Sramana Mitra: At what point did you plug Kabbage into your financing process?
Jay Perkins: That was probably about four or five years in.
Sramana Mitra: So for four years, you operated as a fully-bootstrapped company?
Jay Perkins: Yes, it was tough. We’d be out of the most popular SKUs for four to five months at a time. One, we didn’t have any historical data for projecting them. Two, we were growing. What data we did have doesn’t necessarily apply to the future. It took a while for us to even out that process.
Sramana Mitra: How did you market? What was the customer acquisition strategy that was producing for you?
Jay Perkins: Because we were bootstrapped, we had to be as creative as possible and be willing to try as many things as possible. You name it, we’ve probably tried it. One of the things that I noticed about social media is, if I posted just a picture of a product, it didn’t do well. People didn’t want to be sold to. If I posted something like a workout idea like doing 10 kettlebell swings and then 10 pushups, people loved it. For a few months, that was the main way we were getting interaction.
All of a sudden, it occurred, “We should use this to try to get people on our mail inbox.” After a few months of that, we realized that we should pay to put this information out there and get more people into our mailing list. We started doing content-related ads for workout ideas or commonly-asked questions. It’s a longer sales cycle because you’re building trust with people. Over time, we got a 10:1 ROI on that.
Sramana Mitra: On Facebook?
Jay Perkins: Facebook and Instagram. This is something that I would probably use if I’m evaluating a new business. How granularly can you target your audience with content ads on Facebook? Kettlebells are actually interests that you can target on Facebook. You can put your ads in front of the audience that’s looking for your ad. That’s one of the lenses I look through – what’s the content strategy and how well can we target people?
Sramana Mitra: At what point did you hit upon that Facebook advertising is the one that’s going to produce for you?
Jay Perkins: It was about a year and a half to two in. Because of my background in e-commerce, we knew that online marketing was important. We hired a firm to run AdWords for us. That wasn’t super profitable because even if you have the best-running ads, you still don’t have a lot of brand familiarity and reviews.
Sramana Mitra: It takes a while to figure it out.
Jay Perkins: Exactly.
Sramana Mitra: You were selling on your own website which was built on BigCommerce. What did you learn about other platforms like Amazon and eBay?
Jay Perkins: In the beginning, we thought of those platforms similar to how we thought about marketing. When you’re starting a business, you’re making a tradeoff between your time and the money you’re earning hoping for later payoffs. Because I had never put a cap on my time, we would try every new sales channel.
For the brand we wanted to build, our website ended up being the best because we were focused on building a premium brand. We got on Amazon because we had some customers who wanted us to sell on Amazon, but we never sold as much on Amazon as much as on our own website because we’re priced higher than most Amazon products within the same niche.