How This Entrepreneur Raised $28,000 Using Airbnb to Fund Her Startup

Tracy DiNunzio isn’t your typical Silicon Valley startup founder. She’s a painter and a self-proclaimed Bohemian. She did her first tech startup after the age of 30. And she didn’t start her company in Northern California.

Tracy built her company, Recycled Media, out of necessity. She hasn’t raised any venture capital. She drove her company to profitability before paying herself a modest salary.

She leveraged herself and even sold many of her possessions to get started. And when her assets were tapped she rented out her bedroom and even her couch on Airbnb to afford her year-one operations. More on that later.

She actually IS the prototypical entrepreneur. Just not the kind you would initially read about on TechCrunch. That may soon change. And that’s what I love about her narrative. It represents the great majority of entrepreneurship and eschews the fairytale rags-to-VC-riches stories we so often read about in the press.

Here’s what I learned about Tracy:

1. She started her business from a personal need
Tracy was an artist throughout her 20’s but she watched her then husband found a tech startup. She learned at the kitchen table as so many spouses do. After some encouragement from him she decided to launch her own website – Recycled Bride. This was the first in her string of web properties.

The idea came from having been recently married herself and seeing how expensive it can be to buy a new wedding dress. So many women aspire to wear Vera Wang, but few can really afford the dresses. Weddings are a bit like college degrees – they often set you back financially for many years after the event.

And further, Tracy felt the calling to try to build something “green.” Recycled Bride became the perfect endeavor: Less money, less waste.

Unfortunately Tracy would learn first hand not much later that the business model has two components: both buying and selling. And her marriage headed in the wrong direction she found herself up one wedding dress too many.

While she remained friends with her now ex husband, she was truly on her own. She put all of her savings into her company. She sold many of her possessions on Craigslist and even sold her paintings and materials at less than cost.

2. She found non-traditional financing
But Tracy did what entrepreneurs do. She never gave up. Tracy started renting out her bedroom on Airbnb. She did the math and realized that she could bring in more money through Airbnb than she could by having a roommate. She not only rented out her room but also rented the couch. On occasion she even slept on the couch in order to make more money.

In one year of Airbnb Tracy netted more than $28,000. Without this money she wouldn’t have been able to finance operations. Oh, and one of her roommates would later become her new husband! So her wedding story had a happy ending.

One of the many things you become expert at when you launch your own company and have no money is SEO. If you want traffic you need to learn the tricks of the trade. Tracy studied SEOMoz and several other online sources of SEO tips.

She not only became an expert in SEO, she began consulting in SEO to continue to make ends meet and she became a speaker on the topic. How’s that for an ex painter?

When Sam Teller first encountered Tracy he knew instantly he wanted to work with her. Sam is the managing director of Launchpad LA and we were about to pick our 2012 class of entrepreneurs. Sam just told me, “You HAVE to meet Tracy. In the first 5 minutes you’ll realize that she’s a classic entrepreneur. She’s infectious.”

He was right. By the time we had met Tracy she was running a profitable business, was paying herself a salary and was on the verge of launching her second (related) Internet business called Style Trader (more on that in a minute). Now she had an extra $50,000 to start building out her team.

3. She focused on her customer
Tracy is knowledgeable enough to talk tech and swap design & product stories with other founders, but she realized early that networking amongst this group and reading and writing in their journals would not bring her more customers.

So Tracy began keeping a blog about …. (what else?) weddings. She became an authority on the topic and her blog helped her to both elevate her status in her industry as well as to bring great link juice to her website and improve her SEO.

4. She became part of the fabric of her community
Instead of doing guest posts on TechCrunch or speaking at startup conferences, Tracy became a regular contributor on wedding and women’s lifestyle blogs. She first had to hound the editors of these journals until they were charmed into letting her a do a guest post and once she had established herself they couldn’t get enough of her.

If you haven’t read my blog posts on why Tracy chose the right strategy it’s worth a read. The premise is that you should blog for your customers, suppliers and ecosystem – not for your peers.

I blog on entrepreneurship & VC precisely because entrepreneurs and other VCs are my customers.

Tracy realized her constituency and being a public figure helped elevate her.

5. Once off the ground she could attract mentors from her industry
And through this industry legitimacy she was able to get the ear of Dany Levy, the co-founder of Daily Candy. Daily Candy was one of the earliest successes in the newsletter business, which ultimately sold to Comcast for a reported $125 million.

Dany became a small investor in Recycled Media (the parent company of Recycled Bride) and became one of Tracy’s lead advisors.

6. She is building deflationary businesses with volume
One of the things I like the most about Tracy’s businesses is that she is focused on volume & deflationary economics (which is my main investment thesis as I covered in this post). In her first business she decided not to charge for women to list their dresses or to buy one.

In stead she had the goal of attracting a large audience that she could monetize in other ways. She’s now the leading marketplace for women’s used wedding dresses and accessories and ranks 2nd in Google for the term “Used Wedding Dress.”

She currently makes money in two ways: First she has sponsored dresses. She has data the shows that sponsored wedding dresses sell faster than others for people motivated to move their inventory.

Second, she sells advertising, which given her tight demographic and the big spending that comes when one is planning a wedding she can monetize really well.

But most importantly, Recycled Bride just served as a launching pad for Tracy’s second business: Style Trader. This business will launch soon.

Style Trader takes women’s closets and turns them into virtual bazaars of clothes that can be traded with other women. Tracy claims that only 30% of clothes in a woman’s closet is actually worn.

So this business plays right into the theme of peer-to-peer marketplaces that has seen so much success over the past several years. It enables women on a budget to be able to get new outfits without outlaying tons of money to buy them first hand. And all they really need to do is free up clothes they aren’t even wearing in the first place.

7. She now recognizes the need to have co-founders
When Tracy started her company she didn’t have a technical co-founder. She floundered a bit working with contractors before finally settling on an agency to build her first site for $20,000.

She now recognizes this was a mistake and that getting a technical partner early in the company can have an enormous impact on your chances of success.

Now working safely inside the confine’s of Launchpad LA’s offices in Santa Monica and surrounded by the tech community, Tracy has been out interviewing technical co-founders. I’m told she just signed with one who will be on-boarded soon. She would encourage others to solve this problem earlier in your existence.

8. She exudes many of the characteristics of a successful entrepreneur
Tracy isn’t your quintessential Silicon Valley startup story. But when I look at my list of what it takes to become a successful entrepreneur Tracy is all over it: she hustles, has street smarts, is persistent, has domain knowledge and is still standing despite having a tough few years of bootstrapping.

If you want to watch a video with Tracy & me talking about her lessons and how she built her company check out this YouTube link or click the image below for our session on This Week in VC. I think you’ll enjoy it. (btw, video accidentally got cut short in the last 5 minutes by the staff at This Week In. They apologize).

  • http://bosslee.co/ Bryan Lee

    I am 30 this year. This is so inspiring. She earns all my respect. 
    Thanks for sharing.

  • Evan Reiser

    Great article

  • Deirdre

    Great story.  I love the StyleTrader idea.  There is already a business doing this for children’s clothes called ThredUp.  

    I went to an in person clothes trading party a few years ago… would be cool to create real communities along with the virtual.  Also, what is so cool about this concept is that one person’s (woman’s) old news (in clothes) is another’s treasure.  Look forward to the launch of StyleTrader.  Definitely identify with Tracy’s story… Hope it all goes well, Tracy!  

  • http://kontrary.com/ Rebecca Thorman

    Amazing story! Thanks so much for sharing. I work for a start-up and my boyfriend founded a start-up, so we definitely relate to this. I tested several ideas last year (one that was very similar to Style Trader – I didn’t pursue it for varying reasons and am totally thrilled to hear someone is!), and this year, I took on a side project to help finance future ideas, and my boyfriend and I just put our place up on Airbnb on Sunday! Already, we’ve booked two guests in two days for $1600. Crazy. I share just because I think it’s great to hear that others are in the same place, or have been, like Tracy. 

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    Thanks for sharing.

  • Ctcunning

    Mark-

    I have been reading a number of your posts over the past 8 months. 

    This is your best.

    Typically, I find myself distracted or my mind wandering as I read through your posts as your are quite thorough and have knack for fully explaining yourself  – which I appreciate.

    Despite my short attention span, this had me fully engaged. The way you presented this story was quick and to the point. 

    Thanks for making my morning.

  • Mark

    I just found your blog, and it is a treasure trove!

    I wanted to let you know that the link to recommended lawyers at trueventures in your “how to work with lawyers” post is down.  I know this isn’t the place to post it- but comments for that post are down and I could not find any other way to contact you on the page.  I am sure ALOT of people read that post.  Thanks.

  • Doorman762

    Love it…!

  • Frank Blanchard

    Thank you, thank you… This has help light a fire under me.

  • http://siliconbeachmarketing.com/ Susan Emmer

    I’ve known Tracy for a few years, and she is an amazing businesswomen and entrepreneur, and always willing to share her knowledge. She is also a great friend who is amazingly generous and kind, and funny as hell! I’m thrilled for her success, and am sure she will continue to provide inspiration for myself and others headed down the bumpy entrepreneurial path.

  • Anita Fong

    Great story!  Being a non-technical founder is very difficult but not impossible.  Great job Tracy!

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    Great story. Love it.

  • buzzlair

    What an inspiring story. I wish i could meet her in person and tell her how awesome she is. Mark, the story not only inspired me, but also my business partner (a young lady) and i can sense how excited she was. I think she wont be able to sleep well tonight. 

  • http://www.shoestringlaunch.com/ Robert Lambert

    After working with numerous start-ups and their founders it’s always refreshing to see well spoken CEO’s who appear completely at ease when it comes to accurately representing their companies to media (of any kind).  So many new founders and even serial entrepreneurs falter in taped interview settings.  Great job Tracy and great guest choice Mark!

  • http://www.freejazzlessons.com/ Steve Nixon (freejazzlessons)

    Tracy seems extremely motivated.  Good to see someone with her worth ethic be successful.

  • http://www.JoyaSolutions.com/ Mary Camacho

    Thanks for sharing this great write-up, Tracy’s path is inspiring and your site is exceedingly informative – I’ve spent quite a bit of time in recent weeks catching up.  We definitely did not know our way around Angel and VC conversations in the 90s during my first start-up experience and kept away from that model for years following.  Your candid sharing of experiences and opinions have really opened up my views around the type of support and advice that is possible when you have the right backers in place.  

    We are considering the Angel or VC path for our new venture and it makes such a difference to have my thoughts in order and what I hope is the right balance between the arrogance necessary to get things done and humility to know that we will need some help.  Cheers.

  • Radhika Mohta

    Fabulous story of an entrepreneur & very well told by you Mark! Kudos!

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    +1!

  • staticsteven

    While this is a great article and truly inspiring, I wonder how many people will actually choose to take the slower, self-sufficient route as opposed to strive for VC funding. It seems like these inspirational stores are more of a “wow, that’s great for her, but I don’t think that applies to my business” as opposed to a shift in typical entrepreneurial thinking.

    That being said, it’s really impressive and awesome on her part.

  • Adriana Herrera

    Nice to see a profile of a woman founder that focuses on her business, hustle, and passion.  Great story.