SaaS Interviews with CEOs, Startups, Founders
EP 603: Velasca Has Sold 20,000 Italian Shoes to 15,000 Men, $1.6m 2016 Revenue, $750k Raised with CEO Enrico Casati
19 Mar 2017
Chapter 1: What is the main topic discussed in this episode?
This is The Top, where I interview entrepreneurs who are number one or number two in their industry in terms of revenue or customer base.
Chapter 2: What is Velasca and how did it start?
You'll learn how much revenue they're making, what their marketing funnel looks like, and how many customers they have.
Chapter 3: How did Enrico fund Velasca initially?
I'm now at $20,000 per top. Five and six million. He is hell-bent on global domination. We just broke our 100,000-unit soul mark. And I'm your host, Nathan Latka. Okay, Top Tribe, this week's winner is Charlie Daggs, okay? He was a middle manager at a manufacturing company. He wants to break free and he won the $100 I give out every Monday.
Chapter 4: What challenges did Enrico face when starting Velasca?
For your chance to win, simply subscribe to the podcast on iTunes right now and then text the word Nathan to 33444 to prove that you did it. Folks, many of you reach out to me and you say, Nathan, so many guests on your show talk about the importance of batching. But whenever I try and batch, you tell me this. You go, Nathan, they don't book back-to-back times.
Or they don't show up after they book. It's frustrating. The answer is, guys, you have to use smart tools. I use a tool called Acuity Scheduling at NathanLatka.com forward slash schedule. I'll tell you specifically how I use it later on in the episode. Nathan Latka here. This is episode 603. And coming up tomorrow morning, we hear from the 43-year-old CEO and father of one, Andy Lerling.
His company, which is an accelerator, is called Lumo. It invests $150,000 in companies like Vree to give you full-body virtual reality experiences. It's really, really impressive.
Chapter 5: How does Velasca price its products compared to competitors?
You want to tune in to hear how they give you that full-body virtual reality experience. Good morning, everybody. Nathan Latke here. Our guest today is Enrico Casati. His company is called Velasca, which he is the co-founder and CEO. We're going to jump into it today based in Milan, Italy. Enrico, are you ready to take us to the top? Absolutely. Very good. Hello. Hello.
So first, tell us what Velasca does and how you generate revenue.
Absolutely. Velasca is an online brand focused on handcrafted shoes. We're based in Italy.
Chapter 6: What marketing strategies does Velasca employ for growth?
We produce our shoes in Italy. And basically, we are part of the new direct-to-consumer brands that cut down the intermediation of the supply chain and offer high-quality products at affordable prices through the web.
And what did you... Have you self-funded this or have you raised capital?
Absolutely.
We self-funded it at the beginning and we've just recently had a VC investment. Small one, but consider that Italy is a bit different from the US or other European countries. We had 750,000 euros in a VC round, which is considered like a series A here, but it's probably like a seed investment in the US. Okay. But we are ready to scale with this new financing.
So you raised 750,000 euros? Yes. Yeah, exactly. And was that a convertible note or an equity round?
It was actually an equity round. Convertibles are a bit more rare here and a bit more complex.
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Chapter 7: What are the sales figures and growth goals for Velasca?
Got it. All right. Tell us about the product. So first off, what got you into this space? Is your family kind of shoemakers? Is it in your blood? How'd you get into it?
It grew on me, the shoemaking part. I do not come from a family of shoemakers, even though my dad is an entrepreneur in the textile industry. So it all started with the personal need of finding high-quality, well-designed shoes while I was living in Singapore back in 2012.
And, I mean, I jumped on the opportunity both for the personal lead and for the fact that I wanted a change in my professional career. I was a banking analyst at the time. I knew that it wasn't for me. I'm 29 now, and I was 25 at the time, four years ago. And started from there, and we made a lot of mistakes because we started very naively with our own money and with a massive project.
Chapter 8: How does customer retention impact Velasca's business model?
But through trials and error, here we are.
I love it. Well, okay, so let's jump into one of the products. So I'm looking at right now the Artista. It's the ankle boot. Did I pronounce that correctly? Very correctly. Yes. I feel so Italian now. Artista. So the model is ankle boots. The color is kind of a dark chocolate brown. It's suede leather. Winter Vibram rubber is what the sole is made out of. What do you retail?
What do you sell this for?
It sells for 179 euros, which is around like, what is it? 185 US dollars. Yep. Something like that. It's, it's a product that, you know, comparable product would go for 350 or 400.
We are basically what we're saying, like without mentioning brand names on the website, what we're saying is that if you used to buy an Allen Edmonds or church, you're getting the same product, sometimes even a better quality product, because I know like we source the materials from the same suppliers or even a higher quality materials from other suppliers and you're getting it at half the price.
It's like Allen Edmonds, right? Allen Edmonds, yeah. That's only possible because there is no wholesale margin and retail markup. We only have one link from the artisanal workshops we work with and the final consumer.
And so on this particular product, the Artista, it's $195 on the website. What does it cost you to make?
It's around 80 euros. It depends if we pay like right at the delivery or if we try to extend it for a 60 day payment. But it's around 80 euros. So it would be like 2.4. Yeah, exactly. 2.4. is the markup, which is traditionally what, you know, retail shops apply to the price that brands sell the goods for. But brands also apply their own markup.
So at the very least, usually you get a two times markup from the brand plus a 2.4, 2.5 from the retail. So we're basically skipping at least one passage. And that's just If you consider like the normal distribution, it can get longer than that. For example, like shoemaking companies sell into distributors in Japan and sell through agents in Japan.
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