Category Archives: Strategy

What’s so bad about selling to rich people?

I grew up in a middle class family, but we were very frugal. Creatively reusing things and figuring out how to save money was our way of life. Discovering that you overpaid for something was shameful, as was buying something you didn’t need. We would scoff at the idea of buying name-brand things. “Don’t they know that such-and-such is the same exact thing for half the price?” we’d say, shaking our heads at the thought of such foolishness.

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The Entrepreneurial Journey as a Hero’s Journey

One nice thing about being a small, founder-led business is that telling your “story” isn’t that hard. It’s by nature authentic, because it happened to you and you’re telling it, and it’s probably going to be at least somewhat interesting because you started your business to solve some sort of problem that nobody had thought to solve yet. (If you’re still struggling with whole to get your “story” down to a 3 minute spiel, I highly recommend taking General Assembly’s “Storytelling for Entrepreneurs” class).

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Book Review: “The Dip” by Seth Godin

What helped me rise out of my downward spiral in 2012 was reading the E-Myth Revisited by Michael Gerber. It felt like it was written just for me, and it gave me specific tools for how to move forward. Another book found its way to me this year, and is acting as my guide for the next stage of my entrepreneurial journey. Well not really a book so much as an author: Seth Godin.

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Designers as Entrepreneurs

Last Friday, August 15th, I had the honor to present at the IDSA International Conference in Austin about one of my favorite topics: Designers as Entrepreneurs. Here is a recap of my presentation.

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Now is a great time to start a business. There is better access to capital, it’s getting easier to make and sell products, and there is a growing support network.

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I launched my company Po Campo in 2009. We make bags for modern urban living: bike bags, yoga bags and travel bags. We sell our bags mostly through other retailers nationwide and internationally in Canada, Mexico, Europe and Australia, as well as through our online store.

There are lots of qualities that industrial designers typically possess that come in handy as an entrepreneur, particularly creativity, optimism and tenacity, because people are always going to be telling you that your idea isn’t going to work.

Yet there are other ways that I feel like my industrial design background has led me astray as I transitioned into the role of entrepreneur, which I’ll share through some anecdotes.

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I had two jobs before Po Campo. I graduated from the University of Illinois at Chicago in 2001 and wanted more than anything to become a design researcher. That was right after the first tech bubble burst though and jobs were hard to come by. I was thrilled to get a position at Arctic Zone, a Chicago-based manufacturer of soft coolers and lunch bags. That is where I learned cut-and-sew manufacturing and how to work with China.

Next I took a job at Webb deVlam, then called Webb Scarlett, as a structural packaging designer. In this role I learned about the power of branding, as well as the importance of standing apart from your competitors at shelf. Eventually I transitioned to heading Webb’s design research and design strategy department, focusing on helping our CPG customers identify white space in the market and learn what design language would communicate the desired benefits to the intended consumer.

Then I started to get the itch to do my own thing. As a consultant, I was working on projects for months that I cared deeply about, just to have them vanish with the final deliverable. I really craved holding onto the reigns longer. But doing what?

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I always loved biking to work yet I wished there was a better way to carry my belongings. Backpacks and messenger bags didn’t do it for me and the bags that were designed to go onto bikes were very utilitarian. I felt like I was being made to choose between biking and having normal looks bags, which just seemed illogical.

IDSAPresentation.005I realized that with my background in soft goods design and branding, starting a bike bag company would be a perfect fit for my talents. Plus, when I started doing my market research, I learned that cities around the world were investing a lot of money to build up more bicycle infrastructure to encourage people to bike for transportation. I knew there would be a lot more people like me, looking for crossover products to help them integrate biking into their daily lives. I could claim this emerging market space as my own. Easier said than done!
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I teamed up with a industrial designer friend and these were the first two products we developed, a “Going to Work Bag” and a “Going Out Bag”.

In the beginning, I was so excited about building a company led by two female industrial designers. I really believed in the power of design and thought that it would give us a tremendous competitive advantage. I was convinced that, compared to most companies run by old businessmen, we would do everything differently and everything better.

It wasn’t until I had to start doing all the other jobs in the business that I realized how wrong I was about the importance of the design. Everything from shipping logistics to accounting to customer service had a spirit of creativity and craft to it, especially in the start-up phase where you are building the company brick-by-brick and figuring out how it all fits together as you go.

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This is Po Campo organization chart. Learning the other jobs within a company really leveled the playing field for me, which is why you see Design at the bottom with everything else, instead of at the top where I first thought it would go.

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We launched in 2009, before Kickstarter and Shopify, so we went straight to selling in stores. I went door-to-door cold calling on shops. We got our bags into over 15 stores in Chicago that first summer and got great press right out of the gate. REI asked to bring in the line during our first month, and we soon had orders from Japanese and German distributors for our next season’s production run. Woo-hoo!

We started daydreaming about quitting our day jobs, about all the other great products we would develop, about what a cool studio space we would get. But that didn’t last long.

When I started calling our shops to get re-orders, I didn’t get any because they hadn’t sold any bags. After two and three months, they still hadn’t sold any, and would we mind taking them back? We panicked.

Looking back, I know what the two main problems were. First, our bags were about twice the price as the competition. Sure our bags were a lot cuter, as is evident in the photo above, but not THAT much cuter. Second, we were selling to an emerging market, which meant that our consumer not only did not know that products like ours were available, she didn’t even know that she needed a product like ours yet! We needed to do a lot more marketing that we hadn’t planned for.

Hindsight is always 20/20. At the time, we just felt like we needed to stop the leak and started asking our customers about what we could do to improve sell-through.

IDSAPresentation.010Most of the suggestions seemed like pretty simple fixes, such as streamlining the design to reduce cost, adding different sizes of bags, adding different colors, creating non-bike bags for people who like the look but don’t bike, etc. And here is where you have to be careful as a designer leading a company: Since design was the easiest thing for me to do, I just designed a lot more stuff. Our line ballooned from 6 SKUs to 68 SKUs just a few years later. Sure, we were growing, but it was haphazard growth that was hard to manage and almost certainly impossible to sustain.

So I went back to my design background and thought about what I would’ve said to a client who would’ve approached me with a similar situation back when I was a design strategy consultant. I would’ve told her to reconnect with her consumer, so that’s what I did.
IDSAPresentation.011 We started spending time with our core consumer, identified which values we were aligning on, and refocused our line-up and marketing strategy around those values. We realized that we were not just making bags but building a community around the joy of modern urban living. We’ve started doing a lot more events, selected our retail partners a lot more carefully and started creating videos to show how people can incorporate biking into their daily lifestyles easier. Sales continue to grow – sustainably.

One of the biggest changes for me is learning to use numbers to understand what’s working in my business and what’s not, both for operations and design. Before Po Campo, I rarely used spreadsheets. Now data is my best bud.

I always liked design research because it enables you to make a sincere connection with the people you are designing for and helps you see how the products you are designing will make people’s lives better. But making people’s lives better isn’t enough to sustain a business; you also need revenue & profit. It took me awhile to really internalize that.

The design community doesn’t talk about sales much, as if talking about money that a product makes diminishes its value. I think this is a mistake, as it makes us think that good design is above trivial matters of money, when it’s not.

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Part of the reason our line grew so big was that I got attached to the products that I want to have in market. I started my own company to make the products that I want in the world, so it is hard to kill them off. For products that didn’t sell well, I would always want to give them a second chance, thinking if I had marketed them differently, they would’ve sold better.

However, a bootstrapped company doesn’t really have the luxury to give products second chances. I’ve had to alter my definition of good design to be not just products that are made responsibly and meet a consumer need or desire, but also makes us money (preferably quickly and easily!).

IDSAPresentation.014 IDSAPresentation.015Thank you!

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How to Increase Online Sales: Part 1

Every year I say I want to increase our online sales because, like all manufacturers, we make mad margins on products sold through our online store, which in turn improves our cash flow and bottom line. While our online sales have grown steadily year after year, for 2014, I intend to make a concerted effort to grow them more aggressively. How will I do that? Good question! I’m not entirely sure but thought I could use this blog as a way to share my journey as I go and hopefully help you shortcut the process.

So, for some background info, my goal is to increase our online sales by about 38% to cover the majority of our overhead expenses. It seems ambitious, but I believe it is doable if I put a solid plan together of how that will happen. 

Basic business education tells us that there are generally three ways to increase sales:

  1. Sell more to existing customers
  2. Find new customers
  3. Raise prices (or decrease costs)

I want to consider working on all three things but we need to do some research first.

How do we get our sales today?
My first thought is to try and understand what’s been working so far. I generate the “Sales by Traffic Source” report from Shopify (our e-commerce platform) for 2013 to see where most of our purchasers are coming from and find out that the vast majority of traffic comes from pocampo.com, meaning most people go to our homepage before clicking into the store. Not terribly insightful. Next, I go to Google Analytics to dig deeper into how people end up on our homepage. (Disclaimer: I am definitely a Google Analytics novice, which means you may find better information elsewhere. However, being an entrepreneur means you spend time everyday figuring out something new, which is what I’m doing here)

Since I’m most interested in sales, I go to the conversions menu first, expand “Ecommerce” and check out our conversion rate and average order value, among other things. I plan to use these values for benchmarking our progress as we grow. Next, I click on “Time to Purchase”, also under Ecommerce. Here I find out that 88% of our visitors are purchasing on the same day that they are coming to our site and that 81% are purchasing on their first visit! This suggests to me that when people come to our site, they have already decided that they want to buy.  To confirm that, I then opened up “Multi-Channel Funnels” and peek at “Path Length”. Yep, 70% of conversions have only one path, meaning the purchaser only clicked on one thing before coming to our store to buy, or just plain typed our URL into their browser window. While I like the thought of people exploring us on the web by searching through Google or whatnot, that apparently is not happening. 

I’m curious what the first (and only) path is, so next I go to Acquisition>Channels and change the Conversions option to “Ecommerce”. Here I learn that Google is responsible for about 22% of both my traffic and online sales. The direct channel, most likely meaning people typing our URL directly into their browser, accounts for 19% of traffic and 27% of sales. Facebook comes in third place with 4% of traffic and 2% of sales. Our Mailchimp newsletter shows up towards the bottom of the list which surprises me because it seems like we always get a bunch of orders whenever we send out a newsletter. I suspect that some of the direct sales are from these newsletters and make a note to check our Mailchimp settings to make sure clicks are being tracked properly.

It’s now obvious that people have already decided that they want to buy a bag from us by the time they come to our site and that they are coming to our site from Google or just directly. If from Google, what words are they searching to find us? I go to Acquisition>Keywords>Organic to find out. Most are irksomely not provided, but there are a lot of variations of our brand name. So even if our consumers come to our website from Google, they already knew that they want Po Campo!

Okay, so it’s clear that people who purchase from our online store come to our website with the intent to buy and don’t dilly-dally. But do they come knowing which bag they want to buy, or do they just know they want a Po Campo bag and browse around a little first? To find out, I go to Audience>Overview and see that most visitors see about four of our pages before leaving. That hints at a little browsing and I’m interested which four pages people are going to most often, as well as the sequence of those pages. In Behavior>Behavior Flow, I sort by “Converters” and see that half of all traffic visits our homepage first. After that, most people go to the Bike Bags category, then to a specific bag, then to Cart. Sometimes after that third step, they go back and look at a different bag or look at a video. However, it does seem that people are coming to the site with a specific bag in mind.

Lesson 1: Our current customers know Po Campo well
Based on my first go at Google Analytics research, it seems safe to say that our sales are coming from people already very familiar with Po Campo. Therefore, it seems the best place to start is to figure out how to sell more to our current customers. See Part 2 for that.

Did I make any mistakes in my usage of Google Analytics? Set me straight in the comments below.

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