At the recent Unbound event in London, I interviewed seven startup founders to find out more about the highs and lows of creating a successful tech business in the UK. Here’s the interview with Aron Gelbard, co-founder of Bloom & Wild.
ES: Aron thank you very much for joining us. Tell us about Bloom & Wild.
AG: Bloom & Wild exists to make it a joy to send and receive flowers all over the UK and, soon, internationally. We make it possible to order flowers in well under a minute, mainly on people’s mobile phones, which is where people seem to want to order flowers. Then we deliver them everywhere in the UK through people’s letterboxes in a formatted packaging that we came up with a few years ago that a number of other people are now using to make flower delivery more seamless.
When did this idea come about?
I was, and still am, a huge fan of a company that most people here will know called Graze that does snack boxes through the letterbox. I was just really intrigued by the idea of presenting items in a small format so that they’re really easy to send and receive. I’d had a few so-so experiences sending flowers myself and as I had more and more of those, I wondered if there was a way to create a modern technology-enabled flower company that would make it a real joy. I guess that was something I was motivated by. I don’t have the qualifications to solve a disease or anything like that, but if I can do something that’s making people happier day to day that felt like something that was worth trying.
So the way that they’re delivered is kind of flat-packed in a box really isn’t it? And then you give instructions on how the recipient can then put them together into a nice display.
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We don’t love the term ‘flat-packed’ as it’s associated with furniture that’s hellish to build. But yes, the flowers arrive at both ends of the box and we put nets around the heads of individual flower stems which protect and compress them in transit. Then the recipient of the flowers arranges them themselves. When we started we thought that people would mainly buy these flowers for themselves because people wouldn’t want to send a gift where the recipient of the gift needs to do work. Actually it turned out to be the opposite of that – recipients of flower gifts seem to really enjoy engaging with the creative process and that’s turned out to be a product benefit rather than the disadvantage that we thought it would be.
You were founded in 2013, what sort of traction have you gained since then?
In our first week we sent out seven boxes of flowers, which felt a little embarrassing. We had this huge empty warehouse and production line, and it took about six minutes to run our production line because we were really inefficient at running it. We’ve grown nicely since then. We now send out tens of thousands of bouquets of flowers every month and all over the UK and we’re just starting to send into Ireland, France and Germany as well. So that’s several hundred per cent growth every year and ditto if you look at revenue and other metrics people like to look at.
I think more importantly we’ve improved rather than become more lax about our customer experience over that period. So our net promoter score, which we obsess over, is a little over 80% now, which is higher than Apple’s or Amazon’s or companies that we really admire, and we get really strong ratings across all of the various review platforms that are out there.
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That’s really important to us because you can grow by raising money and pouring it into marketing and creating something that’s so-so and then people just get try it and don’t repeat and you get a big revenue number, but I don’t think you’re really solving a problem. We’ve always been obsessed with the experience we’re creating as we’re getting bigger.
So speaking about the metrics that people like to focus on, one of them is funding. You’ve raised a couple rounds of funding, is that right?
We raised a split round of Seed funding just when we started and then we’ve raised two venture capital rounds, one led by MMC Ventures and then had more recently another one led by Burda Principal Investments, which is the VC arm of a large German media company. So we’ve raised a little over £7m in total so far.
Tell me about that journey to raising funding because that’s one of the things that many of the startups I speak to say they’re having a problem with, they just don’t even know where to start. What was your experience of going through that process?
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I guess we’ve done it in a few different stages and because we’ve done it one bit at a time it’s maybe been a little bit easier than trying to raise all of it in one go. So actually the first time we raised money we raised the relatively small amount of £150,000 and that was through a scheme, SEIS, which is government funded. That means it’s more attractive for investors to make an investment because they get some tax benefits if the investment doesn’t work out.
We just really called up everyone we knew and told them that we would be doing flowers through the letterbox and they caould invest in it and get their money back in taxes if it didn’t work. When we asked if they wanted to invest, most people said no but a couple of people said it sounded cool so we sent them the product, they liked it and then they told their friends about it. I guess because we had a physical thing that we could send people that was new and different, rather than just a pitch deck. That maybe made it a little bit easier to raise that first round and get that first bit of traction.
Then when we had that money we were ultra careful about how we spent it and we knew that we weren’t going to be able to get the company profitable with that amount of money. So it was all about only spending carefully on things that would enable us to get to raise another round and continue our journey. We always had that as the milestone that we were working towards.
We also had the benefit of a seasonal industry; flowers have three peaks at Christmas, Valentine’s Day and Mother’s Day. We raised the first round just before that peak period and I guess the peak period enabled us to show stronger traction because it’s when people buy more flowers, and that helped us raise a further seed round and then it went on from there.
The other thing is with MMC, our first VC backers, we had actually got to know them a couple of years before we ended up raising money from them, and people always say you should meet people before you need to raise money. It sounds like a bit of a cliche but it’s so true; I think if we’d gone and pitched to them and said can you invest in us now, I don’t think they’d have had the confidence. But we’d actually got to know them and we kept them in the loop about our progress, and that really helped us raise that first venture round.
I suppose from your point of view as well it’s best to meet the investors beforehand. As much as they need to make sure they’re investing in the right company, you need to make sure you’re taking investment from the right people because if you get that wrong it can be catastrophic.
Absolutely. So I’ve never experienced getting it wrong and we’re lucky to have really good investors on board. But I do know others who feel that they’ve raised money from the wrong investors and it does make board meetings and the process in between them really challenging.
We found that with MMC in particular they had backed a couple of other similar businesses to us, so Pact Coffee and Gusto who are also doing direct delivery of branded consumer products. I spoke to the founders of those companies and that made me comfortable with MMC backing us and it also made me comfortable that they were real subject matter experts. And then similarly with Burda when we raised money from them, they had similar businesses in their portfolio, and I think that made us relatively more attractive to each other.
Aside from the struggles of raising funding, what else would you say have been the biggest challenges in setting up your company?
Technology, a hundred per cent. I massively underestimated this when I started. I thought that the sort of technology that we’d need to build Bloom & Wild would be like one piece of the puzzle and not even the biggest piece. It’s still by far the biggest piece now and we actually started again after a year when we raised a bit more money because the initial technology we built wasn’t fit for purpose. That was a result of my and my co-founders inexperience, and it remains the most difficult thing to get right.
So neither of you were very technical co-founders?
No, exactly. I think if we were to do it again we’d do it with a technical co-founder next time. Our biggest source of advantage is our people and the technology that we can create, that’s what makes us different to others.
How have you found expanding into different markets?
We’re just at the beginning of it but the initial reaction is really positive. It’s complicating our business; we need to set up a local supply chain and in each of these markets, so there are a lot of steps before you see any progress. You need local flower growers, shipping, website, translation, marketing, etc. So we’re in the phase of compiling resources and testing while we do so. It takes a long time and it’s frustrating but we’re getting good feedback and we’re well on the way.
If you had any key piece of advice that you would give to someone setting up a tech company here in the UK, what would it be?
I think the biggest thing is the whole concept of minimum viable product and actually starting something that’s really simple. Rather than you guessing what the features are that you think your customers will value, build something with really few features and then see what your customers actually complain about being missing.
We thought we’d done this and that we’d built something really simple, when actually we’d built loads of complex different forms of subscription payment and configuration and stuff, which we thought was the minimum, and actually most of that we don’t even have anymore at all. We could have launched way more quickly without it and then seen whether we needed it or not.
So don’t assume, do your market research?
Or like get something out and then let your customers tell you. Rather than market research, try to sell something and figure out why people won’t buy it, rather than ask them what would make them buy it.