Use micro equity to transform your startup’s growth.
How Crafted Crate added 119 subscribers in a month by offering its first customers micro equity using Vestd.
Crafted Crate, a craft beer community startup has set out to free craft brewers of corporate agenda and allow them to create ‘truly remarkable beer’. We’ll drink to that! Here, founder Chris Drummond explains how he used Vestd to instantly incentivise and grow his customer base in a matter of weeks.
We think Chris is really on to something and is leading the way in showing how community-driven startups can acquire and retain loyal customers – the startup holy grail. Businesses from Reddit to Jet have always understood the power of their community and are constantly exploring ways to have them truly vested in their success. And now there’s a pain-free and efficient way for startups to do just that, using Vestd.
We caught up with Chris to hear how he’s using the equity economy to help him grow Crafted Crate from the ground up and bring his customers along for the ride by offering his first 200 members a share in his business. He calls it equity for loyalty…
Tell us a bit about Crafted Crate…
Logically enough, Crafted Crate started over beer. A friend of mine Russ was doing some home brewing and came up with a really decent American Pale Ale and we got talking about it, decided we’d build a brewery and take over the world! That was our initial business plan…
Then we started going to small breweries to find out what it takes and costs to set one up. These were places we’d never heard of before we researched them, and when there we were being offered the beer to try — and lots of it was just incredible. We couldn’t believe we’d never heard of them let alone tried them, and that’s where the idea of the subscription service was born — to help breweries get their name out and introduce people to these amazing independent businesses who are quite often right on their doorstep. So far we’ve found more than 2,500 breweries!
So subscribers get 12 bottles of craft beer hand selected by us and delivered to their door each month for £36, or £3 a beer. We guarantee the beer is never more than six weeks old and we’re just about to bring that down to four weeks, so it’s always as the brewer intended it to taste. At the moment we’re UK only as that’s the industry we want to support and it separates us out from some of our competitors straight away.
And how did your idea of offering equity to your early customers come about?
Once we started looking into the subscription idea properly we did some market analysis and realised there were three or four other subscription companies out there already, but the brewers we talked to really weren’t fans of them as they’re quite powerful and most are always trying to push down the brewers’ prices.
So we hit on the idea of giving 50% of our profits back to the brewers to try and help them build more sustainable businesses and help this industry we love. We want to revive the British side of the industry too.
Then when I was on holiday in the mountains a friend told me about Vestd and we started talking about how to grow the business. We’d worked out we needed 200 subscribers to make Crafted Crate work and thought the equity for expertise model could be adapted a bit to make it equity for loyalty.
I got in touch with [Vestd co-founder] Naveed and we talked over my idea that we’d reward the first 200 people to subscribe for a year to Crafted Crate with shares in the company. He loved the idea and made some tweaks to the platform to make it happen. These aren’t just customers for us — we’re creating a family of 200 founder members who’ll always be with us, who we can reward with cool stuff and who’ll support what we’re doing and hopefully help us grow. And we’re well over half the way there in just four weeks.
How many shares do you offer for a subscription?
So founding members get 20 shares in the business, and we’re hoping to triple that number in the next couple of years as a thank you for their faith in us. But really the appeal is more about being a part of the company and a part of the wider story.
Why 200 founding members?
Maths. We worked out that 200 was the magic number to increase our buying power and rates from breweries. We only start to make a reasonable profit at 200 subscribers and we need their monthly subscription to finance getting there — so offering a share of equity in return for that money without having to find an outside investor seemed like the perfect solution.
And how’s it going?
Well, thanks! So far we’ve had 119 subscribers since we launched and we’re aware that with things like memberships and subscriptions it’s often about scale and momentum. The first 35 were pretty tough but the next 60 were easier and it’s getting better all the time — and we’ve not done any real advertising. We’ve only spent £70 — on Facebook ads!
Do you think offering shares in the business has helped with Crafted Crate’s growth?
Yes. We’re working in a small community-driven industry and I think it’s appealing to people who buy into that ideal to actually buy into it — and get beer as well!
And it was really only when we launched the equity offer on Vestd that we started getting subscribers. Bear in mind that when the first 35 people signed up we didn’t have a picture of a beer on our website and weren’t even telling people what beer we’d be sending out! It only seemed to happen because of the founding members idea.
There’s still not that much on the website, although that’s about to change, but we didn’t have the content and didn’t want to just have generic pictures of beer we weren’t offering. But that made us think if we can still sell these subscriptions without this stuff, imagine what we could do with it! That was the turning point when we really thought we were on to something.
And has it sped up your journey to leaving you current job and taking on Crafted Crate full time?
Well my thinking is along those lines, yes. When we get to 500+ members I want to start searching for a replacement MD at my family company and at 1,000+ members I want to be concentrating on Crafted Crate.
That’s my aim and over the last few weeks we’ve had emails from people telling us that they’ve actually moved from another subscription company to Crafted Crate, which is great. People have said how much they love being a part of the story and being a real stakeholder in an industry they want to support. Giving them some equity is a reward for faith not just in us, but also the industry as a whole, and we intend to do a lot of stuff with these founding members to ensure they’re a part of the fabric of our company.
Lastly, what are your long-term objectives for Crafted Crate and your founding members?
We have so much planned, and in fact going on already. We’re using all the data and feedback we’re collecting to start talking to brewers about what’s popular and when, so we can get a bit more involved in the industry as a whole. Our very first plans for that brewery haven’t gone away either but now we’ve started on something we’re calling the lifecycle of a brewer, but more on that another time…
You can find out more and become a founding member with access to lots and lots of great UK-brewed beers on the Crafted Crate website.