David Weaver has a mantra that’s helped his start-up to survive and thrive over the past five years:
“Embrace the pain and learn from it.”
He doesn’t say this with relish; there’s no masochistic glint in his eye. Rather, the 30-year-old co-founder speaks plainly, as if stating a fact. “When you launch a business, the sh*t will inevitably hit the fan,” he says, “you have to accept that and use it.”
David picked up this idea from his own experiences and a book by Ray Dalio called Principles. He explains: “Dalio says the way you deal with negative situations determines whether you profit from misfortune or stay miserable. That’s the choice you’ve got. You either embrace the pain and learn from it or hide from it and stagnate. So, accept it because it’s coming anyway. Then find a way to use it to your advantage.”
Digital meets old-school
He and his fellow co-founder Antony Charman have embraced plenty of discomfort since launching Vintage Cash Cow in 2015. But it’s been exhilarating, too. Not only because they caught the eye of, and secured investment from, WeTransfer’s founder. But, before we hear their story, let’s look at the business. If you’re a fan of Antiques Roadshow you’re going to love it. On paper, the model is textbook recommerce: customers send in boxes of interesting old stuff that they want to clear out; Vintage Cash Cow buys it and sells it for profit. In practice, however, making this formula pay is complex. A frictionless customer journey is essential. The company also has to process literally millions of items – with not a barcode in sight – efficiently and profitably.
What kind of old stuff? “Anything old and interesting but not just any old thing,” says David. “So coins, old cameras, jewellery, silver, silver plate, toys, watches, medals… you name it.” Vintage Cash Cow covers all postage costs, tracks and insures the boxes. Next, it examines the gear and offers a price. Finally, the sender decides whether to accept or decline the offer. If declined, the items are returned for free. “We’re set up to be the easiest way to sell the old stuff you want to clear out,” explains David. “And unlike your local jeweller or eBay, we take crates of items all in one go, so we’re convenient, easy and hassle-free.”
55,000 boxes and £14m revenue
Vintage Cash Cow re-sells the items across a wide range of outlets internationally. These include specialist traders, famous collectors, scrap metal specialists and a range of online auction platforms. And it seems that there’s plenty of cash lurking in Britain’s attics. David expects to buy and sell 55,000 boxes in 2021 alone. Here are a few more figures: the company turned over £5m in 2020, projected to rise to £14m by the end of 2021.
However, as you’d expect of a start-up – especially one with a hands-on, stock-heavy operation – reaching this point has not been easy. This cow’s birth has been long, occasionally messy and, as the co-founder honestly admits to, somewhat painful.
Elephant’s Foot Day
The story began in 2015 when David travelled from London to Leeds to meet a potential new client – an antiques trader. David, then a freelance consultant, recalls the trip: “The client’s name was Antony, and his kids had been calling him a dinosaur for not having a website. He held one-day Antiques Roadshow-style events. I attended one. Lots of people turned up carrying all sorts of things. I call it ‘Elephant’s Foot Day’ because someone even brought one of those along! Antony would look at their items and make a cash offer.”
David now understood how Antony made a living but was not clear why he needed a website. It was only when the problem explained he wanted a site “similar to Music Magpie” that the penny dropped. Antony envisaged a platform that would allow customers to send in their old stuff at scale to buy and sell. A plan began to crystallise.
“I explained that a website was just the tip of the iceberg. He’d need to think about the customer journey: how would they get boxes to him? What would happen if the sender rejected his offer? People would need to be managed from initial sign-up to mailing their stuff in, to accepting or declining an offer, to finally hopefully sending in more boxes and referring friends.”
David slowly began to see that the idea had enormous potential. “I started to see it more, believe it more,” he says. “I realised this could be big: we were taking a proven business model and scaling it. This was a winning formula.”
Backed by WeTransfer’s founder
With ambition burning, David accepted Antony’s invitation to join the business as a partner and moved to Leeds. But the next challenge was to attract funding and bring in extra business expertise. Would hardened investors also see the possibilities?
In a word, yes. In October 2016, a group of 7 Dutch investors led by Laurens Groenendijk (co-founder and MD of Hiber) and Bas Beerens (founder of WeTransfer) fell in love with Vintage Cash Cow. They put in an initial £170,000 of funding plus advice and coaching. “We are first-time founders and not afraid to admit it,” says David, “so we were as excited to get the help as we were to get the funding.” 4 of the Dutch team have since formed Dutch Founders Fund, building upon their first deal together in Vintage Cash Cow, and now helping other founder teams scale in Europe.
Sh*t hits the fan (part 1)
Before long, the Dutch team invested another £500,000. So far, so good. But do you remember David’s earlier words – “when you launch a start-up it’s inevitable that sh*t will hit the fan”? Sure enough, the fan was primed and waiting. The co-founders were about to receive their first lesson in embracing pain.
“After the investment, we upped our Facebook ad spend from £500 to £5,000 a day. We hired a HR manager, who brought in 16 people. We were now employing 38 staff. So here’s the first lesson: don’t over prepare your business for rapid growth based on such a small window of improved performance. Our Facebook ads were creating tons of leads. But we didn’t react fast enough to the increase. For too long of a period, we weren’t able to handle the call volumes. We weren’t delivering the same customer service that got us to this point. Ultimately, it led to less boxes coming in than we expected, making the ad cost per box unsustainable.
The co-founders soon realised they’d have to make cuts. Redundancies followed at the start of 2018. Says David: “It was painful. We’d just brought in some really exciting people. But the episode put a magnifying glass on many parts of our operation. We needed to plug some leaks and innovate our CRM processes. The next 6 months was all about fixing, improving rebuilding from the ground up.”
However, there was more angst ahead. In 2019, the business was moving towards profit but 2018’s excesses meant extra funding was needed. When David and Antony contacted their Dutch investors, the Champagne corks did not exactly pop in Amsterdam, but their request was approved. “Our backers – founders themselves – understood our position because they’d been on the same journey,” says David. Out of nowhere, the team had a sales channel go down. It’s August 2019 – this was an existential threat because up to £150,000 of sales per month came in through this channel. Suddenly, the funding they’d secured was needed to keep the ship afloat, instead of fuel growth.
“I hate talking about this – it’s stressful even now,” says David. “We changed how and where we ship out the items we sell, but a simple integration issue caused mayhem. The problem wouldn’t have been so bad if it had been one of our smaller sales outlets, but this was our biggest. The issue itself was trivial and fixed within days. With smaller tests before the big changeover, we’d have spotted it sooner. We had no one to contact to resolve the problem and nowhere else to sell. We were in deep trouble.”
This threatened to derail everything, and for two months Vintage Cash Cow sold nothing through one of its primary sales platforms. The co-founder says: “We’ve since ensured this can’t happen again by selling through a far wider range of channels. But at the time It was horrible. Did I want to stay in bed some days? Yes. Did I not sleep some nights? Definitely. But while the business was still alive, we were never giving up.
Embracing more pain
More redundancies followed as David and the team tried to absorb the aftershocks and learn from such an unfortunate curveball that killed all momentum. “You have to stay proactive and keep your mind busy,” he says. “You also have to keep the team together. We made sure we continued doing things outside of work too. Out for food, snooker and BBQs in the car park. ”
The business limped on until the sales channel was back up and running. “It hit us hard. But it also gave us an opportunity to protect against it happening again in the future. We had a forced period of reflection which has helped us realign some of our thinking,” says David. “We held it together as a team and used the quieter spell to improve the customer journey, speed up more of the operational processes and hone our advertising.”
Turning the corner
As 2020 arrived, a chastened Vintage Cash Cow – having embraced the pain and learnt from it – seemed to miraculously turn a corner and move into an exciting new phase. With new sales and marketing strategies in place, even the pandemic – yet another potential wrecking ball – couldn’t knock it off its stride. David says: “Because of what we’d been through already, we were able to be pragmatic about the lockdowns and about what we could and could not change. We made fast decisions about furlough, didn’t panic, and tried to make the most of the slowdown. We redeveloped CRM processes and communications with a customer-first mindset. We shifted our messaging away from what we do, and more towards what the customer will do as a result of using us”.
By July 2020, the business was motoring. More than half the staff had been on furlough, but they could now be brought back. The company saw month-on-month growth in boxes from July to November. In the last two weeks of October the company hired ten more people and have continued to fill positions, bringing the combined headcount up to 65, double this time last year. David says: “Our biggest month was November 2020 with 2,700 customer boxes. But the numbers continue to grow and we’re now on course for more than 4,000 in March 2021.”
What’s more, the company has developed an exciting new partnership with the charity-shop sector. David explains, “We are working with over 1,900 charity shops, including Age UK, Sue Ryder Care, Mind, YMCA and Cats Protection. And we are preparing to launch the service with Oxfam, British Red Cross, Marie Curie, Mencap and Save the Children once charity shops have reopened. The lockdowns have forced charities to find new ways of selling their stock and we are well placed to help them. This will be huge for us going forward.”
Having flirted with disaster in both 2018 and 2019, Vintage Cash Cow rallied in 2020 and 2021 to push itself into a strong and exciting position. The new charity-sector partnership opens the door to over 11,000 charity shops with their constant flow of old items. What’s more, the UK is home to 21 million people aged over 50 – almost all of whom are potential Vintage Cash Cow customers. That’s a lot of cash in the attic! The amount of revenue that this business could unlock via expansion and a successful US launch is even more mind-boggling. The co-founders and their experienced Dutch investment team will no doubt look at America (and beyond) closely in coming years.
David concludes: “Right now, we feel like we’re in a strong position. We’ve got amazing backers and have come through a couple of sticky patches so we’re excited about the future. But we’re also realistic. We know that sh*t is around the corner. It always will be. It’s a fact of life when you run a business. But we accept it because we’ll learn from it and improve because of it.”
By continuing to “embrace the pain and learn from it”, Vintage Cash Cow looks perfectly set to take the post-pandemic world by storm.