Pool tables, baby items and backpacks are just three items that are part of the entrepreneurial journey of Davis Smith. He is the CEO of Cotopaxi, a line of outdoor products and experiences that also donates 2% of yearly revenue to poverty stricken areas. Smith had quite a few businesses before landing on a business that spoke to his heart. MillionaireMatch got the scoop on how Smith transitioned to a more meaningful business model.
Smith and his family moved to the Dominican Republic when he was just age four years old. He spent half of his life living abroad. And that was fine by him. He knew he wanted to be an entrepreneur, so he asked his cousin to be his business partner and they set up their first business delivering roses. This would be one of a few failed attempts before striking gold. They were actually successful at getting pre-orders for a huge Valentine’s Day launch. After going to every Costco they could find to gather roses for their huge sale, the day ended with 100 dozen roses unsold. Luckily, he could return them to Costco.
His next idea came after talking to someone. Smith says, “The more you talk to people the better.” He knows many entrepreneurs feel they can’t share their idea, but he believes talking about ideas allows more doors to open. Then someone informed him about a pool table business that was bringing in $800k a month. He knew right away he could be successful in that industry. And boy, was he right. He immediately started looking for a manufacturer to produce pool tables. After a trip to China, he found one, though not without a few bumps along the way. In order to produce these pool tables, Smith and his cousin decided to pre-order on eBay. The rest is history. Smith quit his job, and opened a store in Georgia. The company made $1 million in sales their first year. After six years, pooltables.com became the largest retailer for pool tables.
You would think that would be enough, but in 2008 Smith decided to sell the company. “People thought we were crazy,” Smith said. He had decided to head back to school in order to leverage the experience he already had being an entrepreneur. “You’re supposed to drop out of school to go start a business. It was backwards. We dropped out of our business to go back to school. We thought it was the best thing to do. To go and leverage the experience we had so that we could start something bigger,” he explained. As he attended Wharton, his cousin went back to school also and attended Harvard. But, they both knew they would come together again to create a business.
“We came up with 60 different business ideas,” Smith said about brainstorming different ways to get back in the game. They decided on launching a baby product business in Brazil, which at the time was just being exposed to the e-commerce. It was the perfect timing to introduce a service and product that was needed in this area. After pitching the idea of Baby.com.br with only a PowerPoint presentation, Smith received $4.5 million in venture backing from a Brazilian investor which he chose over one of the biggest investors in Silicon Valley. “We had no experience in Brazil. We didn’t even speak Portuguese,” he admits. That didn’t stop them. After hiring one of the most popular women in Brazil to be the face of the company, the business went through the roof. Smith raised a total of $40 million in venture capital, all while still in school. After living and thriving in Brazil for three years, Smith decided he wanted to move back to the states. Smith wanted to create a product that would help others. “We all live our lives in a way it’s balance. We realize it’s not about just making money. We look for ways that you can spend time with our families. We can serve others. We can serve people in the church. We can build our communities. When it comes to running a business there’s one purpose, to make as much money as possible, and to maximize shareholder value at the expense of all us. That’s just not me. I knew something was missing. I knew I need to give back.” After taking a trip to Peru with his wife to take on an unpaid internship, Smith created Cotopaxi.
Cotopaxi is a high-end outdoor gear and apparel line. With each purchase, a donation is made to a select country. “Mission is to build the next big outdoor brand. The next Patagonia. The next North Force,” Smith said. “Our slogan is gear for good,” added Smith.
For more information on their mission, go to www.cotopaxi.com.
We all know the basics of marketing and promoting a business. Social media expert has even become a new position. Most new businesses have some kind of presence whether it’s weekly newsletters or sponsored ads, they are doing something to grab your attention. It can be challenging for the entrepreneur who launches a product in a noisy market. But it is still possible to stand out in an overly saturated market. John Tabis is the CEO of The Bouqs, a flower delivery service that is from farm to client. In a $1 billion industry, one could get lost but Tabis has been successful. After recently raising $24 million in Series C, the company continues to grow as well as their customers. MillionaireMatch got the scoop on how this company stays at the top.
“Getting someone to buy something online is in itself a commodity,” Tabis said. Don’t take it lightly that you have paying customers. Tabis explained that having a business in an industry with lots of competitors doesn’t make it easy. “Our competition made flowers not cool for a very long time,” said Tabis. His competition made flowers look like the last resort gift. Why give flowers when you can give diamonds? In order for The Bouqs to stand out, he had to implement a clear strategy.
“Have a mission. Your mission cannot be to make money selling stuff. You have to have a reason for being that goes beyond that. Your mission should make consumers rally behind it. It’s going to create a stronger relationship with the consumer,” Tabis advised. Creating great content to accompany his product was key for his success. “You have to give them something new,” he said about creating a different story around an old product like flowers. As an entrepreneur, Tabis said you have to be clear on one thing, “What is the thing that you are going build your business on? Tom’s is one of the best storytelling brands in the world. Their entire brand is about buying and giving at the same time.”
Not only has Tabis been successful gaining customers, but they also give repeat business. “Building that mission, understanding what that mission is, and living that mission is the single most important thing to building loyalty long term,” he said. “Building content around your product isn’t everyday, but we will give you enough reasons to come back,” he continued. One of those reasons is making sure they give amazing customer service. “Clients expect really amazing service. If not, they will blast you on social media,” he explained.
Two ways Tabis assures a great experience are eliminating hidden fees on the site and not overcrowding their customers’ inbox. He simply said, “Respect your clients.” Many sites post one price and by the time you get to check it, it has increased due to fees you didn’t know existed. Tabis also tries to send out that great, engaging content he believes is important, no more than two or three times a week to your inbox.
If he could offer one piece of advice for the entrepreneur, it would be, “Transparency is absolutely critical to survive.” To date, the company has raised $43 million in funding. He plans to increase his team from 40 to 100 by the end of the year. For more information, head over to www.thebouqs.com.
The mattress industry is a pretty stable industry. People purchase new mattresses everyday that they will keep for 8 to 10 years. It’s a $14 billion industry that hasn’t seen much of a change or anything new and exciting. Well, that was true until the company Casper opened up for business.
In April 2014, Casper was launched. Casper offers the perfect mattress for everyone while allowing customers to skip the awkward sales floor pitch. You can have your perfect mattress shipped to your door, and you get to try it for 100 nights commitment free. Philip Krim, CEO of Casper, wanted to re-invent one of the worst retail experiences a person could have. Krim and his co-founders have raised over $69 million dollars. MillionaireMatch got the scoop on how this company woke up a sleeping industry.
“Our goal is to provide the most exciting brand within the category,” Krim said. A mattress arriving in a box is pretty exciting. “It creates the perfect night of sleep for everyone,” Krim continued. Krim, who attended the University of Texas, knows the mattress industry well. He spent his early years building e-commerce sites that sold them. With his experience in the industry, he knew there was a need for something innovative. That doesn’t mean that he and his team didn’t hit a few hard lessons.
Krim had projected to reach $1 million in revenue for the year. Casper was such a hit, the company reached that number in 28 days. They reached $20 million in the first ten months. Sounds like a good problem to have, but Krim wanted to ensure they offered a great customer experience from beginning to end. “We had a lot of early customers when we launched in April 2014. We didn’t really plan on that. We under forecasted what we thought we would launch with. We ending up doing our yearly forecast in the first two months. That caused a lot of strain on the supply chain and customer experience,” Krim explained. “Fortunately, we have had really great customers from the beginning. They’ve allowed us to catch up. We continue to learn everyday on how to improve on those experiences,” he continued. Today, the company has a $550 million valuation.
The mattress industry has seen a spike as Casper has created competitors. “We don’t worry about the competitors too much. It’s more about upping our own game,” Krim said. “We love that we are providing a better value and a better service,” he continued. Since their launch, they have added some additional products, pillows and sheets. “There has never been a better time to be doing what we are doing, which we hope is to be building the first end to end brand around all things sleep. I think people realize that investing in a great mattress, and investing into great products and sleep accessories can greatly improve your life in a dramatic way,” he said.
He did offer some advice to those on the entrepreneurial trail. “For us it’s about hiring the right people and executing on the vision that we have,” Krim said about choosing your team. He also offered, “Don’t get too overwhelmed with the daunting challenges of starting a startup.”
In case you are wondering, the company was named after one of the co-founder’s college roommates who couldn’t fit into his bed. The company is headquartered in New York City, and has opened an office in Berlin. For more information on this great startup, visit their site at www.casper.com.
Some startups are lucky enough to get funding right away, but there are many who go through meeting after meeting trying to find the answer to the golden question. What do investors want? Well, MillionaireMatch can help with that. We got the scoop from serial entrepreneur Bastian Lehmann, CEO of Postmates. Postmates allows consumers to order food and goods that may not be conveniently located to them and have their craving within minutes. In October 2016, Postmates closed with $140 million in funding and a $600 million valuation.
The idea for Postmates first came in 2006. But like many entrepreneurs, Lehmann had attempted other businesses. Lehmann, who was a college drop-out with a dream to be a movie director, launched his first business called Seven A Day. Lehmann was unable to raise money. So, with the help of his parents, he bootstrapped the company for a year. It eventually failed.
Lehmann met his co-founders Sam, in London, and Sean in the U.S. They soon created a startup called Curated.by. Curated.by later evolved into Postmates. Once again, Lehmann attempted to get funding. Lehmann and his co-founders went to Naval Ravikant, who is the CEO and co-founder of AngelList. He wasn’t impressed with their idea, but instead he offered them the opportunity to be venture hackers for his new company. They turned the offer down. But, after showing him a prototype of how the service would work, they walked out of the meeting with their first seed round of $250k.
“Postmates was one of those ideas that just kept haunting me,” Lehmann said. The business model for Postmates was a model that VCs were not familiar with, which made it hard for Lehmann to raise the money needed to get it off the ground. “VCs have this crazy herd mentality. They like to think that they want to be the first to discover a company,” he explained. “They love to compare it to other companies. That’s why they love to invest in the number two or number three in the market. At the time they do, it’s already the most obvious thing in the market,” he continued.
There are those investors who need to see other successful companies with a similar model. There are also those VCs that just believe in the company once they see the pitch. “If they are convinced of something, they don’t need a lot of external singles to justify their opinions,” he said.
There are a few ways to prepare. Being able to answer key questions that more than likely will come up is one of them. “In the beginning, you have to answer questions around who wants to use this and how big is the total addressable market,” Lehmann said. You should also be prepared to answer, “How big is the market? How high will my return be,” said Lehmann.
It didn’t get any easier for Lehmann and his team, not even after making over 1.4 million deliveries a month. “We weren’t prepared to not be so well received for Series A,” Lehmann said. They ran out of money, and had to go back for a bridge round of funding with current previous investors. It’s not an uncommon thing, but Lehmann said you shouldn’t be proud of it. When you get to this level of funding after being in business for a few years, there are another set of questions investors want you to answer. According to Lehmann, you should know how does your company stick out? Are you losing money? If so, why? Are you going to make more money?
Lehmann is now putting his focus on more premium and subscription based services for Postmates. “Our vision is to provide deliveries on a large scale in major metro areas, cheaper than you would pay from a big retailer,” he said.
If you haven’t already used Postmates, do yourself a favor. Head over to www.postmates.com.
Have you ever purchased something for a one-time use and wanted to take it back to the store? If you are looking for a way to have cool summer nights with your own backyard movie or go camping for the weekend without purchasing all the goods, Joymode is just what you need. Co-founded by Joe Fernandez, who is also the CEO and CEO of Klout, Joymode allows you to have those one-time experiences by renting equipment. Fernandez has raised $3 million in funding from several investors including Homebrew, Founders Collective, Sherpa Ventures, and more. MillionaireMatch got the scoop on how Fernandez built up two great companies.
Fernandez was first known by the popular site Klout, which gives its users a score based on social media analytics. Fernandez admits, raising funds for his first startup wasn’t easy. It took him over a year and 37 investors. “I was struggling a lot when I would pitch,” he said. Fernandez explained that some investors wanted lots of data, while some thought he went over too much data. His first four months went back and forth like this. “What finally helped me was deciding the company I wanted to build, and pitching it as many times as it took to find people who wanted to invest in it,” said Fernandez. After 200 pitches, Fernandez got funding from 37 investors, each contributing small amounts. “I was able to get investors to introduce me to other investors,” he explained. It wasn’t his ideal situation. He didn’t want to have so many investors, because it’s too hard to manage. The average check was $25k from each. It was needed to get his startup off the ground.
Even at the time he launched Klout, Fernandez had another idea that he couldn’t shake- Joymode. In 2015, his second startup officially launched without the long funding round. “It was a lot easier this time around than when I did my first round with Klout. With Klout, I had never even met with an investor before. I didn’t have that network,” he said. Today, he has a warehouse in downtown Los Angeles that houses all the products that can be reserved. “We wanted to provide a consistent, magical experience where you could touch a button and step into a life and have the things you want,” Fernandez said. “We don’t judge status any more by on how far out in the suburbs somebody lives and how much they fill their house with stuff. It’s about the experiences that people have,” he continued.
Joymode has a subscription based model. You pay a $99 subscription fee for the year, and that includes a free experience. After that you pay a reservation fee. Other than the backyard movie night, camping and at home karaoke are the favorites.
One bit of advice he has for entrepreneurs, “Not getting too high or too low. Startups are an emotional roller coaster. Hour by hour I would either feel like we were going to take over the world or that we were so screwed. Getting comfortable with those cycles and not letting yourself get too high or too low, has been really impactful on my life.”
Klout was acquired by Lithium Technologies in 2014 for $200 million.
For more information on Joymode, visit their site at www.joymode.com.