In the latest installment of Success Stories, a series highlighting the personal and professional journeys of some of the most dynamic entrepreneurs, YFS Magazine speaks with Mike Salguero co-founder and CEO of CustomMade, a Cambridge, MA-based online marketplace that connects customers with independent artisans.
In 2008, while attending Boston University, college friends Mike Salguero and Seth Rosen came across a website that catered to both of their passions — custom-made wares. Rosen suggested they purchase the domain. Salguero made the call.
“The founders started CustomMade as a two-person operation working out of Salguero’s one-bedroom apartment. Today CustomMade is the world’s first and largest online seller of custom products with over 12,000 custom makers registered.”“I first called the [website owner] in April 2008 to gauge his interest in selling the website and to let him know we wanted to buy. Initially he was on the fence, but once the economy took a dip a couple months later, he agreed to sell,” Salguero explained.
Without seed money lined up, the two founders put down a personal deposit and raised $400K in funding to purchase the website — with $15,000 contributed by family and the rest secured from friends and outside investors. In January of 2009, Salguero and Rosen purchased the website from the woodworker who had owned and run the site since 1996.
The freshly minted entrepreneurs started CustomMade as a two-person operation working out of Salguero’s one-bedroom apartment. Today CustomMade is the world’s first and largest online seller of custom products with over 12,000 custom makers registered.
In April 2012, CustomMade closed a $4 million funding round led by Google Ventures bringing total funding to $8 million, according to reports. Earlier this year, Salguero and Rosen raised an additional $18 million in venture capital.
Learn how college friends Mike Salguero and Seth Rosen grew CustomMade from 350 makers to more than 12,000 (and counting) and why Salguero believes hiring great talent is the key to startup success.
|Founder(s):||Mike Salguero, Seth Rosen|
How We Got Started
In 2008, my friend Seth [Rosen] was looking for a coffee table for a new apartment, but he was not satisfied with the quality of retail options … considering their prices. On the other hand, highly customized offerings from other companies were out of his budget.
Unwilling to settle, Seth found [the website] custommade.com, a small site that, at the time, helped him find a local woodworker who made a beautiful, entirely custom-made, table that met Seth’s needs and made him feel more emotionally connected [in comparison to making] a big-box purchase.
“Seth and I both had a passion for custom goods – we both had previously purchased custom apparel, belts, etc. – so when Seth approached me about the idea of buying the site, it was a no-brainer.” Seeing the potential to provide the same experience for many others, we bought CustomMade in 2009 [for $150,000], which we quickly transformed into an online matchmaker enabling buyers and makers to collaborate on unique projects that fill their homes and lives.
Seth and I both had a passion for custom goods – we both had previously purchased custom apparel, belts, etc. – so when Seth approached me about the idea of buying the site, it was a no-brainer.
At the time, I was taking two classes on how to buy a small business as part of my graduate coursework at Babson College, which was extremely helpful. I consulted with two of my professors at Babson, and they provided advice on the best way to negotiate.
I first called the founder in April 2008 to gauge his interest in selling the website and to let him know we wanted to buy. Initially he was on the fence, but once the economy took a dip a couple months later, he agreed to sell.
When [he] agreed to sell CustomMade to us, we didn’t have any money or investors lined up yet. We put down a personal deposit, and then ran around town raising money through many meetings with potential investors during our 60-day “due diligence” period.
From those meetings, we were able to raise the initial $400K in seed funding needed to purchase the website and start running the business. Of the money we raised, only $15,000 was contributed by family and rest secured from friends and outside investors.
Today, the CustomMade community includes thousands of makers of custom furniture, jewelry, leather, ceramics, textiles, and even wooden bow ties. The team has grown from two former college buddies with a vision to dozens of impassioned individuals working to make custom an everyday option.
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