Sometimes a great startup idea jumps right out at you when you’re doing something you enjoy. Amy Jain and Daniella Yacobovsky, while working as investment banking analysts, enjoyed shopping at Saks Fifth Avenue on their lunch breaks. Today they run the successful online jewelry retailer BaubleBar, which is expected to see up to $11 Million in revenue in 2012. Here’s a look at the path this fashion savvy pair of 29 year-olds took from lunchtime to launchtime and beyond.
Always be Ready To Be Inspired
During one of their frequent shopping jaunts at Saks, Amy and Daniella noticed that while they spent a pretty penny on clothing and accessories, they almost never bought fashion jewelry. After discussing this observation at length, the pair concluded that women will accept a large markup for brand items like clothing and handbags, but are far less concerned with the designer’s name when it comes to jewelry. This realization led them to the birth of their idea to sell private label jewelry online at prices far below those in retail stores.
Know What You’re Getting Yourself Into
The two had just finished their first year at Harvard Business School when they began to research the idea. Taking advantage of their unique situation, they used the framework of their classes and received academic credit to conduct their investigations. To get to know the supply side of the business they met with wholesalers and designers and quickly found that there was great opportunities for retailers who could move volume.
Spring to Action
Once they had convinced around thirty designers to offer their products, they created a website called 816 (named for their shared birthday of August, 16). They weren’t thrilled with the look of the site, and hadn’t yet addressed the importance of design in the success of a website. Their email marketing efforts were minimal as well and consisted of little more than sending out emails to friends and acquaintances. Despite the humble beginnings, the die had been cast and the game was on.
Focus On Your Greatest Challenges
The pair recognized that getting women to make their first purchase on the site would be their biggest difficulty starting out. Since prices are less than half than those of retail, many users are conditioned to doubt the authenticity of the product. To avoid looking like the guy by the subway stop selling Rolexes from his jacket, they brokered a deal with Erickson Beason, a well established jewelry company, to foster the credibility of the site. They also offer free shipping and a allow returns without question to help potential customers make that crucial first purchase that will keep them coming back.
Ride The Tide
Before long, the site began to attract more attention and was enjoying a high repeat rate, but it was still lacking in design finesse and user interface. Amy and Daniella decided to raise a seed round of capital, and after receiving $1.1 million from Accel Partners they changed the company’s name to BaubleBar and redesigned the website with a great new look. They were off to the races now, and decided to leave their jobs in finance behind.
Stay Current While Looking Forward
Today the duo is focused on the constantly growing success that the site has become. They have a staff of 20 employees, and the site boasts more than 200,000 unique users a month and a conversion rate of between 4 and 5 percent. They’ve also brokered a deal to become the only independent retailer of DKNY jewelry, and are currently looking for more office space in Manhattan. Who knew a shopping spree could be so lucrative?