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11 February 2022
Courier Weekly provides inspiration and tools to help you work better and live smarter.
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Your weekly round-up of briefings, trends and news.
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What Depop's founder did next
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Simon Beckerman founded peer-to-peer fashion resale app Depop in 2011 and helped sell it to online marketplace Etsy last summer for $1.6 billion. The Italian-born, London-based business owner is now turning his attention to the food and drink world with new brand DELLI.
Launched in London earlier this month, DELLI allows users to buy and sell ‘drops’ of food and drink products from local, independent producers. We caught up with Simon to find out his tips for building a successful brand.
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01. Follow your community.
Initially, Depop was intended to be a social-driven retail site for brands featured in Simon's fashion magazine PIG. But sorting out distribution and minimum orders ended up being too much of a challenge. So, Simon decided to focus on the strength of the community and created a marketplace.
‘Today, in the tech world, you might call this product-market fit: take a community and a market, build a product for them, match them together. And, if you find that perfect fit, you get a flywheel turning and a business.’
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02. When hunting for investment, go for ‘smart money’.
Simon sought out investors who could not only write the checks but had the experience to offer advice as he was building out DELLI.
‘Don't look for simple money. Investors have this term – they call it “smart money”. But, basically, find investors who know how to help you build the company because they've done it already.’
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03. Know when you need more than investment.
Depop was weighing up an initial public offering (where shares are sold on a stock exchange) when it was approached by Etsy. Initially, many board members voted ‘no’. But selling the company was a rational calculation of what could push it to the next level.
‘We ended up deciding to sell, because we thought that Depop's biggest challenge was going to be developing the product to the next level, to the next stage. We were finding it really hard to evolve product-wise, and Etsy was doing such a good job there.’
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04. You can create your own untapped market.
When the pandemic hit, Simon saw the rise of home-based food businesses and realized that there was an opportunity.
‘I started thinking, what if this is an untapped market? Like Gen Z, when we started Depop – they didn't exist as a market. What if this is an untapped market that wouldn't exist if it wasn't for DELLI? For example, Airbnb: if you had a house, you wouldn't think of listing it for rent if it wasn't for Airbnb. You could have done it before, but you wouldn't think about it. Airbnb gives you a tool that's inspiring enough to make you want to do it. Depop did the same for clothes. And maybe DELLI can do the same for food.’
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05. USP is king.
With a new company, you don't necessarily have to compete on features or price. Instead, find a unique selling proposition (USP). For DELLI, it was building a community.
‘I think, as an entrepreneur, my job is to create a company that has a very unique USP that isn't replicable with money or features. Whether that's a community, or you're super fast in building the platform – so, you bring people in before someone else can do it, like Uber or Facebook. Our goal is to create a community that people want to be part of.‘
Read our full conversation with Simon here to learn about his journey with Depop, opportunities in the food industry and his book recommendations for being a better business owner.
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Inspiration for the home, plus things to eat, drink and wear.
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Scrubbing up well
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A few things to make your bath-time excitement bubble over.
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The Everybody brush from personal hygiene brand Bathing Culture does it all. You can use it wet with hot water and soap for a deep clean, or use it dry to aid your lymphatic system (part of your immune system) and skin. Its bristles are made from natural sisal (a plant fiber) and it has an oiled beechwood handle. |
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Yunohana onsen powder from lifestyle goods brand Jinen is made from the mineral deposits on Mount Yakedake in the Japanese Alps. Used in onsens (hot water springs) in Japan, this all-natural mineral powder is added to hot baths to soothe sore muscles. |
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What could be more relaxing than reading about baths while you're in one? Founded in 2020, Hamam is a print magazine for the ‘bathing obsessed’. Every issue explores this theme through features and photo essays. |
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Claus Porto has been making artisanal soap and bath products for more than 100 years. Its classic spiced citrus soap on a rope, made with pure vegetable oils and walnut extract, is scented with lime, coriander, verbena and incense. |
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Tips and tools to become better at life and work.
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A metric to know: monthly recurring revenue
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Any subscription-based business will be quick to talk up the importance of monthly recurring revenue (MRR) to its growth. So, what's it all about and why is it so important?
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What is it?
If your business runs on a subscription model, where customers pay on a monthly basis (instead of annually), MRR is a crucial metric. It basically tells you how much regular and predictable revenue you can expect to bring in each month, by averaging your various pricing plans and billing periods into a single, consistent number. You can track that figure over time to see whether your revenue is increasing, plateauing or decreasing. (Hint: you want it to be increasing.) It's not an accountancy figure; it's a sales insight figure that can help you track your business' financial health (and growth).
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How do you work it out?
This is the most basic and common calculation.
Total number of active subscribers x average billed amount = MRR
So, if you have 1,000 customers all paying $15 a month, your MRR would be $15,000. Or, if you had 500 customers paying $15 a month and 500 customers paying $10 a month – so, a total of 1,000 customers paying an average of $12.50 a month – your MRR would be $12,500.
Delve a little deeper and you'll find an arguably more important metric: net new MRR. This tells you how your sales are growing versus the number of people who are canceling their subscriptions (AKA churning). This is crucial for sales teams that are focused on bringing in new customers, upselling current customers and building in retention.
New MRR (revenue from new customers who signed up that month) + expansion MRR (revenue from existing customers who upgraded their subscriptions) - churned MRR (revenue lost, due to customers who canceled or downgraded subscriptions) = net new MRR
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Why it matters
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MRR isn't just a metric for software-as-a-service (SaaS) businesses. All manner of small businesses are bringing in a subscription element to their offering – from fashion rental businesses to lawn care, meal delivery to personal care products, from car hire to… you get the gist. |
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MRR lets you make accurate sales forecasts and projections about what's to come. You'll have a better idea as to what's available for reinvestment into your business – in both the short and long term. |
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Looking at sales trends over a long period of time lets you build up historical data – this can point you towards seasonality and other relevant trends. |
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As you dig deeper into MRR (and its additional calculations), your sales team will get incredibly valuable insights into stuff like how successful their upselling strategy is, which pricing plans are bringing in the most revenue and which periods of the year see higher churn. |
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Want more tips and tools on working effectively and living smarter?
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Other great stuff we loved this week.
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