Greg Selkoe On KarmaLoop’s Success And Giving Back To Boston
The Cradle of Liberty’s own Greg Selkoe is the founder of Karmaloop, writes a blog for the Huffington Post, and has been featured on CNBC discussing the culture he helped spread through his online clothing and content business Karmaloop. Struggling at the beginning like most entrepreneurs, Selkoe stuck with his dream and launched the online destination from his parents’ basement at the age of 25 while working full-time for the city of Boston.
There are many success stories from Boston, but considering the odds and exactly how Selkoe began, there are not many stories as compelling as his. Recently, I sat down with Selkoe to talk about what it was like starting his own business while having no previous business experience. In addition to sharing his advice to entrepreneurs, here’s what Selkoe had to say:
What was it like at the beginning of your startup? The lore is that you started out of your parents’ basement.
Well, the lore is true. Believe the lore.
So, not that long after college I got a job working for the city of Boston in urban planning and in fact, city culture and how a city work is very interesting to me. What happened was that a good friend published a hip-hop and street culture zine and I was helping him sell ads for clothing brands that well known hip-hop artists and skaters were wearing. The brands were really cool and so I would call them also expecting them to have a lot of money and they didn’t actually.
I realized immediately that it was very hard to make money in the magazine world but I also realized that there was a real opportunity with the demand of this clothing because there was a real interest for it but at the time there was no way to get it out to the people. A lot of people knew these brands but if you didn’t live in New York or Los Angeles, there wasn’t a way to buy these clothes.
Although I began it with a business partner, I set up the office in the basement of my parent’s house and the initial startup cost was about $26,000 and I put up all the money, which was all the money I had to my name including the money I had in my Roth IRA.
So it started out as a small side business with four clothing brands and I worked my full time job at city hall for about a year a half. I would come home from work and think “wow, three or four orders!” and I would pack them up. Then my girlfriend at the time, who is now my wife, would help me and I would put them in shopping bags with me to take on the train to work the next day and mail them out.
And how did it continue on from that point?
About a year or two into the business I wasn’t making a lot of money but I was getting a lot of amazing feedback. I would talk to customers a lot and get feedback, which by the way I still do to this day although not as much. By the way, my cell phone is on the website and I still do call customers. Many people call and don’t believe it’s my number, but it is.
So at the time, I had no business experience and I think part of the reason it’s been a success is because I had no experience. I did a lot of things people with experience never would have done because it seemed normal to me. I wasn’t reading any startup magazines and it was the beginning of the first internet bust and one of the things we did differently is that we merged content and commerce together.
We did contests and things like that to make the site very content driven. Also, we shot the clothing on models that fit the brand’s image at the time while most people were still showing the clothing on a flat background or on mannequins. It was definitely something that helped resonate with people because it was an experience and about lifestyle when you came to the site.
It was a community of style.
It was a struggle too because it was 2007 before we finally broke even. Even now it’s a struggle to bring in cash because we’re growing so quickly, by about 80%.
So looking back it at now, are there lessons that you learned early on or ones that you can share?
Yeah, I would say to entrepreneurs, “beware of the person who says that just their involvement in the project is so valuable that that’s why they should have equity,” because supposedly they’ve been involved in other high profile projects. You never know how much actual work they’re going to do.
So, never give anybody equity up front which I did a couple times and that was a mistake. For example my former business partner was that way. He’s not a bad guy. It’s just that one day he decided to move to San Francisco and sold me his equity back for $10,000 and he left me holding the bag.
Luckily for me, that bag filled up with cash eventually.
And I had other experiences with people coming up to me and promising this and that but I’m the type of person that when I tell people I can do something, I generally can do it.
If I can’t, I say, “I thought I could and I’m sorry I let you down.”
Generally I think big, I dream big, and I plan big. Most of the time I’m able to pull it off and there are times when I don’t so I expect the same from everyone else.
The other thing I would say is be careful where you spend money.
The third thing is don’t be afraid to ask for money. Anyone and everyone I met I would bring it up and ask them if they were interested in investing and if not I would ask them if they knew anyone else who would be interested.
My family believed in me so I was lucky that they took the risk and invested what for them was a lot of money too. I was also hustling all the time and was able to get money from outside investors too.
You talked about thinking big and having a clear vision. Can you talk about how that’s affected you today?
Yeah, because I always wanted it to be big from the start. It kept me focused. I wanted to be an entrepreneur whose life and work blended together and it’s that way now. Also, people don’t see the hard things we deal with that are really hard and that take focus.
So today, I get to travel a lot and go to events and I’ve met people who I respect and those are some of the rewards for all the hard work.
And what inspires you or keeps you going now?
Well, now my inspiration comes from the fact that I’m in a position where I can put my own money towards charity, other startups I believe in with the non-profit I started, Future Boston Alliance, and I even put money into the restoration of a fountain here in Boston that was in bad shape. So for me my inspiration now comes from giving back and putting resources towards things I believe in. It’s very gratifying and fun for me.
Speaking of fun, how do you like to spend your time when you’re not working or with your family?
I like to read the Boston Globe and the Herald, Popular Mechanics, TechCrunch, BostInno which is like Boston’s TechCrunch, Pharrell’s channel on YouTube, The Drudge Report, Wired, and Popular Science and tons of fashions blogs that are too many to name.
And how do you balance your work and family life?
It’s not easy to do that because there’s so much at stake with a business and other people’s jobs but what’s good is that I live very close to my office so my daughter can come by and visit. Also, my wife works here and we work well together and she’s been a huge part of the success of the company. She’s essentially my partner in a lot of ways.
What’s important is quality time with family and while it’s not always easy now, I know that sometime in the future that will be possible considering how the company’s going.
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