20VC The Right Way For Founders To Think About Capital Efficiency, How To Create A Culture of Continuous Learning & The Secret To Talent Assessment and Optimisation with Mariam Naficy, Founder & CEO @ Minted

Summary Notes


In an insightful conversation on "20 minutes VC and Founders Friday," host Harry Stebbings interviews Mariam Nafisi, the entrepreneurial force behind Eve.com and Minted. Nafisi shares her journey from pioneering online cosmetics retailing with Eve.com, which sold for over $100 million, to founding Minted, a company that revolutionizes design marketplaces through crowdsourcing and analytics. She discusses the importance of capital efficiency, the strategic growth from angel funding to VC investments, and the lessons learned from the dot-com boom. Mariam also touches on her commitment to building a sustainable, long-term business and the challenges of balancing growth with maintaining a brand's core values. Additionally, she provides insights into talent management, fostering a culture of internal development, and navigating the complexities of public company communication, drawing from her experience on Yelp's board.

Summary Notes

Introduction to the 20 Minutes VC and Founders Friday

  • Harry Stebbings introduces the podcast and invites listeners to follow him on Instagram.
  • Harry expresses excitement about welcoming Mariam Naficy to the show.
  • Mariam Naficy is credited with pioneering consumer Internet models since 1998.
  • Mariam co-founded the first online cosmetics retailer, Eve.com, which sold for over $100 million.
  • Currently, Mariam is the founder and CEO of Minted, a startup that uses crowdsourcing and analytics.
  • Minted has raised $89 million in VC funding from notable investors.
  • Mariam also serves on the boards of Yelp and Every Mother Counts.
  • Harry thanks Julia Hartz at Eventbrite for introducing him to Mariam.

"This is the 20 minutes VC and founders Friday with me, Harry Stebbings. I would love to welcome you behind the scenes here at the 20 minutes VC and you can do that on Instagram at h Stebbings 90 96. As you know, with two b's."

Harry Stebbings invites listeners to engage with the podcast's behind-the-scenes content on Instagram.

"So I'm thrilled to welcome Mariam Nafisi to the hot seat today. Since 1998, Mariam has pioneered consumer Internet models when she co-founded the first online cosmetics retailer, Eve.com, which was sold for over $100 million."

Harry introduces Mariam Naficy as a pioneer in consumer Internet models and highlights her past success with Eve.com.

Mariam's Background and Entry into Startups

  • Mariam was intrigued by the American consumer marketplace as a test bed.
  • She questioned whether she would be given the responsibility she felt she deserved in traditional corporate roles.
  • Mariam viewed the consumer marketplace as meritocratic and a place to quickly make a mark with a great product.

"And I think at the back of my mind, I'd been in investment banking and in management consulting. And I think at the back of my mind I was thinking, am I ever really going to have be given the responsibility that I, at that young age, thought I deserved?"

Mariam reflects on her career in investment banking and consulting, questioning her potential for responsibility and growth in these fields.

Transition from Investment Banking to Startups

  • Mariam felt she had nothing to lose by leaving investment banking for startups.
  • She was consumed by the excitement of her ideas and the startup world.

"To be honest, at that point, I was so young that I didn't really feel like I had anything to lose."

Mariam discusses her mindset when leaving the security of investment banking for the uncertain world of startups.

Lessons from Eve.com

  • Mariam learned the importance of taking the long view from her experience with Eve.com.
  • She sold Eve.com for $100 million before the market crash and later regretted not buying it back.
  • This experience influenced her approach to building Minted with a focus on long-term sustainability.

"And I think that I learned more from the end of Eve than actually the beginning or running Eve, which was that it's good to take the long view."

Mariam shares the key lesson of adopting a long-term perspective from her experience with Eve.com.

Capital Efficiency at Minted

  • Mariam aimed for Minted to be angel funded with low cash usage.
  • Minted achieved a cash float by being paid by customers before committing resources.
  • The business model was designed with high transaction value and good margins in mind.

"Yeah, and actually, that is another thing we took away from the eve.com days was just how to basically create a profitable business, because Eve was not profitable when we sold it."

Mariam discusses the goal of creating a profitable business model for Minted, learning from the non-profitable sale of Eve.com.## Cash Efficiency and Virality in Minted's Business Model

  • Mariam Naficy engineered Minted around cash efficiency due to limited access to funds.
  • The model involved holding no inventory to avoid expenses on inventory planners, systems, or the inventory itself.
  • Mariam Naficy hired Melissa Kim, who had a knack for cash flow management, which was crucial for the company's survival.
  • The goal was to retain ownership and control without relying on venture capital (VC) funding.

"So the whole model was engineered around, ultimately, cash efficiency, because I didn't think I could get any cash."

This quote explains the foundational strategy of Minted's business model, which was built on the premise of operating without significant external funding.

"So it was really a forced by starvation to come up with a very profitable model."

Mariam Naficy describes the circumstances that led to the creation of a profitable business model due to the lack of external funding options.

"And that's what enabled us to hit. And then, of course, I actually found somebody that I hired into the business and became. And then I gave her a co-founder title later, Melissa Kim, who just has this innate ability to sense when cash is leaving the building."

The quote highlights the importance of having a team member, Melissa Kim, whose skills in managing cash flow contributed significantly to the company's financial stability.

"And that forced us down this path of getting to profitability early."

This quote emphasizes the company's focus on achieving profitability early on as a result of their approach to cash efficiency and limited funding.

Inflection Point to Institutional Funding

  • Minted initially struggled with sales compared to Mariam Naficy's previous venture, Eve.
  • The pivot to a crowdsourced marketplace was crucial for Minted's survival.
  • The decision to take venture capital was driven by a commitment to the investors and the need to save the company.

"And we were basically almost out of cash. And I thought about shutting the business down and giving what remained back to my friends, who were the original angels."

Mariam Naficy reflects on the dire financial situation that led to considering the closure of Minted and the responsibility felt towards the angel investors.

"In order to actually save their investment. And really out of just a personal commitment to my investors, I decided to go take venture capital to save the company."

This quote explains the motivation behind seeking venture capital—to preserve the investment of the angel investors and the company itself.

Changes in Focus Post-Institutional Funding

  • Institutional funding led to an expansion into various creative verticals beyond stationery.
  • The business model evolved to support a broader creative community.
  • Taking institutional funding made the CEO's role more complex and required more strategic planning.

"But it did change. It complicates matters a lot once you go into different verticals, and it requires a bigger planning infrastructure."

Mariam Naficy acknowledges the complexities that arose from diversifying the business into new areas after receiving institutional funding.

Capital Efficiency in the Current Ecosystem

  • Retaining a larger ownership stake was a priority for Mariam Naficy.
  • She suggests that an organic pace of growth is preferable to rapid growth fueled by too much early-stage marketing spend.
  • The balance between paid and free marketing channels is crucial for sustainable growth.

"So my conclusion really right now is that there's this organic pace of growth that makes sense and that sometimes if you try to inject capital too early to try to accelerate that pace through marketing, you end up with a marketing mix which is so heavily weighted towards paid acquisition versus the sort of free and cheap channels, that you end up with an unsustainable growth rate."

Mariam Naficy discusses the potential pitfalls of relying too heavily on paid marketing, advocating for a balance that allows for organic growth.

Acquisition Mix Ratio

  • Minted's customer acquisition is predominantly driven by free and brand channels.
  • Finding scalable paid opportunities that are cost-effective is challenging.
  • A healthy acquisition mix for Minted is less than 30% paid.

"We are vastly free and brand driven in terms of our acquisition mix."

This quote indicates that Minted's customer acquisition strategy relies heavily on non-paid channels, aligning with the company's focus on capital efficiency.

"Different businesses are different. I mean, we have a very long lifetime with our consumers because some of them come in when they're getting married, some of them come in later when they're moms, but they tend to have a predictable life cycle and interaction with us."

Mariam Naficy explains how the nature of Minted's business, with a long customer lifecycle, influences their approach to the acquisition mix.## Fundraising and Growth in the Valley

  • Brian Chesky has concerns about the large fundraising rounds in the tech industry.
  • Mariam Naficy notes that as companies grow, there is a mental and cultural shift in strategic planning.
  • Bigger companies have certain advantages, and there is a trend towards consolidation.
  • Acquisitions are a common strategy used by growing companies to gain leverage and assets.

"I think there is a lot of consolidation happening and power seemingly going to bigger players, at least in my space, the ecommerce space."

Mariam Naficy explains that consolidation is a significant trend in the ecommerce industry, which leads to power being concentrated among larger players.

"I think there's probably some money going into acquisitions. Right. To allow you to have that work chest to go consolidate and acquire."

Mariam Naficy acknowledges that part of the large fundraising rounds may be allocated to acquisitions, which can help companies grow and consolidate their market position.

The Presence of Amazon in Ecommerce

  • Amazon keeps the market competitive and promotes innovation.
  • There are strategies for smaller companies and brands to coexist with Amazon.
  • Investing in brands rather than online retailers might be more strategic due to potential partnerships with Amazon.
  • Amazon's constant innovation is beneficial for the entire market.

"Well, I think it definitely keeps everybody on their toes and keeps us, everybody innovating."

Mariam Naficy points out that Amazon's presence in the market forces other companies to stay competitive and innovative.

"I would invest in brands because I think there's a cooperative relationship that can be formed with Amazon."

Mariam Naficy suggests that forming partnerships with Amazon can be advantageous for brands, as Amazon seeks to carry a wide selection of products.

Self-Reflection and Leadership Evolution

  • Entrepreneurs often question their hiring decisions and the composition of their executive team.
  • Funding decisions should allow for building a strong internal team for growth.
  • Hiring based on raw talent and learning potential is key for adaptability.
  • Mariam Naficy has learned the importance of developing people within her company.

"There's just a lot of hand wringing around how you build your executive team."

Mariam Naficy shares that building an executive team is a significant source of uncertainty for entrepreneurs.

"The one thing I've learned is if you are too cheap about how you fund your company such that you cannot build enough bench at the company to grow people from within, you've probably made too strict of a decision to not fund."

Mariam Naficy emphasizes the importance of sufficient funding to support internal team development and growth.

Cultivating a Culture of Upskilling and Talent Development

  • Minted promotes a culture of internal upskilling by rotating employees through different roles.
  • Seeing the potential in people and providing opportunities for development has been a crucial learning for Mariam Naficy.
  • The company focuses on reducing bias and creating a meritocracy.
  • Open calls for internal jobs and anonymous testing are used to assess and promote talent.

"One of the key things we do is as a management team is that we talk about moving people around. So we rotate people a lot, and hiring on talent, on raw capabilities, allows us, that's another thing it allows us to do, is move people around to different jobs."

Mariam Naficy describes the practice of rotating employees to foster growth and development, which is made possible by hiring based on raw talent.

"We're not a company that says we must have this level of diversity at all levels. We are a company that says we must have a bias free and meritocratic process to evaluating sourcing talent and evaluating it."

Mariam Naficy explains that the goal is to maintain a fair and merit-based hiring and promotion process, which inadvertently leads to a diverse team.## Assessing People

  • Mariam Naficy believes her greatest strength is assessing people.
  • She emphasizes the importance of building a company by assembling a team of great people.
  • Mariam tries to stay open-minded and focus on the content of what people say rather than their delivery or appearance.
  • She refers to superficial aspects as "surface level Ui" and tries to look beyond them.

"I actually think it is assessing people. I think it might have been there from the beginning, but I didn't realize it, and I didn't actually even think of it as a thing. But now I realize that you build a company by building a team of great people. So the better you are at assessment, the better things are going to go."

This quote explains that Mariam's ability to assess people effectively is crucial for building a successful team and, by extension, a successful company.


  • Mariam is self-critical about her tendency to see imperfections, particularly from an aesthetic perspective.
  • She acknowledges her controlling nature when it comes to the brand's visual presentation.
  • Mariam has a high bar and a curiosity that may lead to a lack of focus if she gets too excited about various ideas.
  • She mentions the importance of balancing passion with focus, especially given the many opportunities that arise from the creative community.

"Yeah, the self criticism is probably that, well, for example, from an aesthetic perspective, can see too readily imperfection."

This quote highlights Mariam's self-awareness of her critical eye for aesthetics and the potential downside of this trait in her role.

Role of a Board

  • Mariam discusses the role of a board in maintaining focus within a company.
  • The board frequently questions if the company's plans are focused enough.
  • She talks about the challenge of balancing entrepreneurial passion with the necessity of choosing which ideas to pursue.

"And the board is always like, are we focused enough? Are we focused enough this year? Is this plan focused enough?"

This quote reveals the board's function in ensuring that the company's strategy remains focused and does not become too scattered due to an abundance of ideas.

Quick Fire Round: Favorite Book

  • Mariam recommends "The Effective Executive" by Peter Drucker for anyone interested in business management and leadership.
  • She acknowledges the book's outdated writing style but praises its fundamental business wisdom.

"I would say the effective executive by Peter Drucker. It's just a core. If you're interested in business and you're interested in being a better manager and leader, the book is filled with wisdom."

This quote suggests that despite its older writing style, "The Effective Executive" is a valuable resource for understanding the essentials of business leadership.

Impact of Parenthood

  • Becoming a parent has given Mariam insight into the development of people.
  • She relates her experience with her children to understanding and guiding her employees.
  • Parenthood has made her more patient and tolerant.

"And I've been able to see how two very different people develop. And I've come to understand the development of people and their different ways of developing much, much better."

This quote reflects on how Mariam's personal experiences as a parent have informed her approach to managing and mentoring her employees.

Biggest Mentor

  • Maurice Wertigar, CEO of Western Technology, is Mariam's biggest mentor.
  • He encouraged her to become an entrepreneur and believed in her intellectual abilities.
  • Mariam values the support and encouragement she received from Maurice, especially as a woman in business.

"The biggest mentor I have is a guy named Maurice Wertigar at western technology."

Mariam credits Maurice Wertigar as a significant influence on her career and entrepreneurial spirit.

Life Motto

  • Mariam often reflects on the quote "The only thing to fear is fear itself" by Franklin Roosevelt.
  • This motto helped her during the early years of Minted when the company faced financial difficulties.

"There's probably one that I love, which is the only thing to fear is fear itself by Franklin Roosevelt."

The quote serves as a personal mantra for Mariam, especially during challenging times in her business.

Learning from Yelp Board

  • Mariam admires Yelp's strong culture and stable management team.
  • She has learned about the importance of communication with public investors and the public market interplay.
  • Effective communication is crucial for managing a public company, as observed from her experience on the Yelp board.

"I think what I admire about the Yelp organization is how they've built a very strong culture and they've got a lot of stability in the management team."

This quote highlights the importance of a strong company culture and management stability, as observed by Mariam through her role on the Yelp board.

The Road Ahead for Minted

  • Minted's mission is to bring unique design from independent artists to consumers.
  • The goal is to create economic opportunities for designers and allow them to pursue their passions while earning a living.
  • Mariam envisions expanding Minted's reach in various aspects of consumers' lives and homes.

"The road ahead is really to continue our mission to bring great independent design to people's lives and to create opportunity for independent designers."

This quote outlines Minted's future direction, focusing on supporting independent designers and offering unique designs to customers.

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