Depop: $1.6 billion exit to Etsy & now he’s starting from 0 again I Founder, Simon Beckerman

0:04Continue, continue, continue. Close your eyes and continue. It's like you're going around the track or you are walking into a mountain and you have an objective. reach that point and you are tired, continue. Never stop. As an entrepreneur, one is unemployable, maybe doesn't have any money. Those are motivations to make them want to continue. Welcome to Secret Leaders. Today, I'm with Simon Beckerman, the founder of Depop and now the founder and CEO of Delhi. Simon founded Depop in 2011, a popular social commerce app for peer-to-peer resale of clothes and accessories. Depop gained immense popularity among Gen Z consumers, offering a curated platform that combines elements of Instagram and eBay.

0:54Fast forward 10 years, and Simon sold Depop for$1.6 billion to another huge player in the game, Etsy. Now, he's the CEO and founder of Deli, an online marketplace supporting locally sourced food and drinks. So Simon, welcome to Secret Leaders. Thank you for having me. Mate, I'm very excited to have you. I've been a big fan of Depop for a long time. I think the right place to start is understanding a little bit about the Depop story. For anyone that's living under a rock or not a Gen Z or not into fashion or just doesn't understand apps, you know, let's say that this is for my mum. Tell me what Depop is.

1:31So Depop is a mobile social marketplace for people who want to buy and sell mostly vintage and unique clothing. It's gained traction amongst the younger audience, if I may say so, in a sort of way, contributed in making vintage, buying and selling vintage fashionable, pun intended. Yeah, got it. Okay, so let's get into the nuts and bolts. Like, why did you want to create Depop? What was the urge? So I was at the time in Italy. I was born and raised in Italy. So despite my English name. Oh man, a good Italian name of Simon Beckerman. They must have really expected that. Yes. My dad is British. He was born and raised in London.

2:21And my mom is Italian. They met in London before I was born and went to live in Italy. So I was born and raised there. And I've studied in the creative fields all my life. So art, industrial design at university, as many founders do, I dropped out university because I needed to work. I don't know whether that is a lucky thing or not, but in my case it was. And so I start before Depop, I co-founded with my brother a creative agency in the late 90s in Milan. We would do brand design amongst the first internet websites in Italy. and creative things for companies in general. Then we co-founded together a fashion and music magazine called People in Groove.

3:09That one went on until more or less 2012. During that period, we also co-founded a sunglasses brand called Retro Super Future. That brand is still going on as today. My brother is running it from Milan. The magazine, Music and Fashion Magazine, was aimed at discovering all the new up-and-coming and most interesting talents in these fields and bringing them to the people in Italy. So Depop was born out of, let's say, 10 years doing a website, doing the magazine and doing the sunglasses, learning how to build communities, how to build in a sort of way brands. And the idea came because we wanted to build initially an app where the people who read our magazine could discover and buy the very unique and super inspiring fashion pieces that we would feature in the magazine.

4:14As I was designing it, basically, I don't know exactly what made it happen, but I describe it as a brick that fell in my head. At a certain point, I realized that we could open it up, make it a marketplace and allow all these young or new generation people use that to sell their own items too. So not just us listing stuff that we would feature in our magazine. So that's how the Depop idea came to be. I was basically drawing this app, which was supposed to be like more of an e-commerce, on my desk in Milan. And it was late night in, I think it was 1am. And when the idea came, as I was drawing, I remember picking up my phone and calling my soon-to-be wife and then my mom too and telling them about this idea.

5:09I was like, hey, I've got this incredible idea. I think this is going to be big. I want to do it. I had this, as I said, brick that fell on my head. And yeah, so then I basically decided to do it. I agreed with my brother that he would take on the magazine and the sunglasses. I would focus on the app. So I found this incubator in Italy who was investing at the time in the first apps coming out of the country. It was the equivalent of, let's say, Y Combinator, but in Italy. It's called H-Farm. So I went there. I presented the app. They liked it. And I already had a little bit of a career behind me because of the magazine and the sunglasses.

5:58So they trusted my ability in building the community and the marketing strategy and all the tactics that I had in mind in order to launch it. That's it. I built the first app in this campus, which is near Venice. Then this was between end of 2011 and end of the summer of 2012. and then I moved to London and built the team in London, which from four people ended up being, I think at the moment of the exit, it was 450 people or something like that. And the accelerator that you joined in the first place, they got equity? They had equity, yes. So they're happy? They're very happy, yes. Good. And I've got to ask, what's your brother's name?

6:45Daniel. So how did the equity split work? And obviously I'm asking, I'm not trying to get your brother to, you know, not love his own brother anymore. But I've heard of these things happening a million times over. You go work on this and I'll go work on that. And, you know, if the thing that really takes off is the thing that the other person doesn't have the equity in, but they were left holding the baby, that can be very difficult. Doesn't sound like that's what's happened, but tell us. Well, we split the companies, not the equity. So basically, when I decided to move on to the app, we agreed that I would sell basically my equity to my brother of the other two companies and he would continue running those.

7:25The magazine went on for, I think, another year. So I left in 2011 and the magazine continued to until 2012. But the sunglasses business was going so well that my brother decided at that point to just focus on the sunglasses business, which is still going well as of today. We do share an investor, but we didn't share equity in Depop. So what we're gathering from this is you definitely chose well. Maybe, but if we think about it money-wise for today, yes. I hope my brother can do an exit too soon. His company is on the path to becoming very successful. But I would say given the difficulties, as you might have alluded in working with family, I would say one of the prizes that we both won was a little bit more of freedom.

8:22When you work with family the roles are never well delineated so there's a lot of arguments and it's challenging so I think that freed us all from being able to run our companies and in the best way we we think we thought was I managed to make Depop a success he is managing to make the sunglasses company a success so yeah it's a win-win in a sort of way yeah I think that makes sense actually right Like the biggest chance that you had was to separate, not to stay together. And actually, I mean, I don't know. I don't remember the stats, but a majority of reason, I think it's like the number one reason companies fail is the founders.

9:06The founders just fall out or something happens with them. They just can't get on. And like you said, well, you didn't actually say this specifically, but when it's family, you're never just partners. There's always the history. There's always the unsaid stuff. There's the argument that happened 15 years ago around the dinner table that's kind of lodged there somewhere with resentment subconsciously you're not even aware of it so I think yeah better better that you guys are able to focus on your own yeah absolutely actually what I didn't say is that the phase where my brother and I were separating was really really difficult it was quite painful that's when I started also seeing a therapist because separation is always difficult.

9:49And when you separate from your family, from a family business, I think it's one of the most difficult separations ever. So there was a lot of resentment between the two. We started to bring up stuff that happened when we were kids, you know, parents. I'm the bigger brother. He's the smaller. It's not nice. So for a few years, we had difficulty in talking to each other now everything has gone back to nearly normal so or what what is considered to be a good normal but it was a difficult moment yeah yeah I think relationships are so so difficult they require work on both sides and then business relationships are complicated enough without throwing in the family dynamic too absolutely absolutely I now say to anyone do not do any business with your family.

10:44I mean, what about with your wife? So my wife, what about with your partner? What do you do you feel like that's different? Because you're starting a new life together versus you've grown up in an old system together? Do you think there's a difference? Or do you maintain that advice to others? I do maintain that advice, but also for another reason, which is that in my previous company, when I was doing it with my brother and my parents, because my parents were working in the company too. My dad was selling the advertising for the magazine and my mom was keeping all the finances. So it was a fully fledged family business.

11:20And I also, at that point, brought in my previous partner and she was part of the team. She did great. Her contribution to the magazine and the sunglasses was really incredible. She was running parts of the community and she brought in all the celebrities and the influencers so she did a really good job but it was at the same time very very difficult to a point that when I then we separated for other reasons but then I met this woman who became my wife just before I started Depop so she we met when I was still at the end of the magazine period and I made it a point to myself that I would not involve her officially in my businesses.

12:09And I would be careful every day coming back from home to talk about, make it too stressful for her to cope with the dynamics of running a startup, especially after I learned how complicated it is to run a company with a VC kind of system, which requires moving very fast, very big ambitions, and a lot of nights up. And this was your first time, right? This was your first time raising money from VCs. So I guess, you know, a different kind of journey with Depop. Yes. So when I met these people in Venice, they were not really VCs, they were incubators. So they just invested a little bit of money, sort of like Y Combinator does.

12:56And then they had me there in their campus, building the app, teaching me how to do apps, which was very nice. It was one of the most amazing experiences I've ever had, if I may say so. And during that phase, every day, we would have potential investors coming in, we would pitch to them. And at a certain point, when we were ready to go for the next round, someone from Balderton Capital, which is a very big VC firm in London, they are the ones behind Revolut, for example. And he came to HFarm to visit and see some startups, and he is Italian. So we immediately had a connection, and I pitched the app to him, and he decided to bring it to his group who decides who invests and the partners, basically.

13:49And they decided to invest a seed round in Depop. And at that point, I decided to move to London when they invested. This was my first time. When I started Depop, I didn't even know what a VC was. So everything was completely new. I didn't even know what a backend was. so yeah and you were busy designing right you got that italian flair so you were busy designing the app and keeping the the look and feel the front end as we would call it obviously in the tech world that was your remit right yes so what i did was i studied as much as i could ux design because coming from an industrial design background i thought that could be the part where i could do best although I had experience in building brands and community but that would be my main role so I decided to make sure I would design the best app I could and at the same time Hfarm would help me out in taking care of all the finances in teaching me how to fundraise we had some partners in Hfarm who helped helped me to do the all the decks and these kind of things and so when it came to pitch I was more or less ready.

15:06Got it. With the Depop journey in general, you know, you ended up selling for 1.6 billion. However, sure, it wasn't a straight journey up and to the right the entire time. So talk to me a little bit about the clear challenges. What were some of those moments where it just didn't necessarily feel like it was all going to work out? Well, some people call these near-death experiences in startups. No, we can read about it a little bit in Ben Horowitz's book, which I mention very often because I think that book reflects... That's the hard thing about hard things for listeners. Yes. And I think there are multiple of these.

15:50So initially, I would say if you're a first-time founder, you don't know many of the dynamics of how to build a company. Nowadays, probably you can have a lot of help by reading online. And there's also ChatGPT now who can help you out, which I think is very useful. But at the time, there was not many resources. That was 2011 on how to build an app or even how to build a startup. I remember when I decided to come to London, it was still a battle between which one was going to be the city in Europe that would have the crown for the place to go and build your startup between London and Berlin. And so challenges are a lot.

16:31I would say, first of all, building an app that works is a big challenge, especially in Italy in 2011, finding developers who are experts in doing mobile, that was impossible. Mobile has some different kind of skills, for example, in UX design. and again, sorry if I continue to say it, but especially at the time, internet connections were slower and people had less data available for them every month. So developers and designers had to figure out ways to build interfaces that loaded up in a more optimal way. And so those kinds of things were really difficult to find in Italy. But I guess in Europe in general, as of today, it is very difficult to find UX designers, which are really good in the UK too.

17:21So that is a big challenge. Another big challenge would be as you move along, you go through this phase where you need to find what you call product market fit. But then how do you define product market fit? And how do you know when you reach that? Now you would say, for example, certain kind of metrics, certain kind of KPIs would be the ones that you choose in order to define what that means. and then you measure the traction of those in time and you see whether you're moving towards that. And then when you're close to that, maybe you want to go fundraising and you have those numbers and the investors can see that.

18:00But at the time, you know nothing of these kinds of things. You don't exactly know what you're doing, what the audience is going to be, especially with Depop. Depop was an app where people could buy and sell from their pocket, which was a first. When I started Depop, You couldn't even list for sale on eBay on the app. You could only do it on the web. At the same time, you're trying to crack a new market, which is the market for used fashion. Vintage now is a cool thing. But at the time, to buy vintage, you would have to go into a vintage shop somewhere and rummage in baskets full of smelly clothes.

18:36The experience wasn't the best. And so how to explain to an audience, to the world, that people in the future would want to buy and sell vintage clothes from their wardrobes and from their pocket in an app when apps weren't even a thing at the time. Now, Instagram, when I started Depop, Instagram had 10 million users, which was the biggest app probably ever. So that was a big challenge. Another personal challenge was me moving to the UK. I decided to move to the UK on my own to do this thing. I didn't give myself a big salary. So I was living in a studio apartment in Spitterfields near Shoreditch.

19:21My girlfriend still lived in Italy and we used to meet once every two weeks or once every week if we were lucky. And I remember every, she would come on a Friday and on a Monday morning, we would go out of the house together and we would split. She would go to the airport to go to Milan. I would go to the office and imagine someone going to the office on their own with no money. Obviously, we were backed by VCs, but at the same time, we didn't have a lot of money in the initial phase. I think we raised something like 500k in the second round. You didn't know whether it was going to be successful.

20:03And it was very, very difficult. I remember crying many times on Monday mornings and even calling my mom. And I'm saying calling your mom when you're 40, crying because you don't know what you're doing and whether what you're doing is going to be successful. And also, usually, as you might know, founders are people who are, Mark and Justin said this, unemployable. That's why maybe they end up being founders, because they know that they wouldn't be able to work in a company. And so basically, I think that that makes also part of the drive in building a company, which is that if you're not going to make it, you're going to be under a bridge.

20:43So it's either you do it or you or you're I don't know, there's no alternative. So that's probably the biggest challenge, the coping with this uncertainty for many, many years and not knowing whether you're going to make it or not. And how do you deal with the uncertainty? Does it become part of your identity? Do you sort of brush it off when everything has gone well in the past? As in, you're through the exit, you get to reflect? Did you have like a bunch of pent up emotion that started just like express itself and release like some weird behaviors you just didn't even know you had in you because you're basically carrying all this sort of like pent up trauma or you know, can you explain anything that you experienced?

21:29Yeah, sure. Well, the exit lasted like nine months or something like that. I think the first contacts with Etsy were in the summer of 2020. It lasted for nine months. And these were nine months, quite stressful nine months, obviously, because you've got someone interested in buying your company. and you always have this thing in your head which is let's say statistically out of 10 startups I think Jason Calacanis said this in his book Angel seven companies fail one makes the money back another one returns the money for the seven who failed and there's only one left which succeeds and we don't know how much of a success that one is, which is already difficult per se.

22:19But then if you think all the other seven or eight founders who are left, they worked really, really hard for many, many years going through all of these uncertainties and trying to be successful. And then they end up not being as lucky as I was doing an exit. So I guess this might be very traumatic already. So when I was going through these nine months, I was thinking, let's hope that this turns out and works out because all these years, you know, it's been so difficult, so stressful. and it would be really nice if it could end like this. So these nine months were, the first phase were conversations with the board, whether we want to go through this or not.

23:12What were you planning for the business otherwise? Yeah, we were already hiring for potential IPO maybe because I think we sold when we were nine or 10 years in with the company. and so we were more or less reaching the end of the road for a VC, or the first ones at least. And so the two options were exit or IPO. And so we started having these conversations with the board and then we decided to move on and see where this would take us. We started working with Credit Suisse for investment banker. They came in and they did due diligence And the idea was that they would give us a rough ballpark of what we could achieve, whether we would exit or IPO.

24:01And the amount that came out was already quite substantial, more than Unicorn. So at that point, we said, OK, let's continue. And so we went to Etsy and we told them, we are happy if you want to make us an offer. And so they made us an offer. We decided to start negotiating around that offer. It was very, very tough. And keep in mind, all of this lasted for nine months. We negotiated twice. I think we did a couple of back and forths. And then we ended up at 1.625. And it wasn't, to go back to your question, I think we were psychologically prepared by the end of it. So the moment that the exit happened, which maybe that could be when we signed the pieces of paper or someone could say maybe when the money is in the bank, that was a month after the decision had been made to accept the offer and their due diligence had happened.

25:10happened and so everything was okay to close. But the most difficult moment was, or most intense moment, well not difficult, the most intense and emotional moment was the last board meeting when we had to vote whether we wanted to sell or not. And when we all voted, when at the end we decided to sell, I remember having one week where randomly every couple of hours I would start crying. so I was at home doing my stuff already starting to work on the idea of Delhi and I would like start thinking about Depop about one aspect or another and I remember many times looking at my wife and starting to come into tears and say to my wife Chiara I don't know why I'm crying but and this would happen like every two or three hours for a week it was really crazy I think it's more or less like when you have a baby and then this you grow this baby and this baby then becomes a teenager they have their difficulties as a teenager maybe they start dating someone that you don't like or maybe they start taking drugs I don't know and then you start having doubts whether they're gonna make it in life and then at a certain point they find a really good partner and you are there at the wedding in the first row and they say yes and you're the parent classic crying I think that would be the analogy okay so uh Etsy is the uh the chosen partner for the next stage of your child's life okay so the day it happened what was that like what was it like knowing that you've built and sold a company for 1.6 billion dollars that your fortunes forever both literally and metaphorically will never be the same what does that feel like well that's a very good question i i think it's multifaceted answer i would say when you build a startup you build it for probably two reasons one is you have a vision you like building stuff you want to see that vision fulfilled and the second reason is money one cannot hide that you do a company like that also because of money because the stress of building a company like that is so intense that you need to aim for that if none other because you know that when this is going to be finished you might want to not work for a while because you need to recoup some of the energy.

27:48I didn't end up not working for other reasons, which we might touch upon. But I would say, first of all, I'm going to start money-wise. The idea that you... I grew up in a family which wasn't always going well economically. We had a lot of roller coasters in our lives where my parents were in and out of jobs and we for some periods in our in our lives my brother and I didn't have a lot of money I remember there was a time we used to live out of the city and we the only way to go to the to school was to my mum had to drive us to school and we were such in a difficult situation luckily it was just a few times but we couldn't we couldn't do petrol to go to school, which was weird to say today, but it was the case at the time.

28:44So the idea that now I don't need to worry about that, that is one of the most amazing feelings ever. I think there is no day, there isn't a day that I wake up without thinking how lucky I am economically, that I can do anything I want or nearly anything I want, but all the things that I would like to do, I can do. I don't plan into buying 100 meter yachts or guns. I'm sure you buy all designer clothes now though, right? Sometimes, sometimes. Yeah, this is the interesting question I just realized has popped up in my head. So you're Italian and English. So you have a good natural understanding of, let's say, luxury fashion.

29:34That's very much part of both cultures. But you built and sold a secondhand marketplace. So when you can buy anything in the world without actually thinking about it, what do you choose? It's a mix. Sometimes I buy new stuff. For example, I recently bought a secondhand Ralph Lauren shirt from, I think, early 2000s. Really, really nice. Sometimes I buy new stuff. I like to buy stuff from young brands, up and coming brands. although I did, I haven't bought it yet but I did decide I want to buy something from like a very luxury brand for example, there's this Italian brand called Prada which makes really nice men's suits which I really like oh, there's this brand called Loro Piana this is an incredible Italian brand it's a small brand, smallish but I think it in my case I didn't start spending money from one day to another it it's it's a slow process even as of today I I I some some things I have difficulty in buying because I'm still used to thinking when I didn't have money so I think that's a good thing by the way my wife and I always talk about it and being frugal sometimes helps us to keep the feet our feet on the ground So most of my money is in a private bank.

31:05What we did splurge in is we bought ourselves a nice apartment in London and we don't save in restaurants. So when we go to a restaurant, we see a nice bottle of wine. I say to myself, Simon, go for it. It's your. And just in terms of like the, I guess, transition, right? So you sell a company for a lot of money. You're then an employee again, but at a much bigger company. So how long did you have to spend at Etsy? You know, what are your reflections on post-exit? Was it challenging in a good way? Was it challenging in a bad way? I mean, growth is growth, but I'd love to know your personal take on what that was like for you to have gone from owner to not.

31:56Actually. In control to not. I was not asked to stay and work at Etsy. You got lucky. I got lucky. But the reason is simple. Two and a half years before the exit, I had left the day-to-day job at Depop because Maria, the CEO at the time, had finished, more or less finished to build the senior leadership team at Depop. So my role at Depop when Maria became CEO was to sit next to her and help her on building community, the marketing, some aspects of the product and the brand. And I've done so for a few years since she was CEO. But also one of the things that I was supposed to help her on was build a leadership team.

32:44And the goal was once the leadership team is built, they can run the company on a day-to-day business, on a day-to-day. And then I would decide whether I wanted to do something else at Depop, similarly to maybe what the founders of Google did when Eric Schmidt became CEO or leave. And so some of the things I could have done at Depop, maybe launch other kind of products or go and launch in a new country. I was asked whether I wanted to go and launch in South Korea or Japan. But at the time, I thought that Depop was going through a phase where it needed to focus on building the playbook to launch in the US.

33:26It wasn't necessary to create new kind of distractions at the time for the company. So I thought maybe this is an opportunity for me to say, I'm going to take that break. Maria can continue running the company. I'm going to be around if she needs me. And so I left the day-to-day. For a year, I was around and they called me very often. The year after that, a bit less often, although I did continue to travel the world for Depop at events, doing interviews and these kinds of things, panels. So that's why I did not take a break after Depop before starting Delhi, because I sort of had a semi-break.

34:09in those two and a half years although thinking about it afterwards I maybe I should have taken like a full complete even mental break because those two and a half years I did not fully work at the company but mentally I was still in it fully okay so you I guess had the opportunity to live the founder dream which is exit a company for a lot of money have cash in your bank account and not have to slave away working in a new culture, figuring out how to make sure that this thing doesn't collapse. And that in itself is like most founders dreams because most founders, you just said earlier, Marc Andreessen says, you know, founders are terrible employees.