How I accidentally built a tech startup.

tl;dr
While doing a passion project, I discovered real pain-points and built a tech startup.
___________________

In 2013, I quit a former YC company and started my own bootstrapped business. I knew I needed to do something that:

  1. I was truly passionate about.
  2. Actually becomes a sustainable business (real revenue…not user growth)

So I, the coffee nerd, launched Moustache Coffee Club ~ fresh bags of single origin coffee delivered monthly. It’s been ~ 1.5 years and now every month I get $20k+ in revenue & ship 1000+ pounds of coffee. [Read that story here] While I was building my passion project, I ran into lots of headaches. I realized that there are huge problems that are very unique to subscription businesses. Bit by bit, I was creating an admin backend to solve these issues…and by summer 2014, I had built an entirely new business:

BishBashBox: The all-in-one platform to build & grow your subscription box company.
Think “Shopify for subscription businesses”

I’m writing to share my journey with other entrepreneurs. While there were small learnings along the way, there were three major pain-points that led me on the path to building BishBashBox:

Screen Shot 2015-02-15 at 8.09.02 PM

source: Moustachecoffeeclub internal data (2013-2014)

Pain-Point 1: Credit Cards Are Tricky
[summer 2013]

Problem: Storing and periodically charging customer’s credit cards kinda sucks.

Charging credit cards for a subscription box business is more complicated than single purchases. And physical products make it much more difficult than digital subscriptions. I needed to store credit cards and then charge them every time I needed to ship them coffee. Dealing with declined credit cards and remembering what customers had paid for became a major headache. Unlike a time based subscription (like Netflix), I couldn’t just turn the service back on once the customer pays because each charge is tied to a physical shipment.

So I came up with a solution…

Startup Stock Photos

I looked around for existing solutions (Shopify, Squarespace, etc.) and didn’t find a good answer.

Rather than billing on a set schedule, I needed the ability to store credit cards and charge them as needed. And what happens if a credit card fails? I needed an automated way to flag people who got coffee shipped this week so that I didn’t send coffee to individuals whose card fails (which definitely happens). Lastly I built a way to retry the credit cards that failed because A) it costs nothing to retry B) customers actually want to receive their coffee.

Implementing these solutions allowed me to space to run more growth experiments. But after that Christmas season, shit hit the fan.

Pain-point 2: Feeling Overwhelmed With Spreadsheets

My first Christmas, I saw a 122% month over month (MoM) growth. Now I was shipping over 250 pounds of coffee! I was working off of a big spreadsheet full of people…it was a huge mess. Because I was dealing with recurring shipping & payments, I became overwhelmed. What happens when someone’s credit card fails? Do we ship them coffee? Some customers get shipped monthly, some weekly….and each may have started on a different week in the month. Some had cancelled and some had upgraded. Printing labels & packing boxes became a nightmare.

So, I popped open a beer & started coming up with my next solution.

Processed with VSCOcam with e6 preset

I decided to expand my admin to accommodate a customer management system. I built a system that:

A) Make it easy to charge. Each Monday I could simply click “charge customers” & it would attempt to charge all credits on file (of the people who had started their subscription and/or were on a weekly or bi-monthly plan).

B) Make it easy to print labels. Once the credit cards were charged, I knew who to ship to and would automatically purchase shipping labels using Easypost. I could just click a button and print all my labels at once.

C) Make it easy to ship. Since each customer was being delivered a different quantity of coffee, I learned to add a note on the label for quantity to make packing easy.

The system made me 10x more efficient. Instead of spending hours frustrated, I could focus back on what matters most: growth. While I saw the spike in Christmas, I wasn’t seeing the growth rates I wanted. So I started to take seriously the question: how do I grow?

Pain-point 3: How the F*** do I grow?

For the first year, I was doing anything I could to get noticed. I was active in the /r/coffee subreddit. I got to the top of HackerNews with my post “I have a PHD & now I sell drugs online”. I started building a follower on Twitter by starting conversations with other coffee nerds. Blogger outreach got a few articles out there. I tried & failed at running a couple ads on Facebook. The truth is that I didn’t know the answer to the growth question.

So instead of continuing the (sometimes) sporadic approach to grow, I decided to run the numbers. I had implemented referrers on links a while ago, but never looked at them. So, I created a “revenue source” tool in my admin. I could see exactly how much money came from each source. Below you’ll see my top 10 referrer sources.

Top 10 Revenue sources:

Revenue Source
$22,633 https://www.google.com/
$3,132 http://digg.com
$2,410 http://frshgrnd.com/2012/10/coffee-subscription-roundup-review/
$2,305 http://blog.moustachecoffeeclub.com/i-have-a-ph-d-in-computer-science-now-i-sell-drugs-online/
$1,834 http://www.ramblingsofasuburbanmom.com/monthly-subscription-box-list/
$1,657 http://www.reddit.com/r/Coffee/comments/1ik5gn/looking_for_a_coffee_subscription_recommendations/
$1,613 http://www.moustachecoffeeclub.com/gift
$1,426 http://mommysplurge.com/subscription-boxes-list/
$1,254 https://www.facebook.com/
$1,135 http://hellofoxy.com/monthly-subscription-boxes/

This allowed me to understand where my real growth was coming from and to focus my energy on blogging & word of mouth marketing.

When I started Moustache Coffee Club, I had no intention of building a software business. But along the way, I started to realize that my tools would be useful for other entrepreneurs trying to start a subscription box service – especially those that didn’t know how to code.

Now you can start your own subscription business on Bishbashbox. Try it free for yourself.

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