Product Startup Podcast Episode 052: The Business Model Behind Custom Window Coverings

00:00:00 Filip Valica: Hey, everyone. Welcome to the Product Startup Podcast, a podcast that helps bring your product idea to life by chatting with successful inventors, product designers, and other industry professionals. This podcast is run by Mako Design and Invent, and hosted by Filip Valica.

00:00:13 Filip Valica: Our goal here is to get to the bottom of what makes a product successful, from initial idea to putting your product on the shelf. We're taking you step by step to build a functional product and scale your product business. Now onto the show.

00:00:26 Filip Valica: The Product Startup, Episode 52. Alice Orozco talks about selling made-to-order draper. Please online via Pret-a-Portiere.

00:00:34 Filip Valica: Hi, everyone, and welcome to the Product Start a podcast where we talk about turning ideas into successful products step by step. I'm Filip Valica, and thanks for listening today. In the last episode, Samantha and Elaine of Midas Cup talked about creating an all-natural

00:00:49 Filip Valica: alternative to coffee, so make sure to check out episode 51 if you want to hear more about creating a food product and getting it into local stores. So let's jump right into our interview today.

00:01:00 Filip Valica: Hi, Alice. Thanks for coming on the show today. Yeah, no problem. So I'm really excited to have you on because I was interested in your story because you mentioned early on that you had a hard time

00:01:11 Filip Valica: getting started and I know a lot of the people listening are the same way. They have a problem just taking that first step. You know, they get trapped in their head or, you know, maybe even find it difficult to kind of go out there and test the product and see if they've got a market for

00:01:26 Filip Valica: it. So I was hoping maybe you can talk about how you got started and why you got the idea to create your products. Yeah, yeah, absolutely. So I started the company purely out of my passion

00:01:38 Filip Valica: for interior textiles. I had been out of the industry for three years at the time. I was working

00:01:46 Filip Valica: for an association helping women in ICT and biotech. And I worked out of a startup incubator.

00:01:55 Filip Valica: this is where I developed a strong appreciation for entrepreneurship and also I reflected a lot of my

00:02:04 Filip Valica: own background growing up amongst like a very entrepreneurial mother and so taking all these experiences and watching and learning from these startups I was very eager to restart my drapery

00:02:18 Filip Valica: business and do it in a way that is streamlined,

00:02:23 Filip Valica: automated and create a opportunity for scaling and high growth, which is very difficult to do with custom soft furnishings as I discovered. However,

00:02:36 Filip Valica: after like much trial and error, I have finally cracked the code or

00:02:41 Alice Orozco: business model, if you like. So talk about that a little bit. When you first got started,

00:02:46 Filip Valica: you mentioned that you bootstrapped the business. What does that mean? I actually sat on the idea probably for about two years.

00:02:55 Filip Valica: And I had all the funding to start my company and then life happened and I was pregnant and I couldn't, I just, I didn't have the money, but I knew I wanted to start this business and I didn't

00:03:09 Filip Valica: want to wait any longer. So I was actually five months pregnant when I started it and I literally

00:03:18 Filip Valica: started with no money. It took a lot of work, probably about a year. from that point. So we launched a year after that. But yeah, it took a lot of work, a lot of ground

00:03:32 Filip Valica: work, a lot of research,

00:03:35 Alice Orozco: and a lot of negotiating with suppliers as well. Yes, let's take it even a step further before that. Sometimes people say that, oh, you know what, I've had this idea and I want to turn it into a product. I don't know how to get started. Talk about your process a little bit. When

00:03:49 Filip Valica: you had this idea to do some of these custom furnishings, was that what you started with? I had a business selling custom curtains, which I started when I was about 16 years old, and I did that for three years.

00:04:04 Filip Valica: I didn't realize at the time, but I was actually very successful and I never really appreciated everything that I had accomplished in that three-year period.

00:04:16 Filip Valica: However, that business, it failed in a sense because I had no accounting experience at all, no business experience. I actually stopped doing that business and I went and I studied a degree and whatnot.

00:04:31 Filip Valica: But like I said, I was out of the industry for quite some time and one of the things that I loved was textiles.

00:04:41 Filip Valica: And now working in that industry already, you know, I mainly worked with a lot of high profile clients. I worked, you know, with very upmarket customers.

00:04:53 Filip Valica: And I was selling draperies that were just ridiculously priced. And always in the back of my mind, I just thought, look, there has to be another way.

00:05:04 Filip Valica: There has to be a way to be able to give this sort of quality product to a larger group of people.

00:05:13 Filip Valica: And that's something that I sat on for quite some time, just sort of thinking about it, trying to develop some strategies around that until I finally was able to do that. And that's when I

00:05:28 Alice Orozco: decided I needed to start this business. Yeah. And when people usually go through that process, I think they sometimes produce maybe a limited run of products and they go out there and sell

00:05:39 Alice Orozco: them or they go and talk to some people face to face or they set up a table and ask people's opinions. How did you do that to make sure that there was a market for it? I mean, obviously

00:05:49 Filip Valica: you worked in that industry for a bit before, so you understood the market really well. Yes, yes. I did actually do a feasibility study, you know, which took me about six months

00:06:02 Filip Valica: to complete. And I did a lot of intensive research, you know, not only in the industry, but on the kind of customers that I was going to be targeting. You know, it was very obvious

00:06:14 Filip Valica: to me. Like, I don't know what it's like over there, but in Australia, we do a lot of lot of new builds,

00:06:21 Filip Valica: you know, apartments,

00:06:23 Filip Valica: homes and yeah, renovation is a big thing here as well. So it was very obvious to me that it's quite a large enough market for me to get into and it was very feasible.

00:06:37 Filip Valica: In terms of speaking to people, I didn't really do a lot of that only because I had already been in over 200 homes, previously helping them with their window furnishings. I knew what

00:06:51 Filip Valica: people wanted. I knew what kind of products they would buy. So putting the right product in front of them was very easy for me based on my experience in the past. You mean as an interior designer? Yeah, yeah.

00:07:06 Filip Valica: Exactly. I knew exactly what kind of product they would go for. So because like I said, I was bootstrapping it, I couldn't offer everything. At the start, I was. At the start,

00:07:16 Filip Valica: I only had, I think about 10 products, which I selected based on my experience of what people generally bought. And with, look, with curtains, it's like people generally go for those neutral colors.

00:07:30 Filip Valica: It was very, very easy for me to pick the product. But having said that if I didn't have that experience, I think it would have been very wise for me to go out and get that research face to face with other people.

00:07:44 Alice Orozco: because otherwise I would have put the wrong product in front of the wrong people, and it would have been a very costly mistake. Yeah, and that's a good point that you bring up about, you know, using your past experience as an advantage.

00:07:56 Alice Orozco: And I think a lot of people don't do that as they come into a new space and maybe they don't apply what they've learned before just because it's, you know,

00:08:04 Alice Orozco: maybe they don't think about it. But it's interesting that you were able to do that with your work. Can you talk a little bit about how you're able to push through, you know, the challenges of competing. some of these larger companies, you know, whenever we think about creating a product, you see a gap in

00:08:19 Alice Orozco: the market and you feel like you can fill it, but then at the same time, a lot of the markets are dominated by these conglomerates that have a lot more purchasing power, a lot larger budget

00:08:29 Filip Valica: for marketing and advertising. What made you think that you could compete with them? This industry here where I'm based, it's very fragmented. So you either have, you know,

00:08:41 Filip Valica: people, you know, just sewing window furnishings out of home, or you've got your much larger retailers and then in between you've got your interior designers. For me, it was very clear,

00:08:54 Filip Valica: like I said, because I saw a lot of web startups. It was very clear for me that I needed to be

00:09:00 Filip Valica: online. And so that was a big plus for me. Just being able to identify the fact that Australia needs an online retailer of window furnishings or custom window furnishings.

00:09:15 Filip Valica: And another thing also was the fact that you either have your budget cheap product or your very expensive product out there. I wanted to be in between.

00:09:29 Filip Valica: And yeah, like, you know, I just understand the market. I know what it's like. I know what's out there. I have done a lot of research on, you know, the publicly listed company.

00:09:40 Filip Valica: in my industry and a lot of the smaller retailers that are out there as well. Also wholesalers, I actually worked with them. So through my previous business, I did outsource to a lot of them.

00:09:53 Filip Valica: So I understood how they worked and who their customer base were. Yeah. And look, I even reached out to a lot of other suppliers. And, you know, people were generally pretty happy to help.

00:10:06 Filip Valica: You know, I'd say to them, look, I want to get into this industry. I just basically would to pick your brain a bit. And I found, yeah, generally everybody was really happy to help and give some advice.

00:10:18 Filip Valica: But look, majority of the people in my industry are a lot older. They don't. They're not very web savvy or internet savvy, unfortunately. Fortunately for you? Yeah, at the time.

00:10:31 Filip Valica: You know, since I started, there's been more people here in Australia, you know, putting their business online.

00:10:38 Filip Valica: trying to sell custom furnishings online. Like, I love, like, I'm a big user of online-based apps and, you know, SaaS-based products and whatnot. Like, I've got a big vision. Like, you know, where my business is

00:10:53 Filip Valica: at now,

00:10:55 Alice Orozco: my vision is a lot larger than that. So I kind of feel like I'm one step ahead each time or each year as I go by it. Yeah, and I appreciate you sharing how you differentiated your business

00:11:06 Alice Orozco: because I think a lot of people step into it and think that they have to compete on price. And in reality, what you were doing is, yeah, you were making your business more accessible by focusing on, you know, the online market and people being able to get custom tailored,

00:11:21 Alice Orozco: you know, furnishings, you know, direct to their door pretty much. And you also dominated the middle area where, like you said, there wasn't anybody in that space. You either had really expensive products or, you know, something on the cheaper end.

00:11:34 Alice Orozco: And that's really something important to know. in almost any market is that there's probably going to be gaps that aren't being filled right now and you need to make sure that you're well positioned for that. And it's not that you just saw

00:11:45 Filip Valica: the gaps. You also recognize that your skill set was for doing the online stuff that other people weren't doing. Yeah, that's right. But look, having said that, it took me while to get to that

00:11:57 Filip Valica: point, to be honest. So when I started, that was the idea that I had. But I didn't know how to get there. I didn't know how to get online, how to make it work.

00:12:08 Filip Valica: And another big element for me was getting the right business model. You know, with this industry, even though, you know, your products are very expensive, profit margins are actually very low.

00:12:23 Filip Valica: So that was something I sat on for a long time and I tried to strategize around it. You know, how can I have a product that,

00:12:34 Filip Valica: that is at the right price, but that I'm also going to be a high gross company and I'm

00:12:40 Alice Orozco: going to be able to make some money. So that was a big challenge and it took a few different business models before I could get it right. I appreciate you sharing that because a few of the guests that we've had on the show

00:12:54 Alice Orozco: and make it sound like it's a straight line to go from, you know, from the concept to dream, realized, right? And I know that's not the case just personally. as an engineer, I know that we iterate our designs constantly.

00:13:07 Filip Valica: You're constantly, it's almost a guess and check where you're going out there, you're testing the market, seeing if it works, growing it, if it does, or scaling back if it doesn't and changing or pivoting to a different audience. And it's almost like you have to do that constantly.

00:13:21 Filip Valica: It's constant, yeah. You know, just being able to adapt, being able to change. And for me, it's been a lot about perseverance as well. You know, there were times.

00:13:34 Filip Valica: when, you know, certain business wouldn't work. I kept at it and it got to the point where it

00:13:39 Alice Orozco: was like, look, I need to change this model or I need to quit. And look, I was just never prepared

00:13:47 Alice Orozco: to quit. So I never quit, basically, and that's just a personal characteristic of mine, but it's paid off. You know, and knowing when to quit is so difficult because sometimes the answer is

00:14:00 Alice Orozco: that you need to quit because maybe you've picked a, you know, a market that's too saturated.

00:14:04 Filip Valica: or the audience and product fit isn't right. So maybe you can talk a little bit about the business models that you chose that didn't quite work out. Can you mention some of those and maybe why they didn't work for you? Sure, sure.

00:14:18 Filip Valica: Well, initially, look, my idea was to just have ready-made high-quality product. Like a lot of the ready-made that are out there, probably not where you're at,

00:14:31 Filip Valica: but here in Australia is just really tacky, cheap. ready-made curtains.

00:14:36 Filip Valica: And so I thought, you know what, I'll have a ready-made product with all the custom or bespoke standards. And my idea was just that.

00:14:47 Filip Valica: However, I didn't have the big buyers. I didn't have enough buyers for that. I needed to have some cash flow. So I got into custom-made again.

00:14:58 Filip Valica: but then I was sucked into doing it the traditional way of selling custom-made curtains where you visit the clients, you do a free measuring quote, and I did that for about a year

00:15:12 Filip Valica: and it just wasn't working for me, you know, like I said, the margins in that industry are very low and, you know, I had, my son was still a baby, I just, I couldn't do it.

00:15:25 Filip Valica: As a mother, it was too difficult, you know, to work. 50, 70 hours a week for very little return. And so I went back to my original idea of the ready-made art market furnishings.

00:15:40 Filip Valica: And I thought, okay, well, how can I do custom-made as well? And that's when I decided, no, I need to sell custom-made online. And I moved towards doing that online. And that took about it about a year.

00:15:54 Filip Valica: And, yeah, like, then for me, it was just the website. And, you know, I went through about seven different websites.

00:16:02 Alice Orozco: I'm actually due to launch a new one again.

00:16:05 Alice Orozco: And then getting that right, getting all the systems behind it right. And now, yeah, I know exactly what my business model is and where it needs to go for it to be 100%. Sounds like quite a journey.

00:16:19 Alice Orozco: As you've gone through this, you know, how have you handled the custom aspect of it and still standing behind your work or providing returns?

00:16:28 Filip Valica: when needed and things like that. That must be a challenging aspect of the business. You know, beauty is in the eye of the beholder and someone gets their custom furnishings and they might not feel like it's up to par with what they were expecting, even though that's exactly what they ordered. Yeah.

00:16:42 Filip Valica: Yeah, look, I actually faced that a lot when I did custom soft furnishings in a traditional way where I would visit the client, I'd design it for them, et cetera.

00:16:53 Filip Valica: Now, because it's all online, basically the customer feel. feels like they're in control. I help them along the way. I give them ideas and they can customize

00:17:05 Filip Valica: any element that they want. It's not just a matter of choosing a size and a fabric. If they want to add any other element, they can do that. And since I've started doing it that way, I have not had a single complaint.

00:17:20 Filip Valica: Everybody loves what they're going to get. Now, if a customer isn't 100% sure, We do also scale drawings for them and sketches.

00:17:32 Filip Valica: But I don't really get a lot of issues with that. Like the customers that I get now are people who want to do it themselves. They don't want a designer. And, you know, they just feel in control of the whole design process.

00:17:47 Filip Valica: And it's very satisfying for them. But look, the biggest challenge for me was finding the suppliers or supplies that I could work with.

00:17:57 Filip Valica: So, you know, with ready made, it was that alone was difficult enough because I was sourcing it, you know, offshore and finding

00:18:08 Filip Valica: suppliers that could, you know, do minimum order quantities that would be flexible and that also could develop the product with the quality standards that I required. It was very difficult.

00:18:22 Filip Valica: I actually went through about 200 suppliers. I even had to teach myself a little bit of Chinese just so I could get through QQ, which is a bit like Facebook that the Chinese use.

00:18:36 Filip Valica: You know, I tried like Indonesian, Indian companies,

00:18:42 Filip Valica: and nobody just could get the right quality for me. So, yeah, it took a while for me to find a supplier.

00:18:52 Filip Valica: until I actually found one that was happy for me to train them. So I trained them through videos and, you know, like I said initially, I was brute strapping it. So it wasn't like I could travel

00:19:06 Filip Valica: there and talk to them face to face. They were just very genuine people who wanted to help. I said to them, look, this is my idea. I don't have any money. And, you know, what I'm willing to do is just

00:19:20 Filip Valica: teach you and they took that on board. They provided my inventory for free of charge for about six months. Wow. So I built a very, very strong relationship with them.

00:19:34 Filip Valica: And now the next step, once I went to custom made, that was another difficult part. So I've actually opened a work

00:19:42 Filip Valica: room on the Gold Coast here in Australia. And that was really good. I kept a very low scale.

00:19:50 Alice Orozco: because I didn't want to spend too much. I didn't want to have to charge my clients even more money for my products.

00:19:59 Filip Valica: I've just sort of made it work between international and then also making my products locally as well. Talk about that strategy a little bit.

00:20:09 Filip Valica: Are you sourcing fabric from one area of the world and drop shipping it to your manufacturer and then they're providing a custom drapery for your clients and then sending it to you?

00:20:19 Filip Valica: Oh, yeah, yeah. So absolutely. So one of the biggest strategies for me to be able to offer a good price product is for me to source the fabrics direct from the mills. Otherwise, it's just basically

00:20:32 Filip Valica: impossible and I'd be just another person out there doing the same thing. So, yeah, you know, I mean,

00:20:40 Filip Valica: whilst I try to under-promise and over-deliver, generally I do promise like a high-quality

00:20:47 Filip Valica: product at a very reasonable price and the only way for me to do that is to cut a lot of the

00:20:55 Filip Valica: middlemen the biggest cost in in soft furnishings usually is the fabric you know when you're looking at upmarket quality products it's generally always the cost of fabric and you know

00:21:09 Filip Valica: I have actually sourced product that is sold for about $120 a meter wholesale I've sourced it for about $20 a meter. So, you know, the exact same product.

00:21:24 Filip Valica: Just by simply going, you know, direct to the mill.

00:21:27 Alice Orozco: The only issue with that, of course, is that you do have to buy in larger quantities. And now, you know, because I've built those relationships, I've built the trust.

00:21:37 Filip Valica: And, you know, I am able to order lower quantities. But obviously, I've got a much larger product range. so I have more orders with them. How did you establish that trust early in the beginning? You know, it's very difficult.

00:21:52 Filip Valica: You can get to the position where you're over-promising something that you probably won't be able to deliver on. It was very difficult. But, look, for me, it was just about being genuine, just being honest, and just saying, look, this is what I want to do.

00:22:07 Filip Valica: And, you know, are you willing to help?

00:22:10 Filip Valica: And, look, I was just very fortunate. I was able to meet a few suppliers who were very genuine and, you know, they also wanted to enter into the Australian market, which they weren't doing directly.

00:22:25 Filip Valica: And so, yeah, I don't know. I guess I just, for me, I approached them in a very honest way. I didn't over-promise anything. It was just a case of saying, you know, this is my goal, this is what I want to do and this is

00:22:39 Filip Valica: the potential,

00:22:41 Filip Valica: whether it will happen or not, I can't, I can't promise. Will you come on board,

00:22:46 Alice Orozco: basically? And lucky for me, you know, I found a few suppliers that were definitely very keen. It's been like five years now, and I've been working with them for a very long time. So,

00:22:57 Alice Orozco: got a lot of orders now coming through. So obviously, as the orders started coming through, that built on that trust, and they were willing to do a lot more as well.

00:23:08 Alice Orozco: I wanted to take a minute and talk about the one-on-one coaching that I offer to entrepreneurs and small business owners who are launching physical products. If you're just getting started, I can work with you to create a game plan based on your skill set and budget. We'll go through the product development process together and

00:23:24 Alice Orozco: outline your specific steps to your industry or product. Based on your capabilities, I can also suggest ways that you can create or outsource workable prototypes and do some feasibility testing. Of course, I can review your prototype and suggest ways that it might be simplified or improved.

00:23:39 Alice Orozco: and ways of creating drawings or design specifications. If you're going to outsource your design, I can be your second set of eyes,

00:23:45 Alice Orozco: and check your design keeping an eye on reducing cost or improving manufacturability. If you're going to hire a product designer, I can also walk through the process of hiring somebody and reviewing their portfolios and suggesting questions to ask them. When your design is complete,

00:23:59 Filip Valica: we can definitely work together to find the right manufacturer, or I can even ask for bids for domestic and overseas companies for you. Together we can even come up with a quality plan for your manufacturer, so you can balance risk with cost.

00:24:12 Filip Valica: These are just some examples of tasks that I've helped other clients with. Most sessions are usually an hour long, and we talk on Skype or through the phone. You set the pace, and we come up with tasks that you should knock out before we meet again.

00:24:24 Filip Valica: I can hold you accountable, and I'll also make sure that you're budding off the right-sized chunk for you. I really enjoy hands-on work, so if you think that you could benefit for one-on-one help, let's talk. Go to the product startup.com and click on the consulting tab to sign up for a fur call. You

00:24:39 Filip Valica: have any negative stories from working with suppliers and you don't have to mention their names, but was there any learning experiences that you took away from the whole sourcing and getting samples and things like that? Basically,

00:24:52 Filip Valica: I don't trust every supplier. So I had one particular one where I put all my eggs into that one basket.

00:25:02 Filip Valica: I spent, you know, the little money that I had earned on this one particular company, this was before I fly.

00:25:08 Filip Valica: found my more reliable ones. And, you know, I got Promise one product. Then when I ordered the much larger quantity,

00:25:19 Alice Orozco: I got a completely different product. And that took me back. I mean, it wasn't a lot of

00:25:25 Alice Orozco: money, but it was everything for me at the time. And it took me back, you know, a whole year. So I did

00:25:35 Alice Orozco: have to say to them that I had lawyers in the area they were with and we were going to go in there and pursue a legal battle with them, in which case they didn't want to sort of take

00:25:46 Alice Orozco: that road. So they did actually send me the proper product. But yeah, I didn't work with them

00:25:54 Filip Valica: again. They did try to rebuild that trust and that relationship, but I decided to just stay away.

00:26:01 Filip Valica: So for me, with any new supplier now, I won't just buy a bolt-sized order based on the sample.

00:26:12 Filip Valica: I'll actually build it up slowly until they prove themselves. Yeah, that's a good tip, and I do that as well. I have a product that I'm selling in Amazon. Okay. For us, the shipping from China is a pretty large cost.

00:26:25 Filip Valica: And so the cost to ship a partial container versus a full container is almost nice. negligible for us okay so the the ramp up is actually pretty quick you go from samples to full

00:26:37 Filip Valica: containers yes past that like i totally agree with you you know ramping up to different container sizes and the frequency of orders i absolutely agree have the manufacturer prove themselves

00:26:49 Filip Valica: exactly through their deeds not just their promises right yeah exactly exactly like look i've heard so many stories of people getting ripped off i have a friend they spent

00:27:01 Filip Valica: $50,000 on an order to buy electronics and they got a little box in the mail full of USB memory

00:27:09 Filip Valica: sticks and they disappeared completely. So I've heard a lot of stories like that. But for me, it was, it's, it's risky, you know, dealing with new suppliers and at the time, you know, and I didn't

00:27:24 Filip Valica: have the money to waste. Yeah, I had to be very strategic in my approach with support. And, you know, I learnt my lesson very early on.

00:27:35 Filip Valica: So, and obviously now, because we have grown, it's very easy for us to go and meet face to face.

00:27:41 Alice Orozco: And another big lesson that I've had, that I have learned working with suppliers is to have multiple suppliers that can give you the same product, the same quality product as well.

00:27:54 Alice Orozco: Because at one point, I was working with only one supplier and they were in the process.

00:28:01 Filip Valica: process of shutting down and yeah it caused a lot of dramas like my business was on standstill for about three months which was very costly and eventually they did actually sell that company

00:28:16 Filip Valica: and you know we were able to you know get started with them again with a new owner of the company but now I've got multiple suppliers that I work with and they do deliver the same quality product.

00:28:31 Filip Valica: And it's also, it provides diversity, you know. So, you know, whilst one company can give you a certain product,

00:28:38 Filip Valica: the other one can give you something else. Yeah, and one thing that we didn't talk about at all is quality inspections. Have you used any third-party inspection services or anybody like boots on the ground, so to speak, in other countries to help you when you can't be

00:28:52 Filip Valica: there in person? I'm a huge fan of that personally because I'm not able to travel to China. Yeah, yeah. Look, I definitely recommend it.

00:29:01 Filip Valica: I did use that initially, but it didn't work for me because unless that particular individual or company is an expert in what you're doing or if what you're doing doesn't really

00:29:15 Filip Valica: require any kind of expertise, then it's fine. But it didn't work for me because the expense that I was paying for this particular

00:29:25 Alice Orozco: individual agency just wasn't worth it for me because they didn't understand like for me in terms when you're talking draperies you want to look at the stitching make sure it's right yeah they didn't

00:29:39 Filip Valica: understand that it's like oh it's sewn together that's good enough but yeah so there's a lot of

00:29:46 Filip Valica: detail that goes into um QA for my product and it was a case where I just had to do it myself so So, you know, every product that we get in, we do a QA check.

00:30:00 Filip Valica: And if it's not right, my supplier remakes it. And we don't have to pay any extra for that. And they're pretty honest as well and loyal. So, to be honest, I never really had any issues.

00:30:15 Filip Valica: After we did all the training, and there was a lot of back and forth just to get it right.

00:30:20 Alice Orozco: But, yeah, once it's done right, like, yeah, I haven't had any issues. No, that's perfect. That's good to hear. So as you went through this process and you're slowly growing your business as you're growing, your supplier base, I imagine,

00:30:34 Filip Valica: what sort of things did you do on the sales side to make sure that you had additional business coming in? I know you mentioned that you started a website. How are you advertising

00:30:45 Filip Valica: that website? That has been a huge challenge for me. I would say that I'm okay with sales and I was very used to doing marketing.

00:30:54 Filip Valica: from a very traditional point of view but yeah online digital marketing that was just so new for me and I just felt like okay the minute that I learnt something then there was it just changed

00:31:08 Filip Valica: you know then remarketing came on and I just couldn't keep up with it so that has been one of my biggest challenges but one of the things that has worked for me now is social media

00:31:22 Filip Valica: and also developing a lead magnet and then having some automated emails and phone calls. Yeah, that's interesting.

00:31:32 Alice Orozco: So what's your lead magnet for, since you have this physical product that you're selling, what gets people to give you their information? Yeah, look, I tried, you know, all the free reports. I tried discounts. I tried all that.

00:31:47 Alice Orozco: None of that work for me.

00:31:48 Filip Valica: And then one day I just, and I didn't do this intentionally. I just thought, because I was getting a few requests for samples, like free samples,

00:31:58 Filip Valica: but not a lot. And then one day I'm like, look, I just want to have like a page on my site

00:32:04 Alice Orozco: where people can order free samples.

00:32:07 Alice Orozco: And after like a couple of days, I had 20 requests,

00:32:11 Filip Valica: which was huge for me at the time. And that was great, you know, because people could have the the textile in front of them,

00:32:22 Filip Valica: but even better was a conversion rate. The conversion rate for me

00:32:26 Alice Orozco: is about 50 to 75%. That's huge. From that one lead magnet. Yeah. So that's when I decided, okay, that's going to be my lead magnet and I'll build that whole, you know, concept of having a

00:32:40 Alice Orozco: funnel around that. Well, and it makes sense too because I imagine that you provide some exclusive fabrics that are at least difficult to source. Someone might get close, but if they're picking

00:32:51 Filip Valica: what, yeah, I'm looking at some of your patterns here, if they're picking something that's very specific, it's going to be difficult for them to take your lead magnet and go somewhere else with it. Yeah, because I source my product directly from the mills. Nobody else has any of my

00:33:05 Filip Valica: product. So, you know, unless there are a retail store that sells it or, you know, they buy through me, there's nowhere else that they're going to be able to get any of my product from. So how are you

00:33:16 Filip Valica: able to ship out all these samples for free while you're running your business? So I now have an admin person who does that. So as soon as a request comes through, we send it out the next day. I send it out Express,

00:33:31 Filip Valica: which, you know, costs me about $7 to $10 to send out. But it's definitely worth it for me because it's usually very likely that I'll be able to close that sale.

00:33:42 Filip Valica: Yeah. So let's talk about your funnel for a little bit. You mentioned that the sample process is a part of that. So from what I understand it, based on your explanation, someone will browse to the site, they'll see that there's a free sample button on the website, they'll hit it, they'll fill out their

00:33:56 Filip Valica: information, pick their samples, they'll get the samples in the mail. I imagine you follow up with them with a series of emails at some point. Yep. So the first thing I do is I actually follow up

00:34:09 Filip Valica: with a phone call. So like my funnel is not just online, but also over the phone. And through mail.

00:34:17 Filip Valica: So I follow up with a call and then depending on how that goes, I take sort of like the next course of action. Sometimes after the one call, they're ready to make an order. But look,

00:34:29 Filip Valica: in this industry, it usually takes about four to six weeks before somebody places an order.

00:34:37 Filip Valica: So then my next series is like a series of emails. And it's not so much around, oh, this

00:34:46 Filip Valica: is what we do or selling my product or anything like that. It's more just email saying what can we do for you. So one of the things, for example, that I sort of mentioned before was that we can do

00:34:59 Filip Valica: sketches. So if they're unsure of what it's going to look like, we can do sketches. And I send them an email around that. And that really, like, they love that. The fact that I offer it, but mind you,

00:35:10 Filip Valica: they never asked me to do it. Like, it's very rare that I've had to do sketches. So the next thing I just have more emails you know it's like you know can I give you some more samples things

00:35:22 Filip Valica: like that and people generally say yeah you know I wouldn't mind some more colors and even though these emails are automated they usually respond to them so it's more like conversation like my

00:35:34 Alice Orozco: emails are very very simple it's more like an actual personal email as opposed to like a mass

00:35:40 Filip Valica: bulk email yeah and I get response from that and then I continue with my follow-up calls, which are never sales pictures or anything like that.

00:35:51 Filip Valica: It's just like, you know, how can I help you with designing your product or, you know, usually what I say to them is, you know, what is it that you're wanting to achieve?

00:36:02 Filip Valica: Because sometimes it's not about just looking at the window finishing. You've got to look at the whole interior. So I ask them, you know, what is it that you want to achieve in your interior? And we look at it from that perspective. Sometimes curtains isn't the most appropriate.

00:36:16 Filip Valica: thing and I do tell them and obviously I only sell curtains I don't actually sell blinds or other things and they're like oh yeah you know they appreciate the fact that I'm honest or whatever they

00:36:27 Filip Valica: have in mind sometimes it's not appropriate I give them a lot of because they're doing it themselves essentially they're measuring themselves doing the whole process themselves I give them a lot of

00:36:38 Filip Valica: technical advice and tips and they really appreciate that so I think that's probably why I've got a

00:36:45 Alice Orozco: high conversion rate with that particular lead magnet.

00:36:50 Alice Orozco: So do you make the calls yourself whenever you could follow up on these leads? Now I do actually have salespeople and their conversion rate is a lot lower than mine.

00:37:00 Filip Valica: You know, I think because, yeah, like they want to sell. I just want to help out. I just want to see my product in their home. For me, you know, obviously it is about the money but for me at the end of the day it's

00:37:15 Filip Valica: about just having that satisfaction of seeing my product in their home and being able to help them to achieve a beautiful interior. So, yeah, I don't know. Like, I call people from a, you know,

00:37:28 Alice Orozco: how can I help you standpoint instead of, you know, buy my product. And yeah, so I've built a lot of relationships. They all refer me onto other customers. Essentially, I do some of the calls. That's

00:37:41 Alice Orozco: what I love. I don't love all the admin accounting stuff. So I don't do any of that. One of the things I love is just helping people. And so I try to do as much as I can with that. And then I've got some sales stuff.

00:37:53 Alice Orozco: So I've got a sales stuff that does my web base. And I also wholesale now. So I've got somebody that deals with those wholesale clients. And that's totally different to online.

00:38:06 Alice Orozco: Yeah, so talk about that a little bit while we have some time. How did you get the wholesale clients to begin with? Oh, okay. Yep.

00:38:13 Filip Valica: Did you start with the smaller, you know, the wholesale accounts and work your way up or just go for the juggler, so to speak, and go for the largest accounts you can? Mainly the smaller ones.

00:38:25 Filip Valica: And with all my wholesale leads, I only get them from trade shows.

00:38:30 Alice Orozco: I do get some now from Instagram.

00:38:33 Filip Valica: I haven't been on Instagram for very long, but I've had quite a lot of interior designers come on board there. I've also got retail stores that stock my product.

00:38:44 Filip Valica: And, yeah, that's mainly been through trade shows and also through, like, personal connections that I've had over the years. Just to make it clear to everybody else, I imagine that your product doesn't have any type

00:38:57 Filip Valica: of protection on it in terms of intellectual property protection, like patents or anything like that? No, no, it doesn't. People will beat me over the head if I don't ask that question. But I think a lot of the differentiation,

00:39:12 Filip Valica: A lot of the differentiation, especially from a business like yours, comes from the unique value that you provide, especially from the sourcing that you're able to do.

00:39:20 Filip Valica: Like you said, you're going directly to the mills, getting pricing that's better than anybody else, and you're more accessible to your customers through your online presence. Plus, you're able to basically sell a custom-ordered product.

00:39:31 Filip Valica: So unless someone's willing to go through all that trouble to duplicate your efforts, you pretty much have almost like a trade secret, so to speak. Yeah, yeah, exactly.

00:39:43 Filip Valica: And, you know, like I said before, I always try to be one step ahead. So my vision is always two to five years ahead. So, you know, even obviously like there are

00:39:54 Filip Valica: other people, especially overseas doing online draperies. Yeah, they're huge in the US. Yeah, yeah. But like, you know, in Australia, it's very new and there's more now. But look,

00:40:07 Filip Valica: their approach to it also, like, they're sort of trying to.

00:40:10 Alice Orozco: apply the traditional way of doing it online, whereas for me, I've just, I've tried to scrap the traditional way of selling draperies completely and, and just try to reinvent the wheel. Yeah,

00:40:23 Alice Orozco: and that's, that's worked for me. So, and for my customers, like my customers, one of the things

00:40:28 Filip Valica: that, one of the kind of feedback that I received from them is that, you know, with your

00:40:35 Filip Valica: traditional retailers. They go into a home, particularly if it's a very market home, and they give them a price that's a lot higher than what they would give another client, for example. And that's

00:40:48 Filip Valica: very common in this industry here in Australia, whereas with me, my customer can go online and get a price instantly, and everybody gets the same price. So it's very transparent. You know,

00:41:00 Filip Valica: I've dealt with, like the kind of clients that I deal with now are pretty much mansions and,

00:41:06 Alice Orozco: you know, some very upmarket homes. And they're buying my product and they're just astonished

00:41:13 Filip Valica: at, you know, the price. Whereas for some other clients that are more budget conscious, my price might be very expensive for them. So, yeah, my target is very much those people that don't particularly

00:41:28 Filip Valica: have the money to buy through like an interior designer but they do they need they need a quality

00:41:37 Alice Orozco: product yeah because of their home or the kind of home that they have yeah i appreciate you sharing all that with the audience especially going through the thought process because as you said it's a journey

00:41:48 Alice Orozco: what's your perspective on failure like i look at failure as a data point and i'm an engineer

00:41:55 Filip Valica: And so for all the failures that I have that just gives me feedback to improve, what is your take on that? Yeah, look, I totally agree. Like I said, I actually had a business in this same industry years ago.

00:42:09 Filip Valica: And I never realized it had failed. I just thought, oh, no, like, you know, I've got to move on to the next step. So for me, everything that I do is a learning curve.

00:42:22 Filip Valica: and I don't take failure to heart, you know what I mean? Like, for me, it's about, you know, embracing it.

00:42:31 Alice Orozco: So, embracing failure and doing something a lot greater and bigger with that experience. Perfect. Perfect attitude. Thank you for sharing that, Alsa. Where can people go and find your draperies?

00:42:45 Alice Orozco: And are there any stores or anything like that where they can go find them? Yes, yes. So if they go to our website, it's porting. T-E-O-R-T-I-E-R-E-R-E dot-com.

00:42:59 Alice Orozco: And on there, yeah, they can have a look at some of the other stores. So we have stores on the Sunshine Coast, the Gold Coast, in Sydney and also in Melbourne. And, yeah, well, they can just buy online.

00:43:14 Alice Orozco: Great. Well, thanks so much for sharing that with us. And before I let you go, I always want to ask, do you have that one tip for somebody that's kind of struggling. They're just starting out, and they feel like they're not getting anywhere.

00:43:26 Alice Orozco: And, you know, what's your best tip to make sure that they stay the course? I do have a couple of keys to success that I sort of hold on to.

00:43:37 Alice Orozco: And look, for me, number one would be the business model. Try to find a business model that will bring high profits that is very easy to run.

00:43:51 Alice Orozco: Like, you know, businesses can get very complex, but if you have the right business model, you can keep it very simple.

00:43:59 Alice Orozco: Perseverance, adaptability, having the ability to change, and also aiming for excellence on a continuous basis. Sounds like a full plate.

00:44:10 Alice Orozco: Yep.

00:44:12 Alice Orozco: Yeah. Well, thanks again, Alice. Really appreciate your advice to everybody. And thanks again for coming on the show. I wish you all the best and all the success in your business. Thank you very much. Thank you. It's a pleasure. I hope that you enjoyed our talk with Alice. Here are my three

00:44:26 Alice Orozco: takeaways for this week. Number one, differentiate your business. Don't race to the bottom on price. Alice created a different business model that when her competitors were using. How are you standing

00:44:37 Alice Orozco: apart from other similar products on the market? Do you think that's enough to win more market share? Number two, be flexible.

00:44:45 Alice Orozco: Alice changed her business model multiple times. The same applies to products. Don't expect to design the right product at the beginning. Listen to your customers and pivot your

00:44:55 Alice Orozco: design or business if you don't get traction. My mom always told me it's not the strongest animal in the jungle that survives. It's the one that is quick to adapt.

00:45:04 Alice Orozco: And number three, focus on continuous improvement.

00:45:08 Alice Orozco: As easy as it is to start a business now, it's similarly easy to fall behind if you don't spend enough time to improve your processes and leverage the new tools that make it easier to develop and manufacture new products and grow your marketing and sales and

00:45:22 Alice Orozco: interact with your customers. So set aside time every month or every quarter to explore some of the new tools and different business models that are out there. If you'd like to get these takeaways in your inbox, just go to the product startup.com, scroll to the footer of any

00:45:37 Filip Valica: page, and sign up to the weekly wrap up. You'll get my three takeaways for each guest, along with interesting articles, free tools, and inspiring innovations that will help you with your own product startup. So I have a bit of an announcement.

00:45:50 Filip Valica: From this point forward, I'm moving from a weekly show to a bi-monthly show. And that's actually for a few reasons. I'm working with more clients now and spending more time on my Amazon product.

00:46:01 Filip Valica: I'm also working as a mentor at a local startup incubator called Station Houston. If you're a longtime listener of the show, you'll know that I bought a foreclosed home that was boarded up and I renovated it from the studs up.

00:46:13 Filip Valica: My mom has been a realtor for the last three decades and I'm going to take over her real estate investments and businesses as she moves into retirement. So as I've taken on these new projects, it's been increasingly difficult to dedicate a day

00:46:26 Filip Valica: or sometimes two days a week to the site and podcast. Each episode of the show takes me about seven hours to produce from finding guests to recording and editing the audio and creating the notes and marketing it.

00:46:38 Filip Valica: I really like doing the podcast and I'm going to keep it going as long as I can. The monthly downloads of the show continue to grow at at least 10% every month. Last month, the product startup had over 6,200 downloads.

00:46:50 Filip Valica: So thank you to everyone who listens and passes the podcast along to their friends. So join me next time as I speak about manufacturing. We'll have a guest host, Khierstyn Ross, of Crowdfunding Uncutt, will actually interview me.

00:47:03 Filip Valica: So tune in in two weeks to hear that episode. Thanks again for joining me today. I hope that you're taking action on developing your products, and I'll see you in two weeks.