Proving that an industry is ripe for disruption is hard. Proving you’re the right person to disrupt it is even harder. Getting investors to bet millions of dollars on your ability to disrupt an industry they’re unfamiliar with can feel nearly impossible.
As a third generation fine-jewelry maker, I was certain this very complex industry was broken, or at least not keeping up with the times. Historically, women rarely bought fine jewelry for themselves, and the men who purchased it for them as gifts were either indifferent to or unaware of the eight to ten times mark-up they were paying.
Convincing other people that there could be a whole new category in the jewelry industry, however, may have been the greatest challenge I’ve ever faced as an entrepreneur. Not only was direct-to-consumer an unproven strategy at the time, but the predominantly male venture capital community also didn’t understand why women would buy these high-end products for themselves.
My co-founders and I officially launched Mejuri from a Montreal-based incubator in 2015 before packing our things and moving to San Francisco for six months as part of the 500 Startups accelerator program. When we “graduated” in 2016, however, we still lacked the capital we needed for inventory, marketing and other start-up expenses.
In that early stage we didn’t really have any numbers we could show as a proof of concept, and the direct-to-consumer model was relatively unproven at the time. To make matters even more challenging we were pitching an audience of primarily male, primarily tech-industry investors on an inventory-intensive, low-tech, female-centric brand.
I had a lot of sleepless nights during that period, and I’m truly grateful for my co-founders and fellow entrepreneur friends for helping me through it. Entrepreneurship can be lonely, and those who have never tried it can’t really relate to what they’re going through. For many entrepreneurs—especially in the start-up stage—it can be really hard to separate your self-esteem from the performance of the business; when it succeeds, you feel like a success, and when it fails, you feel like a failure.
When you’re constantly hearing “no” and those feelings of self-doubt start creeping up, you need to surround yourself with supportive people who know exactly what you’re going through, because they’ve been through it themselves.
It’s a tough process, mentally, because you’re putting your passion out there, and there’s a high likelihood of getting rejected. Resilience and grit might be an entrepreneur’s most valuable assets, but they’re also nothing without flexibility. It’s important to keep pushing for what you believe in, but it’s equally important to listen to the market, and to be willing to adapt and change as necessary.
I never stopped pushing, because I truly believed from the bottom of my heart that it was going to scale and it was going to work.
The same is true when pitching to investors, a process that I see as its own sales funnel. We spoke to as many as we could knowing that each “no” would help us polish our pitch, see their perspective, reflect on the business and ultimately get us closer to a “yes.”
Though it was discouraging at times I never stopped pushing, because I truly believed from the bottom of my heart that it was going to scale and it was going to work.
It took some time but eventually those introductory meetings led to second meetings, and third, until we found the one that was willing to write us that all-important first check, which we received in April of 2016. In the end we closed a seed round of approximately $1 million in September of that year.
It may sound like a lot of money, but when you’re trying to disrupt an industry with some of the most expensive inventory and production costs on the planet, it can only get you so far. We had to be efficient with that cash. Our goal from the beginning was to design a supply chain that allowed us to be very lean with our inventory, with very compressed timelines. We didn’t carry a lot of inventory, but we built our supply chain in such a way that we were able to replenish very quickly, allowing us to really manage cash consumption cycles.
The greatest testament to our success is the fact that we’re able to introduce a new collection to our customers every Monday. We wanted our customers to think of jewelry the same way they thought of shoes and purses, rather than a once a year (or less) indulgence. Presenting our customers with new products on a weekly basis challenged them to rethink the role fine jewelry plays in their lives. It became our key differentiator as a brand, and it wouldn’t have been possible without a robust, efficient, streamlined back-end system.
In September 2018 we closed our series A round, which was a dramatically different experience than our seed round. We ended up raising $5 million, and could have raised significantly more, but since we had built an efficient cash consumption model, we were able to keep it conservative. In fact, we still exceeded all of our targets for 2018 without the extra capital.
It felt a little ironic turning down investors after putting all of my energy into trying to get them to support us, but we had so much more to offer this time around. We’ve successfully shown how the fine jewelry industry is ripe for disruption; we’ve proven that we’re the right ones to disrupt it; and only a few short years later, we’re in a position to politely decline millions from investors who are finally seeing what we saw all along.
Illustration by John Larigakis.