Start A Subscription Box Business
Hello! Who are you and what business did you start?
Hello, I am Charles Carette, CEO & Co-founder of Bambox. We developed the first monthly subscription-based ecommerce for baby essentials combined with a virtual assistant to guide new parents throughout their baby’s first 3 years. We operate in Buenos Aires, Argentina.
Each month, parents come to our website to tune their subscriptions based on their baby's growth and our recommendations. With Bambox, they can get anything their baby will consume daily at a friendly price and be sure to never run out anymore. Midnight runs to the pharmacy is something from the past!
We started from scratch in July 2017 and we had to evangelize a community of parents in a country where ecommerce, even more in Consumer Packaged Goods (CPG), is not really trusted. Today, we are shipping more than 1.100 box a month and have an MRR of 60,000 USD. Or forecast for 2019 is an ARR around 750,000 USD.
What's your backstory and how did you come up with the idea?
In Bambox co-founding team, we are 3 french engineers, Timothée Jauffret (COO), Rémi Beaufils (CTO) and myself.
We all left our day jobs and we bootstrapped Bambox from our living room in our shared flat. Until today, we couldn't be more thankful to our roommates for letting us pile stacks of diapers in the house for at least a year!
We all came to Argentina for different reasons. One came to study and is getting married now, another settled down here after traveling around the world. For me, after graduating from an engineering Msc in Brazil I wanted to stay in LatAm to enjoy the lifestyle and I ended up working with Timothée at a third-party logistics provider.
That's where it all started. We had a clear vision on how should logistics could help in everyday life and we wanted to do it our own way. At the same time, all our friends started to disappear every Saturday to hunt down discounted diapers, and that was where we started to see an opportunity to make the lives of thousands better. As millennials today, we want more time for leisure.
From our background in designing logistic network plus the technological expertise from Rémi who joined the project, we designed and validated a first MVP. We all left our day jobs and we bootstrapped Bambox from our living room in our shared flat. Until today, we couldn't be more thankful to our roommates for letting us pile stacks of diapers in the house for at least a year!
B2C can be hard, but it was so rewarding to see the user base grow and the positive comments we received about the very own service we designed. We knew we had a direct impact on parents everyday life.
Take us through the process of designing, prototyping, and manufacturing your first product.
In the beginning, we knew nothing about ecommerce, digital marketing and design thinking. What we had was energy and good learning capacities. we enrolled in a free entrepreneurship course from a local university and we quickly learned that the only real entrepreneur lesson: execution is everything and you learn by doing.
“Cheap is expensive”. We learned it the hard way, hiring a cheap designer to build our first landing page - it was a total failure.
So we started surveying during the day, benchmarking, learning, design, coding at night.
We would track every potential customer up to the diaper aisle in big retailers store. We learned a lot and we had to transcribe this learning into a customer experience in our service.
As we needed to try our first hypothesis spending the least money possible, we first did an overview of the landscape of all the tools that could help us. Landing page tool, mailing software, Ads & social network. Which one had a free tier, offer a discount or free money to spend on ads.
But there is also a saying in Argentina : “Lo barato sale caro” which translates as “cheap is expensive”. We learned it the hard way, hiring a cheap designer to build our first landing page, it was a total failure.
Our first MVP was a simple landing page connected to Mailchimp to start gathering mails over a new service launch for parents. We explained our value proposition and offer a discount to anyone who would leave their mail. We drove traffic through Facebook Ads trying different kind of message. We ran the campaign during a month while we were tweaking the real website. It’s fast and allows you to try different version of you value proposition.
We did everything ourselves. Now I realized it wasn’t the easiest way but it was better to ensure we would deliver exactly what our customers were expected. Startup cost were close to none, thanks to the cloud and free-tier in SaaS solutions.
Describe the process of launching the business.
We saw no need for expensive branding and marketing at the beginning. We just needed to think about one, and only one thing we wanted to do for your core customer. Ours at Bambox is: “Deliver baby essentials monthly”.
After a 30 days facebook campaign to get some mails from a landing page, we launched a basic website to let the user choose diapers combo and other product that we would ship it to our early adopter in a common cardbox with a Bambox sticker.
And by ship, I mean we would drive Timothée’s car around the city helped by Google Map.
The first day the real website went live, we were really excited, we sent our “we’re open” mail to our database and open analytics to follow the traffic. We made 0 sales ! All the excitement went down… So we went back to talking with parents, tweaking the copies and Facebook Campaign again.
Until one day where we shut down the website for maintenance without thinking we could finally made a sale, we received a message on Facebook from someone who had bought and didn’t receive her confirmation message. We had shut down our website at the exact moment our first customer was purchasing !
Today it makes us laugh but also tell us that the beginning is hard and you should give up on the first obstacle you stumbled upon !
I think the hardest in the beginning was to tune our communication. There is not enough data to take clear decisions, you have to trust your guts and keep trying until you start to see a path forming.
You also need to have faith in your capacity to find the right value proposition, for the huge majority it’s not an overnight success and you receive a lot of pessimistic comments. Argentina doesn’t have the mentality of “everything is possible” so it makes it psychologically harder.
Since launch, what has worked to attract and retain customers?
Because we knew nothing, I think we’ve tried almost everything. From paid advertising to flyers and partnership with big name brand. Subscription-based ecommerce are a really new way to shop here for retail product and our brand is a frontier with a lifestyle brand. Moreover our target customers are millennials parents, especially moms, city dweller, well connected, what works better for us are social network.
The basic recommendation we could give is beside knowing who your customer is, is knowing how does he shop your special product. Who take the decision, based on which info, when, where.
Our first successful facebook Ad visual.
At first, our purchase cycle were around 5-15 days. People had to know us, trust us. So Adwords didn't really work well as a purchase channel. We organize a marketing mix oriented on brand awareness and aggressive retargeting afterwards. So we started working with influencers, healthcare specialists and blogging.
Our basic strategy was, brand awareness, a discount in retargeting then what we call the “magic moment”. A perfect delivery and a delightful unboxing. Even if it means a lot of work, being in control of the customer experience end-to-end allows us to guarantee a good user retention rate for a subscription-based retail ecommerce.
In Argentina, Amazon is not here yet, but we have MercadoLibre which is the go-to marketplace to buy everything. The purchasing experience is not the same but the prices are really. Which is one of the top two factors in the purchase decision. So we used it as an acquisition channel then retarget the user with communication directly in his box.
We used the same strategy for the local on-demand delivery services (like Uber-eats) who sell retail products.
How are you doing today and what does the future look like?
Our sales are 100% online through our own platform. Today we are closing the gap to be profitable but our goal is to expand our operations to other cities. So more expenses are coming.
You shouldn’t be doing everything because you can’t be the best at everything. And even if you are, you probably don’t have time for it anyway.
We’ve been growing steadily for the last 12 months, around 25% monthly. The huge work on brand awareness is finally paying and we are seeing our conversion rate double last year.
Every week we tweak our ads to get the most of them and we manage to keep a ratio CLTV/CAC around 3. But advertising is just one piece of the puzzle. A sentence I really like is : “Growth is not just a concern of sales and marketing, but of product, engineering and support too. It is this organization-wide commitment to growth that ultimately sets these companies apart.” From Sean Ellis, founder of Growthhackers.
In retail, the hardest part are the margins. Working in consumable goods and even more when it’s diapers require a perfect control of your costs if you don’t want to lose money on each delivery. Especially in Argentina where there is hyperinflation and expensive third-party services cost. Our payment gateway, which is in monopoly here, take us up to 6.0% + taxes on every transaction. Pricing is really tricky.
We received an investment from the team which implement eBay in LatAm to keep building our platform and logistic network. So Bambox’s strategy is to keep delivering a delightful experience to our customers with everyday products and slowly bring perfect recommendation for cross-selling & up-selling based on the baby's age and weight.
Through starting the business, have you learned anything particularly helpful or advantageous?
I think what is hard is to learn that you shouldn’t be doing everything because you can’t be the best at everything.
And even if you are, you probably don’t have time for it anyway. To me it’s true for human beings but also for the company. Be really good at something, and even though you should be able to understand a bit about everything, get support for the others gears of the mechanism.
Delegating takes time, you have to prepare the ground. You shouldn’t wait to be burdened with too much tasks you can think of or you will crush under the pressure and so will be you new resource.
What platform/tools do you use for your business?
As we consider our core competences as technology & operation, we build our own ecommerce from scratch. We use the lean startup method. Each step going through an MVP phase. It all started with a simple landing page to collect mail, then a simple ecommerce without backoffice. Each feature designed according to incoming necessity from the customer or the team.
But the best designed tool to me is Intercom. It has a great user experience for customer support and allowed us to scale our customer base without hiring. Just optimizing the process with the tool. It also offers a great onboarding opportunity for new customers. We love it !
Another one which help to streamline the work in product & process design is miro great SaaS product. We use it to collaboratively design and study our customer journey for new product we launch.
What have been the most influential books, podcasts, or other resources?
There are two books that really brought me great knowledge, in marketing and value proposition building: Tilt: Shifting Your Strategy from Products to Customers - Niraj Dawar, a well documented study about where the customer put the value in your offer today. It encourages you to take a closer look at the psychology and the economic constraints of their customers to come up with new value-added offerings.
The other is Blitzscaling, by Reid Hoffman and Chris Yeh. An overview on how highly valuable company such as AirBnb landed high valuation by scaling at a crazy pace. It’s sometimes hard to implement but you can definitely see the idea and try to follow the recommendation with the resources available.
Advice for other entrepreneurs who want to get started or are just starting out?
Just start doing things with people. It can be starting to talk with friends about your idea, other entrepreneurs. Then define a first step, a small one but get the wheel spinning and work to validate your idea. In most of the cases, the unique validator will be someone paying for your value proposition.
At the beginning your emotions are going through the worst rollercoaster and then even if the business is not going as well as you want it will stabilize. You will get a better understanding on lot of the area you didn't even know existed before.
We are lucky to be three friends with complementary skills, it’s not always like this, but not being alone is maybe the best benefit you could ask for when you co-found a venture.
Are you looking to hire for certain positions right now?
Right now we are working on our expansion, we recently had all our positions filled. We hope to have the opportunity to grow our team more. It costs money but it brings a lot of joy into the startup to see it growing with new personalities.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
Charles Carette,Founder of Bambox
Pat Walls,Founder of Starter Story
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