Sramana Mitra: One clarification, both you and Liz kept your jobs while you were raising this convertible note round. For the whole time?
Nevin Shetty: Yes. That’s the amazing part. It was just the two of us working part-time. From across the nation, Lizzie had moved at this point.
Sramana Mitra: Where is she?
Nevin Shetty: She moved back to Seattle.
Sramana Mitra: During this period, you had a working product. The MVP was in business. You were able to experiment with customer acquisition strategy.
Nevin Shetty: Yes. The product went live in February of 2014. We had a little bit of traction to show friends and family in the Fall of 2014.
Sramana Mitra: The year that you were raising money, what were the highlights on the business side? What did you learn? Did you learn about repeatable customer acquisition strategy? Did you learn anything about unit economics? How many customers were you able to generate?
Nevin Shetty: The unit economics is an amazing part of the business. In that first year, we had around 85 users. We generated $220,000 in gross sales. The cart value per user was incredibly high – over $2,000. Our whole thesis to investors was, “We don’t need a million users to make this site profitable. We need 50,000 users. This is how big the market is. This is where the market is going. This is what competitors are doing. Here are our features.” We wanted to make buying home goods and furnitures a much more seamless and thoughtful process.
Sramana Mitra: I’m asking a very specific question, which is customer acquisition. What did you learn about customer acquisition strategy?
Nevin Shetty: All we tried was social media and referrals.
Sramana Mitra: Did you switch from doing brute force to actually some sort of a paid promo? How were you leveraging social media for your purpose?
Nevin Shetty: In 2014, it was all organic. Once we raised a little bit of capital, we started to do a little bit more on paid marketing. We did learn very quickly which platforms were better for us. It was mostly Facebook in 2015. Which creative worked? Which copy worked? I had never even heard of a conversion funnel before.
Understanding the e-commerce conversion funnel was not only an eye-opener but also rewarding because you can apply it to basically everything. Understanding those metrics and numbers became an eye-opener to us. It was like, “This creative works better because they convert better.” That has a better impact. That was really interesting.
To answer your question, we didn’t do anything in 2014 on the acquisition side. We didn’t know a whole lot. We scaled up the marketing aspect and started doing paid social media in 2015. Then we saw the acquisition work for us.