How Two Sisters Turned Their Dream Into A Million-Dollar Business
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Watching their then-six-year-old nephew play on an iPad, Donna Khalife, 31, and her sister Rosy, 24, wondered if there was some way to get more children to put down their devices and try other types of play.
“We asked, `What are some of the ways we can engage them in the real world?’” says Donna.
Their brainstorming resulted in Surprise Ride, a company that sells subscription gift boxes for children. After launching to the public in a beta phase in May 2013, the Washington, D.C.-based firm shipped more than 40,000 boxes and now brings in more than $1 million in annual sales. Along the way, the duo appeared on Shark Tanklast season. “That gave us a huge boost and put us on the map,” says Donna.
In a market filled with subscription box companies, Surprise Ride has targeted a very specific niche: children ages 6 to 11 who can read and do some of the activities on their own. Their boxes, often sold to family members of the youngsters such as grandparents and aunts, are filled with toys and activities that address questions kids are curious about, such a “Why do birds fly?” or “Why do volcanoes erupt?” The Summer Survival Kit, for instance, includes bee-related activities such as making beeswax candles, African safari-themed projects such as making an “Elephant Memory game” and beach-oriented activities such as making sand art.
What helped the Khalife sisters turn a germ of an idea into a thriving business was the systematic way they built it. Because they live in different time zones—Donna was living in Los Angeles and Rosy was working abroad in London—they created a shared Google doc to record their startup ideas. They ended up with 30 pages. In December 2012, they put $5,000 in a bank account to fund the business and taught themselves to code so they could put up a website.
Both sisters have a knack for creating things from scratch. They had spent countless hours in the workshop of their artist father, Ray Khalife, a do-it-yourselfer who even made his own paint. The family had emigrated from Lebanon in the mid-1980s as war refugees. When civil war broke out, they escaped after nightfall on a boat to Cyprus.
By the spring of 2013, the sisters were accepted to the Betaspring Accelerator in Providence, Rhode Island, where they did much of their market research. The duo talked to experts and conducted surveys, focus groups and interviews of potential customers. All told, they held more than 100 interviews with parents, grandparents and other family members. “We were obsessed with testing and proving it was a valid concept before we spent a lot of other people’s time and money,” says Donna.
Both had a business background to draw on. Donna attended Harvard Business School and had worked on Wall Street; Rosy had studied marketing at Providence College.
By May 2014, they applied for Shark Tank. “It’s a very unpredictable process,” says Donna. “You have to submit an interview video and a pitch video.” On the show, they received an offer for 25% of the company but didn’t accept it.
Still, the appearance sparked sales. The number of subscribers rose from the hundreds to the thousands. Fortunately they had increased their inventory ahead of time.
Surprise Rise had no employees other than the Khalife sisters its first year in business, but with orders flowing, it now has 10. Currently, the founders are working on raising capital in a Series A round. Qualcomm co-founder Irwin Jacobs, whom they met at a scholarship event, has invested $500,000.
The growth has been a bit of a whirlwind but the Khalife sisters say they’re ready to scale. “It happens so quickly you have to get into the swing of things, working late hours and on the weekends,” says Rosy. “It’s something you need to do to sustain your business.”
Article written by Elaine Pofeldt
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