I haven't posted in a while i've been going through a little bit of an entrepreneurial depression to be dead honest. Call it burnout, disillusionment, whatever. A lot of you know me here, i'm the founder of Hippies Hope Shop, we're an online retail store in the hippie niche.
I wanted to share my complete story, what I did wrong and what I did right. This isn't a success story but it's not a failure story either. More than anything it's a story about growth.
The Beginning This all came about because I love social media. I was running a Facebook page as a hobby and we got about 17,000 likes and were doing about 250,000 a week in reach. I thought that we could make money off of this audience somehow so me and my girlfriend at the time decided to start a hippie store. Thus founding Hippies Hope Shop.
It started with $2,000 of my own money, 17,000 Facebook followers, and a really reallyreally shitty blogger.com website. Yes, a blogger website with a paypal plugin.
Since then we secured an angel investment from a fellow Redditor for $30,000, we've grown our Facebook audience to over 400,000 followers, we've done over $100,000 in sales, and we've landed PR in Business Insider, Yahoo Finance, Slate Magazine, SF Gate, and hundreds of other websites. We didn't become wildly successful but we didn't fail either.
How I Spent Our Investment
The first $10,000 of the $30,000 was spent on Facebook, building up our audience. I'm not 100% sure if this was a good choice or not if i'm being dead honest, I feel like I am split 50/50 between whether this was good or bad. At the time Facebook organic reach was doing amazing, there were a couple of newsfeed changes but nothing that I couldn't handle and in fact our audiences reach was doing better than ever. In March 2014 we did about 15,000 hits just from Facebook because of our huge audience, last month we did ~500 hits from Facebook. Our Pinterest page with 9,000 followers is currently our #1 driver of traffic.
The second $10,000 of the $30,000 was spent on inventory. This is the best investment I ever made into the business. If I could go back in time I would have made this a larger investment than I did originally. If any of you new entrepreneurs want some words of advice here they are: Before you focus on anything else, focus on making your "product" absolutely amazing. More than marketing, more than PR, more than anything. In my case my "product" is my retail store, and I wish I had more inventory to fill it out and i'm 100% confident i'm losing money because my inventory isn't maximized.
The third $10,000 of the $30,000 was spent on a manager. This was the worst decision i've made so far. I justified it because #1 at this point we had just done $10,000 in a month and #2 I said I could have him introduce an Etsy store which after 8 months of being built up would more than pay for his $1400/mo salary. Etsy didn't do well for us & the organic reach of the social media he was building up crashed. It was complete waste of money and going back I should have just worked my ass off and done all of the work myself.
What Went Wrong
Facebook organic reach collapsed. I went into this business with a bet that said Facebook would be alive for at least 2 years, and then we could diversify our social media to ensure we're not so 100% reliant on Facebook. I still stand by my decision on this saying that it was a good bet, but a bet with risk none the less and we lost. Facebook organic reach collapsed about 6 months in & our sales plummeted from $10,000 a month to $2,000-$3,000 a month. We're now an established brand with a solid customer base, but it's nothing like it used to be.
I founded the company with my girlfriend. I know, this is a terrible idea, I knew it was a terrible idea at the time, but god damnit women can mess with your mind. Starting a business with a SO is a double edged sword. It can make you 10x more successful when things are good, when your relationship is happy and you are working together, there's nothing more useful and powerful as a business owner than having your SO by your side helping you. Instead of working your ass off 80 hours a week for ramen noodles and no pay, you both will be working your ass off for a cumulative 160 hours a week and it feels like you can accomplish anything. But if you end up breaking up (like I did) you are now out your most important partner & it's a royal pain in the ass to get the equity back from them.
I had to take out too much money from the business to live. I think this was the #1 killer of our long term success besides Facebook dying. When I quit school to start a business my parents cut me off, I shouldn't have done this I should have stayed in school so my parents continued to support my living expenses. The adult version of this would be quitting your full time job without the means to support yourself because you decide you can live off your business. Over the months we've made what feels like sooo much money but none of it is profit in the bank because any profit that we did make had to come out for rent, food, and bills. (I'm actually now back in school with my living expenses paid so I no longer have to take $$ out of the business).
The Outcome Today Hippies Hope Shop is officially and solidly a "small business" we consistently do about $2,000-$3,000 a month (although this christmas has been very nice) with about 10 hours worth of work each week. We'll finish paying back our investor and turn a nice little profit each month. We didn't fail within our first year, we didn't lose money, and while we didn't make $1,000,000 we took $1 and turned it into $2.
The absolute biggest thing I got from starting this business though was personal growth.
I started as a 20 year old kid with no clue what the fuck he was doing. Literally no clue. I look back at myself and cringe i'm not even kidding. Since I started this business I have learned how to code with HTML5 & CSS3, set up a Shopify website, import products from other countries, ship products from the U.S. and internationally, how to do accounting, how to hire & manage employees, i've become an industry expert in social media as well as Search Engine Optimization (we have over 21,000 backlinks), i've turned into an email marketer, learned how to take product photos, photoshop, and graphic design, and i've learned more than anything I absolutely love marketing. I have ended up going back to school with a full ride scholarship to finish my marketing degree & at 21 years old I took a position as the marketing director with a team of my own for a million dollar organization.
So for anyone who is thinking about starting a business I just wanted to say do it. I know it's scary. You might lose money, you might fail, everything might come apart. But you know what? Even if it does, it will be worth it. You will learn more and improve yourself by starting a business more than any other experience in your life ever will. Even if you lose every single penny and completely 100% fail, it will still be worth it.
TL;DR: Go start a business.
EDIT: Wo thanks for the gold, you guys are amazing! =)
EDIT #2: Got a lot of requests for an AMA, just made one here. <3 I know, I know, i'm a karma whore, but if you wouldn't mind upvoting me here I would hella appreciate the support. =)
EDIT #3: Feel free to add me on LinkedIn if anyone else is into networking.
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