By the time Callie and Kelly were selected to pitch at Shark Tank, Slumberkins had surpassed one million dollars in revenue, all with no outside investment. What started off as a weekend side hustle for these two new moms turned into a retail and content business with 10 employees and a potential TV deal that’s in the making.
Listeners of The Mentors can get 20% off of their first order of Slumberkins by using the code ‘mentors’ at checkout. Visit https://slumberkins.com/.
In this episode the founders break down exactly how they got their start, from sewing stuffed animals by hand every night and selling them at craft fairs to creating an online presence with a loyal following. Callie Christensen and Kelly Oriard describe exactly how they leveraged social media (namely Instagram) to grow their sales from day one, and how they divide responsibilities as Co-CEOs. They tell us what they would say to popular influencers to get them to promote their products and how they convinced a giant manufacturer to give them a chance.
Before starting their business, Callie and Kelly had been friends for 20 years, and while their experience as teachers and therapists gave them the idea for their business, they had to slowly figure out how to become entrepreneurs and create a sustainable businesses. Their story is a testament to the fact that you don’t have to have years of experience or deep business knowledge before you start building something. You do, however, have to start.
00:00 Welcome back to them mentors. This is Vadim and Sergei, and this is a show where we tell stories of ordinary people that became extraordinary entrepreneurs despite lack of experience, money or connections. And today on the show we have Kaylee and Kelly founders of Slumberkins. At this point, the company has done $3 million in revenue.
00:52 How many kids did you have when you started the company?
00:56 We started it on maternity leave together. Kelly had one and I had three.
01:10 And yet you decided to start this company. So how did the idea come about for Slumberkins and then why were you motivated to take the plunge and take the risk?
01:55 So as we came up with the concept of Slumberkins, which was to promote emotional wellness and children, and to give parents tools to teach that to children. And we thought of, you know, creating these little snuggly creatures that were unique and stuff that you couldn’t find in the store is that we couldn’t find in the stores for our own kids.
03:10 Yeah. I think from that $200 initial investment into fabric, we made $700 on the first craft fair. And so then we took that $700 and went and bought a whole bunch more fabric and then turned that into I think probably $1,200. We just kept reinvesting everything that we made in revenue back into buying bigger lots of fabric.
04:22 So what was the unique idea when you were starting off, because obviously you learned how to sew and I guess you were writing these books as well, but talk about why you were even motivated to start something like this. And what was different about it?
04:37 With both of our careers working in education, we both experienced that if parents were involved in the process of supporting a child through a difficult experience or wanting to be more involved in their emotional development, the child always made more progress if a parent was involved in the process.
05:50 What was the very first product?
06:02 Our first stories were printed just on card stock and we wrapped them up with twine and, but people resonated with the story. And so all along the way, while we were selling kind of this handmade version, we were behind the scenes trying to figure out how to scale and how to produce more because we couldn’t keep up with the demand. And we really grew the demand on social media. We didn’t pay anything from marketing for almost three years into the business because of social media
07:29 What were the events that you did?
07:36 We did three local craft fairs in our community in the Pacific northwest. And then we put them on Etsy. And it was really through the traction from Instagram driving to Etsy that we kind of gained this organic traction because we couldn’t keep up with the demand with us hand making them.
07:53 So what was your process when you were trying to sell through Instagram? How many people are you reaching out to? What are you saying to them to get them to post? What are the tactics of actually getting those sales in the early days?
08:28 Yeah, when we first put them on, I wouldn’t say they looked exactly how they look now. And I think one of the things that we tell other people who are starting to put products out there is you can overthink an idea to death. And we really subscribe to the idea that like good enough is good enough for now. Right? And we would rather see people buying it and giving us feedback or putting it out there and taking the risk, than holding back, thinking about iterating so much that you think it to death. So we put them out there and, the things that did well, we asked for feedback and we just kept iterating on that.
09:20 I would spend hours after I put my kids to bed, I would lay in my bed and I would spend probably two to three hours just sending DMs. Two different moms that I thought would resonate with the product. And the messages were always personalized. It was never a copy and paste message. I always looked at who they were as a person and read some of their blog. And so I’d always personalize it and then give it a really human touch and just explain we are moms on a mission, we are educators and we’d love for you to try out a slumberkin, can let us know if you’re interested.
10:12 It was never a transactional thing
10:57 People see through the ads immediately. And it’s social media being the new word of mouth. People want to talk about what they’re passionate about and most parents are most passionate about their children.
11:33 I’m sure you know, you started to see measurable results from some of these people that would then post about you. So now was it a pretty clear, when you reach to somebody that let’s say shared in an Instagram post and they had 100,000 or 500,000 followers that you quickly saw the revenue numbers increase or did it depend on how engaged their audience was?
12:09 We weren’t sophisticated enough to be really tracking data at that point. It was really the people who had engaged audiences that really resonated with the message that became our loyal followers that really started to convert to sales.
13:01 What was the next step?
13:48 So this was the really great thing about having a cofounder. Kayleigh’s focus on our community that we’re building in the moment and she was listening to them and helping cultivate this community and has allowed me to start thinking forward for the brand. I was digging around trying to figure out how to scale, how do you produce something that’s not handmade, how do you go overseas? And of course, I had no idea.
14:39 Our MOQ at that time, the amount that we were trying to order was much lower than he would ever accept. But I think he was really inspired that we just wrote him and tried to strike up a conversation.
15:39 That’s awesome. Yeah.
15:40 Well, and he was the one he introduced us to now our strategic mentor, her name’s Maxine Clark. She founded build a bear. And so it’s through these connections and mentors of people that really believe in your mission and the brand that want to meet you halfway just because they believe in your mission.
15:58 That’s so cool. We, we talk so much on our show about not being afraid to take a chance and actually reach out and ask people for help and not shoot yourself in the foot by assuming that they’re not going to respond to you. And even if they don’t, who cares. Do you remember what you said in the email to that person?
16:14 Yeah, I think I said, “Hi, I know we’re a small brand and that you work with huge brands, but we’re trying to figure out how to scale. And I know you’re an expert in that and I would love to just understand your expertise a little bit better and know what, what kind of things you look for when you partner with somebody.”
17:02 What was the amount for that order and how long did it take?
17:04 So I think we placed the order around July and it was for 14,000 units. So, from when I had reached out to him in December, I think to July, I was looking for 5,000 at the time. But we had grown so much by the time we placed it, 14,000 was a stretch, but it was the right number for us at that time.
18:17 What’s cool about your story is you guys actually bootstrapped this business for a while. And it seems like you ask them pretty fast growth, but still until you got a $2 million in revenue, you didn’t raise any outside funding. Right? What ultimately made you decide, okay, maybe we should raise some money for this and how’d you go about doing that?
19:25 I think that was a question we are asking ourselves. We got plugged into a scalar rater and in Portland called starve ups. And um, it was a founder to founder mentorship program where we were able to connect with other people who were, had startups and had been through various stages of owning a startup. And it was the first time that we started hearing about fundraising and for us, because we had such quick turns and we had this scarcity model, we were struggling to understand like, why do you raise money? You know, we have all this product we sell out immediately and then we have all this cash and then we just reinvest it. And we have this kind of flow going. And I remember reaching out and asking people like, why I don’t understand, what is it about fundraising that you know, why people do this?
20:13 Let’s say we wanted to start doing digital advertising, right? Like we have that budget allocated from the money that was coming in, that was all going back into product. And so we really needed to start to figure out, well, how do we want to scale this business and what are the funds that we need? And that was really the basis for saying, okay, we have this thing that’s going, we want to put some money towards some advertising. And that was the impetus for doing our first seed round that we did right before the holidays of 2018
21:16 And you guys ended up raising half a million dollars with that seed round. Now, your first exposure to fundraising was, I believe when you got on Shark Tank in 2017. Right? And tell us about that experience because I guess you guys didn’t get a deal, right?
21:33 No, we didn’t even get an offer.
21:35 You didn’t even get an offer. Tell us what happened between them not getting that deal and walking away from that experience and then actually learning how to present this as an investment opportunity to investors.
21:49 Shark tank was the thing that really made us think bigger for the brand. It made us think through what our mission, vision, what are three to five year strategic plan is. Even filling out that application made us better business owners because it just made you have all of your ducks in a row before you can even get on the show. It was a crazy experience. It’s a real conversation about taking on investment.
22:34 That’s how early we were.
23:07 Now I would say as we went out and started really raising our first seed round. We got our hand slapped a couple of times by seed funding groups in our city. Learning how to present it to investors and actually raising as a woman is very different. So that was something that we felt a big difference on as well.
24:00 So to that point, what do you say now to get investors excited? How did you figure out how to do that?
24:14 So we always had a very big vision for what could come of the power of these tools that we were providing along with characters, more unique characters than anyone has ever put out there. Um, and I think that that’s, that’s another piece to the puzzle. Early on, we invested part of this funds that we reinvested war to protect the IP around the characters, the design of their faces and their bodies and how we are sewing them. And that’s benefited us. Now when we’re fundraising, we really lean on that big vision and it’s all about the mission and empowering parents. It’s led to a lot of really exciting opportunities.
25:29 Yeah. So the really exciting news in our world right now is that we’re in a co-production with the Jim Henson Company to produce a Slumberkins television show based on our characters.
25:57 With Shark Tank you recorded in September, it aired in November. Tell me what happened with the business then and how you were able to keep up with increase in demand or even plan for like that.
27:41 We didn’t have a Christmas that year. Some of the lessons that we’ve learned over and over again is that as we get into these spaces where you’re making quick decisions or you’re trusting that somebody is going to do something to alleviate a stress for you, that it can often be a siren’s call, right? You have to be really careful about who you trust to hand over stuff too.
29:00 You guys told us in the pre interview that last year you did a million and a half. This year you’re on track. Did 3 million next year, I’m sure it’ll be six. But talk about then where you are now, what you’re, how you’re dividing responsibilities, what your respective roles are and how big the team is.
29:18 Yeah, so Kelly and I are Co-CEOs, which is nontraditional, especially as female founders. But we really operate like a Yin and Yang. So my brain really focuses on the creative. I kind of operate as like the creative director for the brand. My voice is kind of the voice that people will see and hear on social media. Kelly is really great at a strategy and operations, and content.
30:32 What would you tell a mother who maybe is considering not going back to the job and maybe she has an idea in her mind, thinking about who to start it with. What would you say from your experience of starting this company together that worked really well?
31:34 Now looking back, I can say like the Yin and Yang of our personalities and how we work together really lends itself so well to what we are doing. And the one thing that you have to have beyond anything is a deep, deep level of trust.
32:28 Like shadow parts of ourselves that we need to work on anyways and what better place to do it then together and to create something that’s beautiful that we’re trying to give other moms and other families and the mission of our company aligns so well with the mission that we have in life, which is to become better people and to have great emotional wellness and that’s why we’re Co-CEOs too, because if you can’t be emotionally, well like you can’t be in relationship. So if we’re bumping up against stuff, there’s a way to work through that and we don’t have to have one power over the other. We are a partnership and we want to bring that to families and to kids as well.
33:11 And how big is the team now?
33:13 We have 10 people right now. We’re actively hiring
33:18 Any specific roles that you guys are hiring?
33:20 A social media manager for sure. I’m still doing the copy and posting on social right now, but a social media manager. Then potentially an art director. I need to be able to kind of talk high level creative vision and then have someone execute on it because we are starting to venture more with the entertainment opportunities ahead.
33:56 What’s the best place for people to find Slumberkins?
34:15 Slumberkins.com or on Instagram just Slumberkins
34:20 If you have that idea in your excited about it, maybe it is the right time. You should give it a try.
34:40 Thanks a lot. Thank you. Thanks for having us.