Coming up with an idea and then profiting from it within the first year is rare, but these eyewear startup founders found the formula.
As entrepreneurs, we are told we should expect to fail at our first, second, or third idea before becoming successful, and that is often true. Coming up with an idea and then profiting from it within the first year is very rare. But after speaking with Caleb Garrett and Alex Moreno of Hawkers Co., a two-year-old D2C eyewear brand poised to hit $60 million this year, I’m beginning to believe they have somehow cracked the code that so many product-focused, bootstrapped startups have been looking for. Using social media, Facebook ads, and a «reckless»attitude toward trying new things, these five young ‘treps tell me how they turned $300 into $60 million.
Know your market.
When Moreno, the company’s CEO, first decided he wanted to launch Hawkers, he knew he wanted to make it accessible, affordable, and loved by a wide variety of individuals. Typically, brands must put a stake in the ground to understand their market and brand voice before casting the net as wide as possible, but according to Moreno, Hawkers is a different story largely due to the market it was infiltrating.
Hawkers entered a market monopolized by Luxxotica, the eyewear giant responsible for brands including Prada, Ray-Ban, and Gucci. Garrett, an angel investor and U.S.-based partner in the company, tells me «you don’t need to screw people over to have a great, well-made product,»and it seems he is right. Hawkers glasses retail from $20 – $40, whereas a pair of Ray-Bans will run you around $200, and Hawkers eyewear is produced at the same manufacturing facility as most of Luxxotica’s brands.
Take great risks.
When Moreno used his last $300 to start the company, he had a prototype, and a simple website. Knowing he wanted pricing to stay low, he decided to sell exclusively online. According to Garrett, part of what attracted him to the company was that the team was unafraid to try everything in their power to get as many eyes on Hawkers as possible while shying away from traditional wholesale. «Because we had $300 when we started the company, we never looked at anything as a failure because no matter how big the company grows, if we were to shut down tomorrow, we only lost a few hundred dollars,» Moreno tells me.
The team includes some of Moreno’s close friends and family with tech backgrounds, who advised him to purchase Facebook ads across many verticals. According to Moreno, at the time Facebook ads were getting a lot of negative press so testing out the algorithm as fast as they could to see what would generate the most sales seemed completely reckless. But they did it anyway. The «spray and pray»approach rarely works, but within weeks the Hawkers social media pages were exploding, sales began to skyrocket, and customer acquisition was pennies on the dollar.
Transparency will create an army of followers.
While I was surprised at the quality myself, Alex Moreno and his L.A.-based partner, Caleb Garrett, agree that their continued success is because they «keep things simple and transparent for the customer,» meaning their voice and message are consistently carried out through all client facing channels. According to Garrett, who has invested in a variety of Millennial-focused companies, including L.A.-based Saucey, the companies and brands you align with also play a large role. Hawkers partnerships include Facebook, Paypal, DOPE, Saucey, and others. Because of their explosive and no-holds-barred outlook on Facebook ad trial-and-error, they quickly became one of the highest-performing companies on Facebook, granting them an invitation to speak at the Facebook campus as a case study.
Going all-in and paying obsessive detail to the price of acquisition per customer is something anyone can do, according to Moreno, but I’m not convinced that any company can pull this off. However, I do think they have proven that Millennials are becoming increasingly aware of companies’ margins, and while they will pay slightly more for something on-demand, they may not for a product with insanely high margins knowing they can purchase a cool alternative elsewhere.