Interview with a Successful Startup Founder

Bootstrapping a Swag Empire to Millions in Monthly Revenue

Michael Martocci
Michael Martocci
May 18, 2021
Category of startup
Design
Country of startup
United States
Revenue of startups
+$500k/mo
Interview with a Failed Startup Founder

Bootstrapping a Swag Empire to Millions in Monthly Revenue

Michael Martocci
Michael Martocci
May 18, 2021
Category of startup
Design
Country of startup
United States
Cause of failure of the startup

Michael founded SwagUp, a swag creation and distribution platform that saves companies tons of time. It started out of his mom's house and bootstrapped it in 4 years to 2,500 clients, a team of over 150, and multiple 8 figures in sales.

Ad

Headway Logo

How do you know that you are making a product or service that your customers want? If you want to discover products that customers love and deliver business results, this live stream is for you. Reserve your spot →

Hi Michael! Who are you and what are you currently working on?

I have been selling stuff for as long as I can remember, starting with re-selling our groceries outside of my house to our neighbors. SwagUp started it out of my mom’s house, and just under 4 years later we’ve worked with over 2,500 of the top startups and companies, run a 40k ft fulfillment center, have a team of over 150 (13 in Miami), and have done multiple 8 figures in sales all completely bootstrapped.

SwagUp takes the super complex world of branded swag creation and distribution and streamlines it through one simple platform. This saves companies a ton of time and allows them to use swag in ways they haven’t been able to in the past.

Currently, I’m based out of Miami, FL, and as the Chief Swag Officer/CEO,  I focus primarily on the long-term vision for SwagUp, Product/Tech Strategy, and building the leadership team.

What's your backstory and how did you come up with the idea?

I dropped out of College of William & Mary junior year in 2015/2016, joined forces with NFL veteran Steve Weatherford on a fitness training business together. From there was at a VC firm in NYC called Brand New Matter briefly where I came up with the SwagUp concept and decided to go full time on it.

I had a bit of a background in branded merchandise in college. A buddy of mine and I wanted to launch an app on campus and in the process needed to get custom flags made. They were super expensive in the US. I was able to find a supplier in China to make them. Ultimately decided to start a side business selling custom flags online. This then expanded into shirts for fraternities and other items.

I put that on the back burner after partnering with the NFL player but when I got to the VC firm I realized how invested startups were in brand, employee experience, building community, etc and swag plays a huge role in it all...but there was no great company I could think of as the go-to in the market that made it simple and had a great brand. SwagUp was formed to tackle that initially. One of our first large orders happened to be for a swag pack, an assortment of items bundled up 1 set per new hire and we realized we could build a business around productizing and simplifying that experience that was traditionally very messy.

SwagUp Branding

From there it’s been a compounding effect of learning more about customers and the industry and eliminating any of the friction points we see, such as handling inventory, global shipments, design, etc all in one platform. We continue to innovate and look to power the industry as a whole.

I’ve always been entrepreneurial. I like coming up with interesting ways to sell things. Swag is not new, but the way we approached selling it and presenting it is. Dropping out of school, I also wanted to prove to people I knew what I was doing and would make it work. 

Failure is inevitable. You need to be trying things all of the time, which invariably means you will be failing a lot. I had probably started 15 businesses/ideas before SwagUp, all to varying degrees of success. The more you swing the bat, the more likely you’ll hit the ball. The fun part in business is you don’t strike out after 3 strikes and you only need to be right once.

Ad

Headway Logo

How do you know that you are making a product or service that your customers want? If you want to discover products that customers love and deliver business results, this live stream is for you. Reserve your spot →

How did you go from idea to product?

Started very bootstrap, given I wasn’t technical and didn’t have many technical friends nor funds to hire someone. Used a combo of Wix and Typeform to create an intuitive experience that wouldn’t cost much to get running. Connected that to Trello via Typeform to create seamless workflows to help operate on the backside. Got a few simple Google Ads up early which led to some early traction on validation. Did this for at least 18 months before starting to bring on a CTO and invest in reinventing our systems. I’m a big fan of just getting something out there quick, get feedback, and see where it goes. See what works and then build it and that’s what we did. 

This all worked for a pretty long time, but over time our two main systems, our pack builder/swag picker on Typeform didn’t give us enough flexibility to build the UX the way we wanted to and then Trello as a back end project management tool started to fail from the massive amounts of data and files on it. We had no source of truth of data anywhere and we needed to get that figured out.

I still don’t think we’ve truly “launched” up until this day. We started quiet, the first 3 years we didn’t say much, just tried to find customers and help them have the best experience possible. Google Ads helped us test the market and virality helped us scale. I’m a big fan of providing as much upfront value as possible, eliminate friction, don’t charge for things you don’t need, optimize for customer experience, trust, and long term potential.

Which were your marketing strategies to grow your business?

Early Google Ads, leveraging that to get some customers, making sure those customers have the best experience possible and then telling others about it. There’s an inherent virality to what we do because our finished products are out in the world, gifted to people. Recipients always want to know where they came from, which leads back to us. It’s a solid viral loop that continues to propel the business. You just need to make sure at the same time you are investing in the existing customer experience so they retain and expand. 

We never really dug into social media and social ads. Facebook Ads testing early on brought a lot of low-quality leads so we ignored it. Sometimes there’s a temptation to do everything, but you can only focus on so much. Test channels but double down on ones working. 

Later on, I started to personally get active on Twitter which I think has helped us build a strong community around the brand.

The first few months, revenue was pretty low, sub $5k, but it was something, especially given no one knew who we were and we didn’t have much to speak of at that point. We got early inbound leads from startups like Soylent which was very encouraging, as it proved people were likely looking for a better way.

After that first order for packs, which was for about $10k, and then our subsequent positioning as a swag pack company, we saw growth take off. The next month we did about $40k and never looked back. I’m a huge fan of Purple Cow thinking and it was clear we had turned ourselves into a purple cow at that point


How are you doing today and what are your goals for the future?

We have grown rapidly each year 2x-3x, reinvesting as many profits back into the business as possible. Still 100% bootstrapped and will keep it that way for the foreseeable future. We have about 150 team members, split about ⅓ engineering, ⅓ sales/marketing/admin, and ⅓ Ops. Have made plenty of hiring and team-building mistakes over the years.

We are starting to bring in some really strong leaders who we can build empires around and own and specialize in different key functions of the business. Still a lot of work to do there but on the right track. We are profitable which allows us to stay bootstrapped.

We want to at least double revenues every year. We want to build a billion revenue business over the next 5-7 years and I think we’ll get there. We’ll need to grow the team, especially engineering, but the idea is to not have to scale the team at the same rate as revenue and continue to be product-led.

SwagUp Landing Page

As a founder, you constantly get inundated with opportunities, and your mind races with different ideas. The key is staying focused and engaged. As long as I am engaged and excited about SwagUp, I will keep giving it 110% and pushing it forward to build the biggest and best business in this industry without the need for outside capital. I like the bootstrapping nature of how we do things, I like the challenge, and always pushing the boundaries and growth, aggressiveness, and risk.

Since starting SwagUp, what have been your main lessons?

SwagUp is such a complex business with so many different components, like running a fulfillment center, building technology, running a sales team, partnership and channel development, product manufacturing, integrations… there are so many different facets of what we do. 

If I had to break it down into two core lessons it would be:

  1. Never lose the penchant for action. Keep things moving constantly, always seek to improve and iterate. Get things done quickly and often and keep pushing things forward. Make sure that you instill this dynamic in all future hires so they carry it forward with them. Avoid bureaucracy and hypotheticals that slow decision-making.
  2. Hire incredible talent as early as possible. Bringing in great talent compounds. The earlier you can do it the better. They will set up strong processes, they will get the job done well, they will find other amazing talents, they will build their mini-empire. Find these people ASAP and don’t try to cheap out here.

I like to spend a decent amount of time on Twitter, it’s the top of the content funnel for me. I find a lot of interesting people, podcasts, blogs, articles, books, etc through Twitter. I have an insatiable curiosity that sends me down rabbit holes that helps me expand how I think about things. Much of the problems businesses face have been faced and even written about. The greatest minds are always sharing their knowledge, you need to go out and get it and then do something about it. 

Twitter is also great for finding like-minded people and other founders at your stage to stay up to date with and help each other through similar phases of the business.


What were the biggest obstacles you overcame? What were your worst mistakes?

Balancing being aggressive with growth with the financial limitations of being self-funded. There’s a lot of infrastructure and team building to do to build this team right and instead of all at once you need to do it piece by piece, given the limitations, so then the decisions become what are the best pieces to build upon and when. 

Building on that, most of the biggest obstacles have stemmed from people management and building great teams. It’s the hardest part of any business. Aside from that, trying to make great technical architecture decisions early on and not accumulate too much tech and process debt is also something to stay focused on. This also ties to data integrity and prioritizing that early. Without good data, it makes it hard to make good decisions and build strong processes. 

We’ve got many strengths and are in a very fortunate spot. We don’t have the funding others have, but that’s by choice and also affords us the flexibility to make autonomous decisions and not chase short-term growth at the expense of long-term prosperity. We don’t have connections in the industry with the vendors and supply chain and maybe the credibility that other legacy distributors do, but we make up for that with creativity and a fresh approach to a stale industry, which has helped us build up credibility quickly as a company to pay attention to. 


What tools & resources do you recommend?

We have what feels like WAY too many tools and platforms at this point. But everything is a matter of ROI. If you can prove out it makes people’s lives better, make them more productive, and can build a business case then it makes sense.

Our core business process lives in Salesforce as a homegrown ERP and we have a lot of other custom-built software.

We use SaaS tools like Slack and Zoom to communicate, Jira for managing product and projects, Lattice for employee engagement, Gong and Outreach on the sales side, Lucidchart for mapping processes, as well as many many more.

Tools are super helpful, but it’s important to first evaluate the problem, build a process and system to solve for it, and then layer in the tool. I see way too many people go straight to the tool thinking it will magically solve problems without doing the work to solve the fundamental issue and understand where the tool plays a role. 

Some books would be The Purple Cow, How to Win Friends and Influence People, Positioning, Contagiousness, anything about Amazon is super relevant and interesting to me, Competing in the Age of AI, and the Intelligent Investor are all ones that come to mind. I’m always hunting for new books and have close to 500.

I also really like the How I built this Podcast (as well as some others) as you get to dive into those early days, scrappy startup stories that remind you that great businesses are built out of passion and grit.


Where can we go to learn more?

You can find me on Twitter or send me an email.

The All-In-One Newsletter for Startup Founders

Every week, I’ll send you Failory’s latest interviews and articles, curated resources for founders, and updates on how I’m growing the site to $10k/mo. Join other +7,000 startup founders!