Walkthrough Case Study (The 1-10-100 Process)

This week I’m handing off the blog to a good friend and client of mine, Pascal Wagner, to provide a case study for one of my coaching aphorisms, The 1-10-100 Process. You can read my background on that process here. Pascal’s experience (written up by Megan for this blog) provides additional insight into what happens when my clients put my advice to work. Big thanks to Pascal for sharing his story.

In 2016, I co-founded Walkthrough, a platform to match realtors with photographers to provide services for their listings. Originally we started out as a VR platform, but shifted to photography in the interest of fast growth. As a founder, that was the million-dollar question I was constantly asked by investors: how fast can you grow? The answer determined whether we were fundable.

Around that same time, I also began working with Eric. For months, I’d been focusing on metrics like how fast we could launch in a new city, how we could get new customers and how much those customers would cost. Eric, however, pushed me to study the market and determine how big it really was. He repeatedly told me to try his 1-10-100 Process, and while I eventually did it, in retrospect, I wish I’d done it the first time he asked.

When we launched Walkthrough, the equations were easy. I was the one going out taking the photographs, so we pocketed the full $200 sale on every customer. As we scaled and added photographers, engineers, and sales and customer service teams, the equations became more complicated. I knew that, but I don’t think I fully understood how complicated it was before implementing the process.

The math became even harder once we added in market data. In the United States, approximately 6 million homes are sold per year. That’s just the facts. We then started making assumptions, and even when we were generous — assume half of them need photography and we corner 10% of the market — we realized that, based on our margins, our maximum revenue topped out around $9 million a year. Nothing to sneeze at, but when you account for all the costs, we realized it was not a good fit a venture-backed. Our investors, and we the team, expected more. 

From there, the process turned into questions about what was not only realistic, but desirable. In order to make it to $10 or $100 million ARR, we’d need to grow our market. That meant expanding our services horizontally by launching globally, and vertically by adding services like cleaning and staging. All options came with challenges, and ultimately, they were challenges we decided not to cross. 

Instead, we sold the company. In the spring of 2019, we were successfully acquired by a competitor. In my calls to Walkthrough’s investors announcing our decision, they responded positively, remarking that many founders don’t have the maturity to make that decision, and most will opt to either run out of money entirely or run “ghost companies” that never make the real money that was promised. There was overall agreement it was smart to get out now, and I’m proud of our decision.

Now, working on the investment side with Techstars, as well as formulating ideas for my next startup, I know it’s worth it to do the due diligence first. Thinking through all the pieces alongside customer discovery and well before talking to investors can save you some major headaches later. 

The 1-10-100 Process is something every founder should be doing from day one. Devote time to it, it’s worth it. And while the initial process may take several months, if you survive that, it’s something you should continue to do along the rest of the way. Sometimes, you just don’t know until you do it. But you have to do it. 

— Eric Marcoullier

I remember the first time I asked Pascal about his unit economics. He was excite about a new strategy for launching new markets and I said something to the effect of “that’s cool, but how much money can you make in that market.” And I remember the fifth time I asked him, when he was excited about his new photographer onboarding strategy. I remember the fifteenth time I asked him, when he was focused on additional services like cleaning. Dude, how big is your fucking market?

Sometimes my number one job as coach is to just keep asking the same important question over and over until it sinks in. Some of this stuff is foundational and you can’t hide from it. If you’re interested in walking through the 1-10-100 Process with me, send an email at eric@marcoullier.com or visit my coaching site at marcoullier.com.

Leave a Reply