When COVID threatened to end his startup for good, Kulveer Taggar was faced with a decision.
“It’s corny, but I believed that if we decided this was the end, it would be,” he wrote in a Twitter thread. “If we decided to come together and find a way, even if we didn’t know how to immediately, we would.”
Before the pandemic, Zeus Living was growing fast. The housing startup, which offers furnished properties to business travelers and young professionals on a temporary basis, relied on the travel industry, and people working in offices, to make money.
Its co-founders, Joe Wong, Srini Panguluri, and Taggar, who serves as CEO, founded Zeus in 2016, had gone through Y Combinator, and by 2019 had a staff of 240. The company had grown accustomed to seeing three to four-fold growth each year. Investors like Airbnb and Initialized Capital had brought the company’s total funding to $55 million by December of that year. By March 2020, investors stopped responding and growth was cut short.
Lockdown, landlords, and layoffs
Taggar was worried about the eventual spread of the coronavirus back in January, but didn’t think it would arrive in the US so quickly. Taggar noticed the first change was when tech conferences were cancelled. Then customers — ranging from young professionals moving for internships to older workers relocating — began to cancel travel plans. Zeus had no choice but to refund them.
“In those sorts of traumatic situations, you go into third person a little bit. I just felt like this is happening to me and this is happening to my company.”
“When we started seeing these cancellations come in, that's when it hit me that, ‘Okay, we had this awesome growth plan for the year and all these things we were going to do. And now we're going the other way and we don't really know what's going to happen.’” Taggar said.
When occupancy of Zeus’s properties fell from 90% to below 40%, Zeus could no longer pay landlords. By June, $10 million in contracts were cancelled, and landlords were banding together on Facebook to get answers from the company.
Then came Zeus’s first round of layoffs. Taggar had to cut 60% of staff in total, with no choice but to conduct layoffs via Zoom. When the next round of layoffs eventually came, Taggar tried a different approach. Instead of deactivating employees’ accounts on short notice, he gave a long lead time for employees to say their goodbyes, which he says went more smoothly than round one.
“I would say we were operating from a place of fear,” Taggar added. “One thing I regret is maybe not staying core to my own values. I knew the company best, and I knew the culture best of what we built, but I almost felt like a passenger in the whole process, because in those sorts of traumatic situations, you go into third person a little bit. And I just felt like this is happening to me and this is happening to my company.”
During one round of layoffs, after a particularly difficult Zoom call, one of Zeus’s co-founders revealed that his wife had just been diagnosed with stage 4 acute lymphocytic leukemia, and would need to be hospitalized immediately.
Taggar tweeted about the call, saying, “It put things into perspective. The company struggles no longer felt important.”
Painting the Daruma doll
During those difficult early months of the pandemic, Taggar said, he was having serious doubts about the future of the company.
“There were times where it felt like maybe we weren't going to make it,” he said. “I tried not to let my thinking go too far down that path, but there was definitely one evening where I remember going to bed and thinking, ‘I remember how hard this business was to start, all of the collective effort that went into getting it to where it is today.’ And then potentially seeing that all unravel and having this moment of, ‘Holy crap.’”
“What we did was find new demand that replaced the demand we were no longer having. That was probably the first ray of light that, ‘Hey, we'll get through this.’”
Despite the initial shock, Taggar decided to stay the course. To help him get through, he found a pair of good luck charms. The first was a gift from his mother-in-law, an Indian Ganesha doll to bring good luck. The second was a Daruma doll, a gift he’d been given from a Japanese friend.
The idea, Taggar said, is to color in the doll’s left eye as you set out on a goal or journey. Then, when you’ve completed that goal, color in the right eye, which gives the doll full eyesight. Although Taggar says he’s not particularly religious, he needed all the help he could get.
Return to profitability and beyond
After months of trying to find a way to get properties filled and landlords paid, Zeus hit upon a winning strategy. Instead of targeting business professionals, Zeus would provide housing for traveling healthcare workers, construction workers, and displaced students whose campuses had shut down.
The Silicon Valley exodus also led to new demand in cities like Austin, Miami, and Nashville. Zeus quickly began interviewing landlords and reviewing properties to expand into the regions, accelerating growth. By July, total occupancy was back up to 85%, where it’s remained ever since. And to top off the good news, Taggar said his co-founder’s wife is currently in remission.
“What we did was find new demand that replaced the demand we were no longer having, because business travel and international travel were stuck,” Taggar said. “That was probably the first ray of light that, ‘Hey, we'll get through this.’”
Zeus is no longer in survival mode — in fact, it’s doing better than ever thanks to diversifying demand. The company began 2020 with around 2,000 properties ready to rent, and that number has since doubled. While the company reduced their burn and found ways of improving profitability, it’s still not reaching the revenue it did pre-COVID. Taggar expects those numbers to return to normal before the end of 2021.
“My ambitions for the company remain the same,” Taggar said. “We want to be in the top 100 metros globally. We want to take this company public. We want to rebuild the team to the scale it was before.”
Travel used to account for a quarter to a third of Zeus’s business. Now that the company is making profit elsewhere, the end of the pandemic only spells growth for the company. With the return of travel comes the need for employees to relocate, and Zeus already has a backlog from companies like Slack and Facebook.
Although Zeus is back to profitability, Taggar hasn’t yet painted in his Daruma doll’s right eye, though he plans to once the pandemic draws to a close. “My wife says I need to, and I should. And I was like, ‘No, I'm just going to hold out a little bit longer.’ So yeah, sometime soon.”