What It Really Feels Like to Sell Your Company to IKEA | Ep. 324 with Leah Solivan Founder of TaskRabbit

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0:34So it's great to have Leah Sullivan. And Leah, I mean, who has never heard of TaskRabbit? I was just telling you, I'm having a tasker from TaskRabbit come by my house. I mean, you've broken so many barriers, but there's something that keeps me up as a business owner. I've been really thinking about this, a few things, but one is I want to exit my company. But A, I don't understand what it's like at the beginning stages of when someone wants to acquire you. And then what's the emotions going through the due diligence and then when it's all done. So can you go back to that moment when you first heard that, I mean, Ikea, a massive company wanted to acquire TaskRabbit?

1:17Yeah, well, it is a lot of emotions. It can be really overwhelming. And what is that saying? I'm going to get it wrong, but I'm going to try to do it. It's like companies aren't sold, they're bought or something like that, right? It's like you have to let the strategic buyer come to you. You can't put yourself on the market. So, I mean, I remember feeling that way at TaskRabbit. We were like raising a growth round of funding. We were talking to strategic partners and we weren't sure which way we were going to go. Were we going to raise more money and continue to build on our own privately or were we going to work with a strategic?

1:55And actually, IKEA was someone that we had had our eye on for years, years and years. And that was because the number one job on TaskRabbit at the time had always been IKEA furniture assembly. Like even day one in Boston, when it was just me, I was like assembling IKEA furniture. I was the first TaskRabbit, okay? I'm not very good at it either. It was like a terrible idea. But, you know, years later, we had always been trying to pitch them to get in front of them. We wanted to at least do a business development partnership with them. And so finally, finally, that's, you know, privately family-owned company, very difficult to get to.

2:37But they were visiting the U.S. with sort of this group of executives, not just IKEA but other companies as well. They came by the TaskRabbit office. we had a whole pitch ready for them and the other execs. And at the end of the pitch, you know, we grabbed the business card of the woman from Ikea and we just, you know, followed up with her. And we eventually from that were able to get an in-store partnership in their London store, one of their largest markets, one of our largest markets at TaskRabbit. And then from there, we were very quickly able to show that we were able to increase, you know, average order size, average order value, just increase, you know, customer satisfaction by having TaskRabbit's on site being able to, you know, drive the product home and assemble it immediately.

3:28So that's kind of how it started. And then, you know, from there, it was like, okay, Ikea was interested in not only doing the partnership, but, you know, maybe buying us as well. And we're running this, you know, fundraising process in parallel. So then you hire bankers. Okay. This is where things went really haywire because I like looking back, you know, we did this whole big process with bankers and we ran all kinds of different like parallel pitches with other strategic companies and offers. And like, this goes back to like, you can't sell a company. Like people have to come to you. I mean, in the end it was Ikea.

4:07It was always Ikea, but we like made this bigger process. We like paid these bankers fees. Like we did all this extra stuff that we actually, in the end, didn't really matter because the fit with Ikea was so good and it was so culturally aligned. And the last thing I'll say is like, I remember as a board, this was before Zoom, right? This was like 2017, getting on the phone, analog phone call and taking a board vote about whether or not we were going to sell the company. and we went around one by one, every board member. And I was the last one to go. And it was like, our series A investor, you know, starts and he's like, I'm so proud of this journey.

4:51I'm so proud of what you've built, you know, and like, I vote yes. And then like our series B investor, like, says his, like, really nice motivating thing, the series C and on and on and on. Stacy, my partner at the time. She, you know, had been running the process, really spearheading the wholesale process. She votes. And it gets to me, I'm in tears. I'm like so emotionally drained by this process and the gratitude I felt too for the journey. I mean, had been almost a decade at that point. And of course, you know, I voted yes. It was unanimous. But it was sort of bittersweet because it was the end of such a big chapter of my life.

5:35But as I look back now today, almost, I was saying, like almost 10 years later, which is kind of crazy, you know, IKEA has been a great partner. They've had amazing leaders. Anya Smith, the current CEO, is just incredible. And I'm really, really proud to see that company continue to thrive and scale without me, beyond me. And that, I think, as a founder, is what I was looking to create, something that lived beyond me. I mean, that's amazing. I think, at least from the US perspective, almost every founder is not looking for a legacy brand to pass down through generations. They're looking to exit at some point.

6:13And I would imagine when you start to raise money, especially from VC, there's an added pressure that their goal is to obviously get their money back 10x or whatever x so they can so they would like you to exit. Did you ever feel pressure in the sense of, or do you think that sometimes the founder and the investor are not always looking the same way because the investor wants to make their money back and the founder sometimes doesn't want to exit? Yeah. I mean, it's a tricky thing. You take venture money, you are on the venture train and that means you have got to exit that company, you know, in the next seven to 10 years.

6:50Like that, that is, that's the game. That's the goal. Back in 2014, I remember sitting there trying to figure out how to sell products online. I had this men's grooming line, but the what-ifs were loud. What if I can't figure out the tech? But I took the leap. One of the biggest reasons I was able to do so was Shopify. They made it possible for a guy with a product and a dream to actually build a real business online. 12 years later, I'm still on the platform, now running our skincare line, and I believe Shopify is one of the greatest technology shifts for entrepreneurs in our lifetime. Shopify is the commerce platform behind millions of businesses around the world and 10 % of all e-commerce in the U.S.

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8:03It's time to turn those what ifs into with Shopify today. Sign up for your$1 per month trial at shopify.com slash founders story. Go to shopify.com slash founders story. That's shopify.com slash founders story. Well, that's what everyone has signed up for. And I can tell you now being on the other side as an investor, like I understand even deeper just the portfolio management that goes into play here. You know, some of the competitive dynamics as well. You know, investors have as a venture capital investor, I also have investors. Right. And I feel pressure from my investors. Those are limited partners, LPs that are saying, I want to see a return on the capital I'm putting into your fund.

8:50And then the venture capitalist funds are saying, OK, I want to see a return on capital of what I'm putting into your company. So there are many layers of pressure here that as a founder, I didn't understand. I didn't really need to understand. But actually now I think it's helpful perspective to have is just really understanding the game as it is being played on the field. And that is you've got to return capital for your investors. and the venture time horizon is seven, 10 plus years. So for the last like 14 years of having some sort of business somewhere, I've never taken capital because I'm always fearful around somebody else telling me what I can and can't do.

9:36But at the same time, I'm also sad that looking back, I know I could have grown in scaled companies that I had to close because I'd ran out of funding. How do you see this in terms of balancing also not giving out all the equity, but also like there's no way you can really grow in scale? Maybe with AI and some costs are low, but to really, really grow in scale nowadays, it almost seems like you have to raise. Otherwise, you're going to be in it for so long. Yeah, no, I think that's such a good point because I think that fundamentally not every business is a venture capital business. There are lots of businesses that can survive and thrive without venture capital funding.

10:17And I think if you can do that, you should do that. You're going to make a lot more money. You're going to have a lot more autonomy. You're going to be, you know, you're not going to be feeling the pressure from all these outside investors if you can do that. But as you point out, a lot of businesses do need venture capital infusions to really scale. And I think right now we're seeing with AI as well. AI in some ways is really democratizing access to building a company, right? Because you can vibe code and you can like do things a lot more efficiently and faster, but it's also really expensive to buy GPUs and like run servers with AI, right?

10:54So that requires venture capital funding. So I think, you know, it's a personal decision and it's also a decision of, you know, what kind of scale do you want your company to have? Are you okay with giving away some?

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11:58of the control or do you want to keep control and maybe grow it a little slower which is completely fine right you don't have to be on a rocket ship every time you start a business that's not the point at least not to me right so you just have to think about like what you want your company to be and what potential does it have with TaskRabbit I always saw a vision of the world where the future of work was changing. The gig economy at the time was nascent. It was not a thing. We really helped create the gig economy along with other companies. And so for me, it was like, this is a venture-backed business because we are shifting the future of work and we need to get to scale quickly to do that.

12:44I mean, that's amazing. The fact that, I mean, how does that feeling when you when you look back and say, I base me, my partner, we basically created an entire economy in the gig economy, which has now been so many iterations of different ways. And many are saying the future might be because you know, Gen Z alpha, they don't really want to work a full time job like they want to work freelance or gig or I mean, this this is like all around the world now changing economies. How does that feel? Yeah, I mean, okay, so what I've become obsessed with really is this concept of breaking precedent. And this like gets into my podcast and my book and the fun that I'm running.

13:25But I think as I look back on what we did with TaskRabbit, it was seeing a trend. It wasn't like I invented the gig economy, right? But I saw that the future of work was changing. And it was a very specific time in the market. It was 2008. We were entering the Great Recession. Everyone was being laid off, like really incredible, you know, high earners, lawyers, physicians, teachers, you know, were being laid off and didn't have full-time work. So there was this trend and this opportunity was like a wave that I saw coming and not just me, other companies as well, right? We all kind of jumped on this wave and helped build and helped create.

14:07What's interesting is I think with AI, we're at another inflection point here. From a technology standpoint, there is a wave happening and a lot of people are jumping on it, right, to see what they can build. And so I just love opportunities where there is this shift, there's this trend. There's this opportunity to build and really set new precedents in a category in an industry. And that's what I based, you know, the thesis of my fund around as well as finding those teams and finding those companies that are creating those category defining experiences for consumers. I mean, amazing. Like the gig economy is just, I mean, there's gig economy, Now it's creator's economy.

14:52I mean, it's people, it's like entrepreneurship. Like everyone wants to be an entrepreneur, but I don't think they really want to be like the business owner in the sense of having all employees and doing different things. They want to just be able to make their own money on their own time with their own freedom. Something though that has irked me about venture capital, and I hope this changes. We started this show originally called Inspired by Her. That was the name of this show before we changed it to Founder Story six years ago. And we started it because we noticed a lot of women were not having businesses above a million.

15:27I think it's like 4 % or something small. But then it's like only a few percent of women get venture capital. And then the ones that do, we've had a few on the show that eventually come to find out were kicked out of the company. and I started doing research and there was like a big growing amount of women who are CEOs who end up getting kicked out of their own company. What do you think about the future of this industry? You know, this is a system. Venture capital is a system that is very broken. I'm just going to be honest with you. It is very broken. It is not built for everyone. And, you know, I like to think of the analogy of like you walk into a casino and the house always wins.

16:11right? Like every table, every card game you're playing, everything is rigged and it's not in your favor. Sometimes you win and maybe you see other people win like just enough to feel like it's fair, but I'm telling you it's not. It's not. The house is rigged. The house always wins. And so in a system like this, like the venture capital world that, you know, I live in, that we all live in and operate in, it's really hard to break through. It's really hard to break out. There's a lot of bias. There's a lot of barriers. And I think, you know, it's a continuous effort to try to build an ecosystem within the system that is progressive enough and growing enough to make a real change, to make a difference.

17:00There are organizations like All Raise, right, that have been started. You know, there are more and more women that are taking on check writing positions in these firms, in these venture capital funds. You know, there's a stat that's like a female venture capital investor is twice as likely to invest in a female founder. Now, my first round of funding was done by Anne Miraco at Floodgate Fund, another women in venture capital. And so I have lived this as a founder. I now see the system as an investor. And there's no silver bullet here on how to fix this broken system that we live in. But things that would help would be more female check writers, more women raising their own funds, more women taking on general partnership roles at larger funds, deploying more capital into more diverse founders.

17:57founders. And we need that to happen at all levels. It can't just happen at the seed level and then you like throw founders off a cliff because there's no series A funding for them, right? It's like at all levels, we need change to happen. So, you know, it is, it's not fair, it's frustrating, it's all the things. But at some point you have to decide, am I going to stay within a broken system and try to push the change or am I going to leave? And I've decided to stay and build and launch a new firm and all these things, but we just need more. We need more of that across the board. It's great that you, I like the founder to funder because I think what I've seen is there's a lot of funders who are never really a founder don't really understand that world.

18:51So it's great that you have both perspectives, but then the fact that you can also deploy money to companies who are maybe, like you're saying, maybe the CEO or one of the founders is a woman or two women or however many people. Hopefully, this will help the industry. I wanted to go back to you were talking about AI and the gig economy and working. I've started doing a lot of research around wealth transfer that's going to be happening in the next 10-15 years from baby boomers down, mostly impacting millennial and Gen Z. So I had somebody from a head of one of the largest financial companies on recently, and they said they expect it to be an$80 trillion wealth transfer, largest in history in the next 10 to 15 years.

19:42And it got me thinking about universal basic income, AI, jobs, robotics, that this is just my perspective. If people receive, and I know this isn't everyone, this is like a fraction of people, but let's say millions and millions of people are about to receive millions and millions of dollars in wealth. I don't know if they will go back to work. I wouldn't. If I receive millions and millions of dollars tomorrow, I might just do something else. Maybe I'll knit, or maybe I'll play an instrument, because I don't really have to work. I wonder how this is. And then you obviously have AI, transforming robotics, like so many, so many things coming together at this point in history.

20:24It's inflection. You are a pioneer of the future. How do you see the future? Okay, this is what I think. I think that humans and the humanities in general are going to become more important than they ever have been because it's being human and having that humanity and, you know, actually studying these things, language arts and English and history and art history. Like these are things actually that I don't think AI is very good at right now. I think that AI is a way to democratize and a way to commoditize a lot of things. And, you know, if I were, you know, going to school, going to college, or the advice I'd give my kids as they're going to school and college would be maybe not to go for that computer science degree, but to study the humanities.

21:21Like, let's really understand what sort of empathy, what sort of discernment, what sort of decision-making capabilities we can bring as humans that the AI isn't good at right now. And so I see a world where people are going to need to be more creative. They're going to need to understand how to get information, how to prompt AI, how to really engage technology. But I think that the unique capability of us as humans is our creativity and our discernment. And so I think those are the skills that are going to become more important. And I think those are the muscles that we need sort of the next generation to build to be successful.

22:08Those are the degrees that when I was growing up, I would be made fun of if I got those degrees, right? Like the lost people, like language arts, like those were like the people that you'd say like, oh, that person is law. Like they have no drive. What are they going to do? Right. What are they going to do? Those are the people now that are going to crush it. Isn't that funny? Like, I love how like the world just goes in circles, right? Like, I mean, you know, if you were, if you did that, you know, 500 years ago, you know, now if you wrote a book about it, now your book would be used in every class because I don't know, you were, you were considered the pioneer of your time.

22:47That's right. I am very fat. I can't wait. Like, I mean, would you have a robot? What's good. So this, let's talk about this gig economy of robots. Yeah. If I have a robot in my house, I don't, I'm not going to use TaskRabbit or any service because my robot can learn from YouTube and do my car, my plumbing, my HVAC. That's how I feel. I think we're a long ways away from that. But yes, I agree. Maybe at some point in the next few decades. I literally was just on the phone with Anya Smith, the CEO of TaskRabbit, and we were literally talking about Tasker robots. And here's the thing. It's like, we have Taskers on that platform that are making like 200K a year by mounting TVs.

23:32Like that's all they're doing. They can do like four a day. They do it seven days a week. They're really good at it. They understand like how to, you know, change the different like wall mountings and materials and, you know, depending on the spaces. And I just think like we're so far away from that from a robot standpoint right now, where I do think AI can supercharge these marketplaces is in a couple of ways. I think one, on sort of the back end matching algorithm, being able to make better matches, be able to, you know, make the taskers, the supply side, their life like more efficient, help them do more jobs, help them make more money.

24:16You know, I think that is a big opportunity with AI. I also think, like you said, being able to democratize skills a bit more, like having taskers be able to like be on a site, take a picture of whatever it is they're trying to fix and like use AI to coach them. Like if they have a question, coach them through it. Like, I think that's a great use case too. So, um, I think there are opportunities to layer in AI right now on these platforms, but I don't think we're at a point, um, you know, where we're going to replace 150 ,000 humans that are making money on TaskRabbit today, um, with, with robots.

24:55Rentmyrobot.com. I don't know if it exists yet. I don't know. I'm, but you know, if someone wants to go buy it, it would be very expensive, I think, to start that company. Well, if you come across somebody who is doing anything with robot dating, I did buy the website date robots.com back in 2016. So if you come across something, I've been sitting on that URL. So if you, if somebody sends you a pitch deck, and it looks like this, please connect me because I want to do something. I feel like, Like, I feel like we are. We're getting closer and closer every day. We are. And I don't know if anyone will even have kids in the future.

25:33I'm really, really concerned and really mindful of like how this whole process will go in terms of friendships. Like our friends will just be we just want to hear what, you know, we just we love AI because it tells us what you want to hear. And we don't want complex humans and, you know, the faults. But this will be funny. This will be funny. So think about this scenario. Okay. The robots take over all jobs. Humans don't work. However, over time, the robots learn our faults. They start wanting unions and they want vacations and sick days. And then the robots become human-like and then the humans have to go back to work.

26:13Would that make a good movie? The humans become the slaves of the robots. I feel like that is a movie. Isn't there a movie that is that? I think so. I think so. It's not a new idea. So for the final thought here, there's a lot of people that want to raise money right now. And I've heard a lot of things like it's hard, it's easy. It seems like I'm hearing a lot. Yeah. How is the industry right now? And if somebody is, how would someone go about connecting with someone like yourself? And what's like a perfect way to approach an investor? Okay, so a couple things. One is, I think that this is an exciting time in the industry.

26:54I think that, you know, most companies need to have an AI story. Like that is the inflection point we're at. That's the wave we're all trying to ride right now. I'm not saying 100 % of companies have to have that story, but I think the vast majority need to have an AI strategy and an AI story. I think that a couple of things. One is it's always nice to get a warm intro from another founder or an investor, but I also think there's a lot of bias in that. There's a lot of bias because you know what? You may be a founder with a great idea and a great company and a great product, and you don't have the connections to another founder or an investor.

27:35So I'd say like network, network, network, start to build your network. I'm always open to cold emails, cold pitches. You can email me Leah at precedent VC. And I look at every single email. I actually have an AI built that triages all my deal flow. So it will be seen and scored and looked at. So I think, you know, this is a really great, exciting time for founders and for builders. And, you know, I really believe founders can come from anywhere. I did not, you know, start in Silicon Valley. I did not have a network in Silicon Valley. I built that up from scratch, from nothing. And so I know that it's possible.