How did Purple Dot get started?
“After our first start up, Twizoo, had been acquired, we were looking to begin something in the e-commerce space. We started to think about how e-commerce businesses hold their inventory and there were constraints with that which didn’t need to exist. We thought there might be a way to do things differently around pre-order sales and increase the volume of sales. If you can sell earlier, like when your inventory is on its way to the warehouse for example, not only does that reduce your inventory risk but you can actually sell more because you have increased the window of time you have to sell.“
Madeline went on to explain just how Purple Dot answered a gap in the e-commerce market and solved an ongoing frustration. “Traditional e-commerce was built around the assumption that when an order comes through online, stock is in the warehouse. This prevented brands from executing a pre-order strategy at scale — because with pre-orders, stock isn’t in the warehouse yet. We heard time and time again the pain around pre-orders — warehouse meltdowns, lack of customer trust and poor CX (customer experience). Purple Dot enables brands to create a pre-order experience that eliminates these operational headaches and that shoppers love and keep coming back to. With pre-orders, brands can always be selling.”
How did you determine when to seek funding? What has your investment journey been like?
“Looking back on it, fortunately, we had a very good exit the first time with Twizoo so we knew what the process would be like. The funding process was way easier than the first time around. With Twizoo, it took us almost a year to raise $250k. With Purple Dot, we raised money before we even had the product, we had our original team back together, and we knew we wanted to build a solution in this space. Luckily, we had built out trust in the investor community in order to do that and be operators and run in that zero to one space.“
How has your business developed over time, where’s it headed next?
“We are definitely a VC backed start-up and we need that to fuel our next stage of growth. We have raised two rounds of funding and we are probably going to be looking for a Series A investment in late Q1 of 2023 which will help us double down on demand with our customers. We just had our best month ever in September with ten new customers signed on our premium product, so we want to get those customers integrated and live and continue that momentum. So, yeah, we will be raising another round of funding in order to do that.”
Given your experience and your two ventures, what kind of advice can you offer other start-ups trying to navigate those early days?
“Firstly, always keep your head up. I think entrepreneurs are some of the bravest people out there, because you are really sticking your neck out and you are really making yourself very vulnerable to critiques all the time. Whether that is from your family and friends and a lot of people just look at you and say, ‘well, this is never gonna work!’ But the thing is, things do work, and I think entrepreneurship is the best job in the world to be honest. So yeah, anyone just getting started I’d say well done for having the bravery to do that, I know that it is hard.
My second bit of advice is now it’s time to do the work. One of the best things about entrepreneurship is there is nowhere to hide, there is not really any posturing and at the end of the day its only results that matter. Hopefully, you are the type of person who draws energy from that challenge.
As for the funding side of things, I think the first thing is definitely know your customer. Know your problem and solution really, really well. Think about that narrative to customers who don’t know your product or industry and never even thought about it and articulate it to them. Know how to present it to an investor, who again, won’t know your product or maybe even your market the way you do. They see hundreds of pitch decks a year. So, my advice to Pre seed and Seed start-ups is have the humility to understand that not everyone knows your customer like you do. Practice pitching to that non-persona. Imagine pitching to your grandmother! I actually did that – I pitched to my grandmother. You want to pitch in a way that anybody, despite not being your key persona, will see it’s a massive opportunity. It’s a good benchmark.
I mentor start-ups at Entrepreneur First sometimes, it’s a talent incubator for start-ups in London. I think the number one thing that some of these people that I work with miss at that very early stage is that they may deeply understand their problem-solution but finding a way to articulate this to an investor who hasn’t been thinking about this in the way the start-up has, day in and day out, can be challenging to put across.”
And what about your infrastructure, building your team, what insight can you share around that?
“Team is the most important thing to get right by far, we invested a lot to get that balance and dynamic right. I would say to be deliberate in who you hire, to align with your culture and value system firstly. I believe that everyone wants the right fit, wants to work hard and wants to find that fulfilling job. So, take your time and it’s your responsibility as the hiring manager to find the employee the right role, even if it’s not with you. It needs to be a mutually good fit for everyone, it’s not just about skills.“
What does the next 12-18 months look like for Purple Dot?
“We believe that we have hit this product-market inflection point that you hear about in start-ups. So, the next 12-18 months will be scaling that motion. Scaling the sales team, customer success team and scaling the engineering team so we can make the product better and better and add more value.
We want to help our customers have a pre-order strategy. We really want to start evangelising that in every sector, so that more brands understand it’s an option for them to maximise sales.
In the next 18-24 months, we think the potential goal would be to get to Series B. We will have to see what the market looks like as we are essentially creating a new category which is very exciting.”