This week, the experts at the University of Maryland’s Dingman Center of Entrepreneurship help a greeting card company get its well wishes in the hands of more people. — Dan Beyers
Adam Donato teamed up with classmates David Henry and Stephan Sabo in the “start-up class” at Virginia Tech. The goal of the class was to launch a company. The trio ran with Sabo’s idea for greeting card kiosks. They used the course to help identify their potential customers and prove their concept. After earning their graduate degrees, the team plunged full-time into establishing their new company, Card Isle.
Donato, chief executive of Card Isle
“Card Isle kiosks let people quickly browse greeting card designs, personalize them, and print them instantly, on the spot. We feature designs from local artists and our kiosks are connected to the Internet so artwork can be updated instantly.
“We serve a niche that online-only greeting card providers can’t reach. We can serve customers buying one-off, last-minute cards. A kiosk is perfect – it gets you the card right when you want it.
“This past year, we deployed 10 Card Isle kiosks in local grocery stores, independent stores, and on college campuses. We are planning to deploy 50 additional kiosks this year and we’ll continue to scale from there. To put the potential in perspective, there are more 40,000 Redbox video movie kiosks out there and the greeting card market is even bigger than the DVD rental market. There is a lot of opportunity.
“In January, we participated in the Techstars accelerator program in Texas. In addition to funding, we made a lot of important connections and got a lot of feedback from others in the greeting card industry. We’re focused on growth and fundraising right now.
“We have identified big corporate campuses as a great initial target. They offer high-densities of educated people with disposable incomes and at least a minimal degree of tech-savvy to feel comfortable with our kiosks. Once we get established on corporate campuses, we hope to expand to other areas, such as hospitals and nursing homes. There are opportunities to sell greeting cards everywhere and we are just looking for what is going to be the best fit in the near term. Then as we continue to grow we can saturate the market.
“We want great scalable partners that can open doors to many locations easily so we are targeting the big players that service corporate campuses — Sodexo, Aramark and Compass. However, we’ve been running into the realization that big companies move slowly. There tends to be a lot of structure in the process. How do we get corporate clients to move faster to meet the timeline we need to move at as a start-up?”
Elana Fine, managing director, Dingman Center for Entepreneurship at the University of Maryland’s Robert H. Smith School of Business
“The answer is you can’t get your customers/clients to move faster. Though big clients might equal bigger contracts with more money, the downside is they move slowly. The lesson is you have to understand from the outset what the decision making process is and how long the sales cycle is going to take. You have to manage your cash understanding that it’s probably going to take twice as long as you think.
“Figure out your strategy from a cash-flow management perspective. Are there other smaller clients that offer a fast sales cycle that can sustain the company while you are going after the larger clients with longer timelines? The smaller clients also offer the benefit of being great references. You could also consider doing unpaid pilots when you can. This is a strategy a lot of companies in the business-to-business space use at first, just to be able to build their client lists without having to weather the long sales cycles upfront.
“Consider the mom-and-pop shops in the lobbies of office buildings or medical buildings. A lot of those places have ATMs and might be able to also fit in your kiosks. For those small shops, you’ll be dealing with a quick yes-or-no decision, versus having to wait for approvals at corporate campuses.”
“We’re now talking with a handful of individual corporate campuses — instead of trying to jump all the way up to the three big players that serve many locations — and have already seen much shorter sales cycles. Between your advice, and what we’ve seen in practice, it looks like it’s going to make sense to push both single campuses, and the big players simultaneously. That way, we can continue to place kiosks and gather data, and will be truly prepared when the big players are ready to work with us.”
Looking for some advice on a new business, or need help fixing an existing one? Capital Business and the experts at the University of Maryland’s Dingman Center for Entrepreneurship at the Robert H. Smith School of Business are ready to assist. Contact us at firstname.lastname@example.org.