
Sonos’ John MacFarlane: Never Be Satisfied
Spencer Rascoff is an entrepreneur and company leader who co-founded Zillow, Hotwire and dot.LA, and who served as Zillow's CEO for a decade. He is currently executive chairman of dot.LA and a board member at Zillow and TripAdvisor. In fall 2019, Spencer was a Visiting Executive Professor at Harvard Business School where he co-taught the "Managing Tech Ventures" course. In 2015, Spencer co-wrote and published his first book, the New York Times' Best Seller "Zillow Talk: Rewriting the Rules of Real Estate." Spencer is the host of "Office Hours," a monthly podcast on dot.LA featuring candid conversations between prominent executives on leadership, diversity and inclusion, and startups.
This episode was originally released in June 2017. Press Play above to listen.
About this episode's guest:
- Served as CEO of Sonos from 2002-2017
- Sonos is known for its high-quality speakers that stream music from popular services
- Currently works in an advisory role at the company
- In his new role, he plans to potentially expand Sonos' commitment to STEM education
- Fan of hip-hop, country and Taylor Swift
Topics covered in this episode:
- Why it's important to be relentlessly progressive
- When to partner with competitors
- The Sonos name – and what makes it an ambigram
- John's favorite music, including Taylor Swift and Q-Tip
- John's decision to step down as CEO
Press Play to hear the full conversation or check out the transcript below. You can also subscribe to Office Hours on Apple Podcasts and Google Play.
Spencer Rascoff: John, it's great to be sitting here with you. Thanks a lot for taking the time.
John MacFarlane: It's an honor. Thank you.
Rascoff: Let's start off with you just describing the company and the service for those listeners that might not be as familiar with Sonos. What does it do? How does it work from a consumer standpoint?
MacFarlane: The Sonos mission is fill every home with music. Our brand promise, what we promise to do for our music lovers at home, is deliver an ultimate home music experience. That's our focus. Let's bring music into – really, it's bring the artist that you like into your home to wake up to, go to bed to, make dinner to, whatever you like.
Rascoff: I love that, when describing your company, you start with the mission statement. We're going to come back to that because that's so important to me that that's right where you begin with the company description. How many employees are there? How long has the company been around? How large is it?
MacFarlane: Fourteen hundred, fifteen hundred, right in that range. We're all over the world. There are three big offices in China. There are three big offices in the U.S. and a couple through Europe with the main footprint in the Netherlands. It's 15 years for me, so it started in 2002. I had just come off of a company called Software.com. There are four co-founders. This was the common uniting theme of that group of four and about 12 people we wanted to work with that we'd been tracking for quite a while.
Rascoff: Are those co-founders all still heavily involved in the business?
MacFarlane: One certainly is, the first one, Craig Shelburne. Three, including me, are involved but maybe in lesser roles now. Probably the eight, like one of the early software people, they're still – yeah, almost of them are still here.
Rascoff: Has management continuity at the top been an important part of Sonos' success?
MacFarlane: When you go from four people to 1,500, you have a variety of different roles to cover because when you're four to 40, you've got much more generalist, if you will. I'd say at 1,500 now still collaboration is a pretty key role, but people have to play swim lanes a little better. You have really deep specialists in various areas so it's a really different set of needs. So, I would say learning agility would be the number one thing I'd attach to anybody that lasted that whole time. Anybody that didn't, I'd say like you might hire someone out of one of the big CE companies.
There are people, like the guy that runs the product team now started as a software developer and through his whole career here accelerated faster than the company did. You've done high-growth companies. You know that's rare.
Rascoff: That's why I asked. The interesting and challenging thing about high-growth companies is everyone's role and functional area is changing every three or six months. So, you'll have someone who's great at a particular stage and then either they don't scale with the company or the role changes.
I encourage my direct reports to think of their direct reports, knowing what you know about that person today, would you hire them today for that role over the next two years? At least every couple months, every couple quarters be thinking about rehiring all of those people because sometimes they're not right for the role anymore. That's hard.
MacFarlane: I graduated undergrad in the late '80s. A bunch of my classmates went off to GE and IBM. GE, a high achiever, every two years they'd move you. As you know very well, at high growth, you don't need to move people every two years because in two years the job is totally different that you're standing in. So, yeah, you're right. It's a completely different environment.
But also, it depends on what the roles are, too. I'm sure you've dealt with all of this. It's both managing the person's expectations because sometimes someone walks in, and they think I'm not advancing unless my role is going up. You're sitting there helping them understand. Actually, if you look at what's underneath you, it's way broader than it was one year ago.
MacFarlane: The other thing is people need direct management skills and indirect management skills in the right measure are really important. So, sometimes, you need to put somebody in a role where they influence managing. If you don't learn how to do that, you're missing a big set of tools.
Rascoff: What do you mean by that? I assume what you mean is that somebody controls their functional area but in order for that to be successful, they need somebody off to the side, some other group, to support them in some way. So, they have to manage by influence throughout the organization.
MacFarlane: Yeah.
Rascoff: How do people do that successfully here at Sonos?
MacFarlane: I don't think it's unique to Sonos. People do it successfully by understanding what the other person is trying to do and fitting your win-win goal. But that's a different skillset than telling someone what to do. Even if you're a great delegator, you're still in a position of power and you're telling them here are your goals. That goal you made, let's tune it this way. You have a lot of influence over them. When you can't set a person's goals, you've got to get them to change their goals. I think it's a mixture of both. You need both those skillsets.
We do a lot of work. In the mission filling your home with music, that music comes from streaming services these days. So, there really isn't any Sonos without a bunch of our partners, Apple, Music, Spotify and Google. Those guys all have different cultures, and you have to influence them. So, there's a whole lot of work we do that's influence management.
The music industry is going through a huge transition. We can't tell them what to do, but we can help influence it.
Rascoff: Let's talk about that external environment, that kind of landscape. You are in such an interesting, challenging, dynamic area where you have these huge giants from Apple to Amazon to Google and others. You have the record labels. I feel there are these giants dancing all around you, and Sonos is doing this incredibly masterful job of bobbing and weaving to chart its course in context as these behemoths all around you do what they do. That's from the outside looking in. How have you navigated the change in the competitive landscape? Are these companies partners? Spotify and Apple and Alexa/Amazon, are they partners, competitors, both?
MacFarlane: It's actually a really interesting time at Sonos because the whole industry is going through a big change that changes the competitive landscape. When we started, the dominant players were the traditional consumer electronics, like Denon, Yamaha, Sony, and Bose. Samsung was a little bit but there were probably 20 labels. Harman Kardon was a fairly big player at that time. They went into the car audio.
What's happening now with the advent of streaming and things like voice response from Amazon is the speakers are getting a lot smarter. They look a lot more like a platform. You're still buying something that produces sound, but it's a lot more useful to a person in their home if it can respond to your smartphone, and to your voice, and use all the different music services. That looks a lot more like a general computer than it does inside itself. Of course, it can't look that way to a user.
Rascoff: Fundamentally, what Sonos sells are speakers.
MacFarlane: Yeah. That's right.
Rascoff: Now that speaker is controlled by your phone. It can put music onto that speaker from any of these services, from Spotify, from Pandora.
MacFarlane: We like to say you can play anything ever made anywhere. If you like QQ music, you can use QQ music from China. If you like a radio station in Brazil, you can listen. My parents listen to a radio classic in Paris. That's the fun of the internet meets home audio. So, it makes a different competitive set because it's not just your old home stereo system, if that makes any sense.
Rascoff: When the early smartphones got their own internal speakers – I remember the first couple generations of iPods and iPhones didn't have speakers. I remember the first iTouch got a speaker as the successor to iPod. I assume that didn't concern you very much because it's so low quality. But when Amazon launches Echo and the speaker quality is good, certainly not Sonos speaker quality – you can obviously use Sonos through the Echo and I do. But there, they're a partner and a competitor, right?
MacFarlane: Yeah.
Rascoff: How do you approach that? Even just internally with employees, how do you navigate that dichotomy with employees to try to talk about these dichotomies?
MacFarlane: None of these companies are a persona. Even when Steve [Jobs] ran Apple, you'd partner with them in one part. Probably the most strategically dangerous period for Sonos, if you recall, Apple made an iPod Hi-Fi. They had come out with the iPod. They were pivoting the company. It no longer was the Apple computer company. It became the Apple consumer electronics company around the iPod.
They came out with this dock for the iPod that was the iPod Hi-Fi. Now, fortunately, by Apple standards it failed. It was too early. But that was a dangerous time for us because had that thing been successful we would've had a battle for our lives at a time when we weren't really ready to battle with Apple.
Now, pretty much all the traditional consumer electronics guys are gone because they don't have the right DNA.
Rascoff: They're not selling their own speakers.
MacFarlane: Or they're teeny. They're irrelevant. Bose is probably the one left of the legacy and it's holding on with really Bluetooth products and stuff like that. But you're right. Amazon Echo, the Google Home, you'll see Apple come out with something at some point. For me, they're the Beats group or otherwise. There you're partnering with them. You're partnering with Apple Music. Maybe they come out with something that competes, too.
We made a really important decision early on which was we wouldn't take any money from the music services or the voice assistance. So, we're an open platform for them. We work great with Spotify, and we've earned their respect to present Spotify into your home, if you're a Spotify user. It's the same with Google Play Music. It's the same with Apple Music. We're the only integrated party for Apple Music.
Rascoff: To navigate this complexity, you've stayed neutral, in an open platform, as you said. You've also built an incredible brand. That's one of the other things that have allowed you to flourish, even in the face of this competition from these big players.
MacFarlane: Those are one and related. Anybody would tell you a great brand comes from great products that people love and then you're building on that. So, those are highly related, if that makes sense.
Rascoff: In my research about your brand I learned a new word. Now I'm forgetting it, of course, which is Sonos is a word that can be turned sideways.
MacFarlane: Palindrome or an ambigram.
Rascoff: An ambigram, yes. An ambigram is a word that can be turned at a 45-degree angle and still be legible. Was that intentional?
MacFarlane: No. What was intentional is we knew we were building a consumer electronics company. A brand is, at the beginning, an empty vessel or the brand like that. So, we went out and got, I'd say, the best guy in the industry, David Placek from Lexicon. If you look at Lexicon naming, they did so many names you'd recognize. It was really fortunate because it was at the end of 2002. That's when the Silicon Valley dot-com crash really had played fully out. The hopper was just empty of new companies. People were really slowing their investments. So, he gave us a good deal. We worked and worked and worked it until he was about to fire us and out popped Sonos. Everybody knew it was the right thing.
Rascoff: I love these empty vessel names. Zillow is one of them. Zillow is zillions of pillows, which is meant to evoke the data, the quant side of real estate, and the touchy-feely, squishy, emotional side of real estate.
MacFarlane: So, you guys did the same thing. You put a lot of effort into it.
Rascoff: We did and it has the high-value scrabble letter of Z and W. Sonos is an anagram, an ambigram, I guess.
MacFarlane: I love your name. I remembered it from the first time I heard it, which is what you're trying to do.
Rascoff: Let's talk about the office environment at Sonos. Having spent a little bit of time here, I can see that the culture is a lot like Zillow, generally open spaced, emphasis on collaboration, a lot of glass walls. You also have a pretty distributed workforce. You have a couple thousand employees but they're in Santa Barbara, Boston, Seattle, and abroad. How would you describe the culture at the company?
MacFarlane: That's a really broad statement. We'd first have to agree on what the word culture means. I would say culture is as culture does.
Rascoff: You're right to say define culture. Culture is how decisions get made and how resources get allocated. That's what I think of for culture. Is it meritocratic or autocratic? Is it centralized or decentralized? How do decisions get made?
MacFarlane: You covered this with Dick Costolo in one of your earlier podcasts. One of the biggest challenges is getting everybody on board so we're all pulling in the same direction. It's amazing when you are and it's terrible when you're not.
Rascoff: That's where the mission statement comes in. Make sure everyone agrees on the mission.
MacFarlane: Yeah. That's exactly right. The mission, the values of the company, values are really important. So, our values are experience first. Start at what experience you're trying to deliver for the customer, for the employee, for the partner. It just takes you out of your shoes and puts you in theirs, at the beginning, so, experience first. Relentlessly progressive. Some people accuse me of being progressively relentless but you need to be moving forward constantly. You guys know that.
Rascoff: That means just never being satisfied with status quo.
MacFarlane: Yeah, never be satisfied when you finish something. When you make physical products or cognitive/physical products, which we do, you always want to stop and collect. What would we do differently? Some of our products we've killed. You never want to be afraid of that. Talk about the things you did wrong.
Rascoff: Can you think of a time when your employees' understanding of the mission statement and the values resulted in a good decision being made that wasn't under your thumb?
MacFarlane: You know very well I just stepped down as the CEO. So, I feel comfortable around that. A lot of the criteria for the team that was taking over was do they really believe in, express, and use the values? They're not real values unless you see them applied all the time. I don't think there's anybody at Sonos, including myself, that's perfect at all three of those values. What you want is to give everybody permission. Are you really thinking about the experience first? In a meeting where that's maybe the most junior person in the meeting and they have license to ask that question because that's values working. It happens quite a bit.
Rascoff: When I think about other tech companies, I mean, it's true of all industries. But in all industries, if the employee base doesn't understand the mission and share the values, things go bad quick. In tech, it's even worse.
MacFarlane: You better have strong command and control.
Rascoff: That's right. Let's wrap up by talking about your decision to hand the reins over to someone else and to step aside as CEO. Fourteen years after founding the company, why did you think it was time to do that?
MacFarlane: In the first 15 years of Sonos, the music services we mostly marketed to our customers, their customers were a lot younger. People used to say young people don't pay for music. The average age of a Spotify paid user was under 25 so they did pay. It's just that the industry hadn't offered a great product until Spotify and Apple came along.
Those weren't our demographic. Ours was a little older than that because you needed to be settled in your first home, rent or whatever, but you were in a home. So, as the shift to streaming services happened, that opened up a much bigger market because that's a global market, not a U.S., UK. When that happens, you pat yourself on the back for a second. Then you sit there and think about what the company needs to do over the next stage.
I thought the group was ready to take it there. I'd just come off of balancing – we were late to recognize the impact of the Echo, and the Echo Dot, and voice assistance overall. I think the magic Amazon did was cleared that undefinable bar of usability. All the voice response systems before that weren't. Being able to walk into your home and say I want to listen to KCLU or KCRW or whatever, the Ruen Brothers radio, that's a really nice way to control your music system. That's definitely part of an ultimate home music experience. So, we needed to get there.
We pivoted the company. The company did a really good job of pivoting. The team was ready to step up. When you pivot a company like that, it was much more me driving. As you know well, using the forces of a founder are dangerous things because people rely on that. You want the team to be able to next time go this is really important. How do we incorporate this in? As much as it was important to pivot, it was also important that I put a bunch of people in charge. They felt the accountability over it. They weren't looking for me to find the next pivot.
My title is the intern. I'm here for anybody that wants help, contacts, or any mentoring. I love the company. I love what we're doing. I love helping, but I wanted to get out of the way of leading.
Rascoff: Let's talk about the day that it dawned on you that Echo was going to challenge your ability to achieve your mission. Prior to that, voice recognition, whether it's Siri or others, was inadequate. It wasn't ready for prime time.
MacFarlane: It didn't stick.
Rascoff: But then, you must have come into the office one day and somebody had an Echo. They said “play music by the Rolling Stones," and it played music from Amazon. You said uh-oh. What happened at that moment?
MacFarlane: I had a board member, Mike Volpe, who was playing with it early on. There were a variety of employees inside that were playing with it. So, there was a cacophony of voices about it. What happened maybe the day that happened is I finally decided we were moving too slowly to change. We had just come off of the calendar Q4 sales cycle.
The Echo definitely impacted our ability to sell because we didn't really have a story with the Echo. It was, yeah, someday voice response will happen. It's not like the Echo and the Sonos are really competitive. They're complementary I think you'll see over time. We just hadn't worked on doing that at all. We had a full plate of stuff that we were working on. The Echo just wasn't one of them.
So, actually getting the company to pivot around that then was a day. I had gone to an Allen and Company conference in Arizona. It's right around this time of year. I just talked with a bunch of other CEOs about how to do change control for this kind of thing. Everybody said the biggest mistake I've made in doing that is not – make the mistakes on getting too aggressive because the way you're describing it, John, you need to embrace it, not status quo.
Rascoff: A couple quick wrap-up questions. What music service do you use to listen to music through Sonos?
MacFarlane: I use all of them. I have a favorite of the moment. I would say probably if I want programmed radio I'll still fall back on Pandora mostly although Google Play's radio stations are getting really good. If I want playlists, I'll use Spotify or maybe Tidal some because Tidal has got some really good ones. If I want serendipity, I'll use the 4U from Apple. So, it really varies.
Rascoff: What kind of music do you listen to?
MacFarlane: It'd be more a question of what don't I listen to. I like hip-hop. I like some country. I like anything from Taylor Swift to the Ruen Brothers to Q-Tip's new album, the Roots.
Rascoff: Eclectic.
MacFarlane: Yeah. It's pretty eclectic.
Rascoff: What's on top of the list of things that you want to do next in life?
MacFarlane: Hang around here and help it be the next 10x growth that I know it's capable of. Music is such a fantastic spot. I think it'll be bigger than it's ever been. It's so much fun seeing it through the darkest of times and now it's opening back up. I love music. That's great for the artists. Everybody wins, finally.
Rascoff: I love your mission: Fill every home with music. It's something that I do almost every day with Sonos. Thanks a lot for speaking with me, John.
MacFarlane: It's my pleasure. It's my honor.
Rascoff: Thank you.
The post Sonos' John MacFarlane: Never Be Satisfied appeared first on Office Hours.
Subscribe to our newsletter to catch every headline.
On this week's episode of Office Hours, you'll hear from Gregg Renfrew, serial entrepreneur and founder of clean beauty company, Beauty Counter. She also serves on the board of directors of Supernova, my special purpose acquisition company.
- Office Hours Podcast: Bill Gurley On Startups, Venture Capital and ... ›
- Mattel CEO Ynon Kreiz on the Power of Brands and Barbie - dot.LA ›
- Mattel CEO Ynon Kreiz on the Power of Brands and Barbie - dot.LA ›
Despite — or in many cases because of — the raging pandemic, 2020 was a great year for many tech startups. It turned out to be an ideal time to be in the video game business, developing a streaming ecommerce platform for Gen Z, or helping restaurants with their online ordering.
But which companies in Southern California had the best year? That is highly subjective of course. But in an attempt to highlight who's hot, we asked dozens of the region's top VCs to weigh in.
We wanted to know what companies they wish they would have invested in if they could go back and do it all over again.
Hottest
<img lazy-loadable="true" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzIyNS9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY1OTQ3MjQ2OH0.JYCNMjYvosYa5SI7701CH_jMFbeFdMcRCChXt442cq0/img.png?width=980" id="4a086" class="rm-shortcode" data-rm-shortcode-id="f2f18f0bc4400a388e43736c560ff87f" data-rm-shortcode-name="rebelmouse-image" alt="PopShop Live logo" data-width="686" data-height="128" />PopShop Live ($100 million)
<p>The live-streaming shopping channel created by Danielle Lin reportedly found itself in the middle of a <a href="https://www.theinformation.com/articles/benchmark-wins-deal-for-live-shopping-app-popshop-at-100-million-valuation" target="_blank">venture capital bidding war this year</a>. Benchmark eventually won out leading a Series A round, vaulting the app at a $100 million valuation. The Los Angeles-based platform has been likened to QVC for Gen Z and <a href="https://dot.la/popshop-live-2646369816.html" target="_self">it's part of a new wave of ecommerce</a> that has found broader appeal during the pandemic. Google, Amazon and YouTube have launched live shopping features and other venture-backed startups like Los Angeles-based NTWRK have popped up.</p>Boiling
<img lazy-loadable="true" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzIyOC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY2MzI5MjYwMn0.h7Nq7GiwXTcg_7Io5WEXblFX0rWQHxn69RzluTh7n_Q/img.png?width=980" id="44eea" class="rm-shortcode" data-rm-shortcode-id="d02c4cad650c987721ff91ee939a5bf7" data-rm-shortcode-name="rebelmouse-image" alt="Scopely logo" data-width="361" data-height="93" />Scopely ($3.3 billion)
<p>One of the most valuable Southern California tech startups with <a href="https://dot.la/doubling-valuation-scopely-is-now-one-of-the-top-la-tech-startups-2648525465.html" target="_self">a $3.3 billion valuation</a>, the Culver City mobile game unicorn has benefitted from a booming gaming market that has flourished in this stay-at-home economy. Scopely offers free mobile games and its roster includes "Marvel Strike Force," "Star Trek Fleet Command" and "Yahtzee with Buddies." In October the company raised a $340 million Series E round backed by Wellington Management, NewView Capital and TSG Consumer Partners, among others fueling speculation that it was on its road to an IPO. Co-CEO Walter Driver <a href="https://www.bloomberg.com/news/articles/2020-10-28/scopely-raises-340-million-in-push-to-be-a-mobile-gaming-giant?utm_source=google&utm_medium=bd&cmpId=google&sref=4Kf8RwDw" target="_blank" rel="noopener noreferrer">has said</a> that he doesn't have immediate plans to go public. </p>Ordermark ($70 million)
<p>The coronavirus has forced the closure of many dining rooms, making Ordermark all the more sought after by restaurants needing a way to handle online orders. Co-founder and CEO Alex Canter started the business in 2017, which recently rang in more than <a href="https://www.forbes.com/sites/aliciakelso/2020/12/09/how-ordermarks-latest-funding-haul-could-help-independent-restaurants-survive-the-pandemic/?sh=443a72644b7d" target="_blank">$1 billion in sales</a>. Ordermark secured $120 million in Series C funding by Softbank Vision Fund 2 in October that it will use to bring more restaurants online. The company's Nextbite, a virtual restaurant business that allows kitchens to add delivery-only brands such as HotBox from rapper Wiz Khalifa to their existing space through Ordermark, is also gaining traction. </p>Simmering
<img lazy-loadable="true" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzMxNi9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY1NjM4MjQ5Mn0.XSHQfru9tTpdeBqd_ecb--8DiZg_vdyOtF9ZV9zAG78/img.png?width=980" id="f1665" class="rm-shortcode" data-rm-shortcode-id="ccc0b78dd8ae8cda9bf95979e83506fd" data-rm-shortcode-name="rebelmouse-image" data-width="455" data-height="111" />Cameo ($300 million)
<p>Cameo, which launched three years ago, had its breakout year in 2020 as C-list celebrities like Brian Baumgartner <a href="https://www.buzzfeed.com/larryfitzmaurice/kevin-office-highest-earning-cameo" target="_blank">banked over a million dollars</a> from creating customized videos for fans. In the sincerest form of flattery, <a href="https://www.bloomberg.com/news/articles/2020-12-15/facebook-building-tool-to-let-fans-pay-celebrities-for-face-time" target="_blank">Facebook is reportedly launching a feature that sounds a lot like Cameo. </a> Even though the company is still technically headquartered in Chicago, we included Cameo because CEO Steven Galanis and much of the senior team moved to L.A. during the pandemic and say they plan to continue running the company from here for the foreseeable future.</p>Mothership ($64 million)
<p>Co-founded by CEO Aaron Peck, Mothership provides freight forwarding services intended to streamline the shipping experience. The company's tracking technologies connect shippers with nearby truck drivers to speed up the delivery process. It raised $16 million in Series A venture funding last year, driving the platform to a $48 million pre-money valuation.</p>Nacelle ($6.7 million)
<p>Founded in 2019, Nacelle's ecommerce platform helps retailers improve conversion rates and decrease loading speeds for their sites. The software integrates with Shopify and other services, offering payment platforms and analytics integration, among dozens of services. Nacelle raised about $4.8 million earlier this year with angel investors that included Shopify's Jamie Sutton, Klaviyo CEO Andrew Bialecki and Attentive CEO Brian Long. </p>Boulevard ($30 million)
<p>Matt Danna and Sean Stavropoulos <a href="https://dot.la/boulevard-app-2649021308.html#:~:text=Their%20four%2Dyear%20old%20salon,to%20digitize%20their%20appointment%20books." target="_self">came up with Boulevard when an impatient Stavropoulos was frustrated</a> wasting hours to book a hair appointment. Their four-year-old salon booking and payment service is now used by some of Los Angeles' best-known hairdressers. Last month, the two secured a $27 million Series B round co-led by Index Ventures and Toba Capital. Other investors include VMG Partners, Bonfire Ventures, Ludlow Ventures and BoxGroup.</p>CloudKitchens ($5.3 billion)
<p>Uber co-founder Travis Kalanick CloudKitchens rents out commissary space to prepare food for delivery. And as the pandemic has fueled at-home delivery, <a href="https://www.wsj.com/articles/uber-founder-turns-real-estate-mogul-for-ghost-kitchen-startup-11603186200" target="_blank">the company has been gobbling up real estate</a>. The commissaries operate akin to WeWork for the culinary world and allow drivers to easily park and pick-up orders as the delivery market has soared during pandemic. Last year, it raised $400 million from Saudi Arabia's colossal sovereign wealth fund. </p>GOAT ($1.5 billion)
<p>Founded by college buddies five years ago, GOAT tapped into the massive sneaker resale market with a platform that "authenticates" shoes. The Culver City-based company has since <a href="https://dot.la/goat-group-la-2647074186/goat-uses-nba-playoffs-to-launch-brand-campaign" target="_self">expanded into apparel and accessories</a> and states that it has 20 million members. Last year, Foot Locker sunk a $100 million minority investment into 1661 Inc., better known as Goat. And this fall it landed another $<a href="https://dot.la/sneaker-reseller-goats-100m-raise-ptrendsetter-in-a-casual-era-of-ecommerce-2647774644.html" target="_self">100 million Series E</a> round bankrolled by Dan Sundeheim's D1 Capital Partners. </p>Savage X Fenty
<p>The lingerie company co-founded by pop singer Rihanna in 2018 is noted for its inclusivity of body shapes and sizes. It has raised over $70 million, but <a href="https://www.nytimes.com/2020/12/14/business/dealbook/roblox-tech-ipos.html" target="_blank">The New York Times' DealBook newsletter recently reported</a> that it's been on the hunt for $100 million in funds to expand into active wear. The company generates about $150 million in revenue, but is not yet profitable, according to the report. It became <a href="https://www.businessinsider.com/rihanna-savage-x-fenty-accused-of-deceptive-marketing-2020-2" target="_blank">the focus of a consumer watchdog investigation</a> after being accused of "deceptive marketing" for a monthly membership program.</p>Warming Up
<img lazy-loadable="true" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzYwOS9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY3MzQ1MzE4OX0.fS5XtGx4M-tqWecrth6NCHawGSg2aSkb-yR-cY3wbtU/img.png?width=980" id="c6334" class="rm-shortcode" data-rm-shortcode-id="aa7476f8a6216fed6b372d8a59876a6b" data-rm-shortcode-name="rebelmouse-image" data-width="600" data-height="600" />FabFitFun ($930 million)
<p>The lifestyle company provides customized personal subscription box services every three months with full size products. Started in 2010 by Daniel Broukhim, Michael Broukhim, Sam Teller and Katie Rosen Kitchens, it now boasts more than one million members. Last year, the company raised $80 million in a Series A round led by Kleiner Perkins last year and <a href="https://labusinessjournal.com/news/2020/oct/05/fast-growing-etailer-fabfitfun-possible-ipo/" target="_blank">appears to be preparing for an eventual IPO</a> as it slims down costs and refocuses on its <a href="https://dot.la/fabfitfun-layoffs-refocus-2645321060.html" target="_self">high value </a>products.</p>Dave ($1 billion)
<p>Launched in 2016, the finance management tool helps consumers to avoid overdrafts, provides paycheck advances and assists in budgeting. Last year, it began to roll out a digital bank account that was so popular that two million users signed up for a spot on the waitlist. The company, run by co-founder Jason Wilk, has raised $186 million in venture capital and counts billionaire Mark Cuban as an early investor and board member. Other backers include Playa Vista-based Chernin Group.</p>Sure ($59 million)
<p>SURE offers multiple technology products to major insurance brands — its platform can host everything from renter's insurance to covering baggage, so customers never have to leave an agency's website. It also offers its platform to ecommerce marketplaces, embedding third-party insurance protections for customers to purchase all on the same webpage. Founded in 2014, the Santa Monica-based startup last raised an $8 million Series A round led by IA Capital in 2017.</p>Zest AI ($90 million)
<p>Founded in 2009 by former Google CIO Douglas Merrill and ex-Sears executive Shawn Budde, Zest AI provides AI-powered credit underwriting. It helps banks and other lenders identify borrowers looking beyond traditional credit scores. It claims to improve approval rates while decreasing chargeoffs. The company uses models that aim to make the lending more transparent and less biased. This fall the company raised $15 million from Insight Partners, MicroVentures and other undisclosed investors, putting its pre-money valuation at $75 million, according to PItchbook.</p>PlayVS
<p>Santa Monica-based PlayVS provides the technological and organizational <a href="https://dot.la/playvs-high-school-esports-2647048099.html" target="_self">infrastructure for high school esports leagues</a>. The pandemic has helped the company further raise its profile as traditional sports teams have been benched. Founded in early 2018, PlayVS employs 46 people and has raised over $100 million. In addition to partnering with key educational institutions, it also has partnerships with major game publishers such as Riot and Epic Games.</p>Tapcart ($40 million)
<p>A SaaS platform helps Shopify brands create mobile shopping apps. The marketing software saw shopping activity jump 50% <a href="https://dot.la/tapcart-mobile-retail-platform-2646056623.html" target="_self">over 90 days</a> as the pandemic walloped traditional retailers. Founded by Eric Netsch and Sina Mobasser, the company raised a $10 million Series A round led by SignalFire, bringing the total raise to $15 million.</p>Papaya ($31.8 million)
<p>Papaya lets customers pay any bill from their mobile devices just by taking a picture of it. The mobile app touts the app's ease-of-use as a way to cut down on inbound bill calls and increase customer payments. Founded by Patrick Kann and Jason Metzler, the company has raised $25 million, most recently a S10 million round of convertible debt financing from Fika Ventures, Idealab and F-Prime Capital Partners.</p>Floqast ($250 million)
<p>FloQast is a management software that integrates enterprise resource planning software with checklists and Excel to manage bookkeeping. The cloud-based software company claims its system helps close the books up to three days faster. It is used by accounting departments at Lyft, Twilio, Zoom and The Golden State Warriors. In January, it raised $40 million in Series C funding led by Norwest Venture Partners to bring the total raise to $92.8 million.</p>Brainbase ($26.5 million)
<p>The company's rights management platform expedites licensing payments and tracks partnership and sponsorship agreements. It counts BuzzFeed, the Vincent Van Gogh Museum and Sanrio (of Hello Kitty and friends fame) among its clients. In May <a href="https://dot.la/headspace-brainbase-2647426309/rights-management-platform-brainbase-beefs-up-c-suite-following-8m-raise" target="_self">it announced $8 million in Series A financing </a>led by Bessemer Venture Partners and Nosara Capital, bringing the total raised to $12 million.</p>OpenPath ($28 million)
<p>The Los Angeles-based company provides a touchless entry system that uses individuals cell phones to help with identification instead of a key card. The company offers a subscription for the cloud-enabled software that allows companies to help implement safety measures and it said demand has grown amid the pandemic. Founded by <a href="https://dot.la/alex-kazerani-james-segil-2646964770.html" target="_self">James Segil and Alex Kazerani</a> the company r<a href="https://dot.la/openpath-primed-for-covid-accelerated-growth-announces-36-million-raise-to-make-keycards-obsolete-2646416034/particle-2" target="_self">aised $36 million led by Greycroft </a>earlier this year, bringing its total funding to $63 million.</p>FightCamp ($2.5 million)
<p>FightCamp is an interactive home workout system that<a href="https://mashable.com/article/fightcamp-review/" target="_blank"> turns your space into a boxing ring</a> with a free standing bag, boxing gloves and punch trackers. The company is riding the wave of at-home fitness offerings including Peloton, Mirror and Zwift that have taken off during the pandemic as gyms closed. The company has raised $4.3 million to date.</p>Numerade
<p>The Santa Monica-based company provides video and interactive content for education in math, science, economics and standardized test prep. Founded in 2018 by Nhon Ma and Alex Lee, who previously founded Tutorcast, an online tutoring service, the company gathers post-graduate educated instructors to create video lessons for online learning.</p>Our Place ($32.5 million)
<p>The creator of a pan with a cult following on social media, this Los Angeles-based startup designs and retails cookware and dinnerware. Founded by Amir Tehrani, Zach Rosner and Shiza Shahid, the company completed its Series A funding earlier this year, bringing its total raised to date to $10 million.</p>Tala ($560 million)
<p>For customers that have no formal credit or banking history, this company's application promises more financial access, choice and control. It gathers data to create a credit score that can be used to instantly underwrite and disburse loans ranging from $10 to $500. Co-founded by Shivani Siroya and Jonathan Blackwell, Tala has raised $217.2 million to date. Its investors include PayPal Ventures, Lowercase Capital and Data Collective.</p>ServiceTitan ($2.25 billion)
<p>Founded in 2007 by chief executive Ara Mahdessian and president Vahe Kuzoyan, ServiceTitan operates software that helps residential home contractors grow their businesses. It provides businesses tools like customer relationship management and accounting integration to streamline operations. The company closed a $73.82 million Series E funding round from undisclosed investors earlier this year.</p>100 Thieves ($160 million)
<p>Founded in 2017 by former professional "Call of Duty" player Matthew Haag, 100 Thieves manages esports competitions in major titles including "Counter Strike Global Offensive" and "League of Legends." The company also produces apparel and merchandise, opening a physical store and training ground called the "Cash App Compound" in collaboration with Fortnite earlier this year. The company has raised $60 million to date, from investors including Salesforce CEO Marc Benioff and Aubrey Graham, better known as the rapper Drake.</p>Emotive ($16.5 million)
<p>This AI-powered customer service platform automates text conversations between customers and businesses to increase sales. Emotive uses their sales team to verify questions, distinguishing it from other bot-driven marketing services, according to the company. The company was founded in 2018 by Brian Zatulove and Zachary Wise, who serve as the chief executive and the chief operating officer, respectively. It has raised $6.65 million to date, from Floodgate Fund and TenOneTen Ventures. </p>Everytable ($33 million)
<p>Created by former hedge fund trader Sam Polk, the Los Angeles-based startup wants to be a healthy fast food chain. It <a href="https://dot.la/everytable-2648958920.html" target="_self">prices its healthy pre-packaged meals around $5</a> in underserved communities while costing more in other neighborhoods with the goal of reducing so-called food deserts in low-income neighborhoods. It also offers a subscription delivery service. The company recently closed a $16 million Series B round led by Creadev along with Kaiser Permanente Ventures.</p>- Los Angeles' Tech and Startup Scene is Growing. - dot.LA ›
- The dot.LA/ Pitchbook Top 50 LA Startups for 2020 Q2 - dot.LA ›
- dot.LA/Pitchbook 50 Hottest Los Angeles Companies - dot.LA ›
- Dave App Snags Former Apple Executive - dot.LA ›