Move Loot co-founders power start-up's growth

When Bill Bobbitt decided to build a marketplace for buying and selling used furniture, he knew he couldn't do it alone.

The multi-dimensional business, now called Move Loot, required marketing, branding and design. It called for a warehouse for storing used furniture, trucks to pick up and deliver the items and drivers to interact with customers. And it needed a sophisticated web platform to list the items, process transactions, manage sales and logistics.

As CEO, he'd develop strategy, set goals and raise money to fund the business. But launching the company would require more than a single co-founder.

A year after Move Loot began handling used furniture sales in San Francisco, the venture-backed start-up expands its service Nov. 17 to Charlotte. Two months ago, it opened in Raleigh-Durham. A key reason for its speedy expansion outside Silicon Valley is a team of four friends divvying up responsibilities and sharing in every success and setback.

Teams of four or more are uncommon in start-ups. The drawbacks are higher overhead when companies are conserving cash and not yet generating money. Larger teams can lack focus, because more jobs must be created than are typically needed at the early stage.

Venture capitalists often advise against founding a company alone. But they aren't keen on more than three co-founders either.

"You get into organizational problems when you have too large a group of deciders," says Aaron Harris, a partner at the Silicon Valley venture fund and accelerator Y Combinator, which invested in Move Loot this year.

Yet, there are outliers. Chinese stock market star Alibaba began with 18 founders, and PayPal, five.

"There is no universal rule here, because really successful start-ups are almost by definition incredibly unique," Harris says.

His question is why and how?

Bobbitt had a big vision for the company — to keep bulky furniture out of landfills and provide a convenience to people making moves — and knew he'd need to tackle all aspects of the business at once. His friends happened to be skilled in the areas he wasn't. Jenny Morrill, now chief marketing officer, previously worked in e-commerce at Anthropologie and at a marketing agency where the main client was Pottery Barn.

Chief technology officer Ryan Smith had deep knowledge of technology platforms. And Shruti Shah, COO, had a background in logistics consulting and managed teams at Teach for America.

It took planning to get them all on the same page. The four agreed to equal shares of the business. They committed to constructively battle out the big decisions until they agreed, and to defer to the person who knows the most about smaller, more specialized issues. They agreed to continue to cultivate their friendships as they built the business.

A team of four proved beneficial at the earliest stages, and a draw for investors.

"You have more brain power, more manual power. You can get more done faster," Bobbitt says. But with sales growing 40% month-over-month since the initial launch, nurturing has also been necessary.

The founding team has two extroverts and two introverts — recruiting techniques were debated at length to be sure there wasn't bias toward one type of candidate.

The founders now reserve time each week for creative brainstorming (appeasing the extroverts) and tactical planning (for the introverts). And they often meet for weekend brunches to catch up on personal issues and casually discuss the business.

One of those brunches in September led to plans for Charlotte and a model for city expansion based on the distribution strategy FedEx and UPS deploy for Amazon deliveries.

"It gives us the potential to create a national network of sustainable commerce in a way that no one has ever built before," Bobbitt says.

The idea came from the creative energy of the large and impassioned team.

But there are some cautions for start-ups considering large founding teams.

Harris recommends setting clearly defined rules for engagement during decision-making.

No one should have the exact same job. Everything should be in writing, and updated as the business changes. And co-founders should typically have equal shares.

A large founding team also needs the right person as CEO. He or she should be able to mediate disputes among the founders, while keeping everyone's respect. And perhaps most importantly, Harris says, the CEO should make everyone feel that they are moving in the right direction.

"The sign of a good leader is bringing in people who are smarter than you to do the things you don't know how to do," Bobbitt says. "That was my first objective."

Baverman can be reached via e-mail at lbaverman@gmail.com or Twitter @laurabaverman.