Swagsy is a socially driven marketplace where tastemakers can share their favorite products and their fans can get great deals on those products. These tastemakers now have direct communication with audiences bigger than most TV shows – note that the cast of the Jersey Shore has more total combined Twitter followers than their highest rated episode ever got in total viewers.

But is anyone in the Twitter-sphere listening or do they care? 

Our assumption, of course, was Yes, celebrity tastemakers have loyal fans that value their opinions and someone is indeed listening on Twitter. Like any lean startup, we decided to test these assumptions, measure, and learn.

The Test

So we reached out to some of our agent contacts in Hollywood and set up a test with an up and coming female teen pop star that had just over 600,000 Twitter followers at the time of the test (we’ve decided to leave her unnamed). The plan was to have this tastemaker tweet about a product she liked using a third party click-tracking link so that we could mesure the results.

We had a lot of questions such as – what sort of CTR (clickthrough rate) will the tweet generate? Over what period of time will that traffic come? From what platforms?

Here are the results of one of our tests.

Our Findings

Clicks / Followers – 0.25% CTR

The tweet generated 1528 clicks in about 2 weeks with the large majority of traffic coming during the first day. This equates to approximately  0.25% CTR when dividing clicks over Twitter follower count.

Unexpected Link Building Benefits

It was surprising to see a long tail of clicks continuing to come weeks after the initial test. We had initially assumed that the link would be buried quickly and nobody would ever see it again. However, it seems that celebrity tweets are highly syndicated online and you actually end up getting lots of referrals from sites other than Twitter.

Optimize for Mobile – 56% of Referrals from Mobile Browsers

We were very surprised to see how much of Twitter’s referrals were coming from mobile. 56% of the referrals came from mobile browsers! This made us rethink our product strategy and after weighing the option of building a dedicated mobile user experience while trying to bring a desktop minimum viable product to market, we decided to build a responsive HTML5 web interface that would adapt to any device.

Here is a more detailed browser breakdown.

And here is a more detailed OS breakdown.

Think Global – 73% of Referrals from United States

The geographic breakdown was inline with what we expected. This particular tastemaker is an up and coming pop star in the United States and has not yet broke out globally. But it’s interesting to note that almost 30% of referrals were from non US residents.

Lots of Fake and Inactive Accounts

Another important metric to look at is how many of their followers are even real followers. Thankfully StatusPeople came out with a cool little tool that lests you do just that. Here are the results of this influencer’s StatusPeople analysis:

Believe it or not, this is actually a pretty good score for someone that is so high profile. Business Insider did a quick slideshow analyzing the top 15 most popular Twitter users and the numbers look a lot worse. This is likely due to a Twitter pushing these high profile accounts into new user’s faces (instead of helping the new user discover people that fit their interests). Additionally, all the spam bots on Twitter are most likely finding these accounts very quickly.

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Fundraising is a pain in the ass for entrepreneurs. It takes a tonne of time and is a huge distraction.

We’ve been working on Swagsy for over a year now but got serious about at the tail end of 2011. Up until that point I had built an early prototype that, in hindsight, Eric Ries would probably recommended we go to market with and begin learning. But I suffer from the same sense of idealism that a lot of product guys do. So my co-founders and I decided to invest our own money into Swagsy and bring on some additional development help.

By March we were armed with a pretty slick alpha that included a fully responsive interface on the front end and a custom built real time analytics system on the back end. Our business dev efforts had delivered some early commitments from celebrities and brands. Our team had grown as well as we had convinced some very talented people to help us out on an equity or commission only basis. We had also put together an impressive set of advisors who could help us along our journey.  We decided it was time to raise money.

We had lunch with our advisor Jody Sherman at the end of March to discuss our fundraising plans. Jody was very clear about his opinion when he insisted we forget about fundraising for now and “Just launch.” My opinion was that we had taken Swagsy far bootstrapping and while we hadn’t ‘launched’ we had a lot of traction and budding investor interest. I didn’t need to prove end user traction, right?

Knowing that we had some loose ends to tie up on the product side and had more business development work to do, we moved forward with our fund raising efforts.

I feverishly worked on a slick deck and went as far as creating a Swagsy web deck  that was based on the pitch deck script open sourced by DressRush. Of course I also spent a lot of time using my analytical skills to create detailed financial models that outline how much capital we would require, our use of funds and all sorts of assumptions. We were armed.

We set up meetings with angel investors in both the technology and entertainment communities. We pitched angel groups. We met with accelerators. We even took meetings with a few early stage VCs.  Our efforts spanned both northern and southern California.

It was a huge amount of effort to go on all these first and second dates and we spent over two months doing it. They all seemed to have gone extremely well. Everyone was saying the same thing. They thought we had a good idea, they were impressed by our alpha product, and thought we had a strong team with complimentary skills. We were feeling like real players.

But then came the eventual ‘We are interested in investing but want to see what happens at launch’. We came to realize that there was a common concern about whether we could actually execute on this grand plan. I guess that I can see why people might think we’re a little audacious – or crazy – to suggest we’ll get a bunch of celebrities to cooperate. To be frank, it has been difficult to execute. Working with celebs is like herding cats and recruiting brands is difficult because of the chicken and egg situation that evolves from our model.

One of our close angel investor contacts made a commitment for $100k very early in our process but our goal was to raise $1 million to get the company off the ground. So in late May early June we realized that all of our attention was going into fund raising and the rest of the business was suffering. It was time to scale back our efforts.

So we signed a convertible note for $100k and went back to building the business. While I think that our timing was off, I don’t feel that our time was wasted. Our beta launch is a matter of weeks away and we have relationships primed with many of top VC names in the country. I’m hopeful that we’ll hit the numbers we are expecting and ultimately close our Series A much faster.

We learned our lessons.

Lesson #1 – Never meet with VC’s unless you are 100% ready to fundraise. We were almost there but weren’t quite there. Our efforts would have been better focused on building the business and getting to launch.

Lesson #2 – Focus on the right investors. Being fairly new to the fundraising process, we spent a lot of time meeting with people that were not a good fit. The stage of our business was far beyond the value add an accelerator could provide and the terms at which they invest wouldn’t make any sense. This was hit home by Howard Marks, Co-chair of the LA based accelerator Start Engine, who simply responded to our pitch with a “Why are you here? You don’t need an accelerator”.

Lesson # 3 – It’s not just the stock market that is focused on short-term results. We hear all the time about how Wall Street is too  focused on today’s earnings rather than investing in tomorrow’s opportunities for growth. Well this is becoming the norm for early stage venture capital as well. These days traction outweighs ideas, team, or product. Investor interest will absolutely be affected by how your business performs during the months they are considering investing in you.

The process has been a great learning experience. I’m sure the roller coaster will only continue.

I hope this was helpful to someone!

The post How Swagsy Raised Its First $100K appeared first on Swagsy Blog.

Case in point is the offer he received from Shutl, a UK based delivery company that focuses on delivering online shopping orders within hours from being purchased. This is a pretty fun concept that we first heard about from our friends at LovePR, who told us recently that there are places Down Under where you can buy a dress online during lunch and have it delivered in time for dinner.

Smartly playing on the hype around Bolt’s sprint through the London Olympics, Shutl has offered him an endorsement deal that will reward him with a 1% stake in the company if he will use that lightening fast speed to set a new delivery record – and to sweeten the offer, they are throwing in all the Mickey D’s Chicken McNuggets he can eat.

It’s probably unlikely that Bolt will take them up on the offer, but still a great move by the brand to help get themselves some buzz through a really fun concept for a smarter celebrity endorsement. Of course, if it works, we may want to hire Bolt permanently to come stateside and do these super speedy deliveries for Swagsy once we officially launch!

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Sure Kobe, LeBron and the other “Dream Teamers” are making $20+ mil a year in the NBA in salary alone, then tens of millions more from the likes of Nike, but they don’t really count as true Olympians. To really understand the impact of a gold medal, you need to look at athletes who compete in sports that virtually no one pays attention to except once every four years – when we all pretend we are experts at identifying the perfect balance beam dismount or triple lutz landing.

In London, Michael Phelps has solidified his spot alone atop the podium of greatest Olympians of all-time, and he is also probably the most well-endorsed of the non-major sport competitors. Phelps ended his run this weekend with his 18^th and final gold medal, which makes it tough to quantify exactly the value of each medal given that he’s long been in a class all his own (he retires with twice as many golds as anyone else – ever).

Thus far through the games, it would seem no American is poised to benefit more from going gold than 16 year old gymnast Gabby Douglas who helped the “Fab Five” win the team overall gold, then followed it up by taking home the individual overall gold as well. Her ability to seemingly soar through the air has landed her the nickname “The Flying Squirrel” and she’s already earned herself a cereal box cover. Unlike swimmers, gymnasts have a much smaller window of prime competing years – so this will almost surely be her one and only Olympics, meaning the next few months will be critical for her to ride the wave of buzz to some lucrative endorsement deals likely to the tune of many millions of dollars.

On the flip side, look no further than the US women’s crew team which defended their Beijing Olympic gold in London and will likely bask in the glory for the next week or two before returning to normal life. One of their newest members is still in law school, recognizing that being just one member of a team in a not-so-popular sport that didn’t get any primetime love from NBC, means that she is far more likely to make the big bucks in the courtroom than on the water or in the studio.

The good news for athletes like Phelps and Douglas, who leave an indelible mark on our hearts with their golden glory, is that there is an opportunity to stay relevant for quite some time. Take former figure skater Kristi Yamaguchi, who won the gold in Albertville in 1992, then faded off the radar to raise a family. She made a fantastic comeback a few years ago when she used her figure skating expertise to shuffle her way back to relevancy on Dancing With The Stars and is now featured in national TV ads and launching her own clothing line with Lord & Taylors.

Of course she may be the exception, not the rule. The rule probably looks more like fellow figure skater Oksana Baiul, who won her gold medal just a couple years later in Lillehamer also at only 16 years old, and slowly deteriorated away from fame. We saw her a couple of years ago, sitting on a curb, seemingly drunk and crying (basically an all-around hot mess) in front of an apartment building in Hollywood that is just 1 block from where Yamaguchi lived during her time on DWTS… So, Gabby Douglas, if you’re listening – cash in big now and stay away from the Playboy mansion.

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No one on the corner has swagger like us.

Or so explained Jay-Z, Kanye, Weezy and TI on their smash hit, which took one line from female rapper M-I-A’s “Paper Planes” and turned it into the highest chart debut even the great Hova has ever had (according to Wikipedia, at least).

Other than the seemingly obvious, what does that line have to do with Swagsy? Well, just about everything…

Swagsy is built around the concept of giving well-known Tastemakers the ability to easily share their favorite stuff in a way that gives their fans access to a little extra swagger themselves. And we believe that the network effect of having lots of these Tastemakers all in one place sharing sweet deals on the stuff they dig the most will result in a pretty cool new shopping experience for consumers – and hopefully help us pay the bills!

From Kanye West to Dina Eastwood (see what we did there!), brands are hooking up musicians, actors and reality stars across the board with free products and services on the mere hope that the celeb will grace the pages of US Weekly or show off the complimentary fits on their Twitpic. And when those brands get lucky and zillions of gossip mag readers or Twitter followers catch the buzz, it’s ultimately the consumers who foot the bill by paying top dollar to experience the product or service for themself.

And here’s where Swagsy comes in: We work with all different types of awesome brands who are seeking greater exposure to help craft flash-sales for their cool products that are specifically of interest to our Tastemakers. Our Tastemakers, which include all types of neat-o people – from fashion designers and models, to athletes and actors, to reality stars and bloggers – then select the best-of-the-best, spreading the word to their Facebook likers, Twitter followers, blog readers and YouTube viewers to share what they’re currently digging and hook-up their loyal fans.

We’re getting very close to our Beta Launch, so we decided it was about time to get ourselves a blog where we’ll be keeping anyone who reads this thing up to speed on everything Swagsy, while dropping some fun nuggets on our take of endorsements, celebs, and beyond.

In the meantime, follow us on Twitter, like us on Facebook, and sign up to be alerted when the Beta is ready to go. And, if you’ve got a favorite tastemaker, product, service – or just a crazy idea – that you think would be good for Swagsy, send it our way, anytime!

Oh and the name “Swagsy” is actually derived from the “Swag Bags“ chock full of free stuff that celebs get at awards shows – and not the “Swagger” that is found on the corner… but we’d like to think there will be a little bit of both coming through real soon

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