Scott Hadfield is one of the three founders of Hello Pretty, a South African online marketplace for handmade goods. Their move to open an exclusive online business where they had to recruit customers as well as product sellers took guts. How we made it in Africa asked what it takes to get a tech startup off the ground and keep it running.
When and how did the idea for Hello Pretty come about?
Samantha [Marx, one the founders] had wanted to do a site like this for years, but we didn’t start seriously considering it until January 2012. When we looked at the current state of online shopping in South Africa we could only find a couple of small online shops [for our type of products]. We couldn’t believe that no one had launched a marketplace yet and decided we should push to be the first of its kind in South Africa.
You have grown since then. How many people on your team?
We’re bootstrapping the whole project out of our own pocket, so we’ve had to keep just a skeleton team. There are three of us – myself, Adeline [Levescot] and Sam – and our part-time intern who is based in Durban. Even though we’re all too busy, it’s ended up working to our advantage as it’s meant that we have our finger on the pulse of the site and all know exactly where the issues are and what needs to be fixed. We’re able to give much more personalised service this way.
Service and quality are two things that are very important to us, and we feel that outsourcing things like development or to call centres would have an immediate negative impact on those.
What is your current business model?
The designers who sell through Hello Pretty are charged either a monthly fee or a commission on sales. This gives the more successful sellers a chance to reduce their costs by paying a monthly fee, but new sellers can test the waters for free until they start making enough sales for it to be worth their while.
We considered several variations on the same model, and though we considered a more freemium, advertising-based model, we didn’t entertain it for long as we want the website to maintain its clean and focused look.
You are focused on South African buyers and sellers. Would you like to expand into Africa or internationally?
Up until recently we’ve been entirely focused on South African buyers and sellers. But we’ve recently started marketing towards international buyers. Though many of the handmade products on the site seem expensive for South Africans, they’re a bargain for Europeans, Americans and Australians and we want to start pushing those markets harder over the next couple of months.
Due to a number of logistical issues, we don’t currently have any plans to expand out of South Africa for more sellers.
Hello Pretty is aimed at women, but you’ve branched out with Hello Man. How has it been received?
From the get go it appeared that the bigger market for handcrafted design seemed to be women, but there’s definitely a large contingent of men out there who want unique locally made goods as well. The reception for Hello Man has been very positive, but it’s back to square one in terms of building up the kind of audience we have with Hello Pretty now.
What about security? Do you find South Africans are still wary of buying online?
Absolutely. For a lot of customers this is their first shopping experience, so we try to make things as easy as possible. Some people aren’t even familiar with a button that says “Add to cart” and will email us asking how they can buy the products. This is just something that will take a bit of time and isn’t so much a concern of ours, but we want to do whatever we can to make people comfortable when shopping with us.
Have you had any problems with shipping products to customers?
Many of the sellers who are new to this are more confused about shipping than anything else. Unfortunately, due to reliability (perceived or otherwise) of the post office, many people may have never shipped a package, and information on pricing and options is not easily available. We provide basic resources about shipping to our sellers to ease the work on their side. We require all sellers to ship with a tracking number, but occasionally things do go wrong.
Tell me about your competition, particularly Etsy, a US-based multi-million dollar e-commerce business.
Everyone at Hello Pretty actually loves Etsy and we’ve ordered from their site ourselves. If Etsy was accessible to South Africans we never would have launched Hello Pretty. But unfortunately, due to the exchange rates, international shipping and customs issues, purchasing from Etsy is simply not reasonable for South Africans in a lot of cases. Many of our sellers also sell on Etsy, and we’ve encouraged people in the past to give it a try in addition to Hello Pretty.
Any advice for other e-commerce startups?
My advice for tech startups anywhere would be the same: just launch. Don’t wait for things to be “perfect”. We launched Hello Pretty after only three weeks of solid development. All you could do was add products and buy products and we’ve been slowly adding and refining things since then.
You’re putting yourself out there when you launch so it’s easy to want to wait until things are perfect and you won’t be embarrassed, but if we’d taken that approach, we still wouldn’t have launched and we definitely wouldn’t have had the incredible seller community that we do.