Bootstrapping a Niche e-Commerce Company to $20 Million: iHeartRaves CEO Brian Lim (Part 2)

Sramana Mitra: Is it a glove that you’re selling? I’m trying to understand the form factor of the product that you’re selling here.

Brian Lim: They’re white stretch gloves with LED lights at their fingertips. The technology is much more advanced than what we had before. Today you can program these lights using a Bluetooth phone and you can customize through millions of colors and flashing colors.

Sramana Mitra: How do you get this off the ground as a business? I understand the genesis of how it came about. You had this passion. How did the business side came about?

Brian Lim: My wife had purchased a glove set for over $150. It took about six weeks to receive the product. She got me involved. I was trying to get the product or get refunded. The service was so bad. I was like, “I can’t believe there is no one servicing this market.” We took $100 and bought our own product off-the-shelf.

We started selling the lights out of the trunk of my car at an event called Friday Night Ligths that we created. The first week, it was at an In-N-Out parking lot. We would have five people the first week, 20 the next week, 30 the next week. Then, before it got to a hundred plus people, In-N-Out was like, “Get out of here. You are loitering on our property for too many hours.” We had to do parking-lot hopping.

Sramana Mitra: From a revenue point of view, how much were you making and how were you financing this?

Brian Lim: We’ve always been 100% bootstrapped, even today. We would have a 50% to 60% margin. All the profits went right back into the company to feed future growth.

Sramana Mitra: But you had to finance the inventory if you’re taking these products into parking lots to sell.

Brian Lim: All with just $100 to start. We started selling at Friday Night Lights. We sold off on Craigslist.

Sramana Mitra: Did you pay for the inventory yourself?

Brian Lim: I paid for the inventory starting with $100. I sold that, took the profits, and just reinvested.

Sramana Mitra: How much does one product cost?

Brian Lim: The glove sets range anywhere from $25 all the way up until $100.

Sramana Mitra: If you invested $100, how many units did you have to sell?

Brian Lim: Back then, the cost per glove was at $10.

Sramana Mitra: You were taking $10 products and selling it at $25.

Brian Lim: Some of these would go all the way up to $100 depending on the configuration.

Sramana Mitra: But the cost would still be $10.

Brian Lim: Correct.

Sramana Mitra: This was in 2010?

Brian Lim: Correct.

Sramana Mitra: How much revenue did you make in 2010?

Brian Lim: I believe it was $245,000. The following year, we got it to $3 million.

Sramana Mitra: In the first year, you got close to a million just by going from parking lot to parking lot?

Brian Lim: Yes, and selling on eBay and Craigslist. We opened our own retail store in California.

This segment is part 2 in the series : Bootstrapping a Niche e-Commerce Company to $20 Million: iHeartRaves CEO Brian Lim
1 2 3 4