It’s been a long time since I last wrote! We have been too busy with expanding our product mix, on-boarding new artists, fundraising & hiring. But I’ve been thinking of scribbling down my start-up journey for a long time now. So I think today is good day to stop putting it off.
It has been a very exciting ride interspersed with maddening events. It all started with a casual conversation with my school friend on a sunny afternoon in Feb ‘12. We discussed how we could mix my previous online selling experience on eBay and her project management skills to start something. We both had done a fair bit of real world problem solving in the past (read college car pooling platform etc.) The difference was in the way we thought about our current jobs; while she was pretty pleased by the opportunities at work and was also interested in an MBA, I had reached an inflection point of sorts working for a strategic consulting start up founded by IIM-A professors. And I had decided very early not to pursue higher education because I knew there is only as much as a school can teach you. So I took the entrepreneurial plunge while she decided to stick to her job, but it was that conversation that led to the birth of PosterGully.
I started working on sourcing, negotiating dealer contracts, finding the right partners for shipping, payment gateway integration etc. in March ’12. My biggest take away from my previous job was that there is no ‘right’ time to start a company. The longer it takes to build, the less likely it is to ever launch. All I focused on was to get the product out at the soonest possible. Definitely not a shabby looking product but not the perfect either. I was working alone at this time taking care of all aspects of launching a company and I was still in my job. It’ll be hard for me to point out a single day from March to May when I slept for more than 4 hrs. It was not supposed to be a smooth ride and it wasn’t. I remember one incident that happened just days before the launch. I was coming back from a meeting in a bus and my laptop got stolen. This incident changed my life in a lot of ways. I didn’t care about anything at that time but about those excel sheets in my laptop which contained everything we required to launch in a week or so. Eventually, we did manage to launch on time but that week was nothing less than an apocalypse.
I bled, sweat, freaked out, laughed, and cried in the first 6 months after our launch in May that year. It was insane. It was absolutely insane. I was in a full time job and I had launched something without knowing the consequences of working without an operations team, customer care, packaging guys, design team etc. But the good part was we were getting orders without spending a dime on marketing. My single biggest belief and focus before the launch had paid off. Search Engine Optimization. I would spend hours and hours just reading Google’s official guide to good quality crawling & search engine results. Then, I also focused highly on product quality which was driving massive word of mouth and referrals. I hadn’t known anything about product market fit, go-to market strategy, MVP etc but I was prepared to learn. Prepared to learn faster than anyone else. Prepared to spend all my time on the internet just going through the vast repository of trends, insights & best practices similar models had seen in more mature markets.
Things really started to change in Sep ’12 after we became the Runners-Up in BITS Pilani Start-Up challenge — Conquest. I quit my job a day after that. It was our first real tryst with business evaluation, benchmarks and how things really work. People were ready to take out their time to guide us and be a part of this journey. This gave me an immense sense of belief and satisfaction.
Soon after, we joined The Hatch which was being spearheaded by Prajakt Raut at that time. The accelerator closed down eventually but those months with Prajakt gave a lot of perspective about team building, operational processes & financial planning. Our first year was full of surprises, achievements & disappointments that will be etched in my memory forever. Some of them I think I should rather forget (pulling multiple consecutive all-nighters, and fainting while packaging).
The Community Aspect
In March ’13 we realized there lay a much bigger opportunity than we could see. Till now we were procuring from international vendors and distributors in India. Building our own brand became the top priority and we shifted gears quickly. We changed our strategy to make it dead simple for designers (contributors) to quickly sell their artwork online. Without any investment from the artists’ end, they instantly started getting 20% revenue share on their sold designs. We took care of everything from technology, customer support to production & logistics. Then is when we understood the value of content & community. I think the community building aspect really has had a significant impact on generating strong word of mouth initially.
There were several moments that made it all worth it. I can remember this one instance where a lady was trying to place an order 5 days after we launched from Abu Dhabi & she was facing a transaction issue. I was travelling in a rickety bus when she called the helpline & her problem was solved quickly. First time we were coordinating with an international customer and the payment gateway on a Saturday evening. Her email definitely left a long term effect on what customer happiness really means.
Laser Sharp Focus
Everyone in the company, from the customer care executives to the packaging guys clearly know about the vision of the brand. We’re building a platform that is focused on opportunities that are exciting to the artist community and also result in products that consumers want to talk about. Our vision is to grow our authentic community to hundreds of thousands of artists who have no means to currently monetize their artwork. In this scenario we have millions of designs & millions of designer products (with no real inventory as we work on a JIT outsourced model).
In the beginning of 2014 we realized we were in the right opportunity but needed to solve the classic chicken-and-egg problem. We needed buyers to attract designers, and we needed the designers to share as much authentic artwork to attract buyers. So we decided to focus on getting more buyers and increase traffic onto the website every month. Our hypothesis was that it’s going to be relatively easy to get thousands of artists to sign up for a platform that promises to sell their art. It’s another thing entirely to attract qualified buyers regularly over time and we went onto crack that first. This allowed us to refine the MVP with narrow audience before opening our community to a wider group after it’s been proven.
We also decided that till the time we’re able to technologically build 100% transparency with our community, we won’t retail our products anywhere else. So we became an exclusively online store with thousands of exclusive artwork. This is quite an achievement for us since we have been able to stick to this vision and not get deviated by short term distractions. Obviously, we have plans to add more distribution channels in the near future but that isn’t a priority. Only after we have the right measuring process built for the contributors & also be sure that brand dilution won’t happen is when we will start selling through affiliates.
I believe that my steadfast belief in the growing trend of personalization and social expression since I was a kid paid off. I was probably the first few customers of Myntra when they were still a customization platform in 2007. The underlying idea behind PosterGully was to be at the helm of this emerging movement to find individualized, curated shopping experiences and churning out products supported by communities with like-minded interests.
Keen Eye on KPIs
Life can be pretty intimidating for vertically integrated online stores & building brand recognition like the biggies of the world is not an easy task. But we also believe that the beauty of the internet is that you can compete. Compete fair & square. We were a 5 member team that scaled to 7K orders at the end of our first year. We keep a very strict eye on our Key Performing Indicators (KPIs). Monitoring them regularly has helped us identify progress towards sales, marketing & customer service goals.
This has helped us gain a huge mind-share within our target audience. With over 250K+ unique visitors in Dec’14, our revenues have grown 10X from Dec’12 & we’ve achieved all this with a conversion ratio of ~3% and a customer acquisition cost of less than $1.
You have to go ALL IN: Taking a break should be luxury when you start out. Your customers dictate your hours when you are trying to get your early traction.
Don’t take No for an answer: Persistence is the key. We could have easily been pushed down so many times. At the end of the day, if you want to lubricate your processes faster, you have to be prepared to annoy a couple of people.
Customer communication is vital: Initially we were really bad at this but swiftly realized that customers are not really worried about the delays or other issues, it’s the expectation setting they have. Many customers now praise us for communication and updates on their orders. A lot of them go out of their way to write emails saying how this was truly and exceptional shopping experience.
Cash is King: Maintaining a healthy cash flow is a make or break for any business, and its effect on operations is critical to building a fast growing company. We’ve been profitable since the 3rd month of our operations and make sure we keep our contribution margins above our targets.
Efficient Supply Chain: We map out our entire supply chain frequently which helps us uncover areas where we can increase efficiency, thus improving profitability.
I have always been critical of people who advocate that there is no right time to raise money — i.e. you should take it whenever you get it. Fundraising is a full time job for the top management and we thought that holding out longer will also allow us time to prove a few key metrics, which will result in a better valuation.
Over the last couple of months we’ve focused all of our energy on growing an operationally sound and cost efficient business. We’re now ready to expand our template to cross $1 million pa by end of FY 15–16. If this space excites you and you’re interested, please feel free to reach out to me. We’re raising our round on LetsVenture.
Bharat Sethi is a start-up and tech enthusiast with special interests in understanding customer behaviour, e-commerce, and retail design. He founded PosterGully in early 2012. Since then he’s been integral in getting over 2 million users to the curated marketplace with an unusually high conversion rate & gross margins. He’s available at email@example.com
Edited version from the original post