Cramberry is a study guide marketplace where the studious sell their shortcuts for everyone's benefit.
Hey Alex, so - who are you and what’s Cramberry?
I’m 29 year old New Yorker who’s always been interested in developing ideas into businesses, in both reality and conversation. Cramberry is a study guide marketplace, so the few studious students can sell to the many in need of assistance.
How did you get started? What’s the story?
My cousin Tom came to me with an App idea for a P2P textbook marketplace. Like I said, I love to develop ideas into businesses, so that’s what I did. He’s a sales guy, and would be full time in the field interacting with customers daily. After my last two businesses (Jordan Products and Pozzo) I had developed a deep belief in the importance of customer interaction and having a full time sales pro on the founding team.
Fast forward through a horrible experience with a predatory app development company, we had an MVP in the field. It was then time to get rid of this predator and gain the other most important part of a founding team, the technology expert. So, we attracted a talented software engineer and UX designer graduate through a friend of mine (Maxime from Stellar Base) based on our MVP and progress thus far. We kicked out the sneaky developer and got towards bringing all operations in-house. As we built our strong ambassador program at Florida State University and grew our app to a couple thousand users we began to accumulate a lot of feedback and it became clear that though they “loved” our concept and product they had two major issues with it. First of all, they “hated” the item our product focused on; textbooks.
They were forced to buy these expensive books they never used, so it was difficult to get them really interested in building an exchange community focused on an item they didn’t want in the first place. And second, textbooks were extremely seasonal. Students bought them at the beginning of the semester and sold them at the last minute in the end.
However, we found out there was one item students really wanted; study guides. A study guide is basically a dense summary outline containing everything an exam is going to address. We found there were a few studious students who made them, and a large majority of students who wanted these perfect shortcuts to studying. Some of these creators sold to their small networks, and others sold them to educational platforms that provided them via a subscription service to other students. Students outside the creators network were forced to commit and pay for these expensive educational platform subscriptions.
There was no other solution for students who just wanted to buy the specific study guide they needed. There was no marketplace for study guides like we had made for textbooks. So, that became the solution to our problems. We added study guides to the platform, to see if we could create some traction to prove this was the answer,and honestly we still couldn’t just give up on the textbook idea (our baby).
Pivoting, no matter how clear the decision to do it seems, is never an easy decision to make. We had sunk over $100k into the textbook app (BookU), and we had really only given it one semester. But, we had only $40k in funds left and needed to gain metrics to attract investors. We didn’t have much time left, and building the tech for the pivot would take time. We ripped the band-aid off, started building over winter break, and launched a study guide only marketplace (now called Cramberry) on March 1st. We had traction immediately.
Do you remember when you had to form the Cramberry business? Boring papers and stuff. How did it go?
Haha! I have done this type of paperwork many times; LLC, C-Corp, trademark applications, etc. I’ve got the process down. However, this time it was a C-Corp out of DE and I was operating out of an office in NY. So, I got a lawyer.
This was the first time I created vesting shares for my partners and I knew having an office in NYC without being incorporated in NY was delicate. I needed to figure out how to work all that out legally. It’s been alright...Albany has still been slow to get back to my lawyer, and I communicate with him over email (which usually has long wait times associated). I provided all the paperwork that I got from entrepreneur friends and he just looked it over and confirmed it was OK.
In hindsight it would be great if I could just pop in my info and have my questions answered fast. I know from doing this many times that it is all simple and the same, it really doesn’t need a personal lawyer and the costs associated with that.
I would also like entrepreneurial help with items like the cap table, maybe some simple accounting tips for ways to make my life easier when tax time comes (set up quickbooks on day 1 essentially), other things a seasoned veteran could answer in a couple minutes.
How did you build your product? How long did it take?
Cramberry was built in a couple of months by our co-founder Justin and part-time adviser Max (from Steller Base).
What tech stack and tools did you use to build Cramberry?
Cramberry.io is a Ruby on Rails web application hosted by Heroku. We use Stripe API to charge our customers and redirect the money to our sellers. Our background jobs are handled with Sidekiq, and our automatic mails are sent through Mailgun.
How did you attract users to your product? Have you had the same strategy the whole time, or has it changed?
Since day one, my co-founder (and cousin), Tom, has been in the field, on-campus, recruiting students to our ambassador program, asking questions and signing up buyers and sellers. Our ambassador program used to be as big as we could make it, with compensation of $1 provided for each referral sign-up. Tom attracted and managed as many ambassadors as he could and users of no specific type were signed up. Since we pivoted we’ve honed this strategy.
A key part of our business is attracting sellers/creators (Super Students) who are motivated to promote their supply to earn sales. So, the ambassador program has been filtered and renamed to Marketing Magnets, a small number of self-motivated, charismatic students who search for and sign-up Super Students. As they search for these sellers, potential buyers also hear about our platform, but mostly buyers hear about us from sellers. Sellers telling their classmates creates the most efficient conversion possible.
By adding this “old school” sales strategy we’ve been able to gather customer feedback extremely fast and acquire customers extremely cheap. It has also fueled our product development, helping us create a marketplace based on the customers’ wants, not ours, and providing us with adjustments that have immediate impact on our conversion rates. It’s not the most innovative strategy, so hardly anyone does it anymore, but it has been a real secret sauce for us.
When did you start charging customers? Why then? Is it hard getting people to pay?
Since we pivoted. I’d say people started paying when we pivoted because we got supply on our platform that they really wanted. We give out discounts at times and try to keep seller's’ pricing as low as possible, but ever since we began, customers have had to pay.
Everyone knows that is a true test of a business, and one that is hard to achieve, especially early on. Being able to do it has been one of our biggest motivators. We take our customers seriously. They are students willing to give us a bit of the little money they have. It’s an accomplishment that makes us proud.
What is your approach to legal things for Cramberry? How much do you care? (be honest :))
We just try to stay honest and give our best to have ourselves and users not break the law. I have some basic business law knowledge, and have experienced some real contract nightmares in my past, so generally we try to avoid that. I never enter a business relationship that I feel depends on the stability of a contract. If you’re depending on a contract’s terms that means you have to be willing to execute a suit to defend it.
And that willingness can be limited by your ability (based on time and money). I’ve learned the hard way that you never want to sue, and that means you never want to be involved in a contract you might have to. You’ll never get the time back, and you probably won’t get the money back.
If you could start over, would you do anything differently?
I don’t think I would...I wouldn’t be where I am now without the mistakes and the bad experiences. There is no way I could have known to do these things differently if I had not learned from the past. Plus, it’d really add to the high amount of stress and pressure of this whole operation if I also had the worry of regret.
What's your advice to people trying to start their own tech powered business?
Research everything you can about tech and the industry you are addressing before you start. That means read and interview the experienced. The rush to jump in is not as important as you think it is. Become a little bit of an expert on the subject to make sure your guess is as educated as possible.
If you have the self-motivation, determination and loyalty to really give it a shot, it’s going to take at least 3 years of your time and a lot of your money. It’s basically committing to a full-time fight against failure, so preparation is key.