Bold, Innovative Entrepreneurship

On Episode 20 of Decision Dialogues, Jennifer Faherty and Victoria Consoles speak with Deepak Shrivastava, CFO of The Flex Company, co-founder of Porter & Sail, and former CEO of Hotel Credits. Deepak discusses the risks he navigated as he took the leap to start Porter & Sail. He shares insights on how he raised capital and incubated a startup within Porter & Sail, highlighting the value of betting on oneself.

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Transcript

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Thanks for joining us on Decision Dialogues. We’re thrilled to have you along. My name is Jennifer Faherty, and I’m the Chief Client Experience Officer at Modera Wealth Management LLC. Today my colleague Victoria Consoles, who’s a Senior Financial Planning Associate at Modera, and I will be chatting with Deepak Shrivastava. Deepak was a co-founder of Porter & Sail, a mobile concierge technology that was recently acquired by Luxury Escapes, an Australian-based online travel company. He also leads Hotel Credits, an alternative hotel booking platform that was incubated at Porter & Sail during the pandemic. He currently serves as CFO of The Flex Company, the top selling alternative period care brand, known for creating highly differentiated, sustainable products available in over 25,000 retailers in the United States. That is quite a bio, so I’m looking forward to this conversation. Welcome, everyone, to the show. And Victoria, please take it away.

Thanks, Jennifer, and Deepak, welcome. Thanks so much for taking the time to talk with us today. 

Thank you so much for having me. 

Of course. This is fascinating, I find, that you ran a company through the pandemic. And I’ll kind of put a spoiler alert in there—you ended up selling it through the pandemic as well. So I kind of wanted to get into that. But first, why don’t you tell us where you kind of started out? I know you started in the banking industry and how you got to wanting to start your own business, and what it took to get there? 

Sure. I had my start in investment banking. It wasn’t necessarily a mistake, but I will say it was a stroke of luck. I was simply looking for the first job and the best job that I could get that would help me pay my student loans off—not an unconventional way to think about things in terms of paying off debt. I was lucky enough to land a spot at Morgan Stanley. I thought what would be a two, three year stint at most ended up being sort of the first half of my career. And that’s sort of how I got into banking. And then from there basically wanted to explore more of my own stuff, like what my own interests were, after my financial obligations, sort of, I checked the boxes on them. Ended up taking a spot at Dropbox in its early days, which then, you know, motivated me to sort of start my own business, which led me to the founding of Porter & Sail, along with my co-founder.

That’s great. So Porter & Sail, what year was that founded in? 

That was founded in late 2014.

2014. And who was your co-founder there? Was it someone from Dropbox or someone else you knew?

It was actually a mutual friend, not from college, but through college friends, I’d met my co-founder, Caitlin Zaino. What a wonderful partner, we still maintain a beautiful friendship, even though we’ve sort of veered off into different paths. But we sort of met in July 2014, I believe, and started talking about new businesses. We both were into travel and hospitality. I guess we hadn’t stopped talking until we sold the business. And we still talk—we actually had a conversation yesterday.

That’s great. So what type of travel company is it? I know it’s featured mostly within hotels. So what were you kind of crafting when you came up with this, and I know you had to raise capital for that? So I want to hear about the process there and what that took.

Sure, when we embarked on building the product and the service, what it was really oriented towards was, and this is back in late 2014, early 2015, was sort of to speak to a new mode of traveling. At the time, there was a, you know, an emerging app for everything. And we knew that there was going to be a growing space and appetite for travelers, for consumers wanting to basically consume travel information. The travel information that was out there, everything from data to where to go, where to eat, where to drink, where to shop, etc, etc. was very diluted and not curated. So what we wanted to do was basically provide a very curated, tailored platform for sort of the new age traveler. 

The medium in which we wanted to deliver that was a little bit non traditional. You know, we could have gone the route where, Victoria, I could have convinced you to subscribe for 99 cents a year and you have this cool app. Quite frankly, we wanted to take the B2B route. And what we found out was, look, the travelers that we want to get in front of, the eyeballs that we wanted on our product, were essentially living at boutique, luxury lifestyle hotels. So why don’t we convince hotel owners and general managers to take on our product, pay for our product, and have this be exclusively offered to their guests. So that’s where we got started. That’s how we started growing our user base. That’s how we started monetizing. From there, we just wanted to invest more and more into the platform, which predicated the need to essentially raise capital and go the quote-unquote Silicon Valley route to raise multiple rounds, invest into the product and get that flywheel going.

That’s great. I want to, you know, talk about raising the capital there. So what did that look like for you? Were you talking to investors or people you knew? Who were you raising capital from? And how long does that process actually take?

It took a long time to raise capital. To be quite candid, it was a very difficult process. Throughout the lifecycle of the company, at different points of the company’s maturity, we raised capital from different classes or subsets of folks. Initially, we went to friends and family and really attempted to bootstrap the whole enterprise just to get it going. We put, obviously, our savings, my own personal savings and capital into it, everything that I had sort of amassed in terms of the nest egg I built up from my previous years into the business. You have to believe in yourself, right? You’re your own best investor, essentially. So it took a little bit of personal gumption to sort of take that initial leap of faith and just put money down to get things going, develop the product, hire a team, hire agencies, to essentially get the actual service and business going up and running. 

Once we started hitting certain milestones, and it became a thing where we started devoting essentially full time energy to the enterprise, we then decided to go for a seed round, and from there go for a series A round, and intermittently we raised convertible debt, so very different financial instruments. All that being said, you know, we started institutionalizing our approach. So we went to professional angel investors, we went to venture capitalists, we went to corporate VCs as well. So it was a full gamut of folks that ultimately ended up on our cap table.

I have a quick question actually about something you said, and also related to the first part of when you were back at Morgan Stanley that relates to personal finances, actually. Because you said in the beginning that you kind of almost did a—these are my words—like a practical decision to go to Morgan Stanley to pay off your debt. And then you ended up eventually pivoting to—you used the word gumption—and then taking your savings out to start this. So can you talk a little bit about the decision making you had to go through financially from practical to kind of taking more risk?

Sure, sure. Yes. So definitely, it was a very practical route for the first half of my career, right. Paying off debt, helping my parents with their mortgage, you know, all that family stuff, helping my younger siblings through college, etc, etc. So it took a good, almost near decade at Morgan Stanley to sort of accumulate that wealth, so I can check the box and all those things I wanted to accomplish. But then, you know, I came to sort of a personal realization, professionally speaking, thinking through like, hey, am I 100% happy here? Is this something that I want to do? It sort of led me down an exploration into other things. I have an engineering background, although I’m not an engineer. So I was always interested in technology. And that’s sort of what led me to Dropbox and then ultimately, my own technology enterprise.

In terms of personal finances and how I sort of looked at the decision making and how and why I took sort of a leap of faith, I have to say it was, quite honestly, reckless. It was less of a pen and paper analytical decision, which is not necessarily my MO. I mean, typically, my decision making framework at large is very data driven. This specific jump for me was an inflection point that was very intuitive and driven by my gut, quite frankly. There was a level of comfort where I had amassed, you know, that nest egg? Well, I could easily say, alright, I have X number of years of runway. At the time, I was single, didn’t have any obligations, no mortgage, had this nest egg of savings and said, hey, you know, if I don’t do this now, I don’t think I’ll be in a better position, mind-wise, to actually take this leap of faith. 

And again, like I have to be my own biggest cheerleader. While I have that gumption, while I have the penchant to really want to take this risk and have the ability to to take this risk at the age of 35—not married, no kid, no responsibilities, I should do it now. Because chances are five, six years later, where I am today, with a kid, with a spouse, with obligations, it would be a much harder pill to swallow. The appetite for it definitively would have been less. It’s like in the matrix—red pill, blue pill. Once you’re down the rabbit hole, you’re down the rabbit hole. I’m sort of on the other side now, you know, I’m glad I did it. But it was—financially speaking, if I had sat down with a, you know, a financial planner, Victoria, you would have been like, do you really want to give up a certain lifestyle to sort of go take a very, very risky proposition? I’m glad I did, ultimately, though, because you know, the bet was on myself. And you know, again, I think in general, you can never go wrong betting on yourself.

I love that. And just kind of curious, did you give yourself a time frame? Like if this doesn’t work out, in the next five years, I’ve got to go back to having a more stable income or back to not necessarily the investment banking lifestyle, but did you kind of give yourself this? Alright, I’m betting on myself for X amount of years. And then if not, I’ll figure something else out.

I should say, like, quite honestly, you know, I had it. And again, this is why my analytical side would classify the decision as being reckless. I knew that I would have some sort of time frame, 3,4,5,6 years where I didn’t need to drastically change my lifestyle, not that I was living an extravagant one. But I knew that I wouldn’t have to really change my day to day. I didn’t know how long that would be. But I also realized, like, my life situation may be different. And it ultimately was—I got married and had a kid and became a parent, you know, let’s just say that shortens your runway quite a bit, you know. So I knew that there was a time frame. I didn’t put specific parameters on it simply because I think I realized that I know my situation is going to change, my circumstance is going to change. So just recognizing that I would need to be agile really, really helped out for my peace of mind.

No, that makes total sense. And so you took this–what you called a reckless kind of chance with your savings account. So what did it look like, then, from managing your personal finances from there on out while also managing the finances of a business? What did that look like for you? Because it definitely had to be a huge change.

Yes, it was a huge change. There was definitively a wall between personal finances and the business’s finances, 100%. We just knew from the bat, my co-founder and I—it’s essentially, it’s almost like a marriage. You’re sharing a bank account, literally. Right? We always kept it separate, what was you know, for me personally, and ultimately, my family versus what was in the business. So there was always that divide. 

Now, what bearing it took on my personal finances? Yeah, I would say what was my approach, if you’re asking that, it was sort of, again, I would say reckless, especially in those first couple of years. You’re just kind of shooting from the hip. For example, there have been multiple instances where we were out doing fundraising, we needed to keep the business going, we needed to make payroll. So guess what, who’s footing that bill, it’s going to be the founders who are going to run up their credit cards or dip into their savings. At one point, I definitely dipped into our 401k, which is not advisable for tax reasons, right?

It shows the confidence that you had in your business. And I love that you were able to back up your employees and put them first in those kind of situations. So I feel like that is incredible as well. So can we talk about the pandemic now and what it was like to run a travel company during that? I mean, essentially, everyone was telling you, please don’t travel. And here you are running a business that has become so successful, and it’s almost put on halt. So I want to hear from you. What did that look like initially? And how did that get you to where you are now?

As you could imagine, it was professionally probably one of the most difficult things that I’ve ever encountered. You know, it’s not even like travel was down—like you have a business downturn, you expect that, you plan for it, there’s contingencies, right? Travel wasn’t like down travel; travel was illegal. And actually, it’s something that one of our staff members sort of equated it to basically being a drug dealer, because we’re here selling a product, which is quite literally illegal. So how do you actually go about doing that? It was just a really tough time. It involved multiple tough decisions, both with clients, both with products and our services. We just had to sunset a bunch of stuff, because we just didn’t have the capacity to sustain it. And also, unfortunately, with staff, we let go about 80, 85% of our staff, shut down multiple offices. It was not an easy time.

How big had your business grown to at that point?

We had about 25 full time employees at the peak. We had a few sales outposts in London, Singapore. Headquarters is here in New York. And we had some folks in Rome. We also worked with hundreds of contractors as well. Overnight, it felt like things just shut down. I remember the day, it was actually March 9 when things shut down. Mainly also March 9, because it’s The Notorious BIG’s death anniversary. I just remember that day where we literally saw like, because we had insight into hotel occupancy rates, it just crashed, like single digits, something the industry’s never seen before. 

To answer your question directly, Victoria, a horribly difficult time. And it’s informed a lot about how I approach work and how I approach decision making, especially tough decision making today. Personally, I think my previous life, or pre-pandemic, I probably was very much inclined to either put off tough decisions or try to circumvent them, so I wouldn’t have to make them. I think it’s just best to confront it head on now. We had no choice during the pandemic, there were just too many decisions to make and for the good of the business, we couldn’t postpone those decisions. So making those tough decisions head-on I think is really important. And then also being swift. I think there’s something to be said about analysis paralysis by using the excuse or internalizing the excuse, like, Hey, I still need to think about stuff or I need to analyze this, like, it’s actually just an excuse. You probably already know or intuitively have a gut feeling of what that answer is. You should just pull the trigger and the quicker you pull the trigger, I think it’s better for everyone. I’m a fan of quick and decisive, tough decisions, just going through with it.

That must have been such a great, you know, learning curve, really, in some respects, because you’re forced to in this way, but really, sometimes it takes so long to learn that lesson. You know, I love what you said about analysis paralysis, because in this situation, there’s no analysis to do because it was so, so unknown. We’d never gone through something like that, you didn’t know when it was going to end. So you almost had to make decisions without having information.

I’d add that the other thing that emerged from that experience during the pandemic was innovation, right. And this is where, like, you know, you’ve heard the cliche—necessity is the mother of invention. It really forced us to think about our business differently, think about how to work with clients differently, think about how we’d run a business. What emerged from it was sort of this business that we’ve continued to run that we incubated at Porter & Sail was Hotel Credits, which for all intents and purposes, was a completely re-envisioned—it was like a startup within a startup. It’s like we started a new business, but we had to. We had to figure out a way to monetize, to pay our bills, to make sure that I could pay rent, quite honestly, right? It really forced us to just really shift the dynamic and the paradigm of how we were operating within the industry. And it forced us to be innovative in a great way.

Do you feel like after now you’ve sold the business and things are starting to open up again in the world—are you still happy with your decision to sell the business there? Or was it out of a need, personally and financially, to do so? I can imagine how difficult that must be, right? You’re hit with this global pandemic. And all of a sudden, you made a decision, which I’d like you to talk about too, to sell the business, but it’s just a complete 180 from, you know, a year and a half ago. So I just like to hear about maybe the challenges or the successes there with selling the business as well.

I don’t have any regrets whatsoever. Just like any entrepreneur, you know, you do strive to have it be a big and relevant business. A relevant business doesn’t necessarily equate to a hugely monetizable one, right, or some, you know, like a billion dollar unicorn. Yes, I would have loved that, that would have been the first best outcome. The second best outcome is to one, have that degree of resiliency to have survived as a business for five, six years, and then survived through a pandemic, and then successfully sell the business to a company that now is going to take our product and distribute what we created to its 3 million plus user base. It lives on. Maybe I’m not at the helm and my partner and I are not calling the shots anymore. It is the second best outcome I think one could hope for as an entrepreneur. Was it some huge financial windfall? By no means, right. But you know, I think we were at a crossroads thinking through like, Okay, do we just keep operating independently, and keep fighting the good fight? Or do we take this opportunity to roll this up. We retained some part of the business Hotel Credits, and there’s a lot of exciting stuff going on there. 

Then also, on a personal basis, to touch upon that, both my partner—I won’t speak for her. For me, specifically, you know, I was at a place where I was at a different phase of life. Not necessarily just monetarily or financial needs I have in supporting a family, etc, etc. But I was doing this business for the last six years. I was ready to sort of think about what the next stage of my career was. It was a great launch pad at this transaction to sort of tie the bow on something we really cared about and see it live on, have a remaining piece of the business, keep going. So we’re still doing right by a lot of our stakeholders, our investors, our staff, etc. And at the same time, on a personal basis, use that as an inflection point to think about what else I want to do, what’s the next stage of my career. So it all sort of made sense. And I’m just really proud of the team and the product and how we sort of managed through it all where, yes, we may have peaked out in 2019. But 2020, like we survived, and that can’t be said for a lot of other travel tech startups.

No, that’s amazing. And it’s so inspiring hearing you talk about, you know, from the beginning and raising capital, and putting yourself on the line for your employees. Now coming full circle and having sold the business and, you know, coming through the pandemic, it’s really inspirational. And just hearing you talk about everything you did, I hope that our listeners are enjoying this conversation, because it’s so interesting. And maybe people have actually seen the brand out there when they’re traveling too, because I know you talked about what was different from this was that the big attractions that they were looking for, you’re kind of giving that inside knowledge and that’s from your personal experiences from traveling through banking. Well, Deepak, thank you so much for joining us today and sharing your story. We have one last question before you go. So take a step away from the finances. What’s the last non financial decision you’ve had to make recently?

Recently? Yeah, we’re in the middle of moving. So I’m here in Brooklyn right now. My partner and our three-year-old daughter, we’re all going to move to Los Angeles in a couple of months. The decision making that’s going on right now is what preschool and what neighborhood to live in Los Angeles. That’s been the major topic of discussion in the household. And we keep going back and forth. But it’s a fun decision making process, because it’s exciting to think about where we’ll end up next.

That’s very exciting. And such a change from where you were a year and a half ago, it sounds like. Well, best of luck with your move and your future endeavors and your new projects here. Thank you so much for taking the time to talk with us today. We really appreciate it. 

Thank you for having me. Have a wonderful day.

That was great. So I think our listeners really enjoyed that. Thanks very much to Victoria and Deepak for letting us listen in on their conversation. We appreciate their time and perspective. And thank you for tuning in. We hope you’ll join us next time on Decision Dialogues for more stories from successful business owners. So long for now.

About Deepak

Deepak Shrivastava is the Chief Financial Officer of The Flex Company, the top selling alternative period care brand, known for creating highly differentiated, sustainable products available in over 25,000 retailers in the United States. He was a co-founder of Porter & Sail, a mobile concierge technology, and he also leads Hotel Credits, an alternative hotel booking platform that was incubated at Porter & Sail during the pandemic.

Deepak previously worked in strategic accounts at Dropbox and as a Vice President at Morgan Stanley. He is a graduate of Columbia’s Fu Foundation School of Engineering and Applied Science and Wabash College.