571: No Funding, 104 Rejections & $411 Left in the Bank - How She made $65M+ on Flowers

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0:39Just head to omnisend.com forward slash founder without the E to get started. All right, now let's jump back into the show. Hey, Founder fam, Nathan Chan here. Welcome back to another episode. Today, we're revisiting our interview with Christina Stemble. She's the founder behind Farm Girl Flowers. This was an amazing interview. What started in her dining room with$49 ,000 in savings, zero floral experience, has grown into a$60 million a year business, fully bootstrapped, disrupting an entire industry. This is a massive business, guys. She built it out of San Francisco and she talks about all of these investor rejections, 104, 104 investors rejected her and she still kept going.

1:26She built this massive business and she really shares like the real unfiltered story of building a standout brand in her own way. So I hope you enjoy this episode. Now let's jump in the show. Hear the stories, learn the proven methods and accelerate your growth and future through entrepreneurship. Welcome to the Founder Podcast with Nathan Chan. The first question I ask everyone that comes on is how did you get your job? Yeah, so I got my job by just doing the hard work. I mean, my job was every job. So I, you know, wore all the hats. And so just being willing to do every single job gave me the job.

2:11Yeah, okay. Yeah, that's usually how it is when you first start. So how did you find yourself, you know, doing the work you're doing today? How did Farm Girl Flows start? Yeah, so it's not the story that most people think. Everybody kind of wants this romanticized version of, you know, I must have grown up like frolicking in my grandmother's garden or loving flowers. And it wasn't that at all. I just wanted to start a business. And I wanted to be able to check some boxes. Mainly, I wanted to be able to grow really big. I wanted to actually do something different. I didn't just want to take somebody else's idea and like slightly tweak it.

2:46I wanted to actually like go in and I hate to use the word disrupt because it's so overused, but I wanted to actually disrupt an industry. I wanted to like do something different in an industry. And so flowers was the first idea. Farm World was the first idea I had that checked all the boxes. Another big one was I knew it needed to be bootstrapped. I knew there was no way that I was going to be able to go down to Sand Hill Road here and get, you know, one of the big, you know, Anderson Horowitz to invest, you know, millions of dollars into me because I didn't have a tech pedigree. I don't have a college education.

3:19I have a very untraditional, you know, backstory. So it wasn't possible. So this was the first idea that I knew that I could bootstrap. And so that's that's why I went for it. Um, and it did check all the boxes, but the one that I didn't know back then that I wish I would have is how hard perishability would be. Because if I was going to start a business now, I would definitely have a checkbox that says, is it perishable? Yes or no. And if it's yes, I would go on to the next idea, but, um, that wasn't the case. So, um, it was, it was the best idea I had out of probably 4 ,000 ideas. Um, I thought that, that I could do.

3:56Okay. Interesting. And what were you doing before that? Like, what is your background? Is it marketing, PR, products, tech? Yeah, you're giving me a lot of credit. So my background before was just, I did a lot of jobs. I was in hospitality. My last job before starting Farm Real Flowers was at Stanford University, which is ironic since I didn't go to college. I ran a catering company within the university that was owned by the university to start, which I learned a lot from that helps me know today. And it also was great because I was able to kind of start a company within a company without the risk.

4:33I had a paycheck. And then after that, I became the director of alumni relations. So I did a lot of programs and events. And we used flowers at those events, which is why I started researching the flower industry, because we would buy a lot of flowers. I couldn't understand why they cost so much, which led me down this rabbit hole of research on why flowers cost so much, only to find out very quickly that I understood why they cost so much. And I thought I switched very quickly from the event space to the e-commerce space because that was where most of the opportunity and the white space was that I could go into and start something in.

5:10So it was just my background was varied. I've worked lots of wage level jobs, coffee shops, hospitality hotels that I worked my way up because I didn't go to college. I always had to start at the bottom and I'd worked my way up to, you know, until I was running the hotels and then going and working for the university. But I knew for at least 10 years that I wanted to start a business and it was just trying to figure out which one that I could start and that I thought would actually be able to scale. Amazing. Well, look, you've done really well for your first business. So how long ago was it when you launched?

5:43Back in 2010. And everybody thought I was crazy then to leave, you know, a pretty stable job. Stanford's not going anywhere, even though it's considered itself a nonprofit, you know. So, you know, it was still the economic downturn in 2010. People are like, wait, you're quitting your stable job at Stanford to start a flower shop? And I'm like, no. How many times I'd be like, it's not a flower shop. It's an e-commerce flower company, you know. But people thought I was crazy. But now all the research I do has shown that, you know, companies that start during, you know, bad economic times are actually the ones that tend to do better.

6:16So I'm always telling people, even right now, when people are scared about the recession that's probably looming in front of us, it's the perfect time to start a business. There's a lot of pros for it. Yeah, I agree. So talk me through kind of how you kind of got the business up and running. You said probably you're bootstrapped, which is incredible. So did you start with a Shopify store? Was Shopify, I think Shopify is still early days or they weren't around? They weren't around then. At least they weren't around in a way that I knew about them. Yeah. Okay. Yeah. So a friend of mine, so, you know, 2010, I quit my job in June.

6:55I gave myself until August to get a website up. That didn't happen. It took till November. But a good friend of mine, his company built it for me for only a few thousand dollars back then. I mean, what I spend in one week of development work now, less than one week of development work now. So, you know, it was just very scrappy. You know, I had$49 ,000 of savings. I was like, I'm going to start this. It's$49 ,000. I gave myself two years or until I ran out of money. But that was to live on, too. It was like one account. You know, I'm like, I need to live on this and I need to start this company.

7:27And so everything was very bare bones, very like grassroots. You know, it cost about$5 ,000 to start the website. You know, I had to go teach myself how to make flower arrangements. I knew nothing about flowers. So I would go buy flowers and practice and watch YouTube videos and how to process flowers or anything like that. And, um, just did everything myself too. I did it from my dining room for the first two years. Um, very close to running out of money at year one and a half. Um, I got down to$411 at one point. Um, thankfully I just paid rent. So I still had a couple of weeks birthday rent again.

8:02Um, and then at the two year mark, um, my corporate attorney landlord found out I was running an illegal business from my dining room and then gave me the pink slip that either I had to get out of the business had to get out. So I moved the business out before I would have actually, because I still wasn't financially stable. I mean, the first year we did, we, I say we, cause it made me sound, you know, like we were big time. It was just me and my dining room, uh,$56 ,000. And the second year did 276 ,000. So I thought, wow, five X growth. That's amazing. You know? Um, and then between the second and third years when it started to get some traction, but I had zero marketing dollars to spend.

8:39When I look back at my first financial model, it's hilarious because I think I had 24 cents per unit in there for marketing. Wow. I'd always been in operations, working in hospitality and everything. So I was like, marketing, this is like a waste of money. I could like hire people for this, you know, and like, you know, instead of putting it into marketing spend. But for the first probably two and a half years, maybe three, all of my marketing was going to coffee shops around San Francisco and putting out a flower arrangement with these little marketing cards that I made that cost like three cents a piece.

9:14And every week I would go back to each coffee shop in different neighborhoods. I did them all over the city. And I would count how many cards were taken. And if like 40 or 50 cards were taken every week or more, then I would deem it a worthy expense to put another bouquet there for the next week. Only 10 or 20 were taken. I was like, I don't think that's worth the$20 it costs to do this flower arrangement. So that was it. And it was going to a lot of networking events at night and taking flower arrangements there. I would always like put them on the registration tables everywhere. You know, even though people didn't, I didn't ask, I just put them out with cards.

9:49And that was all of my marketing spend. And that's, it worked. So people picked up those cards and that's how they found out about us and about me at that point. And, you know, between the second and third years, when it really started to get some traction, I hired my first employee. We went from from 276 ,000 to 920 that year. So almost broke a million. But really, from the start, I thought I was going to be able to prove out the concept and then go get funding. Like that was always the plan. I was like, I just need to prove, you know, it was very different model. It was, you know, less is more.

10:25And the early days, we only had one bouquet option that fit on our site. Everybody else had a minimum of 169 on their website. And so the education was really challenging, because this was way before the less is more that everybody has now. You know, the fewer, better, less is more, everything that, you know, from anything from clothing to shoes to anything now, there's lots of companies that do that. But this was very early in 2010. And so trying to, you know, educate consumers and they couldn't call us and order red roses and baby's breath, that they just had to take our daily bouquet was challenging to do.

10:58And it took a couple of years to do that. And to my dismay, I was never able to go raise capital. I've gotten 104 no's. I've tried many times. And this is now the first time I can honestly say that I'm so glad that happened, though, because we are in such a better place. And we're doing really well with profit right now. And to own your company and be able to do whatever you want with it and to be able to make the decisions that you want, it's amazing. Yeah, that's incredible. So I'm curious. I'd love to delve. I definitely want to go from year three all the way up to 10 and really talk about that journey.

11:36But if we could rewind for a second, I'd love to know about finding the stock, like for your first order to fulfill and how you got your first customer and how you even got like in your first year, that$50 ,000 in revenue. Like that's customers. That's like where and when you consider product market fit somewhere around, you know, probably in between one and two, you've kind of like gone, okay, we're on to something here. How did you know to keep going even though, you know, you were struggling? The first, I mean, when you asked about stock, like when I had the like product, you mean? Yeah. Because it's not an inventory heavy business to start.

12:16Now it's inventory heavy because, you know, I have to order, we can't order off the shelf anymore. Like back then I could order off the shelf and we were really, you know, I was very fortunate that we had a very robust flower market in San Francisco. There's very few cities. There's only really two cities in the United States I could have done that in. If I was in the middle of the country or, you know, if I was in Chicago still or back in Indiana where I grew up, I couldn't have started this company because I didn't have the accessibility to small quantities of flowers. Because I had a flower market in San Francisco, I could go and buy like one bunch of this and one bunch of this.

12:50All I needed was a wholesale license to do that. And so, you know, I remember telling my dad, we still talk about it to this day, like, I just need to get 11 orders a day so I can break even on the flowers that I'm buying because I have to buy so many different types of flowers to make this bouquet that I needed 11 orders. And it took a while to get to 11 orders a day, a long while. And so that's how I came up with the idea for the coffee shops, though, was I had extra flowers that I didn't have orders for. And so instead of throwing them away because they're highly perishable, you have about three days before you can't use them anymore.

13:22I would need something to do with them. It's like, how can I turn this into marketing? And so that's why I took them to coffee shops, the excess ones. And then to get customers, really, it was just the – I mean, my first customer, of course, was friends and family. So like in 2010, when I started November and December, I don't even count that as revenue because those were just friends and family, right? Okay. But really the first real pain, I mean, they were paying my friends. My people didn't know me, my first customers. I remember being like giddy when I would like look in the back end of the site and be like, you don't know this person.

13:54This is someone I don't know. You know, when they're ordering flowers from me, that was from the coffee shops. It really was. Or it was friends of friends. You know, I sent out emails to my friends being like, can you send this out? I'd make like a little marketing flyer. Can you send this to your email list and stuff? It was just very much that. It was anything I could do that didn't cost money. I did for marketing. And, you know, I even like did a few illegal things like papering people's cars with just like, you know, like I make some like fires and be like, Valentine's Day is coming from real flowers and put it on people's windshields and stuff.

14:26So and that was very cheap because I would just print it myself and cut them at home. So it was things like that. And that's where the customers came from. I had no digital spend at all until probably 2013, 2013, I'd say I started doing digital spend and I got really lucky with that. And I just can't, I can't take credit for how well we were able to build our digital presence because the timing of when we started, you couldn't do that now. Like we were acquiring customers in 2013 and 14 for under a dollar, like it was 90 cents. Yeah. To acquire a customer because this was before. And my ex-husband worked in marketing at Facebook too.

15:09So I also had that benefit. But, you know, it was really, it was great timing because it was before all of the big companies, they hadn't transitioned from, you know, Nordstrom, the big companies are all looking for 25, four year old female consumers. We're all fighting for the same people. Right. And it was before they had like, were savvy enough to have like switched over all their traditional channels because they all are huge companies and have tons of red tape, right, to digital channels. And so they haven't done that yet. And so now, you know, there are certain times like Black Friday, we don't even try to market.

15:40We just turn off our ads. You know, it's not even worth trying to do that to acquire that customer when, you know, those companies are spending so much money to do it. But it's being smart about when you're going to spend it. But back then, it was easy, to be honest. Nothing was easy. I shouldn't say it's easy, but it was cheap. It was, you know, to acquire a customer under a dollar is phenomenal. I wish we could do that now. We still are well under$10. We've never really exceeded$10 at customer acquisition. This year, we turned off marketing when COVID hit in March to conserve every dollar we could.

16:12And then we found we didn't need to turn it back on because we didn't have the supply for the demand even because we're over 100 % year-over-year growth right now. That's fascinating. So in the early days, you basically just did things that don't scale, as Paul Graham would say, and you kind of kept going. Why did you keep going, even though it was so tough? Yeah, because it was sweating.

16:39It just, you have to really build a very authentic brand. And that's what I was doing. So I put in a lot of work to build. Like, we're now benefiting from that work that I did from the first five years of building a really authentic brand that people love. It's just, it takes a lot longer to do it, a lot longer to do it. And so, you know, even though I don't have explosive growth, I mean, it is funny that everybody thinks we're an overnight success. And when I tell them we're 10 years old, they're like, oh, my gosh, I just heard about you a couple of years ago, though. And I'm like, yeah, because I was in my dining.

17:12You know, so, yeah, it's like I think Larry or Saria from Google said, yeah, like after five years or after eight years, we were an overnight success, you know, and that's how it feels for Farm Girl. And it did scale, but it just took a lot longer. Ten years is a long grind. And I think the reason I kept going is because I think I, like most entrepreneurs, have a really big fear of failure and I don't quit much. And so I just needed to prove that I could make this work. And it was working from the standpoint of, I mean, we're doubling every year, at least, you know, and so that's that's, you know, we've never had that 20 percent growth year.

17:50That would be horrible, I would consider. But to most companies, that's a good year. Right. So, you know, we were always doubling or tripling. The lowest year we ever had was 50 % growth or 49 % growth. And that was somewhat intentional. So we needed to fix some problems that we're having, supply chain distribution, and also some culture issues internally. So because we've grown so fast. So we've put the brakes on sometimes intentionally. But it's hard. Like, I think that most people just gloss over how hard it is. And, you know, I think we get this over glamorized viewpoint of venture capital.

18:29And we think that companies are supposed to become unicorns in three years. And that's like the norm. And that's not normal. That's the exception. And, you know, we like to call ourselves the workhorse in a sea of unicorns. You know, like in Silicon Valley, everybody's focused on being a unicorn. And we're focused on being the workforce. Like we're going to win at the end. We're going to have built a really good company that's profitable. I like to say, kick it old school. We spend less than we make. We're a healthy company. We treat our team right. We have great benefits for our team. And we worry about more than just the bottom line.

18:59And we're able to do that because we don't have to answer to investors that are looking for that three to five year 10x turnaround, you know, return on our investment. And so it's funny because half the people I talk to think 10 years is so fast to build a$65 million company. And half the people are like, oh my gosh, 10 years. How have you been doing it for 10? And it depends on what day you talk to me and which camp I'm in. But usually 10 years is a long time. Yeah, look, I know what you mean, especially if you're in San Fran. And it's crazy with growth and all sorts of things. But you're making that conscious choice to grow controllably, which gives you all the power.

19:42And it is a really great alternative path. And I think there is a big bootstrapping movement. You look at like the guys at Basecamp, there's many other founders that are now choosing to go down this pathway. So, you know, it's not just a one side fits all. Yep. I think we need to talk about it more because it's, you know, it's something, you know, the most freeing moment probably for me was when I finally realized that success does not equal funding. Like I can be successful without funding and I can stop chasing it and stop spending. I was spending 30 % to 40 % of my time pitching to people. Wow.

20:22Yeah, a lot of time. I have spent thousands of hours pitching. Really? Wow. Oh my gosh, so many, so many. And every single time it was a no or a couple of times we got yeses, but horrible offers. And I did a lot of research and I got very bitter for a long time. And then I realized, look, I have less than a 2 % chance of raising capital. As a solo female founder, I have less than a 2 % chance. You take tech software companies out of that, I have less than a 1 % chance of raising capital. Why in the world am I spending 30 % to 40 % of my time pitching to a bunch of guys who have never actually built a company and they're telling me what I should be doing differently?

21:03And I'm sitting there thinking that, oh my gosh, at first I was thinking they're so smart. They're so much smarter than me. I didn't even go to college. And then probably like the third year pitching, I was like, no, I know what I'm doing. look I'm building look how fast we're growing we've not run out of money the fact that we haven't run out of money should give me enough accolades and enough like you know just proof is in the pudding basically to say you know how many companies can grow a perishable product company where even the big guys do last in 10 % margins mostly are 6-7 % and that's billion dollar flower companies the margins are tiny they're scarce in what we're doing and the fact that I'm able to bootstrap without running out of money is the accomplishment that I'm most proud of in my entire life.

21:49And the fact that VCs and private equity individuals don't see the value in that, to me, shows me that they're not the smartest people in the room. Because if I saw that in front of me, and when I have enough money to invest in lots of female-owned businesses, which I can't wait to do one day, I will give so many points to people that can do that because it's the hardest thing in the world to do. It absolutely is. so and not having to spend 30 or 40 percent of my time felt like a gift I was given back and it also seemed like the wisest decision because if I have like a one to two percent chance max that I should be giving it one to two percent of my time yeah wow that's crazy so how many no's do you reckon you got in those first five years of trying to raise VC I'm going to send them all I'm going to have my pretty woman moment and I'm going to send my check and I'm going to be like big mistake, huge mistake.

22:43So 104. 104 no's. 104 no's. Wow. What a story. So let's, let's go back a little. So first three years broke, broke a million dollars. Um, obviously probably had a couple of employees. Uh, were you still just servicing the local San Fran market or are you starting to service other states too? Only Zeram Sisco. So my intention was always to get national shipping going within two years. And I was so wrong. That was not possible to do that. The subsidies on shipping were huge and I had no idea how big they were. So I couldn't afford it until year five and a half. At 2015 mid-year, we started with just some, not national shipping, we started just doing some other Bay Area area.

23:34So like we were only in San Francisco, which is seven miles by seven miles. It's a very small 49 mile squared radius. It was very tiny for five and a half years. And so we were able to build it. We have pretty market saturation in San Francisco. And we should have launched national shipping much sooner than we did, but I just couldn't afford it. Our subsidies started at$19 per box that we had to subsidize. And that's, I mean, if we just done rack rates before I had enough buying power, it was almost$200 to ship a box and you can't charge consumers that. So I did all kinds of focus groups to find out how much we could charge.

24:06All of our customers said, basically$15 was the sweet spot. I had it like tiered. If we did$15, 92 % of people in my focus group would buy. If it was 18, it was like 80 something percent, 81 or 82%. And then when I went up to 25, which was the highest tier, which is what we launched national shipping with, 2 % of people cold said that they would buy. you know how much we still charge for national shipping 25 dollars we have not been able to get shipping rates down because um even once we launched national shipping what i could afford to which was in 2016 we did you know some local areas additional local areas in 2015 and then 2016 we started doing california shipping the mid-year we started doing national shipping and um those subsidies instead of going down they increased very quickly uh and i hadn't anticipated that because, you know, when I was doing my modeling on it, I anticipated that the entire United States would grow at the same rate, all of the zones.