Since arriving on the scene three or four years ago, equity crowdfunding has become an increasingly popular way to not only raise crucial growth finance but also market a product and develop a core user community.
Internationally acclaimed, London-based shoe label Upper Street is no different, having secured its first round of funding from Venrex Partners and the British Business Bank in 2013. This enabled the company to rebuild its technology, open up its retail concept the Shoe Lounge in central London, grow the team and also buy its US competitor.
Founded five years ago by sisters Julia Elliott Brown and Katy Chandler, the company was worth over 2.8m before it started fundraising once more in 2015. And this year has proved to be just as eventful, with Upper Street having launched a 200,000 fundraising round using equity crowdfunding platform Seedrs to help grow its online platform.
Astonishingly, the company walked away with just under a quarter of a million pounds in investment.
Having revolutionised shoe shopping and enabled women to design their own shoes online using a 3D shoe designer, CEO Brown talked to Real Business about how she succeed in crowdfunding and what the essential ingredients were to creating a competitive luxury brand.
Brown claimed that crowdfunding success came down to doing a lot of planning and preparation. She said: We had a really good video a big factor to rocking the crowdfunding scene. As we were a luxury brand, we wanted to make sure our video reflected our company as well as it could. As such, we really needed to explain the concept and what Upper Street was all about.
Essentially, in 2012 Brown put her house on the line for the perfect pair of shoes, but it was Chandler who was praised by Brown as the real inspiration. Brown explained that Chandler always struggled to find shoes she loved in the right size.
When she got married, Chandler decided to have a pair custom-made for her, and when Brown saw those gorgeous shoes,” she was green with envy, and wanted to see her “own shoe ideas come to life too.
That was her light bulb moment, and her vision was to make it possible for women all over the world to design the perfect shoes. Of course, this meant, in their case, gaining investment through Seedrs.
“We planned the entire crowdfunding strategy like a marketing campaign,” Brown said. Everything was done four weeks in advance. We also put together a communications plan, which suggested when we would talk to the press, the investment community and when we would contact customers. We thought this was incredibly important because when you’re doing crowdfunding, you have moments where you think ‘this is never going to work’ as your campaign can plateau at any minute. But if you have a plan and you stick to it, it gives you confidence so you don’t run around like a headless chicken.
Most importantly, your customers are your best source of potential investment as they, on average, put in twice as much as anybody else. That’s because they know the brand and they trust us. You definitely can’t rely on the platform to do all the work for you.
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Despite the two sisters not coming from the fashion industry and not knowing how to make shoes they knew how to run a business and both had marketing backgrounds. This, according to Brown, was where she learned that the brand itself was the most important aspect to creating a competitive brand.
And the customer,” she said, is at the heart of the brand. So we’re very driven by customer satisfaction.
In the same way, Brown explained that investors often make a decision based on how they feel about a brand and how you’re delivering your service to a customer. It was thus crucial to treat the campaign like a marketing campaign, she said.
Of course, given the competitiveness of the sector, it was always going to be hard to get the business going.
It’s challenging to get press coverage because traditionally, fashion magazines give coverage only to those that spend advertising with them,” Brown explained. “And as a new brand in the fashion space, PR has been core to our strategy which has meant getting creative. We’ve done some interesting collaborations which have helped. We were particularly proud to see our shoes on the catwalk at London Fashion Week in 2011, when Jasper Garvida designed a range of Upper Street shoes to go with his collection.”
Brown also mentioned doing a campaign two years ago with Save the Children, where celebrities such asHelena Bonham Carter and Mollie Kingdesigned shoes with Upper Street, which were auctioned for charity.
“It’s innovative things such as collaborations within the industry that help you as a brand get yourself established,” she said. “Ultimately, you only really build a luxury brand by delivering amazing customer service you can’t do that overnight. Despite having done so from the start, the traction of your brand can’t really be seen until you’ve been doing it for a while.”?
It seems that these days the only source of competitive advantage is the one that can survive technology-