The 90-day challenge made more money than our tech company!
Original Harry’s Japanese blog https://note.com/harrycambodia/n/need4242a7ab8
As the title of the blog says, we had a challenge to start a business from scratch in 90 days to understand our customers for 3 months from the end of September 2022. We learned a lot through the 90 days challenge, and as expected (more than expected?), we sold quite well, and we also got something we didn't expect, which will lead to our next business venture!
Many of you may have never heard of our challenge in the first place, in which case you can check out our brand @etsuka_fashion / https://www.instagram.com/etsuka_fashion/
We started the brand to understand our customers better (on the side on weekends)!As what I shared in my blog last year, as a startup owner, we experienced a year in which your business grew quickly right after release and then didn't grow very much.
After about six months of steady growth, the growth stopped, and we had almost completed all the measures we needed to take, so we went back to the basics.
We thought, "Okay, let's start a brand from scratch and relearn everything to understand our customers just like they do!
Normally, to understand customers, owners would go to meet them or interview them, but of course we have been doing that for a long time now, and we have interviewed over 100 companies, probably more than 200 if you include the companies before the company was founded. If we want to understand more, the best way is to "do it ourselves”.
Surprisingly, there are probably not many startups that go this far, but since BToB targets SMEs, we decided that this would be the shortest way to understand their customers.
Calling Mimi and giving her 10,000 Peso to get started
Co-founder Mimi challenged us to create a 10M Peso (¥25M) business in 90 days! Inspired by the original Undercover Billionaire, which is very interesting. Can you build a company worth $1 million in 90 days with $100 in capital?" This is a documentary about a person who became a millionaire and created a business from scratch with his identity hidden.
We understand that this video was a bit popular in the startup community for a while. We found out about it on Facebook when the Japanese translation was released. This improved version is good.
The rules of the original are as follows.
Earn $1,000,000 in 90 days from 💰$100 source.
💰You will be provided with an old truck and a phone with no contacts.
💰Use a fake name so that your identity is not revealed.
It's pretty much a survival mode, starting with sleeping in a truck on the first day, and the first step is to find a home, rather than just business, or something like that.
It's crazy and interesting as content. Wewatched it over and over again. A must-see for entrepreneurs.This is too hard for Mimi, the co-founder of the company, so we set it up as follows.
90 Days Challenge Kamilas4am Rules
Earn 10 million pesos in 90 days from 💰 a source of 10,000 pesos.
💰She is only allowed to use peso during the hours other than "9~5" on weekdays, i.e. weekday nights or holidays ONLY.
💰Do not rely on kamilas4am employees.
Instead of securing the house and food, we put a time limit on it.Because most small brand owners start out as a side business and switch to full time when the business takes off.So we recreated that in a realistic setting.
Phase 1 : To get to 10M peso at the beginning, we calculated backwards. 750K peso / 40% gross profit.
We only have 10K peso, or a little more than 20,000 yen, so the first step is to gather enough money to make a minimum prototype. We went to Second Street, sold used clothes, and did other things
We were shooting this stage because we thought it would be interesting in terms of content, faithfully taking over the original program, but it didn't make much sense because we stopped shooting halfway through. (Laughs)
We don't think anyone has such a small amount of money to start a quirky business, so in retrospect, we could have taken a short cut and skipped it.
But actually, as it turns out, the action that Mimi took here to earn a little money led to her later business idea, Kimono Remake Fashion.
What we mean is that, in fact, to earn pocket money, we performed live at Don Quijote in Japan, asked people what they wanted, bought things, and simply brought them to the Philippines, earning about 70,000 yen as a result. It was at this time that we realized that there has been a community of Filipinos who loved Japan and are very enthusiastic about it. To my surprise, people who come here on vacation post things from Donki on Facebook, and they usually buy them.
By the way, when we asked what kind of things they were buying, many of them were things like Nescafe coffee sticks or other things that we would think, "Oh, that? I don't know." But there were a lot of things that were bought.
This is where Mimi found the keyword "Japan" for her business idea.
To be honest, weI think this challenge was successful to a certain extent with Mimi's sense of humor. Depending on your definition of success, there are two goals: one is to start one from scratch and learn from it, and the other is to aim for a "10 million pesos" variation as content.
The former was learned well because of Mimi's speed: it is quite difficult to start up a business in 90 days and be tied to a side business.
We simply said, "Yes, do it," and just threw the bill, but it was no easy task.
What Mimi did was very simple. She asked the world what she thought was the issue, and if she saw the reactions and decided it would be a good idea, she made it into a business. This speed, intuition, and boldness.
We also do research on Pinterest, use Instagram to conduct interviews, and check the engagement on posts.
When we looked at our own clients, we realized that many brands "fail" at the idea stage. To be honest, even among our own clients, we see brands that think, "This is a brand that is going to be difficult no matter how good a video we make..." Of course, we do our best, but we also have to be careful about what we say. We should do our best. But it is honestly difficult to find a brand that has nothing to say or easy to deal with
There may be some brands that just don't have anything to say or can't verbalize their ideas, but brands that don't have anything unique to say in the beauty or food industries, which tend to be commoditized, tend to have a hard time.
Y combinator has a saying, "Build something people want," and that is exactly what we are trying to do. Make something people want.Even if it is a ToC product, it must be something that solves a problem, or something that people really want enthusiastically.This point will never change.
It's obvious, but we think that the degree of growth of a brand is almost entirely determined by this point.We won't go into it in this blog, but we will foreshadow that this realization will be a very big factor in future decision making.
This stage was the most stressful. When it came time to start production, we first had to find someone who would produce the clothes. This was really hard.How did we find them?
First, we went to a Facebook group (everything is Facebook in the Philippines).There I would post, "We are looking for a seamstress!" and we got about 50 comments and DMs.From there, we will check them and ask them to send us samples,
At first glance, we thought this was a very inefficient and challenging area to DX. But when we thought about it, it was similar to our existing business of video marketing.
Post on FB, get comments, check them out at first glance, and so on,Yes, this is exactly what we have been trying to DX for the past year.It's the exact same process as finding creators!
In other words, from our point of view, the current situation is very similar: "It looks like a very inefficient area that needs to be improved, but we are used to it.Wehave a feeling that the same thing will probably happen when we enter the market. No, it will definitely happen!This is an area where we should not go, at least not "now".(There are startups in Indonesia, for example.)
By the way, how did we find a seamstress in the end?It was a referral from a client.In the Philippines, referrals are ultimately the most reliable.
The specific keyword is "brand story.Whether it was photos or videos, content with a story behind it tends to have high engagement. For example, here is some content like how Etsuka started.
Check out this brand story content we made for Etsuka.
High engagement, or buzz, was based on whether or not we had 10K views, but roughly one out of every eight times we had a petite organic buzz.
One thing we noticed is that we didn't make as many short videos ourselves as we thought we would. This was a big learning experience. It was good to realize. Of course, a short video would have been nice to have. But for a small brand where one person has to do all 10 jobs, it's hard to get around to that. Even if there were a team of a few Mimi's, video is just Better to have.
At Etsuka, what we did was about 70% photos and 30% videos. We post about 3 times a week, so we have about 1 video a week.Werather felt that our creators' strength lies in the fact that they can take quick photos after the product arrives.
That Mimi, who is actually a sensorialist, should have been able to order many short videos, but didn't. This learning is profound.
Compared to Kingdom, we think Mimi is an intuitive warlord, Lord Cheng (sorry for being a bit of a maniac). She has a keen sense of smell.She is the type of person who can show strength.If others had done this challenge, they would probably have intentionally and unintentionally used more short videos. Once again, it’s a good decision thatMimi do it.
And here's the point, many of the small brands will have many of these sensory-type players. Some of them may be theorists, but we think many of them are sensory types, considering that the best and brightest people go to companies just as much or more than in Japan.
It sounds geeky, but in conclusion, we did it sensibly and didn't make many short videos. We think this is everything
We ordered about two to three videos out of nine of our own submissions. The benefit of having about 3,500 creators was significant, but we didn't order that many videos.
We started this project in late September, but the idea was finalized in early November, and the actual product was released in mid-November, which means we concentrated on selling the product during the last 30 days of the 90-day period.
Here is the post at the time of release. We thought the content was well thought out, but for now, we just gave them the four samples weI received and the creators took the rest of the photos.The following is a summary of the pre- and post-launch actions and realizations.
AI can be used to create samples in the idea stage.
Don't spend too much money on the initial product. Minimum lot size, minimal validation. You should watch your expenses here. Don’t overspend..
It is important to go to the bazaar and verify if the product really sells. Many people mistakenly think that a bazaar is a place to sell.
The bazaar is still a place to sell, but it is also a place to test. Especially when it comes to pricing.
In a bazaar, if you talk to the customers in a charming way, you will catch them. Almost certainly. But 99% of brands can't do that.
Looking back, we now know what our customers are facing and what we are not good at. We also know how deep their pains are in areas outside of their own business domain.
After going through this process, Etsuka was launched, and what we did was very simple. We launched with a clear deadline, posted content on a regular basis, participated in a bazaar, verified the price, and sold the product.
If you can do this, you can launch a brand.
We have been made to work as a FREE LAVOR. Although it is not allowed to use the team's resources, this is acceptableFocusing on a single channel
Mimi doesn't even have a website, just an Instagram. She doesn't even have a Facebook page, which is used by almost everyone in the Philippines. As the CEOsdiscussed in episode 1 of this podcast, we believe that it is better to focus on a channel that works and work through it than to spread out in many different ways.This time, we will focus on Instagram and the bazaar. Specializing in these two. With limited resources, it is the same as a start-up to decide where to focus.
Pricing is very important as well as the idea. Mimi herself experienced this mistake, which is common for small brands. For example, when you first start out, you are afraid of not selling, so you set your price too low and don't change it. When you realize that you have made a mistake in calculating the cost of goods, the profit margin is lower than you expected, and you find that you are not making any money at all.
In Mimi's case, she called me, her "husband" who is a FREE leaver (free labor lol), to the holiday bazaar (this is acceptable as a certain pattern where the husband-boyfriend is forced to help), and when we realized at noon on the first day that we were selling too much, that’s the we decided to raise the price. In fact, kimono pants were initially sold for 2,500 pesos, but now they cost 4,500 pesos or even 7,000 pesos (about 18,000 yen due to the weak yen) for customized ones.
Pricing is a decision. Which market do you want to sell to? We understood again that this is the most important stage after the idea stage, and is where everyone makes mistakes.Again, the deep pain means that it could be a business idea, but it is quite difficult to solve this problem as a startup.
This 90-day challenge came to an end just after Christmas in December last year. For the initial 10M peso variant, Mimi had found on Google that it was possible to reach 700K peso per month in sales and a profit margin of over 40%. After this, they will actually do the variation calculation (to be done on 1/16!). But 700K peso is not reached, so maybe 10M peso variation is not reachable. It seems to be a failure in terms of content, but still reached about 400 peso. That means we sold 1M peso in one month in Japanese Yen. That's more than our current video marketing sales in our day job.
And this is the result of one person starting up a business on the side.
Although this is a "special demand" organization during the Christmas season, we feel that the growth has potential. Mimi's "sense of smell" is a big part of the reason why she is able to do this on the side during the holidays.The best way to understand customers is to "do it yourself" rather than asking them
In this blog, we hope to share the story of how weI not only learned, but also gained an unexpected by-product based on the reflection that "if you want to know your customers, the best way is not only to ask, but also to "do" it yourself.
We hope that this blog will be helpful to those who are fighting for the same thing as startup founders, and at the same time, we hope that we were able to provide some hacks for those who are still struggling with marketing in the ToC area.It is often said that startups should "listen to their customers" in order to understand their customers, but let this reminder resonate – "doing the same thing as the customer" is the best way to learn.
Since we are a UGC video marketing company (as of January 2024), our primary area of support for brands is in the marketing area.But brands have a lot more to do than just marketing. As we ourselves have said in our pitch, we wear about 10 hats together. Production, Logistics, Sales, Customer Support, Finance, Operations,, and so on.
There is a limit to how much you can understand the customer in essence if you only do the marketing part, once we decided to take another look at what we would do and what we would have trouble doing if we were to launch a brand in 2023 in the same setting as our customers.So that was the 90 day challenge. Fortunately, we learned more than we had hoped.
We actually had experience as a small business owner as Kamila's 4am Art before starting kamilas4am Inc. There, we experienced firsthand how the power of marketing can help a business owner shine and make the people around them happy as their business grows, which is why we came to the side of supporting small brands as a startup.
But that was a few years ago. We started the business thinking that if I did business now, in 2023, we would learn something different. As it turned out, I was right.Also, the fact that we launched our small brand after we started our own startup and "did it before we started" dramatically changed the concentration of learning. We believed the difference in mindset was also a big factor, because before the startup, we were just having fun, and now we are really serious about doing something about it.
Finishing the 90 Days challenge and moving onThe real plan was to finish the 90 days and (hopefully) sell the company.Whether we could sell or not, we were thinking of it only as a learning experience, so we wanted to make sure we had a good closure.But then we realized. thought that making Kimono pants would be more profitable than making a short video. Of course, the Christmas season was a big factor in the sales.
Still, when you look at the numbers flatly, it's clear which one is selling better.
What? Is this our main business? (laughs)
We are facing the issue with such a question.
We may be taking a step in a new direction this month.
We've had a previous experience on the podcast where we considered pivoting once around the summer of 2023 (we actually launched and tested a few MVPs) and ended up not doing it.
Actually, in Southeast Asia, especially in the Philippines, not all startups are tech startups just because they are startups: there is a Singaporean women's fashion startup called Love Bonito that has raised 50M, Pick up coffee that has raised 40M a coffee stand chain in the Philippines that has raised 40M in funding, and other startups that focus on the basic human needs of "food, clothing, and shelter.
In Japan, there is the recent news of the listing of Yutori, and we see a lot of potential in the area of commerce x Southeast Asia.
In addition, when we looked back at the 90 Day Challenge and the past year, we realized that ToC is closer to our vision.
“We go where the wave is likely to happen."
In the startup world, it is often compared to a wave and a surfer. After a year of waiting for the wave in the same place, we might give up and go look for a wave somewhere else.
At the very least, we will be increasing our commitment to Etsuka starting this month.Please follow along as we share our learnings in four installments on Spotify and YouTube here!
We have also put together a detailed report (in English) of the 90 DAY Challenge, so if anyone would like a copy, please DM us via instagram at @harry_kamilas4am and we will share it as soon as we can!