Tech startup: Card Gnome Inc.
company: Card Gnome Inc.
INITIAL LIGHT BULB A few years ago, Joel Wishkovsky and Chad McGimpsey worked together at General Electric. “We always talked about startup ideas,” says Wishkovsky. “He was based in Philadelphia and I traveled the whole time.”
In March 2010 the pair decided to leave their corporate gigs, as well as the Northeast, quitting GE and relocating to Colorado in one fell swoop.
“We quit without knowing what we were going to do,” says Wishkovsky. They liked the concept of crowdsourcing, and worked on a website that allowed people to make custom artwork. “It was kind of a failure,” Wishkovsky says. The foray led them to greeting cards. When they realized the market had yet to move online – and artists’ problems with self-publishing – Card Gnome was born.
IN A NUTSHELL Card Gnome aims to be the “Netflix of greeting cards,” says Wishkovsky. The company has a roster of more than 200 artists and “one of the largest catalogs of greeting cards in the world,” spanning 300 holidays – including Flag Day. Card Gnome’s sales are evenly split between winter holidays, birthdays and other occasions.
Customers pay $4.99 per card or buy packages of 10 or more for volume discounts, and can personalize the cards as they order online. Card Gnome prints cards on-demand at a California-based partner, which Wishkovsky says is revolutionary for the industry. “Typically you have to print first. That model breaks down if the cards don’t sell.”
Artists receive a 5 percent commission (a minimum of 10 cents per card), which is better than the flat fee of $500 to $1,000 – the industry’s status quo. “It ends up being almost nothing on a per-card basis,” says Wishkovsky.
Card Gnome’s sales grew by nearly 30 percent in 2012 and saw a 50 percent uptick in users during the second half of the year.
Holly Hamann, co-founder of Boulder’s TapInfluence (formerly BlogFrog) has been both a Card Gnome mentor and customer nearly since the latter company’s launch. She pegs “convenience” as the key differentiator.
“I can choose from a category of cards, write a personal message and customize it, and just hit go,” she says, citing the built-in card calendar and birthday reminders as another selling point.
THE MARKET About $7.5 billion worth of greeting cards are sold annually in the U.S. and growth is flat. “The market’s not growing,” says Wishkovsky. “What’s happening is the channels are shifting.” To this end, roughly 5 percent of greeting cards were sold online in 2011. “Now it’s about 8 percent,” says Wishkovsky.
FINANCING McGimpsey and Wishkovsky self-funded the startup after unsuccessfully approaching a number of venture-capital firms in 2011. “The big VCs told us, ‘We don’t like paper,’” says Wishkovsky. At this point, Card Gnome is “self-sustaining,” he adds. “We’re not looking for funding. You don’t need to give up equity in the business to make it big.”
where Boulder | FOUNDED 2010 | web www.cardgnome.com
“Birthdays are interesting for us, because they soften our distribution curve. Without birthdays, you have this really spiky graph with a huge upswing at the end of the year.”
— Card Gnome CEO and co-founder Joel Wishkovsky