Sharon Schneider and her sister started Moxie Jean to help busy families buy and sell high quality, gently used kid's clothing. Kids grow quickly (faster that they can wear out their Carter's) and with an e-commerce trend on platforms facilitating resale or consignment, it was not surprising that Sharon's idea took off. Her e-commerce startup went through one of the most prestigious tech accelerators in the country (Techstars), raised two rounds of investment, won a bunch of awards and eventually was acquired last year. For Sharon, it was an incredible education (her small team did almost everything - customer acquisition, marketing and social media) and an experience she is putting to new use: growing local businesses in Chicago.
Sharon's new venture is AIM Local. AIM Local creates themed, gift-ready boxes that feature the best artists, makers and entrepreneurs in Chicago. Consumers can buy a single box or subscribe to get a monthly collection of new "local" finds. Each box also comes with 2 free tickets to that month's "Meet the Makers" event so the purchaser can pick up their monthly box in person while getting to know Chicago's creative community.
After receiving an update email from Sharon on her new venture, I needed to know more-what's the small business problem she's solving and why she's venturing again into being a startup herself.
You sold your startup Moxie Jean, how did you find yourself working with local entrepreneurs, makers and artisans?
I have been mentoring other entrepreneurs for years now, mostly informally and through the group I helped launch, Women Tech Founders. After Moxie Jean was acquired, I was introduced to a nonprofit that runs a year-long acceleration program for small businesses on the west and south side of Chicago. I loved the idea of applying the lessons I had learned at Moxie Jean and become their Entrepreneur in Residence.
What startup lessons were you able to apply to local, small-batch makers?
We ran Moxie Jean using a "lean startup" methodology, which is all about identifying your assumptions, finding ways to test them, gathering data and making adjustments to your product and your marketing based on what works. The lean startup mind-set is just as valuable for a small business (maybe more valuable, because they have less cash to burn than an investor-backed startup).
Any success stories to share on how, apply your start-up experience has helped a small business?
One challenge for every company is making sure there is a fit between your product and the market you are trying to sell it to. If you are set on your product staying exactly as it is, you might have to experiment to find the right people who want to buy it. On the other hand, if you want to reach a certain group of people, you might have to adjust your product to be what they really want. One of the companies I worked with got feedback from a potential distributor that their product wasn't "mainstream" enough, although the entrepreneur thought it was. But when we looked at the packaging and product description together, we were able to see how the positioning felt very niche and that we could make some simple changes to better appeal to a mass audience.
Do you approach your new venture differently now that you've worked with small business owners?
Yes, I am trying to build as many benefits for the small business owners into the box as I can. They are providing items to go into the box at cost, but I don't want to suck all the value out for myself-providing items at cost is essentially subsidizing all the benefits I am able to provide back to them. So I'm creating a profile card on each entrepreneur that is designed to lead AIM Local subscribers back to them directly if they love the products and want to find more. They get to participate in the Meet the Makers pop-up with a strong target audience without paying anything additional.
I'm also spending time with them to develop their marketing offers and any other area of their business they would like to work on. We're sending a wonderful photographer to take their profile and product photos, so they have access to a great rate to get that done. They also get connected to each other as a source of ideas and support. I'll continue trying to add benefits as they tell me what they need and want.
How is AIM Local different from other subscription gift boxes?
I think that on the surface, we may feel similar with the twist that our collections are supporting local businesses. But underneath, my real "customers" are the small businesses that participate. My definition of success is not measured by my personal net worth, but by the prosperity of the small businesses in every neighborhood in the Chicago, but particularly the south and west side.
The national entrepreneurship story is often one focusing on technology starts and unicorns, why is spotlighting local makers and community efforts important?
Rocket-fast growth is exciting for writing articles, but stable and steady is what builds families and neighborhoods. Small business owners also own their homes, they invest in their neighborhoods, they sponsor the Little League teams, they provide jobs in the neighborhood that don't require a long commute, which can make a big difference for low-income residents. According to the 3/50 Project, for every $100 spent at a local business, $68 stays local, compared to just $43 for a national chain. It doesn't help North Lawndale to have a franchise on every corner with minimum wage jobs-communities need business owners who live there and pay taxes there and hire accountants and buy office supplies there.
From your Techstars and Moxie Jean experience, what are marketing tips local businesses can implement today?
1) Don't spend significant money on something new until you've figured out how to really make it work.
One of the small businesses I was working with had people coming in the store but they weren't buying as much as he hoped. His first instinct was to have a designer create a postcard with a discount coupon and get a bunch printed. But I saw he had a dry-erase board in the corner, so I told him "Write your offer on the dry erase board. 2 days, 2 different offers. Keep track of sales per visitor on each day, and see which offer performs better. Congratulations, you just did your first A/B test."
2) Make sure you aren't giving away your profit margin.
One company I worked with was running a daily deal where they offered a $40 product for $30. The daily deal site was running Google ads on her business name (and guess who ranks highest in SEO?), so now the effective price of the product for anyone online was $30. And of that $30-the daily deal site kept 50% - so she only actually received $15. I encouraged her to shut off the daily deal and run some targeted Facebook ads instead. Now she's selling the same product for $35 (offering a $5 Facebook coupon) with a $3 spend on Facebook for each new customer.
3) Build YOUR assets, not Facebook's.
Facebook has become a 100% pay to play service. 95% of your fans will not see your content unless you pay to boost posts and run ads. One entrepreneur noticed people would comment and tag others on their boosted post like "let's go here together!" but then didn't actually show up. Instead of continually re-boosting the same ads, as she had been doing, we changed the ad to offer a first purchase discount when they sign up for her mailing list. That way, interested folks get on your mailing list and you can send them emails afterward-without having to pay Facebook each time.