📂 Scaling a Swag Startup to $55M in 4 years

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Michael Martocci founded SwagUp, a swag creation and distribution platform that saves companies tons of time. It started out of his mom's house and bootstrapped it to 2,500 clients, a team of over 150, and over $55M in revenue.

Here's an excerpt from an interview about how they found traction and scaled past multiple 8 figures in annual sales.

Early Google Ads, leveraging that to get some customers, making sure those customers have the best experience possible and then telling others about it. There’s an inherent virality to what we do because our finished products are out in the world, gifted to people. Recipients always want to know where they came from, which leads back to us. It’s a solid viral loop that continues to propel the business. You just need to make sure at the same time you are investing in the existing customer experience so they retain and expand.

We never really dug into social media and social ads. Facebook Ads testing early on brought a lot of low-quality leads so we ignored it. Sometimes there’s a temptation to do everything, but you can only focus on so much. Test channels but double down on ones working.

Later on, I started to personally get active on Twitter which I think has helped us build a strong community around the brand.

The first few months, revenue was pretty low, sub $5k, but it was something, especially given no one knew who we were and we didn’t have much to speak of at that point. We got early inbound leads from startups like Soylent which was very encouraging, as it proved people were likely looking for a better way.

After that first order for packs, which was for about $10k, and then our subsequent positioning as a swag pack company, we saw growth take off. The next month we did about $40k and never looked back. I’m a huge fan of Purple Cow thinking and it was clear we had turned ourselves into a purple cow at that point

We have grown rapidly each year 2x-3x, reinvesting as many profits back into the business as possible. Still 100% bootstrapped and will keep it that way for the foreseeable future. We have about 150 team members, split about ⅓ engineering, ⅓ sales/marketing/admin, and ⅓ Ops. Have made plenty of hiring and team-building mistakes over the years.

Another article sheds light on that early traction:

While I was working at a small VC firm called Brand New Matter, I was running Facebook and Google ads at night to a wix site.

Within days I was getting inbound requests from companies as large as Soylent and Labdoor and knew there was something here to explore further.

After 2 months, I was able to get to a point where leads started to come in at a predictable rate and we began closing some deals and shipping orders out of my house. Once I saw that I ultimately left BNM to work on SwagUp full time.

Yet another article sheds some more light on their approach to growth and monetization:

SwagUp’s strategy has always been to eliminate friction by giving people the tools and technology they need to purchase and distribute as much swag through them as possible.

While it might be attractive to charge clients a subscription fee to use their software, if it means decreasing the number of customers they can acquire or how fast they can grow revenue, they won’t do it.

“Don’t put artificial friction in the way of letting people get started,” Michael says. “The hardest thing is to acquire customers. Once you’ve acquired customers, then you can probably open up the scale and scope of what else you want to do with them.”

Now, some personal observations of mine:

SwagUp essentially offers a ubiquitous product. Every company can conceivably want swag for employees and customers. In other words, it's a huge market.
Swag is not cheap. If you look at their preset packs, you can see that packs range in price from $33 – $360 each, which a minimum order quantity of 50. Do the math and each order has a value of $1,650 – $18,000. Just a few thousand customers gets them to $50M+ in revenue.
The industry was ripe for innovation. Founders and startups have been buying swag from a hodgepodge of generic swag providers for decades — and they all suck.

—Corey

p.s. did you see that I launched my new course, Marketing Like A Media Company? Would love for you to check it out →

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📂 Scaling a Swag Startup to $55M in 4 years

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