Before starting Arena Flowers, Will worked at a private equity firm in the city and before then he was one of the marketing guys at eBay UK. Will explains to me that not everything is as perfect as it looks or pretty as in the case of "flowers" a lot of setbacks happen behind the scene he said.
After being convinced by his business partner to go into the flower business, he eventually cracked and started Arena Flowers. Will explains his journey so far running the business.
The idea for Arena Flowers came jointly from myself and my business partner and long time friend, Steve France. In summary we saw a large market not very well served by existing old fashioned incumbents and poorly executed online. So we thought we’d have a go at doing it better. Five years later, it’s been some ride!
At the time, I had already done five formative years in private equity in the City, then spent three years in marketing at eBay UK in the period when eBay really exploded into the pubic consciousness. That surge was nothing to do with me, mind you, but it was fascinating to watch it from the inside. Steve was already in the flower industry. He was convinced of the opportunity of selling flowers online and I was, quite frankly, rather sceptical about it – “surely the customer will want to see the product?”, ran my logic. However, I realised quickly that I was wrong; flowers have been sold at distance for a long time, using the telegraph originally, so no reason the internet couldn’t be used similarly. Furthermore, the internet could actually be used to ameliorate the experience. Which is why we decided to go for it. Flowers, but leveraging the internet.
We have come a long way from the early stressful days. I had no idea what a tricky business we were getting in to and it was very very hard the first few years. We didn’t raise enough money, we couldn’t afford enough senior people, we really weren’t that sure what we were doing. We had some bad luck: our three phase electricity exploded blowing all power at Flowers HQ; our internet went down for 6 days (a man in a digger genuinely cut 6,000 cables AND a water main and destroyed thousands of businesses’ internet access); our main courier (a household name) tried to play silly buggers and charge us an extra £20K for Valentine’s deliveries with one day’s notice; and many other improbable bombshells that we couldn't possibly list here.
This meant we learned one essential lesson: “manage the downside and the upside will take care of itself”. We genuinely never expected so many things to break or go wrong. But now, having learned to assume that they will, we take bumps in our stride. In my City job, I used to laugh derisively like everyone else at my investment bank and the “disaster recovery” planning we did – “what’s the point of this nonsense?!” We certainly learned the value of contingency in the first few years of Arena.
The opening of our second warehouse in the Naaldwijk flower market near The Hague in Holland was a big part of what made Arena what it is today. Being located on site and now able to cut out all middlemen, we could guarantee full control of the quality of our flowers and their cost. We reviewed our pricing strategy and managed to improve our profit margins while providing more low and mid-price range products. We’re still looking to improve our product range, quality and price, this is why we carry on dealing with growers direct.
Last year we signed a deal with a Kenyan grower which allowed us to offer some of our bouquets at a cheaper price for the same high quality, even during peak periods; it also means the odd trip out to Kenya for our product development manager, which he enjoys! We also work with growers in Thailand to complement the variety of our range. We’ve always been very demanding on the quality of our stems and have over the past months started to institute a testing routine especially when starting with a new grower or product.
Arena Flowers is all about the experience so every single detail is important to us. This is why we offer such a wide range of add-ons (luxury chocolates, greetings cards, soft toys, champagne, balloons…) as well as the possibility to add a personalised photo (or even a video message) to any order. All that stuff might sound quite simple and pretty boring but it is actually part of a very complex operation which in its whole makes Arena Flowers unique selling points strong assets against the competition.
Our Dutch warehouse was also a massive asset in our development and expansion. In 2008, we launched our Dutch language site and quickly had a German, French and two Belgian sites running as well. Offering the same high standards as our English site; fresh flowers, personalised service, competitive prices, next day delivery and International flower delivery; the popularity of our European sites grew rapidly. Our strong presence in the European market and international delivery service (through a highly qualified third party) also opened doors to an amazing deal with ProFlowers for which we manage the site ProFlowersInternational.com.
They started pretty much like Arena did and grew very fast to now be the leading online florist in the US after only twelve years. Pretty outstanding and they have been an inspiration for us and we are very proud that they chose us to handle all their international orders.
When starting Arena Flowers, we didn’t have a fixed idea of what the business would become, more like a concept we believed in and still keep driving today. We wanted to offer product excellence at affordable prices while adding something to the service (like our photos and video messages) as well as attention to detail. This is as true today as it was yesterday and we will continue to work on getting the message out in the future, in particular with some very exciting developments coming in Q2 of 2012. Watch this space!
3 Things We’d Do Differently
Raise more money – it wasn’t possible at the time and it took us a long time to dig ourselves out of the holes that resulted from being grossly undercapitalised. But we got there in the end, via the hard way!
Hire an accountant – we didn’t have a full time bookkeeper at the beginning and we should have done as neither Steve nor I had the time or training for this detailed work. It’s boring but very important.
Have more senior managers – linked to the first point and being under resourced. There was simply too much work to do and not enough good people. So huge opportunities go begging, which is very frustrating. If you have substandard people it can be even worse; they can develop a project, just really badly and lose you a fortune. Woops. Resourcing is something we still suffer from a bit but hopefully it’s something that we’ll put right in the not too distant future. Good people are priceless as in a business like this, you simply cannot do it alone.