Bootstrapping a $25 Million E-Commerce Company: Saatva Co-Founder Ricky Joshi (Part 4)

Sramana Mitra: Are these people in your payroll the people who are doing the delivery?

Ricky Joshi: It depends.

Sramana Mitra: It sounds like a very expensive infrastructure. That’s what I’m struggling with. For a bootstrapped company, to roll out that kind of infrastructure is rather difficult. Help me reconcile.

Ricky Joshi: We’re doing $25 million in revenue.

Sramana Mitra: Still, that full logistics infrastructure around the country is expensive.

Ricky Joshi: It’s expensive. There’s no question. We actually had grown by geography. Initially, we started out at the Northeast. Next was California. Our company is interesting in that we have two offices. Our main office is in New York City where all the logistics and customer service is run. I actually run our Austin office with Chris where we do our marketing and technology. When we started this for a year, I actually didn’t have my own Saatva bed. I was sleeping on my roommate’s extra bed for the first year.

Sramana Mitra: That makes sense. You did it geographically. In the geographies that you have good distribution capabilities, that’s where you did the customer acquisition. Is that correct?

Ricky Joshi: Exactly. We’ve actually grown geographically. Over time, we just filled in the dots.

Sramana Mitra: Which brings me to the natural next question, what is your customer acquisition strategy?

Ricky Joshi: It’s pretty much three-fold. We have great word-of-mouth. For example, we just had a Facebook contest. Within the first day, we had almost a thousand likes. The brand awareness has increased a lot. We do a lot of in-market customers. We have a lot of the people who are peer reviewers. We made sure that we are very visible on websites. We didn’t spend a dollar on AdWords for the first four to five months. It was just in-market reviewers.

Interestingly, we get a lot of people who are not necessarily in-market. We do target people demographically as well. We found that there’s a lot of people out there who are furnishing their homes. They really haven’t thought about a luxury mattress. We’ve done very well with just saying, “You’ve taken care of everything else. What about sleeping on a great bed?”

Sramana Mitra: At this point, you’re doing $25 million and you started in 2011. It’s four years into the business?

Ricky Joshi: Yes. We started in March of 2011—so three and a half years.

Sramana Mitra: Is your primary customer acquisition strategy now AdWords or is it still review sites?

Ricky Joshi: AdWords is obviously big. It’s still multi-faceted at this point. We have re-targeting, PR, and all sorts of things that drive our revenue. SEO is huge. It’s really multi-faceted.

This segment is part 4 in the series : Bootstrapping a $25 Million E-Commerce Company: Saatva Co-Founder Ricky Joshi
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