Sramana Mitra: Facebook is unique in its targeting capabilities. Talk about how you took advantage of that. What was the segment you were going after? What segment was converting for you? What did you learn about these nuances of positioning?
Nevin Shetty: As a wedding registry, we targeted people who were engaged.
Sramana Mitra: The status says they’re engaged, and you were marketing to that status.
Nevin Shetty: Correct. Lizzie and I would go to General Assembly classes and other online classes for marketing. Even though they’re engaged, people who live in New York are different from people in Texas. People who like Vogue are different from people who like InStyle magazine. We would then break out the audience into different segments based on location and interests. If you think about it, it’s a lot of work.
Sramana Mitra: It’s a lot of work.
Nevin Shetty: Even to this day, it’s so much work for both us because we still don’t have anyone doing marketing for us. It’s like, “How do we break the segment up? How is the messaging working? If you think about how much time you’re putting into segmenting, copy, and creative, it’s a massive amount of work. We still don’t do it that much because it takes so much time and we’re such a lean team.
What we did find is that if you send a message to a group, say people who are engaged and in InStyle, and we have a piece written in InStyle, highlighting that piece does a better conversion than not. Certain features work better with certain audiences. Being able to register for all retailers in one place works well with some audience. The pictures that we thought would do really good would sometimes be the worst-performing. The pictures that we thought could never do well sometime performs the best. It happens all the time. We laugh about it constantly.
Sramana Mitra: Switching gears a little bit, talk about the operational part of your business. I imagine you don’t take inventory. You have some other way of bringing the inventory together, and you’re generating demand. Explain to me how this business works. Where are you getting the products from?
Nevin Shetty: Correct. It’s an inventory-less model. We simply aggregate the products on our website. When people buy it, they link out. It’s an affiliate style model. In the beginning, we drop shipped. We worked with all these retailers and drop shipped everything. That had better margins, but is not scalable with two people working part-time. There’s a whole bunch of issues related to that. In order to scale the platform, we shipped from a drop shop model to an affiliate model. We just didn’t have a big capital influx in order to do it. If we got that convertible note all in one go, maybe we could have stayed with drop ship because we could have hired the right people.
Sramana Mitra: At the end of 2015, what were the metrics? How many customers? How much gross merchandise volume?
Nevin Shetty: We went from 84 couples and $225,000 gross sales to 2,000 couples and $4.2 million gross sales in 2015. That was a big jump given that we didn’t spend that much in marketing. We still only have three people working on the platform.
Sramana Mitra: At the end of 2015, did you still have your jobs?
Nevin Shetty: In the middle of 2015, we both transitioned out. Lizzie transitioned out in early 2015. I transitioned out from middle to end of 2015.
Sramana Mitra: By that time, you had a validated business. The business was converting.
Nevin Shetty: Exactly. We were like, “If we want to do this, we have to go in both feet.”
Sramana Mitra: What are the highlights of 2016?
Nevin Shetty: We crossed a little over 3,000 couples and did a little over $6 million in gross sales.