This Startup Just Sold For $130 Million, Founders Provide Insights On Almost Failing Ten Times.
When asked which attribute serves entrepreneurs well, I often reply, “curiosity.” Well, curiosity served the two founders of Pura Vida well. Last month, Vera Bradley, Inc., a leading American bag and luggage company and iconic lifestyle brand, announced it had signed a definitive agreement to acquire a 75% interest in Pura Vida Bracelets. The deal might ultimately total $130 million.
I recently sat down with Griffin Thall and Paul Goodman, Pura Vida founders, to get more insight into their entrepreneurial journey. For full disclosure, Griffin worked in the Lavin Entrepreneurship Center at San Diego State University as a student on marketing projects and I subsequently met Paul once they started the company. I prepared a list of questions and these are their unscripted answers.
Did you have pressure as your college graduation approached to just get a job? We definitely had pressure to find a “real job” once school ended as our parents were no longer paying for our housing or education. With that said, it forced us to think outside the box (we really dd not want corporate jobs) and that’s exactly what happened when we picked up these string bracelets in Costa Rica during the summer of 2010.
Did either one of you think you might be an entrepreneur while you were attending college? Yes. While in still in school, I ran a successful eBay business out of my high school bedroom, college dorm room, and fraternity room as well. In high school, Paul worked with the local realtors and put up their open house signs all around town for a flat fee. So we were always hustling.
What led to starting Pura Vida and when did you believe it could be a real company? We started Pura Vida while on a college graduation trip in Costa Rica where we met two bracelet artisans on the beach named Jorge and Joaquin. The second we picked up one of their handmade bracelets, a light bulb went off in both of our heads. “We can help these guys sell more bracelets by bringing the bracelets back to San Diego and selling them to our friends!”
What were some little or big mistakes you made in the first six months?In the first six months, we had no idea how to properly fulfill orders or manage inventory. With that said, we would constantly go out of stock for weeks or months at a time which really hurt our sales and momentum. It almost killed the company several times.
Did either of you understand the good and bad of cash flow? Paul was a finance major at SDSU, so he definitely had a better idea on cash flow than I did. But for me, I had no idea about cash flow other than the fact that we needed to have enough cash on hand to pay for rent, staff, and more bracelets. In the first two years, every bit of cash went back into the company.
What did you learn about technology in terms of scaling the company? In terms of technology, we initially built an ecommerce website with a developer and at one point we were really struggling. Then we found out about Shopify about two years into our business journey and it changed our brand for the better in every way possible. It’s cost effective, scalable, and most of all, the entire staff knows how to use it with very little teaching.
How did both of you decide on roles and responsibilities regarding who would do what at Pura Vida? We decided this pretty much on day one. I graduated from SDSU in Business Marketing and Paul graduated with Business Finance. It was very easy for us to divide and conquer from that point.
You never took on any equity investors for Pura Vida? Why? We never took on any investors because we started and ran the company as lean as you could. So we never needed an investment. We were profitable from day one and had a goal to take this company to over $100M+ in valuation. We just had to learn how to manage our cash flow, really understand social media marketing and order inventory correctly.
At what point did building the company become hard, like work? We would say it’s always been a consistent challenge, every single day. There is no point in time it just “got hard” because every week, Paul and I would make a list of tasks we wanted to accomplish that week and we just made that list a priority. We never really watched the hours we worked, we just focused on our task list. Never leaving even one task to spill over to the next week.
Ever think of selling the company in the first five years? Why did you sell it now? No, we actually never talked about selling any part of the company or taking on investors in the first five years. As we started to scale over the past few years, we’ve been getting hit up by tons of private equity companies, so that’s when we started to explore our options and get a true business valuation. We sold a majority of the company because we were looking for a strategic partner to help us scale Pura Vida to the next level.
At what point did you realize Pura Vida could become bigger than bracelets, meaning it could become a brand? We realized Pura Vida could be more than just bracelets and become a fashion brand when we released our “Wave Ring” on Instagram. Our fan base went nuts and the ad we put out went viral. We were acquiring customers at such a little cost that it opened our brand up to a whole new category, which is now over 30% of our business – jewelry.
Ever have any major fallouts between the founders? How did you handle it? Paul and I are both very level headed inside the office. We respect and trust each other and that allows us both to stay in our lanes and make decisions accordingly. After talking to many other founders and businesses, we am proud to say that we have a very strong business relationship. And we actually like each other.
What final bit of advice would you have to aspiring entrepreneurs?
Put your head down and get to work. Don’t let other people tell you your idea is bad or not creative enough. Focus on a big market and keep your eye on the prize because YOU are the only one that can make your dream a reality.