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Episode 51 Part 2 Top of Mind Video Transcript | Quilting Startup Uses Tech Mindset to Get Ahead of Competition

"Top of Mind" with Thom Ruhe, Episode 51 Part 2, 6/3/14  Watch Episode 51 Part 2

"Top of Mind" with Thom Ruhe, June 3, 2014, Episode 52, Part 2

>> In Part 2 of our series with Missouri Star Quilt Company we go behind the scenes with company co‑founder and an entrepreneurial force, Alan Doan, to learn how this mother/son team is building an empire in the heartland of rural Missouri.  I'm Thom Ruhe.  And this is "Top of Mind."  

>> I'm here today with Alan Doan, one of the co‑founders of Missouri Star Quilt Company.  Alan, thank you so much for having us here today.  

>> Thanks a lot, Thom.  

>> Like I said, it's been a real treat to discover this awesome entrepreneurial company in Hamilton, Missouri.  

>> That's it.  We have fun up here.  Good stuff.  

>> It's just a mecca of enterprise.  

>> That's right.  You rolled in, you saw the sign, 1,800 people.  I mean, you know we got something going on here.  

>>  You definitely do though.  I know we were saying that tongue in cheek, but you definitely do.  But before we get into that, you know, perhaps for the viewers you can share how did this start?  You know, how is it that you know, this empire, this quilting empire is here in Hamilton?  

>> The Missouri Star Quilt Company was kind of funny‑‑ it was never‑‑ our intention was never to have a big company, right?  In the beginning our goal was to make maybe $10,000 a month.  We thought if we could do that, me and my sisters and my mom, we could all get a little bit of cash, just extra revenue for what we were doing.  You know, I was talking to mom one day and she had mentioned she made a quilt and was taking it in to get it quilted, which means they like put the middle, the batting part and then the back on a quilt.  And she was like yeah, I'll have it back in like nine or ten months.  I'm really excited because most everybody else is over a year.  I was like, mom, are you crazy.  How long does it take to make a quilt?  She said about five, five hours or so.  I said can you do it‑‑ if I got you a machine, could you do it?  She said sure I think I could.  So we bought her a machine, got the building, just a cheap building here in town, $24,000.  I mean, that's why rural America is so awesome.  Because you can get these old abandoned buildings nobody is in, nobody has any use for it anymore because the town doesn't need it.  

>> Right.  

>> So you can jump in and you have this opportunity to do something with an infrastructure that is really, really cheap.  So we came into this building, put the quilt machine in there, refinished a little chunk of it and that's where it got started.  So the whole family was working.  I mean, we were staffing 8 o'clock in the morning to 5 o'clock at night every single day, except for Sunday, for free.  Nobody got paid.  We spent two years working like that.  Not a single person in our company got a paycheck.  

>> So from like 2008 to 2010?  

>> Yep. 

>> Okay.

>> And we all worked for free.  Donated our time.  Did the best we could and that was it.  But we were all building for something down the road.  I mean, we had confidence we would get somewhere.  Then we‑‑ in 2009, in March 2009, we launched a website.  I locked myself in a basement and said you know what, there's an online portion of this that we can do.  I like the development side of computers.  You know, I'm on or in web development with some of the other stuff that I've worked on.  So I saw this opportunity, I said I bet, I bet we could do this better than what's out there.  Well you look at it, and I feel like a lot of industries are the same way, but‑‑ they were still selling fabric the same way you sell screwdrivers and lawn mowers.  It's in a three across, five down grid that every E‑commerce site uses.  How do people shop for this that is different than everything else out there.  So that's what we were focusing on.  And in the beginning, to be completely honest, I mean, we were a three‑by‑five grid.  I didn't know any better.  So we got in there and built it.  I said man, this is not sexy to me.  This is not the nerdy fun stuff that like my skill set should let me do.  I convinced a buddy to come and join me for a year.  We spent a whole year rebuilding from line one all the way to the end our entire website.  We took it off the existing platforms and built it custom so we could handle yardage in a very strategic way.  We could handle, you know, filtering and searching for textiles.  There's styles and finishes and all of the extra things that people want to look for when they are looking for fabric, colors and all of that stuff that people really like.  I mean, they are kind of spoiled.  Our customers are spoiled because no other quilting websites or sewing websites do nearly the amount of work and technology thinking that we do.  

>> So you go online, but then how did you catalyze it?  

>> It's awesome, man.  I had no idea‑‑ I had no idea, right?  We got the site going.  We put all the products in.  And then I made the domain live and I said we're launched.  And then three weeks went by and not a single sale.  

>> Crickets chirping.  

>> I was dying.  Oh, I was dying.  And I didn't know the quilting market.  I didn't know how to go market to them.  We didn't have a budget, right?  We couldn't spend money to get ourselves in front of people.  I would go on forums.  And we were on Craigslist.  And like, you know, we'd reply to people looking for lawn things, oh, I don't know, maybe you could check the Missouri Quilt Co. out, maybe.  Nobody cared.  We finally got our first sale three weeks in.  And it was my cousin, Jennifer, up in Vermont.  

"Top of Mind" with Thom Ruhe, Episode 51 Part 2, 6/3/14  Watch Episode 51 Part 2

>> Oh, sweet of her.  

>> I was like this doesn't even count.  

>> No, it doesn't.  

>> So that's when we turned to Youtube, right?  So we started‑‑ we came down and made some video tutorials of mom teaching people how to quilt.  And we thought it would be a really cool thing to be able to put up on Youtube.  Then once we have that we sort of had our marketing piece, right?  We didn't need people to come and shop with us per se, we needed them to come and discover us through mom.  

So we took these traditional quilting techniques and then taught people in really plain language how to do them.  So as soon as they, as soon as they started learning them, I mean, they kind of fell in love with mom.  She's the magic sauce here, right?  

>> Right.  

>> Sewing two tumbler pieces together.  So I'm going to show you how to do that.  It really is a piece of cake.  

>> Where mom is such a great teacher, people fall in love with her.  And then sort of, I think to support her, they come and shop at the site.  And then they are pleasantly surprised with what we were able to do on the website.  And you know, how great that experience is, some of our deals and specials that are fun to engage with.  And they continue to support us.  

>> Now you're doing a little bit of volume daily, right?  

>> We do, yeah.  Well, it was cousin, Jennifer, and then June that year we had a record day.  We had‑‑ it was the end of June.  And I was still living with my best friend in his basement.  We were still programming it there.  We had eight sales in a day.  We mis‑priced something.  We meant to do it at $1.88.  We did at $0.88.  And we had eight sales.  And our mind was blown.  Like we have a video of us jumping, high fives.  We were like this is it.  

>> We've arrived.  

>> In the future maybe eight sales will be like nothing, but right now‑‑  

>> Right.  

>> ‑‑ we did it, right?  And so now our average, I mean, we'll put out about 2,000 orders a day shipped out of our facility.  

>> Wow.  

>> Which is just crazy to me.  I mean, it's just nuts that there's that kind of volume to be had.  And that amount of people that are excited about quilting.  I mean, that's what's awesome about this.  It's an industry that on the surface some people look at and say oh, it's not‑‑ it's cool.  Not very fun though, I mean, I wouldn't do that.  But like it's turning into this very fun, very artistic, creative, let me express myself sort of thing.  And man, just people love it.  

>> Like how many employees do you have now?  

>> We're at 115 employees.  But coming from a town of 1,800 people, that's a significant chunk of‑‑ 

>> Absolutely.  

>> ‑‑ Hamilton is cranking away over here.  And that's what's cool to me is that we have‑‑ I mean, you walk around and talk to any of our employees, they're the best people you will meet.  We've been lucky enough to have this great community that supported us.  

>> Now the site and the 2,000 orders per day, that's one piece of the business.  But we‑‑ earlier today we got to go see several‑‑  

>> Oh, yeah.  

>> ‑‑ buildings.  One of the buildings we visited looks very much like a hotel‑‑   

>> Yep.  

>> ‑‑ conference center.  

>> Yep.  Yep.  

>> You know, what's the story behind that?

>> Well so we're building here, we talk about all the time the Disneyland of quilting, right?  We sell happiness.  I mean, that's sort of the idea.  You come here, and when you go to Disneyland you go to Disneyland it's the experience for the day, right?  You got a place to eat, you got stuff to do and you got a place to stay.  And they keep you there as long as they can.  They just try, they want you to stay in that magic experience.  Well we're trying to do the same thing here, right?  So we've got things to do.  We had to start a couple of places to eat.  We've got J's Burger Dive and Poppy's Bakery that we backed.  We've got one other restaurant opening in June that we're really excited about.  And so we've got things to do, things to eat.  And then we had to start the places to stay.  So ideally we're going to have enough quilt shops you're not going to be able to do in a day.  The old three ring circus idea, right?  

"Top of Mind" with Thom Ruhe, Episode 51 Part 2, 6/3/14  Watch Episode 51 Part 2

>> Right.  

>> You can't watch all three rings at once.  We want to bring people to town, give them enough to do that they're like well, that was a great Saturday but I need another day, right?  So great, come stay here, eat the food with the local guys, and hang out for a bit, keep shopping.  It's going to be awesome.  

>> What has that meant for Main Street right out here?  

>> Oh, our Main Street is really, has been really fun to watch.  Because we had‑‑ I mean, we've got some great businesses that have been on Main Street for a while.  And people that have made it, they made it through the recession.  I mean, they‑‑ they've hung on where really there wasn't a lot to hang on to.  But there was a lot of sort of abandoned buildings, a lot of companies that didn't make it.  Or people that had run their business and were just done, they didn't want to keep doing it anymore.  There wasn't enough money in Hamilton for them to care.  So those buildings sort of have been left to rot.  And so the one, the hotel that we're in, The Sewing Center, that upstairs I don't think anybody had been in there for 40 years.  I mean, when we got into the building, there were dead animals upstairs and plaster falling down.  And I think there was‑‑ maybe it was haunted by ghosts or something.  It was the worst that you could think of.  And we got in there and cleaned it up and refinished and did all of that.  But I mean, no one was ever going to use that space, right?  

>> Right.  

>> So when we went in there we created this great space out of something that was totally unusable.  Up and down Main Street, man, it's night and day.  People are seeing these different buildings get fixed up and it's like they are rediscovering their town.  

>> What would be your advice?  I mean, again, I have the benefit of knowing some of your background.  You've really made kind of the entrepreneurial circuit.  You have pedigreed Techstars and other things in your background.  So you have, a unique and informed position.  You've lived kind of‑‑ 

>> Yeah.  

>> ‑‑ la Vida Loca in the high tech and high potential, you know‑‑ 

>> Oh, yeah.  

>> ‑‑ building apps selling for a billion dollars and blah, blah, blah.  And here you've done something that's low tech, if you'll forgive me for saying it, but it's had such an enormous impact.  You're having such tremendous growth with it.  So based upon that arc of‑‑ 

>> Uh‑huh.  

>> ‑‑ your life so far, what would be your advice to any aspiring entrepreneurs that are watching this today?  

>> Well I'll tell you what's really cool about doing what I do is we've, we've worked in, you know, you go and build an app or you go and spend months and months and months building something that in the end nobody uses, right?  Let's say your app doesn't stick.  You're the part of the 90 percent that fails instead of the 10 percent that succeeds or whatever that stat is, right?  It's really, really, awesome to have‑‑ my sandbox are people that are coming in every day giving me feedback.  They love to come and use my product.  They're excited about what we're doing.  And that's, that's been amazing to me.  So I've been‑‑ you know, there's a part of me that is still drawn to that high tech, let's go do all of that other stuff.  But man, I get so much joy out of building something that people use every day.  And so if you're an entrepreneur and I was going to give you advice I would say look where you can build real value.  And the, you know, the money, the everything else, that will follow.  If you can figure out where to drive value, everything else will come along.  

>> Building real value.  I love it.  That's a great close.  Thank you so much for your time today.  You know, God speed and good luck with everything that's happening here.  

>> Thanks, Thom.  Thanks for making the drive. 

"Top of Mind" with Thom Ruhe, Episode 51 Part 2, 6/3/14  Watch Episode 51 Part 2