Tracy DiNunzio isn’t your typical Silicon Valley startup founder. She’s a painter and a self-proclaimed Bohemian. She did her first tech startup after the age of 30. And she didn’t start her company in Northern California.
Tracy built her company, Recycled Media, out of necessity. She hasn’t raised any venture capital. She drove her company to profitability before paying herself a modest salary.
She leveraged herself and even sold many of her possessions to get started. And when her assets were tapped she rented out her bedroom and even her couch on Airbnb to afford her year-one operations. More on that later.
She actually IS the prototypical entrepreneur. Just not the kind you would initially read about on TechCrunch. That may soon change. And that’s what I love about her narrative. It represents the great majority of entrepreneurship and eschews the fairytale rags-to-VC-riches stories we so often read about in the press.
Here’s what I learned about Tracy:
1. She started her business from a personal need
Tracy was an artist throughout her 20′s but she watched her then husband found a tech startup. She learned at the kitchen table as so many spouses do. After some encouragement from him she decided to launch her own website – Recycled Bride. This was the first in her string of web properties.
The idea came from having been recently married herself and seeing how expensive it can be to buy a new wedding dress. So many women aspire to wear Vera Wang, but few can really afford the dresses. Weddings are a bit like college degrees – they often set you back financially for many years after the event.
And further, Tracy felt the calling to try to build something “green.” Recycled Bride became the perfect endeavor: Less money, less waste.
Unfortunately Tracy would learn first hand not much later that the business model has two components: both buying and selling. And her marriage headed in the wrong direction she found herself up one wedding dress too many.
While she remained friends with her now ex husband, she was truly on her own. She put all of her savings into her company. She sold many of her possessions on Craigslist and even sold her paintings and materials at less than cost.
2. She found non-traditional financing
But Tracy did what entrepreneurs do. She never gave up. Tracy started renting out her bedroom on Airbnb. She did the math and realized that she could bring in more money through Airbnb than she could by having a roommate. She not only rented out her room but also rented the couch. On occasion she even slept on the couch in order to make more money.
In one year of Airbnb Tracy netted more than $28,000. Without this money she wouldn’t have been able to finance operations. Oh, and one of her roommates would later become her new husband! So her wedding story had a happy ending.
One of the many things you become expert at when you launch your own company and have no money is SEO. If you want traffic you need to learn the tricks of the trade. Tracy studied SEOMoz and several other online sources of SEO tips.
She not only became an expert in SEO, she began consulting in SEO to continue to make ends meet and she became a speaker on the topic. How’s that for an ex painter?
When Sam Teller first encountered Tracy he knew instantly he wanted to work with her. Sam is the managing director of Launchpad LA and we were about to pick our 2012 class of entrepreneurs. Sam just told me, “You HAVE to meet Tracy. In the first 5 minutes you’ll realize that she’s a classic entrepreneur. She’s infectious.”
He was right. By the time we had met Tracy she was running a profitable business, was paying herself a salary and was on the verge of launching her second (related) Internet business called Style Trader (more on that in a minute). Now she had an extra $50,000 to start building out her team.
3. She focused on her customer
Tracy is knowledgeable enough to talk tech and swap design & product stories with other founders, but she realized early that networking amongst this group and reading and writing in their journals would not bring her more customers.
So Tracy began keeping a blog about …. (what else?) weddings. She became an authority on the topic and her blog helped her to both elevate her status in her industry as well as to bring great link juice to her website and improve her SEO.
4. She became part of the fabric of her community
Instead of doing guest posts on TechCrunch or speaking at startup conferences, Tracy became a regular contributor on wedding and women’s lifestyle blogs. She first had to hound the editors of these journals until they were charmed into letting her a do a guest post and once she had established herself they couldn’t get enough of her.
If you haven’t read my blog posts on why Tracy chose the right strategy it’s worth a read. The premise is that you should blog for your customers, suppliers and ecosystem – not for your peers.
I blog on entrepreneurship & VC precisely because entrepreneurs and other VCs are my customers.
Tracy realized her constituency and being a public figure helped elevate her.
5. Once off the ground she could attract mentors from her industry
And through this industry legitimacy she was able to get the ear of Dany Levy, the co-founder of Daily Candy. Daily Candy was one of the earliest successes in the newsletter business, which ultimately sold to Comcast for a reported $125 million.
Danny became a small investor in Recycled Media (the parent company of Recycled Bride) and became one of Tracy’s lead advisors.
6. She is building deflationary businesses with volume
One of the things I like the most about Tracy’s businesses is that she is focused on volume & deflationary economics (which is my main investment thesis as I covered in this post). In her first business she decided not to charge for women to list their dresses or to buy one.
In stead she had the goal of attracting a large audience that she could monetize in other ways. She’s now the leading marketplace for women’s used wedding dresses and accessories and ranks 2nd in Google for the term “Used Wedding Dress.”
She currently makes money in two ways: First she has sponsored dresses. She has data the shows that sponsored wedding dresses sell faster than others for people motivated to move their inventory.
Second, she sells advertising, which given her tight demographic and the big spending that comes when one is planning a wedding she can monetize really well.
But most importantly, Recycled Bride just served as a launching pad for Tracy’s second business: Style Trader. This business will launch soon.
Style Trader takes women’s closets and turns them into virtual bazaars of clothes that can be traded with other women. Tracy claims that only 30% of clothes in a woman’s closet is actually warn.
So this business plays right into the theme of peer-to-peer marketplaces that has seen so much success over the past several years. It enables women on a budget to be able to get new outfits without outlaying tons of money to buy them first hand. And all they really need to do is free up clothes they aren’t even wearing in the first place.
7. She now recognizes the need to have co-founders
When Tracy started her company she didn’t have a technical co-founder. She floundered a bit working with contractors before finally settling on an agency to build her first site for $20,000.
She now recognizes this was a mistake and that getting a technical partner early in the company can have an enormous impact on your chances of success.
Now working safely inside the confine’s of Launchpad LA’s offices in Santa Monica and surrounded by the tech community, Tracy is out interviewing technical co-founders. She would encourage others to solve this problem earlier in your existence.
8. She exudes many of the characteristics of a successful entrepreneur
Tracy isn’t your quintessential Silicon Valley startup story. But when I look at my list of what it takes to become a successful entrepreneur Tracy is all over it: she hustles, has street smarts, is persistent, has domain knowledge and is still standing despite having a tough few years of bootstrapping.
If you want to watch a video with Tracy & me talking about her lessons and how she built her company check out this YouTube link or click the image below for our session on This Week in VC. I think you’ll enjoy it.
(Cross-posted @ Both Sides of the Table)