I first met Christina Stembel when she was a twenty-something staff member at Stanford, organizing alumni events for the law school. As part of her job, she would buy thousands of dollars' worth of flower arrangements for events and was dismayed at how expensive they were, how crappy the quality was, and the fact that after the event, the flowers all got tossed into the trash. Eventually, she became passionate about creating a better solution for the cut-flower business and quit her job at Stanford to found Farmgirl Flowers.
Excited about her new startup, she built her plan around several key assumptions:
Christina's founding assumptions
Most customers would be men buying for women.
She shaped the offering around an ordering process that would appeal to men, with arrangements that would be loved by the women who received them.
One featured arrangement each day.
Her belief was that people (men, especially) didn't like scrolling through huge selections and would prefer one easy choice that changed daily.
Priced well below competitors.
Christina wanted to be the low-cost leader. She believed the efficiency of one arrangement per day would give her the cost savings to undercut the big floral companies.
Strong commitment to environmentalism.
Christina wanted to be the floral delivery company with the smallest carbon footprint — locally-grown flowers, bicycle delivery, and the one-arrangement-per-day model to dramatically reduce the industry's notoriously high wastage.
With those assumptions, she went about getting the business ready to launch. Christina wanted a unique brand in keeping with her eco-friendly vibe, so she wrapped each arrangement in fabric from discarded burlap sacks that had been used to transport foods like potatoes and coffee beans.
She launched the initial version of the Farmgirl Flowers website. As orders came in, Christina would build the arrangements in the dining room of her San Francisco apartment and have them delivered by bicycle. By personally fulfilling each order, she was able to keep costs very low as she learned about her customers and tested her assumptions.
She found out pretty quickly that most of her assumptions were wrong. Nearly three-quarters of her orders were women buying for other women — not men buying for women. Buyers didn't care as much about her low price point; they cared far more about the quality of the flowers and the aesthetic of the arrangements. While they generally liked the eco-friendly positioning, they really wanted to be able to choose from more options.
She quickly adjusted the product offerings based on those early learnings, and the business grew fast. Eventually Christina moved the operation out of her apartment into actual commercial space in San Francisco, hired employees to help make the arrangements, and contracted bicycle messengers to deliver them.
Christina wanted to put her foot on the marketing pedal, but she quickly found that advertising in the flower-delivery sector was very expensive. The big flower companies really drove up the cost of keywords on Google, so a keyword like "flower delivery" was going to cost her $7 per click. If you assume that 9% of the clicks make a purchase (fairly typical), then $7 per click equates to a customer acquisition cost of $78 — way more than she could make on an order.
So Christina switched to guerrilla marketing tactics. She provided San Francisco coffee shops with free arrangements to display on their front counters with a stack of her business cards. Instagram's popularity was just beginning to rise, and flower arrangements are the perfect sort of visual product for Instagram. People were soon taking pictures of arrangements they had received and tagging them with #farmgirlflowers. Her Instagram followers grew to almost half a million people.
With a solid following in the Bay Area, the next logical step was nationwide shipping. It would not be easy to scale from a perishable product delivered locally by hand to one that could be shipped nationwide and arrive in great condition, but Christina worked closely with a packaging design company and figured it out.
Having proven out the business — from a dining-room operation to a nascent national company — Christina set out to raise venture capital. She knew she would face challenges, but she hit the fundraising trail with resolve and a pitch deck full of data.
Over the next couple of years, she pitched to a total of 104 venture capitalists and received 104 rejections. Some of the feedback:
"Sorry, this isn't a tech business to us."
"It's just inherently unscalable."
"There's no economic leverage."
"Team seems weak."
"Your slides are too pretty." (Really.)
"Maybe next time you can bring your husband?" (Seriously?)
Frustrated, Christina decided she'd continue to bootstrap the company, growing it organically — pun intended — without outside capital.
Her personal charisma and a great feel-good story got her lots of press attention, from Forbes, the New York Times, Vanity Fair, Vogue, and Inc. to NPR's Marketplace and The Today Show (several times).
A new startup called BloomThat, founded by three guys with MBAs, raised $7.5 million in venture capital to copy pretty much every aspect of Farmgirl Flowers — from the messaging right down to the burlap wrap.
The fact that Sand Hill Road investors had turned her down and then invested in men who stole her idea was a pretty hard pill to swallow. Happily, the three dudes failed. BloomThat burned through all their money and had to cease operations, selling to FTD at a fire-sale price, while Christina kept building Farmgirl Flowers the old-fashioned way: profitably, with no outside capital.
Her nationwide shipping business did so well that she soon faced a new problem: she couldn't source enough flowers to keep up with demand. Her commitment to only using local Bay Area flowers had become a constraint on growth. So she bit the bullet and started sourcing internationally, including establishing a new facility in Ecuador.
Today, Farmgirl Flowers is an extensive operation, shipping from twenty-two facilities across North and South America. Originally launched as a one-woman operation in her San Francisco apartment, Farmgirl Flowers now profitably generates more than $35 million per year in revenue. And here's the best part: because all those venture capitalists turned her down, Christina and her team still own 100% of the business.