- Name: Schneur Landa
- Age: 34
- Company: Fello
- Industry: Event Tech Services and iPad Rentals
- Headquarters: Butler, New Jersey
- Established: 2011
- Employees: 26
While attending a corporate event, community fair, or checking into a seminar (these things existed a month ago), you will often find people walking around with iPads. Chances are that they are rentals from Fello, an iPad and POS (point of sale) hardware rental company that was started by Zalmy Raskin and Schneur Landa.
From only ten iPads, Fello has now grown to thousands, and it has corporate partnerships with financial tech giants Square and Shopify, as well as BMW, the Make-A-Wish Foundation and Harvard University. Whenever a customer reaches out to one of Fello’s partners to facilitate sales at an event, he is directed to Fello’s website.
Fello’s core business came to a screeching halt a month ago with the onset of the coronavirus pandemic. If there aren’t any events, there aren’t any rentals. But with siyata dishmaya, Fello was able to pivot its business and is now the leading supplier of iPads to yeshivos and schools across the country for online learning. Their customizable iPads offer a safe solution to get through these perilous times because the devices are preconfigured to be safe and secure, without the dangers of regular tablet access.
“My parents, Rabbi Yosef and Shiffy Landa, have been the head shluchim for nearly 40 years in St. Louis, Missouri. Growing up, there was only one Modern Orthodox school called the Epstein Hebrew Academy. I went there for kindergarten and Pre-1A. Then I switched to Torah Prep, a very frum Litvishe elementary school. On the day I put on tefillin, I was sent away to learn in Chabad yeshivos. Like most Lubavitcher bachurim, I learned in Oholei Torah in Crown Heights for one year and was then sent on shlichus. I went to the yeshivah gedolah in Miami Beach, Florida, where I obtained smichah from Rav Yitzchak Yehuda Yaroslavsky of Nachlas Har Chabad.”
“While studying for smichah I became friends with another bachur, an Australian named Eli Feiglin. Eli was into business and was selling cellphones online.
“I had no business background whatsoever. I come from a family of rabbanim and shluchim, and I found the concept of buying something for a dollar and selling it for two very fascinating. I joined Eli in a small business buying cellphones directly from American retailers and reselling them on eBay Australia for a markup.
“After only a year I’d made $50,000 profit, which was enough for me to continue on my own after Eli went back to Australia. I expanded by selling other electronics like Bluetooth headsets, mostly on eBay. Then eBay became very difficult. People would offer me items to sell, claiming that they were new, but they were actually used goods. It was getting harder and harder to make a living selling directly to consumers, so I began focusing on wholesale. I had customers in Dubai, Kuwait, Saudi Arabia, Canada and Australia. Soon I was selling all types of electronics.
“In 2010 Apple came out with the iPad, and my wholesalers overseas wanted them in huge quantities. If an iPad retailed for $500 here, I was able to sell it for over $1,000. It took creativity to obtain volume, but baruch Hashem, I was able to pull it off. I had friends and business contacts with huge credit on their credit cards, and they were happy to make the purchases on my behalf, sometimes to the tune of half a million dollars, for which they earned points. When the second generation iPads came out the following year I also did well. But when the third generation came out in 2012, it was basically over. Apple had figured out how to launch in over 140 countries at the same time, and there was little advantage in buying and selling overseas from the US.
“In early 2012 I was approached by an old friend of mine, Zalmy Raskin, about a business opportunity. I’d met him three years before when his brother married my sister. Zalmy was a graphic designer working in the Shluchim Office in Crown Heights.
“Zalmy’s father had a computer repair and rental business in London, England, and had connections to Apple. So Zalmy came up with the idea of trying to rent out iPads to tourists coming to New York. I didn’t think it was a good idea. I didn’t see it as a large market. I sold iPads, I didn’t rent them. But Zalmy was very keen on us going into business together. That’s what I appreciate most about him. He believes in his ideas and is dogged until he achieves them.
“At first our company was called Flying Connected, because the initial idea was that tourists could stay connected when they traveled. Even though our business model later changed, the name stuck until two years ago, when we rebranded as Fello.
“Around the same time I decided to get on board, Zalmy got some media exposure. But instead of individuals reaching out looking to rent iPads, several companies approached us about renting iPads for their events. These companies were looking to rent between 20 and 100 devices at a time, and sometimes as many as 3,000. We quickly became a B2B [business to business] company, as opposed to a B2C [business to consumer].
“At that point Zalmy had only a few dozen iPads, so I invested some capital and we bought a nice number of them. Having a lot of iPads was key, as we were then able to drop the price point. It was good timing for me to try a new business venture. My core business, the overseas electronics market, wasn’t doing so well.
“I wanted to partner with someone who had good middos and the potential for a long-term equitable relationship, so Zalmy and I became partners. Zalmy has a slightly higher equity stake in the company than I do, which is something I insisted on.
“Three years into the company we received an email from the financial services giant Square. This was the big break from Hashem that changed us from a startup to a real company. Square was giving us an opportunity to become their official hardware rental partner. They were looking for a company to handle all of their rentals. This meant that whenever someone reached out to them looking to rent Square point-of-sale hardware or devices for events, Square would direct them to us for fulfillment and support. We went through a lengthy bidding process and were awarded the contract, and the relationship has flourished for the past six years.
“This deal changed the way we operated. Up until then, when people needed iPads, we’d ship them to the client without much thought for aesthetics. Now we began to pay much more attention to how the iPads were packaged and how they looked. We also made the return process very smooth.
“Today, if you go to Square’s website and click on Hardware Rentals, you are taken to a landing page on Fello’s website. We handle everything from iPads to full POS setups, including cash drawers, barcode scanners and receipt printers. We also provide additional services for Square customers such as nationwide on-site support and pre-event services like menu build-out. In short, we aren’t just a hardware rental company, we’re an end-to-end tech solutions provider.
“More recently, we were contacted by Shopify to essentially offer the same services to their customers. As with Square, a custom landing page was built with a dynamic online quoting and booking platform.
“Later, after getting a lot of referrals, we built other relationships as well. There was one big union that wanted to rent 3,000 iPads ahead of the 2016 presidential election. That was more than we had at the time, but we made it happen. That’s a story in and of itself.
“We initially opened our offices in the Financial District of Manhattan, as many of our clients were from that sector. In 2016 we moved to a much larger facility in Butler, New Jersey. We needed a warehouse to handle the increased volume of shipments and our expanding team, and Butler was the same distance from my house in Morristown, New Jersey, and Pomona, New York, where Zalmy lives.
“Baruch Hashem, we have continued to grow from year to year, forming additional affiliate partnerships, most recently with Charidy. We provide iPhones, iPads, laptops, headsets and projectors for their campaign call centers. Our services are widely sought in the fundraising, food and beverage, and healthcare industries.
“The next partnership we’re about to undertake is with Eventbrite, one of the largest event-ticketing companies whose customers require various hardware components to check in and facilitate sales.
“When the coronavirus hit a few weeks ago, our business took an obvious hit. Until companies start having events again we were at a standstill, or so we thought. Then we started getting inquiries from nursing homes. Since they weren’t allowing visitors inside, they wanted their elderly residents to be able to communicate with their family members. Orders were trickling in, but not that many. Then the cheder that Zalmy’s sons attend sparked the initial idea of renting devices for online schooling because they were familiar with what Zalmy does.
“We published an article on COLlive [a Chabad community news service] explaining that our product was perfectly suited for schools and yeshivos. We have an IT team that can customize any iPad to make it safe for children with zero access to the Internet or any other apps the school wants to block.
“We were contacted by the Lubavitch Mesivta of Chicago and ran our pilot program with them. We dropshipped individual iPads for the entire mesivta. Word spread, and there are now many yeshivos and schools using our iPads. The administrations are happy that they can give their students devices without fear that they will be used for anything other than what the school wants.”
What did you do with the deposits of the companies that had to cancel their events?
We immediately refunded their deposits for the customers who didn’t accept a credit. We were not prepared for this and neither were they. Life is scary now for all people and businesses. The most important thing for a business is to ensure that your relationship with your customers remains intact.
How old are the iPads you rent out?
We specifically don’t buy new iPads, because there really is no point, the minute it gets to the first person renting it, it isn’t new anymore. We buy like-new iPads. The great thing about iPads as opposed to other tablets is that they retain their value. Even after three years of rentals, we can still sell the older models for a decent return.
What’s the story behind the name Fello?
Around two years ago some of the people at Square advised us that our name wasn’t good. Flying Connected didn’t tell the story of what we do and, if anything, it represented something else entirely. We hired a boutique Manhattan-based marketing firm and they came up with the name and the branding. Fello is the word “fellow” playfully misspelled, which gives off an intentionally fun and friendly vibe.
The domain name Fello.com was still available? Most 5-letter domain names that actually spell out a word are long gone.
It wasn’t available, and the owner of Fello.com wanted $75,000 for it. We negotiated with him and got him to lower his price. It was serious money, but well-spent as obviously you want your company name to be your domain name without any extra words like Fellorental.com for example; Fello.com sounds better and is our company name.
How do you make money off of your partnership with Square? Do you receive a percentage of the sales they generate?
We make money off the rentals, and whatever money is generated by processing sales belongs to Square. What we receive from Square are leads and sales! They generate thousands of leads a week from their website alone.
Why do people rent as opposed to purchasing? And how much do you charge to rent a device?
I will answer your second question first. There are three variables when it comes to rental prices: quantity, duration of the rental, and customization. In general, rental costs a fraction of purchasing and without the responsibility or hassle. For example, to rent 100 iPads for a week costs only $30 an iPad for the basic level; that’s why it makes sense for people to rent. Every iPad we ship comes with a foam padded box and a return prepaid shipping label. Our goal is to make it as hassle-free as possible.
For our current initiative supporting schools with longer duration rentals, we have developed custom affordable pricing.
Do you have insurance on your iPads?
Yes, we now offer rental insurance to our customers. When renting an iPad, the customer agrees to pay for any damages such as a cracked screen or if they dropped it in water. Several customers told us they wish there was an option for insurance they could purchase when renting the iPads instead of having to pay for the actual damages. We looked into it and found that in the state of New Jersey, you do not have to be a licensed insurance company to sell insurance on your own equipment. We now offer the option to purchase insurance on all our rentals. As most iPads don’t get damaged, this has turned into a nice new revenue stream for us. You have to crunch the numbers, but this is something I suggest all rental companies look into; having your own insurance can be really beneficial both from a financial standpoint and in making your customers happy.
I’m curious as to why you insisted that Zalmy have a slightly higher equity stake in the company than you? Why not be equal partners?
Zalmy was also puzzled why I wanted that arrangement. Here is the reason.
Today we both help grow the business together, but when we first partnered up, Zalmy really needed the influx of capital that I brought. Often when someone brings in a partner who provides financial support, and the company becomes successful, they can become resentful. They might think to themselves, “Did I really need a partner?” I probably could have done it on my own.” I wanted Zalmy to have the edge over me, so to speak, because, after all, he was the founder of the company.
I think this is key when people enter into a partnership: Don’t focus on what “I” can get out of this; rather, focus on thinking about how this partnership can maintain a healthy balance to work out in the long term.
How do you market yourself?
Our core model of growth is through our strategic partnerships, and I think this is something that many business owners can benefit from if they think about how to form these partnerships.
Instead of building an expensive sales team, we created a steady residual flow of leads and income through our partnerships with Square and others. A partnership is a mutually beneficial relationship, and I am constantly on the lookout for more.
As someone who owns thousands of iPads, have you ever tried making a deal with Apple to purchase them for less?
We have not tried making a deal with Apple. Remember, most of our iPads are not brand new, and we purchase them from third party sellers. Interestingly, Apple has reached out to us multiple times, because they said they were interested in what we were doing. Apple is like an army, and they seek out any and all information related to their products. Nothing ever materialized from our discussions though.
How do you and Zalmy manage your partnership?
I’m more of the face of the company and oversee our sales team while managing our strategic partnerships, which includes Square, Shopify, Eventbrite, and many others. I also work closely with our legal team to make sure that our agreements and partnerships are airtight and that we’re protected. As a tech rental company, these agreements are crucial.
Zalmy oversees the day-to-day operations of the business, focuses on team building and culture, marketing and next steps for the company. When we worked in the city, we would take turns coming into work and our relationship was more long-distance. Now with our office in Butler, it has been great to actually work with Zalmy every day; obviously, this was before the coronavirus.
How do you deal with your competition?
We do have some competition, mostly from audio/visual rental companies that decided to rent iPads as well; why not? We stand out because of the tremendous recognition that our well-known partners bring to our brand.
Our strong factor is the attention to details and care with which we treat our customers. Our iPads arrive in beautiful packaging and the customer feels taken care of. We have a dedicated account manager who handles every client. When a client needs a custom configuration, we assign them an IT tech to work with them and help them with whatever they need.
What happens if someone has an issue at three in the morning?
We have a 24-hour answering service, and depending on the level of urgency we will do whatever is needed. If it’s something serious that needs immediate attention, then it will be taken care of, even at three in the morning.
I am happy to learn you are still able to run your business.
We had siyata dishmaya, a complete business model turnaround. We went from dealing with corporate America, with companies and organization like Major League Baseball, BMW, Make-A-Wish Foundation and Harvard University and dealing with many large corporate trade shows, concerts, events, etc. to working with yeshivos.
Because of coronavirus, we have pivoted and it’s making a real difference. Now we are talking to some of the very same yeshivos that we attended and are helping students learn Torah. I could not feel more humbled and proud by the opportunity my business has to support dozens of Jewish schools and yeshivos with distance learning technology and support at this challenging time.
Do you think this model with an iPad is adaptable to all types of yeshivos?
Absolutely; it can be a model for the most chasidishe yeshivah. As we have a deal with Verizon, our devices can be disabled for Wi-Fi and only run off our network. We are not talking about filtered Internet access; if the school wishes, the child is unable to access the Internet at all.
The safety in this device is that it’s not hackable. We can custom configure the device to only have the application the yeshivah wants, such as Zoom or another program that is directly connected to the yeshivah. We also have something called an MDM, which is essentially an app that runs on the background of the iPad. We can remotely edit the setup and apps installed on the iPads in real time. Just today, we were on the phone with Rabbi Halberstam from Chicago discussing the new curriculum after Pesach and making changes to their setup.
The technology is amazing. We are able to fine-tune the customization per class so that when the student opens up the iPad the next morning, all the sheets and materials they need for the day pops up. We have quite literally become an extension of these schools.
What else has your company done differently now because of the coronavirus?
Zalmy and I had an understanding when we started our company that we would give a certain percentage of the business to various tzedakos. Although we give maaser from our own personal money, we wanted the business to have its own brachah for success.
A few weeks ago we were working on a big marketing video and during one of the breaks I noticed that we were getting many cancellations of events. I spoke to Zalmy about actually increasing our giving now. In this crazy situation, we need extra brachah. We reached out to the various tzedakos we support, explained the situation, and how as our partners we needed them to help bring us brachos. We informed them that while the logical course of action during a crisis was to conserve cash, we were instead going to send them an additional amount over whatever our usual annual donation is.
And we indeed experienced tremendous siyata dishmaya, as when all of our business essentially dried up, we were able to pivot and supply nursing homes and yeshivos with iPads and have a new source of income. It’s all a brachah. ●