Minted: Mariam Naficy

In 2000, Mariam Naficy sold her first company, an online cosmetics store called Eve.com, for $110 million. Several years later, she got the entrepreneurial itch once again: she founded Minted, an online stationery store that solicits designs from artists all over the world. Today Minted is one of the biggest crowdsourcing platforms on the Internet. PLUS for our postscript, "How You Built That," how Vanessa and Casey White turned their grandfather's pierogi recipe into Jaju Pierogi. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

  Hey, really quick before we start the show, I want to let you know about a new addition to our already amazing lineup for the How I Built This Summit in October, sponsored by American Express. Eric Ryan and Adam Lowry, the founders of Method Cleaning Products, will be joining me for conversations on the main stage, along with founders of companies like Airbnb, Stitch Fix, Lyft, and many others. You can get your tickets and see the full list at npr.org/summit.

• 0:30Guy Raz?

  So April 2008, you launchminded, and you're like, the door's open, the shingle's out, you're excited, you pop the champagne corks, and...

• 0:39Speaker 01

  Nothing, nothing. Absolute dead silence.

• 0:42Guy Raz?

  No orders.

• 0:42Speaker 01

  There was not a sale to be had. It was terrifying and horrible, horrible. And we almost, I really contemplated that moment, this is a failure, we need to shut this business down, we need to give whatever remains of the money back to investors, because it's a total failure.

• 1:04Guy Raz?

  From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 1:16Guy Raz?

  I'm Guy Raz, and on today's show, how Miriam Naficy turned her online stationery store into one of the biggest platforms for emerging artists on the internet, and in the process, transformed the business of personalized stationery.

• 1:34Guy Raz?

  Back at the end of the 1980s, at age 13, I was getting ready to officially become a man. This is the age at which, according to Jewish tradition, boys enter manhood and they have a bar mitzvah. There's a big party, you get hoisted up in a chair and paraded around a dance floor, you serve salmon or chicken, you get the idea. Anyway, about eight or nine months before the big day, I remember going with my mom to a stationery store to look at tons of invitation samples. We checked out fonts, paper stock, colors. We ended up going with burgundy, black, and gold. She put down a deposit. It was a long process. Now, compare that to when my son

• 2:16Guy Raz?

  was born 25 years later. I went online. I uploaded a photo of his pink little face. I picked a layout, uploaded my address book, put in my credit card details, and bam, within like, three days, everyone on my list received a beautiful birth announcement in the mail. So, thank you, internet. Now, this is the revolution Miriam Naficy tapped into in 2007 when she launched Minted. But what differentiates Minted is a major pivot Miriam would make early on. Because instead of just selling personalized holiday cards or wedding invitations, Miriam actually built a platform for artists to showcase their work. And she did this by tapping into

• 2:59Guy Raz?

  another revolution that was happening in the early 2000s: crowdsourcing. But before Minted was even a thought in Miriam's mind, she had ridden the dot-com wave of the late 90s with a company called Eve. Eve was a website that sold cosmetics. And at a very young age, Miriam and her partner managed to sell it before the dot-com bust. And the thing about Miriam is that despite launching two successful companies, she never intended to become an entrepreneur. Miriam grew up in Tehran. Her mom was an artist, originally from China. Her dad was an economist from Iran. And toward the end of the 1970s, as

• 3:39Guy Raz?

  the situation in Iran became more volatile, the family decided to pack up and flee.

• 3:45Speaker 01

  You know, the environment was unstable, and we did not-- you know, it was very unclear what was going to happen. I think that we were really worried about what would happen to us in the new regime. So, you know, I guess my dad thinks of us as refugees, which is when you leave unwillingly. When we got here, it was the-- you know, soon after we arrived, the hostage crisis started.

• 4:11Guy Raz?

  Yeah.

• 4:11Speaker 01

  And that was not a great time to be Iranian in the US. And being a kid in school, that was really difficult.

• 4:21Speaker 01

  I basically really honestly tried to Americanize and fit in as fast as I possibly could. I really wanted to integrate. And when I came here, I actually had a pretty, I had a strong accent. I was two years younger than everybody in my class all the way through, basically, school. I was two years younger, so I was small, small, young and foreign. And I just, I really wanted to be American. And honestly, I sort of feel like the whole time, even when I was in Iran, I felt like a little bit of a, you know, an outsider there as well. So you're always, if you're like me and you're, you move around a lot and you're of mixed cultures, you're never really going to feel like you belong to one place or one culture, right? You're always going to feel a little bit like the outsider who's traveling through

• 5:05Speaker 01

  time and space as, as an observer.

• 5:07Guy Raz?

  Were you a pretty good student as a kid?

• 5:09Speaker 01

  I was. I was, I was that nerdy girl who sat at the front of the class with glasses on, who everybody wanted to get help from with their homework.

• 5:19Guy Raz?

  Quiet?

• 5:20Speaker 01

  I would say quiet and, and pretty competitive. Very competitive, yeah.

• 5:24Guy Raz?

  And, I mean, as a kid, did you have any real interest in like business or entrepreneurial stuff?

• 5:33Speaker 01

  No, my, my parents, I come from a completely non-business family. And honestly, you know, with the Iranian upper class, you know, you didn't, you didn't, they didn't set up business as sort of the vaunted thing that one goes into. Things that were, in my family, very admired were things like being a doctor, going into foreign service in the government, for example. So when I was growing up in Chevy Chase, not once did business cross my mind. I was thinking law. And I, I do remember my mom, on the first day of first grade, sort of bending down to say to me something. And she said, "I want you to go to school and I want you to beat all of the boys."

• 6:18Guy Raz?

  So you eventually went on to Williams College in Massachusetts. What did you do after you graduated?

• 6:27Speaker 01

  So that's where I did do the expected thing. Some of my fellow classmates who were in economics and poli sci were interviewing for jobs on Wall Street and in management consulting firms. And those firms had these huge processes, on-campus recruiting processes. So I went to Goldman Sachs as a financial analyst in their investment banking division.

• 6:50Guy Raz?

  And you loved it.

• 6:53Speaker 01

  I can't say that I love being a financial analyst. It is sort of like loving boot camp. I don't know if you're familiar with it, but you end up working very, very long hours. But I will say it's a great training ground as to what work ethic really means. Because you can't imagine working harder than what you actually physically pull off as a financial analyst.

• 7:15Guy Raz?

  You were like 22 or 21, and you were probably moving to New York. And all you were doing was working.

• 7:21Speaker 01

  All I was doing was working. So I was 20, and I was eating breakfast, lunch, and dinner at the office. And I was actually selling. I had a desk on the bond trading floor, and I was selling bonds as well as working with clients. So before I could actually drink, I was selling bonds. So before I could drink legally.

• 7:38Guy Raz?

  So I guess you were doing this for a couple of years. And then, at a certain point, you decided to go to business school. Were you thinking in your mind, like, OK, I'm going to go to business school, and then I'm going to start a business?

• 7:52Speaker 01

  So what happened was, I, at first, was just thinking about going to business school because I'd actually done investment banking and management consulting. And I thought perhaps I would want to go into consumer products or retail. But I didn't get into Stanford the first time I applied for business school. And so I decided to take a year off and try to boost my resume with something that was a little bit more differentiated. And went to work for an entrepreneur, Maurice Werdiger, in the restaurant business, actually, who was a Stanford grad. And he became a key mentor to me. And he was starting a chain of restaurants in Palo Alto and all over California. But I was so inspired and bitten

• 8:37Speaker 01

  with the entrepreneurial bug during that experience. And Maurice importantly said to me, you really, you really could do this. You could start a company. I think you should really consider it. Because we would spend hours talking about entrepreneurial ideas, venture capital, and just becoming completely obsessed to the point where I thought, why go to business school? A real entrepreneur doesn't go to business school. I'm not even interested anymore. And at that point, I thought, all right, I'll apply one more time. Because my boyfriend, who became my husband, was applying. I thought, all right, I'll throw my hat in the ring one more time. And then Stanford accepted me.

• 9:08Guy Raz?

  So you go to business school. By the way, I read that you, while at business school, you published, you published a book called, I'm going to read the title of this book, called The Fast Track: The Insider's Guide to Winning Jobs in Management Consulting, Investment Banking, and Securities Trading. A book that has sold like 50,000 copies. That's very precocious. I mean, that's like, super, like, that is, it's like, overdrive precocious.

• 9:33Speaker 01

  Yeah, so the reason I did that was I thought, well, one, it's a market need. I know how to fill this need. I've done so much recruiting at the two firms I was working at that I knew that there was a need for the book. And I wanted to experiment to see what would happen if you create a consumer product that you know that there's a need for. Can you, can I actually put a product together and sell it? And I also thought it would be a good project to demonstrate that I had some, I guess, chutzpah to be able to get into Stanford. So I, I sold the book, right? And then I, I knew I'd sold the book to a publisher, Broadway, before I, as I was applying. And I think that helped differentiate me as well. And then I used the, the advance to pay for business school, which I needed to pay for. So it was a way to pay for school.

• 10:18Guy Raz?

  So at Stanford, did you actually have a business plan or idea that you wanted to put together?

• 10:24Speaker 01

  Well, I started in the second half of the year. So first of all, second half of the year at Stanford, I was taking every entrepreneurial class I could and trying desperately to get into the best classes. I was auditing some, sitting on the floor of others, and then working on plans. And one thing I knew that I wanted to do was find a partner that I really liked. So I called a friend of mine in New York and tried to convince her to come to San Francisco and start something with me. And we had two ideas. And she said, well, I'll start a company if we pursue my idea, which is selling cosmetics online. And mine was to do market research online, sort of like a SurveyMonkey.

• 11:01Guy Raz?

  What was her name?

• 11:02Speaker 01

  Varsha Rao. And so we decided to pursue cosmetics because I thought, sure, why not? I want to work with you and I need to convince you to come out, so let's work on cosmetics. I've used cosmetics before. We can figure this out. And so I convinced her to move out.

• 11:20Guy Raz?

  To come to San Francisco to help you start an online cosmetics company?

• 11:26Speaker 01

  Mm-hmm, yeah. And she slept on the couch in our studio apartment, or our one-bedroom apartment. And in the morning, we'd get up in our pajamas so we wouldn't wake up my now-husband. And we'd sit on the couch and call all the New York cosmetics companies from our couch in our pajamas and convince people to sign on with us to distribute on this thing called the Internet, which most of people were extremely suspicious of. So that was an adventure.

• 11:54Guy Raz?

  So the business was going to be just an online store selling all kinds of cosmetics to every different brand? That was the idea?

• 12:02Speaker 01

  That's right. So the idea was to create a replenishment brand for cosmetics. We thought skincare, meaning things that you want to replenish, skincare, haircare. You know your favorite and you just want to replenish it. Because at that point, everybody was telling us nobody was going to buy cosmetics online that they'd never tried.

• 12:18Guy Raz?

  Yeah.

• 12:18Speaker 01

  And moreover, women don't shop online.

• 12:21Guy Raz?

  Right, that's a fact.

• 12:22Speaker 01

  Yes, women don't shop online and nobody will ever buy makeup online. And I'll just say, in my career... That has happened repeatedly, right? Where people will say, no one's going to buy paper online.

• 12:33Guy Raz?

  Yeah, who's going to buy that?

• 12:34Speaker 01

  No one's going to buy shoes online. No one is going to do this, no one is going to do that.

• 12:37Guy Raz?

  Glasses? No one's going to buy that online.

• 12:38Speaker 01

  Yeah, so I mean, if you hear that as an entrepreneur, you've got to discount that massively. Because, trust me, it's been everything. All of those things have been said.

• 12:45Guy Raz?

  So when you approached these small brands, didn't even, and why didn't any of them just say, well, we'll just sell them online ourselves? Why were they attracted to what you guys were offering them?

• 12:56Speaker 01

  Well, in those days, there was no, you know, solution that would easily allow a small brand to actually sell online. I know it sounds crazy, but there was no solution. And so, first of all, nobody wanted to sell online. We would have to go in there and convince them that the internet was not bad. We also actually hired a woman from Macy's, who was formerly from, at Macy's is a big manager of the cosmetics business. And she ended up being our river guide, making introductions for us, helping advise us. You know, if you go to Chanel, wear the Chanel nail polish, for example. That was, that one stood out. They'll recognize their colors on you.

• 13:36Guy Raz?

  So you and Varsha, and by the way, what's your husband's name?

• 13:38Speaker 01

  Michael.

• 13:39Guy Raz?

  Michael, okay. So you, Varsha, and Michael are living in this apartment. You and Varsha decide you are going to start an online cosmetic store, which today doesn't sound like that big of a deal. But I guess in 1998, that was kind of revolutionary.

• 13:55Speaker 01

  Right. Nobody was selling cosmetics online. Nobody. Can you believe, literally no one.

• 14:00Guy Raz?

  Insane, yeah. I wish I had a time machine, I could go back and start a cosmetics company.

• 14:04Speaker 01

  Yeah. And then, you know, to start a company, you know, I basically took a white sheet of paper out and started drawing a website on a white sheet of paper in my kitchen, along with another sheet of paper, where I was trying to come up with metrics as to what I would call different things, like people coming to your site. And what would you call the metric where someone converts into a customer? And everything had to be invented, literally, for the first time.

• 14:31Speaker 01

  Then we went through a really insane year. So I graduated in 1998. We immediately started fundraising.

• 14:40Guy Raz?

  But was it easy to raise money in 1998?

• 14:44Speaker 01

  1998, it was getting pretty easy. 1999 was crazy.

• 14:48Guy Raz?

  Just because it was the dot com boom.

• 14:50Speaker 01

  It was boom. It was starting to boom. Yeah, it wasn't the height, but it was getting there. And I sensed that there was an opportunity for me to get capital, even though I was 27 and had no work experience, really.

• 15:01Guy Raz?

  And people liked your pitch?

• 15:03Speaker 01

  They loved our pitch. They loved us and they loved our pitch. And we had a lot of interest. And we ended up in an interesting situation where we did experience some collusion, actually. This was a really difficult part of that journey where in the old days, you could have VC firms gang up. If they could find out who else you were talking to, they could collude and basically work with each other and partner together to drive your price down, your valuation down. And I had heard about it at business school in a lecture. And sure enough, it happened to me. So we had a couple of term sheets come in for our first round of financing. And it was Idealab plus a couple of others.

• 15:44Speaker 01

  But two of the firms decided, first they found out about who we were talking to, and they decided to collude. So we signed a term sheet with one player. And they were valuing us straight out of the blocks, just as people and with this PowerPoint presentation at $6 million.

• 15:59Guy Raz?

  Right. Which sounds pretty good, right?

• 16:02Speaker 01

  Yes, it was fantastic. We were very happy. It was a prestigious firm. They had an office on Sand Hill Road. But they turned around and actually decided to partner with another firm. And they called us and said, we're sorry. This is now their deal. The terms are changing. And the terms now became, we need you to move cities to where this other firm is. We're going to bring the valuation down to 4 million. And it was a collusion, like a textbook collusion.

• 16:30Guy Raz?

  Hold on, this is like Darth Vader territory, like the terms have changed. Just explain to me how that worked, how that was allowed to happen.

• 16:40Speaker 01

  Yeah, so it's a term sheet is unfortunately not binding. It's a indication of interest that's really a buildup of good faith. And so you could do it and get away with it, absolutely. And it happened a lot in the late 90s when you didn't have online transparency and reputation, where other entrepreneurs could learn about what people were doing to you. And so there was no consequence. And so you could become, as an investor, much more abusive.

• 17:09Guy Raz?

  So what did you tell them when they said that? They said, "It's 4 million bucks, and here you go."

• 17:14Speaker 01

  So what's fascinating is, we had not yet called Bill Gross to tell him that we were turning him down.

• 17:20Guy Raz?

  Bill Gross was the guy who...

• 17:22Speaker 01

  At Idealab in Pasadena. So we had had this third term sheet. And we were planning to call him, but we just didn't have the time. We hadn't had the time to call him. So instead of calling him to turn him down, we put the phone down with the other group. We picked the phone up. We called Bill Gross, and we said, "We're signing your term sheet. We'll be in Pasadena tomorrow morning." And we exited the side door.

• 17:45Guy Raz?

  Okay, so you raised some money. It's '98. How long between the time that you went to investors, received money, and you actually launched the website?

• 17:57Speaker 01

  We took the money in 1998, and we launched in July 1999.

• 18:03Guy Raz?

  And what described... By the way, we should mention, the name of the website was?

• 18:08Speaker 01

  I'm sorry, the name was Eve.com.

• 18:10Guy Raz?

  Like Adam, but Eve?

• 18:12Speaker 01

  And Eve, yes.

• 18:14Guy Raz?

  So when you launched Eve.com, did people find out about it right away? How did people even know where to go and how to look for it?

• 18:22Speaker 01

  Yep, so we ended up with a massive amount of press coverage and we actually had a lot of money for marketing and we were encouraged to spend it because at that time it was land grab time. Everybody was trying to grab market share as fast as they could. We launched in and there were four competitors who launched right behind us and one of the big things I learned to do was just completely block out any fear or notion of the competitors, keep your head down. And so the minute we opened the doors, literally the product started selling ridiculously quickly.

• 18:50Guy Raz?

  Wow.

• 18:51Speaker 01

  I mean, we did $10 million in sales in our first year.

• 18:53Guy Raz?

  Amazing.

• 18:54Speaker 01

  Yeah, it was a runaway year, given that it was our first year of business.

• 18:57Guy Raz?

  That must have just been amazing. You were so young and you were like huge.

• 19:02Speaker 01

  But lest anyone be confused here, we were working till 10 o'clock at night, every night, in the office. This is where the investment banking background came in handy because we were trained to operate like that. And my husband would come meet me at the office at 10 and we'd have dinner at 10:30 every night.

• 19:18Guy Raz?

  So you, in 2000, like a year and a half after you launch, you guys get an offer and you sell this company. Eve.com is sold for $110 million. I mean, I don't even want to ask the question why. I mean, it seems obvious. It was a lot of money and a no-brainer, I guess, right?

• 19:42Speaker 01

  Right. So this was a time when we were trying to raise a Series D and honestly, the market was starting to get a little skeptical. When are you going to make a profit? What's going on? And so I start for the first time in the 14 to 16-month period, I started realizing that getting the next round was going to be difficult and we could have safe harbor for the company inside another company. I thought it would probably be a wise move. And we closed it in April 2000. Two weeks later, the market started crashing.

• 20:12Guy Raz?

  Wow. So you made it just like by the skin of your teeth?

• 20:16Speaker 01

  Yeah, we, yes. We had the foot in the door as the door was closing.

• 20:20Guy Raz?

  Were there other people in your position in the industry who maybe didn't have as good timing as you guys did who were, I don't know, maybe resentful of your luck or your foresight?

• 20:35Speaker 01

  I think there were a lot of cases where people were convinced by investors or convinced themselves to keep going and wait for the public exit. Because clearly, at that point, everybody was enamored of the IPO. And I do think people were resentful of us for this, and they considered it lucky versus any type of hard work or intuition or anything else. And that was unfortunate because we worked our butts off to build this business. I mean, we were working-- I basically lived at the office during this time. I never left. So we built a pretty good business in a year. It was $10 million in our first year. Yet, yes, people, I think, were very resentful that we had sold at the right time.

• 21:19Guy Raz?

  So, did you just, like, go to Hawaii and, like, kick it and drink pina coladas?

• 21:26Speaker 01

  I did take a year off, and my husband and I traveled around, it's true. But about two months into it, I was absolutely miserable. I felt like I was missing out on what was happening. And fundamentally, there was a perception that we got lucky with Eve.com. And I had this feeling that, you know, that saying, "Once you're lucky, twice you're good." I wanted to see if I was actually good or not, you know? And so I think I needed to prove to myself that I could do it again.

• 22:01Guy Raz?

  In just a moment, how Miriam got into the stationary business and almost abandoned it right before stumbling on an idea that would transform the entire industry. Stay with us. You're listening to How I Built This from NPR.

• 22:37Guy Raz?

  Hey, welcome back to How I Built This from NPR. I'm Guy Raz. So it's 2002, and after a break from work, Miriam Naficy decides to get back in the game. And it turns out, The Body Shop wants to create an e-commerce division, and so they ask Miriam to run it. But after a few years working for a big company, Miriam starts getting that entrepreneurial itch once again.

• 23:02Speaker 01

  When you have entrepreneurial tendencies, sometimes you'll see something that you can't resist. And I saw a change in what consumers were willing and excited about consuming. And so, for example, bloggers were starting to emerge that were disrupting journalists at really established institutions. And consumers were willing to read them over those established institutions, and there was great talent coming to the fore. And so I was thinking to myself that perhaps in product design, there would be a similar opportunity, that you could find talented designers that people would rather buy than not talented designers. So I started getting really interested in the idea of having design competitions and this idea of crowdsourcing.

• 23:46Speaker 01

  And so I decided to take stationery, which was an interesting model for me, and mash it up with this kind of experimental idea, which was crowdsourcing.

• 23:57Guy Raz?

  And at that time, if you met a friend at a coffee shop and they said, hey, what are you working on? You would say, I'm working on this business that's going to do what? What would you say?

• 24:10Speaker 01

  At that point, I would have said, we're going to sell stationery online.

• 24:14Guy Raz?

  Which sounds pretty clear.

• 24:17Speaker 01

  Yep. And it was one foot back in the old world of just take the brands, consolidate them online, and sell them. There was this slightly embarrassing idea I had, which was to run a design competition around the side and crowdsource designs that weren't available through... The established stationery brands and I was going to do that on the side.

• 24:35Guy Raz?

  In other words, you said, I'm going to have a site that sells stationery and then on the side, we're going to run like design competitions and maybe we can develop stationery based on the winner of that design competition.

• 24:46Speaker 01

  That's right.

• 24:47Guy Raz?

  I got you.

• 24:47Speaker 01

  Exactly.

• 24:48Guy Raz?

  All right.

• 24:48Speaker 01

  So the idea was focused around stationery retail and it had fantastic economics associated with it, good margins, it was inherently viral product because your name is on the back of the card, your company name, but the shopping experience offline was pretty archaic. You'd go to a store, there'd be a piece of paper you'd fill out.

• 25:06Guy Raz?

  Right.

• 25:07Speaker 01

  To order some custom cards, you'd have to fax it in to the supplier. It was an archaic, slow and really inconvenient process and I thought, in my opinion, the design could be improved greatly. And that gave me an opening for crowdsourcing on the one hand. On the other hand, I was a little bit, honestly, a little bit risk averse and I thought that I did not want to raise venture capital again because I had had some bumpy experiences in the first go around. So I thought, I need to find a business model to apply this idea to that is very, very cash flow positive and doesn't require a lot of cash and I'm going to run it as a cash flow business.

• 25:48Guy Raz?

  In other words, a business that could just self-fund, right? Because of the revenue.

• 25:52Speaker 01

  That's right.

• 25:53Guy Raz?

  Yeah. So you didn't want to have to raise a lot of money, but you still had to raise some money, right? To get this off the ground.

• 26:00Speaker 01

  Right. So at this point, I was going to friends and because I had successfully sold Eve, they were willing to listen. And so I was actually able to raise a pretty big angel around of two and a half million dollars, which is big for an angel round.

• 26:15Guy Raz?

  So you decided you weren't even going to go to VCs initially.

• 26:19Speaker 01

  That's right. At this point, I wanted much more control. I decided not to have a co-founder from the outset. And so I put the plan together and what I found was many of my friends were a little bit, they were very, very supportive, incredibly supportive, but they were all a little bit wary of crowdsourcing because it was. Not a tried and true model at this point. What was tried and true was e-commerce 1.0, which is take all the brand names, put them online and provide convenient access online.

• 26:49Guy Raz?

  Yeah.

• 26:50Speaker 01

  So that's what I did. I signed up all these stationery brands and I put them online. And then in the background, I hired a coder who was in college in Portland. And I would work at night on the competition structure, which was my real passion, which was to try to crowdsource the content.

• 27:04Guy Raz?

  So you raised about $2.5 million in angel funding and you are ready to launch this site, which is going to sell stationery. And by the way, how many people did you hire? Did you bring aboard to help you launch it?

• 27:18Speaker 01

  To launch Minted, I had virtually no one. There were maybe five of us, something like that. And I, that's when I raised, I finished the angel round. We sublet a little bit of space in Jackson Square. And we started with just a few people first year.

• 27:35Guy Raz?

  And who built the website? How did you do that?

• 27:37Speaker 01

  So we spent almost all the $2.5 million on an in-house team who came on board, an engineer. And the key challenge was how to render the customization of your stationery online. That was, and that wasn't something we could buy off the shelf from anyone. So we had to build it ourselves.

• 27:56Guy Raz?

  In other words, just to be clear, a way to be able to see what your stationery would look like?

• 28:02Speaker 01

  That's right. So our engineers built a way to see your customized text appear on the screen in, inside your stationery design. And that you couldn't buy from any other technology company. So I spent most of the $2.5 million I raised going around signing up all these exclusives with stationery brands that you would see at a papyrus store, for example. You see them, they've already gotten distribution. They're well-known wedding brands, stationery brands. I spent most of the time and the money doing that. And then I just couldn't let go of this other thing that was really risky and unproven, which was to have a design competition. And I really, really wanted to let myself do that, but I just couldn't let myself do it. It was this tear. So at night, I worked with a college student

• 28:47Speaker 01

  who I found on rent, a coder, which is embarrassing to admit. And we, we worked on this at night. After everyone at Minted went home, I would build the competition structure with this guy. And I really wanted to do that full-time, but I just, I just didn't let myself.

• 29:04Guy Raz?

  So April 2008, you launchminded and you're like, the doors open, the shingles out, you're excited, you pop the champagne corks and?

• 29:12Speaker 01

  Nothing, nothing, absolute dead silence.

• 29:16Guy Raz?

  No orders?

• 29:16Speaker 01

  There was not a sale to be had. It was terrifying and horrible, horrible. With Eve, we opened the doors and the makeup was just flying out from day one. I mean, it was this massive amount of sales. Here, there was not one thing sold in the first 30 days, not one sale.

• 29:32Guy Raz?

  Ooh.

• 29:33Speaker 01

  And we almost, I really contemplated that moment, this is a failure, we need to shut this business down, we need to give whatever remains of the money back to investors because it's a total failure.

• 29:42Guy Raz?

  Hmm. Did you at least have like positive buzz around it or anything like that?

• 29:47Speaker 01

  We had a really negative article from TechCrunch.

• 29:51Guy Raz?

  What did it say?

• 29:52Speaker 01

  Terrible idea, this person's failed before.

• 29:54Guy Raz?

  Wow.

• 29:55Speaker 01

  I think that they didn't really even understood that we had successfully sold the company for as much money as we did.

• 30:00Guy Raz?

  You mean eve.com?

• 30:01Speaker 01

  Yes. So they just made some assumptions and had just a terrible, like that was our freshman, our debut. And so what happened was, and this is what, this is really fascinating when you look back on it, is we just didn't have enough data. And so what happened was we didn't have enough traffic to really assess whether we were successful or not because nobody, nobody knew about us, so nobody was coming. And then when they did come, what they were buying were the, it was a tiny little crowdsourced selection that I mentioned to you, that was my little personal secret hobby, passion on the side.

• 30:32Guy Raz?

  Explain, explain how that worked for a moment.

• 30:35Speaker 01

  Yeah, so, so when we opened our doors in April, we had our very first design competition for what people call save the date cards that people send out when you're about to get married.

• 30:43Guy Raz?

  Yeah, yeah.

• 30:43Speaker 01

  And, and we had very few entries and I think what would happen is we picked something like 66 cards out of that competition based on voting. So the way that Minted works is everything is submitted to us via a design competition. We picked about 66 designs and we launched those. But we had hundreds, if not actually really thousands of SKUs that we were carrying from established stationery brands that we'd launched at the same time.

• 31:10Guy Raz?

  That already said, "Save the date."

• 31:11Speaker 01

  That already said, "Save the date," or wedding. It was all sorts of things, wedding invitations, other things that people provide. And we launched all of that stationery, wedding stationery product online. And then just our little tiny collection of 66 crowdsourced "Save the Date" cards. What was really different is that immediately, the submissions that were coming in were breaking a lot of barriers and a lot of molds that had been assumed about that category of product. For example, people started putting photos on them. And I remember our printer, who we signed up to do this tiny little bit of business, said to us, "You know what? In our industry, people don't put photos on "Save the Date" cards, Miriam. They don't do that." I said, "I understand, but that's what's actually being submitted and that's what's winning."

• 31:53Guy Raz?

  Huh.

• 31:53Speaker 01

  So we're going to sell them.

• 31:54Guy Raz?

  Yeah.

• 31:55Speaker 01

  So what happened was, within a couple of months, we started getting, let's say, one order a day. Seriously, one order a day, maybe by June. And then, you know, a month after that, it went to two orders a day, maybe three orders a day. Still, nothing to write home about.

• 32:10Guy Raz?

  And you were probably not... You're running out of cash. I can't...

• 32:15Speaker 01

  Absolutely.

• 32:15Guy Raz?

  Yeah.

• 32:16Speaker 01

  Our runway at this point is running out. Our conversion rate, which is a critical metric that e-commerce companies use to determine success, was something like 0.1%, meaning out of all the people who come, 0.1% buy. And that is really, really low.

• 32:30Guy Raz?

  See, you're in trouble. Like, I'm getting nervous.

• 32:33Speaker 01

  Yes. And we have, you know, a couple hundred thousand dollars left in the bank. But then, we started seeing the tiny sign of life. And I thought, "Well, maybe what I can do is take some capital and at least save this business just to recoup the initial investment and that's it." So my good friend, an angel, one of my really good friends, Alex Sluski, called me and said, you know, "I'm just getting..." He's like, "I'm just getting nervous about this market. I think you should take some capital, some institutional capital." And I thought, you know, "I feel the same way. I should get on it." So I went out and I decided to break my own rule and actually raise venture capital. And we raised in... We basically closed our first institutional round of capital.

• 33:18Speaker 01

  So that's where we raised a couple of million dollars.

• 33:20Guy Raz?

  How were you able to do that if you, if you, if what you had to show for was a company that was getting no orders, you were losing money quickly? Like, why would a venture capital firm give you cash at that point?

• 33:32Speaker 01

  That's a great question, Guy.

• 33:33Guy Raz?

  Yeah.

• 33:34Speaker 01

  That's a great question. So the reason why they invested in us was personal reputation. That was it. You know, I delivered one thing successfully before and this one brave investor from IDG, now Ridge Ventures, Alex Rosen, decided to take a chance on me. And that's it. That's the only reason. And nobody else was interested.

• 33:54Guy Raz?

  Do you think, I don't want to, I don't want to put you in an uncomfortable position, Ariane, but do you think that, oh, I'm going to do it anyway.

• 34:00Speaker 01

  Sure.

• 34:00Guy Raz?

  It's like that, the way I frame that question. Do you think if you would have been a man, there'd been no doubt, oh, yeah, stationery sounds great, here's the money?

• 34:11Speaker 01

  I think that if I were a man, I would probably have gotten a little bit more credit for what I had previously delivered. I think the personal reputation effect of what had happened with Eve would have magnified. But I don't think stationery was very, and design was very interesting to a lot of male venture capitalists. And I, I don't think that, when I say Silicon Valley doesn't have design confidence, I mean the investors in Silicon Valley don't really understand design and why it's important.

• 34:44Guy Raz?

  So when you, so explain the, the business model. I mean, obviously, you were selling all of the stationery from, from other brands. And so you would get a cut of that and that would fund your business, that would, that would bring in revenue. But also, you had this crowdsourced, these competitions from designers. And then, how would that work? Like, they would? Their designs would be printed by you guys and then they would get a cut of that?

• 35:11Speaker 01

  Well, the way it worked back then was that we had the stationery brands who were basically in a wholesale relationship where we would take the product and resell it and earn a cut. And we had the crowdsourced side where designers would submit and they would receive a couple of things. First of all, they would receive peer critique and feedback from their peers. We built in a critique phase into the process, which was a benefit. And second, if they won, they would receive an upfront cash prize that was completely at our risk, meaning if the product never sold, they could still keep the cash. And then on top of that, if the product sold, they would receive a percentage of every sale. And so that's how the business model launched, but because the only thing that sold was

• 35:54Speaker 01

  the crowdsourced product and not what we spent the entire year launching, which was all the stationery brands, we actually made a hard cut over. And by Christmas of that year, we went 100% crowdsourcing.

• 36:07Guy Raz?

  Wow.

• 36:08Speaker 01

  And so we turned it around. We actually decided to move into the holiday cards business against the advice of all of our investors who probably rightly said, you should focus on what you started, which was wedding. We decided to ignore the advice, launch into holiday cards, and we had an exceptional first Christmas. I mean, we were so oversold. We had to actually shut off our search marketing at one point because we were getting too many orders. So that's when the company went through a huge increase in sales.

• 36:40Guy Raz?

  So at what point did you decide to drop selling other stationery brands?

• 36:46Speaker 01

  Yeah, so that was really rough because I had gone and minted as a partner to all of these stationery brands and I felt very ethically bound. Like, you know, I've made a commitment, I've explained why we brought them on, and now instead this crowdsourced design coming from unknown designers from all over the country is just taking off. And I felt very uncomfortable. And I was lingering in that discomfort for many months. It took me at least nine months to say, we've got to cut and run, we're going to lose all the money we put into building out those brands on our site. We've got to just cut that. And shed all of that work, all that money and all those relationships. And we need to completely pivot towards a crowdsourced model 100%.

• 37:31Guy Raz?

  I'm assuming you had a lot of tough conversations with your partners.

• 37:36Speaker 01

  I did. But I think also they understood why tie themselves up selling online at Minted if that's just not what's working and the sales aren't happening. In the meantime, we couldn't print fast enough. The work of the emerging designers who the customers themselves were picking.

• 37:54Guy Raz?

  So as you started to gain traction those first few years, did any, I mean, did any competitors try to go after you?

• 38:03Speaker 01

  Yes.

• 38:05Speaker 01

  So it's 2013. We have two printers who handle all of our holiday card orders. One does 50%, the other one does another 50%. The first week of October, my cellphone rings at about 5 o'clock. It's the CEO of a much, much larger competitor. And they basically say, we want you to hear the news from us. We have bought this printing company of yours that you use, you know, this 50% player. And we'd love to talk to you about how we could continue supplying you with printing services through the holiday season. Now, this is, mind you, two weeks from the start of the holiday season when all of the, you know what, hits the fan, meaning you have to be prepared.

• 38:48Speaker 01

  You're spending, you know, 10 months of the year preparing for this moment because the seasonality is so high for holiday cards. And basically, he said, you know, can you come in next week to talk to me? And invited me, I think for like a 6 o'clock meeting, you know, the following week. So I went in for the meeting and after a little bit of chatter,

• 39:10Speaker 01

  he said, we'd like to buy you. We'd like to buy your business.

• 39:16Speaker 01

  And I realized in that moment that that whole thing had been constructed to basically force us to sell our business.

• 39:22Guy Raz?

  They basically bought that printing facility, knowing that you guys would be like in a corner, backed in a corner.

• 39:30Speaker 01

  That's right.

• 39:31Guy Raz?

  So what did you do when he said, "We want to buy you"? I mean, I mean.

• 39:35Speaker 01

  Well, I was in his office, kind of stuck there, so I had to say something. So what I basically said was, "Well, let's talk about it. Let's, you know, how would this work?" And I thought, in the meantime, "God, I cannot, I got to get out of this meeting right now and call my head of supply chain so he can, and the engineering team, so they can work, start working on this immediately." Like, you know, I left the meeting and I called everybody. The team is waiting and we had a conversation and they were racing around the country, trying to find printers who would work with us.

• 40:03Guy Raz?

  Did a part of you think that you might actually have to sell?

• 40:06Speaker 01

  No, I never feared that we would have to sell, not once. I knew we would find a way around it. I just, I just, there's just no way I would let that happen.

• 40:14Guy Raz?

  So what did you do? I mean, where'd you go?

• 40:17Speaker 01

  So we found, we found another two printers who were gracious enough to take us on and we, we called, still inside the company, it's called Printer Get In at Minted.

• 40:32Speaker 01

  Because the amount of work and hell our people went through to do that integration at top speed was dreadful.

• 40:40Guy Raz?

  I bet.

• 40:40Speaker 01

  It was dreadful.

• 40:41Guy Raz?

  Yeah.

• 40:41Speaker 01

  And to this day, that, that has left a taste in those people's mouths, you know, around this potential competitor that's still, I think is still there, you know?

• 40:53Guy Raz?

  And at that time, I mean, when they were going after you, I mean, there were other companies who were doing what you were doing, right? There were companies doing custom stationery that you could buy online.

• 41:03Speaker 01

  That's right. So the first generation of companies had been around that captivated people just by the sheer fact that they could make custom stationery for you at a decent price, right? That was just, they were almost like an outgrowth of the printing and manufacturing industry, frankly. We came along with real design vision and really tried to change that entirely into a branded, high-end, European stationery product with lots of bells and whistles and really changed the industry. So that, yes, there were choices, but we felt the design could be better and more exciting. And then as this community, creative community blossomed and developed, we realized that we were a creative community of all kinds of different people. Some people who were former lawyers. You know, there's an oil rig worker from Alaska.

• 41:48Speaker 01

  There's a plumber, a master plumber in New York City, who's winning stationary challenges. There are all kinds of people who want to be creative and who want to earn money creatively. And Minted is a platform for these people to be seen and discovered.

• 42:02Guy Raz?

  Is Minted a profitable company today?

• 42:06Speaker 01

  Yes, so we are in the low hundreds of millions of dollars in sales. And we are EBITDA, we're cash flow positive.

• 42:14Guy Raz?

  Are you able to kind of just relax now and know that your business is fine? You will be fine. Like, can you go on vacation and disassociate yourself from work for a week and not take calls? Like, is that, or are you still always thinking about the survival of your company?

• 42:33Speaker 01

  That's a great question, because I think for the first, believe it or not, five or even six years, even longer, of the company, there was constant survivability risk, actually.

• 42:46Speaker 01

  Now, I feel differently. I feel like the company, given that it's profitable, given that it's growing so well, it's a great feeling. And yes, I can breathe. This, the paranoid immigrant mentality that I've, I think, grown up with.

• 43:03Speaker 01

  And then, of course, a couple of crashes of the market. It tends to make you a paranoid person. You tend not to forget any of this. It just stays with you. But yes, I can now say that a yes, I can guy, go on a vacation for a week and not worry. Maybe even two weeks and not worry at all.

• 43:23Guy Raz?

  How much of your success is because of luck versus skill and intelligence and hard work?

• 43:33Speaker 01

  I think so much of it is luck. I mean, think about what would have happened if I had not been able to leave Iran, right?

• 43:43Speaker 01

  How many people are in areas around the world where they can't escape what the situation that their governments are creating for them? Think about all those talented people who won't ever have a chance. And I guess I would say the other thing is just sheer wanting it very badly. I mean, there are a lot of people who are smarter than I am. And I think it's just, I really focused in on something I'm happily extremely passionate about and love to think about all the time. And I would say that's luck and passion probably outweigh the raw skills.

• 44:20Guy Raz?

  Miriam Naficy, founder of Minted. Minted's also become one of the biggest crowdsourcing platforms for emerging artists. Tens of thousands of artists submit their work to the site each year, and only a tiny handful are chosen to have their artwork and designs sold on Minted.

• 45:00Guy Raz?

  Hey, thanks so much for sticking around because it's time now for How You Built That. And today's story comes from Lynn, Massachusetts, where two sisters have perfected a family recipe.

• 45:11Speaker 02

  I make the stuffings.

• 45:12Guy Raz?

  That's Casey White.

• 45:14Speaker 03

  And I make the dough.

• 45:15Guy Raz?

  And that's her sister Vanessa. And the dough and the stuffing, they are for pierogies, those Polish dumplings filled with cheese and potatoes, sometimes sausage. Their grandfather used to sell them at the family deli in western Massachusetts.

• 45:29Speaker 03

  In middle school, I would go there on Saturdays and help pinch pierogies. And we always had them in our freezer, kind of like our Kraft macaroni and cheese, except we just had frozen pierogies.

• 45:40Guy Raz?

  And when Vanessa and Casey went off to college, their mom would bring them coolers full of pierogies from the deli. And by the time they graduated, they were still eating them, and their friends were too. And sure, they could get pierogies at Trader Joe's or wherever, but... Who wanted those?

• 45:56Speaker 03

  There wasn't really anyone making pierogies like family used to make. And we finally said, it was one of those ideas where you're like, someone's definitely going to do this. And then we realized after a while that no one was really, maybe we should do it.

• 46:10Guy Raz?

  Maybe they should make pierogies and sell them. OK, so at this point, it was 2015, and Vanessa and Casey's grandfather was no longer alive. But he had written all of his recipes out by hand. So they went to the deli and they got them.

• 46:26Speaker 03

  We brought them back to my house and caked my table in flour.

• 46:32Guy Raz?

  And so began the pierogi making for 10 hours every Sunday. Vanessa would do the dough.

• 46:38Speaker 03

  It should be not too thick, not too chewy.

• 46:41Guy Raz?

  And Casey would do the fillings.

• 46:43Speaker 02

  It started with three flavors. We started with potato and cheese, the pineapple and cheese, and sweet potato caramelized onion.

• 46:50Guy Raz?

  Wait, I do not believe they grow pineapples in Poland.

• 46:54Speaker 02

  It is very strange.

• 46:55Guy Raz?

  Yes, definitely not something you would find back in the old country. But it actually was one of their grandfather's recipes. Anyway, every weekend, Casey and Vanessa would make the pierogies, freeze them, and then sell them at the farmer's market in Melrose, Massachusetts.

• 47:10Speaker 03

  We went to our first farmer's market with about 50 boxes and sold out in an hour and realized that there was a market.

• 47:16Guy Raz?

  And one reason they were selling so fast?

• 47:19Speaker 03

  I think dumplings are the ultimate comfort food, whether it's ravioli, or it's empanadas, or it's Asian dumplings. It's a very nostalgic food.

• 47:28Guy Raz?

  So anyway, all that year, Vanessa and Casey would make and sell pierogies on the weekend and then go to their office jobs during the week.

• 47:35Speaker 02

  But there was a point where we had to go to the next step because we were just making only, you know, we could only make so much in that long 10-hour day. We couldn't grow it unless we kind of took the leap of faith. So we quit our jobs.

• 47:48Guy Raz?

  And after taking that leap, the sisters moved their pierogi operation from Vanessa's house to a commercial kitchen in Gloucester, Massachusetts. They hired a few people to help them make more pierogies. But Vanessa, she is still doing the dough.

• 48:03Speaker 03

  Stretching it out, running it through the dough sheeter, and then cutting those circles, thousands of circles a day, for the rest of our staff to fill and pinch.

• 48:12Guy Raz?

  Vanessa and Casey called their company Jaju Pierogies. Jaju is the Polish word for grandfather. This month, they're about to open their first storefront in Somerville, Massachusetts. And by the end of the summer, they're hoping to sign a deal that would get their frozen pierogies into major grocery chains across the Northeast. And by the way, that pineapple and cheese stuffing, they no longer make it.

• 48:35Speaker 02

  Apparently, people don't like pineapple with their cheese. Like, we went to Poland a few years back, and neither of us saw pineapple on any menu.

• 48:44Guy Raz?

  If you want to learn more about Jaju Pierogies, head to our new podcast page, howibuiltthis.npr.org. And of course, if you want to tell us your story, go to build.npr.org. We love hearing from you. And thanks so much for listening to our show this week. If you want to find out more or hear a previous episode, you can go to howibuiltthis.npr.org. Please also subscribe to our show at Apple Podcasts or wherever you get your podcasts. And while you're there, please do give us a review. You can also write to us at [email protected]. And if you want to send a tweet, it's at howibuiltthis. Our show is produced this week by Ramtin Arablouei, who also composed the music. Thanks also to Neva Grant, Sanaz Meshkhanpour, Noor Kutsi, and Jeff Rogers. Our intern is J.C. Howard.

• 49:28Guy Raz?

  I'm Guy Raz, and you've been listening to How I Built This from NPR.