Making Something From Nothing: David Mancarella Of White Elephant Online On How To Go From Idea To Launch

An Interview With Fotis Georgiadis

Stay true to your vision. When you launch a product, listening to feedback is critical. Some of our best features came from understanding the needs of the customers who were reaching out to us, earnestly trying to use our product to run a great holiday party for their company. But you also need to have a strong perspective on what you’re building and why. No one understands the big picture better than you, and if you don’t have some core convictions driving what you think makes your offering special, you’ll likely lose what makes it special.

As a part of our series called “Making Something From Nothing”, I had the pleasure of interviewing David Mancarella.

David Mancarella is the Cofounder and CEO of White Elephant Online, a platform that enables businesses and families to play the popular holiday gift-swap game virtually. He studied business and entrepreneurship at Babson College, after which he began a career in Product Management. He’s spent over 10 years building products at startups in industries as varied as finance, floral and real estate.

In 2020 during the pandemic, wondering how he might celebrate the holidays that year with his co-workers, he got the idea for White Elephant Online. White Elephant, also called Yankee Swap or Dirty Santa, is a popular holiday gift swap game played by millions of people each year. Unfortunately, there was no easy way to play the game virtually. Within a couple weeks he had fleshed out the idea with his wife & cofounder Leliah Kishbaugh, and recruited his friend Andrzej Brynczka as the technical cofounder.

White Elephant Online launched on November 23, 2020, and in the following 6 weeks grew to over 165,000 users with over 11,000 games played by families, friends and business groups across the country. They’re now going into their 3rd successful holiday season.

Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a bit about your “childhood backstory”?

My father was self-employed from the day I was born, so I grew up with a model of someone who approached work & life differently than most. That definitely helped shape my mentality, and I wanted to get into business & entrepreneurship since I was young. My first venture was a lawn-mowing business I founded when I was 16 with my childhood friend Tom. We plastered the town with flyers and were able to make a decent chunk of change that summer. It wasn’t life-changing money, but the experience showed me the possibilities of creating something of value from scratch.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

I’m a big fan of: “I’m a great believer in luck, and I find the harder I work the more I have of it” (apocryphally attributed to Thomas Jefferson). To me this quote captures an important nuance I think is true about the world, which is that luck does play a very real role in success. But you can also put yourself in a position to attract opportunities and be able to pounce on them when they arrive. So: be grateful for the good fortune in your life, and work hard to get more of it!

There is no shortage of good ideas out there. Many people have good ideas all the time. But people seem to struggle in taking a good idea and translating it into an actual business. Can you share a few ideas from your experience about how to overcome this challenge?

I think the key is to surround yourself with people who are doing the things you want to be doing. For me personally, I went to business school with a focus on entrepreneurship, so I was constantly surrounded by people starting businesses or talking about that world. I then worked in a number of different startups to get direct experience in that world, and to see what it takes to successfully grow a business, what works and what doesn’t. If you want to get into a given business or industry then finding ways to work in it is super valuable, even if you don’t start out where you ultimately want to be.

Another way to “surround yourself” is through the media you consume and network you create. If you have an idea for a business but the whole thing just feels so large, then start watching YouTube videos about people who have started similar businesses. Find podcasts and blog posts. Follow people on Twitter, join Reddit groups or Slack communities. Just start seeing other people doing what you want to do, and suddenly the mental blocks will start to fall away.

A great example of this for me personally is my wife and I had the idea to convert a van into a camper so we could travel around the US hiking and visiting national parks. For about 3 months before we even bought the van, we just binged “van conversion” and “van life” content on YouTube. Seeing regular people like us making it happen made it seem more and more attainable, and helped give us the confidence to dive in. It ended up being far harder than we ever could have imagined, but 2 years and many trips later it was 100% worth it. And that’s how you hope to feel about your business as well.

Often when people think of a new idea, they dismiss it saying someone else must have thought of it before. How would you recommend that someone go about researching whether or not their idea has already been created?

First, do the obvious: search for it! Look on Google, app stores and social media. Is it there? Sometimes the result may be very clear: there are well established companies doing pretty much exactly what you wanted. Other times it’ll be more ambiguous. Maybe there are companies tackling the problem you have in mind, but are approaching it in different ways than you envisioned.

You’ll need to consider what your findings mean to your own idea. If you’re in the target demographic for your idea and you’ve never heard of the options out there to solve this problem, then that could mean the existing options either don’t solve it well, or don’t have strong distribution — so there’s still opportunity.

When I had the idea for White Elephant Online, it was one of the few times I’d searched for a business idea and there was no one out there doing it. This was largely a factor of timing (there’s that luck creeping in). Until the pandemic hit, there really wasn’t a need for it. That’s when I knew that we had to act fast or we might miss the opportunity.

For the benefit of our readers, can you outline the steps one has to go through, from when they think of the idea, until it finally lands in a customer’s hands? In particular, we’d love to hear about how to file a patent, how to source a good manufacturer, and how to find a retailer to distribute it.

White Elephant Online is fundamentally a digital business. A big upside of this is that startup costs are significantly lower than brick-and-mortar businesses, or even a physical product company. However, there is still a lot to consider and get organized. The categories I’d keep in mind are:

• Business activities. At a minimum you should legally form your business, get a bank account and know what taxes you need to charge. You could also get bookkeeping and other financial tracking up and running, but don’t do more than you need to. If you launch a product and no one buys it, QuickBooks won’t matter too much!
• Build the product. For a digital product, if you’re not personally an engineer, that doesn’t need to stop you! There are many sites like Upwork where you can find, vet and hire designers and developers. There are also plenty of digital agencies that can do everything from the design to the testing and development of your project. That being said, if you can find someone you know personally or trust on the tech side to be a cofounder or advisor, that could help you vet these options and make sure you’re spending your money wisely.
• Marketing & Sales: How will your customers find out about your product? You’ll want to consider your website, social media presence, SEO (Search Engine Optimization) to drive search traffic, paid advertising options (e.g. Google Ads, social media ads), email marketing, and more. What you want to prioritize will depend on your specific business and audience.
• Business model & monetization. If you’re selling a product, then how you’ll make money is pretty straightforward! But if you’re offering a digital product or service there may be various models for pricing and monetizing. For example, you might implement a “Freemium” model where there’s an entry-level free tier, and then paid premium tiers.
• Customer Service. Make sure you have a way for customers to reach you, but just as importantly make sure customers have a way to answer their own questions. A comprehensive FAQ or support center can save you hours of time answering questions.

What are your “5 Things I Wish Someone Told Me When I First Started Leading My Company” and why?

1. Be clear on your target demographic. When we were planning the White Elephant Online launch, we originally thought we’d monetize by having ads on the platform. When we got rejected by Google Adsense, we pivoted to creating a paid package required for businesses. What we didn’t realize was this choice functionally changed our business from a B2C (Business to Consumer) offering to a B2B (Business to Business) offering. When people are paying for a product, there’s a different level of expectation for customer service and what the product will do. Ultimately the monetization strategy worked great, but it meant a lot more overhead in managing these clients.
2. Customer Service is key but time consuming. One thing we were wholly unprepared for when we launched was the volume of customer support we would need to handle. Within a matter of weeks, our user base went from 0 to over 165,000. In order to maintain happy customers and create a strong reputation we felt it was critical to have fast turnaround time on any questions or issues. But this was easier said than done when 2 out of 3 of us were still working full time jobs. Fortunately we made it through (with heroic CS management by Leliah), but building up a comprehensive support center, and then automating away the most burdensome requests, were key to making subsequent seasons much easier to manage.
3. Build only what’s critical and iterate from there. Having a background in product management, I’m deeply familiar with agile concepts of software development and the ‘lean startup’ method of launching a Minimally Viable Product. The basic premise is that you won’t really learn what’s valuable to your users until you actually launch something and can assess usage and feedback, so move quickly and build on it as you go. It’s great in concept in theory, but is certainly easier said than done in practice, and there was a long list of features we wanted to add before go-live. Fortunately for us, we were on a very tight deadline: if we didn’t have a usable product by the 2020 holiday season, then we’d totally miss our window of opportunity. This forced us to make hard prioritization decisions and focus ruthlessly on the core experience: making sure groups could play White Elephant and would have a fun time doing it. When we launched, you couldn’t edit your name. After you signed up, if you had a typo you had to email us to change it. That was annoying, for us and the customer! But it didn’t impact the core experience, so we put up with the pain for a few days until we could push more features. Ultimately what this approach did was allow us to get real-time feedback and continue to push enhancements that mattered most to our customers, instead of a laundry list of ideas that didn’t actually add value.
4. You can’t please everyone. We’ve had overwhelmingly positive feedback on our game, but as any business owner knows there are always customers you can’t please. And for some reason those are the customers most likely to reach out and let you know what they think. We realized you can’t take it personally and you can’t let their feedback drown out all of the other positive signals you’re getting.
5. Stay true to your vision. When you launch a product, listening to feedback is critical. Some of our best features came from understanding the needs of the customers who were reaching out to us, earnestly trying to use our product to run a great holiday party for their company. But you also need to have a strong perspective on what you’re building and why. No one understands the big picture better than you, and if you don’t have some core convictions driving what you think makes your offering special, you’ll likely lose what makes it special.

Let’s imagine that a reader reading this interview has an idea for a product that they would like to invent. What are the first few steps that you would recommend that they take?

There’s a simple framework I like that’s just 3 questions. Before diving into a new venture, ask yourself:

1. Is the market real? Is the market big enough to make the effort of launching a product worth it? In other words, are there enough people willing to spend enough money on the problem you’re trying to solve?
2. Is the product real? Can you imagine, design and build something that will solve the problem you have in mind? What will that take?
3. Can you win? Given all the competition, your financial and material constraints, your team, the market and all the other factors: do you think you can win in this space? Can you grab customer attention and deliver a product they’ll love and recommend to their friends?

Thinking through these questions will lead you to a ton of information about the market, your potential competition, your customers and what it would take to launch your product.

What are your thoughts about bootstrapping vs looking for venture capital? What is the best way to decide if you should do either one?

I’m a big fan of bootstrapping, but it depends on the type of business you want to build. White Elephant Online is bootstrapped, and in addition to the benefits below it’s also allowed my wife and I to build the lifestyle we want. Sure we’re actively working to grow the business each year, but since it’s such a seasonal business we also use the flexibility to travel a lot in the off-season. This wouldn’t be possible if we were answering to VCs and trying to 100x our business in 8 years.

If you have the capabilities to bootstrap your business without VC investment, you’ll gain some key benefits:

• Hold onto a lot more equity.
• Have aligned incentives: you’re not pressured to grow at all costs, or to put immediate goals over the long term longevity of the business.
• Not constantly focused on raising the next round. Instead you’ll be forced to focus on the product, the customer and building something people will pay for, because otherwise you won’t survive!

That being said, venture capital can be really valuable if:

• You need a big infusion of cash to get to v1 of your product.
• There are well financed competitors.
• The opportunity is so big that moving quickly and at scale is the only way to win in the market.

How have you used your success to make the world a better place?

We’re really fortunate with White Elephant Online that the product itself brings people together and provides a lot of joy during the holidays. In particular, we launched in 2020 during the pandemic and it was important to us to offer a completely free version of the platform for any groups of family or friends that wanted to use it. This allowed people to connect in a way that they hadn’t in months with the ones they loved, and we got such heartfelt feedback about the impact that had. We continue to offer a free version of the platform for friends and family.

This year we’ve also gotten into charitable giving, launching a Toy Drive campaign to support Toys for Tots and get gifts to kids in need this holiday season.

You are an inspiration to a great many people. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.

Haha, I’m not sure I can inspire a movement quite yet, but I would like to be a model for people who want more out of life than a 9–5 they hate. To Leliah and I, flexibility and autonomy has always been more important than dollars in the bank account, and that has led to a lifestyle we’re truly happy with.

We are very blessed that some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US, with whom you would love to have a private breakfast or lunch, and why? He or she might just see this if we tag them.

I’m a big fan of the two hosts of the My First Million podcast, Sam Parr and Shaan Puri. While they’re clearly ambitious and successful entrepreneurs, they also seem like happy and well-balanced guys that don’t take themselves too seriously. It’s a great balance that I myself strive for, and it would be interesting to pick their brains about how to achieve it.

Thank you for these fantastic insights. We greatly appreciate the time you spent on this.