From $0 and No Idea to $10k in 5 Months with a Full-Time Job

I’ve published some of these details before in several places, including here on medium, but wanted to put together one full case study look into it. Thanks for reading.

TL;DR My Co-Founder and I developed and launched a business that created over $10k revenue in the first 5 months.

I’m Chad.

I’ve wanted to start my own company since I was in middle school. Entrepreneur is a word that I’ve written in journals and on homework assignments since before it was super cool to call yourself an entrepreneur. The idea of creating something from nothing has been at my core forever.

I’ve tried it a few times.

Enter SCRIBEdelivery. SCRIBEdelivery is a monthly subscription stationery service, sending boxes of pens, notebooks, pencils, etc. You can learn more at www.scribedelivery.com if you are interested.

SCRIBEdelivery is different than previous attempts for a number of reasons. The first and most apparent reason is that I have a co-founder, Holly. Why have a co-founder? It’s about accountability. After trying to do everything myself for so long, it was clear to me that I want an accountability partner, and someone who is tasked with some of the responsibilities.

Pre-Launch

How did we develop SCRIBEdelviery?

SCRIBEdelivery came from a love of pens and notebooks, a love of ecommerce experimentation, and a desire to take control of our own lives. Initial conversations about stationery and ecommerce shifted very quickly to the creation of a subscription box.

Holly and I are very different in terms of thought process. That helped us early on. I was able to think fast and react to our conversations and decisions, and her thoughtfulness and differing point-of-view helped to keep my somewhat cavalier decisions and speed in check. It worked really well for starting out.

In terms of actions, I wanted to establish that we had an audience or market as soon as possible. Holly and I talked about the concept over the coarse of about a week. The first few days were in passing and never serious conversation. The final conversation was the one that made it clear that we, at the very least, wanted to try this out.

After that conversation, I jumped onto Facebook. I had taken part in a Small Business contest, launching a small product in a little more than a week, and had really enjoyed the somewhat ravenous, totally excited crowd that made up that event. I made a post asking for opinions and to chat with people about an idea I was working on. From that post I conducted more than 10 one-on-one interviews with folks who for some reason or another were interested in notebooks, pens, or subscription commerce. These conversations helped us make the initial decisions needed for the business overall. Things like what we think we could include, an idea of the price we needed to be at, and who we were going to target with the initial launch.

We grabbed www.scribedelivery.com shortly after.

Why a Subscription Box?

Subscriptions boxes are trendy, sure, but the challenge seemed exciting. The other interesting aspect was the idea of creating recurring revenue. Monthly recurring revenue is exciting for any business, and with our goal of simplicity, it seemed like a no brainer.

How did we find products?

My background was in products and purchasing. Holly’s is customers. After figuring out who we thought our customer would be (those conversations in the beginning were enlightening), we were able to start attacking sourcing.

Early on, I wasn’t afraid to ask for discounts. I also wasn’t afraid to pay retail prices to make sure we had a product that people were going to enjoy. We started out by doing what made the most sense. We started contacting every company that made a product that we could possibly include in our monthly box.

We were occasionally met with some resistance, but we chalked it up to not having paying customers yet, added those companies to a list, and continued down the line.

We were able to secure small discounts in many places. Having some margins built in at the beginning was a great boost. We were able to forecast potential profit down the road, and it helped us stay positive where those early months of a new business might drag you down with over-spending.

How did we market SCRIBEdelivery?

Short Answer: We didn’t.

Long Answer: We made some posts in Facebook groups that drove some early traffic. These posts were driven from what we learned in the early Facebook interviews. We basically went to the places that the people we interviewed were already hanging out and made simple posts. We weren’t expecting a lot of traffic, but we had a landing page and an email signup form, and we were ready when we started mentioning that we would launching the sub box. People went to the site and signed up. We ended up with a couple hundred names from the initial week of work.

Launch

Month 1

Our goal for our first month was to sell 10 subscriptions. That was it. While the idea of jumping out of the gate with a successful, huge business is obviously exciting, we wanted to control every aspect of our experience. It was important that we saw the inventory, that we packed the boxes, delivered them personally to the post office, and had our hands on each step of the process.

We opened up ordering for our first box on September 16th (shipped in October) and sold 50 subscriptions in a couple days. We made the decision right away to let orders keep rolling in. The response was great and people were excited, so we rode the wave. Once we got around 50, we had to make the decision to sell out and shut orders down. It was thrilling.

Product wise, our first month was full of what we thought our audience would appreciate. We made some custom printed products for inspiration, and included notebooks and pens that were well rated and liked.

Some people loved it. A lot more didn’t enjoy it. We thought we had the perfect product mix, but we missed. Our focus on the inspirational items was a miss. Customers wanted the notebooks and the pens. We thought we were sunk, but we pushed on.

Month 2

November is a big month for retail. We ship our boxes at the beginning of the month, but we wanted to make an impact. We upped our game with products (we were planning month-to-month at this point, so we were able to react to Month 1) and had a rather successful month. People liked the products.

We did an extra promotion for Cyber Monday. It was a can’t-miss event for us. We were still small (we only added about 10 subscribers in November) so the event wasn’t huge, but it was our first vision of something outside of our original idea being possible. We had something real here.

Month 3–5

We lost some subscribers. People cancelled.

We improved a lot. We made ourselves work lean and act like an actual growing company. Planning ahead. Schedules. Asking for deeper discounts. Growing our social media accounts. Setting up some Standard Operating Procedures. Going after better products.

Those changes led to our first real growth. We did some marketing. We ran some Facebook Ads. We started talking more to our social followers on Facebook and Instagram. We offered discounts ranging from 10% to 30%. We really just took the time to experiment and see what excited our existing audience.

Somewhere in Month 4 we crossed over the $10k revenue mark.

http://i.imgur.com/32iS3oc.png

This was a number we didn’t expect to cross for a while. We weren’t focused on growth. We weren’t focused on marketing. We hadn’t spent a single minute talking about customer acquisition and the costs associated with it. We were just trying to make a box that people who liked pens and notebooks would enjoy receiving.

What’s Changed in 5 Months?

The first major change from us is focus. This started as a hobby-level project and now it’s a real business. It requires more attention and more work. But it’s also our baby, so we’re more than willing.

Size. We’ve grown each month, even if slightly. We started our first month with 50 subscribers, and grew a little bit in the months after. Our marketing efforts in the past month have really changed our growth.

Shipping boxes monthly is now a lot of work. This is an amazing problem to have. Our first month was easy to pack and ship from the kitchen table. As we’ve gotten bigger, things have gotten harder and more expensive. We’ve made some investments into basic things like label printers and better packing material.

The cost of shipping has also gone up. We ship USPS. Their rates changed in January and the effect that it had on our business was immediate. Shipping cost is our largest monthly expense. Products are second. Getting shipping costs down is a big priority. We’ve experimented with shipping through Cratejoy, and we’re now starting to compare third-party shipping solutions, including using a fulfillment center.

We’re better at planning and purchasing.

We’re pretty good at customer service. We’ve got a good rhythm. We’ve been running it straight through email (and weirdly, Facebook Messages) which has worked fine for our volume. We’ll be expanding into a more traditional customer service solution in the coming months, something like Zendesk.

Website traffic has been up and down. I would like to see more traffic, but we still aren’t focusing on it. Marketing has started to push the numbers up a bit, but we still get the same basic traffic levels.

http://i.imgur.com/lczw2wP.png

Are We Profitable?

Technically, yes. We’ve made a couple dollars each month. We’ve never taken a paycheck, so to speak, from the business. We’ve put every dollar back into the business. We pay for a few services to make things easier, and we picked up a label printer. We think that our efforts will pay off in the long run. As we’ve grown, we’ve started to see hints of what future profits could look like. We’re not trying to fill a bank here, but it’s definitely a viable opportunity as a full-time job.

The Future

The future is bright. What started as an idea to launch a fun website has become an actual business. Here is what we have planned going forward.

We’re concentrating on customer acquisition. Yes, we’ve started talking about it. Growth is #1 for us right. In fact, it’s our only goal. We want to be at 1000 subscribers by the end of the year. This gives us better leverage as purchasers, more options as shippers, and would probably be enough to let us do this job full time.

We are going to start looking at the website design. When we launched, the idea was to go slow and control everything. So we put up a site that functioned, that collected payments, and that worked with the backend fulfillment software (we’re using Cratejoy). As we’ve gotten bigger and had some success, we’ve never gone back and reworked it. We know we need to change the site to feature more social proof in order to capture more skeptical customers. That is something we haven’t done much of yet, but will become more important.

Our next major investment will be custom packaging. We’re using standard shipping boxes now but we understand that subscription box customers expect that special touch when it comes to packaging.

We’re expanding our business. I mentioned before, but a big part of the genesis of this project was a shared love of ecommerce. Specifically, we both love ecommerce experimentation, small sites, and really niche sites. We’re going to expand our company to include a number of ecommerce sites. We have laid the groundwork to have 4 sites running by the end of the year across a few different markets. Along with our goal to have 1000 SCRIBE subscribers (subSCRIBErs) by the end of the year, we have a real opportunity to build out a fun company. I expect to write a lot about the development of those sites.

This experience has been incredible, and we want to share it. We’re trying to share as much as we can, and we’ll continue to put together case studies and share what we are doing right and wrong. We also want to bring more people onto the team. Expanding the business is a big part of that, but the idea that a website we started could become a company with employees and a wider reach is obviously very exciting. We aren’t that far off now.

Takeaways

It’s been a lot of work to get to where we are now, but we’re optimistic and excited about where we can go. The experience has been overall very positive. We’ve made some mistakes but we’re constantly improving. We’re also very resourceful by nature. We were lucky that having logistics and customer backgrounds gave us a little extra edge to move faster, make quicker decisions, and jump in more aggressively than I think we have otherwise.

I do think it’s important to note that we’ve taken no investment, and have payed for all of this out of our own pockets. There were some major initial risks involved in terms of just spending money, but it worked out.

Advice

If you are thinking of starting a subscription box, be ready to work your ass off. Make sure you know who your customers are. Talk to them. Don’t wait to buy a label printer. Buy one right away. Spend the money. Do everything you can to set your business up for success from the beginning.

Tools We Are Using

Cratejoy.com — It’s a great backend solution, but certainly has some shortcomings. Everything you need in one place for the most part. You’ll be more than fine using them for everything (website, backend, shipping) if you are just starting out.

Google Apps for Email, Calendar, and Drive.

Uline for boxes and packing materials like paper filler.

Xero.com for accounting.

Stripe.com for payments.

We’ve started experimenting with both Shipstation and Pirate Ship as alternatives to Cratejoy shipping as we’ve gotten bigger.

Dymo 4XL for printing labels.

Thanks

Hope you found this interesting. I had a good time writing it.

Chad Ettelbrick is a filmmaker and entrepreneur. He co-founded SCRIBEdelivery, a stationery of the month club. He loves ecommerce, online video, and Field Notes.