Building a Subscription E-Commerce Business from Switzerland: Samy Liechti, CEO of Blacksocks (Part 4)

Sramana Mitra: Were all these customers in Switzerland?

Samy Liechti: We have different currencies and languages here. We were not prepared for payments outside Switzerland. We only had Swiss Francs. All of a sudden, we had our first German customers. Then we started the same for Germany. Little by little, we introduced other currencies and then other payment methods like credit cards. I remember, in the early stage, a Japanese customer wanted to order and we weren’t able to process the credit card. One of his cousins was on a holiday in the Swiss Alps. He still had some cash left, so he sent it in an envelope and we sent him the socks to Japan.

Sramana Mitra: The first 10,000 customers and the first million in revenue came mostly from Swiss customers?

Samy Liechti: Mostly, yes.

Sramana Mitra: That brings us up to 2003 time frame?

Samy Liechti: 2002 was a very difficult year in e-commerce. That was after the Internet bubble burst. There was a lack of confidence all over the place. Everyone was excited about it and then all of a sudden, they are thinking, “If I order, I’ll never get it because they got bankrupt.” We had to slow down and do several things to build trust. For example, we didn’t have pictures of the founders on the web page, but people wanted to know from whom they are buying. We put our pictures to build confidence. We put phone numbers that they can call. These things are common but at the very beginning, nobody had phone numbers on the web pages. Little by little, growth went up again. We had big growth in 2005.

Sramana Mitra: From 2002 to 2005, you were still growing organically? There was no outside financing in the company at that point?

Samy Liechti: We always invested the money we made back into to the company. We still do that actually. At the beginning, we were two, but now I’m the only shareholder.

Sramana Mitra: In that 2002 to 2005 time frame, did anything major change in your customer acquisition strategy? In a business like this, the real key is the customer acquisition.

Samy Liechti: With the growing customer base and the idea that we always have to invest in customer base, we had more money to spend. We did deals with media companies. If you go to your big customers and you have last minute offers, you’re going to destroy the perception of price. I told them, “You can call us on Friday afternoon at 4 o’clock. If you still have media for the next week, we’re going to buy it at a big discount.” These guys were quite happy. We got very cheap advertising space. This changed a lot because people said, “This is broadcasted. This is credible.” Our advertising spending seemed to be much bigger than they were.

Sramana Mitra: You came across as a bigger brand than you actually were at that time.

Samy Liechti: Exactly.

This segment is part 4 in the series : Building a Subscription E-Commerce Business from Switzerland: Samy Liechti, CEO of Blacksocks
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