Slight rise and slight fall of the Zavtra brand. How We Didn’t Become Wallet Millionaires
In 2015, my friends Ilya Petrov and Mikhail Geisherik launched a brand of accessories. In this column, I reflect on our experience, reflect on what we did and what didn’t, and I don’t give any advice.
The idea behind the brand was that money has changed, but wallets and everyday accessories have not.
We decided to design and implement the accessories of tomorrow that would combine simplicity, functionality and mobility.
The first products were a wallet and a wallet-cover for a smartphone, but pretty quickly we expanded the range with a passport cover, a cover for auto documents, a key holder and a cardholder. In total, we have developed and released 24 models of accessories.
Then, in 2015 at vc.ru column released about how we came up with the idea, analyzed the trends and released the product.
It would seem like a great business idea, you just need to take famous accessories and rethink them. We did, but something went wrong.
To see this, just look at the project’s revenue by year:
2016 – 5,303,756 rubles
2017 – 6 199 548 rubles
2018 – 5 748 598 rubles
2019 – 3 003 401 rubles
2020 – ± 2,200,000 rubles
Having seen enough Bellroy, Hardgraft, Distil Union and Secrid, the guys and I initially imagined Zavtra as a business with revenues of more than a hundred million rubles.
We thought we would launch a revolution in the accessory market. But it didn’t happen. We lacked product focus and courage to pump money into influencers. So we found ourselves in a stalemate: while creating new form factors for familiar products, we were in no hurry to tell a wide audience about it.
But it is also a sin to complain. Every year we stayed with Zavtra in the black, though every year and less. Over time, the financial result became so deplorable that my partners gave up their shares and I remained the only owner.
What went wrong?
To understand the reasons, tables with a breakdown of sales by channel will help.
Dynamics of Zavtra sales by years:
Initially, Zavtra was sold on Madrobots.ru and several other online stores of gadgets and accessories. We experimented with sales on Lamoda.ru, in the Lebedev Studio and Kupivip.ru stores.
Over time, we came to understand that direct sales through our website are enough (Zavtra.co) and representation on Wildberries and Ozon marketplaces.
Why did the revenue drop?
The answer to this question in dynamics across sales channels from 2016 to 2019.
Corporate orders and sales through Madrobots.ru gave us the lion’s share of sales. In 2019, sales through their website fell threefold by 2018. Why? We have exhausted the Madrobots audience by telling our visitors and readers about Zavtra products through mailings and promotions on the site.
Everyone who was interested in our products eventually got them, and the influx of new audiences to Madrobots was not enough to maintain high sales.
Zavtra’s corporate sales disappeared with the cessation of coverage of the project back in 2018. It worked very simply. We write about Zavtra on popular platforms – we receive large corporate orders.
What we did to develop sales
We released a minimalistic backpack. Bottom line: it took 2 years to sell the first batch of 500 pieces.
IPhone Cases Released with pocket for credit cards and badges. Sold in Re: store and a lot of online gadget stores. Bottom line: the covers showed a defect (the edge of the cover quickly began to peel off), the road with them at retail was closed to us.
Developed a bundle “smart wallet” – wallet and bluetooth tag to make it easy to find. Bottom line: nobody took bundles, “smart wallets” remained unclaimed.
We released clutches with a built-in power bank. Bottom line: sold 20 pieces in a year.
Created 24 models with more than 50 articles. Bottom line: 5 models make 80% of sales.
We worked with bloggers on Zavtra reviews. Bottom line: reviews never paid off and we stopped spending money on them.
Developed an anti-theft backpack with students of the British School of Design. Result: removed the project “on the table”.
The “Trap” plan or how we brought Zavtra to Kickstarter and did not withdraw
We relied heavily on crowdfunding trends to develop new products. In 2016, a completely new product category appeared – anti-theft backpacks.
On Kickstarter then Bobby backpack came out from XD Design. It marked a paradigm shift in backpack design, raising over $ 800K in crowdfunding.
Imitators were not long in coming in 2017 the Clickpack project appeared from the studio Korin Design, which broke through $ 1 million in box office.
We decided that we shouldn’t hesitate and Zavtra should become a player in this nascent market. We were not able to develop the design, so we turned to the British School of Design and organized a competition for students with them.
As a cheat sheet and technical assignment, we have prepared analytics for nearly two hundred successful crowdfunding campaigns. Who cares to look, the file on link…
10 design teams had to design 10 backpack models.
Photos from protection projects
Most of the teams didn’t seem to even open the analytics file we prepared, and the projects turned out to be secondary or impractical. We chose one as a finalist. Thus began a series of compromises that led us to failure.
Presentation of the winning backpack:
Why didn’t we get to crowdfunding?
The plan was to develop a prototype of a Russian-made backpack in order to better understand the economics of the product and make a video with it for crowdfunding.
After several attempts, we found a production facility that could send us a prototype, but it didn’t go any further. The prototype was scary.
The designers, due to their lack of experience, did not participate in the field supervision, and the project had to be significantly improved. Manufactures perceived us as the next dreamer and gave our revision tasks the lowest priority, leading to several weeks of waiting for each technology change.
After several months, we got tired of the lack of results and we decided to freeze the backpack project.
Why do I believe the bottom has been reached?
Reason 1. Over 5 years of testing, we have formed 5 strong models:
minimalistic wallet (which started it all)
cover for auto documents
Reason 2. We consistently sell about 150 items per month.
Selling 150 items per month gives us about 150 thousand rubles of gross profit. Wildberries bring on average 100 thousand rubles of gross profit per month, and Madrobots – 50 thousand rubles.
What do I think about the future of the brand?
For myself, I decided that the project will live as long as it pays for itself (one person on a salary is engaged in the brand), and we are coping with this.
I have no illusions to increase sales 10 times. When you don’t have marketing, sales are a function of demand. For example, there is a certain volume of demand for passport covers.
The task of Zavtra as a brand is to be in the field of view of the buyer, who is in the process of finding such a product for himself. This is facilitated by listing on marketplaces and working on constant availability, presence of good product photos and product reviews.
In 2021, we will release several models of compact wallets and the reincarnation of our compact backpack.