We Started a $174K/Year Social Commerce Platform During Lockdown

Paige & Daniel
$14.5K
revenue/mo
2
Founders
2
Employees
FriendsWith limited
from Auckland, New Zealand
started October 2020
$14,500
revenue/mo
2
Founders
2
Employees
720
followers
4.27K
followers
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We Started a $174K/Year Social Commerce Platform During Lockdown

Hello! Who are you and what business did you start?

We are Paige Patten & Dan Hubbard, a couple of duo from Auckland, New Zealand. Our business is a social commerce platform called FriendsWith designed for the modern-day consumer.

Our app incorporates all the necessary features of a social media photo-sharing platform with commerce and an affiliate rewards program. FriendsWith is a one-of-a-kind platform for premium fashion & lifestyle brands.

The model of the app attracts users by offering an interactive way of shopping with social profiles, diversity, and real content. Users are incentivized to shop and share photo content of their purchases to inspire further sales and rewards.

We partner with premium fashion & lifestyle brands to bring a unique and forward-thinking new platform. What sets FriendsWith apart from a regular online marketplace is our built-in affiliate rewards program that allows all users to become paid creators just from sharing captivating high-quality content.

We connect to almost any of the main online store platforms, sync products and orders in real-time, allowing our vendors to operate as they normally would, our vendors have full control over inventory, orders, and fulfillment. While we provide two additional sales channels for their brand and a new audience. Due to our unique business model, our users are marketing our vendor's products for free and creating exposure and hype around specific products through eye-catching content.

We take a commission of just 10% - 14% with all transaction fees inclusive.

Our product is primarily focused on the customer. We give shopping enthusiasts the ability to start a side hustle with no overheads, start-up costs, stock, or large amounts of time. The idea is to simply post as you would on other forms of social media, but select content relevant to what you are trying to promote. We encourage users to be creative, bold, and insightful. We want them to share styling tips, size guides; Anything valuable that will build trust with their followers and help them across the line in purchasing the same item from this user's link.

To become a FriendsWith ‘influencer’ you merely need a phone, an interest in fashion/blogging, and an entrepreneurial mindset.

Since launching the app we had a 300% increase in app users and estimate to bring in $200,000 in revenue for the next financial year. We hope to increase our revenue and user base exponentially and become the leading platform in our niche.

how-the-pandemic-made-us-start-a-174k-year-company

how-the-pandemic-made-us-start-a-174k-year-company

how-the-pandemic-made-us-start-a-174k-year-company

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

We reached a point in our careers where we were feeling unfulfilled and underwhelmed. We have always had an entrepreneurial mindset and have both previously owned small businesses, but this time we wanted to do something together that would utilize both of our skills and create full-time work for us both in a fulfilling and enjoyable environment. Fast forward two years and that is exactly what we’ve achieved.

We had been doing some soul searching when New Zealand reached our first ever level 4 lockdown. During this pandemic and forced leave, we had a lot more time on our hands to evaluate and brainstorm what we wanted for our future. This is where the idea of friendswith App was born. The company has significantly evolved since the ideas stage (we are both overachievers) however we have managed to stay true to the initial concept and values behind the company.

You need to crunch the numbers, large or little, they always add up. You need to work on a budget and make calculated decisions.

Our high expectations and drive, led to us throwing EVERYTHING at this idea. We believe in it 100% and have backed it with everything we have.

Dan's background is in construction, previously owning a successful construction company building luxury homes. Whilst he originally studied Science with a degree majoring in Mathematics and Statistics, he has carried these skills through both quantity surveying as well as aiding in his now, very broad coding and development skills. Dan is self taught in his coding. friendswith was not his first app development (he had previously worked on developing an app, which he chose not to launch due to industry legislation in NZ) because of this project that he worked relentlessly on, and was what led to his broad experience in XCode, he largely learned how to develop the features FriendsWith App has today.

While working on this project, Dan had a realization that doing what you love is so important and he wanted to be spending those hours on something he was genuinely passionate about with lots of dimensions, for both himself & Paige as a team.

Dan has a very business-focused mindset, he can see where the business needs to be and how we are going to get there. The app is his baby, he has spent countless hours/days/nights/years developing the app singlehandedly into the product we see today.

Paige has a background in Accounts, Retail, and Sales - all aiding in her role within FriendsWith as the creative director. This is where our team compliments one another. Paige has a creative and forward outlook on all aspects of the business. She puts on many hats day to day including overseeing design, the purchasing agent, packing and fulfilling orders, onboarding of retail partners, styling, social media management, and more.

The entire world is moving towards an internet-based reality. The internet has changed the world and has impacted the way we communicate with each other, the way we consume news, and of course the way we shop. Physical retail has seen a massive decline in recent years as it has become overshadowed by a new way to shop - Social Commerce. That is why we believe our concept can only thrive in this current Market of social consumers.

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how-the-pandemic-made-us-start-a-174k-year-company

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

With a lot of time on our hands (thanks lockdown), we managed to draw the entire wireframe on paper, as well as draw plans for how special functions may work within the app to validate the idea of building an application firstly, instead of a website.

It was then time to jump on the computer. We worked alongside a business mentor who assisted in useful tools, the customer journey, brainstorming, and advice as being so close to the project we needed an outside perspective.

We did a lot of research and outreach while still keeping our cards close. We discussed timelessly with friends and family the concept and whether or not they would use a platform like FriendsWith.

It was then after a lot of positive feedback that we pulled the trigger and jumped in guns blazing. Dan was coding endlessly, unable to keep his eyes off the screen. If he wasn't typing vigorously, he was researching new frameworks or methods to make sure the code was clean and the application performance was optimized. It had to be perfect!

As the development process continued, new ideas would pop into our heads and we would race to jot them down. Sometimes this would happen during the day but usually, it was late at night while in bed, we would pull out our notepads and write down pages and pages of ideas. The app was all we could think about, it was consuming.

The UI has had many faces during development. There is something about color and patterns that can become a little unsettling when you look at the screen for 12 hours a day, every day of the week. Our design is minimalistic, clean and modern. With all the excitement and fun found in our users' content and stores!

Don’t be afraid of being a failure, be afraid of being regular. “You’ll always miss 100% of the shots you don’t take.” - Wayne Gretzky

By the time we were ready to test it, we were ecstatic because we had finally been able to experience what we had envisioned and planned on paper over a year before actually launching. This feeling is unimaginable unless you have launched a business yourself, it feels like this incredibly crazy race to the finish line. It involves non-stop planning, scheduling, designing, and last-minute refinements.

To then finally, show everyone what you have spent all this time working on, it’s just a surreal feeling of achievement, success, relief, and anxiety. The part that didn’t even cross our minds was the minute you launch your business is the minute everything you knew prior to that changes, you are then officially in your next phase of business.

We had an initial budget of NZD 20,000 to build this product, but if we add up all the costs such as living costs, our time, trademarks, subscriptions, branding, website building, SEO, and ASO, we would estimate we went 4 times over budget.

Budgeting for us was extremely difficult. We couldn’t have anticipated the costs involved or predicted what we really needed in order to maximize FriendsWith until we were right in the middle of it. You always start with the basics and to an extent, you are able to get a fair idea of the outgoings, but startup costs are almost always more than you expect.

I think with technology and everything changing so frequently we were constantly chasing new updates, features and ideas prior to the launch, as well as purchasing stock and product lines. Because of this, we did push the launch date backward and in return, it cost us more.

In saying that, we do believe it’s important to launch your product when you truly feel ready, we never wanted the execution to let down our potential customers. You want to start with the quality and vision you plan to continue with for the future of your business.

When we look back at what we have achieved we believe it is far greater than the money spent.

Describe the process of launching the business.

Our launch was an incredibly extensive race to the finish line, we had worked on the development for what felt like forever and by the launch date in August 2020, we were SO ready to finally show everyone what we had created.

The app had already been accepted by Apple, but many other factors needed to be considered before we launched. The launch campaign was all planned and executed in-house, we had exhausted our budget by this point and still needed money for marketing so we chose to launch on quite a low-key scale.

We planned a launch party which initially was to include our partnering vendors and family & friends however due to Covid and the restrictions at the time we thought it was best to do an at-home launch event with close friends and family and celebrate that final stage of our business - to launch the app!

On the first day of launch, we reached the top 50 apps on the app store for New Zealand. This was pretty incredible for us and we were thrilled with the promising start.

It has taken quite some time to reach our first 1000 users, but we still have a 5.0/5.0 rating on the app store, so we are happy with the quality of the product and are satisfied knowing our customers enjoy the app as well.

We had funded the entire business with our savings. No loans, No investment. We sacrificed our home deposit for this venture and we were finally there.

The biggest lesson we learned from our start-up is that you need to crunch the numbers, large or little, they always add up. You need to work on a budget and make calculated decisions.

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how-the-pandemic-made-us-start-a-174k-year-company

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

Since launching the FriendsWith App we have experimented with lots of methods to attract and retain customers. We had started with the traditional approach, i.e. google ads, Facebook ads, and email marketing, but we were not seeing a promising return on investment.

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how-the-pandemic-made-us-start-a-174k-year-company

how-the-pandemic-made-us-start-a-174k-year-company

We find organic videos on TikTok are great. TikTok's algorithm is streets ahead of other social media platforms, so we can reach our potential customers without the large ad spend. While we don’t have a large following yet, the TikTok community is our target demographic, confident, willing to share, creative, and vibrant with their content creation.

We have two main sales funnels being the FriendsWith Marketplace website and the FriendsWith App:

  • Our website operates like a traditional marketplace, providing multiple brands for customers to browse and products for Men, Women, and Children.
  • Our mobile application operates as a new concept of social commerce, i.e. our own social media platform with a built-in affiliate rewards program.

While social media is taking over our app incorporates all features necessary to appeal to this generation of tech-savvy consumers. The FriendsWith App provides a platform for users to create their profiles, shop our products and upload content to either promote products they already own or products purchased within the app. Our affiliate rewards program rewards users for all shared content that inspires another user's purchase or engagement with the linked products. Our unique approach is what sets us apart from other marketplaces.

We soon realized it takes a lot of educating and walking users through the process to allow them to fully understand how to use the application. Because of this, we incorporated our website to become the main entry for our sales funnel and now use our mobile application as a retention tool.

This has meant we get customers and potential users to make purchases through our regular online store (which also opens up our audience to everyone, rather than just iPhone users) we then send them an email following their purchase, to explain and encourage them to join the FriendsWith App and earn from their purchases. We have also added details to our website to explain the app and hopefully encourage our website visitors to join.

The idea of a customer being able to make money after they make a purchase is the key sales point for our model.

A user's profile acts as a storefront, however, the user does not need any inventory, subscriptions, or to fulfill orders. They simply make a post, link a product, and then share their FriendsWith link to any social media platform where they have the most engagement/following and watch their rewards grow. In our opinion, this is the greatest retention tool.

To make the website the main entry point for our customers, we have partnered with an SEO specialist company to improve organic search as well as create our linktree inspired page within our website to increase our overall traffic.

By cutting out services like linktree, you cut out a whole step in the customer's journey. Once a customer clicks your link, they are instantly visiting your website where your shoppable content is.

See example:

how-the-pandemic-made-us-start-a-174k-year-company

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

We are currently focusing on growth. Without ads, we are achieving approximately 100 customers a day for our website. Our focus is to greatly increase this traffic to allow our sales funnel to work in full force.

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Because we are primarily a marketplace, we owe it to our vendors to drive traffic to expose their brands. Our vision is to grow into an industry-leading marketplace/ social media platform specializing in fashion & lifestyle; a one-stop-shop for inspiration, social interaction, rewards, and an overall elevated shopping experience unseen before!

The main goal, which I'm sure you can all relate to, is to constantly rank on Google's 1st page.

We have gained over 16k followers on TikTok within 1 - 2 months and are planning on reaching 100 k by the end of the year. We will continue to use this as our primary method for customer acquisition as it is cheap and allows us to keep our vendor commission very low.

We work closely with our brands and we will continue to do so. We want our brands to grow with us. We plan to build our software to work in-store for our vendors with brick-and-mortar storefronts. This will work by sending portable kiosks to each store to allow users to shop from our social media feed while still being in the physical store. This lets customers view the items in real life digitally while modeled and styled by customers/everyday people.

There are MANY other exciting developments planned for FriendsWith in the near future and we cannot wait to share this journey with you all.

how-the-pandemic-made-us-start-a-174k-year-company

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

We have learned that a slow burn in business is not a bad thing. We live in a world with fast-evolving technology and if your business relies on your technology to keep up, then that technology needs to be optimized for scaling.

Our advice is that you shouldn't rush to market. Make sure that you are happy with your product and that your message is clear. If your customer doesn’t understand your product within the first 5 seconds, then they will leave. This unclarity can also affect the long-term success of your business.

We use the approach of repetition. We constantly repeat what we do as a company and why we are so different. A customer needs to see your brand and idea multiple times before they are interested enough to look further into it. For example when we speak about our business whether it’s to press, on social media, in video content, to vendors or friends and family the words and message are the same. You will see we have key messages and wording it needs to be consistent.

This can be achieved by creating multiple TikTok videos with similar content or having your advertising campaigns span over multiple advertising platforms. We stand by repeating the message over and over.

how-the-pandemic-made-us-start-a-174k-year-company

What platform/tools do you use for your business?

We use:

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

Our biggest influence comes from Guy Raz and his podcast titled How I Built This, where Guy interviews well-known founders. They dive into everything from methodology to the mindsets of each founder.

This resonates with us because it shows these successful founders as regular people, like us who are just trying their hardest. They have had many setbacks, experienced imposter syndrome, and failed on many occasions. This just humanizes the people behind these corporations and lets you know that it’s not all smooth sailing for anyone.

It reassures us that we are doing what we need to be doing and that setbacks are merely hurdles for us to overcome. We have learned to appreciate the journey more than the destination.

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

Our top tip would be to simply give it a go and have fun with it! While you’re at it, it doesn’t hurt to do the following:

  • Calculate the risk to reward.
  • Do your research.
  • Start with an MVP.
  • Validate your idea in its simplest form.
  • Use Bubble.io to prototype.
  • Surround yourself with people who can inspire you and help bring your ideas to life.

Just know that it won't be easy. If it was easy, then everyone would do it. But be persistent. Be accepting of feedback of all sorts. It will help you refine your product or save you from pouring thousands of dollars into something that may not be feasible.

Don’t be afraid of being a failure, be afraid of being regular. “You’ll always miss 100% of the shots you don’t take.” - Wayne Gretzky

Are you looking to hire for certain positions right now?

We are so happy with the progress FriendsWith is making, and cannot wait to expand our team! While we are currently not looking to expand our team, there could be an opportunity in the near future and we would love to hear from you if you think FriendsWith sounds like a good fit for you. Please send your resume to [email protected]

We are always looking to expand and onboard new vendors. If you are a brand with fashion/lifestyle products and want to join our platform, please use the below link to apply!

Join FriendsWith Here

Where can we go to learn more?

If you have any questions or comments, drop a comment below!

-  
Paige & Daniel, Founder of FriendsWith limited
Pat Walls,  Founder of Starter Story
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