Sandra Oh Lin's career had zigzagged enough times for her to know that at some point it would probably take another major detour. Armed with a degree in chemical engineering, the Harvard MBA got her first job at Proctor & Gamble, before spending most of her career at startups, such as eBay. In 2010, by the time her two kids were 3 and 5, she was running eBay's $2 billion fashion business.
Still an engineer at heart, when Lin wasn't at the office, she'd often arrange elaborate crafting projects and science experiments for her kids. She loved what they were creating, but realized sourcing all the materials was a drag. Once she invited friends to join, her new calling became clear: "You should start a business!" they implored Lin.
After equal parts soul-searching and market research to determine whether it might be a viable company, in 2011 Lin launched KiwiCo, the company behind Kiwi Crate, a subscription STEM crafts, arts, and projects box for kids. (Disclosure: I recorded a commercial for KiwiCo, which advertises on the Inc. Uncensored podcast.) Eight years later, the company has defied the odds of subscription-box mania. After raising a mere $10 million in venture capital in three small rounds, it quickly soared to profitability. In 2018, the Mountain View, California-based company sold almost $100 million in crates, and has been debt free and profitable for three years.
It turns out, Lin had stumbled onto a major pain point for parents who were busy but wanted to help educate their kids in science, technology, arts, and creative problem solving. If she could keep the costs contained while creating mind-opening, time-occupying projects, maybe it could work?
Today, KiwiCo, nestled amid the worker-hive of tech giants including Google, Siemens, and Semantec, has grown into a 100-person tinkering-parent's haven. The staff is more than 70 percent female, and about four times a week a troupe of tiny humans--ranging from toddlers to teens--comes to test the company's proposed new offerings. The largest team is product design, a wide-ranging crew of mechanical engineers, designers and artists, and NASA-veteran rocket scientists. They collectively put more than 1,000 hours into designing each crate, which includes finding parts that are lightweight (to keep shipping costs low), visually appealing (to kids), sturdy and safe (parents thank them), and easily made (again, costs).
While the company started with a single monthly kit, today it offers seven different lines that range from $16.95 and $19.95 per month, and mirror specific age groups. The first crate, for school-aged kids, has STEM-y projects to assemble, like a small circuit board that powers an instrument, or a trebuchet that, when pieced together as kid-friendly instructions dictate, will launch small balls into the air. There are two crates for older kids, ages 9 to 16-plus, who can choose between the Doodle Crate for artists or the Tinker Crate for engineers. Ages 6 to 11 can branch out to the Atlas Crate for world exploration. And there are now even crates for toddlers: babies can get the Tadpole, which contains things like color-matching exercises, and the Koala Crate for 3- and 4-year-olds has felt crafts that explore nature.
The company encourages parents to give feedback, which helped fuel Lin's broad expansion in 2014. In May of that year, she developed three new subscription boxes. It strained the company's product-development team nearly to its limit--and tore apart their year right through the holiday season. "It was a bit of madness," says Lin, whose production facility is linked to the Mountain View office. "But it was extremely helpful and a turning point for the business."
The timing, it turned out, was perfect. One of the new kits, the Tinker Crate, sold incredibly well. "It corresponded with that moment in the zeitgeist that STEM was really taking off," says Lin. From that point, the company leaned more heavily on its STEM focus--and also began to operate more nimbly and quickly. The other new offerings, the Koala Crate and Doodle Crate, sold out within a month.
Rather than dousing Instagram with paid ads, like many other direct to consumer e-commerce companies, KiwiCo largely relies on word-of-mouth.Lin credits her early subscribers with helping her land on ideal product lines and says that's translated to low customer-acquisition costs, with more than 25 percent of sales from families that get more than one different crate every month. "If you map our customer acquisition cost from 2011 to now, it looks very, very even," says Lin. "Our gross margins are continually improving, too."
With 65 percent growth last year--the company is on a hiring spree and shipped four million crates in 2018, having shipped a total of five million in all past years combined--and continuing to staff up, is KiwiCo eyeing an IPO? We don't have any specific plans, says Lin, pausing. "But we could."