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Why we’re closing Walnut

133 points by Sujan 9y ago

kgwgk 9y ago
In short: “What we found was that while many people complain about their moving companies, even the highest income consumers would not pay for a better service. Our mistake was conflating desire for a better product with desire to pay more for a better product”
- slackingoff2017 9y ago
  There's several companies dedicated to moving ultra high net worth individuals. It's hard to believe there's no market between that and the cheapest options. Sounds like their marketing wasn't great or they ran out of runway.
  - jimmywanger 9y ago
    He mentions that in the article. I'll quote the relavant section at the end, but my when money is no object, you usually go by recommendation of friends. At that high of a premium, would you go to a team with good marketing copy, or somebody who has already moved your equally rich friend with superlative service? FTA: We considered our second option more seriously. High-end customers understood our value proposition, and we believe they would be willing to pay for it. But as we dug deeper, we realized turning Walnut into a premium service had too many challenges along the way. The strategy would shrink the serviceable market, and we would also have to be excellent at finding a smaller customer base at the exact moment they’re looking for movers. Even if we solved the marketing challenges, our moving service would also have to meet new, higher expectations. Our concern was whether we could ever deliver enough value in this compulsory experience to justify the substantially higher price.
    - jblow 9y ago
      Hahahaha So they wanted to claim to offer a high-quality product, but don't think they can actually do that. Startup culture is so terrible.
      - Illniyar 9y ago
        As I understand it, they wanted to offer a high-quality product at high-quality product prices, however if they moved to service the very rich they'll need to offer a luxury product, which would obviously require luxury product price. Consider it the difference between an iPhone and a 24 caret gold plated iPhone elite (which apparently exists)
        notyourday 9y ago
        No, what they wanted to do is use a sharpie to fix the the defect on a Louis Vuitton bag from Canal St and offer it to an NYU student from Taiwan as a real thing without realizing that the said NYU student's family has hundreds of real bags.
        jimmywanger 9y ago
        No, to continue your analogy, they wanted to be the Nordstrom of the moving world, not the Saks Fifth Avenue, not knowing that not enough people would use the high-end but not quite luxury service to make it worth their while.
        notyourday 9y ago
        That's the problem: Saks Fifth Ave and Nordstrom are in the exactly same market. The upmarket is Bergdorf Goodman.
        jimmywanger 9y ago
        I suppose that's the problem, which he alludes to in his article. Basically we go shopping a lot (well a lot of people do) that's why there's so much market differentiation. JC Penny and Macy's and Nordstrom and Saks and Bergdorf Goodman all offer a slightly different experience tailored to different budgets, and the stratification is very clear. A truly upmarket experience is a concierge who knows your tastes and scours the stores to bring you what he think you'd like to wear. Just like any sort of suit you can buy in a store is orders less luxurious than a bespoke suit you get made for you on Saville Row.
  - underwoodley 9y ago
    The service they offer has existed for a long time. Rich people pay top dollar to get good, professional movers who take care of their stuff and don't add to the stress of moving. This company tried to provide this service, but at a lower price, so low that they couldn't be profitable. Unfortunately, they couldn't cover their labor costs this way. Movers who will show up, take good care of the customer's stuff, are courteous and don't take tips clearly cost more than typical movers who simply provide a pair of strong arms to lift stuff up and down stairs and onto trucks, but don't give a shit about your brand. Normal people use normal moving services who provide a so-so service not because they are stupid but because they don't have the money to spend on premium movers. Obviously customers who got a heavily discounted service gave them five stars and said they would recommend them. Presumably they tried to interest investors in subsidizing their customers' moving to build a brand. However investors are more cautious now and have been burned on laundry apps and similar. They understand that real-world services don't scale or offer first-mover-advantage (npi) the same way search engines and social networks do.
    - deleted 9y ago
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- justboxing 9y ago
  Totally. Thanks for the TL;DR.
- manyxcxi 9y ago
  I’ve moved three times since I had enough money and not enough time to justify paying for the help. The first time was pretty “meh”. We moved 15 miles, from 1500sqft to about 2000sqft. We did all the packing, they did the moving. They were an hour late, got lost and separated from us for another hour. But all said they were nice, didn’t break anything, and didn’t change prices on us. The second time, about five years ago, my new company was paying to move us about 200mi, my wife was pregnant with our first child, and I needed to start ASAP so a company was paid nearly $12K to pack and move everything. What a freaking nightmare! Things were lost or broken in inconceivable ways and for no real good reason they couldn’t unload on Friday and don’t unload on weekends so we got to spend the better part of 5 days with an empty house when we’d been lead to believe we’d be up and unloaded the next day. And the waste! They used an INCREDIBLE amount of packing/filler material and so much of our shit still broke! This last time, about a year ago, we just did it ourselves. The last experience was so bad we decided to do it ourselves with a two week old baby and two more kids under 4. Our awesome neighbors helped, my mom drove up grabbed the older kids and they spent the night with her (she lives where we moved back to), my sister in law and her fiancé helped because they lived in the city we were leaving, it was a village effort. It was stressful and tiring, but it was also a chance to really bond with friends and family. We filled the biggest Uhaul truck with their biggest trailer, and two cars and were at our new house and un-packed in 24 hours. We had literally nothing break. I would write a check to a moving company for $12K or more if I knew they were going to make my life easier. I’d absolutely rather someone else did all the work, but all I’ve experienced and heard about is massive ripoffs, horrible customer service, and generally unpleasant experiences. I think in total we spent about $1,500 on packing material and a truck and trailer rental. So we were 1/10 the cost for 5x the efficiency in the moving effort.
  - nunez 9y ago
    Yeah, agreed. When we moved to Dallas from NYC (about a 1400 mile move), we did it with our car and a my then-new pick up truck. I bought the truck in Dallas then drove it up to NYC, loaded it and drove it back. She loaded the rest of the stuff into the car and drove it down. I could have stuffed way more stuff into the truck bed had I bought a Leer cover, but I learned that buying truck accessories in NYC is FUCKING IMPOSSIBLE unless done online. (I also didn't want to spend $800 on it. I bought a soft Tonneau cover from Amazon for $200. Still works great!) We spent about $3000 doing the move, much of it being spent on new furniture. That same move would have cost us >$8000 with a moving company, and then you need to hope that the moving company isn't shit.
deleted 9y ago
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zdean 9y ago
"In short, we found product-market fit." "Despite our early successes, we’ve decided to close Walnut. Our tests revealed that we could create an experience customers loved, but we doubted our ability to be profitable long-term." If people weren't willing to pay for a product you were offering at a price that would sustain the business, then you did not in fact find a product-market fit.
- goatherders 9y ago
  I don't much care about the semantics of product market fit, but there are a lot of companies - some with astronomical valuations - that sell things at prices that won't sustain the business. These guys could have taken other people's money and done the same thing. "We just need to buy market share until the autonomous moving robots are available!" I applaud them for not doing so. And FWIW I usually find these autopsies annoying but this one is well written and insightful. Applause.
  - thisisit 9y ago
    This might sound cynical but given the way the conclusion has been phrased, it is most likely they were on path to "autonomous robots" but no VC was interested in their unit economics. Sure, there are companies with astronomical valuations with unsustainable business, but for whatever it is worth they seem to be good at marketing/presenting to VCs too.
    - underwoodley 9y ago
      Moving awkwardly shaped pieces of furniture up and down stairs without damaging them or the building is one of the jobs that is not likely to be performed by robots for a long time to come. It is very difficult to automate, and very easy for humans to do.
      - Mtinie 9y ago
        > It is very difficult to automate, and very easy for humans to do. Easier, but if you’ve spent time attempting to do it, you’ll agree it is not a trivial type of task by any means. Judging the center of balance for awkwardly shaped furniture, while safely navigating the interior of a multi-level residence is not on my short list of “easy” tasks I’d sign up for on a regular basis. In many ways, it’s a task that should benefit from automation in the future. Endurance, strength, precision, and the ability to precalculate the best available three-dimensional routes required to move a piece of furniture are all, individually, solved problems. Bringing them together with a form factor that can adapt to different environments — flooring material, stairs, etc. — and at a price point that encourages use is the challenge.
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forapurpose 9y ago
Moving is detail-oriented work. Ignoring the simple case and consider moving to multiple locations and not all boxes being unpacked. That requires: 1) Many moving pieces, 2) all labeled correctly, 3) all routed correctly, 4) undamaged, and 5) multi-object units delivered together [0] Pulling that off with a sizeable move takes a lot of process and discipline, as anyone who has tried to execute a highly detailed IT project knows. Also, people tend to not focus on details when they are exhausted. I doubt you can get it done well at a price people are willing to pay. [0] For example, a bookcase might include: A 'frame', removable shelves, pins that support the shelves, and for some bookcases a removable back. All these objects must come back together at the destination - 'what are those shelves for?' 'Where are the pins?'
yeukhon 9y ago
I am a Chinese so my family usually have some Chinese contractor do the moving. A couple years ago my family and I bought a home (finally!) and we hired a contractor to come in, after my family and I had packed up everything (since my dad is a jack-of-all-trade kind of a smart man). The contractor paid two Hispanic workers to do most of the heavy-lifting work, but we also helped anyway so we get the move done ASAP. The hardest thing to move was the heavy massage chair so we let them moved the chair. They are strong... I don't know how much we paid the contractor in total, but I know it didn't go above 1000. We tipped the contractor and also tipped the workers separately ($150 each). We are very generous when we work with nice and hardworking people. They deserve the bonus, especially knowing the contractor wouldn't pay them a lot. So tipping to us have to be personal, and shouldn't be part of a system. I mention this story because the hiring process may seem bizarre to the non-Chinese immigrants. Contractors (construction or moving) usually hire workers off the street. There is a place the contractors will find workers waiting to get a job. So yes, these workers are literally picked that morning like 7AM and the guy came around 11AM since the contractor had another job early that morning. The contractor might find another pair the next day. The truth is, every community has its own way to find people to do work for them. In the Chinese immigrant community, we almost never hire an expensive professional contractor. We (at least the people I know) believe Americans charge us way more for the same, if not, less quality work. We "joke" about how schools can save so much money if they'd pay a licensed Chinese contractor. My dad also doesn't use Uber because (1) he doesn't speak very good English, and (2) he can call a driver for $25 going to JFK with just one call (plus maybe $10, $20 tip). We can go anywhere in the tri-state area in range of $20-$75 in a comfortable SUV. The Chinese community (Korean and Spanish community also have this) also have a shuttle bus that goes from Queens<->Chinatown, Flushing<->Chinatown, Brookyln 8 ave<->Chinatown for $2-$3 dollar. You call the call center, tell the operator which shuttle stop to pick up from. "If it ain't broken, don't change." For the same service quality, why go for something more expensive?
- rtpg 9y ago
  You've mentioned it yourself: Many of the people in these systems are likely underpaid. Systemic exploitation is the name of the game for a lot of the base infrastructure in our society. I'm for communities helping each other, but in your moving example you think those workers have health insurance? Why do you have to sneak the tips? I bet the bus drivers make a good amount of money though.
seibelj 9y ago
Amazing write up, thanks for this. Question though - I always thought hiring movers was a higher-end service that targeted richer people? Most people I know rent a truck or U-haul and get their friends to help move for a case of beer...
- goatherders 9y ago
  Most of your friends probably aren't moving out of a 4 bedroom house with two small children under foot. The want for help changes on the far side of 30.
- ghostly_s 9y ago
  How old are you? I think most people find the pool of friends willing to break their back all day for free beer gets pretty small once they're all starting families etc. I hired movers for the first time this year and I'll never go without again. I'm 29 and make a pretty modest professional salary, so it was a big expense for me, but paying a few hundred bucks was well worth it for getting something done in a couple hours that would have taken all days and left me with a sore back for the better part of a week otherwise.
  - seibelj 9y ago
    I agree, and I also have hired movers, but anecdotally among my friend group I am the exception. 30 years old Good points though
  - greggman 9y ago
    I've moved 25 times. only once have I hired movers and they stole a TV. Having moved so many times I learned the key is to have absolutely everything packed in boxes and or in a state that's ready to move on moving day. if it's all packed it will take < 2 hrs to put it all on a truck and even less to unpack from the truck. If it's not ready to go and any kind of packing had to happen on the day it has always taken 3x to 5x the time.
- praneshp 9y ago
  In the bay area, last year, it was $70 an hour (2 movers, 90 for 3) with a 3 hour minimum. I just packed my clothes into suitcases, they grabbed everything else into boxes and left it roughly where I wanted them at the destination. It was under $500 with tips; while not trivial, it wasn't a higher-end service for sure.
rcarrigan87 9y ago
Very few people understand just how difficult it is to operate in the moving industry. Having worked with a lot of moving companies, here are just a few reasons: -In terms of stress, moving ranks just under death and divorce. Movers joke that half their job is carrying furniture, the other half is therapist. -1 in 5 moves involves some kind of claim. This isn't because movers are careless, it's just the nature of moving furniture. Damage is a part of moving. Considering customers are already stressed, layer on some damage and things get really fun. -Margins are slim. Most people assume movers are "making out like bandits" charging hundreds or thousands of dollars. The reality is most well run moving companies operate on 15-20% profit margin. -The industry is cut throat. Bait-and-switch has become the standard sales approach.[0] This is due to a number of factors including deregulation(debatable), uneducated consumers, and the internet (movers are on the cutting edge of fake review schemes. We track a few companies who change their name every Summer.) -The industry is also trying to deal with millennials who tend to move more frequently but have much less stuff to move. These small moves are harder to turn a profit on. Also, household goods drivers are a dying breed putting further pressure on the long distance moving industry. [0]https://www.movebuddha.com/blog/2017-summer-moving-scams/ https://www.movebuddha.com/blog/2017-summer-moving-scams/
- nihonde 9y ago
  I moved several times in Japan. Extreme care was taken in each case to correctly estimate the work, itemize the inventory and note existing damage, to secure the home, elevator, and common areas against new damage, and to obtain necessary approvals from building and local officials. The price was quite low — about USD$1,500 to move a four bedroom household to a two bedroom penthouse condo in a city three hours’ drive away, including removal, transport, and installation of four AC units. No tips allowed. There are even movers who specialize in overnight moves where great care is taken to be as silent as possible. After seeing this in action as a customer, I think the level of service elsewhere is quite low and providers have set very low expectations for themselves.
  - ggg9990 9y ago
    Japan is such an outlier in so many things, especially things involving care and precision, that I don't think it's reasonable to assume that things elsewhere can be similar. 6-year-olds take the subway alone in Japan, and it would be great if we could do that in the US, but most places, we can't.
mathattack 9y ago
It seems like they're also hurt by moving not being a repeat business. You have to rewin your entire book of business every year.
- goatherders 9y ago
  Agree and huge point to make. Having to constantly acquire new customers instead of being able to grow existing Customers is very difficult.
  - speedplane 9y ago
    That's a challenge but they could have made it work. Casper is making it work (I think). They could have also tied it to storage service and found their recurring revenue.
FooHentai 9y ago
>I will NEVER move again without Walnut. Well, that guy's boned.
justboxing 9y ago
Perhaps a digression, but how does something like compare with individual movers like "Guy with a Van", "Girl with a Van", "Brothers with Van" type single person operation? Quite a few of them seem to be in business for many years and seemingly doing well enough to not close shop. What are they doing different to stay profitable? Source: https://www.google.com/search?q=guy+with+a+van https://www.google.com/search?q=guy+with+a+van
- justinator 9y ago
  I guess they're not, "disrupting the industry"
- 5555624 9y ago
  Operating locally. I've made a couple of moves with these type of movers. They were local moves and that was the first question when I called them. It was $X an hour, for 2 people, with a minimum number of hours. Typically, they don't pack your items, either. They load, drive, and unload the truck. They may or may not disassemble furniture. For example, on several local moves, my dining room table was never disassembled; but, on a recent move of a couple of hundred miles, the legs were taken off.
  - underwoodley 9y ago
    IMO it's worth using these guys. Moving with even the best movers in the world is still pretty stressful. Moving with basic movers is only slightly more stressful, but a lot cheaper.
santoshalper 9y ago
That had to be incredibly tough.
ineedasername 9y ago
This was an interesting postmortem, but nearly the first thought that struck me as it proceeded into the closure reasons was that many of the factors (to be fair, not all) seem to be industry knowledge easily gained through the market research about the industry. This gives the appearance that Walnut founders either didn't perform this research (seems unlikely given the research-heavy approach they displayed) or had a large blind spot when deciding to move forward, a bit of blind optimism that somehow it might work out.
- hodgesrm 9y ago
  It kind of sounded as if they didn't like being movers once they got to know the business.
  - scandox 9y ago
    Yeah they turned up at the saloon with pearl handled revolvers and ordered a mint julep.
- speedplane 9y ago
  I don't really believe this postmortem. Moving does suck, it's difficult to know who to trust, and there is no modern trusted brand in the space. There is a need for a product like this. Case study is Casper, which is not much else other than a beautifully branded old school product. There is definitely potential for a company in this space. But like most companies based largely on branding, they would need to drop a good chunk of change on advertising to get a running start, may be difficult to convince a VC to invest in that. There is definitely a potential a company in this space, we'll wait for the next one.
pfarnsworth 9y ago
In SF I use Delancey Street movers. The experience has always been phenomenal. And they hire ex-cons who are trying to change their lives so it's win-win. Any tips that we give them is tax-deductible and goes towards programs for the employees and their families for outings, etc. Everyone works so hard, and they are extremely efficient, I have had no qualms giving 50% tips to these guys and I've used them 4 times now.
- codinghorror 9y ago
  yes Delancey Street is great. They also sell xmas trees!
crwalker 9y ago
This was a well written post mortem and I appreciate Nick's honesty, but it left me with the impression that Walnut closed because the team ran out of willpower. There were a lot of challenges and concerns described, but rather than attempting to surmount the challenge, the team decided to quit (of course, sometimes that's the best choice given the circumstances).
oldboyFX 9y ago
How is this a startup? You can't scale it fast, it's not using an innovative business model, it's not driven by tech at all. It's just a normal company trying to offer a better service at higher prices — which is okay — you don't need to slap a startup label on everything. The medium piece was a great read. Kudos to everyone involved!
- r0ze-at-hn 9y ago
  A startup is a company that is trying to find a sustainable business model. startup != tech
  - oldboyFX 9y ago
    And which companies are trying to find an unsustainable business model?
pvaldes 9y ago
What means 'walnut' in this context? One of the problems IMHO is that everybody wants a cool and short name like 'apple', without noticing that apple has passed long away the state in what people would identify their trademark name with a grocery. "Fruit means computer" is not something that happens in a day in the mind of customers. Why to choose a name that does not add clues about what the company is doing (and expect that the customers will learn to fill the gap)? For each sucessfull 'uber' there are decens of other brands that didn't stick. Programmers love add a layer of mystery about what their programs do. Probably to not give much hints to the competition. Graphic designers have also their bible and will say that a name must measure this and be coloured like that, but you as a company have literally a few seconds to grab the customer attention. If the message is unclear or not complete you lost customers. Starting with something like 'Walnut movers' could look old fashioned but probably will be more efficient.
- speedplane 9y ago
  I disagree, and further, I think it's dismissive to think the naming was done by a bunch of programmers. It's not an easy decision to choose a more obvious descriptive name, rather than a less obvious mysterious one. Clearly, if it's descriptive, people know what you do, but on the downside it weakens the brand. A company like this is taking an old-school service, and wrapping it beautiful branding and a more hassle free sign-up service. The actual product they deliver (moving services) is almost secondary to this. So the entire company's competitive advantage is based on their brand and reputation... that's okay, many companies do this. For a company where branding is not the only competitive advantage, it's not a bad idea to be a bit more descriptive (e.g., General Motors, Showtime). But for companies where branding is their entire company, it does make sense to be a bit less descriptive and focus on building a strong brand identity.
xolve 9y ago
Confused it with: http://www.getwalnut.com/ http://www.getwalnut.com/
0898 9y ago
I wonder if the founders considered serving the B2B market, rather than B2C audiences. Corporates are more likely to appreciate the 'hospitality' service, and less likely to be price sensitive. (I've no doubt they did consider this – I just wonder why they didn't think it viable.)
T3RMINATED 9y ago
who gives a crap close it already quit posting this garbage to hackernews.
nunez 9y ago
This was a beautiful post-mortem. Thank you for writing it. They said it beautifully: when people want to spend money, they'll spend more than they should. But when people need to spend money, they'll spend as little of it as possible. Some have more forgiving tolerances on how little they'll be willing to spend. The airlines and, I think, retail companies call this metric "willingness to pay" (WTP) and spend A LOT of money trying to figure this out. The goal is to make prices as segmented as possible, since you "can't" give everyone a different price for a thing. If Walnut took VC, they would be doing the same because, according to this armchair CEO, that's where the margins are in businesses like these (service industries). Many people will do crazy-ass things to save lots of money (driving two hours or more to or from an airport with significantly cheaper flights, even if basic economy). And people say they care about the well-being of the workers providing services for them, but when put to the test (increasing prices), the truth comes out. Case in point: ultra-low-cost carriers (like Ryanair) pay their crews jack shit to be the jack of all trades. The pilots will do light maintenance (heavy maintenance is contracted out). The flight attendants will check you in at the gate and clean the plane. If people really cared about this state of affairs, then they would fly with a legacy carrier that treats people in these positions better. Instead, ULCCs are beating legacies in profit hand over fist.
stefantheard 9y ago
Incredibly valuable information in the article. I appreciate how transparent you guys are and I'm genuinely thankful for you sharing the experience.

133 points by Sujan 9y ago

In short: “What we found was that while many people complain about their moving companies, even the highest income consumers would not pay for a better service. Our mistake was conflating desire for a better product with desire to pay more for a better product”

slackingoff2017 9y ago
There's several companies dedicated to moving ultra high net worth individuals. It's hard to believe there's no market between that and the cheapest options. Sounds like their marketing wasn't great or they ran out of runway.
- jimmywanger 9y ago
  He mentions that in the article. I'll quote the relavant section at the end, but my when money is no object, you usually go by recommendation of friends. At that high of a premium, would you go to a team with good marketing copy, or somebody who has already moved your equally rich friend with superlative service? FTA: We considered our second option more seriously. High-end customers understood our value proposition, and we believe they would be willing to pay for it. But as we dug deeper, we realized turning Walnut into a premium service had too many challenges along the way. The strategy would shrink the serviceable market, and we would also have to be excellent at finding a smaller customer base at the exact moment they’re looking for movers. Even if we solved the marketing challenges, our moving service would also have to meet new, higher expectations. Our concern was whether we could ever deliver enough value in this compulsory experience to justify the substantially higher price.
  - jblow 9y ago
    Hahahaha So they wanted to claim to offer a high-quality product, but don't think they can actually do that. Startup culture is so terrible.
    - Illniyar 9y ago
      As I understand it, they wanted to offer a high-quality product at high-quality product prices, however if they moved to service the very rich they'll need to offer a luxury product, which would obviously require luxury product price. Consider it the difference between an iPhone and a 24 caret gold plated iPhone elite (which apparently exists)
      - notyourday 9y ago
        No, what they wanted to do is use a sharpie to fix the the defect on a Louis Vuitton bag from Canal St and offer it to an NYU student from Taiwan as a real thing without realizing that the said NYU student's family has hundreds of real bags.
        jimmywanger 9y ago
        No, to continue your analogy, they wanted to be the Nordstrom of the moving world, not the Saks Fifth Avenue, not knowing that not enough people would use the high-end but not quite luxury service to make it worth their while.
        notyourday 9y ago
        That's the problem: Saks Fifth Ave and Nordstrom are in the exactly same market. The upmarket is Bergdorf Goodman.
        jimmywanger 9y ago
        I suppose that's the problem, which he alludes to in his article. Basically we go shopping a lot (well a lot of people do) that's why there's so much market differentiation. JC Penny and Macy's and Nordstrom and Saks and Bergdorf Goodman all offer a slightly different experience tailored to different budgets, and the stratification is very clear. A truly upmarket experience is a concierge who knows your tastes and scours the stores to bring you what he think you'd like to wear. Just like any sort of suit you can buy in a store is orders less luxurious than a bespoke suit you get made for you on Saville Row.
- underwoodley 9y ago
  The service they offer has existed for a long time. Rich people pay top dollar to get good, professional movers who take care of their stuff and don't add to the stress of moving. This company tried to provide this service, but at a lower price, so low that they couldn't be profitable. Unfortunately, they couldn't cover their labor costs this way. Movers who will show up, take good care of the customer's stuff, are courteous and don't take tips clearly cost more than typical movers who simply provide a pair of strong arms to lift stuff up and down stairs and onto trucks, but don't give a shit about your brand. Normal people use normal moving services who provide a so-so service not because they are stupid but because they don't have the money to spend on premium movers. Obviously customers who got a heavily discounted service gave them five stars and said they would recommend them. Presumably they tried to interest investors in subsidizing their customers' moving to build a brand. However investors are more cautious now and have been burned on laundry apps and similar. They understand that real-world services don't scale or offer first-mover-advantage (npi) the same way search engines and social networks do.
  - deleted 9y ago
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justboxing 9y ago
Totally. Thanks for the TL;DR.
manyxcxi 9y ago
I’ve moved three times since I had enough money and not enough time to justify paying for the help. The first time was pretty “meh”. We moved 15 miles, from 1500sqft to about 2000sqft. We did all the packing, they did the moving. They were an hour late, got lost and separated from us for another hour. But all said they were nice, didn’t break anything, and didn’t change prices on us. The second time, about five years ago, my new company was paying to move us about 200mi, my wife was pregnant with our first child, and I needed to start ASAP so a company was paid nearly $12K to pack and move everything. What a freaking nightmare! Things were lost or broken in inconceivable ways and for no real good reason they couldn’t unload on Friday and don’t unload on weekends so we got to spend the better part of 5 days with an empty house when we’d been lead to believe we’d be up and unloaded the next day. And the waste! They used an INCREDIBLE amount of packing/filler material and so much of our shit still broke! This last time, about a year ago, we just did it ourselves. The last experience was so bad we decided to do it ourselves with a two week old baby and two more kids under 4. Our awesome neighbors helped, my mom drove up grabbed the older kids and they spent the night with her (she lives where we moved back to), my sister in law and her fiancé helped because they lived in the city we were leaving, it was a village effort. It was stressful and tiring, but it was also a chance to really bond with friends and family. We filled the biggest Uhaul truck with their biggest trailer, and two cars and were at our new house and un-packed in 24 hours. We had literally nothing break. I would write a check to a moving company for $12K or more if I knew they were going to make my life easier. I’d absolutely rather someone else did all the work, but all I’ve experienced and heard about is massive ripoffs, horrible customer service, and generally unpleasant experiences. I think in total we spent about $1,500 on packing material and a truck and trailer rental. So we were 1/10 the cost for 5x the efficiency in the moving effort.
- nunez 9y ago
  Yeah, agreed. When we moved to Dallas from NYC (about a 1400 mile move), we did it with our car and a my then-new pick up truck. I bought the truck in Dallas then drove it up to NYC, loaded it and drove it back. She loaded the rest of the stuff into the car and drove it down. I could have stuffed way more stuff into the truck bed had I bought a Leer cover, but I learned that buying truck accessories in NYC is FUCKING IMPOSSIBLE unless done online. (I also didn't want to spend $800 on it. I bought a soft Tonneau cover from Amazon for $200. Still works great!) We spent about $3000 doing the move, much of it being spent on new furniture. That same move would have cost us >$8000 with a moving company, and then you need to hope that the moving company isn't shit.

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zdean 9y ago

"In short, we found product-market fit." "Despite our early successes, we’ve decided to close Walnut. Our tests revealed that we could create an experience customers loved, but we doubted our ability to be profitable long-term." If people weren't willing to pay for a product you were offering at a price that would sustain the business, then you did not in fact find a product-market fit.

goatherders 9y ago
I don't much care about the semantics of product market fit, but there are a lot of companies - some with astronomical valuations - that sell things at prices that won't sustain the business. These guys could have taken other people's money and done the same thing. "We just need to buy market share until the autonomous moving robots are available!" I applaud them for not doing so. And FWIW I usually find these autopsies annoying but this one is well written and insightful. Applause.
- thisisit 9y ago
  This might sound cynical but given the way the conclusion has been phrased, it is most likely they were on path to "autonomous robots" but no VC was interested in their unit economics. Sure, there are companies with astronomical valuations with unsustainable business, but for whatever it is worth they seem to be good at marketing/presenting to VCs too.
  - underwoodley 9y ago
    Moving awkwardly shaped pieces of furniture up and down stairs without damaging them or the building is one of the jobs that is not likely to be performed by robots for a long time to come. It is very difficult to automate, and very easy for humans to do.
    - Mtinie 9y ago
      > It is very difficult to automate, and very easy for humans to do. Easier, but if you’ve spent time attempting to do it, you’ll agree it is not a trivial type of task by any means. Judging the center of balance for awkwardly shaped furniture, while safely navigating the interior of a multi-level residence is not on my short list of “easy” tasks I’d sign up for on a regular basis. In many ways, it’s a task that should benefit from automation in the future. Endurance, strength, precision, and the ability to precalculate the best available three-dimensional routes required to move a piece of furniture are all, individually, solved problems. Bringing them together with a form factor that can adapt to different environments — flooring material, stairs, etc. — and at a price point that encourages use is the challenge.

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forapurpose 9y ago

Moving is detail-oriented work. Ignoring the simple case and consider moving to multiple locations and not all boxes being unpacked. That requires: 1) Many moving pieces, 2) all labeled correctly, 3) all routed correctly, 4) undamaged, and 5) multi-object units delivered together [0] Pulling that off with a sizeable move takes a lot of process and discipline, as anyone who has tried to execute a highly detailed IT project knows. Also, people tend to not focus on details when they are exhausted. I doubt you can get it done well at a price people are willing to pay. [0] For example, a bookcase might include: A 'frame', removable shelves, pins that support the shelves, and for some bookcases a removable back. All these objects must come back together at the destination - 'what are those shelves for?' 'Where are the pins?'

yeukhon 9y ago

I am a Chinese so my family usually have some Chinese contractor do the moving. A couple years ago my family and I bought a home (finally!) and we hired a contractor to come in, after my family and I had packed up everything (since my dad is a jack-of-all-trade kind of a smart man). The contractor paid two Hispanic workers to do most of the heavy-lifting work, but we also helped anyway so we get the move done ASAP. The hardest thing to move was the heavy massage chair so we let them moved the chair. They are strong... I don't know how much we paid the contractor in total, but I know it didn't go above 1000. We tipped the contractor and also tipped the workers separately ($150 each). We are very generous when we work with nice and hardworking people. They deserve the bonus, especially knowing the contractor wouldn't pay them a lot. So tipping to us have to be personal, and shouldn't be part of a system. I mention this story because the hiring process may seem bizarre to the non-Chinese immigrants. Contractors (construction or moving) usually hire workers off the street. There is a place the contractors will find workers waiting to get a job. So yes, these workers are literally picked that morning like 7AM and the guy came around 11AM since the contractor had another job early that morning. The contractor might find another pair the next day. The truth is, every community has its own way to find people to do work for them. In the Chinese immigrant community, we almost never hire an expensive professional contractor. We (at least the people I know) believe Americans charge us way more for the same, if not, less quality work. We "joke" about how schools can save so much money if they'd pay a licensed Chinese contractor. My dad also doesn't use Uber because (1) he doesn't speak very good English, and (2) he can call a driver for $25 going to JFK with just one call (plus maybe $10, $20 tip). We can go anywhere in the tri-state area in range of $20-$75 in a comfortable SUV. The Chinese community (Korean and Spanish community also have this) also have a shuttle bus that goes from Queens<->Chinatown, Flushing<->Chinatown, Brookyln 8 ave<->Chinatown for $2-$3 dollar. You call the call center, tell the operator which shuttle stop to pick up from. "If it ain't broken, don't change." For the same service quality, why go for something more expensive?

rtpg 9y ago
You've mentioned it yourself: Many of the people in these systems are likely underpaid. Systemic exploitation is the name of the game for a lot of the base infrastructure in our society. I'm for communities helping each other, but in your moving example you think those workers have health insurance? Why do you have to sneak the tips? I bet the bus drivers make a good amount of money though.

seibelj 9y ago

Amazing write up, thanks for this. Question though - I always thought hiring movers was a higher-end service that targeted richer people? Most people I know rent a truck or U-haul and get their friends to help move for a case of beer...

goatherders 9y ago
Most of your friends probably aren't moving out of a 4 bedroom house with two small children under foot. The want for help changes on the far side of 30.
ghostly_s 9y ago
How old are you? I think most people find the pool of friends willing to break their back all day for free beer gets pretty small once they're all starting families etc. I hired movers for the first time this year and I'll never go without again. I'm 29 and make a pretty modest professional salary, so it was a big expense for me, but paying a few hundred bucks was well worth it for getting something done in a couple hours that would have taken all days and left me with a sore back for the better part of a week otherwise.
- seibelj 9y ago
  I agree, and I also have hired movers, but anecdotally among my friend group I am the exception. 30 years old Good points though
- greggman 9y ago
  I've moved 25 times. only once have I hired movers and they stole a TV. Having moved so many times I learned the key is to have absolutely everything packed in boxes and or in a state that's ready to move on moving day. if it's all packed it will take < 2 hrs to put it all on a truck and even less to unpack from the truck. If it's not ready to go and any kind of packing had to happen on the day it has always taken 3x to 5x the time.
praneshp 9y ago
In the bay area, last year, it was $70 an hour (2 movers, 90 for 3) with a 3 hour minimum. I just packed my clothes into suitcases, they grabbed everything else into boxes and left it roughly where I wanted them at the destination. It was under $500 with tips; while not trivial, it wasn't a higher-end service for sure.

rcarrigan87 9y ago

Very few people understand just how difficult it is to operate in the moving industry. Having worked with a lot of moving companies, here are just a few reasons: -In terms of stress, moving ranks just under death and divorce. Movers joke that half their job is carrying furniture, the other half is therapist. -1 in 5 moves involves some kind of claim. This isn't because movers are careless, it's just the nature of moving furniture. Damage is a part of moving. Considering customers are already stressed, layer on some damage and things get really fun. -Margins are slim. Most people assume movers are "making out like bandits" charging hundreds or thousands of dollars. The reality is most well run moving companies operate on 15-20% profit margin. -The industry is cut throat. Bait-and-switch has become the standard sales approach.[0] This is due to a number of factors including deregulation(debatable), uneducated consumers, and the internet (movers are on the cutting edge of fake review schemes. We track a few companies who change their name every Summer.) -The industry is also trying to deal with millennials who tend to move more frequently but have much less stuff to move. These small moves are harder to turn a profit on. Also, household goods drivers are a dying breed putting further pressure on the long distance moving industry. [0]https://www.movebuddha.com/blog/2017-summer-moving-scams/ https://www.movebuddha.com/blog/2017-summer-moving-scams/

nihonde 9y ago
I moved several times in Japan. Extreme care was taken in each case to correctly estimate the work, itemize the inventory and note existing damage, to secure the home, elevator, and common areas against new damage, and to obtain necessary approvals from building and local officials. The price was quite low — about USD$1,500 to move a four bedroom household to a two bedroom penthouse condo in a city three hours’ drive away, including removal, transport, and installation of four AC units. No tips allowed. There are even movers who specialize in overnight moves where great care is taken to be as silent as possible. After seeing this in action as a customer, I think the level of service elsewhere is quite low and providers have set very low expectations for themselves.
- ggg9990 9y ago
  Japan is such an outlier in so many things, especially things involving care and precision, that I don't think it's reasonable to assume that things elsewhere can be similar. 6-year-olds take the subway alone in Japan, and it would be great if we could do that in the US, but most places, we can't.

mathattack 9y ago

It seems like they're also hurt by moving not being a repeat business. You have to rewin your entire book of business every year.

goatherders 9y ago
Agree and huge point to make. Having to constantly acquire new customers instead of being able to grow existing Customers is very difficult.
- speedplane 9y ago
  That's a challenge but they could have made it work. Casper is making it work (I think). They could have also tied it to storage service and found their recurring revenue.

FooHentai 9y ago

>I will NEVER move again without Walnut. Well, that guy's boned.

justboxing 9y ago

Perhaps a digression, but how does something like compare with individual movers like "Guy with a Van", "Girl with a Van", "Brothers with Van" type single person operation? Quite a few of them seem to be in business for many years and seemingly doing well enough to not close shop. What are they doing different to stay profitable? Source: https://www.google.com/search?q=guy+with+a+van https://www.google.com/search?q=guy+with+a+van

justinator 9y ago
I guess they're not, "disrupting the industry"
5555624 9y ago
Operating locally. I've made a couple of moves with these type of movers. They were local moves and that was the first question when I called them. It was $X an hour, for 2 people, with a minimum number of hours. Typically, they don't pack your items, either. They load, drive, and unload the truck. They may or may not disassemble furniture. For example, on several local moves, my dining room table was never disassembled; but, on a recent move of a couple of hundred miles, the legs were taken off.
- underwoodley 9y ago
  IMO it's worth using these guys. Moving with even the best movers in the world is still pretty stressful. Moving with basic movers is only slightly more stressful, but a lot cheaper.

santoshalper 9y ago

That had to be incredibly tough.

ineedasername 9y ago

This was an interesting postmortem, but nearly the first thought that struck me as it proceeded into the closure reasons was that many of the factors (to be fair, not all) seem to be industry knowledge easily gained through the market research about the industry. This gives the appearance that Walnut founders either didn't perform this research (seems unlikely given the research-heavy approach they displayed) or had a large blind spot when deciding to move forward, a bit of blind optimism that somehow it might work out.

hodgesrm 9y ago
It kind of sounded as if they didn't like being movers once they got to know the business.
- scandox 9y ago
  Yeah they turned up at the saloon with pearl handled revolvers and ordered a mint julep.
speedplane 9y ago
I don't really believe this postmortem. Moving does suck, it's difficult to know who to trust, and there is no modern trusted brand in the space. There is a need for a product like this. Case study is Casper, which is not much else other than a beautifully branded old school product. There is definitely potential for a company in this space. But like most companies based largely on branding, they would need to drop a good chunk of change on advertising to get a running start, may be difficult to convince a VC to invest in that. There is definitely a potential a company in this space, we'll wait for the next one.

pfarnsworth 9y ago

In SF I use Delancey Street movers. The experience has always been phenomenal. And they hire ex-cons who are trying to change their lives so it's win-win. Any tips that we give them is tax-deductible and goes towards programs for the employees and their families for outings, etc. Everyone works so hard, and they are extremely efficient, I have had no qualms giving 50% tips to these guys and I've used them 4 times now.

codinghorror 9y ago
yes Delancey Street is great. They also sell xmas trees!

crwalker 9y ago

This was a well written post mortem and I appreciate Nick's honesty, but it left me with the impression that Walnut closed because the team ran out of willpower. There were a lot of challenges and concerns described, but rather than attempting to surmount the challenge, the team decided to quit (of course, sometimes that's the best choice given the circumstances).

oldboyFX 9y ago

How is this a startup? You can't scale it fast, it's not using an innovative business model, it's not driven by tech at all. It's just a normal company trying to offer a better service at higher prices — which is okay — you don't need to slap a startup label on everything. The medium piece was a great read. Kudos to everyone involved!

r0ze-at-hn 9y ago
A startup is a company that is trying to find a sustainable business model. startup != tech
- oldboyFX 9y ago
  And which companies are trying to find an unsustainable business model?

pvaldes 9y ago

What means 'walnut' in this context? One of the problems IMHO is that everybody wants a cool and short name like 'apple', without noticing that apple has passed long away the state in what people would identify their trademark name with a grocery. "Fruit means computer" is not something that happens in a day in the mind of customers. Why to choose a name that does not add clues about what the company is doing (and expect that the customers will learn to fill the gap)? For each sucessfull 'uber' there are decens of other brands that didn't stick. Programmers love add a layer of mystery about what their programs do. Probably to not give much hints to the competition. Graphic designers have also their bible and will say that a name must measure this and be coloured like that, but you as a company have literally a few seconds to grab the customer attention. If the message is unclear or not complete you lost customers. Starting with something like 'Walnut movers' could look old fashioned but probably will be more efficient.

speedplane 9y ago
I disagree, and further, I think it's dismissive to think the naming was done by a bunch of programmers. It's not an easy decision to choose a more obvious descriptive name, rather than a less obvious mysterious one. Clearly, if it's descriptive, people know what you do, but on the downside it weakens the brand. A company like this is taking an old-school service, and wrapping it beautiful branding and a more hassle free sign-up service. The actual product they deliver (moving services) is almost secondary to this. So the entire company's competitive advantage is based on their brand and reputation... that's okay, many companies do this. For a company where branding is not the only competitive advantage, it's not a bad idea to be a bit more descriptive (e.g., General Motors, Showtime). But for companies where branding is their entire company, it does make sense to be a bit less descriptive and focus on building a strong brand identity.

xolve 9y ago

Confused it with: http://www.getwalnut.com/ http://www.getwalnut.com/

0898 9y ago

I wonder if the founders considered serving the B2B market, rather than B2C audiences. Corporates are more likely to appreciate the 'hospitality' service, and less likely to be price sensitive. (I've no doubt they did consider this – I just wonder why they didn't think it viable.)

T3RMINATED 9y ago

who gives a crap close it already quit posting this garbage to hackernews.

nunez 9y ago

This was a beautiful post-mortem. Thank you for writing it. They said it beautifully: when people want to spend money, they'll spend more than they should. But when people need to spend money, they'll spend as little of it as possible. Some have more forgiving tolerances on how little they'll be willing to spend. The airlines and, I think, retail companies call this metric "willingness to pay" (WTP) and spend A LOT of money trying to figure this out. The goal is to make prices as segmented as possible, since you "can't" give everyone a different price for a thing. If Walnut took VC, they would be doing the same because, according to this armchair CEO, that's where the margins are in businesses like these (service industries). Many people will do crazy-ass things to save lots of money (driving two hours or more to or from an airport with significantly cheaper flights, even if basic economy). And people say they care about the well-being of the workers providing services for them, but when put to the test (increasing prices), the truth comes out. Case in point: ultra-low-cost carriers (like Ryanair) pay their crews jack shit to be the jack of all trades. The pilots will do light maintenance (heavy maintenance is contracted out). The flight attendants will check you in at the gate and clean the plane. If people really cared about this state of affairs, then they would fly with a legacy carrier that treats people in these positions better. Instead, ULCCs are beating legacies in profit hand over fist.

stefantheard 9y ago

Incredibly valuable information in the article. I appreciate how transparent you guys are and I'm genuinely thankful for you sharing the experience.