The key opinion leaders are people who have built-up followings, especially in social media, who tend to be very trusted in a very decentralized media market in China. So it’s important to court them, to make them proponents of your brand. If you can do that then they can bring their followers to your product.
Says Brian Buchwald about how social media works in China.
Brian Buchwald, the New York-based startup’s CEO, told us he’s establishing Bomoda as a trusted brand for the increasing numbers of wealthy Chinese women who have disposable income (and a credit card) and want ‘real’ luxury goods, not the knockoffs which flood their online market. Before starting his own business, Brian took key positions in companies like Morgan Stanley, DoublecClick, POINTROLL, NBC Universal and Gerson Lehrman Group. At NBC Universal, he was one of the creators of Hulu.
Brian is a passionate guy who saw the huge potential in Chinese luxury market and the influence of social network in China. When I met Brian, he impressed me as an entrepreneur and I was blown away by his story. He co-founded Bomoda with his own cash – couple hundred thousand dollars – bootstrapping for about a year, paying employees while not taking a dime in salaries. Since then, Bomoda has raised $2.2 million in funding. Individual backers include entrepreneur Chris Burch, former Yahoo CEO Terry Semel, Y&R chairman emeritus Peter Georgescu and MediaMath CEO Joe Zawadzki
Bomoda is a membership-based, digital community that empowers Chinese women to live the global fashion life. Headquartered in New York, Bomoda publishes directly from the world’s leading fashion capitals, curating the latest in aspirational Fashion, Beauty, Jewelry, Travel and Lifestyle.
From 40K to 250K users in a year
Bomoda sends newsletters on a regular basis, which generates most traffic to Bomoda’s website followed by search traffic from Baidu and social traffic from Weibo. At the end of 2013 the total number of Bomoda users reached 250K. 1 year prior the number was only 40K. Chinese fashion celebrities periodically show up on Bomoda’s platform, such as Chen Man, WanWan, Zhu Zhu, Christopher Bu, Gogoboi.
What motivated you to make the shift from corporate America to being an entrepreneur?
Why did I choose to do something entrepreneurial? At the end of the day I wanted to make a mark. Says Brian Buchwald.
I wanted to build something of lasting value, and I found that working at large companies I could contribute, I could build things, I could get paid well in salary, but at the end of the day, I wasn’t building something that was mine.
I’ve always oscillated between large and small companies. So my first job out of college was at Morgan Stanley doing M&A. But I was working in our Silicon Valley office, which was very entrepreneurial, so I was involved with digital at the outset doing investment banking. We were working with tech start-ups so I definitely got the bug early.
I went to a start up in 1999. I was one of the first ten people at a company that raised $60 million in financing from Benchmark Capital and Hummer Wimblatt and a number of other kind of tier one .dot com boom internet area VC companies.
I think we spent more money on our launch party than we created revenue in the first three years. So a lesson for me, at the age of 24, was that I didn’t know anything about business, so I took the opportunity to join DoubleClick in 2000 and wound up running business development for DoubleClick’s technology division.
I worked with a lot of start-ups coming out of DoubleClick, one of which was PointRoll, which is a rich media advertising technology company, and my old boss from DoubleClick had taken over it. I joined them when there was about 30 employees, and it was eventually sold to Gannett for over $100 million. I spent five years at NBC after that, but it was in a very, let’s call it, intrapreneurial roles, where I was asked to start new businesses, one of which was Hulu.
Then I thought I was entrepreneurial, but I didn’t really know the difference between intrapreneurial and entrepreneurial until I started Bomoda, when I realized what it was really like to roll up your sleeves and start a business bootstrapping with no capital nor resources.
What advice would you give to an entrepreneur looking for funding?
First, make sure that you’re building your company into a large space that can sustain a large business. Investors typically are looking for companies that can become $1 billion exits for them. So you need to show that you’re thoughtful about competing in a market that can support a large business. Putting that aside for a second, it’s helpful to have expertise in that space, which I did not have in the current business that I’m building.
Third, is to have relationships. People will often invest in people that they believe in. And you want to have a couple good anchors in that regard.
The next thing that I’d recommend is to ‘get started.’ You have to show that you’re willing to put in the work, to build a prototype, to get the product out to market and that you’re willing to start to build a team, before they’ll jump in.
And that’s actually what happened to us. We didn’t close our angel round until after we had launched Bomoda
The last thing I would say is you have to be able to impart your passion to the people you’re meeting with. They have to believe in you and your vision. Part of that is knowing that when things go sideways, which happens to every start-up, that you’re somebody who’s going to stick and not give up easily.
Initially at Bomoda one of my co-founders, Alain Rothstein, and I, put in a couple hundred thousand dollars of our own money, took no salary for nearly a year, and were paying employees during that time, before we actually raised capital.
If you are looking to bootstrap, you need to, A, be incredibly capital efficient. B, have money in the bank that you can use to spend on this, so that you can take that time, or, C, just be young and single and not have a lot of encumbrances.
What motivated you to enter China as opposed to here in the U.S.?
I look for blue sky opportunities. I try not to invest my time, whether it’s at a large company or a start-up, in businesses that aren’t in dynamic, big spaces, that have lots of room to grow.
I looked at the luxury fashion market in China, which had been about 8% of global market share five years ago. It’s now about 30% of global market share. So you’re talking about the biggest luxury market in the world that’s growing very quickly relative to virtually anywhere else in the world. You have a market that has a lot of change going on. This consumer who’s coming in is brand new. They’re learning about the luxury fashion brands, trends and lifestyle, and they’re eager to get that information.
Those who are gaining that information are coming up the curve very quickly and they’re eager to get more information and share it with their networks.
Then there are some wrinkles that make the Chinese luxury market different and more attractive relative to the West.
First, the consumer is about two decades younger than their western counterparts. The average Chinese luxury consumer is going to be in their late 20’s, early 30’s, rather than late 40’s, early 50’s, which means that they’re much more digitally efficient online. They’re also getting more information from social media.
Second, they actually buy more abroad than they buy at home. So most fashion or luxury products are focused on the domestic market, when in fact the Chinese market is about 60 percent outside of China. So one of the things I thought we could do with Bomoda was offer a competency in product, both education and entertainment, and ultimately facilitation, in China, but also give them access to information about shopping abroad, which we though would be very important.
Lastly, almost all luxury or fashion products focused on China are created in China for China. What we’ve been able to do at Bomoda is string together a group of professionals who live all across the world who are not just providing information on buying in China or buying abroad, but also are doing so from those cities. Talking about Ferragamo from Florence is different than doing it in Beijing. Talking about Marc Jacobs in New York is different than talking about Marc Jacobs in Shenzen. That’s something that we can do, but always in a Chinese voice.
What worked for you in building a social media community in China?
I believe that good products sell themselves. You could raise $100 million dollars and spend $98 million on marketing and it won’t matter if the user base doesn’t fall in love with your brand. So you have to test, you have to make sure that you’re seeing the engagement levels before you actually start spending money on marketing. Search engine marketing on Baidu, business development deals, focusing on CPA and the DSP’s of the world, I think are an important part of how you can spend ad dollars efficiently.
One thing that makes China different than the West is that there is also this very important group called KOL’s or key opinion leaders. The key opinion leaders are people who have built up followings, especially in social media like Weibo, who tend to be very trusted in a very decentralized media market in China. So it’s important to court them, to make them proponents of your brand. If you can do that then they can bring their followers to your product.
How did you build relationships with bloggers and key opinion leaders in social media?
Nobody does anything for free. Even if there’s no monetary exchange, it’s always about some type of an exchange. For instance right now we’re running a fun contest where we’re giving out a Celine handbag and Alexander McQueen scarves. KOLs have been involved in that because it’s great product and it raises their profile as it relates to Western brands.
Also I think they like being associated with Bomoda because we’re based in New York and they see it again as access to a more international tableau. The good news is these things often lead to new opportunities. We actually went out and bought the Celine handbag that we’re using in the contest, but in doing so, Coach, which is very popular in China, saw this going on and they said, ‘Hey, we’d love to be the next one.’ They’re offering products for free for our new competition.
How did your experience with building Hulu encourage you to become an entrepreneur?
Hulu had Providence Equity put $100 million in before it was launched. So having $100 million in capital and billions of dollars worth of content production from NBC and Fox was very helpful. That’s very different than starting a company where literally there’s nothing other than you and you co-founders and an idea.
Jason Kilar, the founding CEO of Hulu, taught me about building an excellent product that people love. There was a ton of noise around Hulu at the time. It was derisively called the Clown Co. in the press, who thought it would be a massive failure. What Jason did was he said, ‘Tune out all the noise. Only focus on what we think our users will love. And then make sure that the product is executed flawlessly around those features and functions that will really make this a success for our users.’
When Hulu launched it had the benefit of obviously a very talented team, but it also had a beautiful, highly functional video player. It had no buffering. It had a great content management system on the back end, which meant that the user walked away loving the content experience, which was really about putting something special in the market.
As Jason Kilar tought me, at Bomoda, we focus on building great product and delighting our users. We focus on looking at engagement metrics and growth metrics that tie to our user’s coming back. Are they coming back and using it more? Are they sharing it with their friends? If you don’t get that you have no chance of succeeding.
This article is part of the Inbound Marketing Clinic, a research project within M.S. in Integrated Marketing at NYU SCPS.
Big thanks to Conan Guo for organizing the interview with Brian at Bomoda’s NY office, where he is currently working as a social media intern. Conan is aso a contributor to SearchDecoder and author of a popular post: 10 Tips on How to Win on Sina Weibo.