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From $24 in the bank to five multi-million dollar businesses

The New Investors video series brought to you by Yahoo Finance reveals the secrets of the most successful entrepreneurs and businesspeople in Australia today. This is the first episode of the season.

Gretta Van Riel is an Australian entrepreneur who was internationally one of the pioneers of selling products on Instagram.

At the age of 22, with only $24 in her bank account, Van Riel started her first business – SkinnyMe Tea.

“It was back in 2012 – Instagram wasn’t as widely used obviously as it was now,” she said in the Yahoo Finance New Investors show.

“At the time, Instagram didn’t have any features for businesses. So taking a business account was just as simple as changing the account name to SkinnyMeTea. But we started to grow that account quite quickly.”

And grow it did. By the end of the year, SkinnyMe Tea had 200,000 followers on Instagram.

“I think Nike had about 10,000 followers at the end of 2012. So we… pioneered that Instagram presence for some brands and that’s where I started growing my following from.”

Van Riel’s social media selling turns traditional retail on its head.

Small, targeted endorsement deals with influencers, deliberately limiting stock and pumping up demand before manufacture – such tactics would have conventional CEOs break out in a cold sweat, but it’s how all her ventures have gone from zero to hero.

Gretta Van Riel.

Business lessons for a novice

SkinnyMe Tea ramped up to monthly sales of $600,000 within the first six months. But she would soon learn that such explosive growth can backfire.

“And when we grew to that level, we still didn’t have a proper manufacturer. There were no manufacturers in Australia that could fulfill that level of tea orders.”

On the New Investors show, Van Riel recalled how she then turned to a Chinese manufacturer to scale up her production. After the first few batches were on the money, she made a massive commitment that she’d live to regret.

“I placed an order for a year’s worth of tea, which was over a million US dollars worth of tea at the time,” she said.

“We received the order, finally. We held it in a warehouse in Hong Kong for a while. That costs money. We shipped it to Australia. That costs more money. Got held in customs for a week. That was another $80,000.”

And after all that, a nasty surprise would devastate her when she opened up the batch.

“The tea was compost, basically. It was disgusting. I wouldn’t even let my team touch it without gloves on. It had metal bolts in it, had springs in it. You could just see it was wet and dirty, and disgusting.”

With a million US dollars down the drain, Van Riel and her business partner hit rock bottom.

“I cried a bit. I remember my general manager and I were in a car and we’re behind a truck that had building supplies on it and some wood was very precariously placed. And we were like, ‘Do your worst word, we’re done. We don’t care. Fall off the truck, get us.'”

Fortunately, that financial hit was not enough to topple the business and Van Riel went on to found other successful ventures – such as The 5th, which produced luxury watches that only come on sale on the 5th day of each month for 5 days.

“We sold over a thousand watches on our first day, which was over $100,000 in sales. So that company actually grew faster than SkinnyMeTea even, which I didn’t think was possible at that time,” she told Yahoo Finance editor-in-chief Sarah O’Carroll.

“On our first birthday in the end, we did over a million Australian dollars in sales in a single day on the 5th of December in 2015.”

Harnessing the power of influencers

Van Riel’s track record has seen her turn to teaching other entrepreneurs and corporations how to use social media and influencers to market their products.

She has created training courses and videos with Foundr and Shopify, which was the very e-commerce platform that she first created SkinnyMe Tea on.

Her current venture is Hey Influencers, which is a system that performs “match-making” of brands to social media influencers, bringing advertisers within reach of the most appropriate target audience.

The best advice to give to budding entrepreneurs, according to Van Riel, is to research the market for your idea carefully and build up the demand before actually launching the product.

“I think in the past the great e-commerce myth has been ‘build it and they will come’… Create a product, put it online, create some beautiful imagery, press live on the store and just wait for the sales to start flooding in,” she said.

“[But] it doesn’t happen. Not in that way. If you are building an audience before you launch a product, you’re mitigating that risk of launching to crickets.”

The New Investors video series brought to you by Yahoo Finance reveals the secrets of the most successful entrepreneurs and businesspeople in Australia today. This is the first episode of the season.