The Perfect ValentineFollow @jdh
I’ve found the perfect Valentine’s gift for that geek girl in your life. Actually, it works fine for non-geeks but given that you are reading my blog, I’m pretty sure your wife or girlfriends is somewhat of a geek.
That gift is a subscription to RocksBox. It’s an affordable subscription to great jewelry — have something new, fresh and beautiful to wear every day, all for less than $20/month. Not cheap plastic stuff, but real high quality pieces, generally $100+ pieces with a lot of style.
On behalf of Matrix Partners, I have just led the company’s most recent round of funding, and I couldn’t be more delighted. When I met the founder Meaghan Rose the first time, I was very impressed, but early stage commerce ideas are hard to evaluate in advance of market data other than whether it’s a product you would use… and I don’t wear a lot of jewelry. Despite how much I liked Meaghan, I wasn’t ready to write a check.
Meaghan did something smart at that point: she gave a free trial to a couple of Matrix folks, and after those people repeatedly reminded me how delighted they were with the product, I knew I should take another look. When combined with the continued success in acquiring and retaining subscribers in the open market, I had more than enough information to bet on Meaghan and her company.
A value proposition that you can deliver profitably that truly delights consumers is the first thing I look for in e-commerce. Execution demands in this space are extraordinarily high, so that’s not enough.
Matrix is lucky enough to be Series A investors in two of the top 5 e-commerce startups of the last five years, JustFab and Gilt. Neither existed five years ago, and together they’ll do well over a billion dollars of sales this year, profitably. Despite (or perhaps because of) the great success of these two fashion companies, we have been very selective — these are to date our only inventory-bearing e-commerce investments, and I’m pleased to add RocksBox to that list.
Jewelry and accessories is a huge ($33B) market that is poorly served online. BlueNile, started by two of my friends from Bain, has done well at the very high end of the market — but that was formed in 1998! Jewelmint exists at the very low-end, but there is nothing in the middle.
This durable, easy to ship item is great for e-commerce, but women really want to try it on and experiment, which hasn’t leant itself to online purchase. Blue Nile solves that by selling to men — the bride-to-be wasn’t going to get to try it on anyway.
RocksBox solves it with an innovative subscription program — subscribers get three pieces to wear at all times, and they can send them back and get new ones anytime they want. While RocksBox makes a little on the subscription, it really serves as an opportunity to try-before-you-buy. When you find that piece that really works for you, you can buy it.
JustFab has taught me the power of subscription and making a product that has great value and that customers love. One of the key failings that makes it hard for most e-commerce startups generate profits is the episodic nature of purchasing, and thus the need to pay to reacquire your existing customers over and over. A subscription model, even if it weren’t profitable on a standalone basis, is a far better method to retain engagement.
Give it a try and tell me if you agree. For $100 you can give a six month subscription to your mom, sister, girlfriend or wife. Be sure to remember to compliment them when you see them wearing something new!