Babylist: Natalie Gordon. How a new mom used nap time to build a $500M business.

Transcript from https://podmenti.com/t/cf3640d2c3356bcb

Our current CFO, Jocelyn, we gave her a presentation to do.
And her presentation started with
Here's all the ways e commerce is terrible, and we should not be going into it.
You have to collect sales tax, unlike for every state.
You have to deal with returns. You have to deal with products that are being discontinued.
We were
So naive about how hard.
It was actually gonna be
to do the logistics side of this business.
Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements.
They built.
Guy Roz and on the show today, how a bad experience in a big box baby store led Natalie Gordon to build an alternative, a website that grew into one of the most popular registries in the country.
Baby list.
Yeah.
Babies need a lot of stuff.
Changing tables, changing pads, car seats, cribs, strollers, bouncers.
It's endless.
But what do new parents actually need? Which products are worth it?
And where do you even start?
Well, back in 2010, Natalie Gordon was asking those very same questions.
She was pregnant with her first child, living in Vancouver, and working as a software engineer.
And like a lot of expecting parents, she didn't have much time or money to waste.
The baby stores were overwhelming.
Too many brands, too many shelves, and baby registries?
They only worked with specific retailers, so you couldn't mix and match from different stores.
So Natalie decided to fix it.
She quit her job and started building the kind of registry she wanted.
One that included everything.
From traditional gifts to practical help like a diaper service or a friend walking your dog while you adjust to life with a newborn.
And what made Babylist different was that Natalie was building it while living it.
She was a new mom.
Writing every line of code during nap times and
and solving problems for herself and other parents at the same time.
Since its launch, Babylist has grown into one of the most popular baby registries in the US.
With its own retail shop, product reviews, and educational content.
Nearly 100 million gifts have been given through the site, and annual sales are estimated at over half a billion dollars.
As for Natalie?
She grew up in Ontario in Canada. She was a pretty good student, and in college she studied math and computer science.
In the early 2000s, she landed her first job at Amazon, just as the company was at a critical turning point. It was a really great time to be at Amazon. I really was part of the founding team for Amazon Fresh.
Um.
Um, which was so hard. It was like the normal Amazon
Uh Order had two items and Amazon Fresh had a hundred items because it was groceries. There were just all of these problems to solve.
Yeah, and I mean you were there from two thousand four, two thousand eight, and people like think of Amazon as like
you know, just eight hundred pound gorilla that's been like that since the day it started. But at that time, I mean, yes, Amazon was already
certainly a significant a big company.
But it was still it wasn't
as mainstream as it is now. Like in two thousand four, five, six, like
Not everybody.
In fact.
Probably most people were still not
ordering the lots of stuff from Amazon.
If if they ordered stuff it was books. It was books. They were just going into music.
A lot of the cultural elements of like what make Amazon were there, but they were absolutely the upstart.
Like truthfully
Getting a job at Microsoft was much more prestigious than getting a job at Amazon at that time in Seattle. Yeah.
Well
So tell me uh I mean
f you're at you have this great job, you're getting equity, getting stock options, you know, like
W what happens? Four years in
You w are you burned out? What's what's going on?
I made myself a promise when I took the job because I had really I
gone from high school to college. I hadn't taken any summers off. I had been in this internship program that
I r I really wanted to see the world.
I really, really wanted to travel.
And so
That was really what I was um why I left.
Hm.
I
Was really excited about traveling in Latin America.
learning Spanish um and so
Um, with my boyfriend at the time, um, in this trip that it was about a year and a half.
We ended up living in three places in Havana, Cuba, Medellin, Colombia, and then Oaxaca, Mexico.
And and how long did you guys travel?
It was the trip was about a year and a half.
Well.
And then at the very end of it, we got married.
Yeah. Okay, I got it. Okay.
So while you're on this trip, um, I guess you get
An idea.
Uh
for'cause you have to do something, right? You can't uh you I mean you quit
But clearly in the back of your mind, and you you must be thinking, Hey
Uh I'm
You know, gonna
do something when I'm done with it. Like I'm I and so what what did you come up with?
Well not at I not at all.
Like I I don't think I ever
thought of myself as an entrepreneur.
Um, I w the first place we were was Havana, Cuba. And at that time there was very limited access to the internet there.
And so it was actually this total digital detox where
Um, I was learning Spanish all day, like
Walking to the University of Havana, really exploring that city, making some friends.
And I started feeling really excited.
That
I wanted to build something.
And
My actual framing for it was
I went to college for four єirs. I worked at Amazon for four.
And like I don't actually know how to
Build an app or a website from end to end.
Mm.
Like where you're setting up the web server and the database and choosing the language.
And so that was the and it it felt like
A gap it felt like something that I had some imposter syndrome over.
And so that was the thing I was excited to do. So
Dad, tell me more about what you
Start to think about.
Yeah, so
I had a lot of ideas, but the thing that was really true.
In that trip was
I was getting
the most benefit from meeting Spanish speakers and actually practicing my Spanish.
And there were so many people who really wanted to.
Talk to me because they themselves were learning English and they were so motivated to learn English.
And um so it'd be called an intercombio where
You would speak.
Spanish for twenty minutes. They would kind of correct some of your pronunciation.
And then you would
Talk in English for twenty minutes. And so it was like oh like
There's all these people who want to do this. And so like that was the vision. The vision was a place you could go online.
You could
click a button and actually have this real practice with an a native speaker, specifically for Spanish and English.
Got it. Okay. And and what was the what did you call it?
It was called Languajero.
Okay, and so
When this trip ended.
Did you did you guys go back to Seattle? Did you go back to Canada to start this?
We it w I started it on the trip.
Okay. So me and my partner August, it's something that we started together.
You start to code code a website, basically.
Code website.
And then I remember we launched it once we lived in Oaxaca and then it was it was live for a number of months. So it was actually like one of the main things we did during that entire trip.
And you would basically recruit teachers and and I guess pay them. I mean, I know the model today, but was that the model then? Yeah, in this case it was all about the peer to peer learning.
Mm.
Go
Search who's online right now.
see what their interests are and click a button and see if they want to talk to you. And you guys and then it would cost there would be like a fee and then you guys would get a
Well the biggest problem with this is there was no business model. And so like maybe that would make sense, but in this case, um like it never really was set up to make money.
In its top month it only ever made forty dollars. And so
We c
Yeah.
To me, I I even feel bad about calling it a startup.
Like it felt like a project that I was really excited to do. But this project really consumed you, right? Like this became
something that you really wanted to turn into
something with traction, how are people receiving it? I mean, were were you I mean, first of all, how are you getting the word out?
I think we partnered with podcasts.
There were language learning communities and groups on Facebook.
Um it was pretty grassroots.
And
There it had
Thousands of users.
And there were some real power users who absolutely loved it.
Um, okay, so you're working on this and but how are you earning money?
At the time.
So I had saved up so much money from Amazon. So this entire time it was really living off of savings.
And living in Latin America was cheaper than living in Seattle.
Yeah.
Fair enough. So all right. So you
are working on this project meantime
Um
Uh I think around two thousand ten or maybe earlier, you've become pregnant.
And you're you're gonna have a baby.
Right. And you and August at this point are married.
Yeah, we got married in um early two thousand ten at the very tail end of this trip. And then we knew we wanted to move back somewhere.
get back into life and chose to move back to Canada.
Yeah.
We are living in Vancouver, which was a new city to me.
I I was doing contract work, so I was actually working again. I was
Consulting for a startup.
Down in the Bay Area.
And um yeah, we I was pregnant with my
First son.
It was like a pretty
Crappy time?
Like we lived in a really
crappy house that was
Like on a slant.
The day after I found out I was pregnant and when I started to feel nauseous I found a bed bug.
Like and then had to do all of the fumigation.
Um, I didn't really feel like I had friends and I felt like life was really changing.
And I really
Heated the
work I was doing this consulting work it was
that time period, I'm sure you remember where on Facebook everyone was playing Farmville. Facebook had opened up their API. So I was writing code every day.
That spammed Facebook. For other people.
Yeah, for like for a for another company
that and no one was even really using their product.
They wanted people to use their product and so the solution was to
Make it go viral by spamming Facebook and so that's what I was doing all day.
So miserable just kind of like you hate you were hating this.
Meantime you got you were pregnant.
And
I guess I mean and this is the thing like and this happens to a lot of people when you
start to have a family, like all of a sudden a whole world opens up to you that you hadn't seen before. You start to see things. I remember this when my my first son was now sixteen when he was born
All of a sudden just the world looks different. You first of all you start to notice babies and strollers and
You know, playgrounds. I I never even knew there were playgrounds in my neighborhood.
I remember, you know, seventeen, eighteen yeah we were living and I was like, Oh, there are playgrounds everywhere.
Right. You're
And and you're in this world where you're gonna become a parent.
not happy with what you're doing, having these skills
working on this website or this project
the Spanish English project that's kind of not going anywhere.
And
I I guess you start to think about
other possibilities. Tell me about what's going on in your in your head at that time.
So a couple of things lined up.
Um, one of them was I read the book The Lean Startup by Eric Reese. Yep.
I've never talked to him, but so influential in my my life because I read the book.
And it it's like it was titled Natalie, here's everything you did wrong with Languagero. Here's your manual for life.
Yeah, massively influential book. He really describes also like a software engineer's mindset and how they get it wrong.
Where
The solution is to build new features.
where he really is introducing this like new way to build something.
And
I was like, I want another at bat. Like I see everything I did that really
is why Languajero didn't work. I would love to
do this all again and really use this as my Bible and like the way I would build something.
Okay, and I think at at this point you and and August actually decide to
to shut Blanguero down, um like it's kind of run its course.
Uh and it comes to an end, right? And and then meanwhile you're you're in Vancouver
And
You're you're doing this coding job, right?
Yeah, so
I was now
really getting prepared for having
Having a baby.
And
I was gonna have a baby shower. Um, I had a I had a best friend, my sister in law both lived in Vancouver.
They were like you need to create a baby registry.
Yeah. So the way you do that is you would walk into babies R Us.
And they would give you a scan gun and you'd walk around.
And
It was this.
Big box experience.
I walked in, it was immediately overwhelming Just thousands of things in the Iron Man. Thousands of things. So they would give you a scanner. See, I did I there you go. I mean it's all you need to know. I never did that. I don't think my wife didn't either. But you'd go in with a scanner gun. Yeah, they gave you a scan and you just scan the the
UPC or whatever, the code, right? The barcode on the back. Yeah. And it would be like I'm in the bottle section. There's hundreds of products here. There's hundreds of nipples and bottles. Like which bottle should I get? You needed to hire a consultant to come with you.
to tell you what to do. Like an hourly paid consultant. And I think it's money was really tight for us. Like I I was doing this consulting work, August was in in school and
I felt this real pressure. Like I I wanted to really make sure we got the stuff we needed. I want I didn't want to make mistakes. I didn't want to try things out. I didn't have the money for a consultant. And so in this babies R Us experience, like I walked in and I I think I did not even add one item to my registry.
I put the scan gun down and I like walked out in tears.
And
I've heard that story from so many people in these good old days when there were so many baby stores around. Like that's kind of like what it was like. Yeah. And
I was like, I know exactly the baby registry I would want.
And that's the thing that I was really excited to like now build. Still again as like a
A really fun project, like much less like oh, this is the company I'm now gonna work on for fifteen years. Um all right, so okay, so you have this experience and
Was it immediately revelatory to you? W was it like a light bulb moment or did it
kinda percolate for some time and and
And get you thinking.
There you know, like there's to be a better way to do this.
Yeah, I thought
A baby registry, it's a list of products. You can go buy the products.
It but I could see exactly how I wanted it to work.
And so
One example is
They all looked terrible.
They were pink and blue.
With giraffes.
It felt embarrassing to send that out to family and friends.
I was like
I want this to actually feel modern and to feel cool to send out.
I really wanted it to work across retailers.
Most baby registries
were single store registries. And so you could only add items from Babies R Us and then you'd have a second registry for Amazon.com.
Or there were a couple like general universal wish lists where you
could add items from a few sites, but it would be a wish list.
And
I wanted to ask for these other things.
So
We had a dog. We had adopted her in Mexico, Pasa.
And it was like if someone could walk her
Every morning like that's such a meaningful gift.
In retrospect this was a terrible idea, but I was very into cloth diapering.
Like I thought diapering was like the right thing to do.
The cloth diaper service. It cost sixty dollars a month, which was a lot of money. And so if someone could be like, We'll get you February for your cloth diapering service in sixty dollars, that felt amazing. And so I just
So what it felt like is I knew exactly what needed to be built.
I think my aspirations for it at the time were like, Oh, maybe this'll be a great side hustle.
And it could make some passive income
Um and like always kind of be on. So it would be like worth me building it because maybe then over many years it'll make a little bit of money.

you're kind of this idea's germinating, right? Which is
You had this experience at
Babies are us, right?
The problem is is that
Many expecting parents know they need a lot of
Chunk, okay. Stuff.
I should say chunk. They need stuff.
But they don't know exactly what it is they need'cause they're all of it.
No one teaches you how to be a parent. Like all of a sudden you're like, Oh, we're gonna be parents in nine months.
How do we do that? And then like the baby's born and you go home from the hospital and like I remember it. You remember. You're like, Okay, I guess we gotta just figure it out. And I talk to uh people, particularly people who are interviewing to be employees here, and they're like, Well I don't have any
kids and I'm like, yeah, neither do our users. Our users don't know what any of this stuff is. They're the ones who are buying the gifts for the the expecting parent. In this case our users are the expecting parent. Like they I remember not knowing
What is a diaper bag? Why is a diaper bag different than a backpack? What is actually a diaper pail? Is that just an expensive garbage can? Like I had all of these very, very basic questions. Yeah. A diaper changing table. Why do you need that? Well you do, because then the baby's gonna roll off. You need that diaper you know, that sort of half moon shape.
Yeah, do you need a crib and a bassinet? Yeah. How does your car seat work with your stroller? Like there's so many questions. You need the baby swing, you need the Harvey Carp tapes, the shh the F seven S's or whatever they are.
You need it all, but you don't really know.
Right? And so you knew that, that's a problem. But the other thing is if I'm understanding your thought process correctly, is that
You want it
other stuff like maybe cloth cloth diaper service and and it would be cool if like
one friend could fund that for a month and then another friend could fund it for another. So you wanted like
More than just the stuff, you wanted optionality, like ways for people to
Help you
With other things.
that you would need as an early p like in the early days or in the first day.
the family and friends who were getting you those things to feel like they were getting you a great gift.
Yeah.
Alright, so
You're pregnant?
You're doing consulting work and on the side.
You start to write.
The coat and it's just you
Like
Tapping your fingers on the keys furiously not furiously.
Intensely.
W working on this thing?
Yeah, so
I ended up
Quitting my consulting job.
I truly at the very
beginning when I had the idea, I thought I can get this done in one week.
And that wasn't true.
I think it was maybe
one month before I actually made the MVP go live.
So I was really, really taking this minimal viable product seriously.
A logistical question. You had the hard skills. You knew how to do
The engineering.
But there's a difference, right? Not everybody, not every engineer knows how to
do a user interface, right? How to design a beautiful page.
Were you able to also do that yourself?
But
That's so I
I knew I couldn't do that part myself.
I brought on a designer and she did that. And so I posted to this online forum about the project and that I was looking for a designer.
I think I had one real response.
And it was from this woman, Lindsay, a design student in the Philippines. And so we partnered on this first version of it.
Got it. Okay.
And how many hours a day were you were you working on this?
I was probably working like ten hours a day.
Yeah.
Some other things I'd really
Yeah.
What you asked like how did people learn about
Languajero. Right.
In this case I was like distribution
Like I need to figure that out. This is gonna be the hardest thing is how do people find this. Yes. And so I remember
It felt so uncomfortable to do. I was avoiding it and avoiding it. So I forced myself to go to a coffee shop and say
You can't leave this coffee shop until you've sent 10 emails to 10 bloggers that you're going to launch this thing in the next couple of months.
And for each of them I created
A registry which products like
products that they themselves recommended or would like. So there was an
Eco Mom website. So I put a lot of green products on it. There was a design mom blogger. I put a lot of
MOMA products on it. So they could really see that this worked and you could really express
um yourself because you could choose products from any store.
And then
Launch
was the very beginning of February twenty eleven.
And there was a really popular
Discussion board.
For technologists that works like Reddit called Hacker News.
And so I posted to Hacker News.
I'm a pregnant hacker. Please review my side project. And it just linked to Baby List. Got it.
Okay, so w you launched this in February of two thousand eleven, just a couple of weeks before your son is born. It's a minimum
viable version of this. So it's it's a b bare bones version. But what h what how did you have products available? I mean you are it's
It's you and a coder b or a designer in the Philippines, like
You're at that time and I don't mean this pejoratively, but you're nobody, right? You don't have any
deep uh connections to, you know, Hasbro or, you know, the like
Gerber or whatever these companies are.
How are you selling anything?
Yeah, we didn't
need any stores permission if you had a website
Like the babyless button would work and then
what it looked like to the gift giver.
is you would tell Babylist you were gonna buy the item.
And then you would click over to the actual website that sold the item and then you would
Buy it.
As normal.
And would you at that point would you get an affiliate
um fee or or or were those programs not?
fully realized yet.
As
Babylist was launching.
I think I
started to apply to affiliate programs.
Got it.
You come to my registry.
You click over to target.
To buy a one hundred dollar stroller.
Then
Target would pay us some percentage, let's say five percent. So we'd receive five dollars of whatever you bought because we referred the traffic to Target.
And it's a part of their marketing spend.
And so
That was the original business model for Babylist.
Hm.
And and how many of those bloggers that you wrote to or I mean did uh did most of them write about about it?
Five of the ten bloggers wrote about the launch.
It was fantastic.
one of them started to rank for best baby registry.
in SEO, so in Google. And that was also the steady stream of traffic that drove
babyless registries for many years, but particularly in that first year, like a couple every day.
All right.
So now you find yourself.
A mom with a newborn and
Uh
A a a startup.
And you're running your second startup.
And it's already getting a little bit of traction.
You know, I mean

First days and weeks after you launch so
Uh come walk me through the first few months of Max's life while you are
You know, you're
with him, I think, right? Um, probably mostly on your own.
Tell me about how you were doing that.
I really wanted to stay home with Max for like up to a year. And um, August was going to
University in Vancouver.
It was actually like a very
Difficult time.
It was very isolating.
Was very lonely.
Um Max was

Like a Velcro baby. He needed to be held all of the time.
And I feel even saying all of this, like I feel like I need to caveat, like
And he's literally the most wonderful fourteen year old. And like it was but at that time, it was like this is what the next eighteen years of my life is gonna be like. Like what have we done? It was winter in Vancouver. Um I was home all day.
And for me like
Babylist was this really interesting thing I could think about. Yeah.
And I had a goal in those first couple of months, which is
I wanna spend forty five minutes a day on this.
If I can spend forty five minutes a day on this, like that's a really good day.
It sounds to me like it was almost like
It gave you this structure.
That you crave, that you like
Really needed.
It was structure and it was also so fun and it was actually going really well.
So in the forty five minutes I could close a door, which was our second bedroom, which was an office. I would fix two bugs that
Customers had mentioned.
I could
Answer five customer support emails.
Maybe I would email a blog.
And
Compared to Lungua Haro, in its second month, it made a hundred and forty dollars.
And so it was just so clear.
that this was actually really working.
Which I should say.
Many startup founders would find very discouraging, but based on your previous experience where the best month you had with Lingua Hera was forty dollars, you're thinking, Hey
There's some traction here.
It was
Hey, the really hard parts about this, it's
People learning about it. And so when it was making a hundred and forty dollars a month.
It was actually just from a handful of registries, maybe ten registries. And so it was so clear, wow, like this is gonna make more money.
If there's ten times more registries.
Although it's only a hundred and forty dollar.
Yeah.
It was really clear it could get much bigger.
When we come back in just a moment, as Babylist starts to catch on.
Natalie realizes how hard it is to hire people.
And fire them.
Stay with us, I'm Guy Roz, and you're listening to How I Built This.
Hey, welcome back to How I Built This. I'm Guy Raz.
So it's around 2012 and Babylist is getting some traction and Natalie is getting instant feedback from users by doing all of the customer service.
Herself.
I remember getting an email from someone.
And she was just like, this is so confusing.
And I think the thing that was really confusing was how do you say that you
Want
Any amount of a product. So let's say for diapers
Get me like I don't need to say I need five boxes of diapers. Just keep buying me diapers. Keep that on the registry as long as people are
Buying it.
And that I
Emailed her back.
Like the same day, and I was like, Hey, which which of these phrases do you think actually would work better?
And one of them was no limit. One of them was
Any quantity
And she was like, Oh, I think it's that one. And then I remember just updating the code, emailing her back five minutes later and saying like oh now that actually
is live on your registry.
It was stuff like that.
Even today, I think that
those early years of just talking to
Users and customers
Every single day.
was really, really important for how I show up to my job today.
I mean, I just think it's awesome that that you had this goal and you're working on it. So it's like it's like w getting you know, d it's a cliche now, it's like getting one percent better every day, right? One percent better every day. Probably every month, maybe getting
Ten percent bigger.
So was really growing.
And in the summer
It was like okay, I'm gonna take some of the money that this is actually making and I'm gonna pay a babysitter.
And
I would go around the corner to a coffee shop for three hours. I do do that, I think two days a week and then three days a week. So then I had these three hour blocks now to actually work on it with my laptop in a in a coffee shop.
Well, all right.
So you're do we're working on this and by the one year mark, February twenty twelve, Max is a year old, baby list is a year old.
Um you start to see some, you know.
Like not just a hundred or two hundred bucks a month, but to like three grand a month.
I mean that's real
Especially given that your costs were pretty
Low, I guess they were pretty low, right? You had some server costs. Like what what what did you
Because this was all self funded, right?
Yeah, costs were pretty low.
Truly the only real expense.
would have been to hire software engineers and me and Lindsay were both working for free. You didn't need to hire an engineer. You're the engineer. Yeah, exactly. So
Yeah, it was it was
It was a high margin business.
And the the three thousand really represented which was I I was gonna
get a job. Like I was gonna go back to work. This was gonna be a side hustle.
Yeah, this was gonna be a side hustle. I was I was going to go interview four jobs, get back in there.
And
I think August and I in conversations
We set the
The number three thousand where we said, Okay, well
If in a year
This is making three thousand dollars a month.
Like
This is really working and that's the thing that I should actually go to full time. So can I ask you a question about that number? Cause it's twenty twelve.
That's thirty six thousand dollars a year.
Not a lot of money, but why was that the number that you
Yeah.
It was a magic number. I don't know why. It wasn't coming from a spreadsheet.
And it wasn't coming because it's actually
the salary that I wanted to make or we could live on.
It w it was really just representing this business is actually really gonna work. This is gonna be the thing. I'm not gonna go get a full time job. This is now my full time job. And it was about this time period
We had never really gotten comfortable in Vancouver and we visited friends in the Bay Area in San Francisco and absolutely loved it. And so we moved to San Francisco when Max was one year old. And that's when I went to Babylist full time.
Was there any part of you that was w worried that
It was risky or did you were you feeling like no, I think we're I see that this is going somewhere.

At that point it
It didn't feel risky or scary. It was still just me, so if it didn't work out, I would be able to
just shut it down quietly, like what we had done with Languajero.
And you had hard skills, right? You could always go back and

Get a s a a job as an engineer somewhere.
Yeah, I and I had this thing to show for it. I could say, Oh, look at this thing that I built
But it actually felt like I think that year was
I'm now that I have all this time, like I'm not actually sure what I should be doing to make this successful. I'm like
stuck in my living room and I'm doing customer support.
Like, what is the right path for this next stage? And it doesn't sound like you had this sort of
Okay, now I'm gonna do I'm gonna get to this point and then I'm gonna go and raise venture money and then I'm gonna do this. Like you weren't thinking
Or were you thinking that far ahead?
I was absolutely not thinking about raising venture funding.
Mm.
didn't make sense because the business itself was making money.
So it it didn't make sense to me. It didn't feel like the hardest thing was having money to spend. Th there was like this other hardest thing, which was like, how do I make this grow?
Hm.
At this point to to get some support and a bit of money.
Uh you decided to apply to an accelerator program in the Bay Area.
uh called f five hundred startups I think. Um and you
got in, you were accepted. So how did that go? Like what what was it like to be
Uh to be part of that.
Yeah, they give you fifty thousand dollars for a percentage of your company. So it was really that first funding round.
And
Life was gonna get really busy and I was gonna drive now from San Francisco to Mountain View every single day. Yep.
And
I I've been asked the question, like, what was it like going through that program with a toddler?
And
That part was fine. It was really hard though going through the program as a solo founder.
Mm.
I I might have been the only solo founder and so it felt like I was the only person with a company of one person.
And there were
Teams with five founders.
Or at least with three founders.
And so you want to take advantage of every part of this.
program and
Everything's set up because they're kind of acting like you're three or four people.
Plus, I'm literally still doing all of the customer support for Babylist. So it felt like completely overwhelming to be doing it all myself.
And
I had
this new fifty thousand dollars. And so it was really, really clear that I had to for the first time
had to bring on new people.
And when you kinda talk about
Like w was it scary to go to it full time?
I don't think it was, but it was really scary to say.
Oh, you're now gonna join me. I have this real responsibility to you as an employee.
Ha and and what about raising money?'Cause up up until this point you hadn't raised money.
Now you're in an incubator.
So how did you go about starting to think about
Bring in some some significant money.
To start building the
You know, hiring people.
I found it a really, really, really difficult decision.
On the one hand
I really liked that I hadn't raised money. I liked that I
I didn't have investors.
Who
Had expectations.
But on the other hand...
I was like
I think if I raise money like
It's gonna really turn this into a real business.
I I really I made the decision to raise a seed round and my actual framing was like I think I will learn much more by doing this path, even if it's the more difficult path. Like it felt like
It was
Really adding
Like a new part of my job, which would be managing investors, having other people really own parts of Babylist, and really wanting it to succeed. And I also didn't know if I could raise money.
Like, it's something I had never done before.
And what it really felt like was
Like people were doing me a favor by investing in this business. It didn't feel like
I did not have the vision and the confidence to say
Лик це бізнес із гнабі адмільндор.
business.
It was really hard for me to say, and then like this is actually how big this company will get.
So how did you um
Tell me about the process I mean.
raising money's hard, right?'Cause you've got to ask people for money. Yeah. How did you
How did you handle that?
I created a pitch deck and I remember it had a slide.
That was like
Pregnant women need a lot of stuff.
That was so basic, but like is so true.
And um the core of like why this business works.
And
Described really our current traction.
Which was really impressive. People would sign up and they would actually really use the service. That was really important.
Then as part of the accelerator program, you have these demo days where you get up on stage, you pitch for five minutes, and then investors can choose to talk to you.
Um out of that
Had some real interest from um great seed investors.
And ended up raising six hundred thousand dollars.
All right, so six hundred thousand dollars and with that
you were able, presumably, to hire I think you hired about five people.
Yep, hired about five people.
The real goal was
We need to build an iPhone app.
And like that was gonna require hiring an iPhone engineer. That's
Something I didn't know how to do.
hiring our first marketer.
I think at that point actually with the five people, we all still did the customer service. I felt like it was that important.
Yeah.
So
I I read that you felt like you had a hard time. You really was really hard for you to hire. You just didn't really know
how to look for what kind of person to hire.
Yeah.
It felt so hard to say like this is the job.
that like I need to have done. This is the person and the experience they're bringing. And like here's how I'm actually gonna interview them and here's how I'm gonna convince them.
That they want to come work with me.
It's
was really difficult.
I had
During the accelerator, I brought on someone first as a
Contractor
She was a generalist, she was able to do a lot of things.
I really wanted her to join full time.
And I gave her a a job offer that she was really unhappy with. She really saw herself more as a
co founder, then an employee. And so it came down to
the amount of equity
That she was being offered, and she decided not to join Babylist.
Yeah.
I was
Devastated.
I
Remember crying in a stairwell and just feeling like oh this is now back to just me.
Like
I guess I'll just go back to work and w I
That time I think the only thing I did for the next week
was I just did customer support.
Like for the week I didn't try to do other things and it was really grounding where I was like, Well, like our
Our users are still so wonderful, they still really care.
what we're doing, I'm gonna get back out there.
So t t tell me a little bit more about
the challenges of of hiring'cause this is really hard. Like we don't
Most of us aren't
trained on on to look for and and in m in most cases on how I built this, like when people talk about
Challenges, mistakes, errors, or you know, just
it it's hiring because we we often trust our intuition or we like somebody
And uh sometimes that's not enough.
The other thing that's really hard about hiring is your
Hiring someone to do something
Better than you could do it.
Yeah. And so even evaluating can they do this better and how do I evaluate whether someone's a great marketer if I don't really understand marketing, it's incredibly difficult.
You're also probably
Even if you hire someone
How do you set them up for success in such a
early stage environment where things are really changing day to day.
And then like
I remember the very first person I
I let go.
And
It was
Agonizing. It felt
So horrible.
And that we were in this co-working space with no privacy. Like, how do I actually like have this terrible conversation with this person face to face?
I had never managed anyone in my life, and now I was managing them as the CEO of this startup.
I think I was terrible at it for
A few years.
And I ended up getting a coach.
And
The coach
She came in.
And she interviewed everyone around me.
And she gave me a seven page PDF.
And the first three and a half pages were like here's all the ways Natalie's like truly great.
At what she does.
I felt great.
N
Second three and a half pages were like here is just all of the ways that Natalie
Really needs to improve.
And
She was very goal oriented and she's like at the end of our engagement in six months, like how would it feel if we hit these three goals?
that really pertained to the feedback and the anxiety I was feeling.
And one of them was
In the moment
You'll be able to give someone
Quick.
Feedback.
Without it feeling
emotionally
Charged.
Um and I was like, oh my god, if we could do that, that would feel so good.
And I think she gave me like the most basic tools. We would meet every single week.
And
I think I actually really transitioned to like
being a like a pretty good people manager and like a pretty good leader with like these very basic skills in coaching.
Alright, so you've got this team and and
Tell me a little bit about about how the brand is growing. Are you spending money on advertising? Are you how are you getting
More and more people to become aware of it.
So yep, Babylist was continuing to grow. We were continuing to make the product better. We launched the iPhone app.
But
We actually
Didn't really figure out marketing until 2015. And then we really figured it out, and it was a very big inflection.
I think kind of in those first couple of years.
That was the one thing we needed to have work. And it was really the one thing
That
wasn't really working.
So people were using it, people were hearing about it from their friends.
And more people were using it every year.
But the the growth was pretty slow, kinda slow and steady.
But the beauty of it is that it is viral, right?'Cause once
one person uses it, well f twenty, thirty, forty, maybe more people are going to um engage with the site and buy something on it. So
It has that like inbuilt virality.
Yep, at the very beginning we would describe it as slowly viral. So thirty women would all use it, they'd all go to your baby shower.
Maybe then like two would get pregnant the next year and use Babylist. And so it was slowly viral, unlike maybe some social network where everyone's signing up every day.
And Pinterest.

really targeted like Pinterest, you optimize the site.
So that
it would work with Pinterest. How did you tell me how you did that.
Yeah.
Pinterest was really
Up and coming and then scaling with exactly our demographic.
With women
Um about the ages of women who are having babies
And
Babylist like was absolutely growing organically on Pinterest.
A really important thing happened in twenty fifteen.
And that's that Pinterest opened up their platform for advertisers.
And so it they had the Pinterest.
Promoted pins where
You could pay them like any other advertising platform and they would show your pins more often to more people.
We finally got into the program. We
Put
Money in on the first day.
And
Many people signed up.
And the key thing about Babylist is it's free to sign up.
And
hopefully three months later actual people will start coming to your registry and that's when we actually make money.
Yeah.
And the business just actually had that.
hockey stick growth.
by like actually figuring out this first paid growth platform.
Um
That year, twenty fifteen, I think you also had your second
Child as well.
Yeah, twenty fifteen I had been.
So you were living this. I mean, you were
literally creating this new model for baby registry and
You yourself, you know, needed to be a
Consumer this product.
Yeah, that's true.
Um, and I also at this point I had been so steeped in all of this. I knew all of the products that were out there.
I think I did have some good ideas for the business by going through the experience that time.
That year it was just so important. I had a team
Where the team themselves could really
continue to run the business as I took a couple of months off.
I I wonder how you were getting
I mean the the sort of the affiliate programs with Amazon and Target and others
that's you just s kind of plug that in. But then
you started to work directly with smaller vendors, right, that w that m maybe weren't at Target in Walmart and and and on Amazon.
Um w was
A lot of that traffic incoming people starting to connect with you guys saying, Hey, can you sell my stuff too?
So at this point, we were never selling stuff directly.
We
I had this really, really big decision.
Where
More and more people are using Babylist.
And we're like, what's next? Like what's the next big thing that Babylist is gonna be?
And
The really obvious choice was like we should now go into a wedding.
We're this tech company. We've created this fantastic
Baby registry.
The technology would apply to wedding registries.
Like that's what we are. We're this tech company.
And the other option was
The most valuable thing we've really created.
Is this trust and engagement
with women and parents when they're having a baby.
And
Everything we do should be really serving them in more and more ways.
This was a big decision. I think I learned a lot about weddings. I talked to a lot of people.
And really made the clear decision.
We're not doing that.
We are gonna be this company.
Everything we're gonna do is gonna be for expecting and new parents.
Which really then opened up.
So like what is babyless gonna be?
When we come back in just a moment.
Natalie takes a big risk by shifting away from affiliate marketing.
to selling inventory directly to consumers. Stay with us, I'm Guy Raz, and you're listening to How I Built This.
Hey, welcome back to How I Built This. I'm Guy Raz.
So it's around 2016, and Babylist is branching out in new directions.
The company's starting to create content.
Articles and videos about parenting and baby products.
We hired an intern.
And her job was to create this very first version of our content.
She sent out a survey.
with all of our users to say what are your most loved products.
From that she would create like the best stroller guide, the
Best car seats, the best bottles.
And at this time period if you were searching Google for these, you would just get
Sliches.
And we put them up.
They started to do well in
Google.
Particularly like the best bottles guide.
Which was been my
experience in babies arrest. It is the most confusing category, even though it's not that expensive.
And I think it was really the beginning where
Babylist was this company for
Expecting parents and new parents.
Like not just this baby registry.
One of the things that I I so b uh from what I understand, around by the end of twenty sixteen, so you're now
you know, f at least four years into this more, um
Al almost five. Um, you have tw about twenty employees at that time.
And um so you're still relatively small, but growing quickly. Eighty percent growth.
Is the m majority of your revenue coming from essentially affiliate fees?'Cause you guys are not
You didn't have like warehouses of stuff, right? This was basically you would order, but then whoever you're ordering from is is is
Sending you the product.
Yeah, we actually were
Making
Almost all of our revenue.
From a handful of retailers.
And
It felt
really risky.
To hire more people.
It felt like if any of these relationships with retailers change.
Like I'm not gonna be able to make payroll.
And very naively we were like well we can be a retailer.
Like we can actually sell this stuff.
And so this very
First test we did. It was very lean startup.
We're like, does anyone would they ever even buy from Babylist?
And so I went to Bye Bye Baby.
And bought
A bunch of products.
Like put it in the trunk of my car.
Drove back to the office.
And for all these products we would now show
Like buy it from Babylist on people's registries.
We were so naive about how hard.
It was actually gonna be
to do the logistics side of this business.
Um, our current CFO, Jocelyn, she interviewed
I think around this time, maybe
A couple months after we had really started to launch this e commerce.
And sh
We gave her a presentation to do.
And her presentation started with
Here's
all the ways e commerce is terrible and we should not be going into it.
You have to collect sales tax on like for every state.
You have to deal with returns, you have to deal with products that are being discontinued. Like she had a list of forty things.
That were all so difficult and so outside of our skill set as like a tech only company.
And
It took
Years
before it actually paid off in any way.
But then in retrospect, as our retailer relationships changed and as the company grew.
it became like the actual core part of our business model. But
In the very beginning
No one would sell to us.
They really wanted you to have a store if you were gonna sell their products.
So I would get on the phone with CEOs of companies and say, Ple like please take this bet on us.
Uh
First warehouse was our
Office.
And so between everyone's desk we had bassinets.
Piled to the ceiling so you couldn't see anyone.
That business just like
It was so painful to grow. It's so
much harder to do than digital. Like with code you can fix a bug and things work.
В актуа фізика продакс.
You need many trucks and people to move those products. Like it's actually so difficult to fix when things are going wrong. But why did you decide to to shift to in into that direct I mean, essentially you were gonna warehouse products, you were gonna hold
Inventory
Mm-hmm. Right, which is risky. And I guess is it it's because
In the long term the margins.

Yeah, so this original business model was affiliate.
And it was a
It was actually very good.
business model, it was just so risky.
And so the decision to actually
Do
this e-commerce ourselves and really change what the business was gonna look like.
had to do with controlling our own destiny.
So as you start to make that transition, when I mean'cause I I think today you still, of course, don't
Right, you don't all all not all the things you sell are you're holding in warehouses, but
What's the sort of the break, the percentage breakdown is most of the stuff that you sell
Oh that's sold through Baby List.
held in warehouses that you guys control?
It's really, really important.
for our user experience that we are
Universal.
And we do something no one else does, which is
When
We sell a product and Target sells the product, we're actually gonna show Target as a buying option, just like we show Babylist as a buying option.
People absolutely love that. It's why they actually use Babylist.
We don't share the split, but the largest part of our revenue is absolutely us actually selling the the products we sell as an e commerce retailer.
So
you've got this this sort of transition, right, to to this this model or
kind of a hybrid model, and then Covid hits.
And
This is really when you're starting to d sell directly.
Tell me about Covid because because on the one hand
I would think that's the thing.
I mean, it's scary, but on the other hand, I would think that maybe
This would have been a huge moment for Babylist that all of a sudden people are at home
And people still need to
People are still getting pregnant. There's still baby registries. There might not be baby showers in person.
But people
Still wanna support
a a friend who's expecting.
When
Covid hit.
I had been running the business for nine years.
I felt like I was the world expert.
In baby showers and baby registries.
And I actually had no idea what people were gonna do.
Because
Baby showers, it's a
in person party with a vulnerable population.
And I actually was not sure that people would need baby registries without a baby shower.
I thought that this actually would decimate our business for potentially years.
That
March all of our numbers completely plummeted.
Um we implemented a hiring freeze.
But
Then exactly what you're saying.
happened.
There was this shift to online.
People.
Wanted to help you more.
They want like if you were the person in the circle of friends having a baby right now, people were like more generous to send you gifts. Now they were buying them all online.
Our our business actually grew more than we had expected that year.
Yeah, and you guys were sort of on a roll at this point, right? Because I think the next year, which which is twenty twenty one
Uh you were able to raise a substantial amount of money.
in another fundraising round, like forty million dollars.
Yeah, so again, just like our seed round, I like was not sure.
I was gonna be able to do this, but it was it was the right time. It felt like a really important maturation and like inflection point for the business.
So created a pitch deck.
And this was all over Zoom.
Because it was this
Covid time period.
So without meeting anyone, I would meet them over Zoom and I would give them the pitch.
And
They would all start with no.
They would
The investors would be like, We don't
it would be a really soft note. Like we don't really ever invest in anyone. We're meeting for the first time
Um, but it'd be great to hear what you're up to.
I ordered the pitch in this very specific way that was like the very first slide was our revenue. And I'd be like, Here's our revenue. In that year it was gonna be two hundred fifty million dollars.
And they'd be like, Oh no, you mean this is your your GMV, which is your gross merchandise.
value like what you're actually sending to other retailers for their sales.
And I was like, no, this is our revenue.
And they would lean in
It'd be like, Oh, I have to get my partner on the call.
And so the the process it absolutely had
rejection. But the investor we eventually went with um
was actually its nor west venture partners
And I've seen companies raise
Too much money.
And I think part of it is this
wishful thinking of like how is the business now gonna grow?
And with Norwest, we were like very aligned in like what are our expectations for how the
Business is gonna grow.
It really forced us to
Really grow up, get serious about
Our finances
Saying what we're gonna do and then doing it.
So

the vision for I mean, you've got obviously registry is still the main
Thing that you do.
But there are all these other sort of verticals and and revenue streams that you've
created in the last few years. One is like um
helping people get bab uh breast pumps, which I think is is um
insurance b some insurance covers it and some cases it's Medicaid if people are eligible for Medicaid. So that's a revenue that's a a new
vertical that you offer.
And give give me a sense of of what the sort of vision of what you o what you want Babylist to be.
moving forward.
Yeah, I think it's actually all about making families.
Better families.
Like helping
Grandma, be a better grandma, helping famili stay more connected.
Like
That's truly
the babylist that we're building.
Which feels very
Meaningful.
In twenty nineteen
I was
Eight years into building the company.
And it was the first time I really saw like
how big this could be. It was the first time I actually thought this could be a billion dollar.
Business.
And then in twenty twenty two, we really started doing the thing you're naming.
Which is like
What else can we?
Offer new family new parents.
And so us getting you your breast pump for free, that's what we call babylist health.
So
I think there's this opportunity for us to really be a health platform.
When you're having a baby
Like health is the thing you care about.
Like much more than this stuff.
All of the health and wellness aspects to that time period.
Yeah, that's definitely where we're leaning in.
When you think about um, you know, where you are now and and and the journey you took you started this in twenty
Eleven basically.
Um
And it's you know, I think it's
one of the biggest baby registry sites, if not the biggest, in the US. Um
How mu how much of that journey do you attribute to the work you put on the grind and how much do you think had to do with just luck and timing?
I think the initial idea and like the lessons I had learned and me being able to code.
Um, all of this kinda coming together when I myself was having a baby is like
Total luck.
I think where though the grind comes in
I think it's been a lot of really hard work.
Okay.
I've had to put in to really make the transition from founder to CEO.
And I think I really have put in that work, and I don't I don't think that that work
It is like luck. I actually think that has been like written hard work.
That's Natalie Gordon, founder and CEO of Baby List. By the way, you can see photographs of their entire team on the company website, and if you move the cursor over each photo,
You will see what each executive looked like?
As a baby.
Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And if you're interested in insights, ideas, and lessons from some of the world's greatest entrepreneurs, please sign up for my newsletter.
at gyros.com or on substack.
This episode was produced by Carrie Thompson with music composed by Ramptina Rablui. It was edited by Neva Grant with research help from Carla Estevez.
Our engineers were Patrick Murray and Jimmy Keeley. Our production staff also includes Alex Chung, Elaine Coates, Casey Herman, JC Howard, Chris Massini, Sam Paulson, Ramel Wood, and Andrea Bruce.
I'm Guy Raz, and you've been listening to how I built this and don't stop the podcast just yet.
Пиз.
You're about to hear an amazing small business story that you
don't want to miss.
This segment is presented by American Express.
With a business platinum membership?
The best
Just got
Even better.
And this week's story starts back in 2009, when a former Dell engineer named Peter Mann set out to solve a very personal problem.
My son struggled with asthma when he was an infant. He would have an asthma attack to where he would change colors and not breathe and it was really distressing not being able to do much for him.
as he, you know, was a little bit older, more middle school age, he would a have an asthma attack just sitting on the couch.
Peter learned that one of the big triggers for those asthma attacks were allergens and other particles in the air.
So he started looking into air purifiers, and he was pretty underwhelmed at what he found.
It's almost like bulletin board looking terrible websites. And some of them are selling these same products with just different logos on their product.
Peter came from the world of tech.
So he knew how to develop a product and market it online.
And he thought, why not just do this myself?
So we have to flight to Hong Kong.
negotiated a deal with a manufacturer.
Tested some samples.
And about six months later
Peter's own air purifier, which he called Oransi.
arrived at his door. I remember opening it and plugging it in and turning it on, and within about fifteen or twenty minutes the air
Just felt different.
And his son's scary middle of the night asthma attacks?
They went away.
It wasn't waking him up, which wasn't waking us up. It was just a huge win-win.
Customers love the product too.
and Aransi's sales grew steadily over the next decade.
When covet hit
Demand for Peter's air purifiers skyrocketed.
But so did
Competition.
And it just got to the point where it was oversaturated.
So Peter decided to pivot.
and focus instead on the technology inside the device, specifically the electric motor.
He merged with a partner.
bought a huge factory in Virginia.
and built an air purifier in-house from scratch as a way to validate the technology.
Now Peter's setting his sights on a much bigger market.
with a seemingly endless demand for cool, clean air.
AI data centers.
Now around the same time he made that pivot, something happened in Peter's personal life.
that completely changed at his business and himself.
In twenty twenty-two, my wife was watching
CBS morning show. In in April they do
Profiles of people that are autistic.
And she's like, Oh, you need to see this And I watched it and I was like, Oh my gosh, I didn't know I like
Now so many things make sense.
Peter thought, that's me.
the hyperfocus, the ability to build systems,
And some of the social challenges he've experienced as well.
Sure enough.
At age fifty five.
was diagnosed with autism.
I did a LinkedIn post and I said, you know, hey, I was recently diagnosed if anyone that's autistic that you know is going through interviews or
navigating the workplace wants to talk, I'd be happy to talk and
Wow.
I had video calls with dozens of autistic adults.
Probably 75% of them were just struggling with the interview process.
So he's spending more time thinking about ways his company can set people up like him.
for success.
This kinda hit me like my son's asthma did.
By the way, the son whose asthma attacks inspired a Ronse to begin with?
Peter says, he's doing great. She seems to have largely outgrown it. He still has an air purifier, uh these years later.
That's Peter Mann, the founder and CEO of the Air Purifier and now Electric Motor Company.
A Rancy.
His small business spotlight was presented by American Express.
To build a business like no other, you need a card like no other.
There's nothing like business platinum.