How I Started A $20K/Month Designer Smoking Accesories Brand

$20,000
revenue/mo
3
Founders
1
Employees
product
Tetra Shop
from Brooklyn
started March 2015
$20,000
revenue/mo
3
Founders
1
Employees
1.2M
alexa rank
26.8K
followers
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Hello! Who are you and what business did you start?

I’m Monica Khemsurov, and I founded Tetra in 2015 with two friends. Tetra is an accessories brand offering beautifully designed smoking objects for aesthetically minded people.

When we launched the business four and a half years ago, there was no one else in the industry focused on developing products with an elevated sensibility, aimed at a more mainstream, style-conscious audience — we were the first. Being a longtime design curator and writer, it was personally very gratifying for me to be able to bring design thinking to a realm that was not previously known for it, but it was also good for business: Being first gave us a head start in brand recognition over the competition that has come along since.

how-i-started-a-20k-month-designer-smoking-accesories-brand

Tetra actually started out as a retail store, selling products that we curated and commissioned from artists and designers. But as we grew, we began licensing and manufacturing designs of our own, starting with the Balance Pipe, which is still our best-seller. Conceived for us in 2016 by Jamie Wolfond, who primarily designs furniture and home accessories, it’s a pipe that combines a sleek, modern, and sculptural look with superior function, in the form of a flat base that keeps it from tipping when it’s set down and an angled carb and mouthpiece that makes it particularly ergonomic to use.

Since we launched the Balance Pipe we’ve added seven other products to our in-house line, and our burgeoning wholesale business is where I expect to see the most growth in the next few years. Meanwhile, we make great margins selling those products in our online shop, which now has a fairly robust customer base. With no outside investment to date and just a $12,000 initial founders’ outlay, we’re on track to average nearly $20,000 per month in revenue this year.

What's your backstory and how did you come up with the idea?

As I mentioned, I started Tetra with two friends. I was (and still am) a journalist running a design magazine with an online shop attached, and they were both art and fashion writers, one of whom had previously run her own clothing line. The three of us were at the beach one day and my friends were smoking; I asked where they went to buy good-looking pipes and lighters and such. They laughed heartily and said that no such place existed, and it was a matter of seconds before the bells went off in my head.

I knew design and had e-comm experience, they had a passion for smoking. All three of us had a lot of connections and really good taste — it’s how we each made our living. We mapped out a game plan for Tetra that very day, and launched it to the public only about six months later (taking advantage of our professional connections to get a ton of great press).

Did we have a proper business plan? Err, no, not even close. But all of us had been working in trend-focused industries where we were used to trusting our gut instincts, so that’s what we did. We knew we wanted to be first, so we didn’t have time to be slow and methodical and question things. We slammed on the gas and flew out of the gates.

While some might argue that I already had my hands full, career-wise, when this opportunity came along — I was running that aforementioned design magazine, Sight Unseen, as well as doing freelance product curation for outlets like Bon Appetit and T in the New York Times — I had just gone through some major changes in my personal life, so I felt like I really needed a new project to pour energy into. Plus, I had always wanted to try my hand at being a “proper” entrepreneur and this felt like the perfect opportunity, since it was suited to my skill set and in a nascent industry with little competition. Training wheels.

The crazy part is by 2018 my two co-founders had both left the business — one took a buyout to move to another country and start a family, and the other is still nominally involved but focused on other (more lucrative, less start-up-ish) projects. So the training wheels most definitely are off, and it’s been a challenge. But because I was thrown into the deep end, running the business on my own and wearing so many hats, I have learned an absolutely staggering array of skills that, even if the business were to fail, would serve me extremely well in future endeavors. Like e-comm marketing, which I know so much about now that I’ve become a key advisor in my friend’s new D2C business. And product development, which has been the steepest learning curve and the hardest part of my job, and which I’ll talk about next.

Take us through the process of designing, prototyping, and manufacturing your first product.

Our retail store was up and running for nearly a year before we launched our first in-house product, the Balance Pipe. The store itself was fairly easy to set up — we launched on Shopify, using a modified theme, with a design created for us by an old friend of mine in Lisbon who’s an amazing graphic designer. Her studio is called AH-HA and I highly recommend her services.

For our initial assortment, we canvassed pretty much all of the product and fashion designers that we knew, some of them friends and some professional acquaintances. It was through that canvassing that the idea for the Balance Pipe eventually landed in our lap.

how-i-started-a-20k-month-designer-smoking-accesories-brand

Looking back on it now, I can see that we had it almost laughably easy when it came to developing our first product. We didn’t know enough to know how easy we had it. Sure, I had been writing about product design for ten years at that point and had a basic understanding of materials and manufacturing processes. But when Jamie brought us the idea for the Balance Pipe, he also offered to run production for us, through a borosilicate glass factory he’d been making vases with for years, for his own company.

He did all of the prototyping, product development, troubleshooting, and paperwork, and delivered the pipes to our doorstep without our having to lift a finger. It was perfect, until we had a shipment seized by customs, at which point Jamie realized he was absorbing too much risk and we realized we needed to work with sourcing partners who specialized in products like ours.

At that point came another stroke of luck: We had the tremendous fortune of being introduced, through my younger brother’s childhood friend, to a business mentor in the industry who happened to have been involved in the manufacturing processes of another, larger smoking accessories brand, and she was generous enough to introduce us to the agent in Asia that she had been working with then. That information effectively fell into our laps, and the agent turned out to be great, and relentlessly efficient — they handle finding the factory, negotiating with them for better prices and lower minimums, communicating with them throughout the product development process, arranging the packaging, doing quality control, and working with a broker to get the shipments to our warehouse. Even after they bake in their fee, we still get great pricing.

I’ve since run product development and prototyping on my own for one specific product that I wanted to work with a particular factory on, and I have to say, it was grueling. A million things went wrong, and for weeks I was getting hourly WhatsApp messages from the well-meaning factory rep that sent my anxiety levels through the roof. So yeah, having a good agent — if you aren’t quite big enough to have an experienced in-house product development person — can be a real life-saver.

We can’t do paid marketing because we’re associated with smoking. We can’t advertise on Facebook or Instagram or Google. In some ways that have tied our hands behind our backs and made it harder to grow our business. In other ways, it has made us more innovative and saved us money.

Describe the process of launching the business.

Launching the business wasn’t too hard for us — as I mentioned before, we each put in $4k to cover basic legal, software, graphic design, marketing, and minor inventory costs (most of the inventory we got on consignment, though we began buying upfront in our second year). I already knew how an online shop should look and function, from having run Sight Unseen’s online shop for many years, and how to set up a Shopify. I think we made our initial email newsletter out of personal contacts compiled by the three of us, and built our initial Instagram following the same way, by advertising to our personal accounts. Being three journalists, it was also easy for us to set up a blog and begin populating it with stories, though back then we didn’t know much about SEO and weren’t following a content strategy, just using our editorial instincts.

Our marketing strategy for the launch was all about taking advantage of the resources we already had at our fingertips — namely, our large networks of influential friends, our connections to press, and my being the co-founder of Sight Unseen. We had the advantage of not starting a business in a vacuum — we could pull quite a few levers to get attention for the launch without any real marketing or PR spend.

Our launch strategy basically consisted of three elements. First, we held a launch party in LA, in the design studio of some very well connected friends, who did it for us as a favor and invited their own list in addition to ours. We also held a launch dinner in New York and did it in partnership with a bigger brand we knew in the industry, who paid for the dinner because we were inviting key influencers and planning the whole thing. A friend with a mezcal brand donated the alcohol, too. Second, we announced the launch on Sight Unseen’s Instagram and started running free house ads on Sight Unseen as well, thanks to the generosity of my Sight Unseen co-founder, who is not involved in Tetra. Third, we reached out to all of our contacts in the press and landed online stories in T Magazine and Vogue, among a dozen others. That got customers flowing in very quickly. Back in 2015 when we launched, news of the first fancy smoking accessories brand had a kind of slightly scandalous appeal that editors tend to love.

I think the biggest lesson we learned from our launch was that we were VERY right not to spend a lot of money on launch events. I think it’s great to be able to tell key tastemakers about your project in an intimate way, but you never know what the ROI is going to be on events like that. Or really on any influencer marketing, unless someone is signing a fee-for-services contract. I’m really glad we found extremely inexpensive ways to do those things.

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Since launch, what has worked to attract and retain customers?

I’m going to cut to the chase on this one: We can’t do paid marketing because we’re associated with smoking. We can’t advertise on Facebook or Instagram or Google. In some ways that have tied our hands behind our backs and made it harder to grow our business. In other ways it has forced us to rely more on unpaid methods, which has made us more innovative and saved us money. I will say that I still have a lot of room to grow when it comes to customer acquisition and retention. Often when I’m crazy busy dealing with wholesale orders and logistics and product development and other pressing concerns, my ability to come up with and execute new marketing campaigns takes a backburner. I also don’t have one of those crazy stories to share where one genius move I made miraculously doubled our revenue overnight. It’s been a slow build for us.

So far it’s the simple things that have moved the needle. We’ve done several big group giveaways with other brands, often riding along with Sight Unseen, which has a bigger following and is more attractive for group giveaways. That has helped us grow our email newsletter to more than 25k subscribers (actually it used to be bigger, but I recently scrubbed a bunch of subscribers that consistently weren’t opening any of our emails — not worth paying for them). We usually see about $300 to $1,000 in sales with each newsletter sent, and we tend to send 2-4 newsletters per month. One thing that always performs really well for us is our curated vintage collections. I love vintage shopping, and a few times a year we release a collection of my finds in the newsletter, which always sell out within hours of our sending it. People LOVE our vintage, and it feels like something special we do for our subscribers — plus it gets them onto the site and inevitably checking out other products.

We’re still running banner ads on Sight Unseen, and those bring us, customers. We also do little “tag a friend” giveaways on Instagram that always inch our numbers up there, too. Taking beautiful photographs of our in-house line means we can share those photos with our retailers, in the hopes that they post them and tag us on Instagram. We just started working with a PR firm, which has been helpful since my ability to lean on my personal connections without annoying them has a limit. And we also just hired an old friend of mine to do some SEO keyword research and write blog posts for us accordingly. We’ll sprinkle them in among more editorial posts so it doesn’t look like we’re robots or something.

With Tetra, we have to balance traditional marketing strategies with the need to maintain a certain level of sophistication and taste. Numbers are important, but so is our image and our aesthetic, because that’s our brand story. Texting for example — I know people are obsessed with text-marketing now but, it strikes me as sort of cheesy, and off-brand for us. So it’s not something I would ever do.

Honestly, I think a big factor that’s helped us retain customers is the feeling of Tetra being an insider thing, a discovery — people who find out about Tetra for the first time get really excited to see that something like it exists in this industry. And yet our price points are accessible enough for most of them to buy-in. So the result is that people who love Tetra REALLY love Tetra. We feel a lot of joy and gratitude from our customers just for providing them with a more beautiful option, and as a business owner that is such a nice feeling. It’s also something we think about a lot when we’re writing Instagram captions or newsletters — how can we maintain the level of sophistication and design cache our customers appreciate, but also connect with them in a way that says “we’re excited you found us, and we’re excited that you’re excited to be here.”

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How are you doing today and what does the future look like?

Today we’re doing well, but like many businesses, my biggest challenge is how to achieve significant growth, especially without any paid marketing. If we’re at $250k per year now, how do we get to $1 million? I have some ideas about how to move the needle, but I’m not sure if they’ll be enough. This year, I’m planning a redesign that will elevate our brand even further and help fix some major issues with our website and packaging.

Our customer experience will be better after that. I’m going to try to up my SEO game significantly and make my first forays into the Youtube space. I’m going to try to do more photoshoots and create more content. I’m going to try to get a few more products out the door for holiday 2020, which gives us more opportunities for press and marketing. I did have a huge marketing event planned for November, with a few other brands, but with the pandemic, I’m not sure if it will happen — fingers crossed. And then I have a few other plans for expansion that have to remain secret for now.

Right now we’re doing a little over half of our sales in the online shop, and a little less than half via wholesale accounts. I think that represents a huge potential for growth. We went from $20k in wholesale revenue in 2018 to $80k in 2019, and while the pandemic is making it harder for us to sell to our existing retailers, there are SO many of them out there who simply don’t know about us yet. Honestly, it’s not easy to be in the business of selling goods that are under $100 and that you don’t need to constantly replace them. It’s conceivable that you could buy one $65 glass pipe from us and use it for years. That’s exactly why, when we started the company, it was important to me that our products be unisex and relatively affordable — if we can’t sell one person 10 times the number of pipes, we have to sell 1 pipe to 10 times the number of people. I think expanding our wholesale reach might be our best chance at driving those numbers up to where they need to be.

It is nice that because we don’t have investors, and have been profitable since early on, there’s less pressure to achieve some breakneck speed of growth. Often times when I have the most anxiety about my business it’s because I’m putting that pressure on myself, and asking myself why I haven’t yet found the magic bullet that sends our sales skyrocketing. But then I have to remind myself that there’s nothing wrong with building the business organically and not burning through huge reserves of cash. Plus, I have to be realistic about what’s still a developing market. This industry is growing, but it’s not mature yet. We may find ourselves expanding as it expands.

There are some things you just won’t be able to learn or know until you’ve already bit the bullet and started something. I’m a huge believer in diving in and making shit happen.

Through starting the business, have you learned anything particularly helpful or advantageous?

I have learned everything by starting this business. Everything about e-commerce, everything about marketing, everything about product development. And I still have so much to learn, particularly about building a team and about how to keep growing and acquiring new customers.

One thing that stands out as particularly important is that the experience of running Tetra these past four years have brought into extremely sharp focus what skills I excel at versus what roles I would be better off delegating. I figured out that I was really, really good at big-picture stuff — coming up with a million innovative ideas, using my intuition, strategizing on a macro level, having a creative vision, curating our product assortment, making things happen in general — and pretty dismal when it came to detail-oriented stuff like maintaining extensive sales records, or cautiously analyzing data and using that to make decisions (rather than just my instincts).

When I’m working on big-picture tasks, I’m excited to work and I’m super productive. When I’m doing things I’m not great at, I drag my feet. Understanding my strengths and weaknesses means that I can better serve my business in the long run, because I know exactly which roles someone else can fill better than I could.

That’s probably the one missed opportunity I see with Tetra. I love my cofounders and the time we spent working together was really special to me, but in a way, it was always going to be challenging that we had such similar skill sets. In a perfect, parallel world Tetra would have been founded by two people with diverse skills — a creative mind and the mind of a number, for example. I would love to have a numbers-oriented partner now, but at this point, I don’t necessarily have the salary to hire a really good one away from another brand. Yet.

What platform/tools do you use for your business?

We use the following:

  • Shopify for shop hosting
  • Klayvio for email marketing (plus abandoned cart, welcome flows, and stock notifications)
  • Later and Plann for Instagram post scheduling
  • Shopify Ping for customer service chat
  • eFulfillment Services for all order fulfillment
  • Xero for accounting and invoicing

My brother, who has an e-comm marketing agency, has suggested that I install customer product reviews (Judge.me) on Tetra, but I’m still deciding if I’m ready to open myself up to reviews.

The technology I miss the most is Socialrank. I think about it all the time. Before Instagram changed its API, Socialrank helped me see which highly followed users were following Tetra, so I could potentially reach out to them for gifting or collaboration. Now I feel like I’m fumbling around in the dark. Such a shame.

What have been the most influential books, podcasts, or other resources?

I am embarrassed to say that I don’t often listen to business podcasts or read business books. It’s something I know I should probably do. But I’ve always had this issue where because I’m a workaholic and a multi-tasker who has an overactive brain when I expose myself to too much noise and too many outside ideas, my wheels start spinning too fast and I get less productive rather than more productive.

I find that spending time talking with others in the industry, and reaching out to peers and mentors when I need advice, has served me better than filling my head with tons of information that may or may not be relevant.

For instance, I recently had lunch with a longtime marketing exec, a friend of a friend, who impressed upon me the importance of devoting more of my time to developing our SEO strategy, and to getting Tetra on Youtube, because we can’t advertise. That gave me a very focused goal.

That said I have been known to listen to How I Built This and Start-Up Stories from time to time.

Advice for other entrepreneurs who want to get started or are just starting out?

I only have one bit of advice and it’s probably advice you’ve heard from a million other people: Do not overthink things when starting a business. Do not get so tied up in the details and the fears that consume people at the beginning of the process that you can’t move forward. You have to be able to act, and act confidently, even if there are a million things you don’t know or are afraid of.

Obviously the more you’re risking and the higher the initial investment, the more careful you need to be. But there are some things you just won’t be able to learn or know until you’ve already bit the bullet and started something. I’m a huge believer in diving in and making shit happen.

Are you looking to hire for certain positions right now?

No, but if someone who’s extremely good at growing a business (that can’t pay for Instagram ads) — and good at using data to craft strategies — were really interested in being a part of Tetra, I would definitely be open to it. They can DM us on Instagram.

Where can we go to learn more?

-  
Monica Khemsurov,   Founder of Tetra Shop

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