Episode 18- The startup Adventure of Galard
Ravi: Hi there, welcome to episode number 18 of spontaneous conversations. This is Ravi Gundlapalli, Founder, CEO of MentorCloud.
Rajesh: Hi, this is Rajesh Setty. I’m a serial entrepreneur.
Ravi: And today Rajesh I are very, very glad to introduce to you a surprise guest from Czech Republic, Dr. Stan. Stan, please introduce yourself.
Stan: Hello, my name is Stan. As you said, I’m coming from the Czech Republic and right now I’m just traveling around the world. But the reason why I’m here is that you somehow consider me probably a successful entrepreneur. [laughter]
Ravi: We will find out in the conversation. So Rajesh what do you have in mind today?
Rajesh: Yeah, so we also have a silent participant [Ruhita 00:00:49]. Ruhita and I heard a story [stands touring 00:00:52], but his first company, I guess so fascinated how he bootstrapped the first story. Galard is the label?
Stan: Yes, exactly.
Rajesh: Galard is the fashion brand and I thought, this will be amazing for our listeners to hear how Dr. Stan started Galard and what was the thinking, what were the techniques. What were the tactics? How did he go about bootstrapping Galard to be a successful brand.
Ravi: So essentially, you know, to our listeners, bootstrapping is basically doing more with less. And there are so many ways we can find resources around us that we always most entrepreneurs think, first thing to do is to go raise a bunch of money and that’s the mindset in Silicon Valley. So this whole topic of bootstrapping anything is very, very valuable to listen to you to kind of your story. How did you get started?
Stan: Yes, so I didn’t really raise any money. And actually, a lot of people ask me when they see the company now like how did you start a company? Usually they think I have like a really rich parents that helped me to launch the company but basically the first investment, I know it sounds like actually like even like a dream and now basically when I talk about it. The first investment that I put in it was $800. So I started the company with $800 after like after like half a year and I saw it works I put some of my savings there around like $10,000 and that’s still not a lot. And basically it was all money that they launched the company with. So what I was actually doing is that Galard right now is a fashion company that is manufacturing tailor made and bespoke shirts and suits and sells like luxurious shoes so that we import from Britain.
Basically, I started with tailor made shirts and at that time I was working in the company when there was a couple of my colleagues, they were wearing tailor made shirts and they were paying like above $100 a shirt and I loved their shirt and I was like, but they are just like too expensive. You know, I really couldn’t really afford them and at the same time I went just for a weekend to London and I have heard about the street in London and it’s called Savile Row and that street you can get bespoke shirts and suits and they are amazing. Suits start at around like $5,000, a shirt is like $200 and more. And I was like, “I’m sure there must be a way how to provide this experience in Czech Republic, but for like more reasonable price.”
So when I got back from that weekend in London I asked a friend of mine who was working in the fashion business, how are actually these shirts manufactured. I found out that there is just like several companies and they’re also in the Czech Republic who are actually manufacturing all these shirts, they are handmade, they are bespoke, like based on the measurements I take from you, but they do it for a different brand. Basically this is true for every single thing. So, for example, if you have a suit that is, for example, Gucci or if you have a jeans, the dark Cavalli or Versace, they do not have their own production.
Stan: There are factories around the world that are manufacturing this stuff for different brands. So I was like, “Okay, let’s meet that company and let’s ask them if they can manufacture it for me.” So I met with like a GM of that company and I told him what my intention was and actually I met two of those companies. The first one they told me I’m crazy and they don’t know a cooperative with such a small entities. The other one was like, “Let’s give it a try.” So we gave it to try and he said that he will be willing to manufacture the shirts for my brand. At the same time, I found a company that was a willing to, and there are actually a couple of such companies and they were willing to supply me fabric based on order. I do not have to keep it in stock. I just can order like a small amounts.
So basically I was like, “Okay so I can start selling shirts. I don’t need to keep stock. I don’t need to buy any machines anything.” So basically I asked my friend to make me a website. I promised him a shirt in exchange. So let’s say that it was around like $50 for a website. Then I created business cards. I have created a packaging for so like a nice bag and, you know, and just like the little features to provide them a nice packaging. This altogether was like around 800. I just learned– I went to see the manufacturer and everything and they learned me in the day how to measure the body to create the perfect shirt.
So I got back home and actually I just met a couple of my friends and I asked them to provide me numbers of their friends that would be willing to buy such a like high end shirt that would cost around like $100 and I just got a couple of numbers. I met a couple of people really was like a few individuals like 15 and like half of them bought the shirt. At the same time, there were some people who are like hard to crack to buy a shirt. So I provided them the shirts for half the price. So they bought the shirt and basically like within a month I sold around like 50 shirts.
Ravi: These shirts were like, they were not made before, they’re made to order.
Stan: Exactly. And they were they were made to order. So basically I sold a shirt for $100. I manufactured the shirt for around $50 and actually I had like no costs besides my time meeting the clients and selling the first shirts. Retrospectively, I had like no business background and now I know this is called Lean Startup. So basically this is what they say like try to actually first validate the business that the people are interested, but I have seen today I with the help of my wife that we have sold like around like 50 shirts. At that time I made like $2,500 a month besides my regular job. I was like, “That’s great.”
Ravi: That’s nice. Yeah.
Stan: So that’s a lot of money, especially in the Czech Republic. So what we did that, we hired first consultant. It was a young lady. She was paid on commission. So again, no expenses from all the shirt she sold. I was actually making a very small profit on that, but it was helping me to get some traction our first shirts sold. At the same time my clients were not anymore my friends, so they wanted to like go somewhere to pick up the shirt because, first I was delivering the shirt. So they weren’t happy, you know, so I was like, “Hello, this is Stan from Galard. I’m selling a bespoke shirts I can meet you in your office.” That’s a great benefit, “and I will deliver the shirt personally.” So of course they were considering there is a great benefit but actually at the same time I have actually no premises.
Rajesh: Approximately, when was this in terms of years? Was it late 90s, early 2000s?
Stan: No. This was 2012, 2011.
Rajesh: Very interesting. You almost did what Dell did for computers. They didn’t have any stock. They just waited for the order and then the went to suppliers and got the substance, that’s fantastic. Yeah. Please continue.
Stan: So, basically, and there was the moment when I realized that I need like some kind of like a small store. So, I mean, it wasn’t even the store. It was a small office in a business building but I was like, “I don’t need to be in a mall. I’m selling expensive stuff and to businessman. I don’t need to be in the mall. I just need to keep that personal approach.” So I was like, “Hey, let’s have a dinner in the business building,” and actually most of the people in the business building can be my customers. So, I spent like $10,000 to buy a very nice carpet, to put wallpapers on the walls.
I get the first stock of ties and cufflinks and you know basically and like a place where… and first like couple of samples of shirts. That was the moment when it was already me and my wife and the first consultant selling the shirts. What happened like within like six months. Actually, we were all doing this part time but we sold around like 200, 300 shirts. So, actually I got the feedback from the from the market. They like it and what was great change was that some of the clients were saying that they want suit. If I’m going to manufacture suits. I was like, “I have no idea how suits are manufactured and it doesn’t really matter.”
Ravi: Doesn’t matter. Yeah.
Stan: So I went online and I was like bespoke suits. So I learned how they are manufactured and I visited like around 20 tailors in the Czech Republic who are manufacturing suits. I asked them if they would be willing to manufacture them under my brand and I found some that were willing to do that. So what actually happened that I just try to sell some of those. I sold like five suits like in a month but they’re manufactured for like pretty long times like five, six weeks to get them done. Of course there was like a difficult time when I was figuring out if it makes sense if we are able to create a good suit, but basically we were. I was able to manufacture the suit for around between 500 to 1000 and I was able to sell it for the twice as much money. So actually, my margin was like around 100%.
I was still in that small– it was actually very small place where we were selling them but the next like two months I got a couple of good clients who bought, every one of them bought like two or three suits. So, basically I sold like 15 suits in 2, 3 months, but basically I made like around $20,000. So right now, from a retrospective actually I have no idea where I get the guts to open largest store. So actually I just moved to larger place and we opened like store that had around like there was like two sales assistants and finally we got the stock of like shirts and a couple of suits. A year passed, I don’t know how and I started to import shoes from Britain. But again, I needed no money because I bought just a few shoes in stock and when there was a client who liked shoes and I didn’t have the size I just order it of course it edits a certain amount of money. So I had like a smaller margin, but it’s still allowed me to expand my offer.
So that was like in one and a half year. At that time I decided to open another store in different city. Again, it was small, it was like a like a super tiny, tiny store but the by-product about the whole business was that suddenly I had list of like 400 very rich, Czech people and top managers. Like who affords such an expensive suit or shirt. I wasn’t making like a normal amount of money. I feel like one year I ran the company, I quit my previous job and I started to do this full time. I just read a lot online. I started to like write my own blog, a little bit. I spent a lot of time doing like direct sales. So, for example, one of the things that worked very well was that I started to offer courses for correct dressing, like how to dress correctly for free to companies.
So, I called the company and I told them that I’m willing to teach them how to dress properly for free. I got there, there were usually like between 15 to 30 people in audience and I was just telling them for an hour have to dress properly and how to take care of their shirts, suits, shoes etc. Let’s say one, two of them become our client. But secondly, when you realize if one of them bought the suit for $2,000 and I made $1,000 on that suit it was a pretty good training. So there it worked very well and basically I just tried to put myself in as many events where I could talk about proper clothes as possible. And one day I met the guy in one of these events. He was an owner of investment company like a guy who works in the finances. I made him to come to store and he ordered three shirts. Excellent. He liked the store. He came and he said that he wants them like fast, like he doesn’t care about like paying more for having in express.
I was like, “Yeah, sure.” So I did my best to manufacture the shirt really fast and he got them next week and delivered it personally like I really, I really spent a lot of time with the [inaudible 00:15:53] customer experience and like being really personal. He loved that, he got to start next day. He bought three pairs of shoes and every pair of shoes was like $200. So he spent a lot of money there and he said that he wants a suit. We bought a suit that day. And again, he said that he wants to make it express. And again, he said he has no problem paying more. So I just put some kinda like a express fee there. He was shopping in the store like for over a month, maybe two months.
I was very glad I have him as a customer. Every time I could I gave him presents. So, for example, when he gets shirts I gave him a tie. When he got the suit I gave him like a pair of like a special treatment for a suit. I took him for a lunch, next to me for lunch and one day he mentioned that actually– he was always very good fond of fashion and next time he mentioned that actually you know you can imagine having a fashion company like in his portfolio of companies because he was doing a lot with the finances and he said, “You know basically your clients are my clients.” Next time it was the fourth lunch we had together. He said, if I would be willing to sell the company. I was like, “Hmm, hmm, hmm.” [laughter]
Ravi: This was after about two and a half years.
Stan: This was two years.
Ravi: Two years, okay.
Stan: It was exactly two years. And after two years two years and three months we signed the contract. He bought 70% of the company with the with the condition that I will start to work as a executive manager in his holding, in his group of companies that I will be in charge of some stuff there and that he wants to grow the business. He will hire a professional manager and so on. And I was like, “Awesome, because first I’m not the fashion guy” It was like I don’t want to do fashion in my life. I like it. It’s fun. But you know, I want to do something else. So suddenly I had the great job opportunities. So I was like, “Amazing. I want to do that.” So he cashed for the 70% of the company. I was awesome. I bought a house, a better car but after like two months I really didn’t like what he was doing with the company. Like we had a lot of disagreements about the future of the company.
I didn’t say anything he just knew that they disagree a lot. And once again, we had lunch and he said that, “Don’t you want to sell the rest of the company?” And I looked at my way and I was like, “I don’t care.” So he bought the rest of the company. He cashed for the rest of the company and basically I launched the company in 2011. I sold it in 2013. I launched it in 2011 May or April, I sold it 2013 September and since then I’m doing a different kind of a business. Basically the money and put in was $800 in the beginning, then $10,000 later and then I was just doing the whole staff with all the money I earned, of course, like look, I didn’t pay myself for two years. I had free clothes and of course I paid for the gas, but basically like in those two years, I didn’t pretty much like buy anything. Everything was paid from the company. I have like no vocation basically, and stuff like that but who cares. It paid off pretty, pretty soon.
Rajesh: Very, very good. I think Ravi this is extremely [inaudible 00:20:00] so interesting. So I have a few more questions.
Ravi: Sure, sure. I think that this session can be long because the story was so gripping that we didn’t want to interrupt you. Rajesh wanted to ask you first comment or question.
Rajesh: I have some comments but the question was about naming and branding. So you shared with us why you name the company Galard and what was the reason behind it.
Stan: Okay. So, well, I knew it. Well, it’s gonna be a fashion brand. So I wanted to have some kind of like a fashion name and I do not really like those like super suits or like super shirt. I knew that I want to have like a random name, you know, something that doesn’t mean anything but you can imagine something about that. So, I had just created a couple of random words and this was one of them. And actually, okay, I was it was driving on the highway and Lamborghini was passing me. Lamborghini Gallardo. Gallardo. And I was like, “Gallardo.” That’s a nice name I like that. Basically, I took out O, and I took out one L and it was like Galard. It was like, I like it. You know, first my name is Galik. So I was like, “You know, Galik, Galard”. Then I was like, Galard. So this almost like art. I was like, “I go for it.” And I went to the line, there was a free trademark and free website. I was like, “Awesome.”
Rajesh: Very, very nice.
Ravi: You know it’s interesting that you know we were talking recently with Rajesh about this thing called serendipity. And we were saying that serendipity doesn’t happen to anybody. It happens to somebody that’s actually, you know, thinking about things like the fact that the Lamborghini passed you. The fact that this investment guy came to your store did not happen just like that. So people think that luck happened to somebody and they became but your story is another testament of how passionate work and in doing what it takes to build a company suddenly makes everything seem very lucky. The name drops in your mind, the investor drops in your store and suddenly everything happens. So, I think some of the more the entrepreneurs listening should understand that to build a business it requires the passion and real hard work and, you know, not necessarily money in the first place.
Stan: I totally agree with that you know you just really have to put time and effort in it because again that guy who bought the company I met him at event when I was speaking for free. Then next time like next day when he was shopping there he said, “I want to come at this time,” and I did everything I could to be there. Then he said, “I want it to fast,” and like I work my ass off to do it like really fast and to provide him super service. Of course, I had no idea he can buy company, the whole company but I knew that he can be a good customer of mine. So, I put a lot of effort to make him and a happy customer and instead of a suit he put he put the whole of—
Ravi: Here is another example of focusing on your product and customer service. The customer became an investor and became an acquirer.
Rajesh: That is so true. So in closing should we all give some comments with lessons learned and everything just to summarize, you know, what is, what are the takeaways. I’m sure the story was super inspiring Stan and I’m sure people will enjoy it. I’ll go first. One of the first things I realized, even when you first shared the story with me is that there is never about the lack of resources, there’s always the availability of resourcefulness. So because there is no money, there is no business plan, there is nothing, there is no investment, but you are very resourceful to see even to offer someone, “I’ll give you a shirt, can you build me a website,” like a barter kind of thing. That is what is required when it comes to making things happen in a scrappy, scrappy not in a derogatory fashion but with limited resources.
How can you build something that would make something valuable happen. The other thing that I want to draw upon is the fact that you didn’t know much about the fashion industry, right? But that didn’t stop you from saying, “Okay, let’s build a business,” because Google is there.
Stan: I tell you why exactly Google is there. Google taught me everything, like everything is online. There are blogs. There are videos like you can learn everything online, everything.
Rajesh: Yes. The last one in from my side is what, Ravi you mentioned is about insane focus on customers experience. Although you were a small company you gave people a very rich experience because the rich people like that personal service and then attention to detail, caring and giving it exactly how they want it. So much that you went to like an angel kind of person fell in love with you and certainly fell in love with the business so much that he acquired the whole company. That’s what might take away was. Ravi you want to share something.
Ravi: Yeah, I think first of all, it was a very inspiring story and I think a lot of Silicon Valley entrepreneurs and especially entrepreneurs in the emerging countries that don’t always have access to investors. I think they should first stop thinking about raising money but they’re looking at what is it that they’re passionate about and looking around in their network. There are so many people that we have in our network that we could kind of tap into for this kind of, you know, in kind help and your story is again a testament of where there is a will there is a way. You had the will, you are walking in London and then you had the idea and it is not about having ideas, but it’s about converting those ideas into a real business and that requires passion and not always money.
The story again tells guys converting an idea into your business that the key ingredient is not money. Key ingredient is you, your product, your passion and largest user customer service. If you look at Zappos as an as another example they are like instant about customer service. I was recently listening to, you know, Tony Shea their longest customer service call was eight hours. So they don’t track their customer service reps on how many calls you have a minute. He said that’s very insane. If the customer wants to talk let them talk. Apparently somebody spoke for eight hours. So, it’s almost like you going there and delivering the shirt and having lunch with them. That’s what every customer in the world wants, whether they are rich or poor. I think this is a fantastic story and I’m sure many entrepreneurs will take it up and then it’ll get on their new passions.
Stan: Thank you.
Rajesh: Do you want to say anything in closing?
Stan: Well, I’m pretty happy I could just share the story and they hope they were some lessons that everyone can learn.
Rajesh: Yeah. This was amazing. So thank you so much Stan. You are our very first guest in this whole series. We never had guests, it was only Ravi and I—
Ravi: Rajesh and I talking, so thank you so much. So again, signing off Ravi Gundlapalli. You can learn more about us and me at mentorcloud.com.
Rajesh: Yeah. And this is Rajesh Setty and you can learn more about me at rajeshsetty.com. Until then, goodbye.
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