The essence of adapting a startup.
In the episode of the Tough Things First podcast, ZinnStarter Fellow Sameer Saran and ParkStash president discusses the new opportunities with their company, market and ask Ray some question about next steps.
Ray Zinn: Good to meet with you again on one of our exciting podcasts. With me today, I have Sameer Saran who has a very unique experience, and I will briefly explain it to you. A few years ago, I started a program called ZinnStarter, which is a university program to help entrepreneurs become better capable of starting a business before they actually have to go into business. The purpose of ZinnStarter is a funding program to help, and if their project is accepted and is viable, then we would provide some funding to help them start their business while they’re still in school, and so they can learn how to do this before they actually have to get out into the real world.
Sameer, I had the privilege of working with him at San Jose State University. He had this great idea. It’s called ParkStash. It’s an interesting little company, that idea he had. I’ll let Sameer explain it to you. Then, of course, I’m going to ask him some questions about how ZinnStarter has helped him actually in preparing him to be able to run a company before he actually has to get out in the real world and do it. Sameer, welcome. Happy to have you with us today on our program.
Sameer Saran: Thank you, Ray. It’s a pleasure to be here. Thanks a lot for inviting me.
Ray Zinn: Sure. Okay. Sameer, you were one of the ones that was accepted into the ZinnStarter program. Why don’t you tell us a little bit about how that worked and how it’s helped you and now your little business called ParkStash?
Sameer Saran: Sure. When we started ParkStash and we were still very early and that’s when we got accepted in the ZinnStarter 2017 program at SJSU, it really helped me develop the company from just an idea into a product and finally selling it to my earliest customers in SJSU. The best part of the ZinnStarter program was I got to meet with founders right from SJSU who were budding entrepreneurs like me. I got their advice on my product, on my business side and I got to meet with Ray, who gave me some really nice advice on how to think about the numbers side of the business, which I was not really sure about why I’m doing it. It really helped me shape my ideas of how to take this business forward and finally launch it to a great launch that we have now in Fall 2019 at SJSU.
Ray Zinn: Okay. Before we jump into actually what your company is, ParkStash is, how do you see ZinnStarter helping other universities? How do you see that helping students like yourself learn how to start and run a business before you actually have to do such?
Sameer Saran: Ray, like I said, if I’m a student, I’m a first time entrepreneur right now, so I don’t really know how I will get out into the world and face the challenges. A program like ZinnStarter helps you realize what the challenges you will be facing as you grow your business from just a simple idea to a huge business and to help to implement your vision to your real world, and solve your real world problems. I think for entrepreneurs like us, it is really a great program.
Ray Zinn: Okay. What kind of problems did you run into when you started ParkStash?
Sameer Saran: When we started ParkStash, one of the earliest problems we had was there were two problems. One was regarding the product and one was on the business side. Those were actually two minor problems that I had, and came to this point. The first was, we started with an idea that we would have sensors in parking garages, so that people can get the count of the sensors and go in. Then, when we really [inaudible 00:04:47], it didn’t really happen to see … It made me realize that this cannot be a viable business because there are so many people doing the same thing and ParkStash cannot really grow further out from SJSU.
Then, we pivoted to the concept of Airbnb of parking, which is getting more drivers and unused parking spaces and utilizing them for drivers to find the space to park. In this whole transition, ZinnStarter helped me a lot in realizing that this is what you should do and the next point ess we were launching at event centers and the problem with launching at event centers was you get revenue just once or twice a month. For me, it was hard to realize that it’s hard to make a recurring revenue.
When I preach to you, you were large into the numbers, and I’d realize that, “Hey, I need something that would generate recurring revenue for this company.” I pivoted from not going to event centers, but launching right here in SJSU because I know students would need a parking space every single day.
Ray Zinn: The purpose of ParkStash is really to help these high density areas find parking in areas where there’s limited parking. You come up with a unique concept of actually renting people’s driveway, or other parking areas and businesses and churches and so forth, so that you actually can provide additional parking for people who are in a high density area. Even business who have limited parking are going quickly, but don’t want to move their company to another location just to get more space. This concept is really to help companies and students and people who are living in high density areas to get parking for certain period of times. Usually, three to four hours at least as opposed just for half hour or 15 minutes. This is a parking idea for, I guess somewhat long term parking and in a high density area. Is that correct, Sameer?
Sameer Saran: That’s correct, Ray. I would like to mention when we launched this idea, it was just about getting drivers from the home owners, but then we realized with ParkStash there, I walked down and I saw these churches with empty parking lots that were just used on Sundays. I saw restaurants in Downtown San Jose with empty parking lots. Hotels and businesses, and recent study shown was 30% of parking spaces in new apartment buildings are going unused. Imagine the impact. Would you want to build more living spaces, more parks, and recreation areas or would you want to build more parking garages? You have to take into account that building one space in a multilayered garage will cost you around $34,000. Why would you spend millions if ParkStash can bring you parking spaces at dollar zero in construction cost? We partnered up with [inaudible 00:08:00] Methodist Church, [inaudible 00:08:01] Hotel in San Jose, and we have now all kinds of spaces that were just underutilized.
Ray Zinn: Well, that’s great. I love the idea. Now, to your challenges, how do you grow your business? How do you monetize it, so that it becomes a viable way to make a living? You had to look at a lot of different issues. You had to look at cash flow. You had to look at how do you grow your business? How do you hire people? Number of other issues that face anybody that wants to start their own business. Let’s go back really briefly here, Sameer. What kind of challenges did you see as you started thinking about a business? So that our listeners can get an idea. Your thought process is you had to come up with the solutions for problems that you faced.
Sameer Saran: The first problem that we faced was how to get our supply side. We know this is a two-sided market. It’s like a marketplace, just like Uber or Airbnb. I need to get the supply which is the parking spaces and then the demand to match it because if the supply does not meet demand, then the supply goes away and we have a low retention rate. One of these earliest challenges was how to build more supply as fast as possible? That is how we did it as I had explained. With drivers, I used to knock on doors for two hours and I just used to get one space per driver, but when I started calling up churches and restaurants, they now give me 22 spaces in just after two or three calls. Now, I have an idea of how I could scale my whole supply acquisition.
The other unique challenge was landowners were asking like, “How do they know that the person leaving would leave at the correct time or not?” That is a problem, which a lot of landowners face of how do they really make sure that the lot is enclosed, and no persons are overstaying in their spaces? With ParkStash, we again started thinking quickly of how to resolve this? [crosstalk 00:10:08].
Ray Zinn: Do you have to have parking officers that will go around and mark their tires or put a clamp on their tires or something if they overstay their parking? Just like if you’re downtown and you run your meter out.
Sameer Saran: Yeah. Ray, what we decided was if you bring in parking lot attendants, that would actually increase the operation cost of our business. We made a simple software solution where with our app, we know that this car is still parked in that space and it’s overtime. We flag that car, we automatically apply penalty, and misuse fee and we send a notification to the homeowner or the landowner that, “Hey, this care is still parked there. After three overstay warnings, we get that car towed away.
Ray Zinn: Okay.
Sameer Saran: Once you tow away the car, they would never do it again because the cost is so high. Right?
Ray Zinn: What kind of challenges do you think a new business person is going to … A young person wants to start their own company, what kind of things do they have to be aware of from your experience?
Sameer Saran: I would say really, the first point that comes to mind is pure passion and perseverance. At this point, I have made so many [inaudible 00:11:28] to my product both on product and business side. Sometimes I feel like, “Hey, is this ever going to work? Is this ever going to become a big business or not?” But if you keep going and you never lose your passion and perseverance, you are definitely going to achieve that goal one day, and that is what happened with us, Ray. In the last four days in Fall launch at SJSU, we have 4,000 people signing up on our app and 100% of the parking spaces near SJSU are completely sold out. We don’t even have a single space left where you can do [inaudible 00:12:01].
Ray Zinn: Okay. That shows you that your idea is a good one, but what kind of challenges did … You said you had challenges growing your revenue through finding more spaces to lease out. How about cash flow? How did you manage your cash?
Sameer Saran: Yeah. Initially, we were actually in a really negative cash flow. I was just living on my credit cards and just spending all the marketing to my credit cards and programs like ZinnStarter helped a lot in that early seed stage money that I needed help with, but as a bootstrapping entrepreneur, you find really scrappy ways of doing things. Right? Instead of working with SJSU was we actually partnered up with university itself. We found a way to convince them that ParkStash app can be a huge boom to the university and what that did is university is now promoting our app all across the campus. I was spending a lot of money on Facebook and Instagram. I didn’t spend a single marketing dime here in our Fall launch, and that would always help me a lot because I’m not spending anything and I am getting some revenue into my company now.
As a first time entrepreneur, you have to really think how can you keep bootstrapping your company? Especially in the initial times of negative cash flow, that’s one of the question I had also for you. That when nothing is really working out, how do you keep your company afloat and keeping it going?
Ray Zinn: That’s the challenge that all businesses face is how to keep yourself afloat whether you’re a large multi-national corporation or whether you’re just a fellow like yourself, Sameer that’s just getting started in business? It’s always that need to manage your cash and make sure that your gazintas are greater than your [inaudible 00:13:56] as they say, so you want to make sure your cash is king and you watch how you spend every penny that you have. Then, of course, pivoting. You have to be able to pivot. When you start hitting one wall, you got to be able to go around the wall or find another exit. I think you did that with ParkStash when you just decide to expand from just a simple maximizing a garage to looking for other parking spaces like churches and restaurants.
I like your thought about passion. Passion is really the driving force of all entrepreneurs. You have to have that desire to see yourself succeed and then, of course, you have to have that ability to see beyond those obstacles. These obstacles don’t become barriers, they just become little challenges that you have to overcome. Seeing challenges and little obstacles is just opportunities to succeed as opposed to barriers some people look at obstacles as barriers that you can’t get around but being able to pivot, being able to come up with better ideas to maximize your revenue is really the heart of a good enterprise.
Of course, you have to be risk averse. In other words, you can’t say, “Oh, man. I don’t know if I can make my credit card payment,” or, “Hope I can find another solution for my cash problem.” Maybe going to the bank or whatever. You got to have that ability to not be afraid, and not succumbing to that fear factor. I’m glad you were able to go from ZinnStarter to your littler business now. Any other thoughts that you might have, Sameer, for our listeners regarding … You’re a young guy. You’re in your 20s, and you’ve taken this little idea you had in college and you’ve now managed to put a little business together. What other thoughts do you have for our listeners?
Sameer Saran: I absolutely agree 100% with what you said earlier, Ray, about the whole … Being risk averse, also I think is a very essential trait of an enterprise. I was in a lot of credit card debt and that itself put a lot of pressure on me to perform and get some results from my company. Otherwise, what would happen to me? That was a little bit of fear, but that was the extreme pressure to go there and perform and get things done. That is actually also something that motivated me to go out there and get those spaces anyhow with doing one on one sales or doing anything I can. The other part I want to mention is the Silicon Valley culture of raising money. Initially, I was also attracted to it, “Hey, let’s go and raise money.” Now, I believe after I’ve launched this business to this stage, that the perfect way to raise money is by selling your product. If you keep selling your product, you won’t ever need to raise money. That is what I aim to achieve here with ParkStash.
Ray Zinn: Well, you’ve learned well, Sameer, and I think you could franchise this business. This thing could go nationwide, maybe even worldwide, and so I hope that you’re able to find a way.
Sameer Saran: Yeah. [inaudible 00:17:39], Ray. I would like to also mention that we started getting calls from Rhode Island, from Lake Tahoe, Incline Village, and from Notre Dame University and we had people emailing us that, “Hey, we want to promote your product. Do you have a program like franchising an affiliate program?” With ParkStash, I launched this affiliate program where if you go out and promote our product in any area, and if you get a small spaces and drivers, then you take 10% of profit on every booking and that is how we’re expanding to other locations. I think that can be a great viable solution. Like you said, franchising ParkStash to other areas.
Ray Zinn: Well, franchising is [inaudible 00:18:20] than just charging them or giving them a commission. It’s also [inaudible 00:18:26] set up a business. In other words, you can set up a company that just has franchising skills. In other words, you’re going to help them set up ParkStash in some other high density area, whether it be in Notre Dame or Yale or whatever because every school suffers from parking, especially during the critical school year. I think you got a franchising opportunity here that you got to look at. Any case, well, thank you so much for joining us today, Sameer. It’s been a delight for me to work with you when you were at San Jose State University, and being what we call a ZinnStarter fellow, it just makes me proud to know that we were able to help you get your little business going, and learn how to run a business while you were still in school.
Sameer Saran: I think it was an honor for me to get into this type of program, and get all your feedback that I would not have not got by myself.
Ray Zinn: Well listen, that’s what ZinnStarter all about is to really help young budding entrepreneurs learn how to run a business before they have to get out there and do it themselves. Unfortunately, 90% of all startups fail within the first three years and we hope to change that with ZinnStarter. Again, thanks Sameer. Appreciate you joining us today. How can they find more about ParkStash anywhere? Where can they go, Sameer?
Sameer Saran: We have our website, it’s findparkstash.com, and it has all the information including the link to our app. Our app is available on app store and Google Play store. The name is ParkStash and if you search Airbnb of parking, we will be the first one to show up.
Ray Zinn: Okay. Oh, boy. That’s really great. ParkStash is a new Bnb, Airbnb, whatever it is. It’s going to be another great franchise, I think. All right, buddy. Thank you for joining us and if you wan to learn more about Sameer’s company, ParkStash, please go to his website, parkstash.com. Again, if you have any questions that you’d like discussed on Tough Things First, please send us an email on Tough Things First. If you want to learn more about ZinnStarter, you can look online on our website, Tough Things First, and please get my book, which also called Tough Things First at your famous book retailer and also my new book, Zen of Zinn which is a good motivational book for you if you need to get pumped up in the morning before you head out the door. Thank you again, Sameer, and please join us again in our next podcast.
Sameer Saran: Thanks a lot, Ray.