Sramana Mitra: Before you resigned, the site had already gone live?
Jodie Fox: That’s right. The website broke-even within the first two months. We still have savings that we were relying upon, but it meant that there was financial security in the company.
Sramana Mitra: When you say it broke-even in the first two months, what kind of revenue are we talking about? How many customers did you get in the first couple of months and how did you acquire those customers?
Jodie Fox: We don’t disclose our revenue. The major key part of that is thinking about our business model. When you come to Shoes of Prey, you pay for a product entirely upfront. At that stage of the business, we would then commission the product to be made. Then we would get the product to you. The invoice for that would not be due until several months after we’ve given the product to you. It was very helpful that that was our model. It meant that we were able to break even.
To acquire customers, we would email to every single person we knew and explain what we’re doing. We also had a blog, so friends and family could follow what we’re up to. One of the interesting things we did was enter a contest and we were a finalist in the Best Startups. That attracted a lot of attention.
Sramana Mitra: Let me try to step this through. I need to get a lot more granular details. One of the things that I picked up in what you said so far is that your upfront cost structure is limited because the technical team was available in the co-founding team. That cut the cost down. The other thing that helped was that you didn’t have to buy inventory. You were taking orders. People were paying as they were placing the orders and then you would place the orders to your design shop in Hong Kong.
Jodie Fox: That’s right.
Sramana Mitra: These are probably the two key drivers or levers that helped you bootstrap effectively in the early stages.
Jodie Fox: Yes.
Sramana Mitra: You said you emailed everybody. That’s how you got your initial orders. At what point did you start going beyond that? What kind of customer acquisition strategies did you start following? Was it PPC or organic search? How were you acquiring customers?
Jodie Fox: One of the key things about that email was that we incentivized people to pass it on. We did that by offering a link to a discount when you place your order. We have been tracking that to see how far it went. In terms of going outside of that, we just did the regular things like going out to press. That was sort of effective. It’s not necessarily a sales driver so much as it is something that gives validity to your brand in the consumer’s mind. Reports show that people need to hear about a brand sometimes before they would trust it.