Marek Ciesla founded Woolet 3 years ago after successful stints at DivX and BitTorrent. He was able to raise $330,000 in 30 days on Kickstarter for his wallet prototype – today he sells it on Woolet.co clocking Six-figure sales and great margins – he’ll share with us how he did it.
How did you get to starting and running woolet as it is today?
We started 3 years ago on Kickstarter. There we were able to raise $330,000 in a month for a wallet with a small PCB inside that connects with your smartphone via Bluetooth and notifies you when you leave it behind. We also did about $50,000 in pre-orders and started delivering 1 year later. Throughout this time, we grew to the level where we had shipped to countries like Japan, India, Bolivia, the States, Australia and rest of the world and we had two manufacturers we sourced from, one from Poland which dealt with really premium European products and the second one is based in China where we make our lower priced products, designed for people that need the same functionality but at a lower cost and quality. Our E-Commerce store is run on Shopify Platform. We’re also on Google Shopping, use retargeting on social channels like Facebook and Twitter.
What was the inspiration behind the product?
The idea behind starting Woolet wasn’t an accident; there was a real need that came from my experience working with a friend who kept forgetting things, whenever we went out for lunch, he kept forgetting his wallet and keys and then we’d go back to get it. I figured out that if he’s got this problem, I believe there’d be more people out there that keep forgetting their things, people with Alzheimer’s, people with different abilities, busy schedules who’d like a sidekick – something that’s not just keeping their belongings, but also reminding them through a phone notification that they might have left it behind.
What was the experience while building the first few samples and prototypes?
Because of Kickstarter, we started out by trying to sell something that still didn’t exist, so we didn’t have the product yet. We then made a prototype to take pictures of and put up on Kickstarter. So essentially we were able to raise $330,000 for a product that wasn’t into production yet, so it gave us the confidence to make it into a bigger business. Building the prototype, the software was the most difficult part. Bluetooth is still an unreliable technology, sometimes the signal would get jammed due to your body and this would disrupt the communications with the app, sending false notifications. Building the right UX with the product caused a major struggle and we had to overcome problems we didn’t know existed. False notification really was a headache for us, but we started pulling in more data from things like wifi, LTE, GPS, combining to give us better accuracy when it came to predicting if the wallet was being left behind.
You got a lot of attention from Kickstarter in the beginning - how did you maintain that momentum till date?
The thing is that there where multiple such similar Kickstarter campaigns out there, but the competition didn’t last, we actually had just one competitor, from the Netherlands, a company called Ekster. There was this other company too that raised $2.7M off of Indiegogo with a lot of features that sounded almost impossible to achieve, they weren’t able to deliver it in the end, even with a couple of million dollars raised. Whereas with Woolet, we had created a pretty slim wallet, quite similar to your regular wallet but with Bluetooth capabilities. Our wallets charge wirelessly + we bundle a wireless charger, which is Qi standard, so you can charge your iPhone on it too – and people seem to like this a lot. So to answer the question – we’ve managed to build a very good user experience around the product and having done so sustainably has helped us maintain the demand to some extent.
How do you get traffic to the website?
Usually, we stick with the Ads. Doing the product placements, Ads are the major thing. We do Ads on Facebook, Googe Shopping, Google’s getting expensive though as we used to target out competitors search terms, so once they went under, the search volumes have been going down for us. We represent ourselves as guys who can deliver bespoke, high quality European smart wallets. As far as our ad spend, we spend about $800 on average every month. We make use of some marketing automation tools and Email services like MailChimp and that contributes to the traffic as well. I just recently heard about the MailChimp – Shopify disconnect and I’m slightly concerned as of how it’ll affect the business, but it’s something that we’ll have to figure out. I’d like to start shifting our focus to SEO by getting more content, optimizing the site, etc. to drive passive traffic – right now we have 300 people visit us every day organically through search, I’d like to double that and reduce our dependency on Ads. It’s okay to push Ads during occasions like the Holidays and Black friday when there’s a lot of shopping momentum but for the rest of the year it doesn’t make much sense to keep spending on Ads, which is where we need SEO.
Are you Ads effective right now? Are your sales in some way proportional to your Ad spend?
I had relatively good Customer Acquisition Cost(CAC) in Q3 – Q4 at about $11. This Quarter, it was at $50 and even went past that a lot of times. So my goal is to make Customer Acquisition more efficient where the average cost would be around $30.
What are some of the problems you’re facing right now?
We want to make some new SKU’s, it takes significant investment to be adding new SKU’s to the store – we’re now moving more of our products to China to earn a higher markup on our products. Also, half our products now charge via Micro USB, the other half having the wireless charge capability. We’d like to move our entire range of wallets to wireless charging ones, we figured out that’s the only way we’re going to be able to compete with cheaper products. We already make PCB’s here but we can’t send them over to China as there are some obstacles to that, so we have to make it from scratch. But once we achieve that, we’ll be able to enjoy a markup of $100 on every sale, and that’ll help us grow nicely.
With Marketing specifically, I can’t sustain the conversion rate. I spent $2500 on Ads and they didn’t bring me conversions to justify the spend, on the other hand, when I switched off Google Adwords and I started seeing better conversion rates. It’s quite unpredictable, and that’s something that I don’t like.
If you were to build Woolet from scratch in 2019, what would you do differently?
I would’ve changed the way we manage operations internally. I’d put a good amount of focus on B2B customers instead of just B2C. Simplifying the front end of the software instead of just the server side and make software that’s more UX friendly, getting more SKUs and putting more time into manufacturing and production instead of sales. If I could go back, I’d focus on the brand, Acquisition, testing the channels, SEO, having just one shop instead of 5 – if there was a chance.
Your Advice for entrepreneurs who’re just starting out in E-Commerce?
Focus on branding, the users then the product. Don’t get me wrong, I’m not saying the product isn’t important, but it’s more important to build a minimalistic MVP and gather feedback before you build a complex product. It’s better to have less functionality and have it work flawlessly then cramming more than you can deliver into your product. Don’t raise expectations of the customer, just keep it to a bare minimum and aim to please with 1-2 things that your product really does well, the best in the market which no one else can replicate.