Lara Crystal, co-founder & co-CEO of Minibar, took a bit of a winding path to entrepreneurship.
“I didn’t know I wanted to start a company — actually I never knew I wanted to start a company. I’m not one of those people who says I can only ever work for myself,” Lara laughed.
However, after graduating in 2009 with a Wharton MBA degree looking for jobs in retail, but finding no retail jobs available because of the recession, she made her way to the startup world via Rent the Runway.
“I spoke to Jen, the cofounder of Rent the Runway on the phone. She was like, ‘Great, you sound great, you have a background in fashion, why don’t you come to Yale? Bring some dresses to rent out to girls, any of your dresses are fine, just bring them.’ I got off the phone and I was like, ‘This woman’s insane,’ but okay!”
With that, Lara spent 4.5 years building Rent the Runway alongside the co-founders, and learning the lessons that would help her to eventually start her own company in a particularly challenging industry.
No industry experience? Your 'outsider' status can bring creative solutions to entrenched industry problems.
Lara and her cofounder had no experience in the alcohol industry, but luckily, Lara had experience as the second hire at Rent the Runway, whose cofounders hadn’t had fashion industry experience. Lara’s work at Rent the Runway allowed her to understand the benefits of being an outsider.
“If you talk to people in the industry about changing an industry, most people would tell you ‘You’re crazy, get out,”” said Lara. “When you know too much about an industry, it becomes more difficult to really try and find innovation, because you find yourself limited.”
The alcohol industry can be especially maze like for an outsider: alcohol laws are strict, many laws are outdated, every state is different, and even every county is different.
“If you come from an outside industry, you can approach it with this fresh perspective: why is it done that way? If things weren’t always done like this, how would people want it to be done, and how can we move closer towards that?”
Are your partners saying 'no'? Incorporate your learnings into your product and sales pitch.
When Lara and her cofounder walked into liquor stores asking them to put their inventory on their platform, they were often quite resistant. After all, why would they want to give another company their inventory to put online and compete with their brick and mortar location?
Again, Lara looked to her experience in the early stages at Rent the Runway — every designer had said this to the early Rent the Runway team when they asked the same question.
The solution, as Lara already knew, was to come up with a solution for every no.
“We’d say: if you sign up with us first, you’re going be the first on Minibar, and if you take a 10 block radius, you’re going be serving a lot more customers, so, yes you’re going pay us a fee, but you’re reaching more people.”
If the problem was that it sounded like too much of a hassle for stores to get Minibar their inventory, the cofounders would come back and say: “We can connect straight into your POS system, or if you don’t have a POS system, we can give you a POS system, or we can sit there and type up your inventory online.”
There’s no substitute for scrappy entrepreneurship in the early stages of a startup. Lara indeed manually typed up inventories for liquor stores.
“Sitting on the floor of a liquor store is not the most comfortable place to be, your back hurts a lot, but we do it,” said Lara. “For those early partners, it was really about listening to what are their concerns were.”
How do you create a competitive advantage? Create the best experience on the market.
Minibar now has its share of competitors in the space. Lara and her cofounder maintain Minibar’s competitive advantage much in the same they brought on their early partners — responding carefully to their consumers and creating the best possible experience for them.
Both cofounders came from consumer businesses and understood deeply how crucial customer service was for consumers. One differentiator that came from this was investing in in-house customer service reps, which most of their competitors do not do.
“What we’re doing is ultimately building the best way to shop for wine, beer, and liquor, so everything that we do is about that, and ultimately that’s all we can do,” said Lara. “We try not to do too many things at once. We try not to expand too crazily. We haven’t gone outside the US; we haven’t gone to other categories: we don’t do tobacco, we don’t do cannabis, despite investors being like ‘get on this!’”
Even on fronts where the company is multi-focused, such as in Minibar’s revenue streams, the strategy of serving the customer in the best way possible still applies.
Minibar is open, honest, and upfront about their fees to liquor stores. They take the time to explain to their pricing decisions to their partners instead of haphazardly changing them. This creates a strong relationship with liquor stores, while many competitors do the opposite.
“One really great thing about what we’re doing, which is very unusual, is that actually, we’re not disrupting the industry — we are helping the industry. Everyone really likes what we’re doing,” said Lara.
“Ultimately if we do our job well, we’re helping the end consumer, we’re helping retailers maintain relevancy in an increasingly digital age, we’re helping the wholesalers move more product, and we’re helping the brands connect with their consumers in a smarter way.”