LISA: Hey, just a quick note—if you’re a Gimlet member, or if you wanna be one, stay tuned. We have a little something for you at the end of the show.

-music-

LISA: From Gimlet, this is Startup. I’m Lisa Chow. 

A few months ago, we got an email from a guy named Jason Demant.  I’ve got it here in front of me. It’s very direct.  “Hello” it says.  “We’ve raised 2 million dollars and have been featured in TechCrunch, CNBC and San Francisco Chronicle.  We now have 350 thousand dollars left in the bank, which will last until the end of April.  We need to raise more money or we will die.”       

So, we followed up with Jason. And he and his cofounder Vincent Cardillo agreed to record themselves during this particular moment in their company’s life. Would they run out of money and close shop? Or would they figure out how to turn things around in time? They didn’t know. We didn’t know either. 

The result is a rare and intimate look inside one startup—and inside Silicon Valley. And we should warn listeners, it occasionally includes swearing.

Our producer Molly Messick tells their story. 

 

-music-

 

MOLLY: In one of the first recordings Jason and Vincent sent, they’re sitting outside.  They’re in the backyard behind the commercial kitchen they rent, which is also their company’s headquarters.  It’s a cramped spot shaded by bamboo and next to a couple of exhaust fans—a place they come to sometimes when they have important things to talk about.  It’s also a little noisy, as you’ll hear in the tape.  Today the thing they’re talking about is their own salaries.  Jason talks first.   

 

JASON: Okay, so—I was pretty shocked to hear that you’re thinking of not taking a salary.  Like, I don’t understand, like, what changed?  I feel like you’ve been more adamant about this than I have. 

VINCENT: I mean, if it saves us, that will save us eight thousand dollars.

 

MOLLY: Vincent’s a little faint there.  He says, “That’ll save us eight thousand dollars.”

Their company is called Bento, and it does on-demand food delivery.  And the problem Jason and Vincent are facing is that almost a year into running it, they still haven’t figured out how to turn a profit.  Vincent wants to cut his own salary to buy them more time, but Jason’s not so sure.

 

JASON: Like obviously like from a Bento standpoint I appreciate what you’re doing. It makes me feel like I should do the same. It’s just harder for me to do the same.

VINCENT: I know. It’s not easy for me, either.

JASON: I know it’s not easy for you, either.  And I’m really surprised—

VINCENT: I mean I’ve saved like zero money.  It’s not like anything has gone into my savings account over the last year.

JASON: I mean, I almost like want to, like, talk you out of it.  I guess my thought is on this I would rather continue to pay ourselves, and as we start getting close to running out of money, if things are looking optimistic, then we stop paying ourselves.  But at this point, like, what if everything just falls to shit.

VINCENT: Yeah, that’s a total risk.

JASON: And then...but why...like then—

VINCENT: I’m investing back into the company.  And that’s what I’m doing, right?  It’s more cash in the bank now. 

 

MOLLY: On the tape right here, it sounds like Jason drums his fingers on the table. 

The reason it’s a harder decision for Jason is that he has two young kids, and his wife, Sharon, is a stay-at-home mom.  Vincent isn’t married, doesn’t have children.

But in the end it’s Jason who gets won over.  After a lot of back and forth, he agrees to cut his salary. He tell Vincent, “Okay. I’m on board.”

 

JASON: So what do you wanna...what do you wanna...what do you wanna cut?  Do you want to just cut it all?  You wanna do half?

VINCENT: Yeah, probably like half.  If we each cut our salaries in half it’s like one of us doesn’t work here anymore.

JASON: Yeah.  I probably need...I probably need at least six, seven hundred a week just to cover my health insurance. Like five hundred a week.  Two thousand a month.

VINCENT: About half.

JASON: Yeah, that would be around half.  Yeah, about half. So 30-40K.  Somewhere in there.  I’d be willing to do that.





MOLLY: That was one of the first conversations Jason and Vincent recorded.  It happened a few months ago, in February.  But to understand what they’ve been through with Bento—to understand the extremes they’ve experienced—you have to know how they started.

Because it didn’t begin like this, with huddled conversations about dwindling bank accounts. When they first started Bento, it was like they’d been handed a script for startup success, and they played their parts exactly right.

Jason and Vincent met recently, in 2014, through a website called FounderDating.  It’s kind of like Match.com for business partners. Jason already had the idea for Bento and he wanted to team up with someone.  He would be the CEO.  And in Vincent, he found his CTO—his chief technical officer. 

The two of them are kind of a study in contrasts.  Jason’s the optimistic one.  The California native who gave up a steady job in his 20s to spend a couple of years travelling around Asia. 

Vincent’s an engineer.  Quieter.  The pragmatist.  He grew up in New York, in Rochester, and by the time he was 24, he owned a house not far from his parents’ place.  But he’d always wanted to run his own company, and he figured he could do it in San Francisco.  So he sold his house, packed his car, booked a room on Airbnb.  He wound up living there for a year.

Bento’s business is Asian food—customizable bento boxes that they make in their own kitchen and then deliver.  Jason and Vincent imagine that Bento will be a known brand, like Chipotle.  But instead of picking it up at a restaurant, you’ll open up an app and order it on your phone. 

Demand will be high enough that wherever you are, one of Bento’s drivers will be nearby.  Their cars will hold hot bags for hot food and cold bags for cold food.  Individual pods of every dish that Bento offers, and minutes after you place your order, it arrives.  Sometimes it happens so fast that it feels like magic. 

They launched on stage at a startup festival with 2,000 people watching.  And pretty quickly, they raised a million and a half dollars in seed money.  Vincent says that at the time, it all seemed incredible. 

 

VINCENT: It was the most ridiculous thing I’d ever seen. I mean, to see that much money come in so quickly.  To see so many people so excited about an idea. That was kind of the point where I was like, “Okay this is my life for the next four, five, six years. This is what I came here to do.

JASON: I was always nervous somebody was going to launch something similar to my idea before I did. 

 

MOLLY: This is Jason.

 

JASON: Once that didn’t happen, then the reception being really good, people asking, like, “What are your expansion plans?” And you know, “How quickly can you go to LA?” or do this or do that—it’s like, yeah sure.  You’re just thinking, like, “Wow, how fast can I run?”  Like, nothing’s going to go wrong.  It’s just going to be, like, a pretty steady line of growth and funding and yeah, yeah...

 

MOLLY: Bento did grow.  When Jason and Vincent talk about the months after they launched, they use words like “insatiable” and “crazy” and “freaking nuts.”  Every week they sold more bentos than the week before.  Three months after launch, they added a head chef, an operations person, and a new developer to work on their app.  They moved into a bigger kitchen. 

It was what they wanted.  It was what their investors wanted.  Growth equalled success, and they were killing it. 

But then came late August, five and a half months after launch.  That’s when Jason got a report back from his accountant.  It was a regular monthly report showing here’s how much we spent, how much we earned, what our burn rate was.  And it was for the previous month, July.

 

JASON: It was very late to get back July, but we got it back.  And we burned...I want to say like seventy thousand dollars more than we expected?  Which was like, thirty, forty percent more?  And it was like, “Whoa, what happened?”

 

MOLLY: The short answer to that question—what happened?—is that Jason and Vincent are tech guys.  Tech guys who had started what was basically a restaurant.  There were a lot of details to manage.  Bento was hiring cooks, buying saucepans, dispatching drivers.  They were ordering wild-caught salmon and avocados and asian pears.  They needed to take inventory, make sure pricey ingredients weren’t going to waste.  There were a lot of details—a lot of costs—that Jason wasn’t tracking closely. 

 

MOLLY: I’m trying to imagine what that day when you got that report back must have felt like.  You’d been seeing this week over week growth, you thought everything was totally going the way you wanted it to.  So what did you feel?

JASON: I mean, it’s almost like a little embarrassing, because I should have been watching that.  Especially in, like, an operationally intensive business like this.  So, like, embarrassed that I hadn’t done that before.  Scared as to, like, where the problems were.  Scared like, was I going to be able to find where the problems were? Um…yeah, so it’s just—a lot of different thoughts.

 

MOLLY: He wrote to Vincent to tell him about the report.

 

VINCENT:  I was walking into work and I read it on my phone.  I just sort of went—I mean, my immediate reaction was like, “Holy,” you know, “holy F.” 

 

MOLLY: It wasn’t exactly a problem that they were spending more money than they were making.  A lot of startups do that, especially in the early stages when they’re trying to get customers.  But Jason and Vincent had burned through way more than they’d planned.

In July and August alone, they’d used up almost a third of the money they’d raised.  To make and deliver a bento that sold for 12 dollars, they were spending 32 dollars. 

 

VINCENT: I trusted that—whatever was happening was working and that we were, I don’t know, maybe losing one or two dollars, not 15 or 20 dollars on every bento.  The unit economics said something, you know, horribly ridiculous like that.

 

MOLLY: But maybe the worst thing about the spot they were in…the weirdest thing...was that the more bentos they sold, the more money they lost.  So if their sales went up, they’d go out of business quicker.  Growth no longer equalled success.  Growth had become the enemy. 

Vincent put aside his daily work on the engineering side, overseeing the app, and he and Jason dove into the financials.

 

VINCENT: I was in our kitchen every day.  Looking at the numbers.  Talking to our chef.  Figuring out what was going on.

 

MOLLY: To get food costs under control, they cut expensive dishes like ribs and duck confit.  They let delivery times creep up.  They added a delivery charge.  And it worked. The price of a bento and the cost of making one started to even out. 

 

VINCENT: I kept thinking, like, “Okay, not bad.  Maybe we can do this. We can cross this threshold.”  And then there were three days where we managed to.  So we got to, like, positive a penny—

 

MOLLY: Is this per-bento or overall?

VINCENT: That was per-bento.  And then there was a day we had 50 cents.  And there was a day where we had a dollar.  For like three days in a row.

 

MOLLY: Making money on a bento was a big deal—an accomplishment.  But it didn’t last.

 

VINCENT: The days after that it just kind of fluctuated again back and forth between negative 50 cents, negative a dollar loss.  And it was—it was a difficult thing to control and maintain.

 

MOLLY: What all of this meant was that Bento couldn’t make money with on demand delivery—dispatching a driver every time a customer pressed a button in the Bento app. Jason and Vincent needed a better way of predicting demand, to reduce waste and keep cost under control. So they did a couple of things.  They added a new feature: order ahead.  It let customers schedule their lunch or dinner ahead of time instead of clicking on the app when they got hungry. 

Jason and Vincent they also started selling bentos to catering startups—companies that work as middlemen between restaurants and corporate clients, delivering lunches for office workers.  There are a lot of them in San Francisco, so Bento partnered with a few.

Here’s a conversation Jason and Vincent recorded right around that time, in mid-February. They’re in a coffee shop up the street from the Bento kitchen. Jason speaks first.

 

JASON: Now we finally—we finally built order-ahead.  We finally know how to make money.

VINCENT: We aren’t yet. We haven’t. It hasn’t happened. It’s not happening.

JASON: Well, but we know—we know how to do it.  We’ve got partnerships.  We’ve got catering. This business is going to make money very soon. With or without investment, this business is going to make money. Would you disagree with that?

VINCENT: ...with enough time.





MOLLY: With enough time, he says.  It’s shorthand for: if we don’t run out of money first.





JASON: Yeah, with enough time.  Without much additional work, in terms of engineering and—

VINCENT: I would agree with that. Yeah. Sure

JASON: We’ve got it. We’ve built it. So now it’s about executing on everything. You know, like, it’s exciting. 

VINCENT: (laughing) Yeah, yeah, I can see that. It’s exciting.

 

MOLLY: As usual, Jason is focusing on the positive.  The catering orders, the promise of making money.  And as usual, Vincent has his eye trained on the warning signs: the alarmingly small number of dollars in the bank account. 

And also that new order ahead option.  Their customers aren’t using it.  Which makes sense if you think about it.  If you could order your lunch hours ahead, as soon as you got to work, or later when you actually got hungry, which one would you choose?  You’d order when you got hungry. And Bento would lose money every time. 

But just one week later, events forced Jason into Vincent’s camp.  He agrees.  Things are really bad at Bento. At this point they have about two hundred thousand dollars left, and they’re burning through more than a hundred grand a month.

 

JASON: It actually probably hit me the most last night, when we got zero cater orders.  Because next week’s going to be awful.

 

MOLLY: Without catering, Bento’s sales are going in the wrong direction. Jason and Vincent can’t help looking backwards, considering their mistakes. Here’s Vincent. 

 

VINCENT: I wish we had started like this.

JASON: What’s that?

VINCENT: I wish we had started with this, with order-ahead.

JASON: I mean, like, I hate saying this, but...this is why subject-matter experts make better founders.  Like, what we have learned in the last year basically tells us that the way we started the business was fucking stupid.  But if we had been in restaurants, or had tried a similar business, or worked for Spoonrocket for three years, like, we probably would have known all of this and Bento would have just been started basically where we are today. Right?

VINCENT: Yeah, yeah.

JASON: But now we’re subject matter experts, so.  Now we can—

VINCENT: I raised a lot of these concerns, like, in the beginning.  And I think you thought we could just push through and it was going to work, right?

JASON: I did. I did. 

VINCENT: But we didn’t push through it.

JASON: I mean, we pushed through a lot of it.

VINCENT: Some of it.

JASON: Okay, I’m sorry. Like, I had a thesis. And we had smart people encouraging us. I don’t know.

VINCENT: I don’t know, either.

JASON: You know, it felt like...it felt like we were doing all the right things, and headed to the right place.

 

MOLLY: With sales number falling, they can’t go back to investors. They just don’t have a good enough story to tell. 

So Jason and Vincent talk through their options.  They come up with a plan.

And then Jason heads home to his wife, Sharon. The two of them don’t usually talk that much about work. It only comes up when something big happens. So after dinner, when the kids are in bed, Jason fills her in.

 

JASON: It wasn’t a great day… 

SHARON: Oh, why?

JASON: Um, well.  We didn’t get any catering orders for next week. And that happened last night.  And then we, like, confirmed it.

SHARON: Is that unusual?

JASON: Well, yeah. The last three weeks we’ve been doing really well on catering which has been good.  And now next week is going to be awful.  Like, really, really awful.  So I think we may shut off and lay...and lay everybody off tomorrow.

SHARON: What do you mean shut off?

JASON: Shut off on-demand.  And shut off the app. 

SHARON: Like, permanently?

JASON: Yeah.

SHARON: You mean like, close Bento?

JASON: Not close Bento.  By the way, I’m recording this.

SHARON: Okay.

JASON: Vincent and I are still trying to, like, figure out what exactly we would want to do.  But we would basically lay off everybody with a salary.

SHARON: Can you please explain more what you’re talking about, because it sounds like you’re closing down Bento.

JASON: We’re not closing it down.  But we’re basically, like, becoming, like, a catering business. 

SHARON: Oh.

JASON: And...a catering business where me and Vincent are still running it and so we’ll still be like building software and tools and things to make the business more efficient.  But not like it is today. 

 

MOLLY: He says they’d let go of their engineers and their marketing person, and also some of the kitchen staff.

 

SHARON: Tomorrow?

JASON: I mean, it’s not the kind of thing that you want to procrastinate on.  The good thing is, we have some money in the bank still.  Like, if we do all these things and act quickly, like, we could still have two hundred thousand dollars in the bank.  And that could be able to last us, like, four more months instead of like four more weeks, basically.  And if we wait, you know, it just gets worse.



-phone rings-

 

MOLLY: The next morning Jason and Vincent have an emergency call with their board member, David Silverglide.  He’s the CEO of a small restaurant group based in San Francisco. 

 

DAVID: This is David.

JASON: Hey, David.  It’s Jason and Vincent. 

DAVID: Hey guys, how are you?

JASON: Can you hear us okay?

DAVID: Yeah.

 

MOLLY: They get to the point pretty quickly.  Sales haven’t improved like they hoped.  Next week looks bad.  And there’s only enough money to keep the company going for eight more weeks. They’re thinking about laying people off, focusing on catering.  What does he think they should do?

David asks a lot of questions, ponders it for a while.



DAVID: It’s a tough...in my mind it’s a tough decision, because you’re conceding that you can’t raise on this existing path.  But the other path is very different, right? It’s basically just—you’re operating a restaurant, you’re operating a catering operation.  Even if you have the vision in the future of saying, “Well, here’s what we want to be and here’s are the things we want to do,” once you’re down that path, convincing investors to come back in because you’re going to pivot and change, is going to be I think an uphill battle. 

JASON: Yeah.

 

MOLLY: And here, it starts to sound like David is saying—as gently as he can—“Hey, guys. This might be it. Maybe you should think about closing Bento.”

 

DAVID: I don’t want to shoot from the hip.  I think a lot of it depends on what you guys want to do long-term, and where...where you think you can get it.  Because your investors are already saying—their return is already gone.  They’re not going to be upset either way.  But, now is a good time to look and say, “Hey, before we really prolong the inevitable, there’s some cash in the bank which means that you guys can get paid to wind—” I mean, here’s the kind of pragmatic: there’s cash in the bank which allows you to do an orderly wind-down and get paid while you do it.  And, there’s no loose ends.  It all gets cleaned up nicely.  You don’t feel like you’re stuck dragging it out for another two or three months beyond its death, unpaid, where you can’t move on, can’t go do something else.

VINCENT: Yeah, I think that’s a reasonable—

 

MOLLY: This is Vincent talking here.

 

VINCENT: I mean and I’ve said that as well.  The alternative here is that we nicely shut down and everyone gets severances and we move on with our lives, right? I mean—

JASON: Yeah. 

DAVID: Right.  I mean, I’m glad you guys called me now and you guys are able to talk about this now rather than in 45 days because then there’s not a lot left in the bank, the wind down becomes that much more painful, and you guys begin to resent the position you’re in that much more because you can’t move on, and you’re stuck doing this for an extra, you know, whatever it takes.  And you don’t want to be in that position.  So I think—and this is shooting from the hip which I said I didn’t want to do, but if you guys feel you can’t get it to where you need to be to fundraise, now is the time to make the decision.  Not in thirty or forty five days. 

 

LISA: So when your board member makes a strong case for winding down your struggling startup, what do you do?  That’s coming up after these words from our sponsors.

 

 

-ad break-

 

 

LISA: When we left off, Bento’s board member had just given Jason and Vincent some stark advice.  He’d basically said: this might be it.  This might be the time to shut down the company.  Our producer Molly Messick picks it up there.

 

MOLLY: The conversation with David Silverglide didn’t end the way it sounded it would, with Bento closing.  Jason just wasn’t ready to make that decision. So he asked for other options, and David said, “Get your costs under control, stop losing money on every sale.  See if you can increase revenue in the next few weeks.”

 

JASON: So, menu changes every day.  But today we’ve got a tikka masala, braised short ribs, sashimi...

 

MOLLY: It’s three days later. Jason is in the Bento kitchen where a staff of ten is working on lunch orders. He and Vincent have a plan.  And it has ramifications for a lot people who aren’t named Jason or Vincent.   

There’s a tall woman with reddish hair wearing kitchen clogs and tossing kale leaves in a giant metal bowl.  At the end of a long table, a sushi chef turns out rolls with a bamboo mat.  The tall woman doesn’t know yet that this is her last day at Bento. 

 

JASON: That’s part of what we’re going to have to do today.  Is start laying people off. Um—

MOLLY: So you’re actually going to have those conversations this afternoon?

JASON: Yeah, yeah. So, after this I’ll go talk with Vincent, now that lunch is almost out the door.  And, yeah, we’ll need to make some...make some hard decisions.

 

MOLLY: The layoffs are part of the plan to make Bento leaner and simpler.  No more dinner service, no more on-demand delivery. Customers won’t be able to open up the Bento app and get their bento right away.  Instead, there will only be that order ahead option. Customers will have to use the app like a food scheduler—order by 10 a.m. to get a Bento at lunchtime.  And finally, Bento will double down on catering partnerships.  They’ll try to work with more of those startups that pick up food from restaurants and deliver it to offices and corporate events.

Jason and Vincent lay off twelve people.  They ask their two engineers to stop taking a salary for a couple of weeks. One engineer decides to leave.  Jason cuts his own salary to zero.  Vincent’s already been taking nothing for a couple of weeks.

 

VINCENT: I don’t think I ever thought things would be this sticky.

 

MOLLY: This is Vincent.

 

VINCENT: That we’d be, you know, laying off half the kitchen staff, taking no salaries and having to make all these tough decisions.

MOLLY: How comfortable or uncomfortable are you with this reality? 

VINCENT: I—I think I was uncomfortable with it for a while.  I don’t know when or what changed or maybe it was a slow transition, but I think I’ve just gotten to the point where you realize: this is reality.  And I could certainly throw in the towel and just kind of walk away.  Or, you know, you could try to stick it out for the next one or two months and see if we can turn this around.  I don’t know whether that’s—that’s blind faith or whether that’s wisdom. Whether that’s grit. I haven’t figured out the difference yet. Honestly, I’m not sure.

 

MOLLY: For the founders of a struggling startup, there’s a range of futures to imagine. There’s the rosy vision with a fleet of fuel efficient cars deployed all across the city, bearing Bento decals.

And then there’s failure.

At moments like this, when it’s not clear which future is in store, Vincent looks to other people’s success stories. 

 

JEFF BEZOS: ...led to starting Amazon.com was finding…

 

MOLLY: He likes to watch videos on YouTube of Elon Musk and Jeff Bezos talking about the early days.  Musk flirting with bankruptcy. Bezos personally sending off Amazon orders.

 

JEFF BEZOS: ...I would drive these things to UPS and so we’d get the last one, and we’d wait till the last second... 

 

MOLLY: Those guys take risks and push hard.  But what if hard work and staying the course has very little to do with it?  After all, plenty of people work long hours and rack up debt—and then they fail.  In fact, it’s the more likely scenario.  There just aren’t as many YouTube videos about it. 

By the time Jason and Vincent launched Bento, there were already a lot of companies doing on-demand food delivery.  Some were acting as middlemen between restaurants and customers.  Others had their own kitchens.  And investors were backing them.  In the few months after Bento started, an on-demand food delivery company called Sprig raised forty-five million dollars.  Another one, called Munchery, raised eighty-five million.

It’s different now.  There’s a lot less venture capital going into startups than there was a year ago.  Investors are more cautious.  They’re not just looking for companies that can grow quickly.  They’re looking for companies that can show them, “here’s how we’re going to make money.” 

And companies doing on-demand are getting special scrutiny.  In March, right after Jason and Vincent did their layoffs, one of the better-known food delivery startups in San Francisco went out of business.  A headline read, “SpoonRocket Shuts Down Amongst On-Demand Apocalypse.” 

Behind pronouncements like that are real experiences and people like Sharon, Jason’s wife.

 

SHARON: That was in Angkor Wat in Cambodia.  That was in Vietnam.  We took a motorbike and got very, very lost.

 

MOLLY: I’m at Sharon and Jason’s apartment in Oakland, where there’s a wall covered in pictures from trips they took before they got married.

They grew up in the same city—Folsom, California—but they didn’t start dating until after college.  When Jason suggested they quit their jobs and travel, Sharon was game.  She’s Korean American, and for a long time she’d wanted to teach in South Korea.  So they spent a year on the move, and then they settled in Seoul.

Even at that point, Jason knew he wanted to have his own company.  So it’s been a big deal to see him get Bento off the ground. 

 

SHARON: I don’t know, it just—it makes me so proud.

 

MOLLY: Sharon thinks back to a year ago, when Jason was first pitching the company.   

 

SHARON : When he launched Bento on stage at the LAUNCH festival last year.  I was like—ugly crying.  Like, I was just so proud of him.  I’m probably gonna start crying now.

[long pause]

SHARON: I don’t want my voice to be all shaky…I’m like waiting. It was just— I know how hard he worked.  And when he was on stage I was just so proud of him.  I came up to him and I started crying and I was like—I’m so proud of you.  And this was, like, before he even sold a bento.  I was just so excited.  I can’t believe I’m that person, like, crying on a...on a thing right now.  This is really embarrassing. 

MOLLY: Well, it’s this person you feel so close to, care so much about, who you know works so hard and wants nothing more than to have his own business and it’s—and it’s there within reach. 

SHARON: Yeah.  And he did a really good job presenting, too.  So I was like—oh good job!  Because he had been rehearsing with me for weeks.  So I knew exactly what he was going to say, but then I saw him and I was just, like, bawling.

MOLLY: To you, like, what did it represent for him?

SHARON: It just represented his, like, his induction into this startup world.  Rather than thousands of people who have an idea, they want to do something about it, they don’t get to this point, I feel like.  And he had gotten to that point where it was a real thing.  And he was launching it on this huge, you know, stage with all these people watching who were—could potentially be customers and  investors.  And he was starting this company from our bedroom.



MOLLY: But Sharon also tell me that the ups and downs of having a founder husband are getting hard to take. 

 

MOLLY: When you think about the idea of Bento closing, what comes into your head?

SHARON: Um, to be honest, a little bit of relief.  A lot of sadness for Jason.  Even though he’s so logical about things that he wouldn’t—he would be fine, um…

MOLLY: Tell me why you’d be relieved?

SHARON: I don’t know, like, we’re going to have, like, a steady income again? And we could possibly start saving to buy a house.

MOLLY: Do you think he knows that you’d feel a little bit relieved?

SHARON: Yes. I think if I told him, I don’t think—I think he would laugh, but it wouldn’t be a surprise.  If he really thought about it.

 

MOLLY: Since Bento launched, Sharon has learned how hard Jason can work.  How driven he is.  And she loves that about him.  She says it motivates her.  But sometimes it also makes her lonely.

 

SHARON: Before Addi was born, our second baby was born, Jason was starting Bento.  And when he started, he was doing all the dispatch, meaning he was working—he would probably come home at 11:30 p.m. every night.  And he would leave work work anywhere from 6 a.m. to 7 a.m.So he was working like 15 hours a day.  For months.  And that was like the hardest… you know.  And I only had one kid at the time, but I was pregnant at the time, also.  And so—I think that’s probably, if somebody asked me about my life with Jason as a founder, that would be my one thing that I remember the most, is just how hard it is with him working so much.  And that time specifically when he was home, like, one hour a day in the morning.

 

MOLLY: It’s Friday morning in the Bento kitchen, four days after the layoffs.  Bob Marley’s coming through on the speaker, and the back door is propped open to let in some cool air.  There’s the smell of ginger, jasmine rice.  Bento’s five remaining chefs and cooks pick up the pace as the ordering deadline gets closer.

 

JASON: Less than a minute. Twenty seconds. 

 

MOLLY: Customers have until ten o’clock to place their lunch orders, and Jason steps out of his office to count down to the end of the ordering window.

 

JASON: Okay, it’s final!

 

MOLLY: They’ve sold 37—better than they’ve done most days this week. 

Overnight, Jason has run some new numbers based on the cuts they’ve made.  To break even, the company needs to sell 2,000 bentos per week.  Including catering, that means they have to more than quadruple their current business.

A few weeks later I call Vincent to find out how things are going.

 

MOLLY:  Okay, so how are you?

VINCENT: I’m pretty good, can’t complain.

 

MOLLY: He tells me that the first few weeks after the layoffs went really badly.  Instead of improving, sales went down, and Jason and Vincent both got discouraged.  Then a new catering partner brought them on, and suddenly the numbers turned around.  They weren’t selling anywhere close to the 2,000 bentos they needed to break even—but they were moving in the right direction. 

And that put Jason and Vincent back into their familiar roles. Jason focusing on the positive trend.  Vincent, very aware of their shrinking bank account. It was late March by this point. They had enough money left to last them another month.  Maybe.

 

MOLLY: Do you think that you and Jason are on the same page right now about whether Bento will survive?

VINCENT: I mean I do worry about his...his level of optimism.  I mean, I guess I’ll put it this way:  It’s been—I don’t want to say the whole year...maybe it has been.  It’s been a long time of kind of like—let’s see what happens in the next two weeks, let’s see what happens in the next two weeks, let’s see what happens in the next two weeks.  Over and over.  Like let’s just see how this plays out.  And I don’t want—yeah, I don’t want him to play that out until the end?  Like, I don’t want people to come in on some random day and us to say, like, “Sorry we’re out of money now, that’s the end of it.”  Or to have us call people on a Saturday and say like, “Oh we’ve decided not to continue.  Don’t come to work on Monday.”  That’s not how I want to end things. 

 

MOLLY: Vincent has some news.  He’s decided to start looking for freelance work.  Bento won’t be able to pay him a salary anytime soon, and he can’t work for free indefinitely... So he’ll keep maintaining Bento’s app, but he won’t take on new projects.  And he won’t be in the office much anymore.

Jason’s okay with Vincent’s move.  He understands it, even though he’s making a different call.  He and Sharon are living on their tax refund, and pretty soon they’ll be using the money they’ve saved for a house downpayment.  But with sales on the upswing at Bento, Jason can’t see stopping now.   

 

MOLLY: It sounds like you might run into the situation you’ve talked about a couple of times, which is, like—you at some point have to decide, how long can you keep going with no salary?

JASON: Yeah. That’s a concern.

MOLLY: What’s your thinking about that?

JASON: Try not to think about it too much. Umm. Yeah, I don’t know. If—Vincent is able to, you know, find something on the side and doesn’t need Bento to pay salary then I think there’s a decent chance I can turn on a small salary for myself and then, we can kind of cruise along like that?  But, yeah—I need to...part of my analysis will need to include that, for sure.

 

MOLLY: Jason tells me things have improved enough that he thinks he can raise more money.  He’s set a goal of 100 thousand dollars and his deadline in the last week in April.

I’m not sure if Jason would put it this way, but to me it seems like this is it.  The last ditch effort.  His final shot to turn things around at Bento.

 

JASON: Alright, uh, let’s see it’s Thursday.  I sent out my begging for money emails Tuesday. 

 

MOLLY: It’s mid-April now.  Jason’s walking home from work.  He’s reached out to three of Bento’s biggest investors.   

 

JASON: I’ve received two responses.  Both of them were no’s. I guess I didn’t expect this to be easy and it’s—this isn’t going to be easy.  If all three had said yes it would have been easy, but I can’t expect that.

 

MOLLY: By late April, he still hasn’t closed the round.  So he makes a desperate call to his landlord to see if he can put off paying next month’s rent.  She says yes.   

Jason tells Vincent about what’s happening, but at this point he’s making the decisions on his own.  Vincent’s freelance work is keeping him busy.  He hasn’t been at Bento in weeks.

Jason and I check in again.

 

MOLLY : What is it about you that’s made you stay?

JASON: I don’t know I—I don’t discount...sunk costs enough?

MOLLY: Explain that.

JASON: You’re not—you’re not supposed to factor in sunk costs into your decisions, right?  So somebody who can—eliminate sunk costs from their decision may have said, “Yeah, then it doesn’t make sense to continue.”  So, maybe I have a hard time getting rid of sunk cost.

MOLLY: But that’s implying that you think you should’ve made a different decision by now.

JASON: Yeah, sure, yeah.  If a year ago I had asked myself, “Where do I want to be in one year?”  Like, let’s say volume, revenue, whatever-wise.  I would have probably written down some big numbers.  And then said, “Okay, if we don’t get to what number do you think we should quit?”  And I guarantee you the number would’ve been higher than we currently are.  But obviously I, you know, despite that, I still decided—yeah let’s still keep going. Um...

MOLLY: Why is that?

JASON: I don’t know, like, I think about the business that we’ve built, I think about the problems that we’re solving, I think about the customers we have, and it feels like a business that should continue to exist.  And, you know, I’m proud—proud of it.





MOLLY: Jason tells me the last few weeks have been the best ones he’s had at the company—better than launch, better than raising more than a million dollars right out of the gate.  Because he’s built something that he believes can work. 

The kitchen is really busy now.  Just that morning, there was a big catering order for 230 bentos, and then a rush to meet the lunch deadline.  Jason put on a hair net and helped with the kale salad. 

He tells me that startups can be sort of like fantasy businesses.  They spend a lot of money on growth—on getting customers or a big audience.  But really the best thing to do is figure out how to build a real business, one where all the numbers make sense.   

Bento is not at that point yet.  Every week, the company still spends more than it earns.  But now breaking even is just a matter of getting sales up.  Another 600 bentos a week, and Jason thinks they’ll be there. 

A week and a half later, I get a message. 

 

JASON: It’s, uh, Wednesday, 3:15.  As of 2:39 PM, our round is closed.  Got the last 10K, pushed us over 100K.  Yay!

 

MOLLY: It’s Jason, letting me know that he’s pulled it off.  He’s raised the money.  Closed that hundred thousand dollar round. 

 

JASON: Obviously happy.  Excited to keep—to keep pushing on.  Obviously nervous about other stuff, but that’s, I guess I’ll—hopefully I can sleep well tonight and start worrying about that stuff tomorrow. 

 

MOLLY: There’s money in the bank now, but there’s a lot to worry about tomorrow and the next day and the next.  There are salaries to pay, and bills and deferred rent.  And beyond that, there’s the bigger worry about whether all of this is worth it.  How much longer should Jason keep pushing? Will Bento flounder again?  Or maybe this will be the moment that Jason and his investors have been waiting for—the one that he’ll look back on years from now, when Bento is a huge and memorable company,when he and Sharon have traded the Oakland apartment for an airy home in San Francisco, and when young startup founders scan for YouTube videos of him, talking about the early days. 



-music-



LISA: Molly Messick is a producer for our show.

Coming up, we’ll have scenes from the next episode of StartUp, after these words from our sponsors.

 

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LISA: We’ll be back in two weeks, on June 9th, when we’ll hear from a founder whose getting ready to make one of the most important pitches of his life. The thing he’s worrying about—his clothes.

 

MAN: Maybe I should have dressed up a little bit startup-y...right?

LISA: Why do you say that?

MAN: Cuz, like Blake is dressed with a hipster hat, and like, NDM beads...I don’t know what the fuck he’s wearing. I felt, like, competitor zone...looking, like, startup-y. I’m looking a bit corporate-y. My heart is beating fast.

 

LISA: This stage is a typical stop on a founder’s path. But this founder’s path has been anything but typical. That’s coming up in two weeks.

So, I said at the top of the show that we’d have something special for Gimlet members. If you log in to the members section of our website, at GimletMedia.com, you’ll see a special bonus episode featuring the co-founder of Reddit, Steve Huffman. I talked to him as I was reporting the Twitch story, and it was a super interesting conversation. I want to share bits of it with you. For those of you who aren’t Gimlet members, you can join on our website, again, GimletMedia.com.

One more thing, we want to learn more about you, our listeners. And we would love it if you took our brief survey. Go to StartUpListener.club, that’s C-L-U-B. For those of you that complete the survey, your name will be entered to win a free t-shirt.



Today’s episode of StartUp was produced by Luke Malone. It was edited by Alex Blumberg, Peter Clowney, Kaitlin Roberts, Bruce Wallace and me.

Production assistance from Simone Polanen.

Mark Phillips wrote and performed our theme song. Build Buildings wrote and performed our special ad music.

Additional music by Matthew Boll, John Kimbrough, Tyler Strickland and the band Hot Moms Dot Gov.

 

Matthew Boll mixed the episode. We had extra help from Austin Thompson.

 

To subscribe to the podcast, go to iTunes, or check out the Gimlet Media website: GimletMedia.com. You can follow us on Twitter @podcaststartup. Thanks for listening.We’ll see you in two weeks.

 

 

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