In the spring of 2010, Amy Jain and Daniella Yacobovsky were on track to graduate from Harvard Business School and go on to jobs as financial analysts. In fact, both had secured jobs at top firms. But something wasn't right.
"We had been working on this project for the last year or so of school, and we both thought it could be a viable business," says Yacobovsky. "We were at this crossroad. We could take this very secure road we had planned, or we could become entrepreneurs and turn this project into a real business. We chose to dive into the start-up world."
A Warby Parker for Jewelry
Today, this project-turned-business is BaubleBar, an online jewelry retailer that sources pieces directly from designers and sells them at a discount under the BaubleBar label (think Warby Parker for jewelry). Since launching in 2011, the business has grown from two founders to 25 full-time employees. And the New York City--based company just raised $4.5 million in Series A funding led by Accel Partners and Greycroft Partners, which brings its total funding to $5.6 million. The company projects $11 million in revenue in 2012.
"Basically, we sell a necklace that would retail for $90 at a chain like Anthropologie for $35," says Jain.
The duo came up with the idea nearly three years ago while, you guessed it, shopping.
"With jewelry in particular, we saw that the price points were either sky high or bargain basement, $1,000 or $10,” says Yacobovsky. “You either bought a forever item or a costume piece that looked cheap. There was a gap there." So the girls used some of their Harvard Business School classes to investigate the market.
"We talked to hundreds of designers and really mapped out the landscape," Yacobovsky says. "And the business model just grew out of that."
Getting That First Purchase
Before they knew it, Jain and Yacobovsky had not only mapped out the supply chain, but they had also set up a beta website, with a test group of about 5,000 shoppers, most plucked from the pair's social networks. The results were positive; the site found that nearly a third of first-time buyers would come back again. But getting that customer to purchase for the first time was--and still is--the biggest challenge.
"When you have a discount online business, you have to find ways to convince your customers of the quality," says Yacobovsky. "For us, product photography and styling are so critical. The first version of our website was absolutely terrible. But we learned how to do it better."
With this latest round of funding, the duo is planning to launch more collaborative lines with jewelry designers (it has already experimented successfully with Erikson Beamon) and to continue expanding the brand.