You might not expect two naval engineers to run a greeting card company. Lovepop co-founders Wombi Rose and John Wise certainly didn't expect it either, but that's exactly what happened.
By happenstance, on a Harvard Business School trip in 2014 while the friends were working in Vietnam, they stumbled upon a street vendor in Ho Chi Minh City selling cards featuring pop-up, 3D designs. What started as a late-night food run became the impetus for their multimillion-dollar company, and a perfect reminder that inspiration can hit you anywhere.
"We were looking at industrial businesses — we we're ship designers, we didn't think that we would end up in something that was so aesthetic or fun," Rose tells CNBC Make It of Lovepop. But now, years after an appearance on season seven of ABC's "Shark Tank" and an initial investment by star Kevin O'Leary in 2015, the two are at the helm of a burgeoning card and wedding invitation company that topped $18 million in sales last year.
With Americans spending an estimated $7 billion a year on cards, according to trade group The Greeting Card Association, that's big business.
And yet, it almost didn't happen. After buying about 30 pop-up cards that night from the street vendor in Vietnam there wasn't an immediate "aha" moment.
"We were very excited about it, not from a business standpoint, just from like a 'this is really cool [standpoint],'" Rose says. In fact, it wasn't until the duo returned to Boston and started asking people what they thought of the pop-up art in a greeting card concept that they dove in full time.
Rose says one woman picked up a card with a blooming Japanese orchid and explained that she'd give it to her mother since the day marked the five-year anniversary of her father passing away, "and [that] this would just make her day, it's like a tree of life," Rose recalls.
"That was I think the first moment where we truly recognized that there's more here than just like the fun that we have in designing and making it," he says.
Pooling the assets they had, the co-founders launched the business in 2014 while they were still in school. When that still wasn't enough, they took out high-interest loans and worked out of Harvard's shared student work space to save on office costs.
By the time Rose and Wise were invited to appear on "Shark Tank" in the summer of 2015, the company had sold about $300,000 worth of cards. Securing a $300,000 deal with O'Leary for a 15 percent stake in Lovepop proved to be a turning point that led to later rounds of institutional capital, including a $12.5 million round led by Highland Capital Partners in January.
At the forefront of the investment decision for O'Leary was the possibility of applying the 3D artwork to the wedding category, a total market opportunity Lovepop estimates at $2 billion. When the show aired five months later, Lovepop's website featured a wedding invitation option to test the waters.
"We got so much response from that, I think within a few days we had 1,800 submissions to get a Lovepop wedding invitation … which we were not really in a position to fulfill at that time," Rose says. But now, the fully-customizable wedding invitations Lovepop rolled out earlier this year, have become a key component in the company's quest to disrupt the established card industry.
"At this point, now we've developed a system where there's limitless possibilities of how you can make your own Lovepop for a wedding invitation," Rose says, pointing to the way customers can customize color, font and design options online at a retail cost of $6 per invitation. It's a price point that comes in well above the $1.63 cost couples tend to spend on average per invite according to The Wedding Report, but not completely unexpected from the company that's made a name for itself as a premium card option. Rose says that assembly still takes place by hand at their processing facility in Vietnam.
The hope is that the new category will help Lovepop reach its goal of 1 billion shared "magical moments." The fact that the company recently crossed the 6 million mark — or that Rose and his former ship-designing classmate find themselves running a card business at all — is already something that seems surreal for the co-founders.
"I kind of think there was like a million different reasons that all needed to happen for us to even get close to where we've been able to go, and there's a lot of journey left."
— Video by Zack Guzman
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Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."
