I woke up at about 4am, made coffee, and read stories by Miranda July, Charles Bukowski (from his book “Hot Water Music”) Nora Ephron (from her book “I remember nothing”) and half a story from John Updike before I was ready to start my own writing for the morning. It was 4:47am when I got an instant message on Facebook. “Hi James. Can I just get one piece of advice from you”. I didn’t recognize his name. “Ildar” something.
The sun was just peeking through the curtains. I felt good. Within a few minutes, the first train going into the city would pass by the house. I like the sound of it. I don’t like to talk to people so early in the morning. I like morning sounds. Privacy. That’s why I wake up early to start writing. I wasn’t sure I wanted to IM with anyone at 5 in the morning. But…
“Sure,” I wrote.
He had a business selling eco-friendly bags. And he wanted to raise money from venture capitalists and wanted to know how to go about it. Here’s his business: www.ECOcentricBags.com
Here’s a bag:
The IM conversation is below. My notes are in brackets. I apologize in advance to Ildar if I was a little rude. I want to be helpful.
—
Me: Do you have customers? You should get health food stores or other organic-focused stores to buy bulk from you.
Ildar: Well, my main concentration is not reusable bags, but handbags, backpacks, messenger bags etc. No stores. We’re only selling to consumers.
[ Mistake #1: Not a broad enough definition of who their customer is. When just starting out, the focus should be to sell to anyone you can and be creative about it. You absolutely need to get a customer. No customer, no business. Important rule: you want to take the hard problems and make them easy ]
Me: its hard to market to consumers. Unless you get a huge distribution partner like a Walmart or Macy’s. Can you get a big chain to invest / take equity/ in exchange for distribution?
And then you can raise money but by then you might not need it. No matter how much money you raise, money wont buy you distribution. It will just buy you marketing. and marketing to consumers is very hard.
Ildar: …look at ebags.com. They had investors, market to consumers, and now they have a multi-million dollar business.
[ Mistake #2: incorrect comparison to others. You have to make sure you are not BS-ing yourself every step of the way. I’m not being critical here. But once you start BS-ing youself you can end up going down a wrong street, end up in a dark alley, and thugs are standing there waiting to strap their belts around your neck.
Here’s a post on how Ebags got started and succeeded.
Ebags.com raised $30mm from Benchmark Capital…in 1999. 1999 does not equal 2011.
Its hard to sell things. You can’t just put up a website and begin selling organic bags. In an earlier post, I said the easiest way to be an entrepreneur is to start with a customer.]
[Rule: The 5 Wins Principle]
Me: you need to have 5 “wins” in order to even THINK about attracting venture capitalists. Sample wins include: stores buying your bags, Walmart taking equity in exchange for distribution, revenues increasing month over month, light at the end of the tunnel in terms of profitability, some cheap way to market.
Raising money is very, very hard. Find easier problems to solve first. Solve them. Then go for harder problems.
Ildar:
Here’s our wins:
1. we have all our vendors drop shipping products for us – we don’t have any physical stock – so limited expenses for inventory and warehouse, etc
2. we’ve seen constant growth in sales and revenue over past 6 months due to increase in rankings in google, and other marketing
Me:
#1 is no good. Everyone has it. This is the Internet. The entire idea of the Internet is you don’t have to carry physical inventory.
#2 is good [but not really. See below.]
Ildar:
3. we live in the time of “organic boom” and sales of organic products will be constantly going up, besides with ban of plastic bags in many cities – we are in a good shape for future profitability
4. we developed a strategy when we give 5-10 % of every sale to charity – that will create word of mouth, and good for PR
Me:
#3 is only ‘ok’ if you can prove #3 by getting distribution or getting some store to bulk buy your stuff. Otherwise, if no proof, then nobody cares about “organic”. [Rule: Dont BS Yourself. If no customers, then no business.]
#4 is no good at all. Venture capitalists don’t care about charity. They’d rather you take that money and build your business. The PR value of giving to charity is almost zero.
Better PR is having naked girls carry your bags on subways while making out with each other.
Ildar: hard to convince them probably :)
Me: Yeah, thats why its good PR. Its too easy to give to charity.
Ildar: Not everyone does, though, even if it’s easy
[ Mistake #3: Why argue with me about this? ]
Me:
People want to get bags that make them look good. The organic stuff helps a tiny bit. You dont have to further give to charity. Its like you’re begging your customers to buy your stuff. ‘oh, we are so good you should buy us even though you might not like the bags.’
So… the only real “win” you have is increasing sales for six months. How have sales increased? What were sales last month.
Ildar:
still in single thousand digits
Me: Ok, so you can’t count that as a win. No BS! You need to do something drastic after six months of sales and ‘single thousand digits’ sales.
– You HAVE to sell to stores in bulk or give up equity to get distribution. Go door to door to stores. Hustle. Get one store to buy a bunch of your bags and you have a customer.
– or see what happens if Kloe Kardashian tweets you ever day (use something like celebritytweets.com to get her to tweet your bags for $3000 a tweet)
– or… get naked girls making out in subways while “wearing” your bags. Do it simultaneously in every subway in NYC.
Ildar:
:) I see
Me:
Nothing else will work
If ebags didnt raise that amount they would’ve been out of business almost immediately. You want to avoid that if you can. So you have to sit down today and start thinking really wide outside the box
Ildar:
Yeah, i guess retail business is tough to be in
Me:
It doesn’t have to be. But you have to go crazy to make it work.
Give up equity to get customers, go to the heads of stores, go to a Kardashian, do something crazy in the marketing. Just organic bags online is not going to do it. You have to sit down right now and come up with 50 ideas for going completely crazy.
Give up 90% of equity to a walmart if you have to. Again, i’m taking an extreme. but thats the way you have to think. Think WAY out of the box from how you’ve been thinking
——- [End of IM conversation. Ildar said thanks and I signed off.]
Now its 5:50am. I just spent an hour of writing time. Claudia is up. I ask her if she thought it would be interesting for me to write down the IM conversation in an article.
Yes, but only if he gave permission?
He did.
Because you don’t want to do anything over the line.
Its ok. He gave permission. He was fine with it. I’m even going to link to his site.
You know what else is over the line?
What?
Not refilling your wife’s coffee.
So I did.
—-
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And finally, if you have any other suggestions/ideas for Ildar please put them below. He can handle negativity (I asked him this) but try to make it constructive. Or feel free to ask other questions in the comments below.
Good post. It reminded me of this when I read it:online.wsj.com/public/article/SB116379821933826657-0mbjXoHnQwDMFH_PVeb_jqe3Chk_20061125.html
Funny, I remember when Garlinghouse wrote that letter and thought it was great. Not sure if Yahoo implemented any of his ideas.
That’s EXACTLY what I’m suggesting!
Dear James, Please help! I lost my job and can’t find work. PS can Claudia recommend an asana for anxiety. :P
Ok, Jeanne, she is ON THE CASE
Jeanne, I am delighted you asked, yes of course, there is a posture that is almost magical, called paschimotanasana. In plain English it is a forward bend.
The benefits are that it calms the mind and the nervous system, it also awakens the inner fire of the navel area (at the subtle body level) and purifes all impurities. It is a magic potion.
It does require a few things: a) time and space, that you give yourself a space to be silent and try it within a peaceful setting b) that you start sitting with legs straight, breath in and then on the exhale start working your way down aiming for (eventually) nose to knee, but never compromising the legs, never over-stretching, one breath at the time.
Breath in straighten the back up, breath out reach so that the stomach reached for the upper thights.
Once you find your edge (never push never force) stay there. The longer the better, for up to 20 deep breaths.
Let me know how you do
Just wrote a post about it too earthyogi.blogspot.com/2011/04/do-you-feel-fire-in-paschimotanasana.html
Just to add to that: Sharath also mentioned how important this pose was. Particularly in terms of the “fire” it awakens. When I was doing it during his led class last week he adjusted me into that pose. Maybe he saw how inflexible I am. I didn’t realize I could go so far into it, with each breath a little deeper.
Thanks Claudia! I actually do 108 toe touches everyday…however, I haven’t actually slowed them down and regulated my breath to make it more relaxing. I do more of breath of fire and do it quickly. I will add this modification to my routine. This is so great…a business and yoga blog! If you guys keep this up I’ll have to make the AC my homepage.
Well, not sure what you mean but I hope its a good thing.
Just did. Great link. thanks.
V, this is REALLY REALLY important. Thanks for bringing it up. Ildar should absolutely post a blog about green/organic/fashion/etc and use as much SEO as possible on it. I 100% agree.
You are so right. I remember one time I was raising money for a company. It took six months. When we were done we all took a sigh of relief as if that was it, our jobs were over. Now what?
Mahesh! I will always reply to your comments.
James, thank you !,
You are my Warren Buffett.
U are the richest person in the world in terms of experience’s.
-Mahesh
No offense intended. For some reason, I assumed you did want to debate me. I guess I got that idea because you responded to my posts and used my name. My bad.
This is vital for any ecommerce site. More and more businesses are including content and social media marketing into their budget. Some are even letting their PPC campaigns slide and focusing solely on blog content. You have to provide value/solutions. Find out what questions people are asking and answer them on your blog. If you are providing answers to commonly asked questions and have good SEO in place you will not only improve your SERP rank, but also build a community around your brand. Make yourself a news source for your demographic and it will serve you on many levels.
There is one solution to environmental problems. It’s called, “find the smallest set of players that are having the biggest impact and focus on getting them to change”. Otherwise known as “don’t be pennywise and pound foolish”.
The environmental movement used to do this. Now they throw out fear and confusion and collect book royalties and donations, just like the “Black Swan” investor class.
When people start telling me they’re giving some % of profits to charity I start wondering if I really wanna pay that extra % to buy their crap when I don’t really care for the charity or have a better charity I would prefer.
Is *anybody* gonna buy Weird Al’s new song because he’s giving the money to charity?? Hell no.
Benjamin,
The donation will go out of our margin – so it will not make the price of the item bigger – it just makes our profit a little smaller. But this is the part of our vision too – Give and you shall receive.
And when it comes to donating to charities – we don’t want just to mention their name, so nobody really knows what kind of charity it is and where the money goes – we want to “open it up” – and tell their story, what they do, and why we chose them.
Same idea is behind our bags – we want to start telling the story about every vendor – why they started the company, what’s their vision, etc – so we want to show real people behind all the businesses – and make sure everybody understands where the item comes from and who made it.
Ildar should consider partnering with his local NPR/public radio station. Offer them at cost to the station to use as a premium. NPR audiences are affluent, educated, constantly labeled as tree huggers and generally have about 45% female listeners, they might eat up the notion of organic bags. Once he has a success story in his home market, he can branch out into other/larger markets. What he should not do is offer it more than once in any one market because listeners will simply wait for the next pledge drive.
This is what I did to get my product recognized. If you aren’t ready to do something crazy like this, or don’t have $1M to promote your product, then you shouldn’t bother to try and launch something:
www.youtube.com/watch?v=t73Q3f4YjwQ&feature=player_embedded
Didn’t read all the comments. But my suggestion is: Have a bag made with your website adress on it.
Give an A- List celebrity a share of your company or a shitload of money, to wear it around town.
Step 2: Profit
IIdar:
I think your bags are really cool, especially the rubber messenger bag…very hip!
Your website is really informative, I might suggest trimming down some of the words and sticking to the products….make it like a slideshow, at least thats my perspective.
‘Wholesalers Directory’, or ‘Drop Shippers Directory’, and look through the websites containing the lists of such manufacturers. Alternatively, you can type your product keyword together with the word ‘wholesale’. For example, if you want to sell wooden carvings, you may want to try the term ‘wholesale wooden carvings’ and take note of the websites offering wooden carvings at a wholesale price. After which, you can email or call the manufacturer and check if they offer drop shipping arrangements.