Esteban Contreras: What inspired and motivated you to help others start their own subscription services - with Cratejoy?
Amir Elaguizy: During Y Combinator we were really shocked with how well some of the better subscription commerce companies (LE TOTE was in our batch) were doing and spent some pretty significant time looking into the market. We were really shocked to find that there is very little out there for people who want to run physical product subscription companies. Most people were taking normal eCommerce platforms and hacking them into SaaS subscription management platforms (Shopify + Chargify being the most common).
We spoke to over a hundred different subscription commerce founders, and we spoke to directors at Shopify, SquareSpace and other eCommerce platforms. The more we dug, the more clear it became that existing players weren’t looking at subscription commerce - causing subscription commerce founders to practically pull out their hair due to unmet technology needs. We realized that we could really revolutionize this market with our veteran engineering team.
EC: The company pivoted from another startup called Toutpost, which was a community of experts. Why did you decide to pivot?
AE: Toutpost was a project of passion - we felt very strongly that there needed to be a solution for product reviews that did not involve anyone who was financially incentivized to have an opinion being in the loop. We built a Facebook integrated review site that used social validation to encourage sharing of product opinions. We loved what we built and to this day feel like someone should find a way to move product reviews off of the Merchant’s site and onto a community powered site.
However - our style as founders has always been to build things and see how the world responds, then ruthlessly discard the ideas that aren’t winners. Having had success in the past and having built platforms that had millions of users on them (at Zynga) it is very clear to us when a product has potential, and when it’s not there. Toutpost missed the mark, and what’s worse is we didn’t have a clear understanding of what was wrong. All we knew was that people did not love it. They liked it, but they didn’t love it. Paul Graham wrote “It’s better to make a few users love you than a lot ambivalent.” Unfortunately, that was exactly what happened to Toutpost.
We still haven’t had the heart to turn it off, though.
EC: Tell me about Cratejoy's MVP and what you've learned in terms of editing the feature set to turn it into what it is today.
AE: We have a very studied approach to product development. We built an outline of minimum required features to launch a subscription commerce business after speaking to literally more than a hundred different subscription commerce companies. I remain in constant contact with dozens of the founders of these subscription box companies. They have been unbelievably helpful, largely because their hair really is on fire. They’ve been very receptive to someone building a product for their needs.
Even after defining the MVP feature set, every time we are going to build a new chunk of functionality we will research it, mock it up, and then I’ll send it off to some of the sub com founders to get their feedback. That’s how we’ve been able to build such a strong product offering from day one; with this never ending focus on product quality and feedback. It comes from our time in the gaming industry where user experience was literally everything.
It was interesting to learn just how different their use cases actually are. For instance in physical product subscriptions there is the notion of a “cut-off.” If you order your products on or before the 10th of the month you will receive it this month, otherwise you’ll receive it next month. The 10th is the cut-off. The reason for the cut-off is because the physical products must be ordered from vendors, packed in boxes and shipped out of a warehouse. For inventory management they ask questions like “how many of product X should I order based on who has already received this product in a previous box?” These sorts of things are simply not possible on current eCommerce platforms.
EC: Cratejoy is a great name. What's the story behind it?
AE: I picked it and the team went along with it. I’m glad it has worked out so well because we have traditionally been very bad at naming :) I take the name clicking into place so well as one of the many signs that Cratejoy is something very special. It hasn’t always been so easy; it took us months to settle on some pretty bad names in the past.
EC: What are some examples of the first stores launching on Cratejoy?
AE: Helene Jewelry, which is a Bracelet of the Month club, is our first store. Sumo Snacks is launching in early January and it is a monthly snack club targeted specifically at offices. El Hombre Salsa is lined up to launch soon after that, a salsa of the month - that is delicious I might add.
We’ve got several migrations launching as well, including a Tie of the month club and a B2B subscription for hair salons.
After these launches we will open it up to public beta and allow anyone to start their own subscription, likely in early February.
EC: You recently announced three responsive themes and a theme editor. Tell me about recent design trends and how they've influenced your thinking.
AE: Broadly speaking we focus on having a clear visual hierarchy, clean calls to action and a having a strong experience on all devices. We are slightly partial to large product images and bold colors, but we’ve built themes that are more neutral as well. You can tell the way our personal tastes lean by checking out our homepage, it is very bold and colorful.
In terms of choosing our themes, we take feedback from our private beta testers and try to build themes based on patterns we see in their needs. For instance, one of our new themes is built around the idea of a feminine fashion subscription. I can’t take credit for most of the design though, we work with a fantastic design studio in Austin called Frank and Victor.
EC: Is it possible to integrate an existing website on another service (i.e. Squarespace or Shopify) with Cratejoy?
AE: Not yet, but it’s definitely on our radar. I’d expect to see third-party platform plugins in mid 2014. We will have a robust API which could be used to achieve this desired effect before then though, but only by more advanced users.
EC: Do you aim for Cratejoy to go beyond being a platform to also becoming a marketplace for subscriptions?
AE: We definitely intend on helping subscription companies market their products and a marketplace would be one piece of that. Our goal would be to drive shoppers to the best subscription box experiences while also giving new subscription boxes a launching pad to get some initial attention. We’re also looking at facilitating cross marketing between subscription box owners so two non-competitive subscription box companies could help each other out.
EC: Any advice for aspiring tech startup entrepreneurs?
AE: If I had to boil it down to a single piece of advice I’d say never ever ever give up, but adapt constantly. Many people interpret never giving up to mean that you never stop pursuing your vision - that’s not what I mean. I mean never stop pursuing the *right* vision. For me that has meant recognizing the shortcomings of my vision and adapting them to new data constantly. I’m not sure to what I owe my success in the past, but I think it’s a combination of surrounding myself with amazing people and being ridiculously stubborn. I’ve written some about this (i.e. "58 Things I learned at YC".