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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?

Ed: 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?

Ed: 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.

Steve: Okay.

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.

Ed: Exactly.

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.

Ed: Bye.

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.

Incidentally it’s also the best way to support the show, and please tell your friends also because the greatest complement you can give me is to provide a referral to someone else, either in person or to share it on the web.

And also as an added incentive, I’m also giving away a free business consultations to one lucky winner, once a month. For more information about this contest, go to mywifequitherjob.com/contest. And while you are there, you know, if you are interested in starting your own online business, be sure to sign up for my free six day mini course, where I show you how my wife and I managed to make over 100K in profit in our first year of business. Go to mywifequitherjob.com for more information and thanks for listening.

Thanks for listening to the My Wife Quit Her Job podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

Welcome to the ‘My Wife Quit her Job’ podcast. We will teach you how to create a business that suites 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: Welcome to the ‘My Wife Quit Her Job’ podcast. Today I am thrilled to have a good friend of mine on the show Mandy Rose, but I have to be straight up honest with you. I kind of have this love hate relationship with her. So, on one hand Mandy is super cool, fun to hang out with and she has incredibly entertaining quotes, but on the other hand this woman cost me a lot of money every year.

Now, Mandy blogs at houseofroseblog.com, and she often puts out incredibly detailed and visual articles about how she re-decorates her house. Now, my wife is actually an avid reader of her blog, and every time one of these posts comes out my wife goes out and buys something. So, one time Mandy posted a room model, and my wife dropped five figures on new furniture, then Mandy posted a kitchen project which could potentially cost me six figures in kitchen re-model cost this year.

And then there is the threats, so, one night we are hanging out at think-on, it’s like 8 p.m., really early, and she was like yawning like crazy. So I started making fun of her big time, because who gets tired at 8 p.m. during conference time. But instead of fighting back, here is how it went down.

So, after bursting on her repeatedly for being lame here is what she said, she said, “You do realize Steve that I have another basement re-model post in the queue, right?” and I was like, “Wh-wh-what did you say?”“And so I would suggest that you stop talking now, otherwise I’ll hit post from my phone right now.” And I said, “Yes mum”, and I shut up right away.

Anyways, the reason I brought Mandy on today was not to talk about her blog, but to talk about her subscription box service, ‘Happy Mommy Box’. Now, her subscription box business has grown extremely fast to the point where she can’t even keep up with demand, and so I invited her to talk about her box today, so welcome to the show Mandy, how are you doing?

Mandy: I am doing great, thanks for that intro, I don’t know if that was a complement or…

Steve: I don’t know what it was, I was just speaking from my mind, and you know…

Mandy: It’s a good thing you have a six figure online business.

Steve: Yeah, otherwise I would be hurting. This kitchen re-model is getting a little bit out of control, but…

Mandy: I take no credit.

Steve: It doesn’t help that your house looks beautiful, so…

Mandy: Hey, I have good budget friendly ideas.

Steve: Yes, you told me how much you actually spent on your kitchen re-model. I was like there is no way that would actually happen in Silicon Valley where prices are like four or five X higher, but…

Mandy: Yeah, see that’s the problem, you just need to move to the mid west.

Steve: Yes, yes, I would love to do that someday. Well, we are not here to talk about my spending and how you cause me to spend money. We are here to talk about ‘Happy Mommy Box’, so why don’t you just give us a quick highlight review about what you are offering and what you are selling.

Mandy: Yes, so ‘Happy Mommy Box’ was actually something that my business partner Natalie, it was all her idea. Basically it is a subscription service for mums, kind of like a batch box or searchers lane or there are so many out there right now, but they have them for every niche. And when we were looking into it, they really didn’t really have anything for mums, and so we are like, “Near”, you know like, we love– both of us have blogs that are geared towards mothers, and motherhood, and we were like, ‘What can we do to encourage other mums’, because really when you come down to it, it’s about the community and you know, lifting each other up.

And so, it was really her idea, but it is a care package service that we do monthly and we send like a surprise box of goodies to mums all over, and it’s about three to four products in the box, and one product is always for the children and the rest of the products are just for the mum, and it is just the way to encourage and inspire mums. Especially whenever you are, you know, you’ve got a new born or you’ve got young kids, just kind of like a happy melody. We call it, ‘Encouraged, Inspired Motherhood at Your Doorstep’.

Steve: So, walk me through, what’s in one of these boxes, for example, last month what did some of these mums get?

Mandy: So, we always have a print in the box, something that you could post on your refrigerator, on a bolten board. Last month there was a bigger print, so, something that you could frame and hang in the gallery wall, don’t tell your wife that.

Steve: Yeah, I have seen your gallery walls by the way, you should see it, I am going to take a picture of my wall downstairs after this and…

Mandy: If they have stuff on it, I don’t even think you mean you need to know.

Steve: It’s a bunch of blank picture frames with just the stack photos, our family photos aren’t even in them yet, but there all already posted on the wall, anyways.

Mandy: Hey! I’ve had that– I have kept that up for like a year, I had a stock for doing that, Phil would be like, “Who is this?” and I’m like oh I just have them.

Steve: Yeah, we’ve had those up for like three or four months now, but anyways.

Mandy: Anyway, so there is always a print, and then, so we always– we include that every month, we have a magazine that we do, and it is just a ‘Happy Mommy Box’ magazine. In that we feature other happy mums, other happy mums that we want to share with our community. We always have a recipe, we have, or just good idea that you can do with your kids, play aids, fun things, you know, to do with your children.

Then there is usually a necklace or some piece of jewelry, earrings, necklace. There is always a kid item, so like, you know, we had this, like, little crown holders or play doll or maybe it’s a kid’s snack, or like a makeup item. They are always just things, you know, things that women like.

Steve: I can’t relate but yeah, it sounds good. So in this magazine then you don’t happen to talk about home re-decorating or anything in there, right?

Mandy: Oh man, you know what, I think last time we did-

Steve: Ah, okay we are definitely not subscribing, that’s going to do damage.

Mandy: Usually it’s not about that though, usually it’s, I think last month it was the Easter issues, so we did, you know, some fun, DIY race projects in there, but most of the time it’s more things that are related to motherhood, not decor.

Steve: Okay, so there is jewelry and sounds like there is something for the kid to play with? Toys to keep him occupied, are they crafted.

Mandy: Yeah, like a book, a play doll, we always like to include something for the kids, because obviously this box is geared for the mums, so we wanted it to be mommy focused, but we always say, you know, when the kids are happy mum is happy. So we want them to feel included, and so, right now we aren’t able to kind of break it down to like sending age rims, like if you have, this box is really for zero to seven-year-olds.

Steve: Okay.

Mandy: Most of our mums have kids that are under the age of seven right now. In the future we will love to kind of be able to, you know, specify if your kid is between this age and this age, we just right now we don’t have that capability. So most of the items are for children under the age of seven, but it’s just a little something happy for the kids too so that they feel included.

Steve: So, do the parents know what they are getting in the box ahead of time, or is it just a complete surprise.

Mandy: No, it really is just a complete surprise.

Steve: Okay, so in that way, actually it makes it even more attractive, right? Because it’s like getting random gifts in the mail.

Mandy: Yeah, it is, it’s really just a surprise box, and you have no idea what’s coming in it, and so you kind of really have to be one of those people that like surprises, you know. If you don’t like surprises this box won’t be for you, but a lot of our mums love that aspect about it, that it is just a surprise box that’s coming to their door.

Steve: So, just for the benefit of our listeners, what has the demand been like for your box so far?

Mandy: You know, it’s been really crazy, we never thought it would be. There would be such a demand, and we knew that we had a lot of readers that wanted something like this, but we never knew how many. And so, currently like we started out just, we want to keep it small and we started by just doing– I think our first month we just did a hundred boxes. And between me and Natalie, my business partner, I’m kind of like the helper and she’s very much the big idea ‘wow’ person, and so she was ready to just blast it out with, you know, “Let’s start with 500”, and I was like, “My gosh, we can’t do that, we don’t even know what we are doing”.

So, we kind of brought it down and said, ‘let’s scale it down and just do a small start and see how it goes, and learn about what we are doing. We just did a hundred at the beginning. We started in, I think our first box was in November of last year.

Steve: Okay.

Mandy: We started sales in October, our first box went out in November, and then every month we’ve just been adding more, because we had no idea, like we started a wait list. So after we did those hundred boxes that sold out for like less than an hour, we started a wait list, because we were like, “Oh my gosh, okay, so people like this idea, we’ve got to find a way to get more boxes.”

And so, every month we’ve added and added and so right now we are doing 500 boxes. We have 500 subscribers every month, and we are trying to add to that even more, but we have over 3500 people on our wait list.

Steve: That is crazy, that is awesome.

Mandy: Yeah, it’s been great.

Steve: So, how much do these boxes go for?

Mandy: They are $29 plus free shipping.

Steve: Okay, and approximately, how much do you spend in shipping, on shipping one of these boxes?Just curious.

Mandy: Let’s see shipping, I don’t have my breakdown, but it’4s between six and seven dollars, a shipping.

Steve: Okay, so that makes sense. Wow, so did you have like a whole factory putting out these 500 boxes, or how does fulfillment work.

Mandy: Yeah, if you call it a factory, like, it was the basement of Natalie’s house, yeah, we’ve got a factory. That’s the part that was still working through. We obviously have different roles in the business, and Natalie lives in Shirley and I live in Illinois. So she’s in working on her end, that’s her part.

So she boxes everything, and ships everything, and I will tell you what, I went to Shirlety in April to help box the April boxes, and holy cow, it’s a lot of work. That was the first time that I had been involved in doing the shipping. But we don’t currently have, we don’t have anybody that we hire, we do it all ourselves.

We do have a great community of women who– Natalie lived in Pennsylvania, when she lived there she had like six other bloggers that were just willing to help, they wanted to come and box it up, and it was almost kind of like a fun girl’s night. And then now that she is in Shirley we have– there is just more bloggers that keep coming out of the woodwork and they are like, “We’d love to come help box your boxes.”

So, right now we’ve been really lucky that we’ve just had girls and women and mothers that are willing to help us, while we are kind of doing it on our own. Eventually we would like to have, you know, some type of a warehouse or-

Steve: You know, I think you guys are doing things completely the right way, like for example, when we started our online store initially, we shipped everything out of our bedroom and we put all of our goods in the garage and you just gradually scale up to the point where you are ready to start hiring people. And I think you guys are doing the right thing.

Mandy: Yeah, I think so too, she just recently, when she moved to Shirley, the place that they bought has like three levels, and so we are using the whole bottom level just for all of our boxes and so that helped. We have kind of a little bit of a space now, but we are still really just doing everything on our own at this point.

Steve: So, let’s talk about these bloggers that are helping you out. So, I know for a fact that they have some sort of incentive as well to help you out and so, can you just talk about how you’ve created this community of people that are willing to help you promote ‘Happy Mommy Box’.

Mandy: Well, ‘Happy Mommy Box’ is something that I think is very different from other box services, because it’s really focused on the community aspect of mums, and so Natalie and I both – like I said – had blogs that, and had readers from our blogs that are all mothers. One of the things that mums and women love is to connect with other mums and women.

And so we’ve really focused our marketing efforts on that rather than on our box and what’s inside it. It’s more like this community of women, they are like, “Oh we are all in this together, and we are getting a surprise box and we feel encouraged and inspired’, and you know, and sharing it on social media.

I think, you know, when you look at other boxes, and you look at searchers lane or whatever, ‘Brickyard Buffalo’ or ‘Batch Box’. I think about those boxes, and to me those boxes are all about the products, because, I don’t have any idea who runs those boxes, I don’t know the people behind who started those companies.

And so that’s how ‘Happy Mommy Box’ is different a little bit, because Natalie and I feel like, up until this point most of our subscribers are people that are buying our boxes because they either read our blog or they know us through our blog, and they love, you know, that we are mums and that we are kind of just putting it all out there and how we are doing it, our struggles. And so I feel like we are different from other boxes in that aspect.

Steve: So this is what I like about your business. You guys put yourselves out there, and your personality really shines through your blog and even all of your social media posts as well. So just knowing how you write and what your personality is like makes me want to buy your products even more. And that’s actually something that some of the other boxes don’t have.

Mandy: Yeah, and we feel like that too, so, we kind of want to capitalize on that, you know, we want to take a different approach and we want it to be about the stories that we can share with each other, you know. Not just about the products that you are going to get in the box.

Steve: Yeah, that’s a very good strategy; I don’t see very many other box services doing that actually. So in that you guys have a unique advantage.

Mandy: Yeah I think so too, thanks.

Steve: So let’s talk about the very beginning because, I know how it’s really scary to actually launch a new business. So when you guys first launched ‘Happy Mommy Box’, you know, how did you kind of get some of your early customers and generate buzz for your product.

Mandy: Well I will tell you this, when Natalie first approached me about doing the subscription box, I was like, I looked at Jeff and I was like, “Absolutely not!” I’d have no time, how would I ever do this, I don’t know what I’m doing; I wouldn’t even begin to know how to do something like this.

And the more I thought about it and the more that I prayed about it, I thought, ‘Man, all these people,” – you know, Jeff and I have a podcast and we interview people online, you know, successful online entrepreneurs, and I was falling into that, you know, the fear of failing. And I was like, “Man, all these advice that I give to other people about going for it and stepping out, and taking risks’, and I was like, I just pretty much contradicted myself, and he looked at me and he was like, you know, I really think that you just need to think about, ‘is this something that would pay out for you, is it something that you want to do?

And if it is, you don’t necessarily know how, you don’t have to know how to do it, you know, you can learn as you go. And so it was– I finally just ended up just saying, “You know what, I think wanna try it” and I knew that was going to mean for me putting back some of the stuff that I was currently doing. So, I was working for Jeff a lot on his blog, so he has a finance blog and I was doing a lot of work for him, I was doing a lot of work on ‘House of Rose’ which is my personal blog, and we have a blog together. I was doing all the groundwork, I was editing videos and podcasts, and I knew that it was gonna mean I was gonna not be able to do some of that stuff.

Steve: I hear Jeff is a lousy boss also. Anyway sorry, go on.

Mandy: Yeah really, you know, that man – just kidding, he is a pretty good guy. But yes so he actually hired help, he hired a virtual assistant to take over some of the stuff that I was doing, and I just kind of put my whole heart into, you know, trying to figure this out. And Natalie and I, neither one of us had any idea how to run a subscription service. So it was very scary.

Steve: So how did you get your first box sale?

Mandy: Well so we started by marketing on Instagram, so-

Steve: Instagram.

Mandy: Her and I both had a pretty decent following, I don’t remember at the time, I mean, it wasn’t huge by any means. I think maybe I had like 4000 Instagram followers, and she probably had like 5000. So not like something dramatic and huge, I mean, a good amount, and we just thought, Instagram to us is just a happy place of, you know, pictures and mums, and you know, just being happy.

And so we started with Instagram. We just kind of put it out there that we were going to start this ‘Happy Mommy Box’ thing and we created a buzz about it at the beginning because, we pretty much told everybody like it is the secret thing. Like sign up for our newsletter if you want more information, and so we kind of created a buzz about it on Instagram, and that was at the very beginning. And then…

Steve: So can we walk, can we go into more depth on that, so how do you– what does it mean to put it out there on Instagram, so did you have a strategy or how did it work exactly.

Mandy: So we just would post kind of, I’m trying to think in the beginning what we actually posted.

Steve: You know maybe we can just link up your Instagram account, all that stuff should still be there, right?

Mandy: Yeah it’s all on there from the very beginning, but we just put out there that we were gonna be doing a ‘Happy Mommy Box’. And it was going to be something that was going to be there to encourage and inspire mums and we were like, you know, if you are a mum and you wanna be encouraged and inspired sign up for our newsletter and you will get to be the first person to know what this is all about.

And so we posted really just stuff about that. And I think in the beginning it was really just pictures of Natalie and her kids, and me and my kids, just kind of how we shared on a personal Instagram, it’s really how we started it. And so It’s changed a little now, but that’s how it was at the beginning, and we just shared about our own lives and our own stories. And so yeah, we had people that were like, amazingly, people that were like signing up left and right for our newsletter. Yeah, so we started it just on Instagram.

Steve: Did you do any marketing on your blog, because you have a pretty big large audience there as well.

Mandy: That’s the funny thing, I can’t even remember when I first posted about it on ‘House of Rose’, but I do remember Jeff telling me like, “You haven’t even talked about this on your blog” and I was like, “You know what, you are right I haven’t”. It was almost like when we started it on our Instagrams, because you know, we promoted it on our personal Instagrams as well, that is how we got people to go to our ‘Happy Mommy Box’ Instagram and follow that.

I didn’t promote it much at the beginning on my personal blog; I think it might have been like a few weeks then, before I even posted anything about it on my personal blog. But I did post about it on my personal Instagram.

Steve: So why Instagram and not your blog versus Pinterest versus Facebook and that sort of thing? Just curious.

Mandy: That’s a good question. I think at the beginning it was just trial, it was one of these things that we were like, “Well, let’s try it on Instagram” and it worked.

Steve: That’s the understatement of the century, go on.

Mandy: So we just kind of stuck with it, I mean, we have a Facebook page for ‘Happy Mommy Box’, and it’s funny because it’s not near as engaging or we don’t have nearly as many followers. It’s just, I don’t know for some reason Instagram was just where it was up for that kind of community of women.

Steve: So how do you build up an Instagram account, just curious, so how did you build up to 5000 followers?

Mandy: I try to think about that and I’m like, ‘how did we get there?’

Steve: How long did it take you to get there?

Mandy: To get to 5000? Let’s see, I don’t know where we are at now, I’d have to look, but I mean it probably took us– let’s see, maybe like four months or so.

Steve: Okay so, four months to build that many followers, so you must have been doing something.

Mandy: Yeah well, one thing that we started doing is we started promoting other mums. So we would share some pictures, we would find other mums that were, who had pictures of them and their children doing fun things or just cuddling or whatever it was. And we would share those pictures on our Instagram and then we would tag them.

And so you know, it was just a way to get other people involved and for people to see like this wasn’t just about us and us being mums. This was about you, and you being a mum, and her and her being a mum and everybody who was a mum felt like, ‘Oh yeah that’s me’, you know, ‘I can relate to that’. And so we just really started sharing other people.

Steve: So, how did you tap into like, the ‘Mommy blogger network’ after that?

Mandy: Well, I think we are lucky in a sense that Natalie and I both had it in there already. I mean, and I wouldn’t say that either one of our blogs are huge by any means. I feel like we do have a good amount of followers and both of us have been blogging for you know at least five years, I think.

And so, we did have readers that are mums, and so that helped because we kind of already had that connection with mums. And so those few mums that saw what we are doing and felt inspired by it, you know, they shared it. So it was really just about word of mouth for us.

Steve: Wow, okay that’s amazing. Did you guys do anything else outside of Instagram and your blog?

Mandy: No, no, we watched a–Jeff and I were watching Shark Tank– this is a few months ago, and there was a subscription service that came on there, I can’t even remember the name of the box. It was like two women who were like, graduated from Harvard and they were on Shark Tank and they were like, “We have 200 subscribers”, and they were like all pumped about it, and they were talking about how much money they’ve spent on marketing. I can’t remember the exact number, but Jeff was like, “Wow babe, can you believe that, like you guys haven’t really spent a dime on marketing.”

And I was like, You know what, we haven’t, we really haven’t had to in the sense that, you know, just with our blog readership, the only thing that we have done is that at the beginning, every month we have given away a box. And because our boxes sell out so fast, everybody is like, “Oh, I want a free box” because you know, some people can’t get in as a subscriber because they are sold out. So I think just creating that buzz it’s helped us. But that’s– giving away a free box is really the only way we’ve spent any money on marketing, and even that is very little.

Steve: So I can tell you from a third party, why your stuff is selling, it largely is because of your personalities. You guys really put yourselves out there on your blogs, and you guys come across as real people, real mums. You don’t pretend to be like a super mum or anything like that, you talk about your trials, you talk about the good times, and you talk about the bad times. And that is just very endearing from someone who follows you. So there is your answer Mandy.

Mandy: All right, I like that. Actually that’s a huge complement, because when I think about other people that inspire me, and I was thinking about this actually before our interview. I was thinking, I am never inspired so much by like celebrities or these big people. I’m always inspired by people who are like down to earth people that I can relate to. You know, that are transparent and putting it all out there. So that’s a huge complement, so I appreciate that.

Steve: Yap, so let’s talk a little bit about the economics a little bit, so how do you get– first of all, how do you get products for your box?

Mandy: So, I’m kind of the brand person I guess you could say, and at the beginning Natalie and I had some relationships with brands that we had just worked with through our blogs. So we just did some brand outreach, and we basically said, you know, we kind of built up on Instagram a little bit first, then we are like, you know, we have the community of mothers, and we are going to be putting up this box. And, I don’t know, people were just like, brands were just all about it, we had ‘Ikea’ in our first box.

Steve: Really.

Mandy: Yeah, Natalie already had a relationship with ‘Ikea’, but they just saw value in what we were doing and they wanted to be a part of it. So at the beginning, most of everything that we put in the box was donated in exchange for a promotion of the brand.

And now that we are building up our capital and we have a little bit of money, now we are being a lot pickier about what we include in our box, and we’re also– we can pay wholesale prices for some things now. But I will tell you this, we have never paid over two dollars per item for anything that’s been in our box, ever. And most of the stuff still is being donated.

Steve: I would imagine there is huge incentives for companies to actually pay you to have their items in your box, right?

Mandy: Yeah, at first it was a little bit harder because we didn’t have any experience and we couldn’t show them how much value it would create for them. And so it’s hard to be, “Hey you know, can you donate this product”, but for some reason, I don’t know, people saw something in it and they were still doing it. Now it is a little bit easier because we have brands that have worked with us that are willing to, say, you know, I saw a huge increase, like we had a brand in one of our boxes a few months ago, that was like,“I had a 30% increase in sales that month from being in your box”. And just from the buzz that was on Instagram about it. So we do have–

Steve: That is crazy, 30%?

Mandy: Yeah, it was a necklace stuff that we included and yeah, so it is good to hear that. And that helps us get other brands and good products in our box.

Steve: So clearly your reach goes further than just the 500 boxes that you are selling a month.

Mandy: Yeah, I think so, I mean…

Steve: Okay, so that means that people are talking about these products and you are generating these buzz, and you have this huge waiting list and it just kind of feeds upon itself.

Mandy: Yeah, I think the buzz is key. One of the things that we feel like has helped us is that every month it does sell out. So it is always like this. It’s kind like when Pinterest started and you couldn’t get into Pinterest, you were on the wait list, and you are like, “Men, I really want in because I can’t get in” it’s like that. Looks like a logical thing. So I think a lot of people with our box are like that. They are like, you know like, “Oh, it’s going sell out, and I need to get in right now.” You know?

Steve: Yeah I know that’s great, that’s like the apple model right there. So let’s say I’m a brand and I want to get into your box, you know, what is your criteria.

Mandy: Really the stuff that we include in our boxes is just things that Natalie and I would both love as mothers. So we have tons of people now. At the beginning, you know, it was more brand outreach. So we were reaching out to brands, and now it is more about weeding out the brands that reach out to us, because we just have tons of brands every month. They are like, “how can I get in the box”.

And you know, that’s kind of the hard part, that’s– my part is weeding out those products that don’t really fit. So we are very picky now about what we include, but our criteria is mostly just, ‘is this something that as a mum I would love, I would wear or I would use’. And really I feel like we are the perfect people to know that because we are mums, and so a lot of the stuff in the boxes is stuff that Natalie and I just love.

Steve: So if there was something that you love, you actually go ahead and contact the manufacturer and get wholesale pricing, so how does that work? So obviously not all the brands that come to you are going to be providing products that you actually like, right?

Mandy: Oh right yeah, we have– actually this just happened last week. I was working with a brand and some of the stuff that they had online I was like, “this looks cute and I think this would be a good fit for our box.” But we always usually make brands send us a sample immediately before we would ever commit, because we want to have the product in our hands and we want to hold it and feel it and see, is this something, you know, does it look like the picture? Because you know how that can be online.

Steve: Yeah.

Mandy: And so we just had this happen last week where, you know, I was like, ‘Yeah this is great’ and then when they sent us the product and the sample was like much poor quality and I was like, ‘This is not what I thought it was.” You know, we had to go back and be like, you know, ‘I am really sorry, but it doesn’t really fit with what we are trying to do right now, and thank you so much.” And that’s the hard part because I like to say ‘yes’ to everything.

Steve: Right, right.

Mandy: But I finally had to learn how to say ‘No’.

Steve: So what is your– how many products are you getting pitched now from month to month?

Mandy: I would say probably each month now, we probably get fifteen to twenty brands that would contact us, yeah.

Steve: And they are competing for like three or four items in the box, right?

Mandy: Yeah, and the way that we have it set up now is, when we work with a brand we basically tell them, ‘You know you are going to be in the June box, or you are the July box, and we need your product by such and such day. And so we kind of curate the boxes based on the brand that we are working with, but the way that we would really love it to work – and this is going to be in the future hopefully – we want to be able to have a warehouse of products.

You know, we want to say if a brand wants to work with us, we want to say, “You know what, sure send us the products you will be in a box in the next three to four months. And we want to be able to curate the boxes with products that we can kind of pick from our wholesale or from our warehouse. But we are not to that point yet, and so right now it’s working.

Steve: Well, you have extra room in your house; I saw some of those bedrooms that were looking quite nice.

Mandy: I don’t know about that.

Steve: So okay, I still have a bunch of questions here. So let’s say you want to start out creating your own subscription box, so where would someone start?

Mandy: Where would someone start, by researching what other people are doing.

Steve: Like say I want to start a ‘man’ box, let’s say hypothetically speaking, well…

Mandy: A ‘Happy Daddy Box’,

Steve: A ‘Happy Daddy Box’.

Mandy: Don’t you do that now, Jeff Rosen is going to do that.

Steve: Oh really.

Mandy: No I am just kidding. We have talked about doing something for the men like on ‘Father’s day’ we might do a ‘Father’s day’ box, that’s in the works, but I’m just kidding, you can start a ‘Happy Daddy Box’ all day long.

Steve: I have no interest, but let’s say I want to start one or something from complete scratch, what would be your advice on where to begin?

Mandy: Well for me it was easier because I had Natalie and so we were able to kind of figure things out together. So I think if you are on your own it’s a little harder, you just have to research. You know, what we did at the beginning was, I know we even reached out to you, because you have an online store and we were just asking questions and kind of connecting with people that were already doing it. So we didn’t necessarily talk to anybody that was doing a subscription box, but we did reach out to people that were selling things online, and just got advice from people that were already doing it. Because I feel like, you know…

Steve: So what were some of these pieces of advice that you got that were helpful?

Mandy: Well, one of them was start out small. It’s helped me be like, “Okay Natalie, you know, we don’t need to go big so start out very small,” just do like a barter test, you know. Because you don’t want to put everything into it, you don’t even know how it is going to go, you don’t even know if you are going to like it, you know.

This is something that when we started, it’s like, ‘are we going to really want to do this every month? Is this something that is going be fun for us? Is it going to be encouraging for other people? So starting out small, I know, we had that advice from– it might have been you or I can’t remember, but we…

Steve: That’s something that I would probably say, yeah.

Mandy: Yeah, I know you gave us lots of good advice, but I’m trying to really remember the advice at the time. It’s such a blur because we literally knew nothing. I know we had– we were lucky in the fact that we had Natalie who knew a little bit of HTML so she was able to set up our site for us. But when we started out we were on burb.com which I had never even heard of, so we had a lot of issues with that.

So, at the beginning it was really all just about trial and error, we had months where we sealed the boxes, and ‘Oh my gosh,’ like we did it the wrong way and there was no way to fix it. So we had to back in and tell all the subscribers that had subscribed you know like, “Oops, you know, we messed up and we really need you to like– we’re going to cancel, we really need you to subscribe here”. And the thing about that is like, ‘that’s okay’ if you only have a hundred people. But if you would start out with five hundred people, you are going to take a lot of people off.

But we made it very clear to our audience like, “Hey, this is something that we’re just trying, and thank you for being patient with us as we learn”. We really had a good response in just the fact that being transparent about it, you know, not acting like we knew what we were doing. We were kind of like, “Hey, you know this is something that we have a passion for but we are not perfect”. And yeah, I just think that people can probably relate to that a little bit.

Steve: So, are there any website– what are you guys using now for your website, are there any packages that kind of handle the subscription model for boxes.

Mandy: Yeah, currently we are on WordPress now thank goodness. So we’ve moved to WordPress, but we are using Woo Commerce and PayPal. So I don’t think that’s probably the best option, but it’s working for us now. We are having– we’re getting to that point where we are having a problem figuring out tracking. You know, tracking our retention rate and that kind of stuff. We are still trying to figure that out and but…

Steve: But right now you have this huge waiting list anyways, right?

Mandy: Yeah.

Steve: So it’s probably not much of a factor right now, I would imagine.

Mandy: Yeah, that’s kind of how we feel about it, it’s like retention isn’t a huge issue to us because we can’t even reach the people that are like willing to buy.

Steve: Just curious though, what is your strategy for people to continue to get this ‘Happy Mommy Boxes’, so what is your retention strategy.

Mandy: Really, our goal from the beginning has just been, no matter what that just kill them with kindness. So we’ve had people who have unsubscribed or who have been disappointed with something that came in the box, and both Natalie and I decided that no matter what it is, whether they are disappointed or they are unsubscribing for whatever reason, we’ve just really been nice about it.

So we’ve never been like, we’ve had people that are like, “Oh you know, I didn’t really like this” you know blah blah blah, we are like, “Oh my gosh, we are so sorry we would happily give you a refund. And every single time that we’ve done that or said that, they have said, “Oh my gosh, no way, I so appreciate you offering me a refund and that’s really great”.

I think the key is just engaging with them and not making them feel left out, because I know sometimes when I order products or subscribe to things online, have you ever had a personal response from the owner of the store, and has it ever been like, “What can I do to make it better?” you know.

So we’ve done that and then another thing that we do is every month we give people an incentive to share their products on social media and on Instagram. So we send out happy– we call them happy mail days. And so we ask people to tag, like hash tag ‘Happy Mommy Box’ things. So then people are sharing what was their favorite product in the box. And we would pick usually three of those people from the hash tag and we’ll send them like star box gift card or a target gift card, or you know, just some kind of encouragement in the mail on top of the box.

Here is another little thing that I think is important, this is something that Natalie did in one of the first boxes, I think it was the second month. She had somebody who had commented on her Instagram it was like, “Couldn’t wait to get a box”, and she had mentioned like, “the only thing better about this box is that it included diet coke”, you know, kind of just joking around, and Natalie sent her that box and included a diet coke.

Steve: Ah nice.

Mandy: You know when she got that, she shared that all over Instagram. And just doing little things like that has really helped us keep the people that we have.

Steve: That is great advice and in fact that’s actually how we run customer service with our online store too. If there is anyone who is disappointed with anything we just give them a refund and often times, you know depending on the situation we just let them keep the product as well, then you don’t have to bother sending it back.

Mandy: Yeah, yap.

Steve: And just a word of mouth that that generates is just worth it in itself. So speaking of customer service, how do you guys handle customer service?

Mandy: I am customer service, I am everything right now, so yeah, I usually– well, we both tag team on the e-mails and the customer service part of it, but yeah I mean, we are kind of, I think that helps though because people feel like, they get to talk to us, the two people who are running the company, you know. And I think that goes a long way. So I just– customer service to me, is all about making sure people get a response.

Steve: So do you guys have a phone number or is it just e-mail?

Mandy: We don’t, we just have e-mail and so right now that’s been working for us. Eventually we would like to have obviously a number that they could call, but right now…

Steve: I’ll be sure to post your cell phone number in the show notes here.

Mandy: Yeah, go ahead and do that, I would really appreciate. If you could tell them to call me in the middle of the night that will be great too.

Steve: Well, you will be up anyway; I have seen how late your kids stay up.

Mandy: I’m actually sleepy now, well, just one of the reasons that I probably feel so pumped about this business. Don’t do that!

Steve: Okay, so let’s see, I’m trying to run through in my head all the things that we’ve covered. So okay, customer service, okay. So let’s say I am starting my box, how do I get brands to recognize me and send me their stuff?

Mandy: You’re starting a box, how do you get brands to recognize you and send you their stuff, well-

Steve: Or does it even matter, in the beginning?

Mandy: I mean, I guess it depends. For us it helps that we had our blogs and so we could– we didn’t have to just say, “Hey, we just started this website called happymommybox.com, you know, here we are”. We could say, “Hey, I’m Mandy from ‘House of Rose’ and I’m Natalie the busy burgee mama. And we’ve been blogging for five years and we have this passion to help mums and encourage mums”, and so for us it was a little easier, I will say that. I think we had an unfair advantage in the sense that we could send people to our blogs so that they could see the success that we had and the community that we had there.

And I think that they knew from that that, “Oh they have a community here, women that are following them and are supporting them, and are engaging with them, that can only carry over into the ‘happy mommy box’ and so, I think it is a little bit, you have to do little bit more ground work in the beginning. If you don’t have that, it’s harder to get brands to work with you.

Steve: Would you even just go out and just buy some stuff and throw together a box, just to see if it is going to sell even if you didn’t really make a profit in the beginning, I don’t know. Just curious.

Mandy: Yeah no, I absolutely think that’s a great idea, I think that if you don’t have that recognition already and you are having a hard time getting brands to work with you, I think absolutely, you know. I mean, you can always get brands to do wholesale you know if you tell them that you are doing a subscription box service and you want to see their wholesale prices and that you are going to buy a hundred products. Most brands are going to be willing to work with you on that. And so you don’t even have to spend a whole lot of money.

I would say too, one of the things that we did at the beginning as we worked with– so in our box we have like two to three main brands and then we always have a small business brand, like an Etsy shop or we always like to feature other mums in our community who are trying to do online business, and who make Etsy stuff, you know. And so I think that’s a great place to start too is look on Etsy at other women who are running Etsy shops, because those mums are really wanting to get their products in the hands of people, and they have a small, small audience, and so they are willing to work with you.

Steve: Okay, that’s really good advice, I not that I am going to be starting ‘Happy Men Box’ or whatever.

Mandy: Well, don’t worry because there is not a lot of men on Etsy, so you would have a profit.

Steve: What do I even put in the box, like razors, yeah turkey, razors, you know, actually I don’t even have to shave that often, I wouldn’t include a razor, I guess. I don’t know.

Mandy: Actually, you know, you can’t do that because there is dollar shave club, right?

Steve: That’s true.

Mandy: Jeff does that.

Steve: Oh does he.

Mandy: He does yeah.

Steve: Well okay, thanks Mandy we’ve already been talking about forty minutes, and I have learned a whole lot about your box business, so, you are very humble, I just want to say that. And deep inside of you, I see this marketing genius and I’m just wondering are there any books that you’ve read or, what’s your background that has allowed you to be such an effective marketer.

Mandy: I don’t know, sometimes I feel like I’m not. You know, I really do because I went to school for business, but I was more into management information systems, and I don’t really have– I am not–I don’t have a back ground in marketing and I wasn’t a marketer. And it’s really just been trial and error and I think the biggest thing for me is just– and a lot of people have a problem with this, but being transparent online and being who you are, and just putting yourself out there. It’s very hard for people to do, and that’s really been my only strategy, all I can do is stay, you know, here I am love me or hate me.

And I’m sure some people hate me, but hopefully more people love me. It is the same when it comes to anything in my life, like home decor. I am not, I don’t have any background in interior design, but it’s just something that I love to do as hobby, and so I get e-mails all the time from people that are like, “Oh my gosh, can you– I will send you a picture of my house, and can you tell me how to decorate this”, and I feel like, ‘I’m so not qualified for that, like I don’t know, I just try stuff and it works, you know, or sometimes it doesn’t work.

And I think that’s important for people to remember too is, I’ve done a lot of things that haven’t worked, and that’s okay. I think you have to do that. I think you have to get past the fear of failing, you know. I was just at the marathon this weekend, I was with one of my best friends, I remember her, I had somebody come up to me at the marathon and was like, “Oh my gosh you are ‘House of Rose’ can I take my picture with you”. And she just felt like, that is so cool, like, I wish I had something that I could like do online that was a like a niche. But her comment to me was, ‘I would have to quit my job to do something like that, and then, you know, I’d have to invest into it, and then I will have to be like, you know…

Steve: That’s a cup out right there.

Mandy: Right, that’s the mentality of so many people is that you know they are afraid to cross that line and to go for it and I think you kind of just have to get past that fear of, you know, this might not work or, you have to take risks to make things happen, and you have to do the work.

Steve: Send that woman my way, actually because you know, I still work full time and I have got three businesses and two kids. I mean you have three kids but yeah, send that woman my way, what a cup out.

Mandy: Exactly that’s– and I was thinking in my head like, “No, you have to work two full time jobs at the beginning, that’s how it works. You know I didn’t do this overnight, and I didn’t, you know, I don’t not work hard, you know, I’m constantly on my lap top, and I’m constantly working and it takes work.

Steve: I hear you. All right Mandy, so where can people find you if they want contact you, for home decorating advice or whatever. I will not be giving this e-mail to my wife.

Mandy: Hey, she already knows that so…

Steve: I know.

Mandy: Yeah, you could find me at houseofroseblog.com. I am at house of Rose on pretty much every form of social media that you can find. If you are interested on getting on our wait list for happy mommy box, we are just happymommybox.com and happymommybox on social media.

Steve: Awesome, well, thanks a lot for your time Mandy.

Mandy: Yeah, I appreciate it thank you so much for having me.

Steve: All right take care.

Mandy: Bye.

Steve: Here is what I like about Mandy, she really is a genuine person, and she really just wears her hat on her sleeve, and as a result she exudes passion for everything that she does. Now, I know that I asked her about tips and tricks with her business in the interview, but the reality is she was just being herself.

For more information about this episode go to mywifequitherjob.com/episode11. And while you are on the site be sure to sign up for my free newsletter where I will teach you the exact steps that my wife and I took to make over $100,000 in our first year of business with our e-commerce store. Thanks for listening.

Thanks for listening to the My Wife Quit Her Job podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.

Now, normally I’m a very happy, go lucky Chinese boy, but I must have been kind of a downer that day. Anyway, long story short, Noah took some time out of his day to try and help me figure out what makes me happy and he actually shares some of his own experiences with me as well. Now, Noah didn’t have to do any of this, and this guy actually genuinely cares about people and for that, I just want to say thank you, it’s all good today. Now, onto the show.

Welcome to the mywifequiteherjob podcast. We will teach you how to create a business that suites your lifestyle so you can spend more time with your family and focus on doing the things that you love. Here’s your host, Steve Chou!

Steve: Welcome to another edition of the mywifequitherjob podcast. Today I am honored to have Polly Liu with me on the podcast. Now, Polly is actually someone I met at Stanford but I never really got a chance to get to know, because at the time she was an upper class man and I was kind of this lowly freshman just trying to get used to the ropes. Anyways, Polly started her business Beau-Coup.com way back in 2001 selling wedding and party favors and it has since ballooned into an eight figure business, and in fact her site now totally dominates the wedding favor’s space and she has been expanding into baby and other party favors as well.

So, since I have Polly on the line, it’s confession time. When I first started Bumblebee Linens, I secretly modeled the design of our shop after Beau-Coup. I stocked her store, I found out where she was advertising, I found out her web posting, her shopping part platform, and just about the only thing that I didn’t do was that I didn’t stock Polly herself because that would have been kind of creepy. But, you know overall, I tried to follow the same strategies with our store as what she had done with Beau-Coup and, you know, as you can tell we’ve done pretty well as well just following the same thing as she has done. Anyways, I’m really happy to have gotten back in touch with Polly after all these years, she’s truly an inspiration for my business and we can all learn from her. So, welcome Polly to the show.

Polly: Thank you Steve I’m completely humbled by your introduction [chuckles], I’m really not that great. So, I’m happy to be here and share my experiences with your audience. So, yeah.

Steve: Yeah, so let’s just start with a quick background story. Tell us about Beau-Coup and how you started it and how you kind of came up with the idea.

Polly: Wow, that was a long time ago, 11 years ago, 11 years plus but, the idea originated actually when I wanted to kind of, you know, do something on my own, something entrepreneurial. I was about to get married and about you know, six months, had gotten engaged, and I was at a start up and actually got laid off in the fourth round of layoffs but I was you know, kind of debating whether I want to go and get another job or start something on my own which I’ve always wanted to.

So, you know, my husband and I were brainstorming at the time, my husband had a full time job and you know, as I was planning my own wedding I kind of you know, stumbled upon this idea of selling wedding favors online because we were having issues with our own experience. We were really into golf back then and we wanted to give out golf ball wedding favors as our favors to our guests and it was just a really hard experience finding you know, personalized golf footballs online, and getting it packaged nicely and we just thought it was an opportunity, because you know, we needed to buy hundreds of these little golf balls and there was just really nowhere online you know, all the sites kind of look the same, carry the same type of products.

So we just saw an opportunity and we liked the business model because you know, people buy in bulk and each order would be you know, sizeable and we didn’t have to stock a lot of inventory because we could just kind of turn around and get a dropship from you know, our wholesale vendors so, we kind of liked the low risk strategy, we thought it was an opportunity, I thought I could kind of carry more unique products so, we kind of just kind of you know on our way– I remember this, we were going home to Ed’s parents house in Missouri and we were kind of just jotting down kind of a business plan on a piece of napkin on the airplane and that’s how it kind of started, the idea, and then we went to some gift shows after that and just kind of cemented our idea of you know, selling wedding favors online back then.

Steve: So it was important that you did this online, is that correct, because were there catalogues that sold these personalized golf balls that you were looking for at the time?

Polly: No, offline, wedding favors is really not an offline business, again because you have to buy hundreds of an item…

Steve: Okay

Polly: And most stores don’t want to stock hundreds of you know, a key chain or a bottle stopper to sell as wedding favors so it’s really a good business model for online so we kind of saw that as an opportunity and we just didn’t like the selection that was available back then online. And you know, most of the weddings we’ve gone to it’s kind of all the similar type favors so we thought there was an opportunity to be more unique in this space.

Steve: Okay, so back in 2001 I don’t really think that dropshipping was actually really big just yet, so how did you – were all these vendors willing to dropship right away or did you have special arrangements?

Polly: So when I was at the gift show, most vendors had a minimum order size, so if you wanted to place an order, you had to place you know, a hundred dollars worth of merchandise and this is also why we liked the business model because, you know, if someone ordered 50 to 100 of something, it usually meets the minimum size and I did negotiate with some vendors back then. But, you know, a lot of the vendors that we did end up using were traditionally wedding favor vendors so you know, and we tried to carry more upscale selections so we did– we were able to meet the minimum threshold and when I set you know, minimum thresholds on my website, I made sure that it met you know, the minimum order.

Steve: Okay, so how does customer service work and so, someone places an order on your site for a whole bunch of wedding favors and then do you then just go ahead and place the order with your vendor?

Polly: Yeah, yeah so I would take the order whether it’s online or over the phone and I literally you know, we would have a lead time on our site depending on which vendor it came from and I would literally turn around and call the vendor or e-mail them with the order, with the details of the order and it wasn’t super automated back then. It was literally e-mail with the details of you know, what they ordered and then they would turn around and ship it directly to the customer.

Steve: So how did you handle customer support and returns and that sort of thing, because you never actually saw the merchandise right?

Polly: I never saw the merchandise and if someone wanted to return something they would come back to me and not the vendor because you know, I wanted them to know that I was the interface.

Steve: Okay

Polly: And you know, when I worked with a vendor I try to get them to blind dropship so meaning, it didn’t look like it came from you know, so and so, it came from Beau-Coup so they would actually change their UPS label to say Beau-Coup, so the customer wouldn’t be confused when they got the package.

Steve: I see, so these vendors that you are working with, they didn’t really have an online presence at all either right, so it was a win win on both ends?-

Polly: Yeah, yeah.

Steve: Okay.

Polly: Yeah, and it was a new channel for them because again wedding favors wasn’t like you know, their typical customer base so you know, they loved the fact that we were able to place larger orders every time.

Steve: Okay, so even today, do you still follow that same model or do you hold more inventory?

Polly: We hold a lot more inventory because it just makes sense in how you know, a lot of times customers order you know, three or four different types of products and it does make sense to try to consolidate and send them one package versus four different packages. So, the types of products that we do dropship now are mostly personalized products that we don’t personalize in-house, like personalized ribbon or personalized cookies that we don’t bake you know, we don’t bake the cookies in-house [laughter]. So everything else we have to inventory and we you know, now we have a third party dropship, I mean, actually third party warehouse in the mid-west that ships all of our products for us so.

Steve: So, how did you know that you needed to kind of transition over to that model? Or was it gradual or?

Polly: It was gradual, we just ended up you know, stocking a little, a little more, a little more and it’s usually the more popular items that we started stocking.

Steve: Okay

Polly: And then you know, as we grew, the needs became bigger and we actually run out of warehouse space just a year or two ago and we moved our fulfillment to the mid-west.

Steve: So, take me back to the beginning. How much did you invest in this business? And, do you have a technical background at all or?

Polly: Not really [chuckles].

Steve: Not really.

Polly: I was an economics and psychology major, but I have to give credit to my husband who actually helped me build the website, did a lot of technical, yeah [chuckles] work.

Steve: Okay.

Polly: In the beginning I was, well mostly on the marketing and merchandising side.

Steve: Okay, so let’s go back to the early days. So, what were some of the challenges? So you had your husband help with the website, what were some of all the other you know, start up related challenges and how did you overcome them?

Polly: I would say the biggest challenge was probably marketing, just getting the word out, letting people find out about us and I really got lucky with a feature in Instyle magazine. So what I did was, I would just cold call all you know, a bunch of editors…

Steve: You mean stock, kind of-

Interviewer: Stock yeah [laughter]

Steve: Kind of like what I do? Okay

Polly: So you know, I try to get the contacts and either you know, e-mail them or call them and I just got lucky with one editor at Instyle magazine which really helped us kind of you know, put us on the map and get more features after that and I still remember it was a pair of salt and pepper shakers made out of blown glass, that I found at a local shopping mall, Stanford shopping mall, and you know, it was more of a home decor item and I just thought that it would be a really cute wedding favor item.

So you know, I added that to my website and this editor thought it was a great idea, it was very high end. It was like over ten dollars a pair and she featured it, and after that I just started getting you know, traffic to the site and I was able to say, hey, I was featured in Instyle magazine and I got other you know, Martha Stewart weddings or brides magazines to become interested because they thought– oh, wow! If Instyle would feature you then maybe we should too. So that helped a lot and I definitely…

Steve: So-

Polly: Like plastered that all over my homepage and-

Steve: Yeah, we do the same thing.

Polly: Yeah.

Steve: So, you said a lot of stuff in that last statement so let’s walk through some of that. So, you said you saw something at the mall that you liked.

Polly: Yeah.

Steve: How did you get from that point to carrying something in your actual store?

Polly: Yes, that’s a great question because I did that a lot in the early days. I tried to be creative. So wherever I was you know, I’m always kind of keeping an eye out for unique items so. I remember this was a gift store in a local shopping mall and I just thought it would be a really cute item to have on our site. So what I did was, I you know, I looked on the bottom, found out who manufactured it or who they got it from, I do that a lot [laughter]. I’m a very sneaky shopper [chuckles].

Steve: [chuckles]

Polly: I’m always like taking pictures with my I-phone, yeah, just to try to find out where they sourced it from and then it was a place in Santa Rosa, I remember. And I called them up, I got a catalogue and you know, some vendors will drop ship, some vendors won’t. And sometimes I have to take a risk and kind of you know, place initial order to stock and if it works out then I’ll stock more. And this particular vendor didn’t drop ship. So I actually took the risk– I think I bought a $100 worth of products and it was nice because I got to see the products, take my own pictures and you know, just took some risk on inventory, which wasn’t a lot.

Steve: Yeah, a $100 dollars is nothing.

Polly: Yeah, and I really liked the product so I was confident I was able to sell it and I got some in the shop or in my apartment, I got some shipped to my apartment.

Steve: [chuckles]

Polly: And then I just you know, took pictures, wrote some creative copy and got it loaded onto our website and yeah, then the Instyle editor just really liked it.

Steve: So, what did you write in this letter, I’m just kind of curious, how do you approach someone just completely cold?

Polly: Oh! I actually called her [chuckles].

Steve: Oh! You called?

Polly: [chuckles] And I think I got lucky she just happened to pick up the phone and you get lucky sometimes, they’ll just pick up or you leave voicemails which usually doesn’t work well. And I just started talking to her and I still keep in touch with her.

Steve: Oh!

Polly: Throughout the years, yeah, now she’s got her own show online and yeah, so…

Steve: Wow! Okay, so, how did you get her phone number? Maybe I should be taking from you lessons about stocking instead.

Polly: There’s a directory at the library, you can just go to any local library, called the Bacon’s directory, and it has all the magazines that you can ever want to you know, write to and it’s categorized like you know, wedding or baby, or family or you know lifestyle and you can literary get contact information for any magazine there by fax, by e-mail, by phone. So, it’s just a directory of all the editors.

Steve: That is a very good tip.

Polly: Yeah.

Steve: So, is that still up to date today, do you know? As far as you know?

Polly: I don’t know, I haven’t used it in a while.

Steve: You haven’t stocked anyone in a while, I see.

Polly: No, but it’s called Bacon’s directory yeah.

Steve: Okay, great! That’s awesome advice. So, okay, so you get in Instyle magazine and then did you actually get a ton of orders from the magazine ad itself?

Polly: I wouldn’t say that we got a ton of orders; we got a lot of kind of just publicity from it.

Steve: Okay.

Polly: And it was just great right, to know that someone was interested and then it kind of snowballed from there but, I would say what really helped me in the early days from a marketing stand point, I mean, that was really great, InStyle. But I also just kind of started learning about SEO.

Steve: Okay.

Polly: Search engine marketing or optimization and I you know, started writing content, I started building links, I started just trying to you know, learn how to scroll up on Google, and I think in the very early days we also did some paid advertising through Google which brought in a lot of water back traffic.

Steve: Okay, so let’s go in a little more in-depth. So earlier on, so what are some of the SEO things that you did with your site? And this is just back when you were just by yourself pretty much right?

Polly: Yeah, yeah. So, you know, I mean back then it was so early for SEO so it’s pretty easy to you know, gain rankings but, I know I made sure all of my pages were re-titled, wedding favors or anything I wanted to rank for, I wrote content on wedding favors, bridal shower favors too and I exchanged a lot of links. So, I would you know go out to other wedding related sites and try to get them to link to me with anchor text that has wedding favors in it or something related and I would link back to them. So, I did a lot of that because I was just reading up on it and it was a lot of work.

Steve: Oh right, yeah.

Polly: And finding directories to you know, get my link in there. But I did a lot of that in the early days.

Steve: Okay, okay. So, just for the benefit of the listeners, the SEO game has changed tremendously…

Polly: Yeah.

Steve: In the last couple years, so some of these tactics that Polly is describing here, well, will no longer work, and in some cases they may penalize you but, in the early days all that stuff was actually very good strategy in terms of building up a search engine optimization.

Polly: Yes.

Steve: So, okay, so you have– SEO traffic start trickling in, how long did it take for that to happen?

Polly: Not too long. I would say like, within like a few months, I started seeing some results and I just did more and more of it and as you’ll see right now today I mean, we are not just ranking for wedding favors, it’s you know, baby shower favors, birthday party favors. So, we did more and more, and like Steve said, the game has completely changed so, you know, this was like ten years ago [chuckles].

Steve: Yeah, yeah. So, how has it evolved? I’m just curious, how do you guys get links now for your store?

Polly: Oh, we just try to get natural links now, we don’t build any links, we don’t submit anything to directories anymore. It’s really just building good content and doing a lot of social media. You know, we have a blog, so we just try to produce content that we think our readers or our audience will be interested in and then they will want to link to us so.

Steve: Okay, so, percentagewise you know what percentage of your business is direct traffic SEO, search engine marketing and that sort of thing just to give a very rough breakdown.

Polly: In the early days I would say almost 90 percent of it came from SEO, SEO yeah not even paid. Paid was probably like ten percent of it or something, and I think over the years paid has become a much bigger percentage of our business.

Steve: Okay.

Polly: And, today I don’t have the exact breakdown but I want to say that you know, paid is probably like 30 percent you know, SEO is probably another 30 percent and everything else is like you know, press, or social media and everything else so.

Steve: What about e-mail? Do you guys do anything special with e-mail at all?

Polly: Yeah, we have a huge e-mail base now so yeah, we do have a lot of people coming in whenever we send out an e-mail blast, but that’s not a huge percentage of our traffic source.

Steve: Oh, okay. So, do you gather e-mails from people that have purchased or do you gather in other ways with your content as well?

Polly: Both, so you know, you can come to our site and I think one of the first things you’ll see is a pop-up that asks you to join our newsletter and then you know, after every purchase or actually during the purchase process, they can opt in to receive our e-mail and then afterwards we see if they want to you know, sign up for our newsletter as well and there’s just a lot of opportunities along the funnel for them to sign up.

Steve: So this pop-up is often been controversial in terms of e-commerce stores, do you guys offer any special offers with this pop-up or is it an informational pop-up?

Polly: Yeah, they’ll see exclusive notifications on sales and I think you know, they’ll get it– and then once they agree to get newsletters we have a whole cycle of welcome e-mails and you know, so we try to give them bigger and bigger deals along the way every week to get them to buy. Even if they don’t buy on that visit, they’ll get e-mails to try to encourage them to come back.

Steve: Okay, so the pop-up actually hasn’t deterred people from shopping on your site right?

Polly: No.

Steve: Because sometimes it annoys people.

Polly: Yeah, I know [chuckles] we’ve tested it and actually it does work for us.

Steve: Okay.

Polly: Yeah.

Steve: Okay. So, you know if you were to go way back you just got laid off from your job, you’re just starting up your business, when did you kind of know that this is what you wanted to do? How much time did you give yourself?

Polly: Yeah. It was probably a year into it, I mean I remember in the early days it was just me you know, by myself in my apartment and I definitely had doubts you know, in the early months especially that this wasn’t going to work. And I remember you know having episodes where I would cry and be like, what am I doing here? [Chuckles] I’m all by myself trying to get links [chuckles] and then you know, in the early days I mean, fulfillment was you know, a challenge too. I had to like pack up my own packages and then like go to the local drug store to drop off the packages.

So it was just really manual too, and I definitely had doubts and it wasn’t until you know, I got that InStyle feature and you know, I started seeing traffic to our site start to increase and you know, started to get some orders and I realized, hey, this could really work and you know, some days I wouldn’t get any orders in the early days and then you know, I think maybe at the sixth month mark you know, I would get an order a day and then it would become like two or three a day and you know, once you see the growth pattern you just you know, start having more confidence in the business.

Steve: Okay. So, that Instyle thing happened within the first six months?

Polly: Yes.

Steve: Okay. Yeah, you know, one thing that I always tell the students in my class at least is to never underestimate the impact of leg work and it sounds like you did your share of leg work in the beginning by cold calling people as well as you know, just hustling work to get any sort of business that you could.

Polly: Yes, yes.

Steve: So-

Polly: And I did everything, I mean, I tried to partner with you know, wedding vendors and event planners and you know, just trying to get creative with marketing. I think that was the biggest challenge in the beginning, is just to get our name out there so.

Steve: What a coincidence! We have been doing the same thing.

Polly: Yeah, you can’t be shy [chuckles].

Steve: So, okay, so your business is gaining traction and you know if you can think back, I know it’s hard to think back that far, but I’m sure you made your share of mistakes as well. So I was just wondering if you could comment on some of these mistakes and perhaps you know in the hopes that other people who are starting wouldn’t make these same mistakes.

Polly: What are you talking about mistakes? [chuckles]

Steve: I know you are perfect Polly and you know, [chuckles]

Polly: I’m just kidding [chuckles] mistakes so you know I think I might have mentioned this to you at one point but thinking back, I think if I were to do it all over again, I would have invested more in infrastructure from the beginning. You know, in the beginning it’s just hard because you know, you’re not sure if this is going to work and you’re just trying to like get the cheapest like server or get the cheapest you know, any third party software you can get and as the company grew it was just hard you know, with all this legacy.

I remember you know, even our shopping cart, we tried to get you know, something off the shelf, really cheaply and even with you know, our operating system or our fulfillment software, we just tried to find the cheapest thing out there in the beginning and then as we grew, we had to switch it out, it was just a nightmare. And you know, in some cases where we had to spend a lot of time trying to, you know upgrade the system, upgrade the infrastructure and it just took a lot of bandwidth when we could have used that time and the resources to grow the business. So, you know, it’s really hard because you know, you want to save money, you want to be scrappy in the beginning, but I do think you know, for certain things you need to invest in scale.

Steve: Was open source around back then? I’m trying to think this was a long time ago so.

Polly: Yeah, but we didn’t really do that.

Steve: I don’t think it was actually that big.

Polly: Yeah.

Steve: Certainly not in 2001.

Polly: Yeah.

Steve: So, may I ask what you were on initially when you first started out?

Polly: Oh gosh, I can’t even remember, I’m sorry [chuckles].

Steve: Okay, oh, that’s okay. And then, what did you transition to then, is your shopping hut homegrown now or are you using anything kind of off the shelf altogether.

Polly: No, we were using Niva.

Steve: Okay.

Polly: For a long time, now it’s completely custom built, I mean, we built our own shopping cart, our own you know, operating…

Steve: Okay.

Polly: System, yeah.

Steve: Just between you and me, I already knew the answer to that question before I asked so, [chuckles]

Polly: Cheeky [chuckles]

Steve: Okay, so and you know, as your company has kind of grown, how has– so let’s talk about Google for a sec, So, within the last couple of years the Google rankings have been shifting around the algorithm to change so, how has the company kind of transitioned over the years to kind of Google proof yourself so to speak?

Polly: Yeah, yeah, we realized that we can’t just depend on Google traffic as much as we did in the past So we try to like you know, like I said, build a bigger social media presence, build better content and you know, get smatter with paid advertising you know, try to find other places where we can pay for traffic so that we are not so reliant on our rankings you know, we could drop tomorrow and not feel the pain so much because we have definitely experienced that I would say like five or six years ago or even the recent past. It was just really stressful to rely on that traffic. You know, today we are doing very well on Google but you know, that could go away tomorrow so.

Steve: So, what are some of the paper click services that you use and recommend?

Polly: Well, first of all we, you know, advertise on all the major search engines right.

Steve: Okay.

Polly: So Google, Yahoo, Bing. We do you know the shopping engines; I can’t remember the others [chuckles].

Steve: That’s okay, yeah, we know.

Polly: A comparison.

Steve: Google merchants centre.

Polly: Comparison shopping, yeah.

Steve: Right.

Polly: And then we do the product feed, product feed paid advertising, so you know, we just explore and then we you know, we pay for some blog advertising and…

Steve: How did that work out actually? I’m just curious, for the blog advertising.

Polly: Yeah. It actually, doesn’t work out as well as some of the other you know, channels but it’s good for kind of brand marketing. So we still do some but not a ton, it’s not a big channel for us by any means. So, in terms of you know, return on investment it’s definitely not one of our top channels. I would say e-mail, e-mail has the best return but it’s small and we also– let me try to think what else we do, affiliate is also another channel, affiliate marketing.

Steve: Oh! Okay.

Polly: Which actually has worked a lot better in the past too [chuckles].

Steve: Oh! Because the Google rankings affected the blogs?

Polly: Yeah, yeah.

Steve: Okay.

Polly: Yeah.

Steve: That makes sense.

Polly: And now we are trying to figure out how to, you know, get on mobile and you know, advertise on mobile which is not you know, the best performing channel right now for anyone so.

Steve: Yeah, mobile for us isn’t performing that well. Recently we, well not recently, is a couple of years ago, we did a mobile implementation of our site which drastically boosted conversions. But they were still pretty low and I noticed you guys launched one, was it a year ago? Or couple of years ago as well?

Polly: A year ago, yeah.

Steve: A year ago yeah.

Polly: Yeah. I mean, it’s great but it just doesn’t convert you know, I think you get a lot of eye balls but people just don’t you know still buy on their phones as much as they do on you know, an iPad or the desktop so.

Steve: So do you still continue to buy ads for the mobile space then?

Polly: We’re experimenting, I think not a ton but you know, we’re starting with our brand and then you know some of the top terms but it’s just, the returns are just not there so, right now yeah.

Steve: So just curious, how do you measure like brand penetration? Is there a way that you guys can quantify that? Or how does it work?

Polly: Brand penetration, [chuckles] you know, we do look at how many people search for our brand over time, and the good news is that it’s more and more every year because as we you know, become more well known I think people are searching for our name Beau-Coup in all different forms and we do measure how well it converts and it’s by far the best converting returns for us.

Steve: Okay.

Polly: Yeah.

Steve: Okay, so if you were– so I noticed that you decided, I think all of your stuff is sourced domestically, is that correct for the most part?

Polly: Most part I would say 98 percent we did source some things from Europe yeah.

Steve: So, was that a conscious decision to just kind of keep everything domestic? Or just what were some of the thought processes that went into products that you wanted to carry?

Polly: I think part of it is just you know, starting out, we just didn’t have the volume to import and it was just really complicated and I just didn’t have the resources or the mind share back then to even think about learning how to import. And we did go to a gift show in Hong-Kong a few years ago and we do import a few things now from China. But it’s through a middle man and I think the thought processes as we get bigger we will be able to bring in containers and you know of items, but it is a lot more risky, so we didn’t want to kind of, you know, commit to a container full of anything.

Steve: Sure.

Polly: So, it’s just you know, and I think that the domestic market you know, there’s just so much that we want to do still so that we haven’t tapped into the whole importing. But it is an opportunity, we can definitely get the cost down by a lot but we also need the warehouse space to…

Steve: Right, right.

Polly: Store all these products and then we take on the inventory risk.

Steve: And there is quality control as well.

Polly: Yeah, it’s just a whole set of issues so.

Steve: Okay. So, do you have any– let’s say I was a complete nubby today who wants to start an online store. Any advice that you would give for people just starting out, who want to create a business set similar to yours but you know not within the same niche?

Polly: Not within the same niche, gosh, I think the game…

Steve: because you would just crash them you know, if they started in the same niche.

Polly: [laughter] Don’t even try! You know, I think the game’s changed a lot, like I said, I think it’s just a lot harder now with marketing. I think it’s just so much more expensive so, you know, I would just advice to just understand your product, your category, your competitive space because I think it’s just so much more competitive this days and even with bringing traffic, just know how much it will cost you [chuckles].

Steve: Right.

Polly: So, think about you know, your margins, I think that’s a big learning for us is just trying to– I think in the earlier days it was really easy because we didn’t have as much competition.

Steve: Right.

Polly: And we were more unique and as we grew there was just a lot more people came into our space and try you know, started carrying similar type items. So it’s just harder to differentiate ourselves on a product level and we are going back to that a lot more through designs, and through carrying exclusive products because you know, competing on price is just really hard.

Steve: Right.

Polly: And we’re trying to get away from that because you know, you are bidding against all these other guys on you know Google, Pay for click and it just gets really expensive and to have a descent margin, you’re going to have to really differentiate through product offering.

Steve: One thing I do notice is that you guys take your own shots, so even though it might be the same product…

Polly: Yeah.

Steve: Yeah.

Polly: Yeah, that helps a lot actually.

Steve: Yeah, yeah.

Polly: We’ve done a lot of A/B testing on product images using the vendor’s image versus our own and using a nice image versus a not so nice image and it definitely pays off to have good photography. So, we do a lot of that and a lot of like you know our own content and we try to give people ideas on packaging and how to differentiate the product because it really helps us convert.

Steve: Any worries about Amazon kind of encroaching and taking away some of…

Polly: Yeah! We do worry about Amazon but like I said, if we continue down the path of you know, coming up with our own exclusive designs on the personalized products which is a huge part of our business now.

Steve: Okay.

Polly: Inland, and working with manufacturers on producing exclusive product lines, that’s kind of the direction we are headed.

Steve: Okay.

Polly: I think that will help us stay competitive.

Steve: That makes a whole lot of sense because the whole personalization space in Amazon, it hasn’t quite jelled yet, yeah.

Polly: Right

Steve: Okay! So, is there a favorite business book that you could recommend to the listeners?

Polly: Favorite business book– gosh, I’m trying to think what are some of my best books?

Steve: Do you read anymore Polly? I mean, I know you have a couple of kids but, [chuckles].

Polly: I do read, I do read. Maybe not so many business books anymore, but I’m reading a book called ‘Quiet’, which I highly recommend, [chuckles] it’s about introverts verses extroverts and how to you know, and it actually applies in the workspace too, you know, how you can manage people better by knowing whether they are you know, an introvert or extrovert so, it’s quite interesting.

Steve: So are you yourself an introvert or extrovert?

Polly: [chuckle] I you know, I talk about this all the time with my husband, my friends, I think I’m somewhere in between-

Steve: Okay.

Polly: Yeah, I’m not truly one or the other but…

Steve: I would not call you an introvert; I just thought I would ask [chuckle].

Polly: Really? [Laughs]

Steve: Yeah, no, I mean, an introvert – at least when we first met, the conversation was kind of free flowing so I, you know, usually introverts, it’s a little harder to get them going so.

Polly: Oh, yeah.

Steve: But, any online services that you use for your business that you just can’t live without that you recommend? You guys would look at?

Polly: There’s a site – I can get back to you, but basically, you can basically see all your competitors and their traffic and where they are coming from. God, I can’t believe I’m blanking right now so.

Steve: Open [inaudible] [00:36:33] no-

Polly: No, no, no, something with competition in it [chuckles].

Steve: Competition [chuckles] Okay! Yeah, you know, once you get that to me I’ll go ahead and put it in the show notes.

Polly: Yeah, yeah.

Steve: Chances are I’ve already used it on your site.

Polly: Oh! It’s Compete.com?

Steve: Compete! Okay, yes, Compete.com of course.

Polly: I love Compete.com because I’m always like spying on my competitors and-

Steve: Ah! So I’m not the only one? [chuckles] Okay.

Polly: Yeah.

Steve: Well, I know you’ve got some stuff you need to get done Polly, and I don’t want to take up too much of your time, but just thank you so much for coming on the show.

Polly: No, I this is great and I hope you know I want to listen to all your other podcasts too, great series you’re doing.

Steve: Yeah, I hope it really takes off.

Polly: Yeah.

Steve: All right, well, thanks Polly!

Polly: All right, thanks Steve!

Steve: I really respect Polly a lot, and in fact I owe the success of my online store directly to her and Beau-Coup. Back then, I used her online store as a role model for my own and by stocking and tracking Beau-Coup’s every move, I was able to emulate her success or be it on a much smaller scale. Anyway, be sure to check out the show note for this episode, where you’ll find the sites and links mentioned in this episode and if you have a minute, it would really help if you could subscribe and leave a review on iTunes. And don’t forget to enter my free contest where I’m giving away a lifetime membership to my profitable online store course as well as free consulting. For more information go to www.mywifequitherjob.com/podcast-launch. That’s mywifequitherjob.com/podcast-launch. Thanks for listening!

Thanks for listening to the mywifequiteherjob podcast, where we are giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.mywifequitherjob.com.