Here's the first of six profiles of retail industry game changers. Today's interview is with Meaghan Rose, founder and CEO of Rocksbox, a premium jewelry subscription service. (This is Total Retail's second annual profile of entrepreneurs disrupting the retail industry. Here are last year's: Rachel Shechtman, STORY; Ryan Babenzien, Greats; MaryAnn Bekkedahl, Keep; Vishaal Melwani, Combatant Gentleman; Katrina Lake, Stitch Fix.)
Total Retail: Where did you get the inspiration to launch your company?
Meaghan Rose: Personal experience as a young professional living in New York City on a budget. I love jewelry and was constantly borrowing from my friend Lila’s collection, mostly to dress up everyday outfits. The pieces I ended up loving were usually on loan from her, which is when I came to realize just how important wearing something is before you can really fall in love with it (and want to buy it).
I was working for McKinsey & Company as a retail strategy consultant when I decided to create a new way for women to shop for jewelry. My clients, consumer brands, were selling product through traditional brick-and-mortar stores, with warehouses full of product sitting around waiting to be sold. I thought, “If they could just send these to the customer and let her try the product, she would be so much more likely to buy.”
A major source of inspiration for me was Sephora, a model I got to know well while working with a beauty client at McKinsey. Sephora disrupted the beauty industry by creating a shopping experience based on the way women want to make decisions about beauty. They want to explore, try on new things in a no-risk way and learn from experts. This was a radically different shopping model, and it transformed the beauty retail space. I felt the jewelry category had a similar problem around overwhelming product choices and a shared need for low-risk trial and discovery.
I created Rocksbox with the basic idea of building a shopping experience around the way women make decisions about fashion. I saw an opportunity to drive the evolution of fashion retail by reimagining the shopping experience — starting with the jewelry category.
TR: What was the “ah-ha moment” when you realized you might have a successful business?
MR: I’ve always been inspired and motivated by the feedback from our members. Even with our scrappy beta site in the early days, I knew that I was onto something when handwritten thank-you notes poured in and people kept subscribing. We still get the handwritten notes, but now I’m able to see feedback in a much larger way online, with friend referrals and on Instagram, where we’ve organically cultivated a community of thousands of girls who want to promote the brand on their social media channels.
Jewelry is such an emotional fashion category. I vividly remember a note from a member who was recovering from a tough surgery. She told us that getting her Rocksbox set in the mail, wrapped up like a gift with pieces handpicked for her, helped her get off the couch and get dressed up for the first time in a long time.
For me, Rocksbox has always been about the people I’m building it for. I think these stories will continue to be my primary source of inspiration and validation for the business.
TR: How did you develop the resources and guts to start your company?
MR: I believed so strongly in the business model and market opportunity — and had the data proof — that it powered me through the longest of early days, bootstrapping the business from a garage. I learned basic coding and Photoshop online and built the first website in WordPress. I used my own jewelry initially, and when that wasn’t enough I would fly to New York with empty suitcases to fill with jewelry I bought in the fashion district. I gifted Rocksbox memberships to assistants and investors at a few angel and venture firms, and in early 2014, I received interest to invest from several of them. On Valentine’s Day in 2014, I closed my first outside capital investment round of $1.5 million from Matrix Partners and Broadway Angels.
TR: What has been Rocksbox’s strategy for getting financing?
MR: My strategy has always been to focus on our customer and on building a fundamentally strong business. I’ve focused my pitch on our growth, the strength of our relationships with our members and the potential to leverage our brand in new ways as we grow.
I didn’t know anything about the venture world or fundraising process when I moved out to San Francisco and started Rocksbox. I found a few people who were willing to take a meeting, introduce me to others that knew the space, and pay it forward. Through that I’ve built a knowledge base and network in venture and fashion tech that has supported Rocksbox as it has grown.
Even with that support, fundraising can be a draining and emotionally exhausting process. I found the most successful strategy was to always be well prepared, know my business inside and out, and to come with passion and confidence around what we’re building. We’ve also remained conservative with our spending so that we can be opportunistic about raising capital during the best times.
TR: What was the pivotal marketing campaign or channel that really catapulted the business in its early days?
MR: We invested early in building out the technology to understand our customer at an individual level, and Instagram is the social channel we focused on to interact with her. For example, we built a #wishlist feature that instantly adds an item we’ve featured on our Instagram page to your Rocksbox queue. Before we started investing in paid channels this spring, 70 percent of our new members were being referred from Instagram. I’d say growing this channel organically, in followers (90,000) and engagement (1,000-plus likes for an average post), is our biggest marketing success so far.
TR: How are you planning to scale the business?
MR: We recently opened a new corporate headquarters in San Francisco’s Union Square, and have made key executive hires to run marketing, merchandising and operations. We’re narrowly focused on growth in 2016, and opened a fulfillment center in Columbus, Ohio this past spring to accommodate planned customer growth. We’re focused on owning the jewelry shopping experience, and will be rolling out new features and touchpoints in support of that throughout 2016.
TR: Can you talk about your hiring strategy?
MR: The people I work with are the No. 1 thing that drives our success. Building a strong team starts with first having clarity on who you are as a company (i.e., your culture and what you value in your team members) and what you’re trying accomplish (i.e., what differentiates you from other brands). Our hiring strategy has evolved as the company has grown. In the beginning it was about finding smart, driven, all-around athletes that could take on many different roles and were comfortable with a lot of ambiguity. Today, the roles are slightly more specialized and we have more clarity on the goals for the business. We’re hiring more team members that have expertise in specific areas, who thrive in an environment of clarity and ownership.
No matter what stage the business is at, I look for people who are exceptionally smart, thrive on ownership, and get excited and inspired by building meaningful experiences for the customer.
TR: Can you point to a book, blog, podcast, etc., that you like to turn to for inspiration?
MR: I love listening to Steve Jobs’ Stanford commencement speech. I listen to it every few months. I probably have it memorized by now. I also find a lot of wisdom in the First Round Review blog posts, which First Round Capital shares from leaders from within its portfolio company. In general, I get the most inspiration learning from founders and operators within other consumer-facing companies.
TR: What advice would you give to those thinking about launching their own retail business?
MR: Come from the consumer perspective. Begin with instincts about what void you’ll fill in the existing market, and invest in touchpoints to listen to your customer. Retail evolves incredibly fast. A new retail format has a lifetime of 10 years or less before new formats come along and threaten its relevance. Whatever is relevant today will be at risk in five years or 10 years. The way to ensure you stay relevant is to listen to your customer so that you can evolve to fit her/his needs. The most exciting thing is today’s technology allows us to listen to customers at the individual level more than we ever have before.
One of the biggest challenges for a CEO as you’re setting the tone for your culture and driving strategic priorities for the business is to ignore the “noise.” Whether it’s some unicorn buzz or some new trends that investors are piling on at the moment, as a founder you have to stay focused, connected to your customers, and have a strong sense of yourself and what you believe in. There are endless distractions that can take you off path. I get my energy and passion from my team and my customers, and I believe that if I make them happy the rest will fall into place.