Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart.
Joining me today is Sara Ledterman. She is the cofounder and editor in chief of Adorno magazine. It’s an online magazine and a retail site. What makes it interesting is when you see something in a photo in the magazine, you can pretty much click anything and then go and buy it. And it all looks beautiful. Sarah, it’s great to have you on here.
Sara: Thank you.
Andrew: Thanks also for dealing with the whole internet connection thing. Where are you today? The connection was so bad last time. You worked on it. Thanks for coming back. Where are you today?
Sara: I’m in Santa Cruz, California.
Andrew: Okay. I think last time we talked you were in the office or your house.
Sara: Last time I was in the office too but I don’t know what was going on.
Andrew: Man, it’s one of the big frustrations of doing these interviews. It’s just so hard to determine how well internet is going to work.
Sara: Yeah. It’s interesting. Living in Silicon Valley, you’d think we’d have the best internet. But there’s no reception even for cell phones in half of Palo Alto. So, we’re kind of out of whack.
Andrew: All right. But you and I are now on here. Let me see. Is this the right mic?
Sara: I believe so.
Andrew: Let’s find out. That’s the other thing–yeah. We are using the right microphone, the Rode Podcaster. I just banged in people’s ears. You know, I wasn’t sure if we should even do this interview, frankly, to be honest with you because the company is so new. And then you and I had a private conversation last week and you told me your revenue and I said, “You did that much in that short of time?” Can you share with the audience what the revenues are today?
Sara: I won’t share what our month to month is but we will do over $1 this year.
Andrew: We’re about halfway through the year. Does that mean you did about $500,000 so far?
Sara: About Yes.
Andrew: You did tell me in private and I said I wouldn’t say anything, but I figured if I was going to ask you today and maybe you forgot and maybe the pressure of the whole internet connection was going to get you to let your guard down, but it didn’t.
Sara: No.
Andrew: It still gives us an indication of where you are. The whole idea came to you when you were looking at what?
Sara: So, it was just after the Nook had come out. There was no Kindle or anything else. I don’t even think the iPad was out yet. I was trying to shuffle magazines and trying to read on the Nook. This was, you know, the Angry Birds of playing games on your phone. It just seemed like everything needed to become more mobile, especially for the reading experience.
With mobile, everything is interactive. So, trying to make things more dynamic and engaging on the web to make the reading experience more meaningful but also keep users engaged and get more of that instant gratification that everyone is looking for.
Andrew: So, then when the iPad came out and you could get a more magazine-like feel, did that mean that the whole idea was over because your problem was with the Nook not with the iPad?
Sara: No. I think that there was no format that was responsive at the time. So, you were trying to flip pages digitally. You couldn’t move anything. There was no zooming.
Andrew: What about just a blog? Isn’t a blog a good enough platform?
Sara: So, the issue with blogs is I come from a high-end design background. Blogs are just kind of a regurgitation of what’s out there or more DIY, kind of the lower budget stuff. If you really want quality design, you really have to go to print. So, we wanted to bring a print-like experience online of that really high quality original editorial and bring it in a way that felt rich and had a more engaging feel, like a magazine. There is a tactile experience there that you just can’t replicate well on the web.
Andrew: Also, one of your frustrations had to do with articles like–I’m looking at my notes–“Paint Your Leather Chair.” What’s the problem with “Paint Your Leather Chair” articles?
Sara: That’s great if you want to paint your leather chair. I’m sure part of America wants to paint their leather chairs. That’s not the design that we were after. We really wanted to bring the quality. What is an eight-way hand-tied spring and why do I want one? There’s the IKEA sector. There is that person that wants to do that.
Then you grow up and you move into a different price range and then you want to learn about quality and you want to see beautiful, inspiring homes and figure out how to get those. With the web, everybody feels like they can kind of be a DIYer a little bit. But not everybody wants to paint their sofa DIY. Some people want to a $30,000 remodel or a $50,000 remodel DIY. That’s kind of the people that we attract.
Andrew: This is definitely not IKEA. I’m looking at lounge chair and ottoman for $4,800, $4,900. I’m looking at a stump table for about $7,000, just under that.
Sara: Yeah.
Andrew: It’s a whole other market. How did you know what market to go after?
Sara: So, this is the interesting thing. We looked at a lot of sites. A lot of sites have really exploded with users and customers, but we did a really strong market analysis. And I come from a design background, so looking at a lot of industry reports and seeing who spends the most amount of money in the market and we targeted those people. We didn’t need as many customers to do a greater amount of revenue.
We look at a lot of sites that attract everybody. It’s like get as many users as possible. But the thing about that is that it’s the law of diminishing returns if you just get everybody in the site. You’re not getting the right person. It affects your advertising and it affects your revenue because for every sale, you still need to do the same amount of work. So, why have 30,000 $30 sales when you can have 5,000 $3,000 sales.
Andrew: Can you tell me more about the research you did to figure out where the higher end of the market was, the more profitable end?
Sara: Design is a $167 billion industry in total. And the top 20 percent does the top 40 percent of the revenue.
Andrew: So, where do you go and get data like that?
Sara: There’s a lot of retail data sources. The furnishing industry has a lot of information. Even the US government has some retail statistics that are usually not as accurate. The magazine media marketing association actually does a lot of research because there’s obviously a lot of–
Andrew: So, you just, when you had this idea, when you said, “Hey, you know what? We need a much better browsing experience. I can’t deal with this Nook.” And the Kindle actually came out a little before the Nook, but you bought your Nook first. But you were flipping on that and you said, “I can’t deal with this.” Your next step was to Google around and say, “How big is this market? Who’s got the money in this market and then target the people who do?”
Sara: Yes–for the most part, yes. I had an idea to do home décor. I also really wanted to focus on high end. But I think the research really compelled us to know that it could be a profitable business. It was a market that we could get into.
Andrew: It wasn’t as clean as I’m talking about. Was it more like, “Hey, I have this hunch. Let’s go do some research and see if the hunch actually is true?”
Sara: Yes.
Andrew: I see. So, you go on. You do your research. You now know what you want the thing to look like. But I’ve got to tell you, Sara. It is so tough to get a good design right now, frankly any time. And then to make it be more cutting edge than other sites–you’re not talking about getting a theme. Where do you go to have this developed and designed for you?
Sara: So, I come from a tech family. So, I called my brother. He helped us build a team. We actually had a lot of trouble finding the forward-thinking UI designers that we were looking for because I had a pretty long list of requirements. So, we went to Europe. We actually built the product in Germany originally. We have a big design team in Berlin.
Andrew: What’s this family–you told our producer, “I’ve got an entire family in tech. We’ve got developers. We’re in hardware.” Tell me about them. I feel like I should know something about someone in your family and I just don’t have that research. Who’s the most famous person in your family?
Sara: The most famous? None of them are famous. My uncle held several executive positions at HP. My husband worked at both Samsung, Sony and Acer.
Andrew: I see.
Sara: My dad worked at Adobe in development. So, we kind of run the gamut. My brother is a programmer and does work for a lot of prestigious firms.
Andrew: The founder of Thumbtack, that company that’s now doing really well, his father and mother cofounded Linksys or something.
Sara: Oh wow.
Andrew: So, I thought, “Maybe there’s something going on here in your background that I should be aware of.”
Sara: I think when you have a really daunting task, leaning on people that have the skills and feeling comfortable in the space is really important. I think that’s one of the hard things about being a non-technical cofounder, finding technical counterparts. I was lucky enough to have that pool. But I definitely think that’s a huge challenge when you want to build something.
Andrew: It turns out it wasn’t–I don’t think it’s Linksys. I don’t have the time to research it now. But it was interesting and I thought maybe I’m missing something here with you. So, it’s just people who are in the space. Where does your brother go to Germany to find designers who are going to push the boundaries of design for the site?
Sara: Just within his community and network. He went to obviously his office and asked around and built a team that way.
Andrew: Did you do any wire framing of this thing or was it completely in the designer’s hands and you said, “Here’s what I need. Find a way.”
Sara: No. We did a lot of work.
Andrew: You did.
Sara: It took us a total of a year to develop the program and probably seven months of it was really scratching out–
Andrew: Who’s we?
Sara: My brother, a couple of our other designers, Andreas. We did a lot of research and sending emails to friends, surveys, asking what people liked about certain sites, what they didn’t like. I’m pretty adamant about running with an idea but also going back and at least doing some kind of testing or validation.
Andrew: What’s the most helpful research that you did on design before you handed your ideas to a designer?
Sara: Probably just using a lot of other sites and asking people what sites they did like and what they didn’t like or what they liked to read and what they didn’t like to read.
Andrew: What did they like to read that helped you shape Adorno?
Sara: Mostly at that time it was print. People were still really addicted to print. So, we asked a lot of questions around Flipbooks because that was really the current reading experience and what they didn’t like and took a lot of those things into account.
Andrew: Flipbooks. What’s a Flipbook?
Sara: Like an issue or a Zmag or an online–a PDF publisher.
Andrew: Oh, I see. Zmag will create a document that feels like a magazine and what they liked about it was what, the flipping experience where you just get to go from page to page?
Sara: No. Actually, people didn’t like that. They thought it was really bulky and slow. I don’t know if it was one of those publishers–I’m not sure if it was Zmag or another one–the sound really annoyed me.
Andrew: They are trying to closely to mimic the magazine instead of saying, “What is it that people like about the magazine experience?” With a blog, often when you’re done you have to scroll to the bottom and then you click the next button to go to the next page and so on. But what we’d like to do is just keep flipping and flipping and flipping. So, what you took away from that is they don’t like the actual reproduction of the magazine, they want the what? Is it the speed that they want?
Sara: Really the high quality imagery is what we realized. People want those pretty pictures.
Andrew: I see. So, it’s not even what we thought it was going to be, which is more of a magazine experience. It’s just the want “The Captain’s Quarters,” this is one of the articles on your site right now. It just has a really beautiful picture and as I scroll I see even more beautiful pictures. I just get to keep scrolling and see more and more. That’s it?
Sara: No. They also wanted a better reading experience. So, the one thing that people really had a problem with in digital publishers is that text isn’t responsive. So, if you don’t have great vision or you’re looking at it on your phone, you can’ tactually read anything. That was the second thing, to make a good reading experience that you could actually read efficiently on mobile or on your iPad and get some context out of the article.
Andrew: All right. I’m going to your site on the phone. I don’t think I’ve ever done it on the phone here.
Sara: Actually much nicer on the phone, if you ask me.
Andrew: AdornoMag.com. I should be able to show my screen. All right. So now I could subscribe. I see “Captain’s Quarters” here. I’m going to click on it on my phone. All right. It’s all just very scrollable. Once I’m done, I can find Q&A. I see more articles by you. I see other articles below. So, this actually does look like a really well-designed blog though, doesn’t it? But there’s more to it.
Sara: There’s more to it. The shopability is probably the biggest function. You can shop all the images and all the articles without leaving the page.
Andrew: Right. So, that top image of “The Captain’s Quarters” has a chair and if I touch a dot on it, then right below the image of it, I can see information on that chair. That’s what you’re talking about.
Sara: Yeah.
Andrew: All right. By the way, once I’m done looking at the image–in this case, I just looked at a pillow, how do I cancel out and go to the next one?
Sara: Just keep scrolling.
Andrew: Okay. I see. All right. But there’s no way to close out what I just looked at. I have to click on another image and I have to like click on a table on another image. I can’t close out that one item that I looked at.
Sara: No. You can go back to the picture up above. What it does is it loads it so it’s a faster load and it doesn’t change the page. So, you’re not leaving the page to go to the product. So, it cuts down a lot of the time.
Andrew: Okay. That was another thing you wanted to do. You wanted people to buy what they saw in the magazine.
Sara: Yeah. We wanted to figure out a way to monetize without having a lot of banner ads and sidebar ads and popups and things like that that distract from the content and the quality. To grow revenue in digital form, a lot of people just add more and more and more adds. When you do that, you compromise the quality of your publication and what you’re serving to the customer and how things look. So, we really wanted to be able to control the look and feel a lot more closely.
Andrew: Okay. How much did it cost you to build out that first version?
Sara: We had some angel investors. So, we were able to do it on an incredibly lean budget. Yeah.
Andrew: But you did hire a full time staff, it sounds like?
Sara: We did.
Andrew: You did.
Sara: Yeah.
Andrew: Wow. How much did you raise?
Sara: Actually we didn’t raise a lot in our first round. We haven’t published it.
Andrew: Why not?
Sara: I don’t know. I think we’ll publish this round, for sure. But it was kind of–raising money is tough. We raised a little bit and then we raised an initial $100,000. I’ll say that. When you’re doing your product like this, that doesn’t get you very far. We kind of raised along the way. Definitely the hardest part, I think, of having a startup is knowing funding and timing. That was one of the really hard lessons we learned early on.
Andrew: What do you mean? What about timing?
Sara: Raise more than you think you need well before you think you need it. That’s my advice to anyone.
Andrew: Did you have a crunch after the first $100,000?
Sara: Yeah. We did. You don’t really know what your burn rate is going to be early on. You always run into roadblocks and challenges and everything takes longer than you think it’s going to.
Andrew: You raised $100,000 and then you sent it. How close did you get to the end of it before you raised the next amount?
Sara: We had a dark month. We were really close to being completely out of money before we got our grace. We had an investor who was interested. You really have to push them, but you don’t know how hard to push them. So, we are kind of just waiting and waiting and started talking to other investors. Then he finally came through. I think we had like three weeks of runway left. So, we really, really got close. I hear that from a lot of founders. They either run out of money before they get more or they’re like right on the wire.
Andrew: I don’t see you even on AngelList. That’s what I was doing as we were talking about funding, looking you up there. I see you personally on there with like five followers and you’re following three people, but Adorno Magazine is not on there.
Sara: Adorno Publishing Group I think is maybe there. I don’t know. Or not.
Andrew: But the thing is that you’re not going through the traditional venture capital path to raise.
Sara: Yes. Darren Bechtel is one of our investors from South Park Ventures and we’re talking to a lot of different VCs. But we haven’t gone probably the traditional plaster ourselves everywhere and try and get funding that way. We’ve really gone through organic channels. That’s one thing we really learned. Those endorsements and referrals from people mean 100 times more than being on any of those sites.
Andrew: Okay. You said that you launched with 15,000 subscribers. How did you get 15,000 subscribers before your launch?
Sara: We did some industry events. We sponsored a big charity event in LA for the design community. We were really careful about offering–we offered referral incentives. We did some giveaways that got people to get their friends to sign up. We tried to stay in the really high-end space. I came from a high-end design background. My partner was in social. We went after an audience that we thought fit our demographic. We just stayed very focused on that.
Andrew: So, let’s break that down. You went to the charity event in LA, right?
Sara: We hosted it.
Andrew: You hosted it.
Sara: Yeah.
Andrew: How did you get people to come to this event?
Sara: It was a little wild. We partnered with a bunch of showrooms in the Design District in La Cienega. We had what we call the Holiday Crawl, which was we got all the showrooms to do a cocktail and an appetizer and then offer a discount to anyone who showed. We did a huge fundraiser for a children’s orthopedic hospital. It was a great way to get people out and shopping during the holidays.
So, there was a nice incentive for the stores as well as the people who were coming. You got in for free if you bought a toy that was $25 with a receipt. Then we had access to all the discounts. We had a great limo service, busses to bus people up and down the street. We ended up getting a lot of community support.
Andrew: And anyone who wanted to be a part of it needed to donate a little bit of money and in return they’d get a gift and access to all these different showrooms. You then got them on your mailing list as potential Adorno fans.
Sara: Yeah. And a lot of them shared with their friends early on. That grew our mailing list quite a bit.
Andrew: How big, roughly?
Sara: We started, I think, with 3,000. We probably just with that one event ended up with another 5,000 or 6,000 directly.
Andrew: How did you get 3,000 in the beginning?
Sara: A lot of that was from my years in the design business and just reaching out to designer friends. I think one of the lessons I learned is people are willing to do something for you if you’re passionate about what you’re doing. You have a really simple ask. So, I said to everyone, “I want to start this. We really need to get people on our mailing list. If you know anyone who’s interested in these things–design and lifestyle and shopping–will you please share this?”
So, it was a simple ask and it had a great return. I think that’s a great way to start and get people. We had a landing page that was, I through, well-designed. We had a lot of subscribers. We got three or four a day with nothing.
Andrew: You’re talking about the coming soon page. It was AdornoMag.com/ComingSoon. Wow. All right. So, that helped you get more people.
Sara: Right.
Andrew: We’re still talking about under 10,000. What else did you do that allowed you to grow your mailing list before you started?
Sara: I attended a lot of industry events. I talked to people. We went to a lot of design events in the community. We did a few other partnership events. But just really, a lot of it was word of mouth–sending out stuff on Facebook to friends and you know, old clients.
Andrew: What was the incentive to join?
Sara: We did several giveaways, which was cool. We got designers to sign books for us. We gave those away. We did a lot of stuff like that. We did a $500 prize. We gave away some furniture pieces. We just got creative about marketing and not even huge stuff. Sometimes it was just small things. For people to learn, we probably got the same return out of giving away a $50 book as we did giving away a $500 gift card.
Andrew: Okay. I can’t believe that somebody who would be interested in a $7,000 chair would care to win a book signed by an author. I always thought contests were for a different audience, but I’m constantly proven wrong.
Sara: I wondered what the value of it because I was really clear on who we wanted our customer to be and not kind of going outside that target. But people who love design love designers and a free book signed by the designer they like is something that they want. You just have to be really clear about who your customer is and what would actually appeal to them.
Andrew: How detailed were you about who your customer is?
Sara: We made several customer profiles about the kind of people we wanted to be customers on the site and what their demographic was and what their education was. We based that off of a print reader. A print reader is very different. For a lot of companies like Conde Nast, their digital readers are very different than their print readers. So, just being cognizant of those print people and how we wanted to bring them online.
Andrew: So, you looked at magazines whose audience you wanted and you saw who was reading them, what’s their demographic. I see. That’s what you were doing.
Sara: You can do a lot of research online for free. We looked at their Facebook pages and looked who was on their Facebook pages. There’s so much information out there on social that you can really figure out where your customers that you want are and you can go after them in those segments.
Andrew: I kind of feel like Conde Nast Traveler readers would be good fits for you. So, I’m going to Facebook.com/CondeNastTraveler to get a sense of who’s here. All they’re doing is posting their own stuff, so I can’t get a sense of who’s posting, not that that would really be a huge deal. What I want to see is–oh, 442,000 people like it. So, I’m clicking on that. Now, somewhere I guess I’m supposed to be able to see who these people are. But I don’t see that. I know there’s a way to see the faces of the people. That’s what you’re talking about. That’s what you did.
Sara: We would either look at those–the people who comment are the people you can see and you can kind of see who they are. There are so many tools for Twitter and Facebook and others.
Andrew: See who’s following a brand.
Sara: Yeah. It is easier on Twitter. I don’t think they’re showing anymore who’s there.
Andrew: You should be able to see those things. I bet you could see one of those face pileups. All right. You can see it in the comments. The comments are not a good indication. I’m looking at some of these people who are commenting on Conde Nast Traveler. I don’t think they’re your readers.
Sara: I don’t know. That’s not one that we used as a benchmark.
Andrew: All right. But that’s the kind of thing that you’re doing to hunt down who your customers are.
Sara: Yeah. I think early that’s important. I think you’re best customers are always referral customers. I don’t care what business you’re in. So, just building a base of happy customers, because those then become your best advertising assets.
Andrew: Did you do anything formal within your process to get your readers to share the site?
Sara: We did. We always follow up with something that’s shared like follow us. People who are more in the affluent demographic, they’re not as big on stuff like that. What we did is we were really careful about our branding. We were really careful about our packaging and how we send things out and always sending personal notes and things like that.
We got a lot of shares through people getting beautiful packages and sending out pictures, like I got this beautiful box and I don’t even want to open it it’s so pretty because we hand-stamp our crates and they’re made from recycled wood and things like that. So, just building a brand that people get excited about and that really encourages people to share.
Andrew: You mentioned notes. I’ve got that in our outline for our conversation, that you would send thank you notes to people. What was the process for that? Who would you send it to?
Sara: At first we sent them to everyone who did anything. We sent care packages to the designers who did interviews with us or authors. We sent them to some of our vendor partners. We sent them to anyone who said anything nice about the site.
Andrew: You sent them a physical thank you note in the mail?
Sara: We did.
Andrew: Wow. Okay.
Sara: And sometimes a care package, one of our candles or something. When you talk about customer acquisition and the cost of customer acquisition, you can spend a lot of money everywhere or you can figure out how to spend smart money in certain places. So, we really chose to spend money on a couple of things that we thought would make a bigger impact then just Google AdWords.
Andrew: I see. And thank you notes are one of those things that do it.
Sara: Yeah.
Andrew: You were talking about brand. It extends right down to the package that your product is shipped in to the customer. I’m always curious about that because I don’t have the instincts for that. What’s your process for creating a brand that even the person who creates the box that the product is shipped in knows well enough to create the box to fit the brand?
Sara: I have a visual background. So, I think it comes a little more naturally to me. But I think–
Andrew: So, does that mean that you’re like Steve Jobsing it and saying, “Show me. Let me see the box. Let me see the underside. Let me see the inside.” It is? That is what you do?
Sara: Yeah. I’ll show you one of our boxes. Hold on a second.
Andrew: Wow. That is a level of detail.
Sara: Okay.
Andrew: All right.
Sara: This is one from our office that we just happened to have. It’s made in Canada from sustainable wood. We hand-brand them.
Andrew: That means someone is putting a brand in the fire and then stamping it on there.
Sara: And then they have a nice side lid. What’s great about these is our customers all keep them and reuse them for other things.
Andrew: I see. So, that is you. That’s you saying, “We can’t use cardboard. That’s not us. We need to use wood. It can’t just be wood that we get from anywhere. Let’s get the right kind of wood. I want a stamp on here. Not a sticker, a stamp.” That is all you doing it.
Sara: In the early days, yeah. That was all me doing that.
Andrew: So, was there ever a period where you said, “I’m going to create a document so that everyone in the company knows what it feels like, what it looks like, how to come up with product so they know what to do?”
Sara: Interestingly enough, we started putting these things together–my partner, Cindy, was the organizer of things like that about disseminating the brand message. So, she really was the driver in putting those documents together. But I think they’re really important. It’s important to put it on paper because in a sense it becomes real and it becomes something core. We have cheats for everything. I’d say, “Does this meet the standards for X, Y and Z for whatever it is?”
Andrew: What did these sheets with the standards, what did they look like and what’s on them?
Sara: They’re just a piece of paper. Where’s our social one?
Andrew: Oh, you have a social one so you know how to represent the brand in social media?
Sara: Yeah.
Andrew: Do you remember offhand what some of those items are?
Sara: It says, “Is it meaningful?” Hold on one second.
Andrew: I love your attention to detail.
Sara: It was posted up here.
Andrew: Let’s see what you’ve got.
Sara: We had our big board fall over earlier. So, it fell down.
Andrew: All right. But it’s a physical document that will show anyone who’s posting on social media what you stand for and what should go on there. It’s things like, “Make sure it’s meaningful.”
Sara: “Does it resonate? Would you share it?” Things like that, just the questions you should ask yourself before you do anything that represents the brand. We have one for packaging too that says, “How’s the tissue paper. Did you remember to do this? Is the note in there? Did you sign it? Did you add samples?” things like that, little things that when you kind of get caught up in the day to day you don’t always remember.
Andrew: I never thought to do that for social media. I do for it things like–so, just before we talked, I asked my assistant to book a flight for me to Phoenix for a meeting. I have a doc with the way I like the fly. Well, I want no stops, but if it costs this much more to avoid a stop, then sure, let’s take a stop. I’d rather have an aisle seat, etc. I do that.
One of the things that we’ve found, Sara, internally at Mixergy is when people do things over and over, they just stop going back to the doc because they feel like they remember it. But of course, they don’t. What do you do to keep that straight? I notice that you’re looking for the doc and they were bringing it over.
Sara: So, I think hosting them, having them up on the wall is really important. I mean, it’s hard enough to get people sometimes to fill out their time cards. So, I think having things visually in front of people is really important. And then I think we have weekly meetings. That reminder and looking over what you do and really analyzing it, I think that’s where a lot of–
Andrew: So, in your weekly meeting, you’ll go over what you guys are doing in social media and what kinds of things should be there?
Sara: Yeah. For everything–we do that for everything. How are the articles progressing? Do we feel like the images are right, the products are right? We go through all of those steps. I think you should be careful. In the early days, we just put out a lot of stuff. We learned you get twice as much back if you put out half as much stuff but the quality is better, so kind of the avenue we went.
Andrew: You were bringing something. What did you bring? What were you handed just now? If the team was scrambling, that’s totally fine. I just wanted to get a sense of the way you were thinking about your business and knowing that you have a physical document that outlines what you stand for in each part of your process helps me understand you a lot better.
Sara: Just so you can see–we have a lot of them. I have them right here. I mean, we have them for everything. We have them and they outline everything.
Andrew: Oh wow.
Sara: And we have packets.
Andrew: Even that freaking document looks beautiful.
Sara: Yeah. We have these.
Andrew: That shows the colors.
Sara: Actually, these are dimensions. But next to them are the guidelines. We have a lot of them. I didn’t know why I didn’t think to grab these. I was just looking for the social one that fell down from the wall.
Andrew: All right. Well, that gives me a sense of the way you operate.
Sara: Yeah.
Andrew: You told April in the pre-interview–was it April in the pre-interview? It was April. You told April one of your challenges is logistics for the actual publication.
Sara: Yeah.
Andrew: What kinds of issues are you having?
Sara: Well, obviously we do a lot of travel because we shoot a lot of our editorial content as original. We shoot a lot of those. So, getting products and the team and photographers and everybody where they need to be one the time but then also the publishing schedule and trying to marry the ecommerce with the content and the site working properly all the time.
Andrew: I see. You mean like physical logistics, not just how do we publish and when do we publish, but how do we get someone to a different country?
Sara: Well, they all affect each other. Getting the issue out sometimes is a product of getting things back from other sources. We’re not a huge publisher. When Conde Nast probably calls and asks for something, they get it right away. Sometimes we have to wait a little longer. So, it makes a difference, but managing the logistics of the day to day and also obviously marrying the with the text side of things gets really hectic sometimes.
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Your lowest point was fundraising, you also told April. Now I understand why. You’re so deep into the design of this thing, no wonder. Who has time to fundraise? And you’re here in Silicon Valley. Does that help you at all? People believe that in Silicon Valley, you just walk into a coffee shop, you get to talk to an investor while you’re waiting in line and by the time you’re out you get money. But that’s not the way it works.
Sara: No. It’s not the way it works. Before this, I was actually in San Diego and someone had posted something on FounderDating and sent it to me to look at. She was laughing about it because she said, “You should respond to this.” The joke was I felt like it was easier to raise money while I was in San Diego than in the Bay Area.
I think if you’re in the right group of people, I think it’s probably easier. But I think that when you have a startup, there’s a lot of proof and there’s a lot of competition. It’s weird. You look at some of these things and it seems like everyone gets funded and it’s so easy.
But a lot of them, when you do the back research, had connections previously or they struggled for years before they got the traction and then they grew drastically afterwards. But they kind of start the story there. So, I don’t think that people realize what the process is actually like. I call it manic depressive.
Andrew: What is the process? It’s what?
Sara: It’s manic depressive. Some days are great and you feel like everything is going well and you’re working with an investor and you don’t hear from them for three months and then you wonder what happened. And then they call you out of the blue to see how things are going. So, you’re not really on your timeframe. You’re on their timeframe. One thing I learned early on is that I kind of gave people a lot of space, but you have to be really assertive. You have just make your ask.
Andrew: Did you say it was easier for you in San Diego, you felt, than when you lived here?
Sara: Yeah. I think that when I lived there, there was pressure and I’m like, “I’m in town for three days. I need a meeting these three days.” You know, when I go to meet with investors in Boston in New York and we have investors in different places, but I have a lot easier of a time kind of getting things accomplished quickly. I don’t find that here because no one is in a hurry to really do anything. They don’t have to. They have so many people trying to get in front of them as well.
Andrew: I heard that Chris Sacca moved to Truckee, which is, I guess, in Lake Tahoe. He said partially because there were just too many freaking meetings. He said, “If I move out of town, I get to pick who I get to meet with and nobody is going to just want to drive up for a quick coffee with me anymore.”
Sara: You’d be surprised.
Andrew: Yeah. I would drive up to see Chris Sacca. It’s worth it.
Sara: I would drive up.
Andrew: Plus you get to be in Lake Tahoe. That’s not bad either.
Sara: No. It’s not bad. It’s not a bad spot to be. There are some great designers in Truckee because of all the Tahoe business. But I think it’s interesting and I think you also have to figure out what market is a good fit for your product. Honestly, East Coast investors get our product. They are more invested in that space. You can find investors to invest in anything anywhere, but if you want people who add value to your company, then I think you have to be careful if you’re in SaaS or you’re in biotech, you’re going to do well in California, you’re going to do well in Boston.
Andrew: What was your process for figuring out who the right investors are?
Sara: A lot of research.
Andrew: Where did you go?
Sara: All the VCs have sites and they say, “We like investing in this. I invest in that. These are the companies we’ve invested in.”
Andrew: So, you just sat down every night and you created a spreadsheet or something?
Sara: I have a huge spreadsheet.
Andrew: Huge spreadsheet. Here are all the names of the investors and what they specialize in, etc.
Sara: And every time someone recommended a firm, I’d do a lot of research, see how is the best partner there, find someone that knew someone there. There’s a lot to do. A referral is your best asset. So, I think finding people that have a connection–
Andrew: So, once you found a firm that you saw based on their past investments and what they’re saying on their website they’re looking for, once you found one that was a good fit for you, then how would you find an introduction to them?
Sara: You can look on LinkedIn. That’s honestly your best resource to find people. It’s interesting. My network on LinkedIn is really large, even though it’s not something I engage with all the time. I think it’s a great way to kind of pull all the people you meet on a regular basis together.
You’ll be amazed at how many connections you’ll actually have. I think that’s across the board. It doesn’t matter if you’re looking for a marketing person or you’re looking to hire someone who does something specific or works for a certain company. I think it’s a great resource for pulling data and pulling connections together.
Andrew: You’re barely on LinkedIn. We looked to see what we could find about you on LinkedIn. We saw two jobs and like three sentences for each one of them. But you have 500+ connections and that’s the important part.
Sara: I purposefully didn’t–at first when I did it I didn’t see the value in it and I didn’t update it. I started connecting with people from way back, from people I worked with 10-12 years ago. So, I think it ended up being a great resource. I probably should expand it or whatever. But most people who are my connections know me.
Andrew: I still think it’s a really valuable thing to update because it’s the kind of Google hit that you have complete control over and people trust people it’s on LinkedIn. So, you could say anything. You could promote Adorno a little bit. You could talk more about who you are. It helps tremendously.
Sara: Yeah. Actually, that’s’ one of our new social media person, her big agenda is to push the brand on LinkedIn. I’ve used it really passively. The only time I’ve really used it actively is to do research. I think it’s a valuable research tool. It’s kind of like Facebook for people who work.
Andrew: Right, without the time-sucking part. At least I don’t get sucked in.
Sara: I don’t’ either.
Andrew: It’s still fantastic for us. I have someone on the team that goes in there and makes sure that if someone wants to add me, they’re added because it helps to be connected to someone on LinkedIn. We pay for the LinkedIn Premium account because that helps us find guests and do some research on people.
There was one person who claimed that he was working on a certain company or helped found it. I did some research. I found someone who was mentioned by a reputable publication who was the founder. I went on LinkedIn. I found the person. I said, “This guy is saying he’s the founder of your company. Is he a cofounder, yes or no?” I got a no. I moved on. So helpful.
Sara: Interesting. For hires we do a lot of background on there. I think it’s a valuable HR tool and it’s a valuable HR tool to find good employees. One problem I think that we find in tech is people bounce around a lot. So, I’m really careful to hire people–some people have like amazing resumes and they’ve been at all these fantastic companies, but they were there like eight months at a time.
Andrew: You can’t really lie on LinkedIn or it’s harder to lie on LinkedIn because your coworkers are going to see it. Customers, I’m guessing, came in because of the email list?
Sara: Yeah. Most of the emails and referrals.
Andrew: What do you mean? What kind of referral leads to a customer but not through the email list?
Sara: Through the email list. And then Instagram–
Andrew: You get customers from Instagram?
Sara: We sold 62 journals from one Instagram post one time. It got a weird amount of likes, but it just resonated with people and we sold a bunch of these little notebooks.
Andrew: Wow. So, all you’re doing is you took a photo of the notebook?
Sara: It was on the table with the cup of tea and some other stuff. It happened to be there. I think you have to figure out what your good channels are and you have to kind of go with it.
Andrew: I know Facebook hasn’t been great for you. Instagram was.
Sara: We don’t do Facebook. We do Facebook just to keep it up. But it’s not our channel. I think a lot of it has to do with them really pushing ads, like your content doesn’t go out there if you don’t pay for it. I don’t feel like we should be paying for it because I don’t know that that necessarily drives the right customer. So, we’ve just kind of stuck with other channels and that’s worked really well for us.
Andrew: Is this right? SimilarWeb is saying that your traffic is in the hundreds a month.
Sara: What?
Andrew: Yeah. In December, 2014, you had 3,900 hits to the site–excuse me, referrals are in the hundreds. Overall traffic is in the thousands. But going down, December was your height and its’ roughly 10,000 after that then under 10,000 after that.
Sara: No.
Andrew: You’re looking to get confirmation from someone else there too.
Sara: I’ll get someone to pull it up. But no.
Andrew: Usually I can spy on my guests and see where their traffic is coming from. For you, they’re not showing many places. They’re showing that there’s ConfectionaryBliss.tumblr.com and Manss.com. Let me see what Manss is.
Sara: Manss? I don’t know what that one is. We get a lot from Pinterest. We get a lot from Instagram.
Andrew: That’s Thomas Manss and Company is what that is.
Sara: That’s actually one of our developers that works there now.
Andrew: Gotcha.
Sara: No. Actually, a lot comes from Pinterest. I know this morning in our report, we got 300 this morning just from Pinterest. I think it comes from a lot of different mostly social but then a lot from our emails. I don’t know too much where outside referrals is. I have to get Rochelle to tell me about that.
Andrew: Yeah. I can see that, actually looking at traffic sources, social. Pinterest is number one with about 50 percent of your traffic according to them. Oh, actually, that’s Pinterest.com. But if we look at different versions of Pinterest, it’s really high. Twitter is like under 10 percent, they’re saying.
Sara: Yeah. I don’t know.
Andrew: All right. Final question–this software makes a lot of sense. Are you guys thinking about going into a platform?
Sara: Yeah. That’s kind of our next move, licensing the platform.
Andrew: That’s what gets investors excited. You should say, “Platform. Here’s where you sign.” Right, don’t they love platforms? They don’t want to worry that your content is going to do well or not. They don’t want you worrying what your Pinterest is on a couch. They want to know that other people are going to come up with ideas you never could come up with and then they’re hooked into your software and they have to keep paying you. That’s what investors get excited about, isn’t it?
Sara: I think it is, but I think these days figuring out–for us, it was more we’re making revenue now, so, figuring out what the right revenue model for our platform is. Do we want to make it just for publishers, for magazine publishers? Do we want to make it blog-based? Do we want to make it a freemium model?
I think spending the time to do that right and packaging the licensing and all the legal stuff is really important. Also, it’s a lot of manpower to onboard companies into a software like ours. It’s a huge amount of data. You think about just the imagery and the commerce connections that have to be made. It’s a lot of manpower. We use a lot of our manpower now.
Andrew: Have you gotten your first customer there yet?
Sara: No signed.
Andrew: Wow. All right.
Sara: But we’re working on it. That’s exciting. So, that was kind of something we decided we would push off until the end of this year so we won’t have our first customer on boarded until probably the end of the year. But that gave us time to grow our ecommerce business and make sure we have enough cash in the bank to make those things work.
Andrew: All right. Here’s what we learned. Go after a market that has money and do your research before you go after them. That’s why you didn’t go after the IKEA audience, number one. Number two, build up your mailing list and throwing a party where a lot of people help you get guests and getting all those guests onto a mailing list is tremendously helpful.
Reach out to your friends and have them tell their friends to join the mailing list, also helpful. Contests–even people who buy very expensive, very beautiful couches seem to want to win things like books in contests. We learned about that. We learned investors are not as easy to get as everybody says they are. And we learned a process for getting them.
The hard part is that the best part of your business I wasn’t able to show in this interview. I think people are going to have to take a look at it themselves. If they’re curious what this format looks like, they should go to AdornoMag.com and click on one of the articles. You’ll know you’re on the right article when there are these little glowing dots on the things you’re excited about. And when you click on them you get to see what he shopping experience is like. Cool?
Sara: Awesome.
Andrew: All right, Sara. Thank you so much for doing this interview. I appreciate it.
Sara: Thank you so much for having me. I really appreciate it.
Andrew: You bet. Thank you all for being a part of Mixergy. Bye, everyone.
