Daniel had fully validated his business to significant revenue before going to investors. The result is spectacular! Read on…
Sramana Mitra: Let’s start at the very beginning of your journey. Where are you from? Where were you born, raised, and in what kind of background?
Daniel Scandian: I’m from Rio de Janeiro. I started my career a little bit different from other entrepreneurs. I was 14 years old when I started with Go Carting. My dream was to be a Formula One driver. I won the Formula 3 South America in 2001. That’s why I started late because I could get sponsors to go to GP2. I then came back from UK.
Sramana Mitra: To study?
Daniel Scandian: I raced there. I came back to work with my family in Brazil. I finished my degree in Industrial Engineering because my family had an old flooring factory. We had a big problem with the subprime crisis in 2006 to 2007. In that moment, we had to close part of the factory that we used to run. My father said to me that if I wanted to sell a lot of machines to other companies, I would get commission. I created a blog and started advertising on Google. After two years, I sold around $3 million in machines.
Sramana Mitra: Is that by paid search advertising?
Daniel Scandian: Yes, mainly by Google.
Sramana Mitra: Your father must have been thrilled.
Daniel Scandian: Yes. I got a very nice commission from that. Then in the middle of 2009, I started my company. Of course, the money was not enough to buy inventory. I started a business selling specialty flooring through the Internet. I had no experience with technology and retail. What I did was hire an agency that did the technology part and also the marketing side. I had a small team to do the operation – negotiation with suppliers and call centers. I started with around $100,000 in 2009. We bootstrapped until the middle of 2012.
Sramana Mitra: Where did the $100,000 come from?
Daniel Scandian: The commission that I got from the machine sale.
Sramana Mitra: So you incorporated a new company to do the e-commerce using this $100,000 that you saved from your commission?
Daniel Scandian: Yes, exactly.
Sramana Mitra: You owned this fully 100%?
Daniel Scandian: Yes. We hired agencies to do the marketing and technology.
Sramana Mitra: What did you decide to focus your e-commerce business on? Is it the same kind of machine that you were selling?
Daniel Scandian: I started selling flooring through the family company. I started to sell wood flooring, laminate flooring, and vinyl flooring. Because we had no money to take inventory, I had to invest 100% of the money in marketing to start to generate sales and cash.