đź’ˇ How It Started
In October 2018 my co-founder Emily and I came up with the idea for Cherry. We moved to San Francisco to go through Y Combinator’s W19 batch. Shortly after, we raised a $700k+ angel round we used to build and launch Cherry V1. Our product solved the engagement problem with employee perks/benefits (historically a 7% engagement rate was ~90% on Cherry). Now, after an unsuccessful attempt to raise a Seed round we’re closing down and sharing our learnings.
This article is part 1in a 5part series.
In October 2018, I quit my job to start a company with my sister.
Growing up together, Emily and I always had parallel interests that led us to entrepreneurship in one way or another.
As early as 2009 (pre-instagram), Emily launched a fashion blog. The hype she drew to her posts was enough to catch the attention of prominent designers who invited her to Official NYFW Shows at Bryant Park.
I was always eager to turn my skills and interests into business opportunities, too. In my last two years of college, I launched a social media consulting service for startups & called it GRO Media — my initials.
Emily and I would each pursue these side projects and part-time hustles throughout the years — but we were never able to commit 100% to them. Emily had a full-time job, and I was a full-time student. But every few weeks we’d see each other to exchange our latest ideas. We’d try to help each other “scale things up”. The first project we worked on as a team was a website for GRO Media when my client list started to grow. We dreamed about starting a business together, but it remained a background thought.
In the Summer of 2018, that would finally change.
Emily and I reached peak-boiling-point-restlessness in our 9 to 5 lives. We were craving a bigger impact.
“I want to open a yoga studio. I’m serious.” Emily said to me one night as we walked down Broadway. “If these people can do it, why can’t we? I think we would be good at it. Seriously.” I let my mind wander to the idea — still believing it was more of a fantasy than anything — but we ended up having a great conversation. How would our studio be different? What kind of branding and messaging would we use to stand out? What were the fun growth hacks we would try? How could we expand revenue over time? Etc, etc.
I walked away from the conversation with a new perspective. The next time we saw each other, it was me convincing Emily that we needed to start a software business. We had the right skills between the two of us: her an engineer, and me on sales. The timing would never be better. We needed to do it, and we needed to start right then.
Emily agreed; and so from that day on, we spent nights and weekends working on startup ideas. We bulldozed through several bad ones (a chatbot for teenagers with food allergies called TastyText! a DTC personalized perfume called Note to Self! Or what about a new online grocery store where you can filter by ingredient?). We enrolled in YC’s Startup School. Surrounding every bad idea, we also started building landing pages and prototypes, sometimes resorting to posting flyers and stickers around NYU campus. This was a super fun time.
We loved thinking of new business ideas and doing scrappy experiments trying to get positive or negative signal for them. But we were having trouble finding something with product-market or founder-market fit. Sure, we could get excited about an idea — but would anyone else? Enough to pay for it? We always landed on “no”. Then finally, as Summer was winding down, things changed again.
A friend of mine was having challenges with his small, remote team that he would often vent to me about. Recently, he had given each of his teammates a device that would reliably connect them to WiFi no matter where in the world they were. It was like he had infused them with superpowers, and he loved the idea of finding more special hacks to “supercharge” people. Having spent so much time enveloped in the DTC space with Emily, I started firing off ideas: “What about giving them ClassPass? Or what about Urban Sitter, for the employees with kids? What about Postmates Premium, so everyone can order lunch? They can use those services from anywhere.”
When Emily joined the conversation, we talked about the perks our jobs provided for us and whether or not we were actually getting any value or “superpowers” out of them. Most often we saw that the perks companies offered were just wasting money. It also felt like HR software needed disruption. The DTC-feel could be applied to the HR space to make make it employee-owned. We had gone through tons of ideas leading up to this point, but something felt different about this one. Over the next few weeks we spoke to as many HR leaders as we could, and slowly the idea for Cherry started to evolve:
Cherry would be a pre-funded corporate card that would let employees choose their own perks from a curated marketplace. An employee would use Cherry to CitiBike to work, set up dog walking services through Wag, workout through ClassPass, hire a nany on UrbanSitter and Uber home at night. These would be modern superpowers covered by your company to help you focus on work, stress-free.
The most encouraging thing for us was that no other startups seemed to be innovating in this space and so the market was ours to own.
With so many positive signals, we were able to secure our first investment: $100K from the friend we were solving this problem for. And with Startup School over, we applied to YC W19 on the night of the deadline.
A week later, we made the leap to quit our jobs. After years of side-hustles and passion projects: we were finally dedicated full time to a business of our own.
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