Wharton Journal: What is Urban Cargo, and how did you come up with the idea?
Krishna Gullapalli: Urban Cargo is a service that helps men discover premium grooming products, such as shaving cream, face wash and hair gels, to help them step up their game. Each month, we send our customers a customized box of body care products for them to test in the comfort of their home. Our most popular product is our three month boot camp, where we do a complete overhaul of a customer’s grooming regime starting with shaving, then focusing on face, and ending with hair. We partner with best-in-class brands, such as Malin+Goetz, Kyoku, and Anthony, to ensure every product our customer gets is of the highest quality.
We came up with the idea after I was complaining to my co-founders about how my husband was stealing my very pink, very strongly rose-scented lotion. I knew then that if my husband, a 6 foot, self-proclaimed “guy’s guy”, was desperate enough to use my products that men were clearly interested in this category. I had worked with my co-founders on Coach’s men business prior to business school, so we were already familiar with the details of how to build a men’s brand. Plus, between my obsession with hair and my co-founders’ obsession with skincare, we knew it was the perfect mix of business and passion.
WJ: How did you get the business off the ground? Did you bootstrap? Work with Angels?
KG: We have been completely bootstrapped, so we are very familiar with the term “lean start-up”. We knew from the get-go that we had to be smart about how we were going to invest our money, as we’ve all left our jobs (and school) to work on this venture full-time. We constantly have to prioritize what’s most important and make sure we’re getting the most out of each dollar.
In particular, we made a decision early on not to invest too much into our website. We always ask ourselves, “Is this going to be the make or break factor for a customer” before we spend any more dollars on our website. Given that none of us are tech experts ourselves, it’s been a challenge, but we’ve picked up a lot more coding than we could’ve imagined over the last three months in order to fix these problems ourselves!
WJ: Subscription e-commerce has exploded in popularity in the past year (Birchbox, Manpacks, Lollihop, etc.) but some observers worry that consumers may begin to suffer from “subscription fatigue.” How do you counter this concern?
KG: Most of our customers are not aware of subscription services. It’s a different issue when you’re talking to the Tech Crunch reader, but the truth is that people outside of the start-up community are still unfamiliar with subscription. In fact, we spend most of our time with customers explaining the concept more than anything else.
Additionally, unlike traditional mail, with all the spam and bills, we’re really a bright spot in their day. It’s a gift that arrives at their door every month, and our customers are excited for the surprise they get with each package. Our customers say it best: “When the Urban Cargo package arrived today, my girlfriend called to ask when I’d gotten so fancy. She was quite in a state of shock!”
WJ: ShoeDazzle raised a whopping $40M Series C from Andreessen Horowitz back in May of 2011. Is the funding environment for subscription e-commerce still robust, or has the wave of new entrants into the space caused things to cool off a bit?
KG: We’ve gotten some great investor interest and have found that investors are still excited to hear about subscription companies. It’s great from their perspective, because the model allows you to generate profit from day one. However, the flipside is that we have the challenge of explaining of how we’re different from all the other subscription services out there as they get approached by competitors all the time. Ultimately, we’ve gotten a really warm reception out of investors and even have a great advisor from NEA who helps us think through our model.
WJ: Switching gears a bit. Tell us about your experience building Urban Cargo. What have been some of the major challenges you’ve encountered?
KG: Where do I even begin? We’re constantly facing challenges in our business, whether it be staying ahead of competitors or resolving a tech error that popped up. Depending on when you ask this question, there’s a different answer. Currently, our biggest challenge is how to grow while operating the business. With the day-to-day operations sucking up a lot of our time, we find it challenging to take the time to speak with investors, throw the marketing events we’ve got planned for customer acquisition, and take the time to sit back and reflect on our consumer data. We’re getting better at increasing our efficiency, but still trying to strike that balance!
WJ: What do you find most satisfying about owning and operating your own business?
KG: It’s incredibly rewarding to be building a business from the ground up and to get customers, whom you’ve never met and quite frankly live in parts of the world that you’ve never even heard of, that are giving you feedback about how they love your product and can’t wait for more. There’s a sense of confidence and pride to know that you’re helping people, even if it’s with something as trivial as grooming, and that you’ve managed to make people smile off of the blood, sweat and tears you’ve put into each individual box.
WJ: Any final words of wisdom for aspiring Wharton entrepreneurs?
KG: Just do it! There’s never going to be that perfect moment. It’s always more complex than you can plan for, but you learn a lot more by doing it than by reading about it. And make sure to surround yourself with people that expect you to build nothing short of Amazon and hopefully one day they’ll convince you that you can!