In May 2014, two sets of brothers in the United Kingdom--Reiss Edgerton, Kristian Edgerton, James Owen, and Dominic Owen--decided to form an e-commerce company named Tayroc. Their goal was to bring stylish timepieces to market at an accessible price.
The youngest of them was 20. The eldest was a mere 23. And in the last three years, they've generated over $10 million in sales with double-digit annual growth.
The naivety, idealism, and youthful enthusiasm that allowed them to enter a very crowded and competitive space (watchmaking and e-commerce) and scale quickly has now been complimented with the valuable (and sometimes painful) experience that only success and growing pains can bring.
They openly shared these key lessons with me below in a recent interview so that other Inc.com readers could benefit from their pain. I believe that the future is bright for these young entrepreneurs (and others like them) if they continue to see each phase of growth as an opportunity to be humbled, learn, and redesign the organization for success.
You need the right people and process to win at scale.
The four founders say their toughest lesson thus far has been getting the staffing correct. In the beginning, they faced the classic conundrum of staying lean with their organization and having a process in place for staffing key positions ahead of growth. With four founders, they had plenty of manpower at their disposal--but like all great strengths, they can often simultaneously become a liability.
Once they recognized that they were understaffed (even for four hard-working founders) they went on a hiring spree that ultimately fell short. That's because they weren't consciously hiring for cultural fit and skill--and a few of the wrong people came on board.
They learned that hiring only college graduates--lots of potential, but little experience--didn't work. Hiring managers in their 40s without proper screenings for cultural fit didn't work, either.
People and process are the key ingredient from turning an entrepreneurial organization into a professionally managed growth company. A great resource and framework to follow is the Pyramid of Organizational Development model developed by Eric Flamholtz and Yvonne Randle in their book Growing Pains.
When you find a marketing tactic that works, beat it to death.
The Tayroc team started out four years ago with a focused effort on building an audience and driving conversions through relevant branded content they promoted on other Instagram pages. At the time, very few brands were doing this, so they found a high conversion rate and low cost, and stayed with it before the rest of the competition began copying the strategy and diminishing the return.
The lesson here is simple. If you find out something actually works disproportionately well during your testing of various channels, then double and triple down on it until it stops working as well. A big reason they are now able to leverage a combined Facebook and Instagram following of 900,000 is because they didn't question the early returns and just kept building.
Now they have enough of a following to shift their strategy. They can reach out to other large influencers with a base core credibility and deep engagement to expand their reach, conversions, and database further with select larger scale affiliates.
Pricing is important as you scale distribution.
The group's early direct-to-consumer success was built around one pricing strategy, but when the first major retail distribution deal came knocking a couple of years ago, their initial excitement turned into dismay. They had to refuse the offer because their pricing model didn't allow for enough margin to justify the opportunity.
On the future collections, the four founders factored in a new (still accessible) pricing strategy that allowed for a wholesale model to work for all sides and maintain the brand promise to the customer.
The founders also say they learned quickly that profit could not be the only justification to retail partnerships. Some of their early deals intentionally breached their agreements--they could take less margin on higher volume by diverting the product they purchased from Tayroc for geographic-based retail sales through online marketplace stores (where they had set up third-party seller accounts).
This is a common problem faced by products and brands--and one that's dilutive to customer experience and brand equity. The Tayroc team has a more rigorous vetting process in place now for the multitude of wholesaler requests to prevent this unintended consequence. And if you're facing the same problem, that's what you should do, too.