CS183C Session 7 highlights

Mariam Naficy, Founder & CEO of Minted.com, joined the class today and was interviewed by Reid Hoffman.

Mariam offered up candid and detailed insights on her past experiences:

• Huge roller coaster at Eve.com in the late nineties, raising $26MM and hiring 120 people within a year, while in her 20s, fresh out of business school, selling the company for $100MM after 2 years just before Nasdaq crashed, and then having to resell the company again. Lots of learnings in a very compressed period of time.
• Taking a slower approach with Minted.com, first really nailing the stationary market (out of the “zero to one playbook”), raising $11MM in the first 7 years, getting to profitability. Once she felt the time was right, ie they had clear product market fit, they started to “blitz scale” and raised $90MM to accelerate the business and enter new verticals.
• They almost folded after having zero sales in the first 6 weeks. The only reason they kept going was to not loose her friends’ money

She offered some great insights into marketplace dynamics at Minted (which I think generalize well to other marketplaces):

• The creatives on Minted (the “supply”) are not typically professional designers or people with an education in design, but rather people who have always wanted to become a designer and finally have the chance to do so. Key take away: providing a platform that enables people to become experts in something they are passionate about can help an entirely new group of professionals build successful entrepreneurial careers.
• People want hierarchy in a community, ie let the best, most original designers shine and “become famous”. Emphasize that people can build their reputation, make their customers happy etc, but don’t tie this to the “highest earner” or similar metrics. Money saps the energy out of a community.
• Sending snail mail to users (through a feature that lets users import their address book and print envelopes with Minted branding), has proven to achieve huge viral results, with a k factor > 1. Takeaway: “old fashioned” ways of communicating, eg phone or snail mail, can often be a lot more effective than email, social media etc, presumably because it’s much rarer for people to receive these kinds of communications these days.
• While Mariam’s vision was always to crowdsource, she started lining up corporate supply (to hedge and because some investors urged her to do so). This didn’t turn out to work as well as the crowdsourced approach, and Minted reduced the prominence of brands. Takeaway: a crowdsourced approach often beats a centralized approach based on existing companies and brands.
• Making a marketplace works involves running like a mad man between supply (creatives) and demand (consumers). In case of Minted, the finding enough creatives to join the marketplace turned out to be easy, in fact they got too many applications and had to turn down a lot of applicants.