Anthony Coombs knew he never wanted to work for someone else at age 16, when his mother, a single parent, got laid off from her job with the State of Florida after the governor changed. His family had to go on public assistance until his mom found another job in retail. That experience made him realize at an early age that he wanted to be his own boss. “I remember thinking right then I never want to put my future in someone else’s hands,” he recalls.
Entrepreneurship turned out to be the right path for Coombs, who, today at age 40 runs Splendies, a Los Angeles-based company that sells subscription boxes of undies for curvy women. He started the business with $500 in 2013 after a cousin told him that plus-size women had limited shopping options. Coombs says the business, which brought in $13 million in annual revenue for 2020 and turns a profit, is on track for $17-18 million for 2021. He gets things done by using automation such as chatbots and e-mail marketing and for tasks such as customer service, social media, influencer marketing, and web development relies on an extended team of contractors.
Serial entrepreneur Anthony Coombs founded Splendies, a subscription box company that specializes in … [+]
Here are some of the strategies that helped Coombs build his business to seven-figure revenue.
Stay open to new ideas. Coombs, who earned his BA Magna Cum Laude from the University of Pennsylvania, is a serial entrepreneur who had already started successful businesses that sold tiles and automobiles—as well as a mobile app business that didn’t take off—when a cousin mentioned the untapped opportunity to sell plus-size underwear.
After doing some research into the industry through “a lot of Google and a lot of YouTube,” Coombs came up with the idea for a subscription service where he would send customers three pairs of underwear a month: one would be a fun, limited-edition print. The others would be a sexy pair and a practical set. To build recurring revenue, he decided to sell his monthly subscriptions for an affordable $12—a price that would be accessible to women on average budgets (it’s now $14.99). The timing was ideal as his app wasn’t taking off and he was ready for something new.
Find low-cost ways to test your idea. Coombs started the business in 2013, working 70 hours a week during the launch period. Using $500 in startup capital, he built a simple e-commerce website on Shopify and began buying up inventory from the 99-cents bins at his local mall so he could fill the subscription boxes—a low-cost way to find out what women wanted to buy. To promote the subscription service, Coombs taught himself to use paid Facebook advertising, learning from a $9 video tutorial course he found online. “We market it as a gift to yourself, something fun for yourself,” he says. “I was surprised to learn that they can’t wait to open it. It’s more than just three pairs of underwear to our customers. It’s something for people to look forward to, every single month.”
Cultivate patience. During its first year in business, Splendies made $40 its first month—May of 2013—and brought in $29,000 in annual revenue. By 2014, revenue hit $275,000. “2013 was really about figuring everything out. By 2014, it was an actual business,” he explains. By 2015, sales hit $474,000. They rose to nearly $1.5 million in 2016. It was in 2016 that he started online advertising. “That was a big game-changer,” says Coombs.
Get a “Ph.D.” in what your customers like. Coombs made a continuing effort to learn all he could about his customers, so he could keep inspiring them to come back. To learn more about his customers, he did surveys using SurveyMonkey, a free software tool, in 2016 and 2018. “A lot of our customers are in places brands don’t think about,” says Coombs “We have a lot of people in the Midwest, a lot of people in Alaska, Hawaii and the South. Our biggest client base is in Manhattan (Kansas!), Davenport, Iowa and Anchorage, Alaska. “Those are people who really enjoy Splendies,” he says. “It may be a thirty-to-forty-minute drive to go to the store.” Many have incomes below $70,000—and get ignored by lingerie brands that target the upscale market, he found.
He also paid attention to grassroots indicators that customers loved the brand. In 2017, for instance, a group of fans started a Splendies Facebook group, without any involvement from the company. That group has grown to about 7,000 women who share what they’ve purchased with each other there. Another Facebook group made up of women who buy, sell and trade unused purchases also sprung up. “Sometimes they get a pair they don’t like and prefer to get something else they will share with other people,” he says.
Don’t go it alone. Over time, Coombs—a student of Tim Ferriss’ book The 4-Hour Workweek—reduced the hours he worked to the point he could sometimes run the company in 10 hours a week, automating tasks like his digital marketing. However, with the brand growing rapidly, Coombs started losing control of the schedule that he set out to create for himself and decided to bring on a contractor in 2016 to help with customer service. “My first hire was a friend of mine,” he says.
Seeing how much more he could accomplish with one contractor made Coombs realize that bringing on help was the key to keeping his lifestyle going. After finding that his next hire had experience in running her own business and that this primed her well for working in a tiny startup, Coombs looked for other people who’d had similar experiences. He saw they understood the importance of addressing a complaint from a customer quickly before the customer jumped on social media and told others not to purchase. “To someone who has run their own business, you don’t have to teach that,” he says.
When Coombs hired team members to help with other tasks such as social media, influencer marketing, and web development, he sought similar entrepreneurial experience. Often, he’d take stock of how they had set up their websites to get a sense of how much they understood about businesses like his own. Although Coombs communicates with them constantly on a Slack channel, he needs them to operate independently because they are not all in the same room.
By staying focused on the big picture of running his business and relying on his team to handle their specialized parts of it, Coombs has freed time and space to work on the aspects of entrepreneurship he enjoys most, like strategy. “Growing the business and seeing the numbers increase, that’s fun and interesting. I can do it all day,” he says.
At one point, for instance, the company had outgrown its shipping partner and had a backlog of 10,000 orders. “It was going to take them at least a week to get everything fulfilled,” he says. “That wasn’t sufficient for me. I went and rented a storage facility. I rented a truck and some tables and chairs from a party store and found about five people off of craigslist. I taught them how to package everything. We were able to get 10,000 orders out in 2 days. That’s what entrepreneurship is all about.”