About this episode

This week's featured guest is Christina Stembel, founder of Farmgirl Flowers. You may recognize Christina from the national Capital One campaign, where she gets to quote the known slogan, "What's in your wallet?"

And if you couldn't guess, Christina's story is unique on many levels, including her challenging upbringing. Christina was born in a small Indiana town where she was raised with the idea that young girls did not have the same future or potential as young boys. For most of her childhood, she felt like an outsider. She was a young girl with big dreams, and that was not the norm in her town.

Despite any of the challenges Christina faced, her childhood was influential and helped her get to where she is today. She's often asked what's the secret sauce to her success? She immediately points back to the most important lesson of her life, and that is where we begin her story. This is Christina Stembel's startup story.

In this episode, you'll hear.

  • About how she grew up in a small town in Indiana with religiously conservative parents. And how she was continually asking questions and bucking against that system.
  • Though entrepreneurs didn't surround her, she did learn the value of hard work.
  • How and why she made a move to New York City after graduation. And later, moving to Chicago, taking classes at Columbia College, and working in a hotel.
  • Christina shares how she eventually ended up in hotel management in San Francisco. And later, she details her exit from the hotel business.
  • She describes her time working at Stanford University, first in their catering department, and then with Alumni Relations. Her time planning events for Stanford helped her recognize the amount of money being spent, and in her opinion wasted, on the decor.
  • She was able to save the university money by buying flowers and making the arrangements herself, rather than buying finished pieces.
  • Christina could see the gaps in the flower industry but knew she didn't want to be doing events. She researched the e-commerce side of flowers and felt there was something better she could be doing to improve it. That led to Farmgirl.
  • Early Farmgirl had limited product options with excellent customer service and a minimal marketing budget. Christina shares some of the unique marketing she explored in the early days of her startup.
  • Some of the frustrations are getting financing in Silicon Valley and her experiences.
  • The growth of Farmgirl Flowers, including her desire for early regional growth, subsidizing shipping costs, and working on company culture.
  • Why Christina believes anyone willing to work for it can be an entrepreneur.

Resources from this episode

Farmgirl Flowers: https://farmgirlflowers.com/
Christina Stembel on LinkedIn: https://www.linkedin.com/in/christina-stembel/
The Startup Story Inner Circle: https://www.thestartupstory.co/vip
The Startup Story on LinkedIn: https://www.linkedin.com/company/thestartupstory
The Startup Story is now on YouTube: https://www.youtube.com/jamesmckinney
The Startup Story on Instagram: https://www.instagram.com/thestartupstory

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EPISODE CREDITS

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Episode transcript

The Startup Story - Christina Stembel

Christina Stembel: Hi, this is Christina Stembel. I'm the founder and CEO of Farm Girl Flowers, and this is MY startup story.

Every wildfire began with a spark. Every superhero has an origin story. And every single startup has a moment that they point to as their beginning. And every founder has a purpose that drove them in the midst of all obstacles. THAT is The Startup Story.

[00:28]
James McKinney: Welcome to another episode of The Startup Story podcast. While The Startup Story has an international audience, we're based in the United States and I'm actually in the state of Texas when I record 99% of these. And I tee all that up because I want to talk about recent events that have taken place in our country, in the US.

On May 25th George Floyd was killed by a Minneapolis police officer. The murder of George Floyd set off protests across the entire country and those protests turned into riots, just absolutely all out riots. At the time of this recording, the riots were still very active and incredibly violent. Video after video can be found online of business owners standing outside of their location, trying to save their business from being looted, only to end up being significantly beaten by numerous protestors. Now let me be clear, though. That is not what I want to talk about. No, I want to talk about an email that a listener had sent me about the impact of this matter. But in order for the letter to make sense, I need to add a little bit of context to it.

About a month ago I had an impromptu Zoom call with two black female founders. We had connected to discuss how to bring more black founders to The Startup Story podcast, and I was so appreciative of them taking the time to help me solve some of the challenges I face with trying to secure black founders for the show. I know one would think it would be pretty easy to bring people onto a show, but people just don't always accept the invitation. And when it comes to female founders and black founders, well those are the two populations I have the hardest time securing for the show. That conversation was incredibly helpful and it's my hope that the fruit of those discussions will be realized in the coming months.

During that Zoom call though I had asked them if the experiences shared by the founders I've highlighted on The Startup Story were not applicable to them because the founder stories were not from black founders. And I asked that question because in my mind, the challenges of entrepreneurship are color blind. When they responded with the answer of, "No, they definitely are applicable but ours are still different," I asked them to explain that a bit more because I couldn't quite understand what was so unique. During our call, they couldn't quite wrap it in words either. Well, after the horrific murder of George Floyd, one of those female founders emailed me the words that she could not gather just a few weeks earlier during our Zoom call. With her permission, I shared that email on Instagram so that everyone can see a narrative to the black founder story that I truly believe has not been shared before. I would encourage you to visit The Startup Story on Instagram to read her email to me. You will very easily be able to identify it because the image does not fit the overall theme of our Instagram feed.

So now that you have the background, I want to share my takeaway from her email to me and it's this. Still to this day, I believe that there are many things within the entrepreneurial journey that are universal. The hope of what just might happen if we can bring our dream or idea into reality. The angst of navigating the zero to one journey. The rejection of friends and family when we first speak about leaving the security of a normal job to pursue our idea. The rejection from friends and family when we try to pitch them on why they should invest in us. The overall challenge of raising capital and the hundreds of pitches we all have to give to get any type of funding. The frustration with quality hiring. The fear of failure. The negative self-talk that continues to haunt us despite any record of success we might have. And of course the many, many operational, sales, and marketing challenges that we all have to endure. But with that said, there is one unique challenge that until that listener emailed me I simply had no full understanding of, that being the challenge of stolen hope.

As a white male I enter every single day with tremendous hope and excitement for what could be. Even on my worst day the outcome, good or bad, can be tied to some decision or action on my part. Not a single day goes by where I need to worry about whether or not the color of my skin is going to create an obstacle along my journey. My listener woke up on May 26th with the same enthusiasm and hope that I did that day, yet her day spun out of control because she was reminded that she needs to walk a bit more cautiously because she is black. In that moment, her hope was stolen simply because she is black. In that singular moment, the game changed for her. The trajectory of her day was no longer about how to execute against a plan she set out to accomplish. It became about how to build a life and a culture that's so blatantly seeks to oppress you because of the color of your skin. I've tried so hard to use terms like founder or entrepreneur when speaking of people like you and I because I see so much commonality in our journeys regardless of our gender or race, but the events of the past few weeks have given me cause to reflect on the reality of our time and our culture. That reality being that black founders in the United States have a narrative to the entrepreneurial journey that is unique to them simply because they are black.

While The Startup Story has been laser focused on ensuring that we have balance among male and female founders, I'll be pushing equally hard to ensure we have consistent representation of black founder stories as well. And I share that with you because The Startup Story seeks to bring authenticity and transparency to the entrepreneurial journey, period. So please I implore you make sure to subscribe to the show wherever you listen to podcasts so that you don't miss out on any of these future episodes. I also ask of you if there are black founder stories that you want to hear, please tell them about The Startup Story so that when I do outreach to them it is something that they are interested in because they've heard about it from you, the listener. Now let's jump into this week's episode.

This week's guest is Christina Stembel, founder of Farm Girl Flowers. While you might not have ever ordered flowers from Farm Girl Flowers, you'd probably recognize Christina from the national Capital One campaign where she gets to quote the ever popular slogan, "What's in your wallet?" Well, Christina's startup story is unique on many levels, but one of them is her unique and challenging upbringing. See, Christina was born in a small Indiana town where she was raised with the idea that young girls did not have the same future potential as young boys. In fact, for most of her childhood she felt like the outsider because of how big her dreams truly were yet how small she was being told they had to be, simply because she was a girl. Despite those challenges she also sees just how influential those childhood years are to her story. In fact, she's often asked what's the secret sauce to her success and she immediately points back to the most significant lesson of her life, one that she attributes to her challenging childhood. So what is that lesson, Christina?

[07:22]
Christina Stembel: The value of hard work, and I think that has helped me so much in being resilient and not spending money that you don't have, and just some good old fashioned things that I don't believe are taught much anymore that have helped me in a huge way what I'm doing right now. I don't want to undervalue that because if I wasn't raised on a farm where we worked… We had chores that now people would probably claim against child labor laws and things, which I think is complete crap. I think it's great to teach kids how to work and I think that's probably the problem we're having right now. At least I can say this from hiring a lot of team members that I don't know that they've ever been taught how to work before, and I joke about it but I kind of want to send a lot of them to the farm to go learn how to work.

So I don't want to undervalue the importance of that, because I did learn that. I learned how to work hard. I learned that when you fail at something you just do it again, and you get back up. There's no of this, "I can't." Also, I was raised by a mother who is probably the strongest person I've ever met. Farm Girl is really her. She's the one that is a real farm girl. We grew up on a farm but we cash cropped it out so we did a lot of work but not like she did. She also has a handicap, a physical handicap. So as somebody who has never lived a day without pain in her life trying to get her to feel sorry for you for anything is next to impossible. And so that really helped me because there's not this like oh, like my mom's not coming in to like fight for me against teachers. She's like you've got to do better, come on, what's wrong with you. I'm being bullied. So what? Who cares? They're just words. You know? It's like getting her to feel sorry for you, it's not going to happen. That just toughened me up a lot.

So while I didn't see any entrepreneurs around me other than I mean my grandparents were farmers, that's technically an entrepreneur. It was a different type of entrepreneur. I didn't see any high growth. I never once thought, never once in my life before I moved to San Francisco did I think I could start a company. It wasn't even in my thought process of a possibility. In my head if somebody had said, "Hey would you ever want to start a company?" I would have thought that's not an option for me, I don't have money. You have to come from money to do that. That's not the truth. I want young girls to know number one, if they're still being raised in that way, that does not need to be their path. If they choose that path that's fine, but it doesn't have to be their path. And number two it is available to you. It's available to anybody. Anybody who wants it can do it.

[10:02]
James McKinney: I love that. As you're coming to the end of your high school years though in this two stop sign town, and a town that's got more churches than gas stations, you feeling a bit out of place of sorts because you were rebelling against the system of the town if you will, or of the family structure as well. At the end of high school what did you think you wanted to do?

[10:23]
Christina Stembel: You're going to laugh. So yes, not only was I rebelling against the family and the religious structure, I was also rebelling… I was that kid in school. That kid that just got made fun of to oblivion. I don't know how kids do it now with social media. At least it was, I graduated in 1996 so it was before all of that. My heart goes out to kids now because they can't get away from it. At least I could get away from it when I left school. But it was horrible for me. There were dark moments in my high school life from just the horribleness of other kids.

While that hurt really bad and I would not wish that on the worst person in the world, what's great about it was it gave me the motivation to get the hell out. I just could not wait. I couldn't count down the days quick enough to leave that town and to get away, and also it gave me the strive. You know that saying the best revenge is living well or success. That was my mantra. I was like I will show all of you. All the things you say about me it's bad to say, but not really revenge but it was just like watch me, you know? You want to make fun of me, yes I don't fit in here, yes I make my own clothes and they look crazy, and I'm like super creative, wearing weird hair styles and makeup and stuff before that was cool. But thought that I wanted to be an actress. Looking back on it, I think the only reason that I came to that conclusion was it's the only thing I could think of. There was no conversations with my family or parents. I remember going to the guidance counselor in high school and I had heard that Sarah Lawrence and NYU both had great drama programs. We only had one college conversation in my house growing up, and that was when we saw a man come to the house and meet with my parents in the afternoon, which was really unusual. My sister and I asked… my sister, I'm four years older than my brother, and she's five years older than my brother. We were in high school getting ready to graduate and my brother was in junior high or elementary school. We asked what this guy was doing at our house wearing this like JC Penney suit and this briefcase we'd never seen before. My mom responded saying, "Oh, well that's a financial planner. That's what they call them." We're like, "What does that do? What's that person do?" And she's like, "OH, he's going to help us save for your brother's college education."

[12:48]
James McKinney: Oh wow.

[12:49]
Christina Stembel: We were like, "Oh, so we're going to college?" This was the whole college conversation growing up. My mom's like, "No, you guys are girls. You're going to get married and have kids." And I just was like wait, what? But interesting heir defense, that's how they were raised. You might go to school to be a secretary as they would call it back in the day, or a nurse, but there wasn't the same opportunities. So when I decided I wanted to be an actress it was just because we had a TV with three stations, and I saw people on that, and I was like I could do that. My dad worked at a company that makes trucks, delivery trucks, like a factory. He worked in customer service there and he's been there for 40 years. He's retiring next week actually.

[13:33]
James McKinney: Oh wow.

[13:34]
Christina Stembel: But he's been there as long as I've been alive almost. My mom was not allowed to work out of the house. That was definitely a thing. She works now, but after the kids left home she was able to get a job, but that was definitely a rule in our house. And so all I saw was gender roles, and the only thing I could think to do besides hearing that women could be nurses or secretaries, which neither one appealed to me. I can't stomach blood and I didn't want to take notes for someone else to do something interesting. Not that there's anything wrong with those careers at all, they just weren't for me.

So I just saw people on TV and thought I could do that, so let me do that. That was like my ticket out of there. So I moved to New York City two weeks after I graduated high school. I worked a ton of jobs leading up to that. I'd saved I think I had like $12,000 saved which I thought was a ton of money then. I moved to New York City, never being there before, getting my apartment through classified ads and sent a cashier's check which I cannot believe to this day was not a scam. Found an apartment with a roommate way up near the Bronx/Manhattan line because I'd never been there. And just moved there at 18 years old.

[14:46]
James McKinney: That's incredible. So before we go any farther though, I want to kind of do a look back if you will. So we all know your story now, Farm Girl Flowers, and what you've built. So now knowing how you were raised and kind of what your parental narrative was, what are their thoughts now as they look at where you're at? Before we close the childhood chapter, I kind of want to see like how does it resolve in today's age when they see what you've done?

[15:12]
Christina Stembel: My parents are very proud now. It took them a while to get there as far as understanding the magnitude of what I was doing. In their head I think for a long time it was that I had a little flower shop. No, it's actually a big company. Even getting them to understand that I'm the CEO of a company was really hard, because I think in their brains that's not how things work. My brother would talk a lot about the chiefs in his company and how close he was, and how many layers there was between him and the chief, the C suite. They call it chiefs out there I guess, but here we call it C suite. And while I'm sitting there thinking I'm the CEO, I'm actually kind of a big deal at my company, this is a company.

I don't think they understood it for many years until I honestly think it was the Capital One commercial that I was in that really made them see that this was like a bigger thing than what they were thinking. But they're really proud. They've always been very supportive of letting me go and do what I want to do, which I am so thankful for. When I see parents, helicopter parents now, kids are still living with their parents in their thirties and things like that, and parents wanting to have so much control, still doing their laundry. My parents, a lot of people are like how would you let her leave? And they were like, "There was no 'let her.' She was 18, she was an adult. If we told her no do you think that was going to stop her?" you know what I mean? I have so much respect for my parents, being the type of parents that can teach you what they want you to learn and even if you don't cling on to what they want you to learn, love you through it and let you go do what you want to do.


[16:52]
James McKinney: Before we continue with our episode, I want to let you know that all the great content from our most recent two day livestream event, Startup Story LIVE, is available to you in an on demand format. Basically a Netflix for entrepreneur. After two full days of groundbreaking content at Startup Story LIVE my head was spinning for days. Every time I thought, "That's going to be the biggest takeaway," I was floored by another mic drop moment. And that's why we created a new membership program for entrepreneurs that want to leverage the Startup Story LIVE experience as much as possible.

So I am introducing to you The Startup Story Inner Circle. When you become a member in this exclusive group you secure an unlimited VIP pass to The Startup Story LIVE content and bonuses designed to help your business succeed no matter what the environment. Your Startup Story Inner Circle membership includes on demand access to every founder session from the event, real practical and tactical advice from real entrepreneurs and business owners, full transcripts for each session with crucial talking points highlighted, which allows you to focus only on the information you need right now. We're going to have exclusive livestream events each month with top founders from companies like Mailchimp, Meetup, and StickerMule. You get access to our private Facebook group where entrepreneurs support other entrepreneurs, make valuable connections and even find new clients and customers.

And plus, members will receive special offers and giveaways from Startup Story brand partners like Express VPN, Trainual, Design Pickle, Foundermade, and even Entrepreneur Magazine, and so much more. And right now you can claim a three month, all access membership for just $99. That's probably less than you'll spend on streaming services for the next three months. Except this content can radically change your business. These coming months might be the toughest challenge you'll face as an entrepreneur and the truth is many businesses are going to fold in times of crisis like this. They just aren't able to adapt so they collapse under the pressure of rapid change. But other businesses emerge stronger than ever before. If you want to be in the group that emerges stronger then you need practical strategies to survive and the support of entrepreneurs who want to see you thrive. And you'll find both and more when you become a member of The Startup Story Inner Circle. Let's fight for your business together. Secure your three month membership for the flat rate of $99 by just visiting thestartupstory.co/VIP today. Again, just visit thestartupstory.co/VIP to start your Inner Circle membership today. All right, now let's get back to our incredible episode.


[19:18]
James McKinney: So now we find ourselves in New York with an apartment that you found from thousands of miles away, or 1,500 miles away depending on where we landed in Indiana, with a cashier's check that was not a scam. So here you are in New York. You're wanting to pursue acting I'm assuming is why you went there so what were those next steps before you got to California? Because ultimately you get to California somehow. So what is that journey to California?

[19:44]
Christina Stembel: You probably don't have enough time so I'll skim over that. There's a lot of things in between. When I went to New York, I'm so glad that I did that. It was just eye opening. There were more people in my apartment building than in my entire town.

[19:56]
James McKinney: Wow.

[19:57]
Christina Stembel: To be 18 years and just experiencing the world in this way, people think I was nuts. You're so brave. I never thought I was brave. I was scared a lot of the time. I got mugged three times when I was there, you know?

[20:09]
James McKinney: Oh man.

[20:10]
Christina Stembel: There were a lot of things, but I'm glad that I did it, that I didn't let fear be like because this is the unknown, you're not going to do it. That's kind of foreign to me. I've always been the person, you'll probably get some hate from this because anytime I say this the press thing, they get hate for this. I apologize in advance but I did not believe that humans are trees and can't be moved, and people get really mad because they bring up mental health issues and things like that, and I get it that people are experiencing different things. But I think ultimately I have a lot of privilege being born white in this country and so I'm not negating all the privilege that I do have, but I also think that if we don't like something in our life we should change it instead of complain about it. That's what New York was for me, and then what every step in between New York and California was me not being satisfied with what was in my life and making a change.

At every step, I didn't know people everywhere I went, anywhere I went. I just did it. I lived in New York for two years. I went to an acting school there, just a summer one. That's all I could afford. And then realized I liked acting, but what I was seeing was that there were a lot of people that were really talented, that had been trying for many decades to make it in this world. I'm a dreamer and a creative person, but I'm also pretty logical in my head. I'm a numbers person too, and I'm like statistically speaking, my chances are not super high making this. I did some auditions and just got my hopes and dreams kind of bashed in a little bit. I was like I don't want to spend 30 years of this.

I remember one of my coaches that was teaching one of the classes that summer, she was beautiful and so amazing. I remember watching her do a monologue in front of the class and being like, I was crying, she's so good. And she literally has had little bit parts on soap operas, and she's probably 50. I just remember in that moment being like I don't want to be 50 and honed my craft and be as good as her, and still just have bit parts in soap operas. I'm not a super lucky person, nor do I believe in luck that much, but I also, I wanted to hedge my bets and go for something a little bit more realistic.

So I moved to Chicago from there. I went to college there, Columbia College there for a very short time. I thought I'd be able to pave my way through that while working full time, and found that was not working very well. I started working at a hotel in Chicago only because where the school that I was going to and where my apartment was, there was one block in between and I had just lived in New York where I had to take like three subways to get anywhere. I was like I'm going to work there, in that hotel, because I can walk there and save two hours of commute time a day, and I needed to do that so I could take a few classes and work at the same time.

Meanwhile, I should have mentioned I had three jobs in New York. I worked seven days a week. I worked two jobs a day, 16 hours a day, except for Sundays I only had to work one. And so I also think that the one thing about me, the one thing that makes me special when people ask what the secret sauce is and why I've been able to be successful with Farm Girl goes back to how I was raised on that farm. When I moved to New York at 18, had to work three jobs. I've never not had a job. At least one, usually two or three. It's that work ethic. That's all it is. I will work harder than anybody I'm in the room with. That's the thing that makes me special. But that's just as an aside.

[23:46]
James McKinney: No, that's awesome. I love that because I think a lot of people, when they have this idea of what entrepreneurship is, they think it's one of those things that you're born to succeed. And it's like no, no, you have to work and grind at it. That's why I love The Startup Story is to unpack the reality of that story. So now we find ourselves in Chicago. You're thinking you want to pay your way through college, you're working at a hotel. We know you're not in Chicago still. What was that season in Chicago like?

[24:14]
Christina Stembel: Yeah. So stayed in Chicago for a big. What I found with hotels is if you just work really hard and have some intellectual curiosity and self-motivation, you'll advance very quickly in hotel management, and so that's what happened with me. So I then started opening, I got promoted really quickly. Several promotions then went and opened a hotel for the Kimpton group, then opened more hotels for the Kimpton group, and then that's what got me travelling around. Opened one in Salt Lake City. There's a small blip where I met a guy, thought I was going to quit my job and move to be close to him in Seattle. That did not work out. And so moved back to Indiana for a very short stint.

Thought I would be there for six months, ended up being there like four and that's all I could deal with, just because I didn't know where to go at that point. Went back to Chicago, and then from Chicago out to San Francisco. So there's just a lot of cities. It was literally just I didn't like where I was at. I would kind of give myself two years at a job and in a city, until I figured out this is the one where I want to be longer than that. None of them had that staying power for me. So I ended up in San Francisco. It was during the dot com number one era. I moved here in October I think 2000. I got paid so much more for hotel management here than I'd ever anywhere else, because you couldn't find people to work and I was in startups.

I was dating a guy out here that I'd met in Chicago, so that was how I ended up out here. He did not last, but I really liked that city. I went to work for a startup at that time. I knew I didn't want to do hospitality long-term, it was just kind of a stop gap that if you just work hard you do well in. it didn't require any college. I wasn't doing brain surgery on anybody so you can do it with some hard work and intellect. Went to work for a startup. It went out of business very quickly like everything was back then. Then did a small little record label thing, just like as a homemade business basically from some assets from that startup. That's way too long of a story. Didn't work out. Then went and worked at Stanford University from there.

The reason I went and worked there was I just found the job on Craig's List. It was building out a catering department within the university, and I thought my skills from hospitality can transfer to that, and I thought at that point that's when I kind of got bit with the bug of wanting to start a company. I thought I can go do this job and while I'm doing it, it won't be as intense as hospitality. What I learned from hospitality was hotels never close. When we were opening hotels, I just remember my favorite story from it is in Chicago opening the Hotel Monaco. It was the week before opening and we couldn't figure out how to lock, they'd just installed the revolving door in front, and we couldn't figure out how to lock that. Because you never lock it. You can always enter a hotel. It's gotten a little tight with security now, but back then you could always, it's 24/7, holidays, everything like that. I didn't want that intensity and I thought I can't start a company.

All these people around me were starting really, in 2000 and 2001 even though most of them were going out of business, the thing I saw was that everybody no matter what your background, no matter what you had done, everybody was thinking of new ways to do things. And that was super exciting to me. I was like whoa, that's a first time I thought I could do something like this. I could take my creativity and even though I need to save some money, but I don't need a fancy college education for this. In fact, a lot of the best people, a lot of them are dropouts from like Harvard. I classify myself in the same category as them which I probably shouldn't, since I never would have gotten accepted to Harvard, but same same.

[28:09]
James McKinney: Same same.

[28:10]
Christina Stembel: So that was like when I got the bug, and I thought by going and working at this catering gig it would be less intense than hospital that I knew I didn't want to do long-term. So I started that job. It was not less intense, but the great thing about that job was I had horrible bosses there. Horrible. I had to work for some really chauvinistic, condescending people. I learned how to get a really thick skin with that. I learned what not to do as a leader from that experience. Also though what I did get from that experience was I got to build a company within a company. It was a new department that I had a lot of control over like how am I going to build this catering department within this university? And so while getting a steady paycheck it gave me some room to kind of hone my entrepreneurial chops, while not taking the big risk myself. And it did well. It did really well.

I built that catering department into if it was at retail value, which it was not in the university, it would have been a $4 million operation within two and a half years. So it was pretty good. It was better success than I had at Farm Girl as far as revenue goes the first couple years. But that was a good kind of foray into it. Then from there, I needed to get away from it was just a really toxic department and boss situation. So I needed to leave that position just for my sanity.

So I went to another department at the university, which just still blows my mind that I even got this position because I was so underqualified on paper for it, which my boss liked to tell me, you know that toxic masculinity that my boss had, that I was not qualified for it. But I went to become the director of alumni relations, and then eventually campaign outreach as well, for the law school at Stanford University. That was a great confidence booster because everybody else in those positions had multiple degrees from Stanford and other fancy schools, and the fact that this late 20s I think I was at that point, a kid as most people would look at me, when most people were 50 in that role, was given the trust to do that. I did pretty well there. But I stayed there I thought it would be a two or three year thing.

Every single job that I've taken now since 2000 when I moved to San Francisco was with the intent that I was going to start a company on the side. And I thought now this is going to be at some points I had 150 plus team members. The catering thing I needed something smaller and I got a team of like 4 at this new job, 4 to 6. So I thought now I'm going to have the time to start a company on my own. But what I realized about myself and this is probably true for a lot of people that are listening that are starting companies or want to start a company, is they probably are that type A personality that is always going to make a 40 hour a week job an 80 hour a week job by doing everything they possibly can. I treated it like it was my own company. So I never did start a company while I was doing that, and I ended up staying there in that role for five years, overall seven and a half at Stanford. I wish I hadn't. Looking back, I wish I would have left three years before at least, before I did because then I'd be three years younger than I am right now.

[31:23]
James McKinney: Real quick. I don't want to leave the Stanford years just yet, but when did you end up leaving Stanford? Because that was your last job before Farm Girl, correct?

[31:33]
Christina Stembel: Yes. My official date that I left was June of 2010.

[31:39]
James McKinney: So the idea that you wish you would have left a few years earlier, well at that point it was everything was hitting the fan in '07 and '08. So it was probably best for you to wait that season out on the recovery side. But one of the things you said as you were walking through why you took a job at Stanford for catering and then why you moved to the alumni relations was you wanted to start a business. That's just a big sentence without a lot of detail. What were you leaning towards as far as industry or problem to solve? What was this business that you thought you wanted to start? Because again, that's just a big claim. I want to start a business. Of what?

[32:24]
Christina Stembel: It's a great question because there is no answer, because the only answer I have is at least 40 different industries. I would carry an idea book. Actually I just found some old decks of mine that I saved that have like these old business ideas that I would make these creative decks about the problems I was solving and how I was going to do it. But funding's, like soiree and pockets and guy check, all these were in different industries. Most of them had some kind of creative component to it. I really wish I had the brain to do a software idea back then. I think my life would look really different right now.

But it was just every problem that I encountered, and this is still the way, every problem I encounter today even I come up with a solution to solve it. I come up with a business around a solution to solve it. It still happens all the time. I mean its slowed down now that my focus is so singularly focused on Farm Girl pretty much, but I probably have I don't know between two and four a month still. And right now I'm thinking about what my next one is going to be. So I'm constantly thinking, and I know it's not going to be perishable. I'm hoping it has a software component to it, but it never was a certain industry. It never was the story. And I'm really passionate about this because as women we get pigeon holed a lot.

There's this just generalization that occurs all the time with female owned companies and female founders that we must have had a passion and turned that passion into a business. It's like oh, you must have grown up frolicking in your grandmother's garden and just loved flowers. No, the truth is I thought flowers were a waste of money. I hated the entire experience and I was trying to solve a problem in that. I knew nothing about flowers. That's the romanticized view, the story that people want but they never do that with male owned companies. Every single company in our competitive set is owned by men, 100%. There's not another female founded large scale B to C ecomm company in the floral space that's owned by a woman.

[34:35]
James McKinney: Really?

[34:36]
Christina Stembel: Yes, yes. Even though 80% of people that buy flowers are women buying for women. So makes no sense, yet that's one of the reasons why we're successful, one of the many. But it's so fascinating to me to watch this, and I just challenge everybody listening to go into any industry like fashion or makeup, or things that you would think would be female driven. Go see who actually runs the companies. Most times, 99% of the time it's men. Then go read interviews or listen to podcasts where they're interviewed, and see how many of them are asked if this was their life's passion, if they just love flowers, what's their favorite flower, what's the favorite makeup, what's the favorite hair product. You know?

No male was ever asked that. It's always they're doing this for business. And every woman is asked that, and we have to come up with a story because that's how we get press. Why can't we just say, "No, I'm a really good business person and I saw a gap in an industry that nobody had addressed, with no recent innovation since the mid-nineties. And I saw a gap that I could fill in a better way. I thought I could take a new methodology and bring it to this space," which is what I did, but that doesn't sound as great as, "Oh, I just love flowers, and when I would send my mom flowers I didn't love it so I thought I would fix it." I think that as women we should be able to be loud and proud about the fact that we are business people.

[35:56]
James McKinney: Oh, I love that. And when I think of the people that are asking that question, the idea that you must have been frolicking through your grandmother's garden and love flowers. I have to believe that those are journalists and not entrepreneurs just wanting to have the discussion, because I can't imagine thinking that that is how you came up with it. Especially covering the ground that we've covered in your story, but I do have to ask the problems we want to solve tend to be because they're either problems that we have firsthand experience with or within grasp experience. We saw a problem, we see an opportunity to solve it. So how did you come into this space being surrounded, again Stanford and in Silicon Valley where everything was technology driven, how did you come across this gap in the direct to consumer floral space?

[36:46]
Christina Stembel: It was a real problem that I was experiencing, but not in the direct to consumer side. I was experiencing it first in the event side. So one of the departments I oversaw did events for the law school and initially my first thought was why are spending so much money on flowers, especially we hadn't even come through it yet. People thought I was nuts to leave a stable job in 2010 when the economy hadn't rebounded yet, but just coming you know in '07, '08, '09 all of the budgets across the university were cut, and especially the budgets of the departments that I oversaw, which did events and programs for the school. So those are first cut, first tier cut.

So I've always been scrappy and I was able to save a lot of money, so much so that the controller's office contacted me and thought we were fudging our numbers even. I had to go like defend them and how we were able to do so many events with so little money. It was because when I went through our expenses and our P&Ls for these events, I was kind of mortified to find out how much we were spending on the decor and also the food and beverage for these events. Let me get these two things in check and we can do double the events, which I worked for a very inspiring and also just little crazy dean that wanted to do… he did twice as many events and twice as many visits than any other dean at the school. So I needed to be able to figure out how to do, to keep up with my boss the dean, and do the number of program and events he wanted to do with half the budget of another school, with half the budget and half the events even. So I needed to really do something with that.

So when I was researching, I was like we're spending for the decor line item, I mean the food and beverage I understood although that was pretty easy to get in check just by buying direct on wine and stuff. I was amazed we weren't doing that. But for the decor I was just like we're spending between $100 and $200 a pop on these centerpieces, and ordering like 50 at the time, and then they just go home with the servers at the end of the night. Why are we doing this? So first thing I did was start doing our own flower arrangements, literally in the parking lots just putting them together quickly and easily, going and buying the flowers myself from the flower market. But then I was like, I'm able to do these for $1,000 instead of $20,000 for these big events. And that led me down this rabbit hole of research on weekends, because I was the dork that came up with business ideas every week, going to all of my friends and family with like, "What about this idea?"

So in that research I started in the event space and very quickly transitioned that to the commerce space because what I found was the event space was very saturated. There's a dime a dozen on event florists that are doing it from their garages, and studio florists but it's really garage florists. The average amount that they would make is about $250,000 a year and I was like that is, when I had all these boxes I wanted to check and I knew I would not start a business that didn't check at least most of these boxes. One of the biggest things that I wanted to accomplish in whatever business I ended up starting was I wanted it to have the ability to grow really big. I didn't want the total available market size to be $1 million is all I could get. That wouldn't be worth it to me. If I was going to go forward, I was going to go big, you know? And I wanted $1 billion. And so until I could find one that had the capacity to be $1 billion I was not going to settle for a smaller one.

When I moved to the ecommerce side though from events, that's where I saw the opportunity. Wait a second, it is now 2009. I was researching this and there's four companies that make up ¾ of the entire space, and they're all doing between $600 million and $1 billion a year in revenue. Now between more things than just flowers, but still I'm just like there's so much room then, and the last innovation, the latest "newness" in the industry was in the mid-nineties at that point. Wait a second, people are disrupting toothbrushes around me here, nobody has touched this?

Now I understand why people haven't touched it, because it's such a hard industry but that's where I saw the gap to start. Then that lead me down the trail of every time I send my mom flowers, which is twice a year, how do I feel as a consumer? I hate the whole experience. I bet a lot of people feel that way, so I made research on how do people feel about these ecomm companies, and then I found that it was really bad how they felt about these ecomm companies. So that's what made me think a-ha, I have an amazing opportunity here. Now let me try to create a model that would fix all these problems, and so that's how I came up with the Farm Girl model.

[41:12]
James McKinney: So when we think of that question though, let me think of a model to solve these problems, what was Farm Girl 1.0?

[41:24]
Christina Stembel: Farm Girl 1.0 was In & Out Burger for flowers.

[41:27]
James McKinney: so just a few menu options.

[41:30]
Christina Stembel: Fewer better, yep.

[41:31]
James McKinney: Fewer better. Really good meat. I'm just kidding.

[41:33]
Christina Stembel: Yeah. Highest quality and great customer experience, and it started out with just one option. You don't get to pick at all. In & Out at least you get single, double, triple, and do you want fries and a shake or a drink. With me, it was like you get the daily arrangement, whatever I'm making that day. Whatever I'm serving up is what you're getting. And you can either pick it to be the presentation to be different. You could get it two ways, so my single double was you get it either wrapped in our signature that we created burlap wrapped, upcycled coffee bags which I came up with after 14 different ideas, that I polled all my friends to see which ones they liked and that was the one everybody liked. We're the OG burlap wrapped bouquets. We had a lawsuit against that which I lost, and so that's why you see that with a lot of other companies. Still a little bitter about that.

[42:21]
James McKinney: When you said loss, what you couldn't trademark that?

[42:26]
Christina Stembel: Yeah, we trademarked it. I didn't know about trade addresses early enough. So this is when a friend told me, "Get a lawyer early on," I was like I've got $49,000 of total money in my bank account, and that's to live on and try to make this business work for two years, I'm not going to spend that on a lawyer. Probably should have gotten a loan if I could, or begged, borrowed, or stealed to get a lawyer early on. Because if I had known about trade dresses I probably could have protected that, but by the time I knew about it we had starting seeing similar companies that were utilizing the burlap wrap as well. So I filed for it but then they fought me. They had deep pockets with lots of investors here in Silicon Valley backing them to fight me on it, so I spent a fraction what they spent, so at least I made them run out of money a little bit faster. The company that we fought is no longer right now business even, so that's a little insult to injury.

[43:13]
James McKinney: Oh man.

[43:14]
Christina Stembel: But anyway, that's okay.

[43:16]
James McKinney: So 1.0 was limited menu, great customer service, a few iconic pieces like the burlap option, things like that. So let's talk about customer acquisition. This was in 2009, 2010. Really from a technical perspective all that we could leverage potentially was Google AdWords. Facebook ads wasn't a thing yet that it is now. How did you acquire your first early customers with that limited option? Because I'm also trying to think, and you would probably be able to answer this, what other customer experiences were around at that time? I'm thinking is this the Groupon era where-

[43:54]
Christina Stembel: It is. It's the Groupon era. Living Social, Groupon, that's the era that we're talking.

[43:59]
James McKinney: So this idea of maybe a daily newsletter where it was like here's my bouquet of the day type thing. Is that kind of how you marketed it?

[44:05]
Christina Stembel: Didn't even do that. So in my original financial model I had 24 cents per unit allocated for marketing. I obviously was always on the operations side, never on marketing. I thought marketing was a waste of money. I was like you want me to spend what? I could hire somebody before I'm going to do that. So I had no marketing dollars to spend. I didn't spend anything on digital at all to start with for the first two years.

My entire marketing spend was taking flower arrangements to coffee shops all over the city, and getting them to let me put them out on the bar where everybody is waiting for their drinks with little marketing cards that I made myself. I taught myself in design well enough to make these little cards that cost me like 1/3 of a cent each to print at Vista Print or something. So then I would go back every week and I had my little notebook, and I'd say, "How many?" and I would count how many cards were left to see if it was worth putting another bouquet out that week. If there were like 40 or 50 taken, it was totally worth it. If there were 10 to 20, it was like nope, not worth my $20. Now, if 20 cards were taken for $20, so worth it right? Back then I was like no, then I'll go find a different coffee shop in that neighborhood. And so I had coffee shops all over the city that would let me do this, and that's 100% how we grew.

[45:12]
James McKinney: That is unbelievable and probably one of the most incredible early marketing stories I have heard on the show. That is awesome. Oh my goodness, that is so like gorilla style. I just love it so much. How did you come up with that idea? Because again, you're in Silicon Valley right? I mean, I say it often being pickled by the juice that we're sitting in, you're in a tech hub and your coming out process was I'm going to do something that is direct to the consumer in a tangible way. How did you come up with that idea?

[45:49]
Christina Stembel: I can't take credit for it. So my ex-husband was my boyfriend at the time or fiance, boyfriend I think at that time. And he has worked in marketing his whole life, and so he came up with that idea. So it started with our neighborhood Starbucks and he was like, "You should put a flower arrangement out here." And I was like actually really introverted and I was like, "Oh, I have to go ask them if I can do this," and it was really hard for me to come out of my shell and do that. But he was right. He was absolutely right. It worked.

And all of it was that and me going to so many networking events at night, which is also an introvert's worst nightmare. There's nothing I would like to do more than sit at home in my sweats watching TV, but instead I was at like three networking events every night, having to go up to people in crowds and be like, "Hi, I'm Christina. How are you?" which is not my cup of tea. But I would go and I would take flower arrangements to every single one of those networking things and I'd just put it on the reception desk with cards. Wouldn't even ask a lot of times, I would just put it out and people would think they were meant to be there, when they weren't looking when they were helping someone else. And then let people take cards from there. And so that was it, that's all I did for the first two years.

In 2012 once we could afford a little bit of marketing spend, it was really small. This was when I will use the word "luck." We were lucky. That was back in the day when Facebook marketing had not yet taken off, it was just starting and the big companies, the big traditional ones had not yet transitioned from the normal channels that they spend their money on to digital channels. And so I could acquire a customer for under $1 for like two years.

[47:20]
James McKinney: Oh my goodness.

[47:21]
Christina Stembel: Now I'm like I wish I had more money back then. If we had been able to raise capital, we would probably be doing $150 million a year now in revenue because I just didn't have much. I was like well I have $1,000 a week so that's how many customers I can acquire, you know? So we were very fortunate. You can't do that now. We now spend $10 to acquire a customer, which is still unheard of and amazing.

[47:43]
James McKinney: Wow.

[47:44]
Christina Stembel: But you'll never get the 98 cents again.

[47:47]
James McKinney: I know. Gone are those days. When you went to those networking events, and I had someone ask this question. When I laughed so hard when you mentioned that because I love those types of environments. I'm such an extrovert it's absurd. But when you went there, did you present yourself from a technology perspective or a florist? How did you present Farm Girl Flowers?

[48:09]
Christina Stembel: Technology always. I never presented as a florist. In fact, I get really upset when everybody calls us a florist. I'm like we're not a florist. I know I have to classify as that in a lot of things in any drop down menu, but we're not that. We're an ecomm company that uses technology, so I always present it that way. Those networking events actually messed with my head though. It's another thing that once I figured out how messed up my head was from those, it gave me such a freedom. Because at those networking events, especially here in Silicon Valley, you would introduce yourself and say what you do, talk about what you're doing, and the first question out of everybody's mouth was, "Who's invested?"

[48:47]
James McKinney: Oh yeah.

[48:48]
Christina Stembel: Every single time. They don't care your name, they don't care anything. Like did you get Fourrunner? It was like not even like you couldn't say friends and family. I didn't have friends and family, I totally bootstrapped for myself, but even if you said a low level, unheard of PE firm, they would not have much respect for you. It's even like a class system of who has invested in you. And as soon as you say that you're bootstrapped, you were invisible, and they would immediately look over your shoulder to find somebody more interesting and that could help them out more at that event.

And so it really got in my head that like I had to raise investment or I wasn't going to be taken seriously. It's so wrong. We have over glamorized. We talked about last time, we have over glamorized this world of VC and private equity and capital. Literally we need to start looking at it like banks. Like banks don't have this sexy cool things. Nobody thinks of a bank and says, "Oo, they're so amazing," you know? That's what it is, and it's a bank with big strings, huge strings. And so we need to stop this and we need to like…. We need to be putting more emphasis on businesses that are profitable and are building good businesses and creating good jobs and good values, and not these ones that… I remember I did a speaking gig a few years ago that I had to follow this guy that his entire presentation, all it was talking about what product they launched to get now on Series C and then on Series D, and at the end of the presentation I had no idea what his company did, like none. And I'm a pretty smart person, and I'm like I had no idea what you even do. That's literally like your entire presentation is about how amazing your company is because of how much money, how much debt basically that you've taken on.

[50:32]
James McKinney: it almost becomes the validation metric that is used for a company. And VCs drink their own Kool Aid. Like so many VCs will get in on something. I don't need to bring up Theranos, but it's just like so many people drink their own Kool Aid and without even thinking for themselves.

[50:48]
Christina Stembel: Or WeWork. Let's talk about WeWork because everyone goes back to Theranos, and WeWork is like everyone knew for so long, so long out here. And yet nothing. Still people were like, "Oh, it's WeWork."

[50:58]
James McKinney: Yeah, it's like there is truth in saying numbers don't lie, but you have to look at the right numbers.

[51:04]
Christina Stembel: Anybody can make any number up. The other thing is I was told so many times that I needed to inflate our numbers, even by the PE firms that we were talking to that said that they were going to invest but they needed me to inflate my numbers. I'd go back to talk to some smarter people than me at this, and they'd be like, "The reason they want you to inflate your numbers is so that way you won't hit those numbers, and then they have control and you don't have the control any longer." I can make a spreadsheet read anything I want it to read and it's all bullshit. It's all bullshit.

[51:32]
James McKinney: Yes, 100%.

[51:33]
Christina Stembel: You know? So we've never not come in higher than what we projected. We've always come in right around there but always a little bit higher or a lot, blow it out of the water. I've way under promised and over delivered, and vice versa, and that's not the way of Silicon Valley.

[51:50]
James McKinney: I don't want to over glamorize being undercapitalized or over glamorize bootstrapping, while it is the ideal method to go, self-fund everything because obviously you're going to maintain ownership of everything. It's also so hard when you're just playing for singles, to use baseball analogy, you're just playing for singles and doubles, and hoping for some type of homerun. So can you walk through the Farm Girl Flowers story, knowing that it's bootstrapped, knowing that you haven't received venture capital even out of 104 no's. We know that you bootstrapped it but at the same time it has been a tremendous effort for you to bring it to where it is today. So can you walk us through in some type of timeline of customer acquisition and revenue metrics, and just kind of the growth of Farm Girl to where we are let's say December 2019. Let's not go into 2020 yet.

[52:48]
Christina Stembel: Okay. I really appreciate you saying that because almost everybody tells me how lucky I am that I'm bootstrapped, and it never, not one day of this 10 years has felt lucky to me, not one. There's things that are lucky like the customer acquisition using Facebook early on and things like that, but not one day has been luck. It's just been, I mean I went to bed this morning at a quarter to 4 am, still today. So I work 100 plus hour weeks. I am going through a divorce right now. I don't have any children. I have made so many choices that this is my thing, this is the one thing I have time for in my entire life. I haven't been a good friend to a lot of friends. There's a lot you give up to bootstrap a company. It is not glamorous.

And really quick before I get into that. I think the abject lesson that goes with that best is last year I was sitting at a lunch table with really amazing CEOs. I was definitely the small potato at the table. These are like amazing names that you can't even imagine, that I'm like I'm so lucky to be sitting here with these people. And the topic was investment and what rounds people were on and what they were doing with that, and going into the financial insecurity before speculating we were going to have a downturn at some point, before we even knew that 2020 was on the horizon. All of them there when my story is bootstrapped, all of them were like, "Oh my gosh, you're so lucky. You don't have to deal with board meetings. You don't have to deal with not making your numbers. You don't have to deal with any of this. And look how much of your company you own." I own 99.86% of the company, you know? They went around the table and not a single person there owned more than 6% of their company. They're like, "See? This is why you're so lucky."

I'm look at these people that I had seen on the cover of every entrepreneur, every business magazine, Fast Company, all of them, that my dream is to be on the cover of one of those magazines. I'm sitting there being like yes, and how many of you wake up at 3 in the morning or haven't gone to bed yet at 3 in the morning because you're worried about payroll the next day? How many of you have done that? How many of you are the CFO, the CIO, the CTO, the CMO, the COO, the CEO? How many of you are the entire C suite of your company? No one. You have people that help you that are way smarter than you. You have millions of dollar sitting in the bank where you're not worried about making payroll. While I understand the grass is always greener for everybody, so like for them it looks great to not have board meetings. For me it's like I would welcome a board meeting and I don't have to worry about payroll.

[55:26]
James McKinney: Yes, yes.

[55:27]
Christina Stembel: And have really smart people to help me with this. So I think that defines what you just said really well. Okay, so the trajectory of Farm Girl. Early on first full year, I'll do with numbers because I have no board so I can tell you numbers, you know? So first full year we did $56,000 in sales from my apartment. So the first two years, I launched Farm Girl in 2010. I quit my job June, like I said, I launched in November. So spent those few months getting a website together, figuring out how to make flower arrangements, find the flowers and things like that. And then launched it from my dining room. Did the first two years there, $56,000 the first year. $276,000 the second year which was max growth so that was amazing. Yeah, now if we only bill $276,000 in a day it's like whoa, so different world.

But then my landlord found out I was running a company illegally from my apartment and I got a pink slip on my door, and never want to get evicted from your place in San Francisco because rent control. So had to get the business out very quickly. Moved it into the San Francisco Flower Mart which is one of the other, worst things I ever did, worst decision I made for the company because then everybody in the industry here saw how much we were doing as we grew, and then we had a big target on our back. We got blackballed from a lot of places. It was just a really bad experience there. Hired my first team member. Went from $276,000 to $920,000 that year which was really good growth.

[56:56]
James McKinney: That's incredible.

[56:57]
Christina Stembel: Yeah, that was the year we started with tiny bits of marketing then, and that helped. We saw that helped a lot and we started to get, that was the year I didn't know if we were going to make it. I didn't have, I'm barely making ends meet in my apartment how am I going to afford rent now? And then I need to hire somebody, so that was the whole thing of you've got to spend money to make money was really true that year which was good. And then went from $920,000 to $1.9 million in revenue, to $4.4 million.

[57:24]
James McKinney: What was the jump there? You seem to be on track for you start 5X then you go 4, and now you're kind of doubling. But the double is still a significant jump each time. Is there something you learned in that year that helped accelerate from $1.9 million to almost $5 million?

[57:41]
Christina Stembel: That one was really I would say digital marketing that helped us a lot. That's when we acquired customers for under $1. It really was the digital marketing that year. Meanwhile, when I started this I really thought I'd be able to start this company, prove out the concept for two years, and then launch national delivery, but it took a lot longer to launch national delivery than I thought because it costs a lot of money to ship flowers and I had no idea how much. The wrap rates on shipping flowers is like $200 a box and I couldn't subsidize that much. So I was spending a lot of time trying to figure out how to get national delivery going. So the next year is when we were able to go from $4.4 to $10.2.

That was a horrible year. We grew too fast. I didn't spend any time on team culture. It was too much growth but that's because we added on regional delivery. We went outside of San Francisco. Up until that point we were only providing service in a small space in the 7 miles by 7 miles that is San Francisco, and we had reached a lot of saturation there doing almost $5 million the year before, and then we expanded to the rest of the bay area like the peninsula, South Bay, North Bay, and East Bay. From there we also did a small number of California shipments as our test with a regional shipping company that we couldn't afford UPS or FedEx yet, but we could do with a smaller one here.

And then the next year we launched national delivery, but we could only do it for 200 packages a day or I lost my shirt because we were subsidizing about $18 per package. So it was very slow. It started with 50, then very quickly we could afford 200. That same year, we opened a similar kind of like a mirror of San Francisco in LA, and that failed miserably. We launched national shipping and LA at the same time, and I thought LA would grow much quicker than national shipping because we were doing zero marketing for national shipping, because I had to take all that marketing dollars… Marketing dollars was always the bucket that I pulled from in order to do expansions. And so then I take all my marketing dollars, take it out of marketing and put it to this.

Within four months I saw that there was no way LA was going to work. It was too spread out. Deliveries took too long for what people spent. I could ship one to them in LA for $6 in the city, yet it's costing me about $32 or so to deliver something to them so I needed to get of this. So I got rid of LA and then I took that money and put it into marketing for national shipping, and that helped grow that quickly. Too quickly where I had to cut it. We sold out of Mother's Day that year in four minutes for national shipping.

[60:14]
James McKinney: Wow, wow.

[60:15]
Christina Stembel: We just, I could only afford 200 boxes though for subsidies. So then went from let's see $10.2, that year we slowed it down and we did right under $15 million with 14.7 or something. It was the slowest growth we've ever had as a company, but that was also because 2016 the year before was just a crap show. It was horrible. We had to move out of the Flower Mart, move into a warehouse, so we had to move it ourselves on a weekend and launch it. The week before Mother's Day. People were hating me. It was like I didn't spend any time on culture. We had to stop and rebuild, and structure the company how I wanted to structure it. Spend a lot of time rebuilding the culture to where we needed it to be. So we intentionally, I didn't spend any money on marketing for six months in order to focus on the culture. That was that. It was a strategic slowdown of growth that way.

Then that helped us to be able to accelerate again because we had gotten the company where we need it to be and went from $14.7 to I think it was like $23 point something million, and then last year came in at $32.7 million.

[61:24]
James McKinney: That's incredible.

[61:25]
Christina Stembel: Yeah. This year we're on track for a lot more. We're on track for about $60 to $65 million if the economy doesn't crash.

[61:30]
James McKinney: So up until 2016 it sounds like your growth in revenue was attributed to the regional market in which you could serve, whether it was just San Francisco, you went regional, you went to southern California, and then subsidizing some national. So it was all kind of in your service area if you will. What do you see, when you think of the growth you've seen over the last three years how has that occurred? Because your service area isn't really beyond, continental US is all you really serve right?

[62:11]
Christina Stembel: Yes.

[62:12]
James McKinney: Okay. So being that your area has stayed in the continental US, I assume you're not subsidizing national shipments anymore?

[62:20]
Christina Stembel: We're still subsidizing. We subsidized over $3 million last year.

[62:23]
James McKinney: Still subsidizing shipments, because UPS, FedEx is just crazy expensive.

[62:28]
Christina Stembel: Absolutely.

[62:29]
James McKinney: Talk to Amazon. Maybe they can figure that out.

[62:31]
Christina Stembel: I can't wait for Amazon. Right now currently today, I'm in a huge fight with FedEx as well. That's a whole other story.

[62:36]
James McKinney: Well I think you shared about that on Startup Story LIVE when they took the packages off your plane, yeah. I can't even imagine.

[62:41]
Christina Stembel: They did it again today. We had another over 2,500.

[62:44]
James McKinney: Well if you want to hear that, you're going to have to check out Startup Story LIVE episode with Christina, because she unpacks that. So it's all around the market in which you serve. But you had such an incredible saturation point with just San Francisco. So I think a lot of times, and I'm asking this question from a perspective that when we think of growth, a lot of times we kind of go the route that you went. Why not take the San Francisco model where you are the flower brand of that market, and then like jump into New York and do the same thing in just New York, and then maybe jump it down to Miami or something? Just kind of follow the metroplex. Yeah, LA is a mess. Traffic is horrendous, there's a lot of reasons that's a challenging market, a lot though it could be solved for. But what try to go nationally when you have to subsidize everything versus just filling out these metroplexes and just kind of building out from there like you did San Francisco so well?

[63:39]
Christina Stembel: Because you're going to subsidize even more doing satellites in every city. So when I tried to raise capital in 2015-16, I was told if I could prove up the model to do just what you said, because on demand delivery was the hot thing with Munchery and Sprig and all these companies with food, proving it out for food, and getting so much money which also makes me realize that VCs are not the smartest people in the room. Come on.

[64:03]
James McKinney: That is true.

[64:04]
Christina Stembel: It's so much money for that, and I was told you have to do on demand delivery. American consumers will not wait one day for things. You have to be able to do it within an hour. And so I went back and I did like 14 different business models to see if I could figure out how to make that work. There is no way. There's no way unless you're just going to fudge the numbers to show that you can actually prove out that model and make it work. None whatsoever. I have no college degree and I can tell you that. I'm not a super analytics nerd and I can tell you that by doing some really basic Excel spreadsheets. It just doesn't work.

So when I look at opening satellites, what we do is so hard, like so hard. We have to design bouquets that look beautiful every single day. It's not like we make a sweater, we make a pattern once and then we make hundreds of thousands of units. Every day we have to rely people and the moods that they're in when they come into work, and they have to make something beautiful, and the quality of the flowers, and they're highly perishable coming in and they're highly perishable coming out. They have to be rushed and cold chain and all of that. It's so hard what we do.

To replicate that around the country in major metro areas, that is adding so much complexity and so much expense to it, and for what? For let's say it's the same as if you open retail doors. What are you going to get, $2 million per door? No, I want to go for $1 billion and how I do that is by opening eight distribution centers around the United States to get 86% shipped ground overnight instead of air overnight. And by taking it to ground overnight, we do have to do trucking to other areas and then flying out. The complexities on the operations side would blow your mind. They blow my mind daily on what I'm trying to figure out how to do this. But you do that and if we could do this well, then we get it 86% shipped ground overnight instead of air overnight, which takes it down to about $12 instead of it costing me $32 per box to ship.

So that's how we do it and then operating 8 larger facilities, or even doing that with what's happened this year, that's only changed our entire distribution channel and model, and doing that with other partners and things like that so we're definitely changing and revising that a bit. But that is way better to me and easier to achieve that $1 billion mark than opening in like 30 different locations around the United States, which sounds like hell to me.

[66:15]
James McKinney: That's awesome. If you want to hear more about how Christina navigated the coronavirus, we're not going to unpack it in this episode because we covered it in great detail at Startup Story LIVE, so again go back to her founder session at Startup Story LIVE to unpack how she navigated the season. It's just incredibly brilliant. But as our time comes to an end unfortunately because I feel like we could go on for so much longer, if we had this episode, record this session again in let's say five years, what do you hope the narrative of Farm Girl Flowers is at that point?

[66:48]
Christina Stembel: I hope the narrative is wow, they have built such an amazing company. Her and her team are just doing amazing things and have built the company that I'm excited to buy from or sell to or work at, depending on what your perspective is. That's worth more to me, and hopefully the revenue follows that. I'm hoping in five years we're in the hundreds of millions mark with higher profit margins than we currently have, and still have a brand that resonates with consumers around the country and maybe even world at that point.

[67:22]
James McKinney: That's awesome. And I will say first hand, I am already sitting in the posture of wow, that is an amazing company that she has built.

[67:30]
Christina Stembel: Aw, thank you so much James. That means the world to me.

[67:34]
James McKinney: So there's a couple questions that I have to ask every founder, the first one being the idea of just the title and role of entrepreneur. Do you believe anybody can be an entrepreneur or is it something genetic in our makeup?

[67:48]
Christina Stembel: I think anybody can be an entrepreneur that is willing to work hard enough for it.

[67:53]
James McKinney: Well said. Awesome. Also, you know one of the things that I love, and if we had to trim down the show to 20 minutes this would be one question that does not get removed, and it's about gratitude. You have worked 100 plus hours a week for many years, but even with that we don't get to where we are today on our own. It really is the lifting from others, and sometimes people just holding us up when we just want to completely quit and crawl under our desk with some tears and wine maybe. And so when you look back along your journey who are all the people you point to with such tremendous gratitude for their contribution to where you are today?

[68:31]
Christina Stembel: First my parents. They're amazing and they taught me hard work and so many values that I have and I hold dear to my heart, and that have helped me so much in this journey, so I thank them so much for not spoiling us and making us learn the value of a dollar, and how to treat people around us. They taught me that.

And then secondly and I can't say this enough, I'm so grateful for my team. The biggest reason why I wasn't able to raise capital this last time was because people were telling me it was because my team doesn't look the way they want them to look basically. For that I take such pride because my team is the hardest working team with the most heart, and I will stand by that. I have never met such amazing individuals in my life before. We don't give equity and all this thing that people in Silicon Valley give and the fact that every single one of my management team treats Farm Girl like it's their own company, it's just amazing to me, and they care so much. I would not be here. I can't build a $60 million company on my own. That's not possible. So it's the people around me that are doing it with me, and doing it better than me in a lot of ways. They're just amazing people, amazing human beings.

And then lastly our customers. I will stand by this as well. I am so grateful for our customers. When everything happened this year, and they just rallied around and voted with their dollars. They are the reason that we're here and I just couldn't be more grateful for them.

[69:59]
James McKinney: that's awesome, I love that. Thank you so much for sharing all of that. And our final question with your time here on The Startup Story, we've been talking to tens of thousands of entrepreneurs and want-repreneurs. Those that have a business and might be frustrated their current state and lack of traction. Might be super discouraged with the current pandemic that we're all navigating through. Or maybe it's the person who's got a 9 to 5 and a book full of dreams and ideas, maybe it's 40 ideas a week just like you had, but there's something in their mind that's blocking them from actually moving forward on it. Or maybe it's the defeated entrepreneur that has tried time and time again but continues to fail, and maybe they just lost everything right now because of the current situation. Whoever it is you want to speak to, we've been speaking to tens of thousands, I want to bring the conversation down to just you and one of them. What do you have to say to that one? And you can choose any of the personas that resonates with you, because I know you have played one of them at one point of time in your life. What do you have to say to that one person?

[70:57]
Christina Stembel: If you are the entrepreneur that is scared to start a business right now because of the uncertain economic conditions that we're in right now, I would say go for it. Do it. Do not be worried about that because all the statistics show that businesses that are started in a down economy are the ones that have the highest success rate of any business. Look at this as a great opportunity and a blessing. This is a huge blessing that you're going to be able to acquire talent that you would never, ever be able to get starting a company before, and you're going to be able to have rents that are far lower than you'd ever pay. Look at all of the positive side of what's going on right now as your opportunity, the perfect opportunity, to start your company right now and do it.

[71:44]
James McKinney: Once you've had a few moments to process all the value Christina brought us in this week's episode, please hit me up on LinkedIn, Facebook, or Instagram and share with me your thoughts on this episode. In fact, as a thank you to Christina for sharing her startup story with us and all the value she brought to us today, visit farmgirlflowers.com and buy something. Buy anything. Buy it for your spouse, significant other, your child, anybody. Just buy something as a thank you to Christina and the Farm Girl Flowers team. The challenges that Farm Girl Flowers is navigating right now because of the coronavirus is huge, so let's support another small business and let's visit farmgirlflowers.com. Remember, entrepreneurs support other entrepreneurs so also make sure to visit thestartupstory.co/VIP to join other likeminded entrepreneurs that want to see your business succeed. And now for my personal ask.

The Startup Story community has been so incredible about sharing our podcast with others, but we have more stories to tell and more people to reach. We too are a startup and word of mouth is everything, so please follow us on Facebook and Instagram @TheStartupStory or on Twitter @StartupStory_. If you're on LinkedIn, please search for The Startup Story and follow our company page. LinkedIn is a really powerful way to raise awareness of the show. But the most impactful way you can help us grow our audience is to leave a review on Apple Podcast. Or if you listen to the show via Spotify, then please simply share the podcast directly from your Spotify app or wherever you listen to the show.

These simple actions can make a huge impact in getting these amazing founder stories out to the masses. And please make sure to tag or mention The Startup Story when you do share so that we can connect with you and say thank you directly. I'm so incredibly appreciative of the fact that you listen to the show each and every week, and I look forward to sharing these amazing stories with you every Tuesday with hopes of encouraging and inspiring you to start your story.

If you like this podcast and are thinking of creating your own, consider talking to my producer Danny Ozment. He helps thought leaders, influencers, executives, and authors create, launch, and produce podcasts that grow their business and make a real impact in this world. You can contact him today at emeraldcitypro.com/startupstory.

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June 09 2020
Christina Stembel, founder of Farmgirl Flowers

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