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Small Business

Small-Business Success Story: Man Crates, For the Man Who Has Everything

This company offers trendy alternatives to ties, shirts and run-of-the-mill gift cards.

Photo by Eric Millette

Kiplinger's spoke with Jon Beekman, 37, founder and CEO of Man Crates (pictured above), a Redwood City, Calif.-based company that serves as an online marketplace for men's gifts, about how he started his small business. Here's an excerpt from our interview:

What is Man Crates? We want to be the best place to buy men’s gifts online. We have 85 gift packages, priced from $20 to $180, and we constantly launch new ones. Our biggest sellers include the Premium Jerky Ammo Can [$50], the Smash and Grab Gift Card [a digital-gift-card code comes encased in a brick; $75], and the Whiskey Appreciation Crate with a personalized decanter and rocks glasses [$150; whiskey not included]. And we’ve launched a line of maker kits: You can carve a pipe, cure bacon or brew beer.

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Have you always been entrep­reneurial? When I was a kid, I was always selling lemonade, pretzels or candy. After college, I worked in financial analysis, in investment banking research and at a nonprofit. I was a Fulbright Fellow. But I still had an entrepreneurial itch that I yearned to scratch. After I got my MBA from Stanford in 2009, I started GroupIt, software for retailers with large gift registries. But we built something cool that end users didn’t understand or use. So we relaunched as a service making gift recommendations. After scouring the Web for great gifts, I realized how uninspired men’s gifts were. I saw an opportunity.

You started Man Crates with $1,000? In 2011, I bet my wife that I could do it and borrowed the money from her. I used it to test my idea. I bought a wooden crate and products at stores such as Target and Walmart. I hired a photographer, and we staged and photographed three packages. I built the first version of the website myself, and I bought Google ads to drive people to it. And people started buying! Of course, we had just one crate. So we refunded their money, gave them a coupon for their next purchase and asked what they found interesting about Man Crates. Customers told me how hard it was to find great gifts and that they loved what we were doing.

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How did you grow? I worked out of my apartment in Palo Alto with my amazing cofounder and two other talented guys. We worked without pay until September 2012, when we convinced some early investors (mostly people in the Stanford network) to invest $500,000, and we moved into our first warehouse. At the end of 2014, many of those same investors and a couple of new ones gave us $2.5 million, which helped us continue building our team. Today, we have 50 full-time employees, five customer service reps from a staffing agency, up to 120 seasonal folks and two warehouses. In 2015, we had about $22 million in gross sales. We’re still growing aggressively.

How do you describe your brand? We are 100% not a bro or frat brand. We want to be edgy and fun, but not offensive. More than three-fourths of our customers are women. We want our products and customer experiences to be lightheartedly sincere and humorous.

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What’s your greatest satisfaction? Hearing our customers’ stories: We’ve brightened the mood of people who were sick or hurt, surprised a husband serving in Afghanistan, and made a giver look like the coolest mom ever!