Tuesday, December 18, 2012

Safely scaling your startup

Mike, Jodie and I are often asked how we persuaded ourselves that it would be ok to quit our jobs to start Shoes of Prey and how we managed to self fund the business without over stretching our resources.

The methodology we followed was essentially that of The Lean Startup:

1. We ran a number of tests (here’s our blog post from June 2009 calling for beta testers!) prior to launching to understand how customers wanted to design their own shoes. We then used this information when building the first version of our shoe designer.

2. We launched in October 2009 with a ‘minimum viable product’. It worked well enough for our customers to use, but wasn’t fully built out and the branding was very different to what’s on our site today. This minimum viable product let us launch, speak to customers, then we used this feedback to improve the site dramatically over the following months.

Not only did the lean startup methodology help us to launch quickly, it also reduced the risks for us personally. If Shoes of Prey wasn’t going to work, by launching quickly we were going to find out early that the concept didn’t work and we would have been able to switch to a different idea, or potentially even go back to the jobs we’d just left.

Getting the word out about our business with no marketing budget was a challenge. Part of what attracted us to the design your own shoes concept was that our product was unique, exciting and very different to how other companies sold shoes, it’s a purple cow. This meant the we received a lot of viral and word of mouth marketing, our product was popular on social networks and fashion and business press picked up the concept and wrote about us from very early on. With all this great coverage we didn’t need to spend much on paid marketing.

We also got creative with our marketing. When we noticed that some young YouTube vloggers in the US were getting a lot of traction we reached out to one of them and had them do a video on Shoes of Prey. Traffic to our site exploded, and with some tweaks and press releases about this we were able to permanently triple our sales at that point in time. We were able to do all this with an incredibly low budget.

Until June when we raised a Series A round of funding, we were always very careful to run the business at break even and not overextend ourselves. We only hired new team members when we could afford them, we kept our marketing budgets lean and we saved money wherever we could. This meant we didn’t grow as quickly as we might have otherwise, but keeping a close eye on our budgets was important during this stage of our growth, and the disciplines we learnt were good ones that we continue to apply post funding.

We also thought through how we should scale the different aspects of our business. We have 3 key pillars to our business that we need to scale at roughly the same pace:

1. Customer acquisition
2. Our shoe design technology
3. Operations - including manufacturing and customer support

At times we would get excited about one particular area and it was tempting to overinvest, however our business is limited by whichever of these 3 pillars is the least advanced. There’s no point acquiring lots of customers if our shoe design technology is no good. Lots of customers and great shoe design technology is useless without enough manufacturing or customer support capacity. So we’ve always tried to scale these 3 pillars to our business at roughly the same pace.

Scaling a startup successfully is a challenge. Adopting a lean startup approach, launching with a purple cow product, scaling the 3 pillars of our business at the same rate and a willingness to try some new, creative marketing ideas has helped us to scale Shoes of Prey successfully to date.

This article was first published to StartupSmart.


  1. Hi,

    May I ask how much capital you guys invested in order to get the business going?


    1. Hi Jonathan, see here: http://www.22michaels.com/2009/12/bootstrapping-startup.html

  2. Hi, curious to know whether you have experienced a similar growth from your other ads made with YouTube vloggers?