What Shutting Down Your Startup Feels Like - Avni Patel Thompson of Poppy with Kat Manalac

TL;DR

Avni Patel Thompson, founder and CEO of Poppy, discusses the challenges the company faced in the childcare industry and the decision to shut it down, while also expressing optimism for future endeavors.

Transcript

cat you haven't been on the podcast in a while why don't you introduce yourself before we talk about omni for an hour well so I'm captain Alec I'm one of the partners at YC I I work a lot on outreach to applicants so everything we do with an external focus at Y Combinator and I help a lot of companies in the batch with their launches I had the plea... Read More

Key Insights

• 🙋 Captain Alec: Works on outreach to applicants at Y Combinator and helps companies in the batch with their launches.
• 🎙 Avni Patel Thompson: Founder and CEO of Poppy, a platform connecting childcare providers with families in need of childcare.
• 💡 Economics of child care: Child care is a margin-challenged industry due to the high cost for parents and the need to pay caregivers a fair wage.
• 💼 Challenges of scaling: Scaling a child care platform is challenging due to the changing dynamics as the business grows, such as an increase in bookings and caregivers.
• 🧪 Experimentation: Poppy tested various strategies to make the platform more scalable, including a membership model and partnerships with local businesses.
• 👧 Different types of caregivers: Poppy aimed to connect families with a range of caregivers, providing children with exposure to different skills and professions.
• 💔 Shutting down Poppy: After multiple experiments and considerations, Avni decided to shut down Poppy due to the challenging economics and inability to scale.
• 💼 Communicating with investors: Avni had open and transparent communication with investors throughout Poppy's journey, which made the decision to shut down more manageable and understood.
• 🌱 Next steps: Avni is still passionate about solving problems for parents, especially working mothers, and is exploring possibilities and learning from diverse experiences before embarking on her next venture.

Questions & Answers

Q: What were the main challenges Avni Patel Thompson identified in scaling Poppy in the childcare industry?

Avni Patel Thompson recognized the inherent margin challenges in the childcare industry, where parents have a limited budget for childcare and caregivers need to make a reasonable income. This made it difficult to find a profitable margin as a company that facilitated these connections.

Q: How did Avni Patel Thompson's understanding of the childcare industry change as Poppy grew in scale?

Avni realized that the dynamics of the industry changed as Poppy handled larger volumes of bookings. Scaling up to 500 bookings per week required working with hundreds of caregivers and thousands of families, which made the personal connections and knowledge of each caregiver and family more challenging to maintain.

Q: What experiments did Poppy conduct to test the viability of the business model?

Poppy tested various strategies, such as a membership model, transaction revenue, and the "bring back brunch" initiative. They also focused on finding and vetting talented individuals within communities who could provide childcare services.

Q: How did Avni Patel Thompson communicate the decision to shut down Poppy to investors, employees, and users?

Avni maintained transparency throughout the process by providing monthly investor updates and openly discussing the challenges and financial situation of the company. She had conversations with investors, trusted team members, and eventually the entire team to explain her decision. She also ensured that users were informed of the shutdown and provided alternative ways for them to connect with caregivers.

Summary & Key Takeaways

• Avni Patel Thompson reflects on her experience as the founder and CEO of Poppy, a childcare service, and the decision to shut it down after three and a half years.

• She explains the challenges of scaling a business in the childcare industry and the constraints of the economics involved.

• Avni discusses the experiments and learnings from Poppy that made her optimistic about the space and her passion for solving problems for working mothers.