Today, Memebox is the Birchbox of South Korea; the beauty sample subscription and e-commerce service is leading in terms of marketshare, gaining thousands of fans and pulling in over S$1-million in annual revenue. But that wasn’t always the case.
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Hyungseok Dino Ha, CEO and founder of Memebox Korea, recently shared his startup’s story at a Tech in Asia meetup in Singapore, providing insightful (and honest) answers to questions about how his company grew.
Humble beginnings
At the beginning, the three co-founders raised a small amount of money themselves — not much, but just enough to get the business running for about two to three months. They did not raise investment during the early stage because they simply did not have the luxury of time to prepare financial statements or reports for VCs. Thus, they decided that rather than wasting time preparing such reports, they’d focus on running the business.
In the first three months, the Memebox team’s revenue increased exponentially, as they more than doubled their monthly revenue every successive month, allowing them to gradually accumulate sufficient funds to get the business going.
Hiring and motivating staff with few resources
In order to bootstrap, their first strategy was to hire interns from universities and colleges at a small salary. Although the paycheck wasn’t much of an incentive, the students still accepted the offer. Memebox retained their talent by keeping their promise on subsequent pay raises. As for the co-founders, they took home a modest salary each month to avoid spending all of their profits too quickly.
Dino mentioned that in Korea, startups are a megatrend among intelligent people. Their main motivator is not the money, but the ambition of wanting to build the future. In fact, the first questions these talented individuals posed to the company was about the vision and culture, not about their salary and employee benefits.
Cheap but efficient marketing tactics
Dino emphasized that the co-founders’ DNA is in sales. For the first six months, they didn’t believe in hiring any engineers or designers, and instead outsourced everything cheaply. Thus in order not to lose focus, they invested only in hiring sales people at the start as an excellent team will drive sales.
Furthermore, they focused mainly on partnering with great brands, thinking that if they have good products on the site, subscribers will naturally start pouring in. No investments were made in Google Adwords, but instead, they engaged on social platforms such as Facebook and Twitter to spread the word on Memebox.
Complimentary Memebox samples were also distributed to bloggers to review, and Memebox also entered into a revenue-share model partnership with a Korean television talk show called Get it Beauty to gain exposure.
Another interesting fact: the company also roped in the famous entertainer PSY to collaborate for a special Memebox called PSY Energy Factory without having to fork out a single cent.
This article by Emily Goh originally appeared on Tech in Asia, a Burn Media publishing partner.
