Startup CEO: Would You Max Out Three Credit Cards To Start A Business?

Image representing Alec Lynch as depicted in C...
Image by None via CrunchBase

This post originally appeared on Forbes.com.

Would you max out three credit cards, spend your life savings, and take on loans from family and friends all for some cool website idea? In January 2008 Alec Lynch did just that and started a freelance marketplace in his garage called DesignCrowd.

Today, Alec and his team announced a new round of financing putting the company’s total fundraising to date at $6.3 million. Back in March, I was able to spend some time with Alec to hear about how he took his small garage-based startup from Sydney Australia and $60,000 in debt, to multiple locations worldwide and $1 million per month in revenue.

Dan Reich: What were you doing before DesignCrowd?
Alec Lynch: I studied Bachelor of Information Technology at the University of Technology, Sydney (UTS).  I loved it and did well academically (I was awarded a $36,000 scholarship and the University Medal).  When I graduated from UTS I was 20 and started my first business with a friend from UTS (Adam Arbolino who studied a Bachelor of Science in IT).  Our business was online CRM software and, while it ultimately failed, we learned a lot of good lessons.  After this, I went to work in strategy consulting at Booz & Co where I worked for 2 years.  While I was there I had the idea for DesignCrowd.  In 2007, a few weeks after scoring a promotion, I quit my job at Booz and moved back home to live with my mum and start DesignCrowd.

Reich: What gave you the idea for DesignCrowd?
Lynch: While I was working in strategy consulting at Booz I was constantly looking at different industries.  I had a personal interest in the design industry, as I’d been building websites since I was 14 and I could see three key problems in the traditional design industry: for small businesses buying design it was 1) slow 2) expensive and 3) risky (you never knew what you were going to get back).  One example that highlighted these problems for me was the release of the London Olympics logo in 2007.  It cost £400,000, took one year to make and was absolutely panned by the public and the media.  I thought to myself  “wow, imagine if they had run a global design contest for £40,000 or even £10,000?”.  I knew they would’ve received thousands of designs and ideas from around the world and saved half a million dollars.  At the same time, I could also see a lot of friends graduating with degrees in creative disciplines but struggling to find work.  Essentially, I could see the dynamic for a marketplace that could disrupt the traditional design industry.

So is Alec and his team disrupting the traditional design industry? According to Techcrunch, “the company currently has over 250,000 registered users in 197 countries, including 100,000 designers and says it recently hit $12 million in design projects through its site, a figure that it expects to exceed $20 million in 2014.”

When I asked Alec back in March what his ultimate goals were, he said “our goal is to pioneer crowdsourcing around the world.”

And with the latest round of financing of another $3 million it looks he is one step closer to that goal. Not bad for someone that maxed out three credit cards and moved back home wit his mum to start some nifty website called DesignCrowd.

Startup CEO: How To Build A Double Sided Marketplace In the Fashion Industry

Textile Supplier with President George W. Bush

This post originally appeared on Forbes.com.

Websites like eBay and Amazon have transformed the way people buy and sell products. With a current market cap of $68B and $151B respectively, it’s clear that efficient and highly engaged marketplaces between buyers and sellers can provide real value to both parties.

A new NYC based startup realized the same marketplace dynamic could be applied to a different part of the retail value chain, and in a very specific but necessary category: textiles. Until recently, textile suppliers from around the world had no way to conveniently sell their products in a global marketplace.

I caught up with Benita Singh, the CEO of Source4Style, to learn more about how she is building an online marketplace for a very interesting but critical part of the fashion business.

Dan Reich: There are hundreds of online marketplaces in existence today. Alibaba.com is one example. When did you realize there was a need for a textile marketplace?

Benita Singh: Throughout my career, I spent a lot of time at trade shows, on expensive sourcing trips and even on sites like Alibaba. And it wasn’t unusual for a two-week sourcing trip to India to result in finding only one new supplier. So I learned early on that it was a highly-fragmented market.

At the same time, many of my “best finds” were suppliers that didn’t showcase at the biggest trade shows. And their online presence was limited to a three-page static content site.

We then started to do some research on the market opportunity. In one of our surveys with independent designers, we heard that they spend up to 85% of their time sourcing and navigating the complex textile supply chain. And among the larger fashion brands, we saw that since 2008 travel budgets on the production side of the business were dropping. Couple all these industry trends with the rise of B2B marketplaces and we saw a clear opportunity.

Reich: Any entrepreneur that has built a double-sided marketplace will tell you how hard it is. How are you building both the supply and demand for Source4Style?

Singh: At the beginning, we focused exclusively on building up the supply side of the marketplace. In our case, that was getting a critical mass of textile mills onto the platform. Within three months, we were working with suppliers in over 30 countries. We learned that we must have a baseline of supply before we could go to the demand and start the engine.

We’ve also learned that the two sides of your marketplace may very well have two very different reasons for wanting to be part of your platform. For our buyers, it’s about discovery and access. They want to be able to replicate the inspirational experience of walking a trade show floor 365 days a year, and that’s how we present Source4Style to them.

Our suppliers on the other hand want a more practical tool to help them streamline their leads, follow up with potential buyers and track conversions from sample requests to purchase orders.

It’s critical to learn the value proposition for each side of your market. For our buyers, we have to effectively merchandise and market. For our suppliers, we have to really focus on building a great SaaS platform for them to help manage their global business.

Finally, your influential first adopters can help you grow both sides of the marketplace. Some of our buyers bring their suppliers onto the platform because they want to use Source4Style to manage all of their sourcing. These buyers are also offering case studies that are inspiring others in the industry to give us a try.

Reich: You had to build a global business pretty quickly. What challenges did that entail and how did you overcome them?

Singh: Sourcing is inherently global, so yes, we had to become an international business pretty immediately. Operationally, we built a dynamic platform that allows buyers and sellers to confirm final pricing before proceeding with a purchase order. This accounts for currency fluctuations in the 36 countries where our suppliers are now based. We also brought on local agents in key markets like India and Italy who help us to both onboard new suppliers and ensure that their collections and data are kept up to date.

We have a global market on the buy side as well. And with a small team, we have to provide top-notch service around the globe. This isn’t easy and it means our phones are ringing around the clock. But I consider it the best incentive to grow quickly and intelligently!

Our next steps are to translate Source4Style.com and optimize our platform in key markets as well.

Benita’s work is paying off. In less than two years Source4Style has created a presence in over 76 countries. More recently, they partnered with The Council of Fashion Designers of America to provide their members with “concierge-level access to their comprehensive online sourcing marketplace.”

5 Tricks To Get Press For Your Business Or Startup

This post originally appeared on Forbes.com.

Celebrity Photographers at the Tribeca Film Fe...

So you spent a few months, perhaps even a few years, to develop the most cutting edge and revolutionary widget. This widget could be anything ranging from a new product or device to a new company or startup. The bottom line is that the development phase is completed and now it’s time to get the word out. You run through your marketing list. Social Media? Check. PR firm? Check. Paid Media? Check. Events? Check. As you run through the list you realize that it’s the same list every other company would put together. You think you have an extraordinary product or solution and yet, you’re plan is about as generic as they come. Having worked in the trenches as a founder and startup employee, I know firsthand what this marketing laundry list could look like.

But for the past few years I’ve had the opportunity to sit on the other side of the table as a contributor for various publications like Forbes, HBR, and other industry specific outlets. As a result, I’ve personally been pitched dozens of stories that are “game changing” or “disruptive.” What I learned is that most of these pitches are in fact, not “game changing” and moreover, some of the methods used to acquire the sought after press is shockingly abysmal.

But that doesn’t have to be the case. Here are some tips to avoid the generic PR trap and ways you can achieve meaningful exposure for your new widget or business.

Build a targeted list of writers and journalists. I was once pitched a story about a non-profit in Africa. While I love nonprofits and love Africa (although I’ve never been there), this type of story is one I’d most likely never write about. Spend some time to identify who the best writers are that are most likely to benefit from your story. Journalists are always looking for good, relevant content. Make sure your story aligns with their experience and area of focus.

Let the writers know you’ve read their work. Most people respond best when they are shown personal attention. Journalists are no different. When pitching your story, start with a personal reference to grab their attention. You can reference a previous article they wrote or mention a past achievement:

“Hi Dan, I thought your last article on startups was …”

This will demonstrate that you were thoughtful and respectful of the person’s time. Check out their profiles on Twitter, Facebook, and LinkedIn. Do some homework first.

Pitch a story, not your company or product. If you are looking for press coverage it’s because you want a broader audience to know about your product or service. To do this, try to tie your company or product to a hot trend in current events so that it becomes relevant to a broader base. For example, one recent company I covered was building a new home security system. Instead of pitching me on their product, they pitched me on the fact that they raised over $180,000 on their own crowd funding site during a time when crowd-funding was getting a lot of attention. The story was how they raised money. The result was more coverage for their company.

Don’t hire a PR firm to do it. I respect the hustle of people trying to make their business grow. So when I get an email from a hired PR shop, I think to myself, why didn’t the founder of the company send me the note instead? If press is so important to them, why push it off to someone else? Steve Jobs for example would personally spend time, lots of time, chatting up the press. Be like Steve. Spend some time curating relationships with those that can help amplify your message.

Make it exclusive to that journalist. Journalists love exclusive stories because in the world of content exclusivity is a competitive advantage. When trying to get press coverage, let the journalist know that you will make your story available to them and them only. This will create more motivation for that person to write a story about you.

When it comes to press coverage just remember that journalists are people and not robots that crank out words in publications. If you can craft a story that is unique, adds value to a specific journalist, and can convey the message in a personal and respectful way, then it’s a win-win for everyone involved. The journalist will get a great story to write and you will get some nice exposure for your new shiny object.

From Law To Liquor: How One Corporate Attorney Left Law To Start A Luxury Tequila Company

This post originally appeared on Forbes.com.

Over the past few months I’ve heard the same brutally refreshing remarks from a handful of friends: They all want to quit their job as a lawyer so that they can pursue a business of their own. As one corporate lawyer friend put it, “it’s rewarding to help my clients with their business but I think it would be entirely more satisfying if it were a business of my own.”

This is one of the reasons a new tequila company called Qui Tequila was launched. Pete Girgis, a once corporate attorney, felt the same way and decided to leave his corporate gig so that he could launch a tequila company. Pete put it this way.

“I was at a big firm where I felt like a cog in the wheel.  There wasn’t a sense of creation.  Growing up, my father was a small business owner who owned liquor stores that I managed while in school. I had a passion for the spirits business and was lucky to have met my cofounders while practicing law. We are like brothers.  We saw a great opportunity in the luxury tequila market. Now every time I walk into a bar or restaurant and see someone enjoying Qui, it is incredibly satisfying.”

Pete’s leap of faith to start his own business is now paying off. His tequila is now carried by dozens of liquor stores like Sherry-Lehmann, Bottlerocket Wine & Spirits, Park Ave Liquor Shop, Chelsea Wine Vault and prestigious hospitality venues like the Bowery Hotel, the Standard, Lure Fishbar, Casa La Femme, Darby, 1OAK, the General, and La Cenita.

Although hard work and hustle are two key ingredients to Pete’s success, he was able to share some more tips for future x-lawyers and aspiring entrepreneurs.

Education Matters. Although he doesn’t practice law anymore, Pete’s academic background as a JD/MBA provided him with critical building blocks to build his business.

“If I had to do it over, I would have still studied law and business. Starting a successful business is incredibly challenging and big businesses can have lots of complexities. I’m a firm believer that a strong foundation in the business and the legal worlds only helps your likelihood of success.”

Create a unique product. Pete and his team spent a lot of time meticulously developing a product that they would be proud of and the once lawyer is now a full blown tequila connoisseur.

“On the product side, Qui is the first Platinum Extra-Añejo Tequila in the world. So after the tequila is made, it rests in French Bordeaux and American Whiskey barrels for three and a half years.  This aging process gives it a rich flavor, character and beautiful aroma. Then we filter it 9 times and distill it a third time for an incredibly smooth finish. No one has done that before and as a result, we just won Gold in the Spirits of the Americas Competition.”

Have a good distribution strategy. In the world of liquors and spirits, it is incredibly difficult to stand out. Pete and his partners figured they could create a unique product and distribute it in a competitive landscape by targeting specific market segments.

“We knew that New York was one of the most challenging spirits markets in the world, but if we could win here, we could go anywhere.  We set out to create a brand that was more elegant, sophisticated and cosmopolitan then the rest with a juice that was equally as refined.  So far, Qui has had great traction in the fashion, film, music and art worlds because of our focus on strong product-market fit and distribution.”

So if you are thinking about leaving your corporate job to start your own business, just remember that hard work, hustle and good planning can pay off. And then maybe you too will see your product in a nice window display like the one above.

Who Gives You Advice?

A few days ago I was at The Barclays golf tournament watching Jason Day as he was about to tee off with his three wood.

(above: Jason Day is a professional golfer that plays on the PGA Tour)

He was standing at the 5th hole tee box analyzing his shot and thinking about what club to use. These are the same steps that he, and probably every other golfer does before they hit the ball. The only difference however is that he is a professional and most other golfers, like me, are far from it. So I really started to laugh when I overheard the following conversation between Jason and some seemingly out-of-shape, mildly drunk, pompous golf spectator.

Golf spectator: Hey Jason, you’re not using your driver, huh?

Jason Day: Hey Buddy, that’s why you’re on the other side of the ropes.

Everyone was laughing including the genius that tried to give golf tips to the golf pro. Jason also had a laugh and then softened the blow a bit to save the guy from pure humiliation.

Jason Day: All good man, I’m just kidding. Thanks.

Too bad he wasn’t kidding.

There are many critics out there and it seems everyone has some advice to give. Sometimes you have to stop and think about where that advice is coming from.

The corporate ladder climber that offers advice on startups.

The single person that offers advice on relationships.

The broke person that offers advice on money management.

The drunk amateur that offers advice on golfing.

When it comes to taking advice the best critic is you. Listen to yourself first. Trust your instincts. Occasionally you can and should listen to others but understand where they are coming from and where they’ve been. Jason’s golf critic was some 300 pound fat dude drinking a beer. Of course he wasn’t going to listen to him.

If you are getting outside input from someone first think about why they are uniquely suited to add value to your situation. If you can’t think of anything meaningful then you’re probably just listening to the guy  outside of the ropes.

Who gives you advice?

YouTube Is Growing Up, Celebrates At VidCon In Anaheim

This post originally appeared on Forbes.com.

Español: Logo Vectorial de YouTube

 

YouTube has been around for a while but it’s finally becoming the transformational platform everyone thought it could and would become. Until recently, brands and businesses have written off the medium as a place for teenagers to film short, quirky, and often nonsensical short form videos. But something funny happened along the way. Many of these teenagers became overnight sensations which has people rethinking the power of online video.

Take for example Jenna Marbles. With about 10 million YouTube subscribers and over 1 billion video views, she has amassed a following most brands would be envious of. And there are plenty of others trying to follow in her foot steps by using YouTube as a platform to create a meaningful brand and personality. This week, many of these YouTube stars and celebrity hopefuls will converge in Anaheim, California for the VidCon conference. In attendance will also be other forms of professionals and they are ones you’d only expect to find in Hollywood: talent managers and entertainment agents. The talent and respective managers are both starting to realize that YouTube has completely changed the game.  And this trend is only increasing. According to Rolling Stone magazine, just last week Russell Simmons announced a brand new music label with YouTube and Universal Music  that would be focused on promoting and developing new artists using YouTube.

But music isn’t the only category that is taking advantage of the medium.

Major retailers, consumer packaged goods companies, and beauty companies, are beginning to partner up with influential YouTube bloggers in order to facilitate product placement within online videos. Companies like Stylehaul and HaulerDeals have been created to facilitate these types of transactions between product companies and video bloggers.

Media companies are starting to invest heavily in in-house video production and content creation, whereas just a few years ago they would argue that it was too expensive. However, after recently speaking to a number of executives at various media companies like Conde Nast and Hearst, it’s clear that they realize the time to invest in video is now. And with the costs of video production coming down due cheaper and better tools it’s starting to become a no-brainer for businesses to get into the video production game. Cameo.tv is one such example where videographers can film, edit, and publish a professional video without needing anything more than just an iPhone.

Even medium to small sized businesses realize that in order to do effective marketing and sales, you need to be able to tell your story in a meaningful and engaging way. And how much more engaging can you get than using site, sound and motion? This is the reason more and more businesses feature videos right on their home pages, and even about-us pages, instead of static text.

So if you’re thinking about building your own personal brand or adding fuel to your business, you should take another look at YouTube. It’s not just about teenagers and cute kitten videos anymore.

A Student – Learning, Living at the Intersection of Business + Technology + Innovation + Culture.