The Customer-Funded Business: Start, Finance, or Grow Your Company with Your Customers' Cash by John Mullins

Author:John Mullins
Language: eng
Format: mobi, pdf
ISBN: 9781118878859
Publisher: Wiley
Published: 2014-07-02T16:00:00+00:00

Petals for the People and H.Bloom: Two Startups Come Together36

In April 2009, Sam Pollaro was out of a job, his employer having closed his business to take a position in the Obama administration. Having long wanted to start and run a business of his own, Pollaro thought, “This would be a good time to start a business”—except for one thing. “It was the worst recession in 70 years.”37 Pollaro, whose wife, Sarah, operated a small floral design business that provided floral arrangements for weddings, events, and some corporate accounts, was looking for an idea that wouldn't take much capital. Sarah already knew how to buy and arrange flowers, and the two of them wondered whether the combination of Sarah's capabilities and the power of the Internet might offer consumers a better way to buy flowers.

“In April 2009, Sam Pollaro was out of a job”

Neither of them knew anything about developing a website, but from Sam's perspective, “We had no idea what features and functions we needed, so it was better to teach myself how it needs to work, as opposed to ‘Let's go out and build this gold-plated site where we attempt to figure out everything that people are going to need to do and hope we get it right.’ In retrospect, he recalled, “It was one of the things we did right.”

Launch on a Shoestring, Plus Customer Funding

In July 2009, the Pollaros launched their site, PetalsForThePeople.com, having spent practically no money—just a couple of thousand dollars on a graphic designer and some printed materials. Their customers' cash would fund the rest of their journey. Consumers could log on, create a weekly or biweekly subscription, and then either have a small bundle of cut flowers delivered or pick them up at a couple of locations in Washington, DC. A video on the website told the customers how to arrange the flowers, and the site described for the customers the sources of the flowers in that week's bundle, along with information about the species. So there was an experiential and educational element to the concept, too.

Sam knew someone at Daily Candy, a blog with tens of thousands of subscribers in the Washington area, and for the first couple of weeks Daily Candy was extolling his company's virtues. “Never again shall we search in vain for unique and affordable blooms. From this day forward, the people will receive bundles of fresh flowers each week with which to create their own unique arrangements.”38 On just one early day, 50 new customers signed up, and referrals soon followed. Word was spreading!

“the Pollaros knew exactly how many subscribers they had, unlike a local florist”

Because the Pollaros knew exactly how many subscribers they had, unlike a local florist, who never really knew what demand would be from one day to the next, they could provide to their customers flowers that were truly fresh, and at a price at which customers could get flowers for several weeks for the price of a single high-end delivered bouquet.

By June

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