Zaarly is hoping to be KC's next great tech company.

Zaarly CEO Bo Fishback is waiting for his tipping point 

Zaarly is hoping to be KC's next great tech company.

Zaarly doesn't have a garage.

So many huge tech companies have origin myths centered on guys tuning up their dreams in California garages. Hewlett-Packard ran commercials that touted its launch in a Palo Alto garage. Apple founders Steve Jobs and Steve Wozniak started their company in a Los Altos garage. Google founders Larry Page and Sergey Brin, the Web goliath's story goes, rented a woman's garage in Menlo Park. Later, they bought her home to preserve the piece of company lore.

Zaarly, a new tech-industry darling, has no similarly humble origin story. And its founder still lives in Kansas City.

The idea crystallized on a plane in February 2011. CEO and co-founder Bo Fishback was on his way to an event called Startup Weekend, in Los Angeles. The conference assembles volunteers to help entrepreneurs flesh out their ideas. Fishback, then the vice president of Entrepreneurship at the Kauffman Foundation and president of Kauffman Labs for Enterprise Creation, had been planning to chip in his expertise for other participants' ideas, not propose his own.

"On the airplane out there, I was just thinking, 'God, I wonder if I were to pitch something, what I would pitch out there.' You know, I keep a little file on my phone of just company ideas I'd like to be involved with or help people get going, whatever," Fishback says. "Really, we were going to party in L.A. It was NBA All-Star weekend."

Friday night at Startup Weekend, people give no-frills, one-minute pitches for their business ideas. Then people voted and formed teams of volunteers to work on 10 of the ideas over the rest of the weekend. Fishback listened to more than 30 startup ideas but couldn't, he says, get "geeked" over any of them. So he threw out his own.

"I was just like, 'Fuck it, I'm going to pitch something,' " he says. His presentation was an unpolished kernel of an idea: a hyper-localized version of a commerce site similar to eBay or Craigslist, but faster and more versatile.

Fishback, 33, admits that what he suggested — "a real-time, proximity-based, buyer-powered marketplace" — must have come across as a jumble of buzzwords. "It sounds like the nerdiest pitch garbage ever," he says. But he found enough supporters after his 60-second talk to put together a team and refine the idea.

By Saturday afternoon, Fishback says, he was sure he'd created something good.

"I was like, 'Holy shit, if this works, this could be massive,' " he says. In a hushed voice fit for telling an origin story, he adds, "This could be, like, Google massive."

By the end of Startup Weekend, Fishback had found two lieutenants: Eric Koester, who would become the new company's chief operating officer, and Ian Hunter, now Zaarly's chief technology officer. Together, they raised $1 million in seed money from A-list tech celebrities, including Lightbank, a fund started by the founders of Groupon; actor Ashton Kutcher; and Paul Buchheit, Google's 23rd employee and the creator of Gmail.

In March, Zaarly rolled into the South By Southwest music festival in Austin, Texas, and attracted droves of app-hungry hipsters. "Hungover at SXSW? Use Zaarly to get your Gatorade and Advil," one blog headline read. The site brokered $10,000 in transactions in 24 hours. (More later on how they did it.)

So Zaarly's creation myth had taken shape, and it wasn't a story of dreamers bent over soldering irons in a California shed. These were professionals running with an idea of unknown potential, even if the national media didn't see them that way.

A Wall Street Journal article from April suggested that Zaarly was merely cashing in on what many experts are calling the second coming of the tech bubble: "After the brief presentation, actress Demi Moore tweeted about the company. She noted that 'everything has a price!' — a reference to her role in the film Indecent Proposal, about a man's $1 million offer to borrow a stranger's wife for a night. Within 48 hours, Zaarly had raised its first seed round of $1 million."

Fishback, a graduate of Harvard Business School, says it's true that his team put together a fast initial round of funding led by Kutcher in the days immediately following Startup Weekend. But it hasn't just been about being in the right place as a bubble inflates. These were well-connected businessmen making, in the startup parlance, "a play."

"We're very experienced founders," Fishback says. "And not only are we experienced founders — the last 10 years of my life has been helping people build what they want to build. And I loved doing it," he says.

"It's only possible to go this fast if you have a really deep and trusted and robust network. So it's not like we're just some random dudes who had this idea." Fishback says mutual friends introduced him to Kutcher, Moore's husband, six months before Zaarly existed. Both men — Kutcher more famously — are borderline obsessed with startups.

By the end of February, Fishback had quit Kauffman Labs and the Kauffman Foundation to run Zaarly full time, a move that might be the closest thing in Zaarly's timeline to the classic garage story. But the reality of Zaarly's slick, fast emergence hasn't stopped the national press from putting the company in a metaphorical garage or suggesting that three guys happened to collide at a serendipitous moment.

Fishback shrugs it off. "People like that story," he says.


Ryan Wallace, a bearded, redheaded bartender at the Riot Room, has the look of a 19th-century settler. In this millennium, he's a different kind of pioneer, one of Zaarly's early local adopters and biggest users. Wallace says he has completed about 20 transactions, ranging from delivering food to high-fiving a man sitting alone in a park for an easy $5.

That's how simple Zaarly is. A user posts a request, a time limit, and what he or she is willing to pay for the desired thing: something delivered, a yard raked, laundry done. Another user then agrees to fill the request, and Zaarly brokers the deal. If the transaction is paid for with a credit card, Zaarly takes a 9.95 percent cut. The company makes no money off cash transactions.

Zaarly so far has charted the experiments of people discovering what their neighbors are willing to bring them or do for them. Alcohol is a frequently asked-for commodity, even though it lies in a Zaarly gray area. It's on a list of banned items, but Fishback says the listings aren't being removed as long as users are being responsible and checking IDs. Some items that have been listed in Kansas City in recent weeks include a 24-pack of Bud Light (to be dropped off at the City Place Pool) and a "good bottle of non-first-growth Bordeaux."

Some proposals are, of course, far-fetched. One recent user hoped to borrow a Lamborghini for the weekend. Another Kansas Citian solicited a very specific item. "Custom Championship Belt: I'm looking for a custom wrestling type championship belt. Leather strap, 1 large main plate then two small plates on either side. Jewelry maker or metal sculpter would be ideal. Would like it to be done by end of September at the latest."

On a warm August morning, Wallace sees that someone wants a Kansas City road map and will pay $15 for its delivery. He explains his method for making deliveries more profitable. First, he says, he always rides either his Honda Nighthawk motorcycle or a scooter that conserves gas. Second, he uses Craigslist to find certain things people are Zaarly-ing — the golf shoes that someone else has him hunting, for example.

"I always go through the free section because people give away free stuff all the time, like crazy," Wallace says of Craigslist. "And if there's nothing posted in the free section, I'll go to 'For Sale,' because sometimes people just want to get rid of stuff. And if they're getting rid of stuff, then I'll hit them up or make them an offer, and if it's worth making, you know, 10, 15, 20 bucks off it, then I'll do it."

This morning, he cruises on the Nighthawk to a nearby QuikTrip, buys two maps and heads to Zaarly's offices, just west of the River Market. The map, it turns out, is for a Zaarly employee who wants to track where door hangers advertising the company's services have been placed.

Wallace parks his bike in the building's small lot and jogs up the back stairs rather than approaching the front door. An employee answers the locked door. Wallace, money now in hand, calls out across the office to a couple of employees he has come to know: "Thanks, Josh. See you, Tom!" The fact that he's on a first-name basis with the Zaarly staff is indicative of what he says is the young company's one major flaw.

"There's not enough people on it yet," he says. Wallace estimates that roughly 70 percent of his customers so far have been Zaarly employees. The company offices are indeed easy to on the Zaarly website map via a constant cluster of requests concentrated in one building.

There have been a few other growing pains. In July, a security glitch exposed some user information, including (it was briefly feared) phone numbers. Fishback dismisses it as a minor stumble for a company expanding so fast.

"You know, whatever," he says. "Some hacker found a hole. You couldn't actually get any important information out of it, but what he did was, he e-mailed me but he also e-mailed all the editors of the major tech places. It was pretty low-trauma."

The CEO says such missteps ultimately improve his company — sometimes in unexpected ways.

"We had a 17-year-old kid find another hole," Fishback says. "Again, zero risk associated with it. But he just e-mailed us directly and said, 'Hey, guys, don't worry, I come in peace, but I just found this little hole, just thought you should know about it.' So we put him on contract to find some other holes to see if he could."

Wallace says he occasionally has had minor issues with mapping Zaarly's traffic. Sometimes, users post something from one place, but the location of the delivery is somewhere else.

He recalls a 2 a.m. request that he and a friend set out to fulfill: Someone wanted Taco Bell delivered to his house. On the Zaarly map, the request appeared to be not far from Wallace's home in midtown. But the user was in Overland Park, which led to Wallace encountering another of Zaarly's potential problems.

"We actually met the guy on a street corner because he was creeped out," Wallace says. "He didn't want us to know where he lived."

Fishback says he doesn't believe Zaarly will face complaints similar to those leveled against Craigslist, which has been marred with allegations that it has promoted prostitution and created contact points for human trafficking and other criminal activity. In the same way that eBay's anti-scam model encourages eBay users to leave public feedback about one another, the key to keeping Zaarly safe, he says, is that each user's success on the site depends on that person's earning a good reputation.

"We believe that people want to do the right thing," he says. "And the more local you make something, actually, the more true that becomes. If you only were doing deals with people on your street, no one would ever screw you. Why? Because they're going to fucking see you tomorrow."

Fishback says scams and incidents of nonpayment have been all but nonexistent on Zaarly.

"Right now, we've had one complaint in almost $3 million of transactions. Someone didn't get paid. One. So we just paid the person."

Zaarly users, he insists, aren't psychopaths. They're normal people who want normal social interactions to be part of their commerce. To illustrate this theory, Fishback, who travels on company business most weeks, tells a story about a 4:45 a.m. ride to the airport that he requested through the site.

"A woman came and picked me up," he says. "And [now] I'm interviewing her to be my nanny. Amazing, right? She just moved to Kansas City a week and a half ago. She doesn't have a job yet. She's interviewing and looking around for places, and a friend of hers told her about this thing called Zaarly, and she was like, 'Oh, my God. What a cool thing. I can make some money and meet people in the city I just moved to.' We've heard this story over and over again." His chauffeur that morning started work as a nanny to Fishback's 9-week-old son, Pierce, earlier this month.

Adam Hofmann, Zaarly's director of marketing, who also left a position at Kauffman Labs to join the company, says couple users are another Zaarly trend.

"Who would have thought to open up an app, see that someone needs some gardening done, and go and do it with your girlfriend?" he says. "It's the new date."


The River Market office, with its hardwood floors, exposed-brick walls, pingpong table and trashcans full of empty energy-drink cans, registers as the set of some clichéd movie about a tech startup. Young, attractive employees sit around a communal work area, gazing at flat-panel monitors and tapping on Mac laptops. Many of Fishback's hires say they've moved thousands of miles and changed careers for the chance to work here, under its charismatic leader. Peeled away from their tasks to talk about Zaarly's potential and their boss, employees tend to swoon over both.

Amanda Fick, 30, met Fishback in Madison, Wisconsin. Fishback's wife, Shelby, a radiologist, was finishing a fellowship there, and Fick, who owned a pet-sitting business, took care of the couple's two dogs: Dax, a golden retriever, and Keen, a Bernese mountain dog. Fishback, who had visited his wife every weekend while she was in Madison, suggested that Fick work at Zaarly. When asked if it was a hard decision to uproot her life for a startup, to do a job no one defined for her when she took it (one she can't easily explain today), she laughs.

"It was, but Bo and his razzle-dazzle," she says. "I don't know. He can make you do anything."

Jeff Morris, 26, ditched his job at a San Francisco tech firm. A spur-of-the-moment cover letter that he e-mailed Fishback at 2 a.m. one spring night led to a job interview at Zaarly's Bay Area outpost at noon the same day. Twenty-four hours later, he was at work in Kansas City. Morris says he did it because Zaarly stood out among an endless pile of Silicon Valley schemes.

"L.A. has screenwriters," he says. "San Francisco has startup founders." But when he heard about Zaarly, he saw something that other startups didn't have. Like Fick, he can't really define Zaarly's mission or how precisely he fits into it. Like his boss, though, he knows what he likes when he sees it. "You can't help believing in what they're doing," Morris says. "Their conviction is just really infectious."

Josh Coleman, 35, among the few locals in the office, came to Zaarly after working in the telecom industry. The CEO infected him, too.

"Bo is just one of those charismatic people who comes in the door and people take notice," he says. "Not just for the fact that he's 6 feet 8, but he just has a presence about him. He influences people easily. In a good way."

Starry-eyed they may be, but nobody involved with Zaarly thinks success will come without difficulty. But Fishback's hires are mostly young — 20-somethings — as any good garage myth demands.

"What youth helps is that you probably don't have to sleep as much, or don't even want to sleep," says Hofmann, 24. And a young staff, he points out, helps the company's push to attract young users.

Ryan Sauter, a 23-year-old who graduated in May from Miami University, sits in a corner, planning Zaarly's upcoming push into colleges. The company is hiring "campus CEOs" at 20 schools on the coasts and in the Midwest (including the University of Kansas and Kansas State University) to spread the gospel of on-demand commerce.

"One day you could have someone using it to get food delivered to the library if they're sitting there late at night," he says. "Then the next day, they could use it on the other side to make $20 ... to sell a textbook they have from a class previously."

Schools, Sauter says, should be rich with people willing to do odd jobs for beer money or grocery cash. "There's always those hustlers on each campus, those scrappy, entrepreneurial students that are willing to run around," he says.

With the college effort under way, a sustained effort at building a strong Kansas City market (the third-busiest Zaarly city in the country) and major marketing operations in what Zaarly calls its seven core cities, Fishback says his brood realizes how busy they're going to be.

"We have a shitload of work left to do," he says. The immediate goal: $1 million a day in posts over the next year. "If we get to $1 million a day in posts to the system," he says, "with decent fulfillment rates and all that stuff, that would mean that we're probably going to get to $10 million a day. And that would mean we have a good chance of getting to $100 million a day at some point."

Even with Fishback's palpable enthusiasm and a staff of uprooted believers, failure is as likely as massive success. That's the nature of startups, he says.

"EBay facilitated $100 billion in transactions last year," he says, "$100 billion. Not everybody uses eBay. A lot of people don't. A small percentage of the population actually does. But we have a shot of being bigger than that, actually. We also have a shot at being out of business in a year. It's a binary shot, in some ways. I think it's going to be one or the other."

What happens if Zaarly fails to gain traction nationwide? What happens to Fishback and his troupe if the company isn't the next indispensable Web utility after all?

"That's a good question," Fishback says. "I don't know. No one's asked me that question."

Comments (2)

Showing 1-2 of 2

Add a comment

 
Subscribe to this thread:
Showing 1-2 of 2

Add a comment

More by Ben Palosaari

Most Popular Stories

Facebook Activity

All contents ©2014 Kansas City Pitch LLC
All rights reserved. No part of this service may be reproduced in any form without the express written permission of Kansas City Pitch LLC,
except that an individual may download and/or forward articles via email to a reasonable number of recipients for personal, non-commercial purposes.

All contents © 2012 SouthComm, Inc. 210 12th Ave S. Ste. 100, Nashville, TN 37203. (615) 244-7989.
All rights reserved. No part of this service may be reproduced in any form without the express written permission of SouthComm, Inc.
except that an individual may download and/or forward articles via email to a reasonable number of recipients for personal, non-commercial purposes.
Website powered by Foundation