Startups Don’t Need Product Managers & Other Lessons Learned from CarGurus Langley Steinert

Photo Credit: Dylan Martin

When most people sell a company for a couple hundred million dollars, they take a little time off for a victory lap. Not Langley Steinert. Just months after selling TripAdvisor (a company he co-founded with Stephen Kaufer) to IAC, Steinert revved his entrepreneurial engine and founded CarGurus.

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This simple idea has become a massive business with little no venture capital in the tank.

In the ten years since, CarGurus has become the #1 car shopping site on the web. Today, it employs over 280 people and is growing 100% year over year — profitably. On Monday April 4th Founder Collective’s Eric Paley, recently named to the Midas List, will be interviewing Langley Steinert, an entrepreneur with the Midas Touch, to learn about how he’s managed to build two businesses, worth a combined $10 billion dollars with under $10 million dollars of venture capital in the tank. Here’s the roadmap of what will be discussed:

Math beats media spending

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Math > Media.

In a market dominated by massive television media campaigns, CarGurus succeeds by leveraging math. “With all due respect to our competitors, they’re newspaper guys who morphed their products onto the internet, but never applied math or technology to make things better for their customers,” says Steinert. “They’re big businesses so they’ve done some things right, but they’ve never done the consumer experience right.”

For instance, Steinert’s competitors make customers click through pages of ads before finding the model they searched for. CarGurus uses linear regression models to help users figure out whether a given listing is a good or bad deal based on recent historical data for their area and shows sponsored ads separately, like Google. This gives customers an honest third party assessment of the various options in their area and provides an incentive to buy.

Focus on your customer’s ROI

No product managers required

“I could give a $#!+ what you think, what can you prove?”

Also, with 20 million shoppers a month CarGurus operates on a scale where there’s no excuse for not making cases based on data. “With the amount of traffic we get we can get an answer to an A/B test in six hours,” says Steinert. “We don’t even need to wait the full day.”

CarGurus once lost its biggest customer in one month — and survived

The customer “fired” CarGurus, right before Steinert was about to head out on a vacation with his wife. Fortunately, the VP of sales was able to close the gap and within a year they had surpassed their old revenue, with a much more sustainable customer mix.

TripAdvisor has a Y Combinator connection

VC is optional

Low burn rates = Longer runway

Sometimes it takes an outsider perspective to drive change

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