As second birthday nears, Goodsmiths founder reflects on changes, growth

Just months before its second birthday, the founders of Des Moines-based Goodsmiths are reflecting on their business’ growth and making some changes. As both the startup’s revenue and sales have been on the rise 15 of the last 21 months, the startup recently reduced its team to focus on marketing and attracting users to its…


James Eliason accepts Goodsmiths’ award for New Startup of the Year at the 2012 Silicon Prairie Awards.

Just months before its second birthday, the founders of Des Moines-based Goodsmiths are reflecting on their business’ growth and making some changes. As both the startup’s revenue and sales have been on the rise 15 of the last 21 months, the startup recently reduced its team to focus on marketing and attracting users to its now completed product.  

“Our mindset was based off of how Levi and I have created companies in the past—to spend the money to actually build a team,” co-founder and CEO James Eliason told Silicon Prairie News. “I still fully believe in that model. I think that’s the way that it should be done, but now we’re in a situation where we have to get creative.”

For Eliason and his co-founder, Levi Rosol, getting creative has meant “making some hard decisions” in terms of staffing and resource allocation, despite continued revenue growth for their ecommerce startup. Over the last few months the startup’s staff has shrunk by seven, with some of the team leaving to pursue other opportunities and some cuts being made. Only its co-founders remain and they plan to relocate to a new office space this year. 

The pair plans to move into StartupCity Des Moines by February, handing the keys of its’ Valley Junction office to KCL Engineering, a company exiting the West Des Moines Business Incubator.

“If we were in the same situation that we are today last April, we wouldn’t be where we are today, with just Levi and me and a bunch of people doing contract work,” Eliason (right) said. “We can’t forget that. We’ve seen too many people try to do that and fail.” 

Eliason says he doesn’t see the operational changes as a setback for the startup, but rather as a necessary way for the company to adapt to its products’ needs. 

“It’s difficult when you’re out raising capital and there’s a significant amount of money that you’ve spent building the product to now have to scale that back and say, ‘Salaries aren’t X dollars now because we dont need it. And now instead of spending X on marketing we’re spending 10 times that to increase sales and traffic.’”

Since launching in April 2012, the startup has fully built out its product—an ecommerce site for handmade items—and solidified its branding and design standards to a point where Eliason says they feel comfortable moving forward. 

“All of these things are heading in the right direction,” he said. “Now it’s just getting everything pieced together so people can understand it.” 

Goodsmiths by the numbers 

SPN recently sat down with Eliason to hear about some of the startup’s growth since its official launch almost two years ago. 

As of late 2013, Goodsmiths’ site houses more than 6,000 shops and has $45.5 million of listed inventory.

Eliason says that since the startup’s April 2012 launch, its visitor valuation has risen to 13 cents per visit.

“Now we’re starting to get that recognition from buyers,” he said. “They’re comfortable purchasing on our site and they’re coming back so we’ve already acquired that user.”

When the site first launched, Goodsmiths averaged two sales per day. Now Eliason says the startup processes roughly 30 transactions—which may include multiple products from different vendors—each day.

With increased sales comes increased revenue, placing Goodsmiths’ average quarterly revenue growth at 159 percent since launch. 

In March, Goodsmiths launched paid plans for its shop owners that include advertising and submitting items from shop inventories to Google’s shopping feed.

Currently only about one quarter of Goodsmiths’ inventory is submitted to Google, but the site receives 33 percent of its traffic from its paid promotion within the search engine. Goodsmiths also receives 22 percent of its organic site traffic from Google—a potential power Eliason says he and Rosol will focus on harnassing in the coming months. 

Looking forward

In the coming year Eliason says he and Rosol hope to continue to grow Goodsmiths’ user base through more extensive marketing efforts as well as expansion of its market. With a functioning product and steady revenue growth, Eliason says international sales are an area where he sees large growth opportunities for the startup, noting that both the United Kingdom and Australia are popular markets for handmade goods. 

The co-founders also have discussed plans for a Goodsmiths mobile app sometime in the next year. 

“We know we need a mobile app. The shopping experience on the actual web version if you visit it on mobile is tough,” Eliason said. “We’re not seeing a lot of mobile transactions right now, but we do see a lot tablet activity.”

Without a full-time developer on the team, Eliason says much of the tech work, like building the startup’s mobile app, will be outsourced to contracted developers. However, this process is nothing new to the startup’s co-founders—Goodsmiths’ blog is populated by content from paid freelancers and the startup used a local firm to create Swipe, a payment app to process credit cards and help keep track of shop owner’s online wares, which launched in May.  

“We continue to see some people trickle in who are interested in that,” Eliason said of Swipe. “We need to do a better job promoting it though because it’s a big differentiator.”

About a month ago, Eliason blogged about his frustrations raising capital in Iowa. While he wasn’t able to comment on the specifics of the funding round Goodsmiths is currently working toward, Eliason hopes the deal will be wrapped up by the end of the month. 

“I would say it’s been great locally and we’ve had quite a bit of interest here. I think what we’ve done and the hard decisions we’ve had to make are going to pay off.”

 

Credits: Silicon Prairie Awards photo by Malone & Co. James Eliason photo courtesy of Eliason. Graphic created on Infogr.am

This story is part of the AIM Archive

This story is part of the AIM Institute Archive on Silicon Prairie News. AIM gifted SPN to the Nebraska Journalism Trust in January 2023. Learn more about SPN’s origin »

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