Jane Lu on Startup Cliches
"The startup world is full of cliches and catchphrases that are just so over-used. Let's see if some of them are true"
Mythbusters: the startup edition
Jane Lu is the CEO and Founder of Showpo, one of Australia's most exciting retail brands for women's clothing. The brand turned over $10 million in sales last year, largely due to social media where it has over 1.2 million followers. At SydStart 2015, Jane set out to bust some myths about startups, having been through it all herself.
Cliché Number 1: Entrepreneurs are born, not made.
Jane never had any fashion or retail experience. Her first business was a failure – she had no money to start the business, and she didn't have a business plan. She never even thought of herself as entrepreneurial.
The daughter of Chinese immigrants, Jane came to Australia when she was 8. Her first job was at KPMG straight out of high school. She never thought about starting a business – until she fell in love with a European boy who talked so much about traveling and starting his own business.
Entrepreneurs are born, not made – busted. "I definitely don't think I was entrepreneurial, but rather, it's the experiences and mistakes that I've made along the way that has brought me to where I am today," Jane said.
Cliché Number 2: The more, the merrier.
Jane's entrepreneurial journey started when one of her friends asked her to hop on board an idea, which was to run pop-up stores inside bars. It was there that Jane made her first set of big business mistakes.
Mistake Number 1: Getting in bed with the wrong person. Jane's business partner proposed getting a third person on board so they can have another helping hand and extra seed capital. The rationale was that they'd rather have a third of a million dollars than a hundred percent of nothing. Jane says this doesn't make any sense. Getting that extra business partner isn't going to increase your turnover. "Trust me, everything's fine and dandy until you have to divide up your profit," she declared. "I'm not saying partnerships don't work... but I just know that getting out of a bad partnership is one of the hardest problems that people have had to deal with," she added.
Mistake Number 2: Over-rationalizing. According to Jane, it was only when they started that she and her partner realized their assumptions were wrong. It's so hard not to get excited when you're first getting started and it's hard to believe that other people won't like your products as much as you do, but, unfortunately, that's frequently the case. "What's important is that your MVP – that's your Minimum Viable Product – is solid, and to test and validate at every stage."
The more, the merrier – results inconclusive. "I guess my advice would be, when you can, try and pay for these services, which I know is hard because when you're starting, your funds are limited. Or, consider using a profit incentive before you start giving away your precious equity or control," said the Showpo head honcho.
Cliché Number 3: Fail fast.
Jane and her partner also thought that getting heaps of press and heaps of parties would lead to heaps of fun and heaps of customers. They had heaps of fun, but ultimately, their products weren't in demand, and pricing was high, so it was never going to work.
The fun stuff completely hemorrhaged the company and the little money they had. It turned out to be a blessing in disguise, because it meant that they didn't keep chipping away, trying to make their pop-up stores work. It allowed Jane to move on to the next thing.
Fail fast – confirmed. According to Jane, "Don't fail, but if you're going to fail, fail fast."
Cliché Number 4: The only way to do great work is to do what you love.
In July 2010, Jane was working full-time at Ernst & Young as a business analyst when she decided to quit. She was doing her business on the side by then, but she didn't quit the job because she believed in the business – she quit because she hated her job. A month after quitting however, one of her business partners decided to shut the business down, and that was the end of the company called the Fatboye Group.
Jane found herself at rock bottom without a job or a business, so she had no choice but to keep going. A few weeks later, she was introduced to a girl who wanted to start an online store. One night, they just came up with the concept of Show-Pony, which eventually re-branded to become Showpo.
The only way to do great work is to do what you love – confirmed.
Cliché Number 5: You need money to make money.
Jane was in debt for $60,000 at the age of 24 when Showpo started, but the business turned over $10 million last year. They've been bootstrapped the entire way and they've always been profitable.
How did they do it? Well they were in the business of consignment, which meant that they didn't have to pay for any stock until it was sold. Jane made the website by herself by Googling HTML code, and postage was pay-as-you-go.
You need money to make money – busted.
Cliché Number 6: What makes us different makes us extraordinary.
A self confessed "Facebook Addict", Jane counts marketing through Facebook as her biggest win. She managed to build up the Showpo name at a very low cost back when companies were only looking at Facebook as a fad. One of the things she thought of was the Face of Showpo competition – a Facebook contest that asked followers to get votes for the chance to model for the brand. The word spread, with people spamming their networks to vote for them, and in one month, Showpo went from 3,000 followers to 20,000 followers. It cost them nothing as well, since the prize was to model for Showpo for free.
What makes us different makes us extraordinary – confirmed.
Cliché Number 7: Fake it 'til you make it.
Jane did all this while still living at home with her Chinese immigrant parents. She didn't tell them that she quit her job and started an online business, so for the first six months, she put on a suit and pretended to go to work.
Showpo eventually opened one brick-and-mortar store plus a couple of pop-up stores. Sales were good at first but then petered out, and they decided to close the stores and focus all their efforts online instead. That was when Jane's business partner opted out of Showpo, and the two amicably went their separate ways.
Jane then made several changes to the company – removed the shipping charge, optimized Facebook spend, started running Google ads, provided faster and better customer service, made better buyer decisions. After that, sales doubled month on month.
Fake it 'til you make it – confirmed.
Cliché Number 8: Do more with less.
Jane started Showpo operating out of her parents' garage. She tried to do everything herself, but little by little, she found herself burning out and was forced to hire staff, as well as put systems into the business. Showpo hit its first million-dollar month with just Jane and four staff members. The company moved thrice due to increasing stock, until they had to carve out the warehouse part of their business.
Do more with less – confirmed.
Cliché Number 9: Work smarter, not harder.
Now, Showpo has an office in the Sydney central business district, with 11 staff. Jane said the biggest lesson she learned in business so far is to validate everything. Don't sink everything into the business upfront. "You want to have some money left over to invest into the business once you make these mistakes and learn," Jane advised. She added that you should re-invest in growing your business as it grows, which means that you're constantly validating your business model, website, buying decisions, and your marketing campaign.
What's next for Showpo? Jane shared her vision for her brand by saying, "We're going to be one of the largest online retail stores for women 16-30 years old. We're going to do this by expanding into international markets. We're currently selling to 45 countries but we want to have deeper penetration into our key geographies. And we're going to bring our production in-house and be more autonomous and vertically-integrated. One of the big things on my business/long-term bucket lists is that I want to have our own factories and for these factories to have great working conditions, and for that to be able to set the industry benchmark for how offshore factory workers should be treated."
"And on a personal level, I want to do as little as possible," Jane stated, and shared her social media handle, "thelazyceo" with the SydStart crowd. "I want to delegate as much work as possible, and just hire/get much smarter, more brilliant people to slowly make me redundant," she added.
Work smarter, not harder – testing in progress.
Cliché Number 10: Success is a journey, not a destination.
"Everyone always asks me what my exit plan is, and I hate to sound so trite and cliché – because we all know what my sentiments towards clichés are, but I just have to say that actually, success is a journey, not a destination. I absolutely love my team, I have so much fun at work, and you know, I actually look forward to going to work – something that I would never have imagined saying before," she declared.
Success is a journey, not a destination – confirmed.
Jane ended her talk by admitting that she didn't actually bust that many startup clichés, saying that maybe they're overused because they're largely right. She finished the keynote with this: "But, I hope in the least that you can at least see that there is no prescribed way to achieving success in business; that you can go against the grain and follow your gut; and that there is no prerequisite knowledge or experience that's needed to starting a business. I think I'm a really good example of 'If I can do this, anyone can.'"