In 2012, John Tabis, a former strategist for Disney and Bain & Company, and Juan Pablo Montúfar, a biochemist with a green thumb, set their sights on a grand ambition: changing how people think and feel about flowers by creating a farm-to-table model where customers could directly connect with farmers all over the world. Their online flower startup, the Bouqs Company, cuts out industry middlemen and strives to bring romance and delight back to the giving and receiving of flowers. We visited Tabis, Bouqs’ founder and CEO, at the brand’s Los Angeles offices to discuss how his upstart brand turned $13,000 in seed capital into a growing thorn in the side of established floral giants.
Take us back to the beginning if you could. Where did the idea for the Bouqs Company come from, and what is your long-term personal ambition for the brand?
My cofounder JP—Juan Pablo—and I were in a band together in college. He grew up working and living on a dairy and rose farm. He was absolutely in love with flowers. He would say to me, “I’m going to go be a biochemist and research for a while. Then I’m going to get an MBA, and then I’m going to run a rose farm.” He was really passionate about it, and lo and behold, he did just that. He got his degree in biochemistry. He researched for a while. He got his MBA, and then he went back and began running a family-connected rose farm. He did exactly what he said he wanted to do, and he loved it. He loved the product. He loved the people. He loved being outside on the land.
What he didn’t like was the financial side of the business, which was really tough. Low, single-digit operating margins, really low product margins, months of negative cash flow. The supply chain is overly complex. There are farmers, exporters, importers, wholesalers, florists, and then there are order gatherers. Everyone marks up the product and takes a chunk. Everyone takes time, which creates waste and obfuscates where the flowers come from. Thirty-three to 50% of flowers die along the way. By the time the farmer is paid, we’re sometimes talking 200 days. Meanwhile, a flower is an organic product that is not 100% predictable, and buyers would want very exact counts on very exact days. He was thinking, “That’s not how flowers work.”
JP said, “I could fix this.” Rather than dealing with all the middlemen, he started shipping flowers directly to florists, saying, “Pay me a little more, and you’ll get a better product, the customer will get a better price, the flowers will be fresher, and people will know where they came from. Isn’t this great?” And it was. It was way better for his business, all around.
The problem with his new model was that he was now doing sales and service, and he’s a biochemist. He reached out to me with some questions about e-commerce and scaling the business, because of my experience in strategy and branding at Bain & Company and Disney. At the time, I was a VP of brand strategy at an e-commerce startup called ShoeDazzle.
I had recently bought flowers for my mom, and I was wildly frustrated with the process. I experienced antiquated websites with lots of clicks, and thousands of different products, and lots of discounts, but then lots of fees—so I didn’t know what I was actually getting. It was this bait-and-switch pricing thing. They advertised a fake price—I think it was $19.99 or $24.99—but after I gave them my credit card and tried to check out, the real price was two-and-a-half to three times higher than the advertised price.
My other choice was to call a florist directly, and that went as expected. They said, “How much do you want to spend?” I thought, “It depends on what I’m going to get.” But they wouldn’t tell me that. There’s an auction mentality in the industry: Everyone sort of thinks of it as this constant negotiation.
I thought, “Man, these are really old-school businesses, and I’m really frustrated by this shopping experience.”
That’s when I called JP back and said, “Look. We have to do something here. You’ve clearly identified some major problems on your side. Here’s what I just experienced on my side. Let’s put these two ideas together, and let’s go build a company and give every farm access. This opportunity is way bigger than I thought. This is an $18 billion industry in the U.S.—over $50 billion globally. More important, we can cut out waste, inefficiency, big markups, and lack of transparency.
How does a tiny startup in a multibillion-dollar industry get the attention of customers and suppliers and convince them to work with you?
We had no marketing dollars at first. We were just emailing and Facebook-messaging everyone we knew. Our initial hook was that we were offering flowers from a volcano for $40. That got people excited. We had this source in Cayambe, in the highlands of Ecuador, where flowers grow on the slopes of a volcano. Transparency and providing people with a direct connection to the farmer were core to our brand, so we led with those values. And when customers received the flowers, they’d actually see the customs stamps from Ecuador, and they said, “Wow! This is for real!” And then they began talking about us.
The other immediate feedback we got—and continue to get—is gratitude for just being honest. People say, “Finally, a brand that treats us respectfully. You told us it would be $40, and it was actually $40—and you said it would be 10% off, and we actually saved four dollars. Thank you!”
So, our honesty and transparency generated this natural virality, and the brand grew organically, adding farmers and customers as our sales grew. We went from $8,000 in sales in the first month to selling $12,000 the next month, then $20,000, and $40,000, and then $100,000. That first $100,000 month was driven by Valentine’s Day, but pretty quickly Bouqs was on pace to generate a million dollars a year. That’s when we knew we were really onto something.
Looking back, was there a milestone or a tipping point when the day-to-day operations got easier and your long-term ambitions came into focus?
My mindset started to shift back when we actually began looking to raise some real capital. That flipped my thinking from “What do we have in the bank?” to “How big can we be?”
At the time, e-commerce wasn’t sexy. Investors had been through an e-commerce bubble with brands like Fab.com shutting down. Money was not falling off trees. But pitching Bouqs got me back into big-idea mode. We weren’t just pitching the business as it was; we were pitching what it could be. It was moonshot thinking.
After about four months of trying, we were able to raise $1.7 million. It was a slog for us, but compared to the average seed-round time frame it was relatively short. We [built] the company—from about six people to maybe 15 over the next year.
Then we raised another $5.5 million. Now even bigger thinking was required. Were we a $50 million company? A $100 million company? A $200 million company? [Meanwhile] the way my cofounder and I thought about problems in the floral industry was getting a lot deeper and more mature, because we were learning more about what those problems were and how we could solve them, theoretically, with things like artificial intelligence and machine learning, so that flowers get from where they’re grown to where they’re purchased most efficiently.
So it was probably during the spring or summer of 2014 when we started to say, “If this really works at scale—it fixes everybody’s problems. If our model becomes the way flowers go from farm to everyone, it’s so much better. Better labor standards, better sustainability, better pricing, better transparency. There’s no reason to go any other way.”
You’ve spoken in the past about your love of storytelling. Can you tell us about how storytelling figures in for you and how Bouqs is using storytelling to advance the cultural narrative of the floral industry?
I grew up with two older sisters, six years older and eight years older, so there was a big gap in terms of age and what I wanted to do. We played together a lot, but I also spent a lot of time on my own, making up my own narratives as a kid. I’d build these elaborate worlds, and then I started drawing a lot. I started drawing comics, creating games, making short little movies with a $65 camera from Toys “R” Us.
As I reached high school and college, this storytelling part of me kind of fell away. Then, after college, I went and worked at Bain & Company. It was storytelling—but with data. That was fundamentally important for me in my career, but it wasn’t scratching the itch. And as soon as I decided I was going to leave Bain, I knew I had to get back to the creative kind of storytelling, because I was craving it. So, I went and worked on some independent films. I did it for free on nights and weekends because I needed that outlet. I had suppressed it for eight years of my life and sort of pushed it off, thinking, “That’s not what ‘serious’ people do. Serious people don’t study film or acting or storytelling. That’s what you do as a kid.”
Wow, was I wrong.
The thing is, when we set out to launch this company, storytelling was all we had! We had no capital. We had no relationships. We had nothing else. All we had were the stories we could tell. So everything was about telling our story, and that was super fun.
One thing I believe lasting brands do well is relate to customers on a personal level, and we can do that through stories. With stories, you can change from a company that keeps customers at arm’s length and simply transacts with them, to a company that develops personal relationships based on shared values and trust. In this category, no one has ever really been able to tell those stories. We’re the only ones actually telling the origin stories of these products, which is something I’m particularly proud of, because telling stories is something I’ve enjoyed doing all my life.
Mark Miller is the chief strategy officer at Team One, a fully integrated media, digital, and communications agency, and the coauthor of Legacy in the Making (McGraw-Hill Education). He is a regular contributor to Fast Company.