After co-founding Borrough and eventually sunsetting the business in 2024, I’ve had time to reflect on what we learned during our journey building a peer-to-peer rental marketplace for household items. These lessons have shaped how I think about building products and validating ideas, and I hope they’re useful for other founders navigating similar challenges.
In the early stages of your business, when validating your concept with customers and conducting research, people will tend to tell you what you want to hear, especially if you ask leading questions. Most people we talked to told us that a rental marketplace for household items was a great idea. However, when we built the product for them, we found people much less willing to use our product. This phenomenon is called the “say-do” gap – the difference between what customers say they want, and what they do once they’re faced with the option to use your product.
I believe this gap was larger than average for a concept like Borrough. There were many elements that made this a sensible idea. The sharing economy had become commonplace in people’s lives with Airbnb, Uber, and Turo. Younger generations were more likely to live in rental apartments and wanted to live more sustainably and save money. And everyone could imagine a situation where they might need a one-off item – like a drill or an air mattress. It made a lot of sense to people and we got a lot of rational, positive responses to our idea.
It is an incredibly hard thing to discard positive validation from people about what you are building. But it is critical to keep the bar high and validate that you are solving a problem that people actually experience in their lives (be a painkiller and not a vitamin). It is tempting to move forward after the many soft “yeses” you will get about your idea. However, we learned that you should be looking for the people who give you a “hell yeah” when you tell them what you’re doing. These are the folks that you will ultimately build your business around in the early days.
We tested our first MVP in a building in Evanston that was occupied largely by MBA students. Putting a very basic product out into the world taught us a lot about the business and allowed us to validate some of our riskiest assumptions, even though it was mostly a lot of our classmates using the product. We knew that there were factors about the environment that were beneficial – there was a strong sense of community in the building with everyone being students, there was already borrowing behavior through informal means like Slack channels, and the population was highly transient with students staying for 1-2 years before moving out. These factors clearly helped accelerate the adoption of Borrough in the building and drove a strong usage rate.
However, we reasoned that there were factors in other buildings that created more of a need for a product like ours – primarily the fact that people in most buildings do not know their neighbors and thus need an intermediary to help them borrow items from their neighbors. We reconciled these pluses and minuses as a sort of balance sheet and called it even without paying enough attention to what questions the environmental factors brought up.
We realized early on that it was critical to partner with the property management team in a building from a monetization and customer acquisition standpoint. Given how hyperlocal the marketplace we were trying to build was, acquiring customers through online channels wasn’t viable. We needed to go through the building’s marketing channels to drive adoption.
While we knew adoption would be harder without a building on board as an official partner, we should have still pushed to test informally in a guerilla-like fashion in other buildings to understand this concept in different contexts. We instead prioritized selling to buildings more formally, which resulted in us hastily checking the validation box after our first MVP test and moving on to build a higher-fidelity product on top of a foundation that had a lot of untested assumptions.
As you build your business, storytelling becomes a bigger part of your job. Whether you’re selling to clients, pitching to investors, or recruiting people to join your team – you’re sharpening and fine-tuning your story. The pitch deck is a great way to consolidate everything about your business into a story that people can understand. However, it can also disguise the fact that certain assumptions have not been thoroughly validated in the real world. An entrepreneurship professor of mine used to say – “the business you’re building in this classroom (where you’re testing assumptions) is different from the business you’re pitching to the outside world.”
It is a very human tendency to attempt to fit the information you’re receiving into a clean narrative that makes for a compelling story.
Most new products require customers to change their behavior. Oftentimes it’s substituting one product for a new one that offers additional value. Sometimes, it’s solving a problem in a completely new way, as was the case with Borrough. We were trying to get people to stop ordering cheap stuff on Amazon and rent from their neighbors instead. This was a significant shift in behavior, and we knew marketing was going to be something we would have to be good at. In hindsight, we underestimated how high the bar truly was.
When marketing to consumers, you’re competing with countless other products for a small slice of their attention, so you must be incredibly effective at using that attention to inspire action. It also means being extremely focused with your value proposition and the use cases that your product is meant to solve, which is something we struggled with at Borrough because it could be applicable for in many different contexts. You also must find other ways beyond just emailing people to drive virality and engagement through the product. This was a skillset that we knew we lacked at the beginning. It didn’t worry us though because we knew you must wear multiple hats as a founder. We figured out the sales side of things pretty well, so we assumed the same learning curve with marketing. This was where our approach fell quite short of moving the needle with customers. Looking back, we should have thought harder about how to fill this marketing gap that neither of us co-founders were going to be great at.
We had a lot of stakeholders we were trying to bring to the table – residents, lenders, and property managers. We had a two-sided marketplace with all the inherent challenges of balancing supply and demand, as well as a B2B monetization approach that relied heavily on the property team being invested in marketing the idea to their residents. In theory, yes we could have got all these stakeholders aligned and got the business to work. In reality, it was quite challenging to figure out the right incentives for 3 different customers and make those work concurrently.
Limited resources demanded that we focused on 1-2 groups at a time and move the ball forward on a single front. However, this can lull you into a sense of complacency where you feel good if one of the groups is working. There was a period where we were excited that property managers were interested in Borrough for their buildings. During the launch phase in our buildings, we were excited about lenders signing up to rent their items out. We viewed demand with renters as our problem child. As our pilots launched, we started to see issues emerge on all 3 fronts. Lenders would ghost renters who we had worked hard to drive to rent on the platform. Property managers would go silent after a few weeks and ignore our requests to put up new marketing materials for residents. All this while we struggled to move the needle on demand with our limited marketing capabilities.
For Borrough’s approach to have worked with the model that we had, we needed all three customers to be properly incentivized to participate in the platform. This was far more challenging to accomplish than we realized during the journey. Acknowledging this earlier might have changed how we approached solving this puzzle or might have made us more willing to shift the model to a simpler approach before layering in more complexity.
Building Borrough was one of the most challenging and rewarding experiences I’ve had. While we ultimately decided to sunset the business, the lessons we learned have been invaluable for how I think about building products and understanding customers. As we explore rebuilding Borrough v2 with these learnings in mind, I’m excited to apply a more rigorous approach to validation and a simpler business model that addresses the core insights we discovered along the way.