Episode 36: Bootstrapping for Success with Chris Gatbonton and Ryan Afflitto of Creation Crate

Aug 23

In this episode of the Subscriptions: Scaled podcast, Chris Gatbonton and Ryan Afflitto of Creation Crate join host Nick Fredrick from Rebar Technology to talk about their subscription box company that focuses on STEM education. They send customers boxes that offer hands-on learning projects focusing on electronics and programming.

Bootstrapping Beginning

Chris tells Nick how he was frustrated his whole life with the formal education system. He felt like everything he was learning was going to be outdated by the time he graduated, and he knew there had to be a better way to teach and learn.

Chris has also always been entrepreneurial. He knew since he was a child that he wanted to be an entrepreneur, and in 2105 he blended his entrepreneurial spirit with his aspiration to create a better way to learn STEM subjects.

The problem was that he didn’t have any money. So he went on a PR blitz. Chris contacted every local journalist that he could find who had written about subscription boxes, education, or tech. He pitched them on his idea for his subscription box company, despite the fact that he only had a domain name, a WordPress theme, and a prototype.

The gamble paid off, driving enough traffic to his new website to collect pre-orders on a box that didn’t yet exist. Those orders generated enough revenue for him to create his first box after just two months.

Doubling Down

Around that time, Chris reached out to Ryan who was a managing partner at a marketing agency. When Ryan took on Creation Crate as a client, he was very hands-on in working on the growth and marketing strategy for the company.

He believed in the mission of the company to create different hands-on ways for people to learn. Being frustrated with traditional education resonated with him. At the agency he worked on projects for as many as 30 different clients. He wanted to focus on the Creation Crate mission, so he left the agency to work full-time with Chris, doubling the size of the company.

Evolving Into a Tech Platform

Like many subscription box companies, Creation Crate has evolved over the years into more of a curriculum-based tech platform. They realized as they created and delivered their first line of electronics projects that the natural progression was to offer new STEM learning projects to the customers they already had, eliminating the new customer acquisition costs.

From there they evolved into keeping an inventory of their projects and selling them outside of a subscription model, with some customers buying all the projects at once. They feel like they are about halfway through the evolution process, and that they will eventually become a full-service e-learning platform featuring a full line of hands-on STEM project boxes.

Diverse Customers

When they were getting started, Chris and Ryan assumed that their target customer base would be students, and they focused on getting kids to subscribe. They quickly learned that the customer base was quite diverse, and they were getting parents and grandparents, often with STEM backgrounds, using their boxes to bond with their kids and grandchildren. They found that they struck an emotional connection with those parents and grandparents because they found a way to share their enthusiasm for technology.

This led to explosive growth during the pandemic because parents were seeing first-hand how their kids were being asked to learn, and many felt that the kids weren’t being challenged enough. Being in STEM fields themselves, those parents knew what kind of skills were going to be valuable in the job marketplace of the future, and the Creation Crate boxes were a perfect fit to teach those skills.

Adjusting the Model

The company currently has 18 projects, meaning most customers sign up for 18 installments, receiving one box per month. But as they’ve grown, they’ve made adjustments, like offering all 18 projects at one time, and they continue to evolve.

They are currently looking at several options to add, including an audible-style platform where customers buy credits and use them when they want instead of locking into a monthly model. They’re also looking at offering bonus gifts, like a digital multimeter or a soldering kit, to reward pre-payment instead of offering discounts, so customers feel like they receive added value by paying in advance.

Online Engagement

Creation Crate offers an online classroom to its customers, differentiating it from most standard subscription box companies. They admit that the engagement with the online learning platform isn’t as high as it should be, and they are working on ways to increase it. They think it’s important to provide their subscribers with a digital learning experience to go along with the physical experience they get from the boxes.

Having the online classroom enables them to track metrics that other subscription companies don’t have access to. They can monitor how often and when customers log in, and how long they stay engaged. This allows them to create custom marketing programs through email that speak to exactly what those customers are interested in.

Influencer Marketing

These days, they rely heavily on affiliate and influencer marketing to gain traction with a wider audience and grow the business. They emailed thousands of bloggers and YouTubers involved in STEM subjects and offered them free products in exchange for reviews. Within 30 days they had more than 100 requests for products to review, and those reviews quickly boosted sales. One influencer that created a big boost in sales did his review in French, something they weren’t expecting. The sales numbers were so strong, they now have a French version of their boxes.

Knowing the Numbers

Like all start-up businesses, cash is king at Creation Crates, and they have learned that knowing exactly where the revenue is coming in and at what rate is critical for the health of the company. Chris has always been interested in numbers, and he created a financial model that is incredibly accurate at forecasting cash flow so they don’t have to rely on assumptions and guessing.

They iterate the model every month, and work hard on making it as accurate as possible. This helps them make the right decisions about spending on things like marketing, PR, and advertising. As Chris says, “Anyone who runs a business of any kind, if you're not intimately familiar with your numbers, I think you're at a disadvantage.”

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