Product-market fit is how well your offering addresses actual demand within the market.
Some entrepreneurs start with a product in mind and then seek out the right audience for it. But others find a target market first and then figure out the products, brand, and business model they'll need to serve it.
In this episode of Shopify Masters, you’ll learn from an entrepreneur who relentlessly studies his market and adjusts his products to achieve a better fit.
Elad Burko is the CEO of Paperwallet: one-of-a-kind wallets and other accessories for men and women.
If there are features in your product that they don’t care about, get rid of them.
Tune in to learn
- A unique way to get an appointment with a retail buyer
- How to mold your product to improve your product-market fit
- How to keep the momentum going after a successful crowdfunding campaign
- Store: PaperWallet
- Social Profiles: Facebook, Twitter, Instagram
- Recommendations: Privy (Shopify app), Kickstarter campaign
Felix: Today, I’m joined by Elad Burko from Paperwallet. Paperwallet has sold well 100,000 of one of a kind wallets and other accessories for men and women using a vegan-friendly smart material called Tyvek. It was started in 2007 and based out of New York. Welcome.
Elad: Thank you Felix, a pleasure to meet you.
Felix: Yes, likewise. So you’ve always had a fascination for how things work. You’ve always been disassembling up things that you found, you had an artistic and creative home. But you consider yourself the least artistically talented. So you instead you focus your attention on business. What were some of the earlier things you did to combine your love for art and this creativity with building a business?
Elad: Really early on when I was really young, I was all into cars. I just loved cars. I was able to … I’m talking about maybe two or three years old. I don’t remember it, but my parents told me this story. I was able to just by the design of the car, by the shape of the car, know what it was, was the make with the model and all of that. So it was really about the little details in design from a very early age that caught my eye. And then jumping into business, when CD burners first came out in the nineties and I was in high school, it was Napster and CD burners. And I was basically just burning electro music that I was downloading from Napster that was nonexistent in the US. Bringing it over basically from Europe, creating CDs. This of course, totally illegal. A high schooler, not knowing what he’s doing.
Felix: This is the iconic entrepreneurship high school thing that almost, it’s so funny that this wasn’t like a course every entrepreneur took and now all of a sudden you burn CDs to make money. But it was almost like everywhere people were realizing hey, there’s a way to make money doing this in high school. And it’s always funny whenever to hear an entrepreneur like yourself talking about this, it’s something that a lot of entrepreneurs did. What gave you the idea?
Elad: For me, it was I love this music that I’ve never heard about and I just wanted to share it with my friends. So I shared it, and they loved it, and they want it more. And then I had to figure out a way to get more of it at a cheap enough price that I wasn’t buying and importing CDs from Europe. And that was how it all started. But slowly, slowly it got there. And the design element comes in because I didn’t just want to give them these, you go to a store or you used to be able to go to a store and buy a CD and now those days are gone. But the CDs and the packaging and everything was designed so beautifully. I didn’t want to just have one of those CDs that are silver or with the logo of the company on it. It was beautiful music, it was art in that the music was amazing and I loved it and I wanted to share it. But the CD just wasn’t the right packaging. And what I did was I ended up buying and figuring out how to print and doing custom art for the CDs, and that was the layer of design on top of this product that I wanted to share with my friends at high school.
Felix: Got it. So usually this kind of entrepreneurial spirit comes in, in high school, middle school, but then it goes dormant when the rest of your life kind of catches up to you. Did it happen to you before you really started to figure out where can I actually start building a more legitimate business? Or did you always kind of start businesses throughout your journey until you got to Paperwallet?
Elad: I wouldn’t even call it businesses. I’m a creator, and no matter at what point of my life, I was constantly creating. At a certain point, I realized I gotta make some money. How do I make money out of the things I love to do? How do I make money out of the creations, out of my creativity? And that’s where it kind of got to. But just to answer your question, in the beginning, it was the CDs and then it did go dormant. And the reason it goes dormant is that you have this infrastructure. You got to go to college and you have to learn certain things, and you’re in the system. It’s not a good environment. All of your time is taken up learning something very specific. In my case, I went to Baruch College and I studied entrepreneurship. But still, I didn’t have the time and energy to do other things because my focus was let’s go to school, let's have good grades, let’s finish this and then I can do something else. And then out of college, I ended up going to work in private equity for a few years. And only after that, I said, “Let’s see what I’m worth. Let’s try a business and take it there.” So as an entrepreneur, you definitely have those ups and downs, because life takes you to different places.
Felix: Right. And you say you’re constantly creating things, and then you decided how can I make money out of these things? I think it’s a situation that a lot of creators are stuck in where they have this passion for art, for creativity, but then you don’t know how to turn it into a way to sustain themselves. Turn it into a living. Where do you see people kind of slip up here that maybe you were able to figure out in terms of turning your creative passions into a business?
Elad: One of the best things that I’ve done when I decided to start my business was I reduced the non-essentials in my life. Because a business, it’s hard to start a business, and it takes a lot of money. And living takes a lot of money just as well, and you need to be able to say, “If I’m going to focus on this, I need to cut back on other things in life.” And I was able to do that very well, very efficiently in saying let’s give this thing 110 percent. Which means I had to cut away from the luxuries in life so that I can invest and give this flower that I was growing as much water attention, love that I can give it. And slowly, if you do that and you’re lucky and you’re hardworking, that tree ends up being an apple tree and giving you fruit, and then you can eat from that fruit. But in the beginning, it’s hardships. It’s investment in that plant, in that tree.
Felix: Yeah. I love that analogy. So, again we said you’re based out of New York, so it’s not a very cheap place to live. What were some of the sacrifices that you had to make they you had to cut out when you decided to let’s down and invest all of our energy and capital into the business?
Elad: For me, it was sacrifices on all levels. If it means I’m living with your parents or if it means not going out to restaurants or not buying the brand new iPhone to be able to focus on what you do. The truth is it was much easier. Even though I look back and I see the sacrifices that I made at the time, my passion was to create what I was creating. So it was not that I needed anything else. The passion fulfilled me. The work that I was doing and what I was building and the vision that I had was enough to just make me happy with what I had. And I wanted to see this thing grow. More than I wanted an iPhone, more than I wanted to let’s say move out of my parents’ house or more than I wanted a new car. And that balance makes it either easier or harder. For some people, they want that stuff maybe more and they’re not willing to sacrifice the time, the energy, the sweat, the tears. And then it doesn’t grow.
Felix: Yeah. I think that's an aspect of why it’s important to pick something that you’re passionate because that means that you don’t have to look elsewhere for this fulfillment. You don’t have to go and spend money on fancy vacations or fancy dinners, or gadgets for that fulfillment. Because by devoting your time to in your case building Paperwallet, it was what was it allowing you to get that fulfillment. Then, of course, helping you build your future as well. So was Paperwallet at the very first business that you dove into when you had that moment where you’re like, “Let’s see what I’m worth,” and essentially get out of the corporate life to dive into starting your own business?
Elad: So no. As an entrepreneur, I look at every single creative endeavor. Anything I made previously, and I did everything from selling and importing will laser pointers to the CDs that I told you about. There’s a lot that I’ve done before Paperwallet, but Paperwallet is one of those times where I did step out of the corporate world and I said, “Let’s see what I’m worth.” And I dove into it with full force. So it was the first time that it was not a side project or not just along the lines. It was the first time that I said, “Let’s give it 110 percent and see what happens from it.”
Felix: Would you say the Paperwallet was one of the projects, back then let’s call it project when you first started out? Was it one of the projects that you first looked at that was easy to see success, or were there others along the way that you could have pictured success more easily?
Elad: Success is not in your mind. Success is in the hard work that you put into it. I’m always working on new projects, be it new businesses. I’m a serial entrepreneur and a serial creator. But I don’t think that I started Paperwallet because I saw that success was easier to achieve. It was just that I liked the product and I thought that the product had a real need in the market. Everywhere I was looking, I saw these brown, boring, brown or black wallet being pulled out of people’s pockets. They were made of leather, which I didn’t like the whole animal skin concept. They’re big, they’re bulky. It felt to me, and this is in 2007, that the whole world was changing. Phones were getting smart, and thinner, and smaller, and this accessory that’s been around for thousands of years just had no change whatsoever. And I wanted to spruce that up. I wanted to bring innovation, art, design, life to this product that to me looked dead.
Felix: Yeah, I think this is something I’ve heard before too where it’s like the best products for you to work on, to bring into life are the ones that you just can’t understand why it doesn’t exist already. Where it seems to you like this should be a thing that should exist in this world already. There’s this antiquated wallet that hasn’t been changed in so many years. There should be something new, and that’s why you focused on it. So why was it that this was the project that you decided to let’s say, let’s dive all into compared to the other ones that you started in the past that were more of on the side?
Elad: The projects that pull me in are the projects that are design related. I’m really all about design and art. The other projects that I was also considering were also designing and art related, but this one was different, and it was unique. So not only was the product itself unique, and a much better alternative to what currently existed. It had that element of design and art that I was able to combine with it that really did it for me.
Felix: Got it. So you saw that there was something missing in the world, lots of black and boring brown wallets. You’re saying using animals skin. What were the first steps that you took to turn your idea into a reality?
Elad: The very first step was to research materials. I knew that the leather wasn’t gonna cut it, and I wanted the product to be as thin as light, as slim as possible. So that the wallet would be as thin, as light, as slim, as comfortable as possible. And therefore I just started researching materials. Another important aspect of the material was I wanted it to be customizable. So I wanted it to be able to print on it, design. So we were looking for a very durable type of paper. We were writing out to all the paper companies and asking them to send sample swatches and every day we had to do sample swatch come in, and we’d take a look at it and we try to rip all the papers, and we put them through tests of water resistance and all these things. And nothing really cut it until finally one day, we received a swatch book for one of the paper companies. And I tried to open that envelope and I wasn’t able to rip the envelope open.
And I tried harder and I still wasn’t able to. And then finally I realized that I didn’t really care about the swatch book in the envelope, I cared about what the envelope was made of. And the envelope was made out of Tyvek. Then we put that Tyvek envelope through all the stress tests that we were putting this paper swatch samples through. And it just passed with flying colors. It was thinner than paper, it was lighter than paper, but it was stronger than leather. And it was just a really amazing moment when it was an aha moment of "we found it!" And then from that point, there was another whole process of industrial design and product development.
Felix: How long did this early prototyping process take between the time that you started working on it, to the point where you’re like, we have basically a prototype that’s ready to. And we’ll talk about in a little bit. To present it to the world.
Elad: Just everything from the sampling. The sampling took time because it took, everything was dependent on these companies sending us the samples and all of that. So that itself took a few months. And then once we had the material, we were playing around with the way the construction, how we did that. That was another couple of months. And then from that point on, we just needed to find someone who would be able to manufacture this for us. So all in all, I would say anywhere between four to six months.
Felix: Got it. So a few months is not long during this waiting period looking back on it because of the delays essentially between waiting for the samples to come in. But I think that that kind of delay sometimes will slow down the momentum enough for someone for them to just start looking elsewhere to do something else. What were you doing at the time to keep yourself kind of focused on making sure that you will be able to carry this project all the way through?
Elad: At the time I was still working on the project. When you build a business, it’s not like, you don’t just build the product. You have this idea in your head of the concept and the long term and the short term, and your goals, and where you’re going to get to. So we were really researching the market. We were doing a lot of researching potential target customers, building a business plan. Doing everything that I basically was taught in university to do, to get a business ready. To plan out the business.
Felix: What did you say were some of the most important things that you did during that time that and look back on it, gave you the most value in terms of setting the business up for the scale that it’s able to achieve?
Elad: I would say the most important thing was focusing on the product itself. It was all that prep work and the business plan and all the stuff that we’ve done in the time where we were doing also the other things of waiting for the material and creating the product. That changes. A plan is something that changes as you go along, but the product itself and being able to focus was a very important part in that very beginning part of the business. Later on, the focus went on to the customer, because once we actually had the product, it was extremely important for us to get it in front of the customer, or potential customer that we thought. And see what they said about it, listen to them, understand them, see what was missing, see how they took to the product.
Felix: Got it. Once the prototype was done, did you go straight to manufacturing or did you guys go to the crowdfunding route first?
Elad: No, we started the company in 2007. Crowdfunding was, if I don’t think it existed back then if it did, it was not anything that anyone was really doing like they’re doing it today or three years ago when we started doing it. We had to actually invest in production, in samples, in taking it to market, in selling it. So we had to just mass produce it, and we believed in what we were doing. So we just made that investment and hit the streets.
Felix: Right. Do you remember how large the first production run was?
Elad: The first production run? I think it was a few thousand units.
Felix: Did you have multiple skews of different products or did you just focus on one design?
Elad: Yeah. The very first production run, we produced I think it was four colors. It was a completely different product. It was very at its infancy completely, but it was still a good product. It was just nothing compared to what we have today. It was four solid color wallets, and one with a design that we created. But really nothing special. It was I think a green, black, purple. Well, I think maybe white. And some custom design product.
Felix: And where did you say you were selling these, the first thousand?
Elad: The first few thousand we hit the streets. We went to markets. If it’s flea markets or just anywhere because we were a startup company. We needed to be lean. We wanted to just kinda get these out there. We knew that we made a mistake and we needed to learn from them. The only way to know and to learn was to be introduced to the customer. And that’s why we went to these art markets, these art fairs, design fairs, flea markets. Anywhere we can get a placement or a booth in front of the end user for a good price, or no price at all. Just give me a chance to expose the product. And that’s where we went, wherever we were able to sell. And that’s where we learned everything about our product from the customers, from the market. We saw how we fit or how we didn’t fit into the market.
Felix: What were some of those most valuable learnings that got out of talking to your customers face to face? Especially early on.
Elad: There’s so much. You understand of all how to present the product, right? Because at the very first stage, we’re trying to sell the product. No one’s even approaching us. So we start to change the way that we’re presenting the product until we start to get people to approach. That’s the first rule of marketing the product that we’ve learned.
Felix: I think there’s a valuable lesson here. Do you remember how you were presenting the product at first and then what change you made to improve the presentation?
Elad: With the trade show would booths, I don’t remember. It was like a pitch that was off the top of your head. I don’t remember exactly what it was. I just know that we changed so many things until we got … I’ll give you one example that I do remember. At a certain point when we were actually starting to approach B to B clients, we wrapped the products up really nicely and we went into stores and we tried to get the buyer’s attention of the store. And they were just knocking us down. They were just saying, “No I’m sorry, buyer’s not available or I’m not interested.” Just kind of leave the store. And we tried that so many times. We realized basically our approach wasn’t good, and the approach. it was in Paris that we were trying to get into these stores. The approach was just kind of way to direct.
So we changed our approach where we pretended not to be the owners of Paperwallet, and we basically approached whoever was behind the register and letting them know that we’re here for fashion week because it was fashion week that time. And that the designer of this brand Paperwallet is here and likes the store. Would you want to set up a meeting? And now all of a sudden, because we’re approaching them from a different way and we’re asking for a meeting, every store, literally stores that said no to us one day, the next day said, “Yes, sure. Please, let’s schedule a meeting. We’d love to see your product.” So it’s really about testing and interacting with whoever you’re trying to sell to. The end user is definitely the most important person that you want to test this out with. And just trying things and seeing what’s working and what’s not and changing your approach until you see that you’re, you’re hitting that bullseye.
Felix: I think that’s genius where you’re asking for that permission with a good reason. Like, “Hey, we’re here for fashion week,” and you’re asking for their permission rather than catching them off guard and coming right at them. People are going to put up their defenses immediately. So I think that’s a great salesmanship approach that you took. Do you remember the kind of feedback that you’re getting from the early customers, and how you guys are able to implement that feedback? You said you were lean, you guys have to produce a thousand units. It must be hard to kind of iterate on that, right?
Elad: Definitely. One of the most important lessons that we had was we were just so blown away by the material Tyvek, which it’s this super smart enough material that NASA uses on spaceships. And we loved it and it’s just so strong and so durable that the first way that we try to kind of show people how amazing this paper while it is, is by showing them that the paper it’s made of, you can’t rip it. And we used that in the beginning until we realized nobody … First of all, people weren’t responding to them will. They were amazed by the material, but it didn’t speak to them as a wallet. And then we thought about it. Nobody sells a leather wallet and shows you, “Hey look, you can’t rip this leather wallet. You should buy it.”
No, that’s not something that I care about. I care that it’s durable. I care of the product’s longevity. I care that it’s water resistant. For example, some of the clients, I remember this one guy who came, he was amazed by how thin and small and light the wallet was. And he bought it from us at one of the really early shows. He bought one because he wanted to use it as his jogging wallet because when he goes jogging, he likes to just have some money and maybe a card and as thin a wallet as possible. And he’s never seen a wallet this thin. So he bought one, try it out. And then at the same exact show, I think it was a week or two weeks later, he came back and he bought five more. He just loved the wallet. So things like that, those are the things that we learned, what’s important to the end user and what we should be focusing on, and what we shouldn’t be focusing on when trying to market to them when trying to sell them.
Felix: That’s a great point where what’s important to you, what’s important to the people that are working on the product and the business could be completely different than what’s important to your customers. That’s great that you guys learned that lesson. So once you guys are able to start selling these in the markets, in these fairs or flea markets, what was the next step that you decided to take? The next step that you guys did take to get to the next level of building the business?
Elad: For us, the next level was trying to get into stores, right? Because we wanted to sell in higher quantities. We didn’t have a store of our own and that was the way we can do it. We went to Paris, where one of my friend’s father helped us out and kind of mentored us. And showed us, he’s in the retail game. Showed us how to sell to stores and what’s important and what’s not. And we hit the ground running the same as we did when we tried to sell to the end user, only this time trying to sell higher quantities to stores.
Felix: So once you were able to book these appointments, using the technique we were just talking about, what did the buyers of these stores care about?
Elad: The types of stores we went to a really high end. It was design stores, it was museum gift shops. High-end, I guess art designs and high-end boutiques. And that’s really where our target was even till today. That’s our target. What was important to them was that the product was quality, that they liked the product. And how we pitched it to them, so that was in our control, how much they liked it to a certain extent. And then finally, how unique it was. That really an important part here is our products are unique and constantly changing. We’re always working with hundreds of designers all the time creating new collections of really beautiful artwork and designs for new collections and new products that we’re working on.
Felix: That’s something I’ve heard too is that you don’t want to go approach the store selling a product that’s just maybe slightly better than what they already have in their inventory. You want to come at them with something that they could add uniquely to their store that’s going to add an almost new category to their inventory.
Elad: Yeah, I mean it makes sense. I’ve never sold anything to stores except for very unique products. But I can understand why. If they already have a product that’s selling well in their store, why would they change over to a new product or new brands?
Felix: Right. So let’s talk about crowdfunding. So this is where you’ve had a lot of success as well. What did that get introduced into the business?
Elad: About three years ago. We created our first Kickstarter campaign for one of our new collections, as a way to kind of like launch it and see how the Kickstarter community would respond to the brand, the Paperwallet brand. And to the new designs that we were working on. It was a really great ride, completely organic. And we connected to I think it was 3,600 backers if I remember correctly. And it was just an amazing way to connect to people who are passionate about what you’re doing about your product, are willing to give you the feedback that you need, be it positive or negative about your products, about your service, about everything. Your interaction with them so that you can grow so that you can improve. And, that’s invaluable to a business.
Felix: Right. So I’ve certainly heard of businesses that have gone to Kickstarter after they’ve already had successful launches themselves outside of crowdfunding. You guys are eight years in I think, my math is correct. Eight years into the business at this point, when you decided to go over the Kickstarter. What made you guys choose to go that route to introduce a new product this time?
Elad: I guess we’re always experimenting. As a business, we’re trying to stay ahead of the curve. And Kickstarter was fairly new. We did our research, we saw that not every con and not every type of product or brand is gonna make it on Kickstarter. We saw and thought that our product was a good fit for the Kickstarter demographic. And that’s why we kind of took it on.
Felix: Yeah. That’s interesting. What kind of products do you think are a good fit for? What kind of questions did you ask yourself, I guess as a person that owns a product or wants to bring to life? What questions should you ask yourself to see if you’d be a good fit for Kickstarter?
Elad: You look at Kickstarter’s demographic and who they are. They’re mostly men. They’re trendsetters. They’re interested in gadgets, they’re interested in what’s new. A lot of design. So because we tick those boxes, it kind of made sense. But for I do a lot of advising for Kickstarter projects as well, and I see all sorts of entrepreneurs and creators that really have beautiful ideas. Number one thing to do is go on Kickstarter, and look at the projects that are associated with what you’re doing in one way or another, and see how they did. You’ll see if your product or other products that are similar to the product that you’re working on, didn’t really do that well on Kickstarter, that’s a real indicator for your product or what you’re doing. At the same time, maybe you’re doing it better, maybe you’re doing it differently. That shouldn’t stop you as a creator to try because that’s what Kickstarter is all about.
Felix: Got it. So obviously you have to have a product that ticks a lot of those boxes. And based on your experience on Kickstarter yourself and advising, what do you think differentiates a good campaign from a great campaign in terms of the marketing side?
Elad: That’s a good question. The product has a lot to do with it, and you really need to be spot on. You really need to understand, I guess it’s not the product, it’s the product market fit, right? If we’ve been doing Paperwallet for six, seven years before we started to jump into crowdfunding. And we really were able to mold the product to fit the market. And if you’re able to do that before you launch, then you just have a much smoother way forward with your marketing, with conversions, with selling your product.
Felix: Can you say more about this, about the product market fit? How do you mold your product to fit a market?
Elad: You mold your product to fit a market by listening to the market. That’s what I’ve been saying also before. You want to listen to your customers. Take your product to the customer, try to sell it to them. Understand what’s important to them, what’s not important to them. And mold your product. If there are features in your product that the customer doesn’t care about, get rid of them. There’s no reason for you to invest in them. If there are features in your product, if your customers care about a certain feature very much so and you’re lacking that in your product, you need to figure out is that important for us moving forward? If you want to attain those customers, it’s important for them. So you kind of play around with your product according to the feedback you’re getting from your audience.
And many case Kickstarters do this. There’s no reason to have perfect product-market fit. Most products don’t. When you first launched Kickstarter it’s about trying. It’s not about succeeding. The success will come if you try. And so will product-market fit. So if you’re not sure if your product’s ready, Kickstarter is the best place to kind of put it up on Kickstarter, and see how the market responds. If you only get a few backers and your project ends up failing, that’s fine. Take those few backers, and now those people passionately care about your product. Ask them the questions, see what they say. Create surveys for them. Pick up the phone, call them. Have a conversation. You’ll learn a lot about what’s wrong with your product or what maybe there’s nothing wrong your product, but you’re just not marketing it right. Maybe it’s your story itself. By doing that, you slowly mold your product to get that product market fit.
Felix: So you guys again, you said 3,600 backers raised almost $84,000, so definitely broke through your goal and had a successful launch. And you said that after the wallets went out to all the backers, all the press mentions stopped. Traffic to the new site which was coming in large waves at first slowed to a trickle, right? This is a successful launch, but then like any successful launch, it doesn’t last forever without you pushing things along. So you guys knew that in order to survive and keep things rolling, you got to harness the buzz around your brand that was being developed during this campaign to turn into something more sustainable. So can you little us a little bit more about that? So after the launch happened, what happened before, right before it ended or right after it ended, what did you guys do to try to keep this thing going?
Elad: We’ve done three Kickstarter campaigns so far, and three Indiegogo campaigns. And we were also on Japanese crowdfunding sites. That’s definitely, we consistently launch products on crowdfunding. But you’re completely right that from the first campaign, you have that launch, you have the campaign, you have that extra added traffic from the visibility on the crowdfunding sites. And then it dips down. And we were doing a whole bunch of things. We never just focused on crowdfunding. We focused on our website, we focused on how do we continually improve our website? In the very beginning, we had an old custom built website that took us a lot of time and energy and all that. We wanted to automate that because a lot of the time was going into that.
We ended up switching to Shopify, which really helped us to kind of do what we wanted to do, do what we needed to do. Focus on the business, focused on sales, increase the productivity of our website. At the same time we were also doing other things like increasing our B to B’s, and our sales to wholesalers, and distribution worldwide. Doing trade shows. We always kept busy jumping from one project to another to make sure that the business is alive. You don’t want it, they’re of course going to be dips. Life is just one big up and down, and businesses no different. But you want to just keep on trucking, you want to keep on moving from one thing to another and trying things. Certain things are going to fail, certain things are going to succeed. And stick with what works. That’s what we did as well with crowdfunding. Every single crowdfunding campaign that we’ve done from the very first one doubled itself.
Felix: That’s awesome. So can you give some examples of things that you were doing, again right after the launch to be able to keep the momentum going? What were some things that worked for you guys?
Elad: After launch, we invest in the campaign as much as we can to get brand awareness. Once the campaign is over, you want to really nurture … For example, our last campaign we had over 10,000 backers. Those 10,000 backers, we wanted to basically take from Kickstarter and have them smoothly transition over to our Shopify, to our website. And we basically nurture them through an entire process of getting them accustomed to the brand. They just saw us on Kickstarter, they’re about to receive our products, some of them already received their rewards from Kickstarter. We make sure that they’re happy. We made sure that everything is good with them, want to bring them to the site, let them know that being on Paperwallet and signing up to the newsletter, and following us on Instagram has its incentives because we have giveaways and we have huge discounts for our followers, and our subscribers. And we want to make sure we’re always building that. We’re always nurturing.
Our list of customers, we look at them as our partners in growing the business. We want to always make sure to give them value. And that’s the process after a Kickstarter campaign, how do we get as many of these backers as possible to understand that they should be coming to paperwallet.com and signing up to the newsletter and following us because we want to give them more. We want to give them more incentive. We’re continuing to grow the brand and they helped us with the campaign. We want to help them, and we want them to continue to help us push forward.
Felix: Right. So when I first approached this question, I think a lot of people would think that once you are successful on a crowdfunding campaign, you want to keep the buzz going and get more new customers. What you’re talking about his work with existing backers and the customers you already have, nurture them, and develop more relationship with them. Not trying to get more, the main focus that to get more customers is to work with the customers, the backers that you already have. So when you do you have a successful launch and it’s ended, there’s this period of time right where they don’t have the product yet, but they’ve already finished the first kind of transaction essentially with you. What are some things that you want them to, you mentioned that there’s an email list that you want them to join on your store? What are some incentives and ways for you to keep them engaged while they’re waiting for their product?
Elad: The truth is from the Kickstarter campaign before they even receive their awards, we incentive them to join the newsletter. The ones that join the newsletter, we have a huge sale. And many of them even before receiving their products, because we have such a high success rate of happy backers, excuse me, of happy backers that they trusted us enough to even before they received their product, go on our website, purchase the product and, interact with the product before the Kickstarter.
Felix: Got it. So they’re buying a different product that’s not being launched on Kickstarter?
Elad: Yeah. But that’s not normal. I wouldn’t say that that’s normal, that’s just something that some, a small percentage actually did. But in general, just to touch back a little bit, we’re always looking to gain new customers. But our existing customers are so important to us, and for any business, I think holds true that holding onto an existing customer is going to be much cheaper, and pay off much more than acquiring a new customer. So you might as well make the most of the people that have helped you so far build your business because they’re the ones that are the most connected. Especially if you work hard to make sure that they’re happy.
Felix: Right. So keeping in getting those repeat purchases from existing customer base, like you’re saying is way cheaper than getting a new customer. What are some suggestions that you have there on keeping a customer around and having them repurchase from you later on? What are some things that you guys do to encourage that?
Elad: First of all, one of the things about Paperwallet is we’re always coming out with new designs. We’re always working with new artists. Our products are not just simple dry products as most are. We tell a story of a human being, and that is the artist who designed the product. And you’re really receiving an artwork here, an artwork that you can carry around in your pocket. An artwork that when you go out and you put it on the bar, it’s a conversation piece. But it’s much more than just a wallet. So we want to build as much as possible into the product itself.
Felix: I want to talk a little about the website now. So you mentioned that you guys previously made a lot of tweaks, and now that you’re in Shopify you’re also making changes here and there. What are some of the more recent things that you’ve done to the website to improve it?
Elad: A complete redesign of the website. We’re always looking at what’s out there. We’re always researching other sites. We’re looking at the tools that are available. We’re creating content for new products that are coming out. So we’re constantly on the move. We’re never satisfied, I could say with the website. We’re always tweaking it, and changing it, and seeing if it’s converting better if it better flows for user experience. If the pictures do the product justice. It’s really a constant struggle that we love. We’re very proud of our site, and it’s the reason why we show it the attention that we do.
Felix: What kind of tools or apps do you have on the site or just, in general, to help you run the business?
Elad: A bunch. We’re not fearful of trying new apps. And we’re contacted a lot by all these apps to test things, and we’re all about testing, seeing how it works. It’s really easy with Shopify to kind of install it, take it out. And we’ve done that a bunch. Some of the tools that we really stick to, one of them is privy, which helps us with popups grower on our list, improving conversions. Making sure people stay on the site, exit intent, pop ups, things like that, that I think definitely helps our bottom line. Another one is product reviews by Shopify that we’re just getting into now. We’ve used other tools in the past. They’re so expensive, and what you guys have done is simplify it down to a point where the reviews are important. We want our customers to be able to let the new guy on our website know what he thought about the product so that it builds trust within this community. And product reviews by Shopify, it’s something that is a no-brainer for us. And we’re moving towards that and are excited to be using that soon.
Felix: Awesome. So thank you so much for your time Elad. So paperwallet.com again is the website. Where do you see yourself, where you see the business growing over the next year?
Elad: In the next year we’re going to have another crowdfunding campaign, another Kickstarter launch. And we have new products launching as well. We’re working with a whole bunch of new designers. And we have a new concept for Paperwallet where we’re doing Paperwallet originals. I can’t say too much about that, but it’s basically more art, more design, limited edition, Paperwallet, products that are going to be a sold in a new way, a new concept of kind of how to get them out and how to keep them limited.
Felix: Got it. So again, everyone out there check out the show notes for links to everything mentioned on this episode. Links to Paperwallet and any crowdfunding campaigns. And Elad, you’ll be able to hop over there too, to help answer some questions from listeners?
Elad: Sure. It’d be my pleasure.
Felix: Awesome. And where can folks reach you if they have any questions about crowdfunding or want to learn more from you?
Elad: You have my personal email address. It’s Elad. That’s E-L-A-D @paperwallet.com
Felix: Awesome. Thank you so much for your time.
Elad: Thank you very much. I appreciate it.
Felix: Thanks for tuning into another episode of Shopify Masters, the eCommerce podcast for ambitious entrepreneurs powered by Shopify. To get your exclusive 30-day extended trial, visit shopify.com/masters.
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