Nick Chapleau is the Founder and CEO of Starchup, the Chicago-based software company creating a mobile search platform for on-demand laundry services.
Read on for a transcript of his presentation from our January 16, 2018 Here’s How Startup Marketing Conference, where he describes how Starchup dominated its space without spending a dime.
Hi, everyone. My name is Nick. Prior to starting Starchup, I was a lawyer practicing litigation. After I decided to leave, I made the natural next step of getting into dry cleaning technology.
Starchup has always had the same mission from the beginning: Help small businesses – in this case, in the garment care industry – to compete with larger technology players by helping them grow, avoid disruption, and provide a better product to their customers. We noticed this industry was an ignored group when it came to technology and we saw an opportunity to help that.
Our product is a white-label, customer-facing app for mobile, web, driver, and delivery management. Basically, we help our customers have a digital storefront where they can use a website to bring customers in, place orders, and clean their clothes without ever having to leave their home.
Our target market is dry cleaners and laundromats, but we also have a good amount of people who just want to start up a delivery service.
When I came in I had no valuable experience for a startup other than my ability to write a contract. I was a new player with no marketing, money, or industry chops. I had no experience in the dry cleaning industry and no idea how difficult this market would be to sell into.
These are small businesses and they see technology as a cost center: something that breaks down for them and ruins their day, not as a way to grow. They don't see technology as something that they're going to utilize to improve their business, and we have to change that.
The industry is a $20 billion market, but as far as technology is concerned, it's a drop in the bucket. Their resistance to technology and medium-sized market make it hard to sell into. This is not the kind of market that's going to be looking at advertising, clicking on something and going through the normal marketing sales funnel that you hope for with a SAS product.
This is an industry where the business owners and the decision makers look to trusted advisors in the industry to give them tips on different vendors to use.
With all of this in mind, you can bet we had venture capitalists just knocking down our doors to give us money.
We didn’t have a lot of success raising money, which turned out to be fine because had we raised a lot of money in the beginning, we would have dumped it all into AdWords digital marketing and tried the typical marketing funnel that startups were using at the time. The ROI on digital marketing is getting slimmer and slimmer as it becomes more saturated. We were forced to go a different path, which I will talk about today.
- We pushed mission-driven brand building.
Rather than spending a lot of money on marketing, we focused on mission-driven brand and relationship building. It’s the very old-school method of building your brand and making relationships with the industry you're selling into.
Mission-focused brand building means that every single thing we did related to the outside world and imbued our mission of helping small business compete with technology. So how does that translate?
- We always went the extra mile for our existing and potential customers.
We did anything that could possibly add value, whether it was related to our product or not. We would make a logo for a company that said, "Well, we need a logo. Can you do that?" We don’t do that but we did it for them.
We started to do marketing for cleaners, which wasn't originally a part of our core product but ended up becoming an actual revenue stream for us doing B2C marketing for our B2B customers. We’ve even done some minor legal work for a customer that asked for it, but don't tell anybody about that.
- We filled in what was missing from the market.
Being as customer-success-focused as possible has filled in what was missing for the market. When it comes to customer service and customer success, vendors in our industry are not known to be the best.
The market wasn’t used to a technology vendor that was actually customer focused. So as we were figuring out exactly what our business model was, what we were going to do and how we were going to be successful, we focused on the customer at all times, regardless of what we were offering.
- We built our product to our customers’ needs.
When we launched our original product, it was totally different than what it is now. Of course, we took the advice of the experts and turned it into something that was going to work for everybody that uses it. They're the experts because they know what they need.
By listening to them and continually coming out with updates that these customers had influenced, they become trusted advisors for us. They spread the word within the industry that Starchup is a company continuing to be responsive to their customers, adding in new features and making changes based on what the industry is showing them.
- We soaked our web presence in our mission.
When we came in, we made sure to put the message out there that we're about the customer, the business owner, and that we bring everything we do back to our mission. Everything we put out, every piece of writing, blog post, video, speech, presentation, etc. was tied with our mission.
Every prospect that we have is going to Google us and say, “What does this company stand for?” As they read things we've written and see the speeches and presentations we’ve made, they're going to see that we can talk the talk and walk the walk.
That changes us from being a no-name newcomer to one that's really become integrated into the garment care industry, helping this industry grow and improve and offer a better overall customer experience.
- We built real relationships wherever we could.
We went to every trade show that we were invited to and even some that we weren't. Early customers are the most key resource that any startup can have. Once we perform what we've promised product-wise, we can turn these early adapters into a marketing tool through recommendations, videos, testimonials and other things we can then share with new prospects.
Find out who's important in your industry, the ones people look to as a trusted advisor and who is going to be able to say, “Starchup is new but they know what they're doing and they're working hard and providing value for their customers. They can provide value for you, too.”
In any industry, there's already going to be established players who need help on the technology end. Find partnerships there and help them sell it to their customers, provide value for them.
Even if it's not immediate, you're going to get ROI on it. You're going to build these relationships and they're going to feel like you're someone they can trust going forward. All of these relationships have been absolutely key to us building our brand and growing.
We launched in early 2016 and in the first year, we grew to 70 customers. We doubled our revenue in 2016 and 2017 and are now profitable on a monthly basis.
Last year we processed over a million dollars in revenue for our customers. While not spending a dime might be somewhat of a misleading title (because we did spend some money and test outwards) this kind of brand and relationship building drove down our customer acquisition costs to under 10 percent of the lifetime value of our customers. And that's including employee compensation.
We also discovered new revenue streams through helping our customers in any way we can, even if it’s not a part of our traditional services. They need marketing help? We can do it. We've started building websites for our customers. We now offer a marketing package in addition to our core platform. All these streams support that as well and become legitimate revenue streams for the business.
Now we are an industry-recognized brand. If you talk to anyone in the industry who's keyed in, they've heard of us, they know what we do, and they've talked to somebody who's using us. Whether or not they're using us, they're excited about our future and where we're taking technology in this industry, which is I think is different than anybody else at the time.