Today I’m happy to have my friend Ed Han on the show today. Ed is the co-founder of Tiny Prints, a stationery company that he bootstrapped and later sold for over 100 million dollars.
Ed is probably one of the most successful entrepreneurs that I know personally and I’m extremely ecstatic to have him on my podcast. The business model for Tiny Prints was ingenious and Ed’s story is truly an inspiration to us all.
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What You’ll Learn
- How Ed got the idea for Tiny Prints
- How to bootstrap your business early on and leverage your relationships to gather business
- How to start a company with 2 other co-founders without a lot of strife
- Which marketing channels Ed used early on to grow Tiny Prints
- The one pivot that allowed Tiny Prints to gain traction early on
- How to leverage partnerships to keep costs under control
- How Ed convinced designers and publishers to take a chance on Tiny Prints early on
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For more information, go to www.mywifequitherjob.com/contest. And if you are interested in starting your own online business be sure to sign up for my free six day mini course, where I will show you my wife and I managed to make over 100 K in profit in our first year of business. Go to www.mywifequitherjob.com for more information and sign up for the newsletter. Now on to the show.
Welcome to the ‘My Wife Quit her Job’ podcast. We will teach you how to create a business that suits your lifestyle so you can spend more time with your family and focus on doing the things that you love. Here is your host Steve Chou.
Steve: All right, welcome to the ‘My Wife Quit Her Job’ podcast. Today I am honored to have Ed Han with me on the show. Ed is actually someone I met through Polly, the owner of Beau-Coup.com whom I interviewed previously on the podcast. And as luck may have it, it turns out that Polly is married to Ed, the founder of tinyprints.com, a 9 figure company.
So, talk about your power couples here. After having kids, we views ‘Tiny Prints’ several times in the past to create baby announcements, imitations, you name it. And what I really like about ‘Tiny Prints’ is the ingenious business model. The site started up by working with local printing facilities and encouraged designers to create awesome looking card designs in return for a royalty on the sales. And so he ended up with this really nice business model where designers were creating great looking card designs for free, and the fulfillment was handled by a third party as well.
So, Ed is just a true inspiration to us all and I just want to formally welcome him to the show, how is it going Ed?
Ed: I’m blushing over audio.
Steve: It’s all true.
Ed: Thank you Steve. How’re you doing?
Steve: Pretty good, pretty good, and really glad that you could take some time out of your business schedule to talk to me today.
Ed: No, my pleasure, any time anyone takes interest in the story, I love to talk about it.
Steve: Yes so, you know, speaking of the story, can you give us the background, and tell us about the early days of ‘Tiny Prints’ and basically how it all got started?
Ed: Sure, well, the very very early days of ‘Tiny Prints’ was just a group of wannabe entrepreneurs who didn’t know they were going to be working on ‘Tiny Prints’. We had a handful of business school classmates, a couple of years after graduating, start to get the entrepreneurial itch And we would get together once a week on average, over burritos, and sort of both socialize and also banter about different business models, and start-up ideas.
And over the course of probably about a year and a half we had some attrition, we had an idea or two that we took to a prototype stage, and ultimately canned for various reasons and then settled upon Tiny Prints. One out of some of the personal needs that in this case my wife and I saw as we were expecting our first child, and also as we dug into this category more just found some of the characteristics about the products so interesting and easy to work with, with an ability for technology to make an impact.
Steve: So you mentioned attrition, was there a larger group of folks?
Ed: Yes, as is often the case business school students, grads, business people in general just like to talk, and so we were never exclusive and so anyone could come and go as they pleased. It was certainly our closer circle of friends, and it did start off with a much bigger group. I would say six to eight folks, and you know, after you work on something for a year and a half and you ask folks to get together for that amount of time, you know, some of the folks lost hope that this was ever going to go anywhere, or they just became too busy. You know, life got in the way and ultimately it kind of came down to three of us. And luckily, you know, before we all kind of surrendered to the idea that we’d never come up with an idea, Tiny Prints came along and started to get some traction.
Steve: So, you started out with a larger group of people that were meeting every day, or weekly, or…
Ed: Yeah, we were meeting weekly.
Steve: Okay, and it was just kind of one gigantic brainstorming session among your business school members, is that right?
Ed: Yes, it was mostly business school members, and they did start off with, primarily just brainstorming which I think was our problem. For many many months it was just people [indiscernible – 00:05:15] and just kind of throwing out ideas, you know, that was in their head versus having had some rigorous analysis. Which we eventually came down to, and I think at that point when we were assigning homework to folks and making sure that the conversations were a lot more meaningful with, you know, sort of backed up by data, some of the folks left at that point as well as I think this had turned into more of a social thing for a few people. And for others like me and the other couple of people that did end up surviving, we felt more desperate as time went by that we were not finding the right idea to work on.
Steve: Were you working a full time job at the time?
Ed: At various points in this window I was, I was working at a start-up called ‘Danger’, and then I was also helping Polly with the business that you had mentioned.
Steve: Okay, so it’s weird, so you started out with three people and often times in the very beginning, you know, opinions somewhat clash and that sort of thing. So, did you guys all agree on the business model and how ‘Tiny Prints’ was going to be run early on?
Ed: Absolutely not, and I think that didn’t matter as much because none of us really knew exactly how it should be run, or which direction it was going to go. And as you hear about all the time, it certainly didn’t go in the perfect direction that we ultimately we thought it would as we got the business off the ground.
So there were many tweaks and certainly a couple of bigger pivots that eventually led us to get greater traction. But in the early days one of the most important things that our group did was kind of step back from the business, even as we were running a thousand miles an hour to try to, you know, build the backend, build the website, you know, have all the commerce capability.
We really stepped back, given that the three of us had started off as friends before we were business partners and talked about a lot of personal things, a lot of things that we had probably had never shared with each other. Our goals, aspirations, what we, you know, cared about and mattered to us, as well as how that would largely impact the culture that we’ll build as a company and so it sounds a little cliché and probably kind of overdone.
But you know, back in 2003 we really thought hard about that and felt that it would be a shame to work on a business, perhaps have it, you know, gain some traction but we are on a bunch of relationships along the way. And it just so happened that the three of us cared much more about our relationships with each other, with our spouses and other folks who were going to have to be on board to support us.
And so we took great care to have those conversations very, very early on, which I think helped navigate some of the choppy waters that you, you know, ultimately come across as you try to build a business together.
Steve: Yes, what were some of those challenges, I mean, was the business model that ended up being ‘Tiny Prints’ was that how it was in the beginning, or has it evolved a lot over time?
Ed: Well, you know, I would say that it has evolved a lot, but there was certainly a couple of very big sort of step function evolutions or, you know, they like to call it around here, pivots. So when we first started the business given that it was bootstrapped, and thus needed to be low capital, we had really no capital in the business. We couldn’t go off and own our own printing machines or do anything that had any sort of capex involved and so we took designs from existing stationery designers that were sold in stores, we scanned them using a fifty dollar scanner.
And we took those images and put them up on a website that had pretty primitive personalization so that you could enter some text, and have us receive that information, allow us to print that off as a fax form and send it to the actual stationery designer for them to fulfill through whoever print partner they were using.
So if you know anything about the stationery industry certainly offline it can somewhat still work that way but if you have much experience ordering personalized stationery, premium stationery online or certainly in bigger boutiques you know that feels pretty primitive. But that is really how it was done over ten years ago when we got started, and we did really nothing much more destructive than bring that process online.
So as we kind of bumped along for, you know, a year, a year and a half we recognized that this was never going to be a big business. I mean, we could potentially scale to the size of you know a very small store that you might find in the main street, it’s just that we would happen to be online or perhaps our cost base would be a little bit better, but we recognized the fact that it would just never go to massive scale.
And that’s when we started to explore, I guess what you’d call our first pivot.Which as you allege to us to become our own designer, vertically integrative and that was more of a virtual vertical integration by partnering with designers and printers, and automating that entire flow from acquiring the designers. That’s again in a very sort of technical ways so that we didn’t have to manually do the equivalent of scanning albums into a website. And on the backend be able to convert, you know, files that were being done by our customers on our website into a format that could be then automatically sent into our print partners for fulfillment.
Steve: So back when you were scanning these cards, did you have licensing agreements with the card designers at the time?
Ed: Yes, so, we were probably one of the first if not the first to partner with independent designers. We had a couple of, you know, bigger brands over time, but really, you know, we pioneered the idea of working with very cool regional or up and coming designers who were independent looking for a way to, you know, make their mark on printing stationery without having to go into all the printing and customer service and fulfillment and all those things.
Which we were able to offload, and so we were able to somehow convince even with no track record, a half a dozen or so really wonderful designers early on who gave us exclusive rights to their designs, worked out a licensing arrangement, which allowed them to own their designs, but be paid a royalty based on sales performance. And that was really all we needed to, you know get the new business model off the ground.
Steve: So it’s basically an up-front payment for the design itself followed by royalty payments.
Ed: No, actually it was all variable, so it was 100% dependent on whether the design sold or not.
Steve: So what would be their incentive to give you an exclusive deal like that?
Ed: Yeah, I think the incentive changed over time. In the very early days certainly most of them said exactly what you said, ‘why would I ever do this, especially if I have to actually spend time coming up with designs for you specifically?’
I think we had in the beginning a couple of personal relationships that allowed us to make that case so that the designers would do us a little bit more of a favor, and submit a handful of designs. But for the most part, you know, in those very, very beginning days, we were working with designers who already had designs. Perhaps for, you know, their own line of stationery or, you know, for a different product that they could easily translate to stationery. So there was really not a lot of up-front cost. There was certainly no up-front up-side, but there was no major up-front cost to asking them for, you know, just kind of a translation of their designs into stationery templates.
Now over time the incentives changed in that as we became a bigger and bigger distribution platform, there were certainly stationery designers who had a nice business that thought, gosh, I could actually off load all of my customer service, all of my fulfillment, all of my technology and just go back to what I love doing which is design and potentially even outpace the income and the revenues that I’m doing on my own.
And so that was an attraction for a certain number of, you know, smaller designers. And then as we grew, I think just the sheer size of distribution and income opportunity certainly attracted a whole host of other designers.
Steve: So, how did you find these designers early on? I don’t think Etsy was around back then, right?
Ed: Etsy was probably not around at the very, very beginning when we started this, correct. So, you know, luckily one of our business partners, Laura, who really is the merchandizing genius, and probably the entire genius behind ‘Tiny Prints’ just had a wealth of information and resourcefulness for hunting down these designers that, you know, could be hard to find back then.
So, we lucked out in having someone like Laura on board as well as a couple of us had some personal relationships with folks who run that design community, and I think we were lucky that just a handful of designers that we were able to convince to come on board allowed us to grow faster than we were growing. That then proved the opportunity to sort of second and third degree type designers that we could reach out to and show them proof that there was an opportunity here. And so we were very fortunate that one thing led to another, and certainly didn’t happen overnight, but it allowed us to grow the business pretty consistently.
Steve: So just to get an idea, what would the arrangements of the royalty arrangements kind of look like on a percentage level?
Ed: Sure, you know, that evolved as well as is often the case or is always the case. It is all about you know who has leverage and at the beginning is, you pointed out, we had none. And so, you know, we were, you know, convincing designers early on with bigger and bigger percentages. I think at one point we had designers who were making a fee of, you know, 15% possibly even slightly even north of that for every sale. And, you know, we are in the business of selling in bulk, so stationery is purchased in bulk whether they are holiday cards or birth announcements, and so the average ticket size was pretty high for e-commerce.
Back then the average order size was around $126 and so you would be making $15, $20 per order, and you know, when we were tiny that was not a lot of money in absolute, but that was a pretty decent percentage. And that has floated down candidly as we’ve gotten bigger and the checks became again an absolute much, much bigger.
Steve: Now that makes total sense. So that’s one side of the equation, you know, working with designers,and then you had to work with the people who actually print the cards, right. You guys didn’t do anything in-house at the time, is that correct?
Steve: Okay, so describe the experience in getting the printing presses and convincing them to come on board as well.
Ed: Yeah, you know, one would think that, again a very insignificant player like us trying to convince these massive commercial printers to take on a new venture, you know actually become much more of a technology company themselves in order to integrate with us, would be a pretty tough proposition. And I think that probably was the case, but we got really lucky with the first printer partner that we really took on serious discussions with, a company called ‘Progressive Solutions’ right here in SantaClara.
They were one of the premium partners to HP which made the digital equipment that we thought we wanted to use for their quality and upload. And so, we were able to use the incentive that HP sales people have, their sort of agnostic tube who is calling on them they just want to provide leads and have their machines work harder.
And so my other, one of our other founders Kelly called HP, talked to a very eager salesperson and said, “Hey look, we have this great idea about stationery, we’ve got a little bit of traction, but we think if we could actually print our own, that, the business will really scale”.
And luckily for us the salesperson took us seriously and introduced us to progressive who, right from the get go just kind of really, you know, got what we were trying to do, and ou know more than half believed in our vision.
So they were willing to do some of the upfront work, experiment with us on pricing, on process, fulfillment, shipping, all that stuff, and took what was more or less kind of an analog commercial business to, you know, experiment in the consumer space. And you know, so I think had we reached out ten other printers, nine probably would have said, ‘you are crazy, don’t ever bother calling us again, until you can promise revenue amount of X.’
But we were extremely fortunate that progressive also saw this great future in digital printing and the promise of higher margins by being a consumer driven company versus an enterprise driven company which they had been for the last twenty years, and was willing to take this journey with us. And as we did that we both, I think really lucked out in catching an important technology with that, you know, I think this was a blessing to all of us. Because digital printing was just starting to take off, it was at a point where the quality and output was good enough to meet consumer demand. Whereas sort of in a previous era they were great machines, but really mainly used for commercial reasons.
And so we happen to kind of hit a window by luck, when the technology was ready, we by luck found a wonderful, kind of visionary printer partner, and I think just exploited that, you know, for the years to come.
Steve: So walk me through the ordering, like early on at least. When someone places an order, goes on your website, configures their card, and then, did you have some automated way of sending all that information to the printing press.
Ed: Are you asking after we had become our own designer?
Steve: I was just thinking in the beginning when you first…
Ed: Oh sure, in the very, very beginning what would happen is– and this may be hard to imagine, but you would actually come to our website which was, you know, back then one of the only ones where you could actually personalize. But you couldn’t personalize for anything but text. There was no such thing as a picture card. So forget photos, we are talking about text only.
So if you are talking of the very early days you would end up on tinyprints.com, you would find a design that was again scanned in from some album somewhere, and you would personalize that card for text only. When you check out, our system would send us an alert that an order came in which wasn’t a big deal because there would be like three a day. And we didn’t need anything automated for that. We would get an alert, we would go and effectively print out a fax form. So the customer information had been translated and converted into a PDF of a fax form that the album designer used to then send on to their printer.
And so we would physically print out this fax form, we would fax it, not even e-mail it, we would actually fax it to, I think most of our designers who by then could read half of it, of course. Who would then send it to their printer, again probably by fax, wiping out the half of what was legible, to ask for a proof. We would get the proof back through the same sort of communication channel. By the time we got it, we could hardly read it, we would send it to the customer, who could then hardly read it themselves, and there would be multiple back and forths, which would ultimately cause one of the greatest headaches in opportunities that we saw, which was like ordering premium stationery, custom stationery back in 2003, 2004 was extremely laborious and time consuming. It would often take three to four weeks to get your order.
And you can imagine if you are thinking about Christmas on December 10th that’s not going to work. Or if you’ve had your baby, and the baby might be six months old by the time you send the birth announcement, that’s not going to work.
And so this became one of the interesting drivers of trying to become our own designers and using digital equipment. Certainly there was a huge cost advantage and thus an ability to bring prices down, but really the other major factor that I think allowed us to convert customers quickly after that was, just the ability to turn orders round very quickly.
Steve: Okay, so the today processes, someone configures everything on their site and then you generate the fonts yourself and that just goes straight out to the printing press, right?
Ed: That’s correct, they are basically just bits at that point. The printer is a very high tech machine that takes input from our system and generates an art file. Actually the art file is generated on our end because we’ve had the philosophy that when somebody is ordering $100 of stationery and putting photos and valuable text in it, we should not– we should hold ourselves responsible for blurry photos, red eyes, typos, edicate mistakes and those types of things.
And so that was another differentiation that we had early on was that we actually had human eyes review all this work. And so what would happen or what does happen now is, once the customer checks out of our website, an art file is created that allows our designers to look for those mistakes, find out opportunities to improve and only when it’s completely blessed and signed off, does that art file essentially get translated into bits that can talk to the printer over the internet, and out on the other end spits out large sheets of paper with the customer’s stationery. Which then goes through a cutting, and fulfillment, and shipping process.
Steve: So are the cards shipped by you or they are shipped by the printing people.
Ed: The cards are always directly shipped at the printing facility, for just efficiency reasons, and also to save time, you know, Tiny Prints has now become part of a much larger platform, having gone through a merger with [indiscernible – 00:26:00] who at this point owns almost their entire production.
So when you say do you ship them or did they ship them, it’s both but it’s all internally owned equipment and it is, you know, certified Tiny Prints equipment that is printing and shipping out of our own facility.
Steve: Yeah, I was just referring to back before the merger, when you guys… yeah. So we are going to printing press, so you guys were separate entities, so did you have to tap into their system somehow, I’m just kind of curious how it all worked.
Ed: We did, there was a lot of systems integration, which again we can thank Kelly and his team early on to do that work. And there was a lot of just inventing that integration because it had really never been done before for consumer product like this.
And that process was extremely frustrating for many, many years. It also, you know, went through many iterations. And as the equipment changes, and software changes, and capabilities change, it’s still constantly changes. It’s a never ending set of work that I think, you know, we tackle still today.
Steve: Right, but the point was it started out very manual and over time you gradually automated things over time, right?
Steve: Okay, so let’s talk about sales now. So you have this stationery company set up, what were some of the challenges in getting sales in the early phase of your business?
Ed: Well, like any consumer facing company, or any company, customer acquisition is of course the thing that makes or breaks a start-up. And so in our case, you know, I think we were early to catch the e-commerce wave for personalized products. Certainly by 2003, you know Amazon was a big business, eBay was a big business, but the idea of actually customizing products and having that be it fulfilled online was still relatively new.
So I think we were unique and faced less competition than perhaps a lot of the other e-commerce categories as a result, but that doesn’t help you either if nobody is stumbling across your website. And so we really committed to certainly the product and design but committed equally to being unique and defensible in customer acquisition.
And because of our capital constraints ended up betting on Search Engine Optimization and PR. And we had great success with both. I think over time really the dominance and SEO that we were able to build because of that early start and commitment to that channel, really eclipsed everything else including PR. But in the early days, you know, we were stalking celebrities, we were trying to get into every inStyle, people magazine we could, with product endorsements at the same time, building a website that was both dynamic and static, that was extremely Search Engine friendly.
Unlike today, it actually had impact pretty immediately; we would see results within a couple of weeks to a month. After making certain changes and the algorithm wasn’t moving as much back then and so we were defaulting two three four five pages at a time until relatively quickly we found ourselves in the top ten or top five position of, you know, all of our major head terms. And as we plugged in new businesses, you know, we just kind of rode the wave of having an already great SEO site that could then again position really well for new terms.
And so that became just a really great virtual cycle for us that grew with online traffic and search engine growth, and provided just a massive advantage because it was zero customer acquisition cost.
Certainly today it is not free to do SEO but, you know, in the early to mid 2000 you could just do so much through sweat equity which is all we could afford. And we were just able to get you know a lot of free traffic that as we continued to focus on the product allowed us to convert at a pretty decent rate, that allowed us to be cash flow positive, and kind of restart the cycle.
Steve: So, I’m sure a lot of the listeners are familiar with Search Engine Optimization, but on the PR side, how did you get your cards in the hands of celebrities and that sort of thing, did you have an agency or?
Ed: You know over the years we experimented with agencies, I have to be candid and say we haven’t had much luck with them. In the very early days, again we couldn’t afford anything, we couldn’t afford any agencies, and so we did it on own, and you know, it was a very ego destroying humbling experience. A lot of rejections, but again all credit goes to Laura who was able to work with our designers to come up with this amazing modern unique look that a lot of our, you know, our customer base at that time was mostly young mums.
And that group really sort of embraced the design direction that Laura was taking the company in. And as a result all the magazines that they read also took notice and so we had a pretty decent hit rates after the early going, and that really propelled at least a brand recognition for the company. So that you might go to Google and search ‘tiny prints’ which at that point we would be at the top of the search engines and then bring you to the site. So they worked really well hand in hand.
Steve: So did you reach out, and try to contact, you know, these magazines, and…
Ed: Oh yeah, we would go to the library and look at the latest directory of all the publications out there, and the editors and editorial staff, and just talk to them.
Ed: Yeah, we would send unsolicited FedEx packages with tons and tons of cards in them.
Steve: Ah, very clever, okay. And then you know just based on the design they would become interested and want to feature you in their magazines.
Steve: Okay, and then on the SEO front did you do anything special, were you pumping out content, were you reaching out for links, how did that work on that end.
Ed: Yeah, I think we again lucked out a bit in that, you know, our cards were all content, so as we added more and more cards that had lots and lots of keywords, they were only the birth announcements, the baby showers invitations, the birthday invites. There were many ways to automate the content management system that allowed us to, you know, vary the keywords, but really explore the content that was on our site.
In the very early days of 2003, 2004 everyone was doing link exchanges, so we were part of that. We found ways to, you know, contribute to sites to get one way links. And then we were just very smart about publishing our HTML whether they were dynamically driven or not as largely static pages. Which back then was heavily rewarded by Google, because there was a time when Google actually had trouble crawling java script, or pages that were hidden behind you know dynamic or PHP pages.
And so we would certainly use a database on the backend to manage all the content that we had, but we would make sure that when they were published on the website they were published as static HTML pages. I think that helped a lot. It helped grow the size of the site, so that the content could actually be crawled.
Steve: So in terms of the website, are you technical at all, like how did you develop your own platform or were you using something out there already?
Ed: Yeah, I’m a total technical poser, I love it, but I am severly incapable of doing a good job. However, again we had no choice in 2003 but to do it ourselves and so our business partner Kelly who is very technical and incredibly just thoughtful and creative about building technology really did you know 99% of the work. I, you know, mainly for just shear lack of time, shear lack of his time, I built some of the front-end, the website, the html around all of the great things that he was doing on the backend. Some of the forms and things like that, you know, I was using out of date html tables and, you know, CSS wasn’t even much part of what we did back then, and I was using some of the macromedia, which is not around anymore. You know, things like fireworks and other other kind of html editors to edit the html and you know…
Steve: Basically you just did what it took to get the site up there.
Ed: More or less.
Steve: Okay. So how long did it take you before the business actually started getting some traction?
Ed: Well, it’s depends on your definition of traction, we got an order probably within the first couple of weeks of launching the site, in March of 2004. But then it was probably just that one order for another couple of weeks.
So that’s kind of how it started, you know, every order was cash flow positive, if you think about the economics of what we were doing, throwing off 50% gross margins, zero customer acquisition cost, and that was for getting paid, and we had hired no one to do anything, you know, every order was cash flow positive. And that allowed us to kind of chase the next order.
And so the flow of orders was, you know, a few a month in the very beginning and then it turned to a few a week, to a few a day. And then at some point over the course of the next year or so, it felt like there was enough cash flow that we could actually hire somebody to help us with customer service, as we were completely buried in, given how manual the process was back then, just buried with even trying to serve as a handful of customers.
Meanwhile the back log of things that we had to do to automate to actually make things better, and to work, and to not have errors on the site kept growing. And so we had many employees, long before we were able to pay each other, and you know, truly consider the company profitable.
Steve: You know that’s a similar story to our business. Like it started out, you know, very few orders, and then they just started trickling in and before you know it, you know, it’s enough money to support you and a bunch of other employees as well. So what would you say were your primary marketing channels then and even today?
Ed: Sure, back then it was, you know, we like to say it was PR, we did have a little bit of success there but it was probably 90% SEO. A few search engine traffic, we didn’t even do SEM for the first three or four years of the company’s life. Long after we had probably busted through, you know, single digit millions, maybe even double digit millions in revenue, we were so thankfully successful in SEO, that we just didn’t feel the need to try to go even faster. We were barely able to keep up with the growth that we were experiencing through SEO.
You know, today now we probably employ twenty different channels of marketing, and certainly CRM is a huge one now that there is an actual customer base and the least expensive if you can re-engage customers.
SEO is still incredibly important now that supplemented with SEM and all the very essence of SEM, whether it is product list Ads or display Ads or whatever. There is a ton of partnerships that are important to the company, business development became an interesting opportunity as the brand became more noticed and bigger distribution platforms wanted to, you know, potentially work with us. So that was great.
You know, I would say that we are probably doing about as much advertising as you would expect a fairly large e-commerce company to be doing. And so, you know, whether it is You Tube Ads, or Google Ads, or other Ad networks. And now novel is becoming incredibly important critical on so, I am no longer at the company, but I’m sure they are doing way more in mobile advertising, and marketing, and apps and things like that than certainly what I’ve seen.
Steve: So if you were to give some advice to entrepreneurs out there who kind of want to create a similar business to one that you’ve already created, what sort of advice would you give them?
Ed: Are you asking about e-commerce or just a start-up in general?
Steve: A start-up in general, but, you know, with an e-commerce bent, because you know after all you have to sell something to make money, right?
Ed: Sure, right. Well I think e-commerce is getting, I think it’s getting both, you know, much more interesting as migration happens from physical to online. At the same time getting much harder with the likes of eBay, and Amazon and Wall Mart really kind of dominating the space. So, I would say be cautious and be incredibly thoughtful, and be incredibly just kind of honest with yourself about defensibility and uniqueness of the product or line of products that you are planning to market.
And then I would focus on the two things that I think are just kind of generic recipes for anything that you start, which is to again being credibly thoughtful and creative about product definition. And a lot of times people think about product definition in the context of software companies, but I think it’s relevant across anything that you want to do.
So whether you are opening a restaurant or starting an e-commerce company, or a mobile app, ensure that you are doing something unique and well defined with a road map that will not run out for many, many quarters. So that you can continue to improve upon, you know, what you’ve built and ultimately, you know prove to yourself that you’ve thought about a very, very long term product vision.
And then the second thing that I will focus on is having the same amount of obsessiveness around customer acquisition. You can build the greatest product, software, whatever it is that you are going to go and do, and if no one ever comes across it, it’s meaningless.
And so, again it is very easy to have a generic recipe for either or both of these to say, “Hey, I’m going to go and do SEO and SEM.” Can you really do that for the business that you are trying to build, and be honest with yourself about whether you can be unique and have a competitive advantage? And ideally have a proven, you know, sample of that working, even if it’s a very small scale, and so, you know, test a lot along the way, but test with the idea that your product is unique, well defined, and your customer acquisition strategy is equally unique and effective.
Steve: So in that respect that is how you would combat places like Amazon, right, by being unique, by being the only person to offer that sort of product.
Ed: You could certainly to uniqueness, or you could potentially find niches that Amazon would not be as interested in, or find ways to out-market Amazon for your particular product. Which may sound quite unrealistic, but I bet if you sat down and thought about it– for example, in our category of personalized products, Amazon has yet to make a big push into custom T-shirts, custom stationery, photo books. They’ve done very light weight partnerships, but they have not actually tackled that on their own because it’s just a much more complex– not complex for them, but it’s a different process than what they specialize in. Which is to create, you know, ten football sized warehouse and just stock them with things that you can put on shelves and ship as fast as you can.
You know, allowing customers to actually go in and, you know, put user generated content on the products that you ship for them, is a whole different type of capability than, you know, something that eBay, and Wall Mart, and Amazon has decided to take on.
So be thoughtful and look for those air pockets that present opportunities. They give you the, you know, headroom to go, you know, go pretty far before they take notice, or before you know you will get squashed. Because hopefully by then if you’ve been thoughtful about your product, you are again one step ahead in the direction that they are either, uninterested in or just isn’t a priority.
Steve: Okay yeah, that makes a whole lot of sense, and that area specifically regarding personalized products is something that I think will be a lot more difficult for Amazon to just automatically fulfill. So, great advice.
Ed: Let’s hope so.
Steve: Yeah, let’s hope so, for sure. So okay, I don’t want to take too much more of your time Ed so, one question I always ask people is, is there a particular, business book that has really influenced the way that you looked at businesses in starting, you know, your ventures?
Ed: That’s a really good question. I love to read, unfortunately I don’t have a whole lot of time for it. I am not going to say a particular book, I’m going to go a little bit un-conventional which is sort of my mission in life. But I grew up reading a ton of biographies, and I learned from other people. I think business books are great, I tend to avoid them, so I haven’t read a whole lot.
I’ve read chapters of, you know, probably some of the famous ones, but I find, you know, I learn a lot more from the examples that other people have set. You know, the name escapes me, but I did enjoy the first half of Blake Micoskie I believe who started Tom Shoes. His book, I thought it was a very, very thoughtful, written not to be kind of a prescriptive business book. But really had a lot of great things that you deal with as an entrepreneur, and he is of course got a slightly different business model and much more mission focused, which really spoke to me and I really enjoyed that book. But I would say that generically I would just recommend books on everyone from J.C. Penny to Collin Powel, to Warren Buffet, to Bill Gates, to Steve Jones, Jeff Bezos. So I just really enjoy reading about the personality, the mindset, how you know, their kind of brains and hearts work over, you know, what I consider pretty dry and generic business how-to books.
Steve: Sure, sure and if you ever decide to write a book, I would be the first one in line to purchase that book, because, you know, one thing I noticed as I was interviewing you, as you mentioned luck like 15 or 20 times. You got lucky doing this, you got lucky doing that, but in my opinion, you know, there was really no luck involved. You went out and you hustled and you created your own luck, and that’s one of the reasons why you are such an inspiration to me.
Ed: Well thank you, I think we can have yet another phone call on that whole topic, I do believe that luck plays a big role. I think it’s important to seize the luck that you see coming your way, but I appreciate what you said, it’s very kind of you.
Steve: Well thanks Ed, I’ve already taken up a lot of your time, so I think we’ll just call it a day right here, thanks a lot for coming on the show.
Ed: My pleasure thanks again Steve.
Steve: All right, take care Ed.
Steve: Ed is the man, and I have a tremendous amount of respect for him. And the best part, the guy is incredibly modest and humble even though he is a business genius. For more information about this episode go to mywifequitherjob.com/episode15, and also if you enjoyed listening to this podcast, please go to iTunes and leave me a review. When you write me a review, it not only makes me feel proud, but it also helps keep this podcast up in the ranks, so other people can use this information and find the show more easily to get the awesome business advice for my guests.
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