Bufferbox: From Lean Startup to Google Acquisition in 18 Months

Businesses and entrepreneurs are often faced with the question of "if I build it, will they come?"

How do you arrive at an answer?

It’s tough, especially when you’re just getting started (with little money and even less time).

This is the story of how one startup answered that question as they went from a campus project to a 25 million dollar Google acquisition in only 18 months.

In this TGIM short, you'll...

  • Discover how BufferBox went from product idea to successful business.
  • Learn about the concept of Lean Startups and how you can employ its principles.
  • Find out the value of meeting your customers half way. 

Check out the full short below:

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Narrator: Businesses and entrepreneurs are often faced with the question of if I build it, will they come? How do you arrive at an answer especially when you're just getting started when you have no money, when you have no time? That was the fundamental question facing recent university grads who had what they thought was a great idea. This is the story of how they found the answer.

Mike: How do we prove that people want this? That people will pay for it?

Narrator: That's Mike McCauly, co-founder of Buffer Box, a kiosk that solves the problem of missing that home package delivery.

Mike: The whole premise was, we see more and more people spending time online buying things and as people do that, there's going to be more and more failed deliveries.

Narrator: You know those little door hangers that the mailman leaves on your door telling you your new purchase was here but is now across the city, behind the counter that is opened at the most obscure hours? Yeah, Mike hates those too.

Mike: If you can remove that barrier as part of the online shopping experience, I felt like we could further accelerate eCommerce and more importantly become and important part of the infrastructure network that would make the future of eCommerce so that's where Buffer Box was born.

Narrator: They had their idea and it was a pretty good one. So good in fact just 18 months after launching their company, it was bought by Google. We'll get to that but first, how do you go from an idea to a desirable products to a successful business? The Buffer Box team are all recent graduates, some living in their parents basements with next to no money to turn this idea into the global solution they dreamed.

Mike: It was like okay great, we have this product that we think will work really well but we don't actually know if people want it or will pay for it. How do we go from having this product to actually knowing whether or not we should invest in building more of them and getting the partnerships to actually put them into physical locations and all that work and money should be actually be investing without knowing whether people are going to use it or pay for it.

Narrator: How do you solve this problem? One approach that is building some followers, that is millions of followers and one that the Buffer Box team employed is called Lean Startup. I'm sure you've heard of this before, it's a term popularized by Eric Reese's book of the same name. It's all about building your product in the fastest, cheapest way in order to get it into the market and in front of customers.

Marilyn: Lean Startups starts with this idea of 2 critical questions, should we build this new product or service then how do we increase our odds of success?

Narrator: That's Marilyn Gorman.

Marilyn: I'm one of the faculty for the Lean Startup company.

Narrator: Marilyn has devoted the last 5 years of her life to understanding what makes Lean Startups work and training companies around the world to adopt its principles. The problems Mike and his co-founders were facing and the questions he was asking are all too common to the startup world. Should I pursue this idea? Lean Startup is meant to solve these problems, methodically and quickly.

Anne: What's attractive about Lean Startup is that it allows you to move quickly to build the least expensive test that you can, to get it in front of a customer quickly and to learn from that.

Narrator: This idea was attractive to BufferBox too. Remember at this stage, they had no funding. This was an idea on a piece of paper with a prototype that was simply too expensive and complex to replicate. To prove that their idea held more weight than the paper it was written on, they decided to take the lean approach and build the least expensive version of it that they could.

Mike: We're going to launch a website and not even going to have a kiosk or a BufferBox. We're going to tell people to send packages to us. We're going to email them, literally pull up your inbox, be like, "Hey Joe, we got your package. Let us know a location on campus and a time that works for you, and we will come and meet you."
Narrator: They would then meet somewhere on campus. Mike in his green hoodie, and sometimes roller blades, and Joe, or Jen, or Josh, waiting by a bookshelf in the student center. This wasn't the tech company they dreamt of building, but it was a crucial step along the way.

Mike: That allowed us to actually talk to customers one on one, ask them really important questions with the product, where should we put this BufferBox if we were to put it on campus, where are the good locations? Why do you use this? What don't you like about it? How much would you pay for it? All the stuff that you can usually have a really difficult time talking to customers about, or just getting the answers from the people who were actually going to pay for it. There is no better way to do that.
Narrator: The information BufferBox was gathering was incredibly valuable. The process started to grow tiring and frustrating.

Mike: I remember one instance very vividly where I was thinking to myself, "My parents just helped me get through my undergrad, for engineering. I have this great degree. On top of that, I turned down a job offer in California to go and pursue this dream, and here I am telling people to pay us 3 dollars a package and delivering them hand to hand, totally not scalable at all."

Narrator: Ultimately, the goal of this Lean Startup approach of doing this clunky, unglamorous work, is to get to a decision point of pivot or persevere.

Anne: Do we decide based on the metrics that we collected to keep going in the direction we're going, or do we keep our vision of success and pivot with a different solution? Or, and this is the hardest one sometimes, do we kill the project all together?

Narrator: BufferBox was scalable. The information they were gathering was so important, not only in helping them identify what service their customers wanted, but also to help them convince investors of the idea that this clunky service that they'd built actually had a user base. They began to imagine what it could be like with a real kiosk that was far more convenient.

Mike: Then we put the kiosk in. Then we got even more people using it, because the people that didn't want to use it that first stage saw that it was more legitimate now.

Narrator: BufferBox now had a real product and a real proof of concept. They started pitching to investors and ramping up their service across the country. On a whim, at the very last minute in fact, BufferBox decided to apply to Y Combinator in San

Francisco. It's a prestigious and highly competitive tech incubator. They got in. They then started deploying BufferBoxes in 7/11s, train stations, subway stops, universities, coffee shops.

Mike: We were crazy. We were trying to spend all this money to deploy all these physical kiosks which were going to cost a ton of money to do. That was polarizing with investors. They either loved it or they hated it. They were like, "I am scared [bleep] about this." Or they were like, "This is awesome and I want to be a part of it, because if this wins, it's going to be huge."

Narrator: This hunch of a good idea, some customer testing, and a whole lot of hard work led to BufferBox eventually selling to Google. According to TechCrunch, the price tag was over 25 million dollars. However, Google recently decided to no longer operate BufferBox as a standalone service. They've instead integrated the team and everything they had learned launching BufferBox into the Google shopping experience. That said, similar ideas have popped up all over the place, and you'll see cousins of BufferBoxes in Walmarts, transit hubs, and outside 7/11s all across the country. For founders out there, Mike's story and his eventual success teaches us not to go big, but go lean. If your idea has a market it will be proven by the willingness of customers to meet you halfway, just as Mike's customers literally met him halfway on campus to get their package, your customers are willing to put in some work too, if and only if you have something they really want.

About TGIM: TGIM is a podcast for people who can’t wait for the week to start. In each episode we’ll be bringing you inspirational stories about entrepreneurs who have overcome obstacles, built incredible businesses, and are now living the life they want.