Aurate Co-Founders Sophie Kahn & Bouchra Ezzahraoui on why authenticity matters

Joining me on the show today is Sophie Kahn and Bouchra Ezzahraoui, Co-Founders of Aurate.

Aurate is the premier, direct-to-consumer fine jewelry brand offering ethically sourced, luxury jewels without the retail markup. Founded in 2015 by Bouchra and Sophie, the company seeks to democratize the fine jewelry industry through its online driven model, accessible price points and social impact strategy. All of their jewelry is designed and manufactured with love in New York City.

In this episode we’re chatting through how they got started and brought this brand to market, why authenticity is so important in today’s world, and the key takeaways from raising capital.

Please note, this transcript has been copy pasted without the lovely touch of a human editor. Please expect some typos!

Hi, my name is Sophie, I'm originally from Amsterdam. Um we've been now in New York for around 10 years and I'm the Co Founder and Co CEO of a startup called Aurate in New York. It's a fine jewelry direct to consumer brand and in one sentence, because I can talk about it for hours. We're basically trying to improve the way women buy fine jewelry for themselves and really empower them in the process. Sounds beautiful Bouchra. And hi everyone, I'm Bouchra, I am Co Founder of Aurate, who basically again, very similar story to Sophie looking to change the way women shout for fine jewelry for themselves. I'm originally from Morocco, grew up in paris and the U. S. Where I actually met Sophie the first year I came to the U. S. So we've known each other for a long time.

00:04:38Edit Gosh, there's such global women, I love that. I want to go back to life before you started. All right. I think I read that you were at Princeton together in 2009 or something. So it has been such a long time. What was getting you excited to start a business together. So basically Bush and I to give you context, we were both working in the corporate world. So I was at the time at marc Jacobs doing strategy and Bush was a Goldman Sachs and we were already very close friends because you know, we had met at Princeton, it was a very quantitative program. We were very few women. So we loved each other not just for women, but also we had similar interests other than finance. So one day just in new york, this cafe called cafe Gitana nolita, we were talking about life and how yes, we liked our corporate jobs but we really wanted to do more, you know, have more impact, have a meaning in life and not do the kind of corporate ladder thing. And at the same time my finger had turned green from this ring I had just bought and we started talking and Bush was like in Morocco, people were, you know, fine jewelry, real gold.

00:05:43Edit This doesn't happen. And I was like, yes, but I want something that's cool and it looks good and they're like, hey actually kind of this light bulb moment, wow, there's actually no brand out there for women like us in our late twenties, early thirties where you know that hits essentially all the boxes of what we're looking for, which is high quality but affordably priced ethically sourced, it looks good, but it also does good kind of the whole shebang of and then that's from a product perspective and then from a brand perspective a brand that talks to us and not to men, there was nothing out there that took our hearts or took our wallets for that case and we were like you know what, let's try this, that's kind of how it originally started that light bulb moment for the first time. The light bulb moment. I love it. And what were people saying when you started telling people, oh you know we're going to start this business together, what was the feedback you were receiving? Which part of the feedback would you like to hear because the first feedback I think was your crazy that even like joking aside Sophie and I again we didn't have any background, let's say, and fine jewelry, we don't come from families of jewelers and I come from a family of entrepreneurs, so I do understand what it takes actually and all the hard work that goes into building a business.

00:06:57Edit Sophie had background in luxury because she works at marc Jacobs and she understood basically the ins and outs of basically working at a global corporate that actually wasn't in the fashion space. So that was basically the first feedback. However, however, when we actually spent we did those focus groups with it started like with our friends, literally our friends, our family members, all the women, basically, our colleagues, all the women surrounding us asking them, how do you shop for fine jewelry? What is it that bothers you in a current customer experience that you're seeing and how do you think we can improve things around? And that became kind of like a work in progress, almost like a project that we're working on on the side. Like how can we go over all those pain points that we as women working women or not necessarily. I wouldn't even call it working. I would call it more independent spenders looking to buy fine jewelry for ourselves and we don't need men to buy us a pair of hoops or, you know, a basil necklace whatsoever. It's nice to have a gift. But it was almost like this self gifted product that we enjoyed as women.

00:08:00Edit That's part of your story as a women. So, the story started building from there. So early feedback actually helped us a lot throughout all the building blocks of what or it should be, I should stand for. So better customer experience. The superior product, more transparency, ethically sourced sustainable. Like all these points like matter to people and get back in the concrete way we give back schoolbooks for basically the collections that we sell and a lot of people say we're given X percent of proceeds to X in a very vague way and it's not part of their DNA. But I think our D. N. A. Was more about transparency, but building a brand that spoke to the women that wanted to wear it brother sounds so beautiful and a really nice foundation to build upon. You mentioned in the beginning you were doing this more on the side is a bit of a side hustle. How long were you kind of dabbling before it became to the point where you thought, hey, we're going to actually quit our jobs and and pursue this full time.

00:09:03Edit So all in all I would say it was probably like two years from the very beginning of us thinking about the idea because right, you have the idea of this cafe, right? Then you need to start thinking putting pen to paper, looking if it's even realistic. So we did the whole strategy piece of, wow, this actually could really work, you know, looking at all the other players out there what they're offering. Yeah, there is really a white space. So that takes sometimes, especially if you're having, you know, a full time job. Then all these focus groups with your friends, you know, so I would say maybe we did the classic Parsons where we learned at least somewhat of jewelry and kind of the basics of how to the jewelry design. So I would say like six months was kind of just concept ideation and getting everything ready then starting off and then probably the first year was really actually up and running the year after that, basically the second year was actually up and running running the business right? So we had the first thing we almost did is open the store which is funny. So while we were you know while I was at marc Jacobs which was a goldman Where in Soho we found this location that was I remember it was like $1,000 a day, we have like $10,000 under a bank account, so we decided you know let's get it for five days into what happened.

00:10:09Edit So we put the jewelry in there that by then we had developed and it started working and that's also when we knew wow this thing actually has traction right? So anyways long answer to your story but essentially it took all in all two years before we decided okay we have the concept, we've tested it, it really works there. Women that want this, I'll never forget one day in their little Soho store that looked really scrappy because we had no money and we were just putting the jewelry there to test these like really cool french girls came in and they were looking and they were like you know I won't pretend I can do their accents, I won't do it. But they were basically like wow this stuff is amazing, I've been looking for this all my life and and they bought so much that's when you know these type of moments when you're like wow we're not crazy, this is, this can really be something, let's take the jump, wow, yeah, that is a tipping point. I can totally imagine that sort of profound moment of seeing people's faces also in real life and watching their, you know what happens to them when they see and discover a brand that they truly love. I'm interested to know about in the very beginning how much it costs to start a jewelry brand like this and you know, were you having to place huge minimum orders or if you were able to start small?

00:11:20Edit I would say especially in this space, that's very capital intensive, It helps basically to kind of have kind of a support system, I would say to kick off that first, you know that first gig. So it is, we started very small. Like we started and it was really hard because I think the first suppliers that we worked with just took a chance and believed in the story because in there, in their experience, obviously they're used to the traditional way of doing things and I think the first person who took the stab on us, we're just saying we haven't seen this before, so you're either crazy or this is actually going to work And we started very, very, very small, very small and it grew very fast and we went from ordering and just making up numbers from ordering 10 pieces to 50 pieces and it started scaling and as we were scaling, I think something that was helpful at least having those corporate side jobs on the side. I would say there were kind of side jobs now that we think about it is having that to burst them around us.

00:12:23Edit And we were fundraising capital around us. We were borrowing money from people who worked with us. Like we'll pay this back in three months, will pay this back in six months and we're collecting that. I'm just making products and selling it. So there is no shame in starting small, but you just need to have a vision of how that small becomes big and how you get too big. How can you finance the big as you're growing basically from the small. Mm That's so interesting. And I think that's something that we haven't spoken about before on the show is rather than immediately thinking, hey, raise money and give away equity more of this. Hey, ask your friends or colleagues or people who are in your life for some kind of loan with, you know, maybe exciting terms for them or something that it's not so big to jump into like a bank loan for example or something like that. Where it's a lot more strict, I assume. Very cool. I want to dig into the launch the launch of the brand, How you started getting customers finding out about you maybe even more so around the time that you've done the first pop up and things were starting to move and you were deciding to quit your jobs and go full time into or eight.

00:13:36Edit So basically we had, you know, so we both went full time. We had a little bit of money that we could use. And then it was really about, you know, a proof of concept was kind of there and then it was all about getting our name out because at the end of the day, I mean people think if you have an e commerce company or you have a website, people will just come. But it's like having a store in the middle of the desserts, right? If you don't, if you don't have traffic, nobody will ever know you're around. So how did we get a name? So obviously did the traditional things such as launch parties and all of that, like physical things the first time around. But then it's really trying to figure out on the income side how to generate traffic right now. For instance, two thirds of our traffic is organic, so unpaid. But to get there, that's the thing. In the beginning, obviously it's really hard to get there. So we did a mix of a lot of stuff, you know, obviously with some facebook advertising, we have some influencers, we got a lot of press, we worked with affiliate, so kind of like all of the basic standard marketing ideas that are out there.

00:14:36Edit We tried to do, but we try to always be innovative and how we're going to do it. So because also we didn't have all the money in the world at all. You know, and we do have a finance background so we wanted to be very careful with their money was being spent. We try to always just do it differently and really learn. So I think one of the things also is with you know, strategies, I mean I used to work in strategy so nothing against them but at a startup specific really, you have to adapt strategies much faster than in the corporate world. Right? So we could say it makes no sense to start saying, you know, x percent of our budget is going to go here doesn't make any sense. You just try it out and you look at it almost daily and after a week of seeing results, you know where to put more in. So it's very much I would say like the main thing that I can say about how we skilled or it relatively efficiently was by pivoting all the time in terms of where you're gonna put your money and how you're going to do it because having like this january strategy of the whole year, it's just, it doesn't work like data changes things change numbers change, you just need to be on top of it and edit as you go and when you were doing those pivoting, what were the kinds of things that were really working that you were like, okay, this sticks and now we're going to double down and scale in these areas.

00:15:52Edit It really, again, I think things change very fast as we started. For instance, our Pop Up strategy was extremely lucrative because we would open a space and it becomes profitable very quickly like month or month three. So that was basically something that that just did super well then Covid hit for instance, last year and now you hit a wall of like how does the physical experience need to change to adapt and get to the profitability when it has to be. So you pivot completely into something else. So we found different ways of talking to our customers that we're not only offline, but there were a combination of, you know, online styling, virtual styling, texting them doing different things where basically you talk to your customer or you go after them in a different format or you do partnership with different brands that speak to very similar demographic and they're your cross kind of crossing that demographic that sees both brands like or a demographic that you couldn't have rich if unless basically you've done partnerships with those other people.

00:16:58Edit So again, like piven has been kind of, I wouldn't talk about it like on a daily basis almost at a time, but it's more every month basically brought a different challenge, especially when you start like in the beginning for instance, a lot of people put a lot of their eggs into facebook and instagram marketing and sometimes you find another channel that could be a little bit more lucrative than that where you're on google instead of facebook whatever. So it really depends on the business, our business is more visual, so more visual channels have been working for us and our business relies a lot on word of mouth. So I think our job is for us to find ways to amplify the word of mouth, if that makes sense. So it's not heavily catered towards, let's just stay online and like acquire customers just for paying basically all my platforms. But how can we get our own customer actually to be our best ambassador? And that's been kind of the best pivot for us for the last two years talking to them more. Hmm, that's so interesting. And you mentioned the zoom styling session.

00:18:01Edit What happens in a zoom styling session? How does it work? What's it like? So basically, I mean, it's what we did and this is part of the whole pivoting after, you know, in general and specifically after Covid, we were like, okay, retail always worked for us. It was always profitable. People still want to, you know, what are the main reasons people still come to the store, They don't come to the store to just buy the jewelry because quite frankly you can do that online. They come because they want styling advice right? Like there's a certa