Bootstrapping an E-Commerce Startup from Utah: KURU CEO Bret Rasmussen (Part 3)

Sramana Mitra: Let’s get back to the question I asked. How did you get to the product? Since you didn’t have the expertise, who designed the product? How did you get it to a version one product?

Bret Rasmussen: I worked with a local design firm. While researching on patents, I got a book called Patent It Yourself. I worked on the technology myself. I went to another inventor that had some patents, and he helped me refine the technology.

We worked with a design firm to design it and create what’s called a tech pack. We took it to factories in Asia and made some prototypes. We tested it with people back here in the states and refined it. We did three rounds of prototypes with three different tools. It’s not cheap. We spent $5,000 to $6,000 on tools. We made some prototypes and had dozens of them tested.

Based on the wear test, we would tweak it and improve it. That’s how we took it from a concept to a prototype to a product that we felt was good enough to go to market. Once it was good enough to go to market, we made the salesman samples and said, “Here are the five colors that we are going to offer these shoes in. Here are the materials.” We would have a sample of each color and each material so that a customer can choose.

When we launched, we sold from stores along with our website. That was in 2008. In early 2009, we were forced to pivot and start selling directly to consumers. We ended up pivoting early on after launching to be 100% web direct. 

Sramana Mitra: When was this?

Bret Rasmussen: That was the middle of 2009. We launched in October of 2008 right after the big crash. By the middle of 2009, we pivoted and went 100% web direct. 

Sramana Mitra: What was the customer acquisition strategy when you went web direct?

Bret Rasmussen: A lot of search and a little bit of email marketing. Social media didn’t blow up yet as a marketplace. Twitter was starting to take off then, so we did a lot of that. We built relationships there. We also used a lot of Google search and SEO type activities. Shortly after, Twitter and Facebook became effective places to get in front of people and help them become aware of KURU.

Sramana Mitra: What kind of numbers were you getting early on? By numbers, I mean the number of units. What kind of price point were you able to sell at? What are the metrics of this business?

Bret Rasmussen: A vast majority of our orders are one pair of shoes. You have to get in front of a lot of customers when your transaction is one pair of shoes at a time. If we sold five pairs a day in 2009, that was a pretty good day. We quickly grew well beyond that.

Our orders are individual shoes. The goal was what we call first purchase positive. We were running super lean. I won some cash in business plan competitions. I had savings and I also did a small seed round. All that financing was used to prototype, buy tools, and get inventory.

When we launched and then pivoted in 2009, we were down to a couple of thousand dollars left in the bank. We had to be first purchase positive. We didn’t take a brand-building approach. We took a product need approach. We targeted customers that have a real need – a need that we could solve.

We pivoted from our outdoor lifestyle type brand because a lot of customers that had bought from us said that they had plantar fasciitis, foot pain, heel pain, or neuroma. We changed their lives because our shoes were incredible. Part of our pivot was not just to go direct but also to start targeting those customers – people with foot pain and other problems.

We were targeting them with a first purchase positive mindset. The idea there was that for every dollar that we spend on marketing, we had to generate $4 to $5 in revenue to be able to be profitable. We have a profit per transaction mindset. We focus on effective landing pages to communicate to the customer our value proposition and to help them understand how we can help them solve their foot pain needs.

We had a return policy to try to encourage them to try us out and give us a shot to be the low hanging fruit. We wanted to make sure that we were targeting customers who can be convinced to buy and give us a shot at a profitable level. 

This segment is part 3 in the series : Bootstrapping an E-Commerce Startup from Utah: KURU CEO Bret Rasmussen
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