Marley Spoon recipe box delivery concept

Four bootstrapping tips from Marley Spoon co-founder Dave Malcolm

Azadeh Williams

Not all start-ups can hit the ground running with investor funding, and while bootstrapping seems like a daunting alternative, recipe box delivery company Marley Spoon is proof success is possible with the right product creativity and customer know-how.

Here are four tips from the meal kit start-up’s co-founder and Australian Director, Dave Malcolm to get your business off the ground with limited financial backup.

Think of bootstrapping as an approach

Founded in Berlin in 2014, Marley Spoon has since expanded into the UK, the Netherlands, Austria, the US and most recently, Australia, bringing the two-year old start-up’s reach to over 217 million households globally. Speaking at the Online Retailer Expo in Sydney, Malcolm stressed the company’s idea of bootstrapping from the beginning was not about the lack of cash or fund available, but more about an approach or methodology.

“It’s all about being mindful and making decisions based on data and executing according to your plan,” he said. “So you need to launch the right product at the right price, with the right stories – through the right channels and at the right time. Your product also needs to be relevant, useful and valuable.”

Get creative with your Minimal Viable Product (MVP)

Being resourceful and creative from the outset can be one of the best ways to start your business. Malcolm actually created Marley Spoon’s first delivery concept prototype from packaging he collected from Office Works and ingredients from a supermarket.

“I put together what’s called an MVP or minimal viable product, which is referred to in the Lean Start-up – a book that I think is the bible for anyone who is interested in rapid growth and deployment,” he said. “And the premise of a start-up is to have a leap of faith - Marley Spoon’s leap of faith was that people want food delivered to their houses in boxes.”

Malcolm said the company didn’t wait until they had the box finalised and on the road, but started out by getting consumer feedback on their prototype.

“We got feedback from friends and family immediately,” he said. “And we weren’t shy in saying our product wasn’t finished. But after analysing the feedback, we could then improve and roll out a better concept. And after 12 months of testing in the market, we became confident in the product and process.”

Find the balance between growth and scale

According to Malcolm, many startups fail because they don’t understand how to find the balance between growth and scale – or they have sacrificed quality in order to be cheaper.

“If you can’t find the balance, there are actually huge risks associated with rapid unplanned growth, particularly for businesses with physical and perishable stock” he added. “You could risk massive cash burn, potential product failure due to production capacity, human error with pick and pack, which could potentially destroy your customer acquisition.”

This means as a bootstrapped start-up, there’s no point scaling your acquisition model if you’re unable to scale your business in capacity, he added.

“So it’s about getting to operational readiness,” he said. “And part of our business being bootstrapped, was having the breaks on our acquisition strategy until we got to the point where we had the right economics and processes that were super tight, in order to facilitate the needs of our customer.”

Identify the right marketing channels

It’s critical to identify the right marketing channels so you can scale as a start-up, at the right cost per acquisition, Malcolm explained.

‘You need to optimise your marketing channels to deliver your story and offer, keeping in mind you don’t have heaps of cash,” he added. “But you also need to embrace the idea of ‘flearning’ – or failure through learning. So ego must be parked at the door and be open to ideas coming from everywhere, particularly with marketing. But it’s all part of being agile as a small business.”

One Marley Spoon adopted from the outset was turning on AdWords to help customers find the brand and visit the website.

“We were spending only $10 a day initially, and you can cap them and optimise constantly,” he claimed. “You can even sit at home and do it in front of the TV if you’re obsessive. But search underpins everything we do.”

Marley Spoon also went down to Bondi Markets and hired a stall for $100 and spoke to absolutely everyone and encouraged them to sign up.

“We got our first ten customers there and a couple of them are still with us as users today,” he said. “What was our cost per acquisition? Ten dollars – I’ll take that every day. And while it’s not scalable, it’s a great way to find out about your customers and well worth doing.”

Email marketing associated with lead generation online has also been effective for Marley Spoon, where the brand shares quality and engaging content via the likes of MailChimp and Mandrill.

“Email marketing has worked really well for us,” he said. “We have so much beautiful content that we create every week with our recipes, which we send out to people to help them convert. We use MailChimp and Mandrill for our automated emails, which is easy to set up with minimal barrier to entry and are very scalable tools. Email is also very fast and we can optimise it constantly.”

Azadeh Williams

Azadeh Williams is a former business and finance news editor at Thomson Reuters, Azadeh Williams has written over 3,000 articles in her 15-year international career on business, technology, marketing and innovation for the likes of The Times, CMO Magazine and Fast Business. She has also lectured in business journalism and media law at Macleay College. 

Image: Marley Spoon Facebook page

If you’re looking to start your business on a tight budget, including how to understand cashflow and avoid those first-time financial mistakes; make sure you read up all the tips and advice ShortPress has to offer. 

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