SUSTAINABLE FASHION & E-COMMERCE:
How to bootstrap a consumer product company, with Kati Ernst (Ooia)
Hello dear Entrepreneurs changing the world for the better,
Episode 17 is out, and I have learned SOOO much in this interview!!! 😄
Everybody tells you
“you should raise funding as a startup!”
But is it true?
Well, It's not.
And actually there are many cases where raising funding is actually a really bad idea and bootstrapping your startup would be much smarter.
But how do you bootstrap your startup?
Today, I'm talking to Kati Ernst, co-founder and CEO of Ooia. They sell innovative consumer products for the needs of women.
They've ENTIRELY BOOTSTRAPPED the company they started two and a half years ago, and they already have
🚀 more than 100,000 customers
🚀 several million euros of revenue.
They also have an exceptional company culture, completely flexible: they work without working hours and both co-founders are also parents combining entrepreneurship and raising children.
Katy shared a list of Do's and Don'ts about
💡 “How to bootstrap a consumer product company” 💡
And as usual, your promised newsletter perks below 😄
DO'S & DON'TS
Don’t take anything as a given (e.g., if you found a startup you have to raise an angel round…).
Kati explained how she thought they had to raise an angel round after doing a successful crowdfunding campaign, and how she bumped into investors who couldn’t trust her project (very interesting discussion about how female entrepreneurs struggle to raise funding - vs men - by the way). Then how they decided to bootstrap it...with the success you know (millions of revenue in 2.5 years). She also explained how you don’t have to spend 50% of your revenue on marketing, as you often hear! (see my comment below about that).
Do consider alternative financing options/securities
Kati explained the three things they used at Ooia:
- Crowdfunding to kick it off
- Grant in Germany called the Gründerbonus from the Investitionsbank Berlin
- A credit line to scale up: a credit that you get from the bank to be able to take extra cash when needed (up to 1 million € for Ooia) at a very interesting rate. Interesting part: it is available but if you don’t touch it, you don’t pay anything. Very handy for a consumer company like Ooia who sometimes have to lay down big amount of cash to order materials/products before delivering / selling them.
Do think about cash constraints when choosing your business model (e.g., is cash up front an option)
Kati insisted that if possible, try to find a business model when people pay you upfront, or it is way more risky and difficult for you (but then that’s why they went for a credit line as mentioned here above)
Don’t let bootstrapping hold you back from baking bold decisions you need to make to become market leader.
See the credit line example above. Or another example: one idea Ooia came up with to manage the cash flow difficulties: they allow pre-orders of their products (beside the crowdfunding campaign!) when they have demand peaks and their products are out of stock.
*** My Special FAVOURITE ADVICE from Kati:
everybody has a story to tell - grow your community organically!
One very interesting part of this episode is about how Kati used Instagram to organically grow a strong community of followers of their company, and how they use storytelling and live sessions on Instagram for that. She gave REALLY useful tips about that in the episode (see this snippet here - or after 18’ in the episode).
Kati and Ooia:
Resources and recommendations from the episode
- Let my people go surfing (from the founder of Patagonia)
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Have a nice listen to the episode and see you in two weeks for the next episode and Do's and Don'ts :-)
Keep up the good work,