WhoBuilt

Female Founders Conference

Jul 11, 2018· 18 min· 82K views·Watch on YouTube

Speaker

Mariya Nurislamova, founder of Scentbird, explains how she developed the fragrance subscription business at Y Combinator’s Female Founders Conference.

Early ideas without customer input

Nurislamova and her co-founders first built a fragrance recommendation platform, including a tool for finding scents by occasion and smell. After six months, they realized recommendations were hard to monetize. A $9 discovery kit brought in about 100 buyers, but few went on to purchase full bottles, and the founders still had not asked customers what they wanted.

Finding a subscription model

A try-before-you-buy offer sent customers three full-size bottles, but about 30 percent of shipments were not returned, leaving the company unable to charge some customers. After mentor Michael Seibel urged the team to focus on fragrances, they tried a subscription offering a 30-day supply for under $15. A plain one-page site brought in 105 orders in a week, which the founders fulfilled by hand.

Raising money through setbacks

With about $5,000 left from ERA’s $40,000, Nurislamova struggled to raise working capital. She rejected offers that demanded steep discounts or equity, then persuaded angel investor John to invest $100,000. After two YC rejections, she applied a third time and was accepted; she says YC changed the company’s focus toward week-over-week growth and user interviews.

Learning from users and building the team

In an early user interview, a woman who had not used Scentbird offered to buy 10 subscriptions after worrying the company might close. Nurislamova took this as evidence that customers cared about the product. Looking back, she says she would have hired fewer, stronger people instead of prioritizing low cost.

Advice for founders

Nurislamova encourages founders to set ambitious goals and communicate them so teams and partners can support them. She also advises taking guidance from people who have achieved what you want. At the time of the talk, she said Scentbird had about 100 employees, served roughly 250,000 people in the United States, and had raised about $25 million.

Takeaways

  • Talk to customers before building a detailed product; founder assumptions can persist through multiple failed business models.
  • Test whether customers will pay and what they will buy before investing heavily in a business model.
  • For products with inventory and fulfillment costs, account for working capital and return or fraud risks early.
  • Use user interviews to learn what customers value, including how strongly they want the product to continue.
  • Set clear, ambitious goals and seek advice from people with relevant experience.

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