Skylight · B2C · digital family calendars and frames
Borrow from risk-tolerant lenders at 15-20% to buy holiday inventory, not raise VC
Stayed bootstrapped and profitable; paid 15-20% a year at times
Workedfinancing
What they did
Kept a weekly cash flow model early on, since inventory must be bought weeks ahead of Black Friday and COGS are ~50%. Grew 'fast, but not too fast' so lenders stay comfortable, and found lenders more risk-friendly than banks (which balk at 4x growth plans and unsellable connected-device inventory). Paid 15-20% annualized at times; traded gross margin for keeping ownership.
What happened
No equity raised; company remains bootstrapped and profitable.
“In the early days, I had personally a weekly cash flow model, because you could be at zero cash in the bank and then millions the next day, if the next day is Black Friday.”
“And then finding lenders who are more risk friendly than a bank, but less expensive than debt.”
“I would trade off gross margins all day long instead of selling a piece of the company.”
Related topics
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More from this episode
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- Skylight: Keep old customers on the old price, and honor it for anyone who asksGave up an estimated couple million dollars for goodwill; no measured effect
- Skylight: Send the device's QR code to an Apple in-app purchase instead of a web checkoutOver 100% more conversions, on a small slice of users
- Skylight: Knock money off the device when people buy it with the subscriptionMuch higher subscription attach on the own website than on Amazon or in stores; no numbers
- Skylight: Test a free trial, with and without asking for a credit cardNo extra subscribers; trial takers were people who'd have subscribed anyway
- Skylight: Make every first purchase cover what you paid to get the customerEvery order in company history paid back on day zero; grew without VC money
- Skylight: Keep what people bought the device for free; charge for new add-ons like meal planningPhotos-on-calendar paywall 'just worked' for years; now some customers want it free
- Skylight: Don't mark which features are premium once someone has subscribedRenewal rates high even for light users of paid features; no numbers
- Skylight: Survey customers on whether the product is life-changing, and build to raise that shareAbout 20% say life-changing today; goal is 50%
- Skylight: Push marketing spend on a new calendar product before the product was goodDidn't work; nearly killed the product; took off only after product fixes in fall 2022
- Skylight: Sell the device everywhere: your own site, Amazon, Costco and Best BuyCalled very successful; retail acts as a quality stamp, but lowers subscription attach
- Skylight: Change how you show what's in the subscription bundleRarely moved the share of buyers who subscribe