Validating B-to-C Business Ideas and Building to $40M Run Rate: Shaunak Amin, CEO of SnackMagic (Part 4)

Sramana Mitra: Customer acquisition was all Facebook ads?

Shaunak Amin: Initially it was. We built the waitlist using Facebook ads. Then when we launched, the whole idea of group ordering means that there’s some virality in the product itself. We had this concept where one person could share a link. Those other people could become customers. Just to remind you, it was still centered around dinner at that time. There was no lunch. We launched, but the business wasn’t growing the way I’d like. It didn’t make sense for me.

Sramana Mitra: You asked for the zip code, but you didn’t ask for input on lunch or dinner. It was your blind spot.

Shaunak Amin: Yes. Then we started talking to customers and we realized very quickly that families were a very small percent of people who are ordering from us compared to teams staying late at night. Customers who order for their office loved it.

Then we launched lunch. That’s when things started taking off. Some would order every day from us because it was a perk they were getting. Because of that virality that’s built into the product, things spread quite quickly once we shifted to lunch. It got too much to handle, so we closed down dinner. The business was growing 15% month on month.

Sramana Mitra: All bootstrapped?

Shaunak Amin: Yes. When I left Novus to start my own firm, I had saved up money. I had invested all the money that I had saved up. Some people I had worked with at Novus wrote checks. I raised another $250,000 to $300,000 from people I had worked with in the past. During the first two years when things were not working, I maxed out my 401k and invested more money.

Sramana Mitra: It was your money and friends and family. No institutional capital all the way.

Shaunak Amin: All the way until 2018.

Sramana Mitra: What happens in 2018?

Shaunak Amin: Some customers reached out and said they wanted to invest. One of them was a firm called FJ Labs in New York. They do a lot of seed stage investing. They used to order lunch from us every Tuesday. That was the first time we took in institutional capital. In 2019, we had another customer, Larkspur, who we were delivering lunch to every day. They also wanted to invest. That was the second institutional investor.

Sramana Mitra: How much between the two did you raise?

Shaunak Amin: We raised $450,000 from the first. Then we raised $2.5 million from Larkspur.

Sramana Mitra: What was the revenue trajectory?

Shaunak Amin: We did Stadium all the way to February 2020, which was the peak. We were doing close to $40,000 in gross revenue every day. That was the peak. We were doing slightly under a million dollars a month.

This segment is part 4 in the series : Validating B-to-C Business Ideas and Building to $40M Run Rate: Shaunak Amin, CEO of SnackMagic
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