Monday 25th February 2019
Joe Sillett launched his retro electric iron after deciding that other models lacked design panache. Here, Joe shares his advice for growing your business.
The Funky Iron Company only launched last November, selling retro-style irons through its own website and on Amazon, where it is currently achieving a 7 per cent conversion rate.
It is currently raising £250,005 on Seedrs in exchange for 8.3 per cent equity, valuing the business at £2.8 million. At time of posting, The Funky Iron Company has already raised £152,038, having previously persuaded 160 people on the equity crowdfunding website to put up £330,000 for a 37pc stake in 2017. Here Founder and CEO Joe Sillett explains how the ex-Dragon's Den investor Nick Jenkins inspired him to launch The Funky Iron Company, why entrepreneurs need to be wary of big-ticket investors and the health benefits of playing golf.
Where did the idea for your business come from?
I went to an entrepreneur’s talk in Southampton, where Mike Clare of Dreams Beds and Nick Jenkins of Dragon's Den and Moonpig.Com were telling the story of how they found success. I was the first person to stand up and ask a question, which was, “Coming from someone who has already founded three businesses, this might seem like a strange question, but how do you go about finding an idea for a new business?” Mike said, “Find something which everyone needs in their house. I knew that everyone needs a bed. So I started a beds business. Find something and put your own twist on it and then just get on with it.” Nick added, “Find something which people buy regularly” – in his case, greetings cards – “Then put your own slant on it, which I did with personalisation.”
Four days later, my wife and I were driving to our local hardware store, as we needed a new ironing board and my wife said, “Ironing board covers are a bit dull and not very funky.” To which I replied, “Forget ironing board covers, there aren’t any funky irons in the world.” So as soon as we got home, we searched for electric steam irons on Google and had a look at how they all look. There was nothing there which you could call funky or cool, so we made up our minds there and then and The Funky Iron Company was formed soon after.
What experience do you have in your sector?
In terms of brand building, sourcing, purchasing and selling, I have had a lot of experience in my career of doing this. I’ve designed, sourced and sold over £20 million worth of products. I then needed to get to know the iron market quickly, so I did a lot of research, bought a lot of products and got myself up to speed as quickly as possible on price point, functionality and market positioning. I also very quickly found a brilliant sourcing agent in China, who has worked with me from the outset and imparted a lot of knowledge on electric steam irons.
Do you consider your business to be a disruptor – what’s its USP?
I think we are a disruptor in the sense that we have firmly challenged the norm with our new Funky Iron design. There is nothing else in the world like it and people have described it as “beautiful, classy, cool, desirable, gorgeous and impressive”. The Funky Iron also has a dedicated steam pump which delivers continuous steam when you hold the steam trigger down. We think the combination of our looks with excellent functionality is a winning formula and the customer reviews to date would back this up.
What part does technology play in the business?
Quite a lot. Across all areas of the business. In the product itself, in our communications with China every day. Our website, our Amazon store, our interaction with our third-party logistics company, our communications with the wider world on social media.
What funding did you have to start the business and where did it come from?
My wife Sadie and I funded the first year of the business through a capital injection from our savings and we both worked unpaid for a whole year. This demonstrated to future investors that we had skin in the game and had taken significant risk ourselves.
As the business has grown what are the major challenges you have faced, and have you overcome them?
We have only been trading for 12 weeks, so in business terms, we are very young, although the company was formed in June 2016. The design process itself was a long process which started with a blank piece of paper in May 2016 and ended with our first manufacturing run in October 2018. The last 12 months of product design, development and refinement demanded great patience and required everyone involved to stay very focused on the end target, which was to produce a beautiful looking steam iron which also ironed beautifully. Happily, everyone involved in the project, both here and in China stepped up and in December 2018, The Good Housekeeping Institute gave our new Funky Iron the status of “Good Housekeeping Institute Approved 2019”, citing that the Funky Iron had met the rigorous standards and performed really strongly.
Have you turned to external finance to grow? If so, what type – debt or equity?
To get us to where we are today, we have raised all of the money via equity. My wife and I injected the first funds, we have had two successful rounds on leading crowdfunding platform Seedrs and we have just started a new round on Seedrs. We think this will be the last funding round we need, as future growth will be funded by trade finance. We have already been offered unsecured trade finance of up to £1 million, so this is the route we will choose after we have closed our current crowdfunding campaign.
What would you say to any other small business owner mulling whether to bring in outside investors?
Be very very careful about who you bring into your business, how you do it and why you have decided to do it. Be very firm about what you want from investors, how much you are prepared to give away in equity, and who will be running the business after the investment.
My experience of this having gone through multiple rounds of investment on crowdfunding platforms, with angel investors and with hedge funds, is that you need to listen to what your gut feel tells you about an investment opportunity and the people behind it. If you have the slightest doubt about whether to do a deal or not, don’t do it. You need to be 100 per cent certain that it makes sense and that you are happy with it. Crowdfunding gives you the perfect tool to raise important capital and bring in an army of people who want you to do well, without any one or two investors wanting to then take over the business and run it. Again, my experience in the past is that you can only have one boss making the final decision and running the business. If there are too many chefs, it won’t work.
How do you measure success for yourself, your investors, your staff and your customers?
Success for me is defined on a number of different levels.
From a product viewpoint, it is measured by product reviews from customers, both in the rating they give to a new Funky Iron and with their comments. We have had some wonderful reviews to date, which after 30 months’ worth of hard work is very rewarding to read. Forty-seven of our first 55 reviews have been 5-star rated. Success for our investor base is measured by progress. As we have only been trading for 12 weeks, the progress between the share price in Round 1 (£4), Round 2 (£7.81) and Round 3 (£16.49) is the best way of tracking success.
Everyone involved in the business is very excited about the future and we are all working hard to make sure that we convert the excellent opportunity we have created for ourselves. Customer success is tracked by online reviews, emails and telephone calls. We have received many kind comments to date, and we look forward to receiving many more.
What business (or personal) tip would you give to other entrepreneurs hoping to scale up their businesses?
Be sure you are scaling for the right reason. If you are diversifying into other areas and verticals, make sure you know why you are doing that, and what challenges that will bring. If you have found a winning product and a winning formula to push the product successfully out there into the market, you will know whether scaling the spend behind that makes sense. Those working with you on the business will also know. We hope to hit that moment soon, where we find the perfect formula to know that by increasing spend behind certain areas in the business will lead to a direct growth in sales.
Who has most influenced your working life?
My wife Sadie. She has always believed in me. We’ve been together for 17 years now and we’ve had some amazing highs with my working life and some lows. Finding an idea together for this business has been amazing, as it really is a husband and wife creation and she has as much passion for the product and brand as I do.
How do you relax outside of work?
I enjoy spending time with my three children, Sammy, Emily and Heidi. Sadie and I see a lot of each other as we are in the office together every day as well as at home.
I have always enjoyed sport and have played sport all of my life. I am a very keen golfer having taken the game up aged 34. I got down to a 10 handicap and have my sights set on getting to single figures this year. It’s so important to find space and balance outside of work and golf is a brilliant sport for this: no other sport can offer you such health and mind benefits as a regular round of golf with your mates.