After raising over £700,000 from 368 investors back in March 2015, The Idle Man have returned to Crowdcube for a follow-on round of funding, with the aim to further boost customer retention and expand internationally. Here, CEO Oliver Tezcan tells us what has happened at the company in the past two years, and the benefits of being backed by a crowd of investors.
Could you tell us about The Idle Man?
The Idle Man is an online retailer dedicated to young men who want to look stylish, and need some inspiration to help them. Our e-commerce site has our blog “The Manual”, which gets 1.5m unique visits a month, making it the 3rd biggest in the UK. We sell approximately 100 third party brands and recently launched our eponymous own label collection, which has 300+ styles, generating 19% of total revenue. Last but not least we have a Guide Store in Clerkenwell, London, where customers can come and try before they buy.
What has the investment you received in your first Crowdcube round from 2015 helped you achieve to date?
Our growth over the last financial year of 104% is a pretty good place to start. Our first Crowdcube campaign allowed us to invest in our content strategy and brand marketing, helping us to build awareness and grow our customer base. We were also able to bring our photography and tech functions in-house to really finesse the user experience, and the site is almost unrecognisable from 2015.
How has your team grown since you raised finance two years ago?
The team has now grown to 30 members of staff across head office and our store. The most prominent additions have been an additional buyer to focus on our own-label, a merchandiser to control stock, and a six-strong content marketing team who create and edit The Manual. According to SimilarWeb data, our website now receives mores monthly visits than Esquire - an achievement we mostly attribute to The Manual.
How would you describe the last two years compared to your projections and plans?
We’ve been pleased with our overall growth rate, but we started from a lower base than we anticipated. In our early days, we underestimated the cost of acquiring a new customer (CPO) – we thought it would cost £8 and the reality was closer to £30. We have learnt from this and the CPO is now £15 and falling fast. We have over two years of data under our belts so we’re confident that we can now forecast with greater accuracy. We’ve had detailed feedback on our model from our institutional investors and we are confident of breaking into profit in 2018.
What do you hope to achieve with this second round of funding for IdleMan?
We’re back on Crowdcube with the aim to raise £500,000 to contribute towards more marketing activity, including brand awareness campaigns. Channel 4 invested in the business in 2016 through a media for equity deal, so we have a credit line with them for TV advertising. We feel this is still the single strongest brand-building medium for our type of business. Although the air-time is “free”, we need to create an amazing ad and invest in additional digital marketing to coincide and support it.
We are also launching our first international site in the US where we already generate about 15% of our revenue, and if this is a success, we wish to follow in Australia, France and Germany. Aside from that, we aim to build our product team with an own-label designer, spend more money on customer retention strategies and invest in our systems to ensure we are all set to scale.
Other than the financial backing, have there been any additional benefits of being backed by a crowd of investors?
Definitely. We have won lots of new customers and have been amazed at how many members of the crowd are customers already. Running a crowdfunding campaign is a great 360 degree review of your business plan. There are a lot of informed investors who quickly hone in on any challenges, so it’s invaluable to have that feedback and be able to act on it. From the original round, there are a couple of investors whom I still meet up with and have benefited greatly from their advice and experience.
Finally, what would you say are the top trends in men’s fashion for 2017?
Skinny jeans are dead, it’s all about looser silhouettes across denim and trousers, and jeans must have raw hems. Pink is a key colour across all categories. Technical sportswear is huge, but think “football hooligan” rather than “going to the gym”.