Daniel Yuabov was a 22-year-old IT manager in New York who wanted to buy a new car. He was so frustrated with the buying experience that he started a software company called Carvoy to make it easy for car buyers to find, buy, and finance a new car online. He grew the company for 5 years—without VC funding—and sold it to a giant Fortune 500 company in 2020.
Daniel quit his job in 2015 to build Carvoy’s first product using developers in Ukraine. It allowed consumers to choose a new car online and then buy it easily from a dealer. Their first version was interesting to consumers but resisted by most car dealers. Their second solution had them manually arranging the car purchases behind the scenes for their growing crowd of online buyers.
It wasn’t until they started automating every step in the car buying process, including choosing a car, getting a confirmed best price from dealers, arranging pre-approved lending, and handling delivery that they started to sell thousands of cars. They pivoted from a marketplace with transaction revenue to selling it as a SaaS product to car dealers. They grew faster and were acquired by a major car-financing lender for an undisclosed sum in 2020.
“I learned the hard way not to build a big first product that takes a year to build. Be very, very lean with what you’re building at first. There’s the 80/20 rule that 80% of your users will use 20% of your features. Find that 20% and build that before doing everything else.
“You should try to get an actual commitment from a user, a handful of users, and even actually have them pay you a dollar, whatever it is. You should probably build last.”
In this episode, Daniel explains:
- Why he quit his job to build an online solution after having a frustrating car buying experience
- How many “gruesome” pivots and experiments they tried in three years before they finally created an amazing online car-buying solution that dealers were excited to pay for
- How he financed the startup phase with his own savings, a loan from his father, and credit card debt
- Why he chose to sell his startup to a big industry player rather than get venture funding
- How he dealt with the long process of selling to a large financial lending company and what it’s like to work there now
- What it felt like to sell his company for life-changing wealth only to realize that his life didn’t change much
Carvoy Company Facts
- Founded: 2015
- Description: Carvoy is an automotive digital retailing company that has transformed the way dealerships sell cars online.
- Practical Funding Type: Self-funding, debt from parents, credit cards, customer-funding with revenue
- Number of Employees: 12
- Acquisition: Acquired by an undisclosed Fortune 500 company for an undisclosed sum. Carvoy rebranded as part of the acquirer’s solution.
- Location: New York, New York
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