There is a depth of wisdom in the “Main Street Entrepreneur” segment of early stage business growth. More often than not, the guidance we crave isn’t how to close a $3 million round from a VC, how to set up a stock option pool or how to plan for an IPO or acquisition. Only a few businesses need this guidance. All of us, including those trying to create the next Google or Facebook, benefit from “meat and potatoes” guidance.
We pulled many pearls of wisdom from our recent interview with seasoned entrepreneur David Sandusky and his wife, Julie. They founded Idea Chic, a stationery and gift company with all products designed and produced in-house using vintage letterpress to some of the best modern technology. They sell online and in shops around the world.
The quality of their custom paper products reflects their quality as human beings. Good people plus good product plus good execution usually equals good business. Enjoy the knowledge they share below.
Q. Describe your “Eureka Moment”. What was the market opportunity that drove your decision to form a company around this product/service?
A. My wife, Julie, has been designing and producing invitations and related products since 2003 and has developed great fans of her style. We found paper lovers are fanatic and look high and low for a style they like. That coupled with my marketing and confidence to drive sales online we decided to create a retail line of products and started Idea Chic to be the company we could scale.
Q. How did you fund the company to its current state?
A. We funded slow growth the first two years with income from Julie’s wedding invitation business (JS Design) and my other entrepreneurial ventures or consulting. Idea Chic was a side or part time venture for both of us utilizing our equipment, office and production space for JS Design. Julie and I have officed and enjoyed our short commute together for many years but in the past worked on different business. We launched Idea Chic in 2009 but I did not start planning to actually grow the business for two years.
Christmas 2010 was our first real effort at producing a line of products. It took until early 2013 to dramatically extend our product lines. Last year I decided to focus on Idea Chic because our products sell and we are having a blast also because we were getting so busy with orders. Julie continues JS Design on an exclusive specialty project basis but has also shifted to Idea Chic focus on the growth plan.
From a financing standpoint this has been stressful because now we had to make sure Idea Chic worked and we wanted to continue via bootstrapping. This focus meant turning down outside opportunities and revenues which started off strange and difficult but is now easy. Managing a growing business really helps dictate how you spend time. We had traction with regular customers and daily online sales because of Etsy and our own website, so we could invest back to product development, more equipment, more space and hires.
Space and people are currently a stress point. We need more of both. We have decided to grow as we can including opening new Idea Chic boutiques and the required people without outside funding or debt. It will take longer.
Q. ActSeed champions the need for solid planning and preparation from the very beginning. How important is planning and prep to your company’s success?
A. Planning is very important and should have a focused target but flexible and adaptable at the same time. Since we decided Idea Chic was a good business and one we love to grow, we started scrapping the multi-business plan. For us planning to scale one business has prepared us for large wholesale orders and volume retail shipments.
Q. How long did it take to get your idea into the market from initial concept to first customer?
A. Idea Chic is unique in that it started to build a small customer base before we launched the company. We did not realize at the time that Julie was doing market research with existing custom clients. We literally sell some of our retail products out of initial request from existing customers as long as ten years ago. Now we launch products and list them online followed by email to those who subscribe for product updates.
Q. What influence have the internet and social media had on the way you are marketing, selling and supporting your products and/or services?
I started playing with ecommerce and building online communities ten years ago with some success. I’m passionate about marketing and the Internet as a tool. We reserve some resources for traditional marketing channels but as time goes on really seeing the Internet and mobile as most significant for us.
Q. Describe the challenges you faced as you built your customer base.
A. Our target market is a no-brainer so no challenges there – women 25 to 60 who love paper. A pleasant surprise has been the market size of the young women who buy stationery. The average age of our regular customer is mid-40s and active online but the number of passionate paper fanatics in their 20’s is awesome! We may not have ventured into the business if not for how many young brides wanted personal stationery, everyday greeting cards and packaging.
Pricing is always interesting but our industry is not new and there are plenty of examples of pricing. The problem is you see prices all over the map. Even quality work and materials like we use is found heavily discounted. We know some find us expensive and we have also been thanked for being reasonable. The income bracket we target has no complaint. We make everything and sell at our own boutique, retail priced online and we sell wholesale as well. We keep our prices consistent across all places of sale. Margins are different across product and of course in volume numbers retail vs. wholesale teaching us how to listen to numbers.
My advice for pricing is to understand every penny of your expenses. Not accounting for what seems insignificant will bite you. Know what you need to make. Know your brand. Price dictates perceived experience. Know if you want to be premium or discount, somewhere between and why. If you live in a long time industry like we do you know what the market is and any pricing difference needs to have an obvious benefit. If you are doing something new you need a lot of testing. The biggest mistake I see is giving away demos. Put a value on it and take that calculated risk. Besides, it is all about marketing.
Q. What techniques have you used to establish credibility in the eyes of customers, investors, partners, personnel and the general public?
A. Locally we do tours of our production. The letterpress, her name is Hazel, is an attraction. We also mail items to our targets and existing customers. We mail invitations to events, birthday cards, Christmas cards and Valentine’s Day cards. We show off the quality and design. People take pictures and share on social media and we convert sales.
Q. Have government, University, or other community / economic development programs been useful?
A. I believe in networking and giving back so my involvement in each of these areas exists. Even when I’m advising, speaking or in some way involved I get direct benefit and learn too.
Q. What is the most important thing people never tell you about joining or founding an early-stage company?
A. I think people generally know if is difficult even though there has been glorification of the perceived easy millions success stories. The most important thing people don’t talk about is how being an entrepreneur changes you. Doesn’t matter if you are a serial entrepreneur and started in high school or a boomer who has been in corporate until their first business, the experiences change you. This is important because relationships like family are affected by the entrepreneur’s often misunderstood passion and depression.
Q. Is there anything else you’d like to share that we didn’t ask you in the questions above?
A. First hires. Even part time or contract have a direct relationship to your culture and therefore brand. Knowing what you stand for as a founder and how to recruit to that standard is critical. Joining a community like ActSeed is important in sharing experiences and allowing debate on your business or products. That coupled with the resources is helpful in navigating through peaks and valleys.