We recently hosted a talk from Brie Read, whose Edinburgh-based startup Snag Tights has surged in popularity at home and abroad since its launch in March last year.
The every size and every shape tights website has reached a turnover of more than £2 million in just 18 months, and didn't require outside investment.
Before launching Snag, Brie worked in marketing and advertising. The psychology and computer science graduate says it's vital that businesses stay focused on the person who buys their product:
"We've grown really rapidly. We sell in 82 countries across the world and our biggest market is the UK followed by the States. We make tights that actually fit—90% of women are unhappy with their tights and the tight market is a $38 billion market so there's huge opportunity within it. So we redesigned tights to fit better and they've been incredibly successful."
So how did you do it without outside investment?
"We did a really small [fund] raise with family and friends and started the business on £100,000 which is a very small amount and that's what we needed to start our marketing and photoshoots. We didn't want to give away more of the business, we wanted to keep control. We believe that if you have a successful business, a reallygood structure, you should be able to make money from day one. We've been profitable since day 11."
So you did your research?
"We did a Google survey of 3,000 people so we were pretty sure. We did lots of interviews with people, lots of focus groups, keen to understand what people thought. We continue to take feedback from customers every day."
Why is feedback important to a startup/scaleup?
"We get about 400 or 500 comments a day from customers across our channels and we reply to every single one of them because the customer has taken time to tell us what they think about our product. We reply, scale that information up, so when we launch a new product we're very sure our customers want that. And we don't launch anything or do anything that they don't ask for. If our customers don't go "what we really want from you is a bi-weekly newsletter" we don't send one out!"
And why is Edinburgh so good for startups?
"There's definitely a huge number of bright and talented individuals here and it's been great to pull on that resource to build our team [including graduates from Edinburgh]. In terms of community support, I think that's there for businesses that aren't as successful as we are, which is probably the right way to have it.
"We were told at the start that our financial projections were too ambitious. We ended up doing five times what our projections were."
What else can be done to support startups/scaleups?
"There are a lot of ways you can support new business. My biggest thing is not making businesses pay VAT for the first year of their trading. If you're a successful business the first thing that hammers you is the VAT bill. Lots of great potential businesses go down the drain because of that one tax.
"To build businesses that pay a lot of VAT in the future I think it would be sensible to allow them to trade a little bit longer. (At the moment all businesses have to register for VAT if they make sales of more than £85,000 a year). I think it should be based on time not turnover."