Sramana Mitra: The first $700,000 of revenue, did that come from any of these cohorts?
Vishaal Melwani: Yes, all these cohorts really converted well for us. We noticed it right away. Word of mouth also became really big for us. One investment banker would get a white shirt and he would then spread that through his office. We would get inundated with orders because we serve a purpose for this guy. Every other guy that he knows has to go through the same thing. He has to wear white shirts. Garnering that user on the first acquisition and then letting him be that brand architect for us after that was huge. It’s something that we really didn’t expect.
Sramana Mitra: The customer acquisition strategy was Facebook. That’s the one that really clicked for you?
Vishaal Melwani: Yes, definitely.
Sramana Mitra: Awesome. $700,000 worth of revenue and you have a validated business. Something is obviously working. You’ve found a sweet spot. What’s next and what year are we talking about?
Vishaal Melwani: This was late 2011 and early 2012. From that point on, we’re having great sales and we have a great understanding of where to go. The vision was big at this point. Our biggest goal first was, “Let’s climb this anthill first.” Let’s say people start buying stuff. Will they buy this stuff and will they come back? That was our first question – recurring revenue. We wanted to know if this customer will come back to us wanting to buy more stuff. If so, what do they want? Luckily for us, they did come back within 18 days of their first purchase. 47% of our clients came back within 18 days asking for more. That told us right away we needed more money. We need this faster and we need to build this faster because we’ve found something. We want to own the space.
At that point, we started to focus on who are the right partners for us. Being cash flow positive at that point really changed the way we looked at funding. I think a lot of people feel that they need to find funding before they bootstrap anything or before they try anything because they’re not willing to take the risk. One of the biggest things that my dad always told me was, “If you’re not going to learn to take a risk on yourself, there’s no investor that’s going to take a risk on you.”
We had money. We were having great sales. Now was the time to raise. We could find strategic partners who have worked in products and who can help us with their network in getting to that next level. Luckily at the same time, Gucci and Dapple were throwing a pitch competition specifically for fashion-based tech startups. This was May of 2012. We had never pitched before. We have done other businesses that were successful but we had never gone on a platform and pitched our business to anybody for money. For us, it was definitely a new world. We walked into this huge auditorium and there were about 600 people in the audience. The judges were Enrico Beltramini from Gucci, Will Young from Dapples, a young lady from Northface, and one person from Gap.
Sramana Mitra: Who was providing the funding there?
Vishaal Melwani: It was Dapples and Naxuri Capital, which is Gucci’s investment arm. It wasn’t the biggest check in the world but it was definitely a great platform. Other VCs were in the audience. We said, “What do we have to lose? We have revenue. We have a great model and we have a story.” Having never done anything in this world, we ended up in the first place. After that, the momentum was just overwhelming. That night, the site crashed. I think people are really starting to see the value of the brand and the story.