0 Comments |  Planning |  PRINT | 

How to safely scale your start-up in 2013

Monday, 17 December 2012 | By Michael Fox

feature-model-city-thumbMike, Jodie and I are often asked how we persuaded ourselves that it would be okay to quit our jobs to start Shoes of Prey and how we managed to self-fund the business without overstretching our resources.

 

The methodology we followed was essentially that of The Lean Startup:

 

1. We ran a number of tests (here’s our blog post from June 2009 calling for beta testers!) prior to launching to understand how customers wanted to design their own shoes. We then used this information when building the first version of our shoe designer.

 

2. We launched in October 2009 with a ‘minimum viable product’. It worked well enough for our customers to use, but wasn’t fully built out and the branding was very different to what’s on our site today.

 

This minimum viable product let us launch and speak to customers. We then used this feedback to improve the site dramatically over the following months.

 

Not only did the lean start-up methodology help us to launch quickly, it also reduced the risks for us personally.

 

If Shoes of Prey wasn’t going to work, by launching quickly we were going to find out early that the concept didn’t work and we would have been able to switch to a different idea, or potentially even go back to the jobs we’d just left.

 

Marketing

 

Getting the word out about our business with no marketing budget was a challenge. Part of what attracted us to the design-your-own-shoes concept was that our product was unique, exciting and very different to how other companies sold shoes – it’s a purple cow.

 

This meant that we received a lot of viral and word-of-mouth marketing, our product was popular on social networks and fashion and business press picked up the concept and wrote about us from very early on.

 

With all this great coverage we didn’t need to spend much on paid marketing.

 

We also got creative with our marketing. When we noticed that some young YouTube ‘vloggers’ in the US were getting a lot of traction, we reached out to one of them and had them do a video on Shoes of Prey.

 

Traffic to our site exploded, and with some tweaks and press releases about this we were able to permanently triple our sales at that point in time.

 

Story continues on page 2. Please click below.

Funding

 

We were able to do all this with an incredibly low budget.

 

Until June, when we raised a Series A round of funding, we were always very careful to run the business at break even and not overextend ourselves.

 

We only hired new team members when we could afford them, we kept our marketing budgets lean and we saved money wherever we could.

 

This meant we didn’t grow as quickly as we might have otherwise, but keeping a close eye on our budgets was important during this stage of our growth, and the disciplines we learnt were good ones that we continue to apply post-funding.

 

Three key pillars to our business

 

We also thought through how we should scale the different aspects of our business. We have three key pillars to our business that we need to scale at roughly the same pace:

 

1. Customer acquisition

 

2. Our shoe design technology

 

3. Operations – including manufacturing and customer support

 

At times we would get excited about one particular area and it was tempting to overinvest. However, our business is limited by whichever of these three pillars is the least advanced.

 

There’s no point acquiring lots of customers if our shoe design technology is no good. Lots of customers and great shoe design technology is useless without enough manufacturing or customer support capacity.

 

So we’ve always tried to scale these three pillars to our business at roughly the same pace.

 

Scaling a start-up successfully is a challenge. Adopting a lean start-up approach, launching with a ‘purple cow’ product, scaling the three pillars of our business at the same rate and a willingness to try some new, creative marketing ideas has helped us to scale Shoes of Prey successfully to date.

 

Michael Fox is the co-founder of bespoke shoe retail business Shoes of Prey. He has blogged for StartupSmart about his start-up journey.

<<<12>>>