Mariam Naficy is the founder and CEO of Minted. The online design marketplace employs nearly 400 people and generates hundreds of millions of dollars in annual sales. (The company does not disclose specific revenue figures.) Last year, Naficy earned more venture-capital funding than any other female entrepreneur, bringing in a whopping $208 million round. Getting to fast growth and profitability wasn’t a straight line, though. In the first year Naficy worked on Minted, she says, the whole operation seemed doomed.
–As told to Christine Lagorio-Chafkin 

After I sold my first business, an online cosmetics company called Eve.com, I was really surprised by something new happening online: People were paying attention to bloggers. People they’d never met, people with new voices not affiliated with big institutions. It inspired me to want to crowdsource style and designs, and see what would happen.

I had young kids and wanted a lifestyle business. I knew I could create some very, very good cash-flow by selling stationery online. I’d basically spent my entire career pioneering e-commerce businesses, going back to the early days of e-commerce. So I kind of knew what the economic characteristics of an order should be, and I really wanted good margins, high transaction size, the right value-to-weight ratio, and to create good business dynamics. In 2007, I raised a small seed round from friends and family and thought, “OK! I’ll start this business.”

There was not a single sale for a month. It was total crickets. And then after maybe four weeks there was one transaction. And I thought, “This is such a dud! I should really take the money that remains and return it.” I felt so responsible for people’s money.

A friend of mine called and said, “Well, maybe you should actually try to raise capital to save the business.” And I thought at least I could maybe get us around the corner to where this is working, to pay my friends back. Literally the only reason I sought venture funding in 2008 was personal obligation. Otherwise I was ready to shut the thing down. Thank goodness I didn’t.

Then a couple of fortunate things happened. First: the recession. It was actually a very good time to start a business, because people started to really question if they really needed large institutions–those huge brands. People started thinking, well, maybe I want something smaller and more artisanal and affordable, actually. It was a consumer-perception shift that worked in our favor. And then Pinterest and Instagram were coming along and exposing more people to style and design.

My investors didn’t initially believe in the crowdsourcing aspect of the business, so I hedged my bets by also selling stationery from a collection of well-known stationery brands. I hired an intern and spent my evenings working on my passion: the crowdsourcing experiment. When we started posting the winners of our first crowdsourced-design challenge, sales started to slowly trickle in. And among the few orders we had, it wasn’t the established brands that were selling, but rather the crowdsourced designs. 

We started with save-the-date cards for weddings. Through our crowdsourcing model and unique customization offerings, our data helped us uncover consumer needs and desires that were not currently being met in the traditional marketplace. For example, we saw customers gravitate toward save-the-date card designs with photos in them. I remember a national printer saying to me, “Mariam, in our business, people do not put photos on their save-the-date cards.” I thought to myself, “That’s funny, because consumers seem to be voting for them.” Now, almost 100 percent of save-the-date cards sales have a photo on them. Minted completely changed that market. 

And from a marketing perspective, we bought small ads at the back of magazines we loved. We could afford only quarter-page or half-page ads, but it helped us get off the ground. 

With our first holiday season in 2008, we offered a full assortment of crowdsourced holiday card designs and blew out the doors. Minted had found its audience while also creating an entirely new market for designers and creative people around the world. It wasn’t long before there was a whole community of designers on the site, and illustrators and artists. And their work was selling.

It became clear soon that this was a valuable, talented community. I realized that we had tapped into something a lot bigger. They could produce art and design work for many, many industries and businesses. It wasn’t really just a stationery company that we’d created. As Peter Fenton from Benchmark, one of our investors, said, “We brought a gun to a knife fight.” Meaning, we built this very large platform for stationery, but we could then take it to much larger businesses and markets, to textiles and wall murals.

I’m a very disruptive person at heart–a bit of a boat rocker. A lot of the establishment people we would talk to would ask: “Well, who are these artists anyway?” I would get that question over and over again from people who could not accept the fact that there were people who could not afford to go to design school or art school, and yet could teach themselves and in a blind competition actually win.

I really love the artists and the designers and I really wanted to bring their work to the world. Proving the point of American meritocracy to the establishment was a really interesting hypothesis that I wanted to see play out. Many of these artists and designers are transitioning from other careers like, for example, an Alaskan oil rig worker and a master plumber in New York. I would say probably 20 percent of the designers probably are fully making a living from Minted.

It has turned into a business that is in the hundreds of millions of dollars in sales, with an incredibly vibrant community worldwide of 15,000-plus artists. They are creating a design platform that is not only serving Minted, but is also now expanding to serve as a design-content platform for other retailers–very large mass retailers. We are doing both licensing and wholesale. We are pushing 400 employees right now, and around the holidays that will double to 800. It’s certainly not a “lifestyle” business anymore.