy Raz?

  Um, okay. So, so really, I mean, given that you had this product and, and a limited amount of money, um, how were you, I mean, was it, I guess this is also the advantage of this product is it's sort of viral by nature, right? Because if somebody's using it and sending it out, then all the people who get it see it. And, and you essentially don't have to spend money, a whole lot of money on user acquisition because your customers are your, your sales force.

• 49:53Speaker 02

  Totally. And honestly, we didn't really spend much money on marketing until a few years ago. We kind of thought the marketing was like fake news. We were really on to product led growth. Um, and, and kind of, you know, these viral growth dynamics very, very, you know, a lot.

• 50:09Guy Raz?

  Yeah.

• 50:09Speaker 01

  Yeah. And then the other thing is that, um, we decided to try having an envelope where the, the invitation came out of the envelope.

• 50:19Guy Raz?

  Like the card. And I think most people have experienced this because probably most people listening have gotten a paperless post, which is when you click it, it's like the envelope opens up, the card pops out. Like you would pull it out.

• 50:33Speaker 01

  Yeah, and to be honest, that was, James can, James can chime in on this, but that wasn't necessarily key to his original vision. The, the design of the invitation was key and the idea that it was a luxury design product was key, but the idea of it coming out of an envelope was something that we decided to try out because we wanted it to be, we wanted it to stand out and people to say, oh yeah, I received your invitation, the one that looked like paper and came out of an envelope. And we, you know, ended up building that in pretty, um, pretty close to the, the launch.

• 51:09Guy Raz?

  Um, because you guys had, had to be scrappy and you didn't have a whole lot of money. Um, you know, and again, like the model at this time was just get a bunch of users, acquire a bunch of users, but your, your model's a little different because even if somebody used your product, it didn't mean that, that it wasn't like Facebook where they were going back to check the site 17 times a day and you didn't have advertising. So you had to hit profitability pretty quickly, right? I mean, that, that, that must've been a pretty like sort of pressure filled goal.

• 51:42Speaker 02

  Well, you know, we, we've got two sides of our network. We've got senders and we've got receivers. And it's true that receivers don't come back and check the product 15 times a day, but senders actually are very, very, very active for the month leading up to their event. But you're right. We didn't make money by monetizing, you know, engagement in that way. We were lucky to be able to raise, um, more venture capital financing as the product kind of took hold. Um, and I think, you know, that, that took away some of the urgency around achieving profitability early on.

• 52:21Guy Raz?

  When did you guys first hit profitability for the first time?

• 52:25Speaker 02

  We had always been running kind of close to profitability and we would always be profitable in Q4, probably since 2010, we'd have a huge surge. But we've been profitable since 2021 in terms of full years of profitability.

• 52:44Guy Raz?

  Yeah. Right. I mean, again, a marathon.

• 52:47Speaker 02

  Yeah.

• 52:47Guy Raz?

  Right? It's a marathon. So, all right, let's go back to the timeline for a moment, because you've launched this thing. And I guess, you know, sort of two, two and a half years in, you decide to actually offer up printed cards. And not just to offer them up, but I think you built your own printings, like, business, like, within Paperless Post. Tell me about how that came about.

• 53:15Speaker 02

  So, we realized that we had, you know, a couple of years in, we'd built up this very passionate user base of early adopters who were people who actually loved paper. And when we would talk to them, you know, they would say, "I used you for my wedding. I wish I could print some for my scrapbook." Or, "I used you for all of my birthday parties for the past two years, but now I'm getting married, and I want to use you guys for my wedding invitation, but I want to send paper." And I think for me, there was this kind of big vision of being a platform that could be sort of one-stop shopping for any type of invitation you were sending.

• 53:59Speaker 02

  And, you know, could we be everything to our users, not just digital invitations, but the paper as well? And we validated the demand for it, and then we set about building it. And we launched it in 2012. I think we did $500,000 in sales in the first, like, 10 weeks of paper.

• 54:23Guy Raz?

  And did you build, did you work with a partner? Or did you actually, like, did you contract with a printing business?

• 54:31Speaker 02

  So we had two print partners. We had, we worked with Crane Stationery, which is, which is, I think they make the paper for, for, for money. Yeah, like a, yeah, three hundred and fifty year old paper company in Dalton, Massachusetts, that did all of our fine printing. And we worked with a state of the art digital printer in Memphis, Tennessee, that did our digital printing on these incredible, you know, million dollar printing machines. And, you know, maybe there was a bit of a vanity aspect as well, where I really, I thought we'd, you know, we'd created a product that people associated with quality so much, that could we offer a product that was, you know, people would spend hundreds of dollars on,

• 55:15Speaker 02

  instead of ten, you know, ten or twenty dollars.

• 55:18Speaker 01

  But at the same time, it also pulled us in a different, into a different market with different competitors. But there were other companies that had been at it for a long time, and gone deep into the product, production, manufacturing, marketing, all areas that we were new to. And so we were able to get up to speed, and we actually grew it to be a pretty big business. But, you know, in 2017, we, we decided to shut down the operation. We would have had to choose, like, to compromise on one, you know, the quality of one product or another.

• 55:53Speaker 02

  We also found at the same time that our, our engineering team and our product team was, was being forced to think a lot about this paper product, you know, and how to, how to be more competitive with the people who are doing great things in that space. Yeah, but they were engineers. They were, they were, and, yes. Yeah, they were not, they didn't have three hundred years of stationery experience. Yeah, exactly, exactly. And they, you know, what we really needed them to be doing was focusing on kind of, Making our product amazing on these iPhones, which were becoming more and more pervasive and replacing BlackBerries.

• 56:28Guy Raz?

  Right.

• 56:29Speaker 02

  And when we saw these opportunities kind of passing us by with our core digital business, which always remained much bigger and much more profitable, and made, again, this maybe for the second time, the difficult decision to shut down a business that we had built with blood, sweat and tears.

• 56:49Guy Raz?

  I mean, it sounds like what you're saying is, which makes a lot of sense to me, you couldn't do both things and be best at both things. That it was not, like, it's another sort of version of saying you were spread a bit too thin.

• 57:03Speaker 02

  Yeah, exactly.

• 57:05Guy Raz?

  When we come back in just a moment, how James and Alexa get spread even thinner when 2020 hits and every event that brings people together is canceled. Stay with us. I'm Guy Raz and you're listening to How I Built This.

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• 58:44Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's early 2014. Paperless Post has grown to about 45 million users. And after some false starts with its business model, the company raises a big chunk of cash, $25 million, which, as it turns out, is both good and bad.

• 59:06Speaker 02

  It was kind of problematic for us because we weren't ready to have that much capital. And it's so funny how when you look back on, you know, building a business, how the things that you think are going to be great can be kind of the kiss of death. And things that you think are going to be really bad can be amazing. You know, the thing about having a lot of capital when you're a small company is that you can put it behind the wrong strategy. And you don't, you lose, you lose touch with the practical reality of the business. And it took us a little longer to realize that it wasn't right for us because of that, like, you know, heavy capitalization.

• 59:46Guy Raz?

  Yeah, yeah, I mean, I wonder whether, you know, when you raise that amount of money, right? There's also an expectation that you're going to do something with it, that, right, that there's going to be like a shiny new thing. And so one of those shiny things was the paper business, right? But then another thing you tried was, was a less expensive version of the online invitation, I think, which I, which I think you called Flyer, right?

• 1:00:11Speaker 02

  Yeah, so Flyer was conceived as a mobile-first, you know, more casual, less expensive product. And we built it on the back of, of, of kind of exiting the paper business. And, you know, it's, it's been really, really popular with existing users and with new users. So, yeah.

• 1:00:31Guy Raz?

  But it's mainly, it's mostly free.

• 1:00:32Speaker 02

  It's mostly free. It's about 75% free.

• 1:00:36Guy Raz?

  Wasn't there concern that might undercut your core product?

• 1:00:40Speaker 02

  Our position was that it was a very different product. You know, Flyer today is heavily based around motion and GIFs and it's much more of the aesthetic of sort of social media, stickers and animated text. And our position was that people who want cards are going to continue to use cards and people who want Flyer want something different. And so that is mostly turned out to be the case.

• 1:01:09Guy Raz?

  I mean, I struggle with this idea, even with what we do, which is how much free stuff can you give out without understanding what you're going to get back in return, especially if you're trying to build a sustainable business? Because even giving free stuff away still costs you money, right? And so, and you have no advertising. So it's not like all of a sudden people are getting Flyer and they're also seeing an ad, right?

• 1:01:33Speaker 02

  You're right. We have no advertising ever and we don't sell people's data.

• 1:01:37Guy Raz?

  Yeah, so what's the return?

• 1:01:39Speaker 02

  I think that you have to remember that our growth has been so heavily driven by this viral dynamic that happens. So when someone sends an invitation, their recipients are clicking to our site, they're engaging with it. If it's like a cool looking invite and it feels relevant to them, then we acquire a user who can become a customer. So, you know, yeah, maybe we give a lot away for free on Flyer.

• 1:02:11Guy Raz?

  But there's a return in terms of, and are you able to measure that? Is it possible to know for sure if actually it's generating?

• 1:02:19Speaker 02

  We're definitely able to measure that, yeah.

• 1:02:23Guy Raz?

  So on balance, it works out?

• 1:02:25Speaker 02

  On balance, it works out and it's been a very, very popular product.

• 1:02:28Guy Raz?

  So, okay, so you've got this business humming along and growing and obviously,

• 1:02:35Guy Raz?

  You launch in 2009 and 10 years in, you've got a product, a business that's really kind of penetrated the culture. And it seems like there's nowhere else for you to go except up. Except something very significant is about to happen in the world, which is a global pandemic. Good for some businesses. If you are an online apparel and you happen to sell athleisure wear, it was going to be a very good year for you. If you're in events business, we've had Eventbrite on the show, or you are in the business of helping people to organize their events, different story.

• 1:03:18Speaker 02

  Yeah, it was pretty catastrophic. I mean, our mission is to help people gather in real life in a more meaningful way. And the term "social distancing" that kind of like entered the lexicon out of nowhere and became the word everyone was talking about. It was pretty much the sort of antithetical to the purpose of our company.

• 1:03:42Guy Raz?

  Yeah, every event was a super-spreader event. Don't go there as a super-spreader.

• 1:03:46Speaker 02

  Exactly, every event was a super-spreader event.

• 1:03:48Speaker 01

  Yeah, I was actually five months pregnant at the time and people were writing saying, "Oh, how are you? Are you OK being pregnant during this pandemic?" And I was like, "That is not my biggest problem right now, if I'm being honest with you. I think the pregnancy is going to be, hopefully it's going to be fine, but I have something bigger to deal with."

• 1:04:12Guy Raz?

  Which is a business that was collapsing.

• 1:04:14Speaker 02

  And payroll that was the same as it was two months before, when our sales were significantly, significantly higher. So we took about 10 years' step backwards in a month.

• 1:04:29Guy Raz?

  Wow.

• 1:04:30Speaker 02

  But it took us back, probably in terms of like our sales volume. And we were probably back to where we were in 2009 in sales. Yeah.

• 1:04:39Guy Raz?

  But with a staff of how many people? 100?

• 1:04:41Speaker 02

  100 and 20, yeah.

• 1:04:44Speaker 01

  It's just the difference between...

• 1:04:49Speaker 01

  Ten years before and and that time was that ten years before we really had very little to lose and and during covid, we had a lot to lose. The stakes were were inarguably much, much higher.

• 1:05:08Speaker 02

  Yeah. And actually, I think when I think about it, what what really happened was that sales dropped by eighty five percent in April and then over the summer, they they settled around fifty percent down to the prior year as we saw people figured out how to have parties that were outdoor parties or drive by parties or virtual parties. So so so for for twenty twenty and twenty twenty one, we were down about fifty percent, but still, um, you know, very difficult.

• 1:05:37Guy Raz?

  That's still devastating.

• 1:05:38Speaker 02

  Devastating. But but what we what we realized is that our our our main concern was to get through it without ruining our company.

• 1:05:50Guy Raz?

  How are you gonna do? Tell me how you I mean, I am imagining you had to do everything.

• 1:05:54Speaker 02

  We had to do everything.

• 1:05:55Speaker 01

  But first, I think it started with deciding that we were going to survive it and that we were going to respond as shrewdly and as scrappily as possible.

• 1:06:12Speaker 02

  So we did a little bit of everything. So we had to, we had to kind of work every angle. We we started with pay cuts, um, which was, you know, everyone was pretty good support about that. And and so we we kind of heard, we heard about PPP loans. We were one of the first companies to get PPP loans. Um, and we they were pretty generous. We negotiated with our landlords, we renegotiated our debt, and we ultimately did have to raise some money from our investors who who all came together around the company and and helped bridge us to the other side. So we were really, we really pulled every lever to keep the

• 1:06:53Speaker 02

  company together and to allow us to preserve the value that we'd built over the previous ten years.

• 1:06:59Guy Raz?

  But but an idea would eventually emerge from this. I mean, an idea that now is a part of your business, which is actually. Really interesting, basically a kind of a products side of your business, like physical products.

• 1:07:14Speaker 02

  Yeah, that was that was definitely that that emerged. Actually, a lot of a lot of great ideas emerged during the pandemic. We became very focused on profitability for obvious reasons. And once we, you know, we came up with the idea of of starting a physical product shop, which has been very cool.

• 1:07:35Guy Raz?

  This is called, just for people to know, it's called Party Shop.

• 1:07:38Speaker 02

  It's called Party Shop, the paper was post Party Shop.

• 1:07:40Guy Raz?

  Yeah.

• 1:07:40Speaker 02

  You know, if your kids having a dinosaur birthday party, we can create matching dinosaur products, etc. So that that was that sort of started as a test coming out of the pandemic. But I think even more substantially, we started to really look at the business through the lens of, you know, which segments were driving the most value. And we we noticed that the two segments were kind of standing apart from the rest, professional events and wedding events. And we were thinking about the fact that these customers, these business customers are really appealing, like they're they're great customers. They they have high willingness to pay. They have high repeat rates. They are pretty easy to serve. Maybe we should

• 1:08:25Speaker 02

  build for those segments.

• 1:08:27Guy Raz?

  I mean, this comes out and and you launched this, obviously, you know, this is launched, I think, in 2022. So and again, we forget, like, there were is basically a year and a half of or in many states in the in the United States of just people not going out. And then there was another year and a half of like, outdoor eating and masked eating and going to hotels masked and sidewalk cafes. And that really lasted in at least California until like 2023.

• 1:08:59Speaker 02

  Yeah, no, it was it was really, we became like, like weather people on the TV. I mean, I remember everyone, we were kind of looking at maps of the US and saying, well, this outbreak of this Omicron variant is moving across these states.

• 1:09:13Guy Raz?

  Yeah.

• 1:09:13Speaker 02

  The next wave would happen and we would be battered again. It was like being in a boat that was going through a storm. It was like waves of of kind of crashing over our business.

• 1:09:26Guy Raz?

  Yeah.

• 1:09:27Speaker 02

  And actually, I think, even when I think about it, a lot of the competencies that we've built up and the muscles that we built during COVID that we had to hone for survival as the kind of the cloud lifted, it was like we'd been training at altitude.

• 1:09:42Guy Raz?

  Tell me a little bit about what, where the, I mean, are, so you've fully recovered and more, like now you're, you're back to full strength where you were before COVID in terms of like employee count or, or what?

• 1:09:54Speaker 02

  Yeah, we're a little bit, we're around the size we were before COVID, but we're double the size, we're profitable.

• 1:10:01Speaker 01

  We're double the size as a business, yeah.

• 1:10:03Speaker 02

  And we're growing at a pretty nice clip.

• 1:10:07Guy Raz?

  Yeah. You know, back in, in 2023, Saturday Night Live had a, did a parody of a paperless post commercial and, and we'll, we'll post a link to this, by the way, in my newsletter for people who haven't seen it because it's so funny. And it's like, it basically, it's like paperless post, you know, if, if we have a new feature, if, if the, you know, your, the people aren't RSVPing, we'll throw a brick through their window and it just gets more and more crazy and like eventually like wild dogs are sent after people who aren't responding to the paperless post invitation and then to the one person who writes in and is like, I don't really want to celebrate the, it is so funny. When you saw that, because when I saw it, I was like, this is amazing. They must love this.

• 1:10:51Guy Raz?

  This is so good for the, did you, is that how you responded initially or were you like, ooh, I don't know about this?

• 1:10:57Speaker 02

  I think we were pretty, we were pretty, we thought it was pretty amazing. So we just got a Google alert one, I think it was Saturday night and I think I was probably out at a party. I got this Google alert and I looked at it and I thought, wow, this is pretty, pretty wild. And the skit kind of gets at some of the manic energy behind planning an event. You know, you really care about it. You really want people to RSVP. You, you want those damn RSVPs.

• 1:11:27Guy Raz?

  So funny.

• 1:11:28Speaker 02

  It's really funny.

• 1:11:29Guy Raz?

  One of your early investors that you mentioned was a French guy. And I think he was also like they had invested in Chanel. And I just think about like, you know, all the the the brand partnerships you do with some of these designers. And I wonder what is the like, what is, is there an exit, so to speak? I mean, is there a world where you're acquired by LVMH or you're you're looking for something like that? I mean, or does it go public like some other companies do or or or neither of those?

• 1:12:00Speaker 01

  I think that we didn't build the company to sell it. We built it because we have a personal passion for it and we're inspired by it. And it's all around us. So, you know, I think over the years, we've explored, we've had different companies approach us and, and, you know, sometimes explore different opportunities that came our way. But the timing, the partner, the deal never really felt right. And we believe that we have more to build and further to grow. And we're, you know, we're still, we're, we think we're still the people to lead that.

• 1:12:33Guy Raz?

  Yeah.

• 1:12:35Guy Raz?

  When you guys think about this, this journey you've been on and where where you are now. And I mean, you've got a lot of incredible success and you proved early doubters, including me, I would have been a doubter, wrong. And you had a massive crisis, you know, once you were a mature company and you recovered from it. How much of where you guys got to, do you attribute to the the work you put in the grind? And how much you think has to do with just the luck of the timing and how consumer behavior changed?

• 1:13:08Speaker 02

  I, you know, I, I think that there are ways that we've been lucky. I think we were lucky to be born as siblings, you know, to have a co-founder that you know so well. And, you know, from, from day one, to have supportive parents that gave us confidence. But. When I think about luck, I also think there have been a lot of supremely unlucky moments that have happened going out, launching our beta and going out to raise money in the fall of 2008. Covid was extremely unlucky for us. I think it kind of washes out in the end. I think the part that doesn't wash out is the incredible hustle and desire to succeed that I think Alexa and I share and our team shares.

• 1:13:54Speaker 01

  I agree with everything that James said, but I think that, you know, I do think that really horrible and difficult things happen to everybody in their lives and you can't stop those things from happening. So how you respond to these unlucky situations like people quitting, or Covid, or death, or sickness, that's the biggest freedom that you have. That's one of the biggest powers that you have as a person and as an entrepreneur. It's how you respond. And oftentimes, those really, really hard moments are where you can perform the best.

• 1:14:33Guy Raz?

  That's Alexa and James Hirschfeld, founders of Paperless Post. By the way, earlier this year, the company celebrated its 15-year anniversary with a big party. And the invitations were, of course, sent by Paperless Post. I saw a photo of you with Anna Wintor. I was like, wow, you have fancy people at your 15-year party.

• 1:14:56Speaker 02

  Yeah, that was-

• 1:14:56Guy Raz?

  She's like the Michael Jordan of the fashion world.

• 1:14:59Speaker 02

  That was very nice for her to come, yeah.

• 1:15:01Guy Raz?

  By the way, how do you have a conversation with her? I would be so intimidated. I don't, she's got her sunglasses on, she's Anna Wintor, like-

• 1:15:09Speaker 02

  She's surprisingly nice.

• 1:15:11Guy Raz?

  I'm sure she's nice, but I would still be like, I don't know what I'd say to her. I'd be so nervous.

• 1:15:15Speaker 02

  Talk about the theater, talk about tennis.

• 1:15:18Guy Raz?

  I don't know anything about tennis. I don't know anything about theater. I guess my wife would be with me so she could talk about theater. I'm like a caveman.

• 1:15:25Speaker 02

  She's great.

• 1:15:27Guy Raz?

  Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And as always, it's free. And if you're interested in insights, ideas, and lessons from some of the world's greatest entrepreneurs, sign up for my newsletter at guyraz.com. This episode was produced by Kerry Thompson with music composed by Ramtin Arablouei. It was edited by Neva Grant with research help from J.C. Howard. Our audio engineers were Robert Rodriguez and James Willetts. Our production staff also includes Alex Chung, Chris Messini, Devin Schwartz, J.C. Howard, Sam Paulson, John Isabella, Catherine Seifer, Carla Estevez, and Elaine Coats. I'm Guy Raz, and you've been listening to How I Built This.