Sramana Mitra: The customer acquisition is Facebook primarily?
Nevin Shetty: It’s transitioning now to Pinterest. You have to think about where your users live. A lot of couples, who were recently engaged, go to Pinterest for inspiration for their wedding. As they’re looking for inspiration for their wedding, they see Blueprint there. Potentially, they come bock to Facebook or find us organically.
Sramana Mitra: So you’re advertising on Pinterest?
Nevin Shetty: Yes.
Sramana Mitra: Are you operating in the 15% to 20% affiliate commission range or is there anything unusual about your business model?
Nevin Shetty: It’s slightly below 10% on a weighted average basis. That’s because a lot of the gifts that we’re selling on our platform aren’t being monetized because we don’t have affiliate relationships set up with certain vendors or retailers. Our average weighted commission is lower. That’s something I spent a whole lot of time in 2016 working on.
Sramana Mitra: Your team is still three people or have you expanded the team?
Nevin Shetty: In the beginning of 2016, we were four people. We got into TechStars. Through TechStars, we added four in-house developers. Then we added two more people, so we’re a team of 10 today.
Sramana Mitra: This is a relatively thin-margin business. With $6.2 million gross merchandise value, you’re at about $620,00 kind of revenue level. What levers do you see that will accelerate this business?
Nevin Shetty: There are a couple of different things. There are a number of things we’re not doing in terms of products and features on the website as well as conversion of users. We know there’s a lot of gap in what we’re operating in just because we have a bandwidth and resource issue. Someone comes to the website. They don’t see the products they want. We’re not showing the right products to the right people and because of that, we’re losing a lot of customers.
If you look at the conversion funnel along the way, there’s all these things that we can fix in the next 12 months. It’s a race for us. It’s a resource allocation issue for us. There are a number levers we can pull. There are a few marketing channels that work relatively well for us. There’s a number of levels here for us to get there next year. Interestingly enough in our space, we actually have a product that not only couples but also vendors like. Whether they’re a retailer selling products or another analogous wedding brand trying to help everyone scale in the ecosystem, can we build partnerships with different analogous businesses?
Sramana Mitra: Talk to me about why you chose to go to TechStars.
Nevin Shetty: It’s a good question and it’s something we wrestled with early on. One thing we’ve always prided ourselves on is, we love to learn. We see this as a constant challenge and a constant pursuit of knowledge. Even though we built this business getting to $10 million in two and a half years with no institutional funding, there’s a lot of things we don’t know. We saw TechStars as a way to test us. If we’re really passionate about this, we have to get outside our comfort zone and learn things.
Sramana Mitra: What are the top three things that TechStars has taught you?
Nevin Shetty: It was compounded with the fact that Lizzie just had her first baby. I had just gotten married. I came directly from my honeymoon to TechStars. Lizzie just had her baby and brought her son Cole to TechStars.There’s a couple of things we learned in TechStars that were really interesting.
One is how you create a collective mission on a team. I’ve read a number of management books. I’ve done it before in my old investment firms, but doing it here with a development team is very different. How do you develop a collective mission on a team in order to continue to build that roadmap? That was interesting to see in practice and how we brought it back. Second thing is, how you actually think about your product. When you’re a lean team, you get focused on marketing, business development, accounting, and finance. How do all those relate back to the product? The third most important thing is, how are you communicating and getting investors on board? Even though I had raised institutional money, it’s different from raising capital from high net worth, angels, and VC’s for a tech company. There’s an actual playbook to that.