This article was written about Moovin 1.0 to provide more of a narrative explanation of how Moovin could become a unicorn company. While the focus has changed in 2.0 to being purely software based, some of this background is still valuable, and other aspects such as focusing on high-density cities will have changed entirely in a post COVID-19 world.
You’re reading the TOP SECRET plans for how Moovin is going to become a multi-billion dollar company. If you don’t want to think big, stop reading.
Moovin is a home furnishings service for today’s upwardly mobile society. We create magazine-worthy interior designs, available on an affordable rental basis.
“I’d love to live in a place that looks average”
-No one, ever
Why build this company?
If you asked most people to describe the lifestyle of their dreams, 100% of them would explain something about the place they see themselves living, and 100% of the time those dreams would include well-designed and great looking places. Never will you hear someone say, “I’d love to live in a place that looks average.”
But most of us DO live in a place that looks average. Why is that?
First of all, the places with magazine worthy interior design are expensive and generally require a professional designer’s talents to create. Then we have to pay for all the stuff the designer selects. Then we have to pay the designer.
Assuming we can afford all that expense (and want to), there’s another problem: what happens to all that stuff when we inevitably need to move to the next place? Do we have to go through this whole exercise again? What if the stuff we bought for place A doesn’t work in Place B? What if our needs change? what if… what if…
TAKEAWAY: the expense and lack of flexibility keeps most of us from having great interior design. Instead we settle for average. Instead of living the lifestyle we want, we settle for this dream of hopefully having it eventually.
But eventually rarely comes…
Our vision
Instead of settling for average and eventually, what if there was a service that transformed your home into a magazine worthy space with just a few clicks?
…and, you didn’t have to become an expert in interior design?
…and, you didn’t have to visit endless websites or furniture stores?
…and, you didn’t have to buy any of the furnishings?
Enter Moovin.
TAKEAWAY: Moovin makes getting great interior design easy, flexible, and less expensive.
Show me the Money $$$
Ok, you get the idea.. Moovin can make your place look magazine worthy, and we rent you a complete interior design instead of you having to buy furniture piecemeal. So who cares? Well, if you’re an investor you will. Here’s why:
Big Market
Home Furnishings is a $120B market in the US. Moving & Storage is another $73B. Let’s call it $200B all in.
People spend a LOT of money each and every year on buying home furnishings, moving them from one place to the next, and storing the stuff they don’t want or won’t work in their place now.
So this is a BIG market.
And…
It’s a market that’s changing because people are becoming more and more mobile (Mobile Society).
There is growing societal value placed on interior design (Design Importance)
The population growth is happening in cities, where space constraints and urban lifestyles place more emphasis on design (Growth of Cities).
So not only is this already a big market, but it’s growing big market.
Interior Design Services
Moovin has two interior design services: Staged Design and Custom Design. They’re essentially the same service, but with different rental durations to appeal to different customer segments and use cases. Think Uber Black vs UberX. Staged Design has better economics, but Custom Design has FAR more potential customers.
Staged Design is for staging a house so that it looks desirable to potential buyers. Contracts range from 2 weeks to 3 months, and in our first 12 months, Moovin’s average Staged Design in San Francisco was $5k+ and lasted 54 days. Some examples from projects we’ve done are below.
Example 1, Example 2, Example 3, Example 4
Custom Design is just like Staged Design except that it’s for a consumer to actually use, and the contract is for 12 months. We estimate that Custom Designs will average $250/month across all markets once we implement them, and a higher number in major markets like San Francisco, Seattle, NYC, etc. That number is informed by our team’s combined 30 years of experience in the furniture rental industry with Aaron’s (NYSE: AAN) across 60+ locations.
Ok, so now to the money
With these 2 services (and again, they’re really just the same service with a different name and different duration), we believe each market can support, on average, 10 Staged Design projects per month and 2,000 Custom Design Customers, and generate over $6M in revenue annually.
We have identified the first 29 markets we plan to grow into, but there are likely 100+ markets in the US that have the right characteristics to support Moovin.
Here’s the rationale:
Staged Design: We have already had months where we’ve done 7 Staged Designs with ZERO marketing or sales budget, so it’s very believable that we would average 10 per month or even more once we are able to focus on it. Our current average revenue per job is $5k, so even if we cut that by 50% to account for non-SF real estate markets, that’s still $2,500 per job on average. 10 jobs per month @ $2,500 per job equals $300K per year in Staged Design Revenue, per market. Interesting you say, but not venture scale… well, now let’s talk about Custom Design.
Custom Design: Our team has previously achieved 500 customers per market with their Aaron’s franchises in small town markets (<20,000 people) in Oklahoma, Kansas, Arkansas, Texas et al, so averaging at least 2k customers in larger markets seems very doable. We already have a deal in place with the 11th largest property manager in the Bay Area that has 3k units, and we’ve only just started the sales/marketing process to bring in other opportunities. And, the SF Bay Area has 2M households and ~7M residents. So again, getting to 2k customers on average seems doable. At an average of $250 per customer per month, that’s $6M per year in revenue, per market.
TAKEAWAY: Those 29 markets are worth roughly $180M per year or more in potential revenue to Moovin, and if we can expand to the full 100+ markets, we’re talking $600M per year.
What about Unit Economics?
Ok, so I have your attention on revenue… now let’s look at unit economics. As we’ve said already, Staged Design has the better economics, but Custom Design has more customers. It’s not an either/or, it’s a both.
**Staged Design:**Breakeven period is about 3 months.Useful life is 60–120 months.600%+ levered IRR.No wear & tear.
**Custom Design:**Breakeven is 12 months.Useful life is 60–120 months.150% levered IRR.Average wear & tear.
Per Project Financial Performance
Moovin DB (our backend tech) calculates financial performance on a project by project basis, bringing in the inventory used in each project, the logistics costs, payments made, etc. This helps us analyze which customers perform best, where we can improve, etc. In a sports analogy, reviewing this data is the equivalent of watching game films.
The below example from 42 Sumner Street was our best project from an ROI standpoint. In the upper right corner you’ll see we returned 10x+ on this project overall. Returns are a combo of cash returned from the customer and the value of the inventory returned following project completion, less the cost of logistics to accomplish the project. Moovin DB calculates budgeted amounts for these costs depending on the rental duration, property type, etc.
Wear & Tear
The best part about Staged Design is the furniture doesn’t get used. It just has to look good for photos to be taken.
Custom Design items get more wear and tear because they get used, but this isn’t nearly as big of an issue as you might think.
First, when you buy great items to start with they have more durability anyhow. In the furniture world, this more durable furniture is called contract grade or hospitality grade, and that is more the direction we will be going from an inventory standpoint. It’s what hotels use.
Second, as items get wear, we will simply discount the rental price for the next customer a little bit if needed (the 10yr financials above build this idea in). With a great overall design, even slightly worn furniture can still look great. The best example you’re already familiar with is called a hotel, particularly the hip/cool boutique hotel variety. A hotel room is simply rental furniture with a room wrapped around it. No one walks into such a place and says “wow, this furniture has some wear and tear.” Instead, they’re simply impressed by the overall design aesthetics, and wondering why their own home doesn’t look as cool.
TAKEAWAY: Moovin has great unit economics, giving it flexibility to drop prices to gain market share OR reinvest more profits to grow more efficiently. What’s more, the ability to fund inventory purchases with debt financing allows for more efficient use of equity capital and less overall dilution, benefitting early shareholders.
Ok, so how does Moovin actually work?
Ok, let’s talk about how Moovin works, and what makes it defensible.
Here’s the high level customer journey:
(1/4) Technology
Moovin’s competitive advantage is its backend technology (Moovin DB), which brings together and automates numerous operations that formerly were done manually. This capability is expanding and getting more powerful all the time, but already it handles numerous functions that competing companies would solve through headcount, yielding a 50% reduction in scaling costs.
This article has a deeper dive on Moovin’s tech layer.
(2/4) User Experience
On the front end, consumers and service providers can instantly get price quotes for complex interior design projects. Moovin’s algorithms calculate the property type and what should go in it, as well as all logistical considerations to return a quote instantly. For Custom Design, consumers can even specify that they prefer to use certain furniture they already own and the algorithm will give them credit and recompute a new quote.
https://www.youtube.com/watch?v=fbyPHuvzyyY
(3/4) Design
Once a customer agrees to a quote, In-house designers use Moovin’s software to assemble an interior design for each customer, including not only furniture but also artwork, rugs, linens, etc. We call this a “Design Brief” and seeing it all laid out carries a high prestige value and gives customers a sense of the possible.
(4/4) Logistics
Once a customer signs off on the Design brief, the necessary items are retrieved from our warehouse (or ordered), delivered, and setup for the customer. Moovin’s software handles all logistics and scheduling for deliveries, pickups, and move jobs, and was built to incorporate future services as well (more on that later). It also provides work time estimates, and can track estimated time vs actual for future planning accuracy.
3rd Party Logistics
The way Moovin actually handles logistics is by partnering with 3rd party moving companies. This is a smart growth strategy because it scales up more efficiently and leverages existing capacity in a market. Each market has existing moving companies that we can work with, and Moovin’s software was built in a way so they could easily be added as needed.
TAKEAWAYS:
Moovin’s technology automates numerous functions that interior designers previously did manually.
Rather than taking days to schedule a property tour and get a quote, a Realtor can get an instant quote from Moovin in seconds.
Rather than a consumer having to master interior design and spend weeks scouring the internet for the right home furnishings, Moovin DB helps our in house design team put together a design in 30–60 minutes.
Rather than a legacy company getting bogged down by complex logistics and having to add headcount to address the problem, Moovin DB allows Moovin to operate lean and easily manage numerous overlapping jobs. Our outsource relationship with 3rd party logistics carriers makes it faster and cheaper to enter a new market.
How does Moovin get customers?
In other words, what’s our gotomarket strategy?
Real Estate Agents:
Realtors aren’t the buyer for home staging, but they do influence 99% of the decision to use a given vendor. They also have the trust of sellers and buyers (and even some rental tenants) and can make referrals and influence thinking around interior design. Here’s what we’re doing to target Realtors:
Assemble list of Realtors in San Francisco Bay Area: Currently, our list has 3,200 people and growing. We have already done several jobs with Compass, the largest firm in San Francisco with almost 1k Realtors.
Present to Realtors through speaking opportunities for Vendors. Each real estate firm has a flavor of this, and we’ve already made 6 presentations to offices of Coldwell Banker, Intero, Sotheby’s and Vanguard. We will continue doing this to build relationships and expose more Realtors to how Moovin can help them and their clients. As you can see from the presentation below, the reception is pretty strong from Realtors, and it’s a great means of continued customer development.
https://www.youtube.com/watch?v=etC6Umk3Vos
Engage Realtors through customer development conversations; provide them blog posts and case studies that detail Moovin’s unique value propositions vs traditional stagers; ask them for targeted referrals to other Realtors (in VC speak, an intro :). Realtors are in a relationship driven business and playing off this personal element has been our best way to generate new opportunities to date, far more than email marketing or cold calling.
Offer Discounts to Realtors who make referrals that lead to new sales. We have a program called Moovin Credit that allows Realtors to get credit for 10% of the value they refer. For example, if a Realtor refers another to Moovin for a Staged project that yields, $5k in revenue, the referring Realtor would get $500 in Moovin Credit that they can use on anything Moovin does.
Meet the Realtor is a marketing campaign we haven’t started yet to offer Realtors the opportunity to introduce themselves to Moovin’s audience and explain why they’re different from every other Realtor. The campaign would center around a video that Moovin would produce and would include branding for Moovin surrounding the Realtor’s content. An example is below. The purpose of a Realtor doing this is that they get an opportunity to tell their story on video and describe what makes them unique. This is crucial when competing with 3k other people in the Bay Area who have the same title and capabilities. For Moovin, for the simple effort of producing a short video we get to build a relationship with a new person, tell our story, etc. If we did this with 50 Realtors and created 50 superfans, and 1/5 had a project for us at any one time, that’s 10 projects per month, at $5k per, that’s $50k per month in revenue.
Consumers:
Consumers are Moovin’s target market for Custom Design. Most consumers are also going to be apartment renters, though some will also be home owners.
Moovin’s target market is:
Millenial/Gen-X, age 25–45
Values experiences over possessions
Values great design and a story behind a product/service
Digital native; heavy internet, app and smartphone user
Expects nearly everything to be available online, as-a-service
But there is a much wider market of potential users beyond this target:
Homeowners: We typically associate rental furniture with renting an apartment but as length of home ownership decreases, more and more Moovin customers will be homeowners as well. Homes appreciate (usually), furnishings do not.
Roommates
Divorce/Breakups
Temporary workers e.g. consultants
Airbnb owners who want their place designed well so they can get higher average daily rates and occupancy %
Professional Athletes: this isn’t a huge market, but we’ve already had one as a customer (Kevin Durant) and it’s an important category for generating buzz and cool factor.
Baby Boom generation moving back to cities (empty nesters)
Property Managers
Property managers want the ability to market their properties as furnished rental optional. This gives them a way to get tenants in the door who don’t have furnishings, as well as appeal to others that do. But, few property managers want the gargantuan project of doing all the design themselves or trying to figure out how to build a similar flex furnishings company such as Moovin.
We already have a deal in place with Structure Properties, a great customer of ours, that has 3k units in the San Francisco Bay Area. We will be compensating Structure’s leasing agents with a commission equal to 2 months of rental payments for each new tenant they sign up for us. It gives their agents a reason to push Moovin to exactly the people we want to appeal to, and is the cheapest sales force around in that we only pay for successful referrals.
Structure has 3k units in the Bay Area, and is turning over 40–50 units per month. Once we start marketing and pushing this program, we estimate a 20% conversion on new tenants, so 8–10 per month, and an unknown conversion on existing tenants. Given Structure’s apartment prices and feedback from them, we estimate a customer pays Moovin $300–400 per month. With just this partnership, we estimate ramping to $50k MRR within 12 months, possibly even more.
We plan on using this first deal as the archetype for other partnerships with property management companies.
Moovin Pro
What is Moovin’s fundraising Strategy?
Similar to the effort to land man on the Moon, we’ve broken Moovin’s growth into phases. We’ve completed phase 1 “Angus” already and are raising money to fund phase 2 “Longhorn.”
After Phase 3, we plan to raise another round and more aggressively begin entering markets, perhaps 1–2 new markets per month. Inside of 5 years, the plan is to have operations in 30–40 markets.
The Future in 5–10 years
Here’s where all this is building up to… the future of our “stuff.”
https://www.youtube.com/watch?v=_ZZqQZp1CJs
“All this is aspirational… as I change, as my needs change, my ‘place’ should be able to change too, and up until now that hasn’t been possible... THAT’S the service we’re building.”
-Trevor Goss
The Easiest Relocation Ever
Fast forward 5–10 years and imagine that Moovin exists in every city (We’re in it to win it, afterall).
How much easier would it be to relocate from one city to the next if all you had to do was make a few clicks and then…
A truck showed up to pick up the furnishings you have now and packed up your personal stuff to send to the next city
A relocation expert helped you find your new place in your next city
A designer put together an interior design for that new place that you loved or you could select an existing package
Another truck showed up to your new place with all your new stuff as well as your personal effects
You only dealt with one company for all of it, and entered your credit card one time
You could manage everything online, or from your phone
That reality doesn’t exist yet, but that’s our North Star.
A place online for your place in the world
Everyone has a place in the world, and that place is important. In fact the place that you call home is, if you think about it, the place you spend the most time in your lifetime. We believe making it great should be easy. We’re building Moovin so that it can be.
You’re going places. We make places great.