SaaS Interviews with CEOs, Startups, Founders
EP 377: 6M Shoes Designed, $24M Raised, By Customer Shoe Maker Shoesofprey.com
05 Aug 2016
Chapter 1: What is Shoes of Prey and how does it work?
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Chapter 2: What inspired the creation of Shoes of Prey?
Top Tribe, this is episode 377. Coming up tomorrow morning, bright and early, you'll hear from Peter Voogd. He's a $750,000 info marketer who has sold 130,000 books. Top of tribe. Good morning. Our guest today is Jody Fox, and she's the co-founder and chief creative officer at ShoesOfPrey.com, the world's first website where women can design their own shoes.
Started in 2009, Shoes of Prey broke even at two months, hit multimillion dollar revenue in under two years, and today is a global multimillion dollar enterprise with stores
in david jones nordstrom and 24.6 million usd in funding to date jody are you ready to take us to the top yeah let's do it let's have some fun right with your shoes shoes and all so so first things first tell us what shoes of prey is and how do you generate revenue okay so shoes of prey is a place where women can design their own shoes
We started as a pure play just at the, obviously just the website. And then we moved to offline retail. Um, so yeah, we make our money by making shoes for women.
I love it. And I'm on the website right now. And it's like, your guys is kind of header background images. It's like these women that look so happy in their shoes.
I love it.
I love it. Okay. So, um, help people understand, uh, they might not understand what you mean when you say pure play. So when you say you started as pure play, what it tells people what that means.
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Chapter 3: How does customization work for shoes at Shoes of Prey?
Yeah, PurePlay means that we were only online. So, you know, I mean, for us, I mean, it was the easiest way to get something out there, test it, see if it worked. And honestly, I think we always thought we'd only be a website, but we would interview and survey and look for feedback from our customers. And the key piece of feedback we always got was what will my shoes look like in real life?
And we came to realize that it wasn't necessarily that she wanted us to make the shoes in advance for her because that wouldn't fit with our business model. But actually, she wanted to try a pair of shoes on. She wanted to touch the materials, see what they look like together. And, you know, I mean, women just started turning up at our headquarters and saying, oh, I'm so sorry.
I'm just here on holidays and I wanted to see some shoes. And then the penny dropped for us. Oh, right. They just they need a physical presence to be able to see the shoes. So we started opening offline stores. Our first one was January 2013.
Chapter 4: What challenges did Shoes of Prey face in its early years?
And we made the store an experience. So, you know, you walked in and there were sculptures built out of shoes. Every surface was something that we made our shoes from. So it was truly an experience. You know, we even had a bespoke fragrance and, you know, soundtrack going through the store. But the store did double its forecasted revenue in the first 12 months and went on to win.
What was the cost?
Oh, of building that store?
Yeah.
So I'm not actually able to disclose that and it will depend on place to place and the complexity of it as well. You can also negotiate with retailers to contribute to your store build costs as well.
Like a build out cost on a lease signing or something.
Yeah, yeah. So there's lots of ways that you can structure it. So yeah, the store itself, we went to the World Retail Awards and up against Karl Lagerfeld.
on the world retail award for the world's best store design that is amazing congratulations so starting your launch year on this was which year sorry what year did you launch oh 2009 2009 okay good and what what was the uh you said funding to date as of june 2016 is how much
24.6 million US dollars.
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Chapter 5: How did Shoes of Prey secure $24 million in funding?
Oh, so... Look, every single pair is custom made. So the, even when people go to the gallery, that usually they'll pick a pair of shoes, but they'll always tweak it. So it's, yeah. So they're just, the gallery that you're looking at is, you know, sort of a set of inspirational suggestions that, you know, we've sort of made or seen and thought were absolutely beautiful.
So there's not really, there's no wholesale part to sitting with the business at all.
So like when I, now obviously I'm trying to be as feminine as possible and put myself in a feminine mind here, but there is a $189 black kind of shiny shoe. I guess you'd call this like a stiletto. When I click it to add it, it's called the Black Patent Heels. And it says designed by Annabelle. Tell me what that means. Is that a crowdsourced design?
Sure. So actually Annabelle is our merchandiser. And so that one happens to be a design that she's put together.
Chapter 6: Who are the major competitors of Shoes of Prey?
But as you click through the shoes, you'll see different names come up and that's attributing to who it was that actually created that design. So yeah, so you can, and it's kind of a fun way. You can also share the designs with your friends and things like that too. So it sort of becomes quite social and fun.
It becomes a place, and we've seen that it's become a place where women just love to celebrate. They really care what brand you want to talk about. Just come celebrate shoes with us.
So where do I, where am I customizing this? I see a big add to cart button. Where's the customization happen?
Okay, so can you see the edit button as well? Yeah, so you hit the edit button. Now this is only if you want to start with sort of something that is suggested to you.
You can start with a totally white canvas as well. Oh my gosh, this is a crazy amount of options.
Holy mackerel. Yeah, so as you can see, you click on If you click on the shoe and then hold the click down and go side to side, you can rotate the shoe. You can also click on any part of the shoe and then go over to the materials palette and color it in effectively. Oh my gosh. Okay, wait, I have a question, Jodi.
How do you prevent, because my last company, Heyo, was a drag and drop website builder, right? And we were like, yep, of course people want all the custom, like they want to customize everything. And the big problem we had was people designed crap. They look so disgusting. How do you prevent people from designing disgusting looking shoes?
Well, I guess the thing about shoes of prey is that, you know, beauty is in the eye of the beholder.
Well said.
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Chapter 7: What marketing strategies drive customer acquisition for Shoes of Prey?
Do you measure how much time people spend on the editing per purchase?
Oh God. Yeah. So look, they can either, it depends on your personality. So some people will come in and they'll, they'll be like, yep, yep, done. And that's the person who I think who's come to the site kind of knowing what they're looking for and they can't, they haven't been able to find it.
And speaking of which the whole name of the website, Shoes of Prey, it's the whole idea that the shoes are your prey and you're a hunter kind of hunting around for, so you'll get everything there. Then we have the ones who kind of, you know, they might visit three or four times and,
you know end up designing 15 pairs of shoes before they pick one that they're really excited about so it really is kind of a personality thing I'd say the majority of people though are in the early interesting okay so on this on let's let's get into kind of how you guys actually are making money from this so black patent heels it's 189 plus 365 day return or remake on that 189 what break down the margins there how do you make money from that
Okay, well, I mean, you know, we've built out our cost of goods sold. We actually have our own factory. So we built that because we couldn't find anyone else who would make one pair of shoes at a time at scale with us. And we were growing too quickly and not stripping our suppliers.
What are your cost of goods sold on a $189 product?
Oh, I would love to tell you, but that would be giving away too many secrets. And I totally respect you for asking because I think that's a pretty interesting thing to give away. Jodi, is it industry?
I mean, for people that know nothing about shoes, what's industry standard?
Sure, okay, okay. So industry standard would be at least like double the cogs.
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Chapter 8: What advice does Jodie Fox have for aspiring entrepreneurs?
Okay. So on a $200 shoe, a hundred is usually cost of goods sold.
Well, it actually depends on the shoe. So, I mean, 50 would be a minimum actually. Um, a lot of shoes are, you know, like, yeah, even more than that. A lot of shoes are kind of 75%. And, um, yeah. So our, our margins are not as big as usual shoes because usual shoes are whole are like made in a,
um they're mass-produced and so they cost a lot less and they're customized right so so it's fair to say that you're somewhere above 50 percent in terms of cost of goods sold literally more um it depends on how we're structured at the time but i mean sorry it was big enough for you where it deemed a pretty significant capital investment to build your own factory say it like that.
How about that? Yeah. So I think that, well, I mean, I guess the thinking about why people would invest. Yeah. You've got to show that you can grow and all that kind of stuff. But I mean, they also give you the money to throw it at stuff and spend it to see if you can grow faster.
So, you know, I mean, we're not, we're not necessarily, you know, looking to make a profit so far, but we are in a healthy cash position.
Okay. So let's go back to kind of a macro level. What, since you launched, how many total pairs of shoes have you sold? Oh come on Jody, millions or tens of millions or a thousand or what?
Well I can tell you that we've had more than six million pairs of shoes designed with us. That's designed though, I'm not gonna give you the number of shoes.
So is it a fair assumption to say that some people design it and never buy? Okay got it, it was either that way or there's six million designs but people buy three of the same design so it's actually more than six million.
Sometimes they do.
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