Starting an ecommerce store? Learn how to validate your product before mortgaging your house.
Our lessons from building an (un)successful D2C shoe brand from scratch. Introducing: Spires. TLDR: If you are launching an ecommerce business, you should use ads to find out if people actually want your product and (more importantly) PAY FOR IT! We saved thousands of dollars and precious time by spending about $100 each.
Our lessons from building an (un)successful D2C shoe brand from scratch. Introducing: Spires.
TLDR: If you are launching an ecommerce business, you should use ads to find out if people actually want your product and (more importantly) PAY FOR IT! We saved thousands of dollars and precious time by spending about $100 each.
When I moved from Wall Street to Silicon Valley, I was ecstatic to trade my daily heels for sneakers (P.S. I’m 5'2''). Sneakers are great, right? They’re comfortable, casual, and all-around-fun! Not so fast. It wasn’t long before I started to miss my heels. Their boost in height brought me more confidence and recognition among my peers.
Popular footwear options in Silicon Valley are minimalist, low profile shoes (Atoms, Allbirds, Birdies, Rothy's, etc.). Unfortunately, I couldn’t find any good-looking, trust-worthy brands of sneakers that gave me the same lift as my heels (just a lot of this...ew).
One day, I stumbled across sneakers that promised a boost in height from a (sketchy-looking) overseas ecommerce store. Desperate to try a new solution, I immediately bought them. They took so long (~1 month) to get delivered that I was surprised when they finally arrived! Once I tried them on, I never wanted to take them off. I shared them with a few friends and realized that many others could also benefit from the shoes. However, I didn’t want them to have to go through the same annoying and dubious process that I went through. I thought that there could be a better way.
When I told David this story, he knew we could make this a reality given his ecommerce background and no-code toolkit. We teamed up to see if we could build and test something quickly.
Trust the Process
Our goal was to find out: Did other people want sneakers that made them taller? Who were they? How could we reach them?
How did we actually start to do this? More or less we followed these steps (and regularly revisited them):
- Market & competitor research
- User interviews
- Manufacturing research (if we did this again, we would probably skip this)
- Brand design/naming
- Website design & messaging (also known as “copy”)
- Ad Experimentation
We did market research by defining the problem and exploring existing solutions. The problem: some people hate being short or are simply uncomfortable with their height. Since the folks can’t force themselves to grow taller, the main solutions we found were shoe inserts, heels, boots, or the specialized sneakers from overseas. Inserts didn’t fit in all shoes. Heels were only available to women and were uncomfortable. The sneakers from overseas had a sketchy website and branding that didn’t instill trust, especially compared to the aforementioned popular minimalist sneaker brands.
Next, we brainstormed names by googling random words related to “tall” (very scientific). After a few iterations we had found it: Spires. Spires are the tall cones or pyramids on top of skyscrapers, which we thought sounded cool.
Now that we had a name we both liked, it was time to get a domain and build a website. We made the first version of our store (spires.shop) using Webflow, and soon after, we migrated to Shopify. Although Shopify has less customization, which was sometimes infuriating, their ecommerce setup was more user-friendly than Webflow’s. Shopify easily integrated with ads and showed us specific ecommerce analytics, which we preferred to Google Analytics. Over the course of a week we continuously simplified our website design and iterated countless times on our copy.
Excited to show off our fancy new website, we interviewed people as they interacted with it. During our user interviews, we also asked questions about pricing based off of the Van Westendrop model. After more than a dozen interviews, we repeatedly heard that our price was too high and the messaging was too specific to women. This was our first big indication that height is probably a bigger issue for men.
After we finished our major edits on the website, we launched on Product Hunt, tweeted it out, and posted to a few other founder communities to share Spires with the world. (Check out this great how-to on Product Hunt launches).
In parallel, we learned about manufacturing, white-labelling, private labelling, ODM, OEM, and more. We spoke with people who had experience manufacturing products overseas. We also reached out to the shoe manufacturer that Pujaa had purchased from. The manufacturing process was more challenging than we previously thought.
Regardless, we were putting the cart before the horse; this was a wake up call. While we had learned a lot, this effort wasn’t getting us closer to answering our primary questions: did other people want sneakers that made them taller? Who were they? How could we reach them?
We pivoted our focus exclusively on answering these questions and validating demand for Spires...using ads. More on that below.
Unfortunately, neither of us had any substantial experience using ads. So we followed the Julian Guide to Growth word for word, setting up ads on Facebook and Instagram, and later Reddit (we also got advice from other growth experts, h/t @Asher).
The primary method we used to validate our product was to run Facebook, Instagram, and Reddit ads. Why? Running ads is a quantitative way to test people’s reaction to your product, website and ads. It is important to get qualitative feedback from user interviews, but surveys don’t scale as well as ads. And your friends and family start to get annoyed after the 5th survey you ask them to complete...
Ads are a low-cost way to test your idea in the wild, where your actual customers are (especially relevant for e-commerce businesses). After running ads for ~3 weeks with a shoe-string budget, here were our results:
We used a variety of targeting techniques and ad copy on each of the 3 platforms. At any given time, there were a mind-boggling number of combinations of age, gender, location, interests, messaging, imagery, and any other factor we could test.
We checked the dashboards obsessively as soon as we woke up and before we went to bed (and...a few more times throughout the day). Eventually, we created ad reports that would be emailed to us daily. Then, we took the numbers from the dashboard and reports and would put them in Google docs and Excel sheets to track our numbers. Every day, we’d experiment like mad scientists, tweaking our ad targeting and turning ads on and off based on performance.
Initially, Pujaa hypothesized that women would be more interested in buying the shoe. David believed that more men would. Instead of arguing, we ran an ad experiment to see who was right! The results indicated that men were more interested in the shoe (more clicks and higher click-through-rate). After running more tests to double-check, we eventually stopped advertising to women.
All in all, our advertising cost us less than Apple airpods or a roundtrip Uber from SF to South Bay: $200. That spend resulted in over 80,000 eyeballs on Spires ads and 456 on our landing page. We first advertised on Facebook and Instagram, and then on Reddit just for fun. Reddit became our favorite because of its low cost-per-click (CPC). Note: Our click-through-rate (CTR) was abysmal across the board. Individual ads got as high as 1.5%, but were still lower than the average 1.6% in retail.
Thanks to our efforts (and $200 of ad spend), were were able to answer some of our most pressing questions:
- Do other people also want sneakers that made them taller? Yes (but not as many as we would have liked)
- Who are these people? Are they men or women? How old were they? Men were more interested in the product than women. Many of them were in the age range 25 to 40. While most women were much less interested in the product overall, some women from ages 35 to 40 did show some similar levels of intrigue (similar CTR).
From the 900+ who visited our website as a result of ads and other marketing channels, we had 2 people purchase our sneakers (~0.3% conversion rate, while the industry average is 2.5%). We refunded them immediately, explaining that we were a startup that hadn’t resolved our operational issues and that we would let them know when we were back in business. We also asked those two people if they’d be willing to do a user interview with us, and offered a 25% discount for a future Spires purchase. One of them said yes!
Interviews with real customers are gold. Everyone has an opinion, but you need to prioritize the ones who will pay you.
Let’s call our buyer SpiresLover275. He was excited to buy our shoe. He had heard about it via a 10k person slack group that he and Pujaa were in. This unfortunately means that our ads had resulted in only 1 conversion (maybe even 0 since we couldn't tell how the other buyer found our site). SpiresLover275 loved the minimalist shoe design most, and he said that the height increase was an added bonus. He also mentioned that his biggest fear was that the shoe wouldn’t look great on his feet because he didn’t see any pictures of people actually wearing the shoes on the website. We were ecstatic to meet our first customer and look forward to incorporating his feedback.
We learned that anyone, even us, can start an ecommerce business...and will probably fail on their first attempt. However, experimentation and iteration are core tenets of ecommerce (and startups)!
Speaking of experimentation, a logical next step would be to take more pictures and try running ads again. This time we’d be able to see if the new pictures made a difference by comparing them to our previous ad statistics (CPC, CTR, etc.) and website conversion rate. However, we’ll be taking a break for the time being. It turns out that during these crazy COVID-19 times, most people aren’t really wearing shoes. Maybe we should look into socks...🤔. Until next time!