Mariana Castillo, Ben & Frank | Starting, Scaling and Funding a D2C E-Commerce Brand [Ep. 59]

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It had never been so easy to start an e-commerce brand in Latin America. In recent years, multiple services and tools have emerged that have made launching an e-commerce brand increasingly cheap and fast.

But starting, and getting to sales of tens or hundreds of thousands of dollars, is one thing. Scaling to millions in revenue implies commercial, operational, and financial challenges of a greater magnitude.

Today we spoke with Mariana Castillo, co-CEO and cofounder of Ben & Frank, the direct to consumer glasses brand that is transforming the experience of buying eyeglasses with modern and affordable options.

Ben & Frank has surpassed tens of millions of dollars in revenue, has established itself as a leading brand in Mexico and, to date, has raised investment from funds such as L Catterton, DILA, and Wollef.

Thanks to Alejandro Diez of DILA Capital and Cristobal Perdomo of Wollef for the excellent question suggestions.

What You Can Learn Today

  • How to start and scale a Direct to Customer brand
  • The process of selling in physical stores vs. e-commerce
  • Financing strategies for e-commerce

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Youtube Timestamps*

About Mariana and Ben & Frank

  • [1:16] - How did Mariana get into the world of startups?
    • In 2014 she went to study an MBA at the University of Chicago
    • She did internships at a venture capital fund
    • She collaborated on the launch process of a crowdfunding startup
  • [3:41] - What is Ben & Frank?
    • Ben & Frank was founded in 2015
    • The brand offers good-quality glasses at an affordable price
    • They have 55 stores in Mexico and one in Chile
    • Ben & Frank has more than 600 employees

Origin of Ben & Frank and Direct to Consumer

  • [4:46] - What is a Direct to Consumer brand?
    • They do not require intermediaries to integrate into the value chain
    • They serve customers through their digital channels or points of sale
    • They make it possible to reduce costs and have greater control over product quality
    • With a D2C model, you have greater closeness with the customer
  • [7:06] - What explains the explosion of Direct to Consumer brands?
    • Emergence of tools to develop an e-commerce quickly
    • Facebook and Google democratized access to customers through advertising
  • [11:08] - Trends in consumer behavior
    • There is greater awareness about the origin of products
    • Preference for satisfying purchase experiences
    • Closeness with consumers and customer loyalty
  • [13:36] - What role does technology play at Ben & Frank?
    • Comparison with the operating system of a traditional optical shop
    • Interlinked systems to optimize processes
    • Centralized inventories to maximize efficiency
    • A unique offering of 150 glasses references
    • Omnichannel order processing (online and physical)

How to Scale a Direct to Consumer Brand

  • [17:05] - Deciding where to sell
    • Analyze the product’s attributes
    • Understand consumer behaviors
    • Complement the digital side with a physical experience
    • Physical stores make it possible to acquire customers
  • [21:44] - Challenges in scaling Ben & Frank
    • Understand how regulation works in order to open physical stores
    • Hire the right employees to serve customers in the stores
  • [25:25] - Marketplaces as a means of scaling
    • Analyze the acquisition cost and the conversion rate of the e-commerce
    • Understand how recurrently customers buy
    • Consider the relationship with customers
  • [28:34] - Differentiation as an e-commerce
    • Focus on the core of the business and the value proposition
    • Understand why customers buy
  • [30:36] - Advice for scaling an e-commerce brand
    • Remove everything that does not add value in the process
    • Focus completely on the customer

Financing for E-Commerce

  • [31:45] - Financing strategy for e-commerce
    • Betting on Facebook or Google Ads is not always efficient
    • Investment to hire talent
    • Leverage with capital
  • [34:55] - Financing alternatives in e-commerce
    • In the long term, venture capital will not be a good option for e-commerce
    • Opt for financing with debt, working capital, and digital advertising
    • Choose funds that are a fit with the startup

Tweet Round

  • [40:52] -
    • Recommended book: Bad Blood by John Carreyrou
    • Changes in the Latin American startup ecosystem: greater gender diversity and diversity at the sociocultural level
    • Founders to interview: Jaime Macaya of Kavak Argentina, and Fernando Gómez and Abdon Nacif of Nexu

Episode Mentions

You can find Mariana on LinkedIn and Twitter

Recommended books: Bad Blood by John Carreyrou

Founders to interview: Jaime Macaya of Kavak Argentina, and Fernando Gómez and Abdon Nacif of Nexu

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