Shop the websites of top e-commerce brands like Rothy’s and Dollar Shave Club and you’re likely to receive an ultra-targeted–and pretty effective–follow-up email pitching the products you may have missed. It is the handiwork of Retention Science, a 62-person company based in Santa Monica, California. The profitable startup clocked in at No. 894 on the Inc. 5000 last year, with revenue of $ 4.5 million–and its CEO and co-founder, Jerry Jao, has come a very long way. –As told to Lindsay Blakely
I grew up in a very loving family in Taipei. I never felt like I lacked anything. I didn’t realize until I got older that we were poor.
But my parents couldn’t afford to care for me. When I was a newborn, my father threatened to drop me off at the orphanage. My mother wouldn’t let him. He left when I was 3. We moved in with my mom’s parents, and she and I shared a bunk bed. Eventually, I moved into the basement, which everyone used for storage–we blocked off a corner with some thin boards. I slept on a mattress on top of some boxes. There were mice. But I had my own bathroom.
In elementary school, I had a side hustle collecting cans and bottles to recycle. I could make $ 5 to $ 8 a day. It was like a game–every day, I’d try to collect more than the day before. I wanted to help put more meat and vegetables on the table.
I knew very early on that there was a world much bigger than the one I lived in, and that education was the only way out. I got into the best high school in the country, but I really wanted to make something of myself. At 13, I asked my mom if I could move to America.
It never occurred to me that this was a big, scary decision. My dad–whom I’d met only a few times–came to the airport to see me off and gave me a Transformer toy and a small Nike bag.
I still haven’t Marie Kondo’d those things out. They’re the few things I have from him.
I flew by myself to Los Angeles, where I have an uncle. All I had was a suitcase and a textbook understanding of English. I found an excellent high school in Woodland Hills and enrolled after searching the classifieds for a Chinese family in the area to take me in and act as my guardian.
Though I met Andrew Waage, who became my co-founder, I didn’t spend a lot of time making friends– I just wanted to get out of ESL classes and excel. I was valedictorian and received a full ride to Berkeley. I wanted to get through everything quickly, and get out into the world. I graduated in three years, in 2005.
Andrew and I always knew we wanted to start something. We were excited about e-commerce, and helping businesses use data to track customer loyalty. It took us three tries to start a business that worked. In 2012, we each put in around $ 70,000 and launched Retention Science.
The first two years were a total slog. We didn’t know what we were doing. We kept making mistakes, and weren’t good at asking for help. The way I grew up, there wasn’t a lot of help to be had even if I asked for it.
One of my problems is that I’ve always been so frugal. It comes from a childhood of scarcity. I’m always thinking, “What can we do to save more?” This is just not the right way to build a business. I should have hired more experienced people early. We made a lot of mistakes with people, and I didn’t let them go early enough.
We raised $ 7 million in 2014. But instead of growing, business went down for two years. My board was starting to doubt our strategy, and our employees were asking for salary raises. No one else knew this, but anytime we increased someone’s salary, Andrew and I cut our own. By 2017, we’d stopped paying ourselves.
But late that year, we finally figured it out and business started to take off. We got lucky–a lot of the startups we worked with started blowing up: Dollar Shave Club (its founder, Michael Dubin, became one of our investors), the Honest Company, Sugarfina. This year, we signed a deal with P&G to power the data analysis behind all of its brands. That’s going to force us to mature further.
My mom is really proud of me, though she doesn’t really understand what we do. My family thinks, “Jerry did it. He’s gone somewhere.”
My father? I haven’t spoken to him in seven years. I think he’d be happy for me. I would like for him to know that I’m doing OK, and that I’m a good person.
Maybe part of me is still that kid in Taiwan, trying to prove myself again and again.
From the July/August 2019 issue of Inc. Magazine