She thought flowers were a waste of money. Until selling them brought in millions

SAN FRANCISCO — Christina Stembel used to think flowers were a waste of money. But when the economy spiraled into a recession, she started seeing things differently.

“I saw a big opportunity,” Stembel says.

At the time, she was overseeing alumni relations and events for Stanford University’s law school. The recession was forcing the school to tighten budgets for things like floral arrangements.

Curious, Stembel started digging into why flowers carried such a hefty price tag in the first place.

It turned out it was a combination of factors: merchants carrying too many options, unused flowers that resulted in as much as 40% annual waste and high overhead costs, among other things.

“I thought this is an actual problem and I [could] solve it,” said Stembel.

After taking almost a year to research the industry, Stembel launched her online flower shop, Farmgirl Flowers. The site sells flowers sourced at farms in South America. Unlike its competitors, however, it limits the choices it offers consumers.

“It was kind of an ‘aha moment’ I had,” she says. “Because we [limit choice], we can use every flower. It drastically reduces our waste.”

While most other online sellers can offer hundreds of options, Farmgirl Flowers only offers between 12 to 20 arrangements at a time on its site.

“We’re under 1% waste and we can purchase more expensive flowers than a lot of our competitors,” she says. “There are peonies and garden roses and calla lilies.”

All of the company’s floral arrangements are made in-house. “Arranging is much harder than people think,” she says. “If you’re spending that much money, and it’s a gift for someone, you want them to receive it beautifully.”

Based in San Francisco, Farmgirl Flowers ships across the US, with the exception of Hawaii and Alaska. The flowers are wrapped using reused burlap coffee bags obtained from local coffee roasters, instead of plastic.

Taking the path less traveled

Stembel doesn’t shy away from doing things a little differently.

She never enrolled in college but worked for eight years at Stanford, first as general manager of catering and then for a few years at the law school.

She calls herself an “ideas” person. “I was one of those crazy people that came up with a different idea every week,” she says. “I had an idea notebook in my bag and had about 200 ideas at any given moment.”

The company’s name was inspired by her experience growing up on a farm in Bremen, Indiana, a small town of 3,600. There, she never imagined running her own company.

My parents worked for people. Everybody I saw worked for people,” she says. “When you don’t see it, you don’t go for it. You can’t think of that as an opportunity for yourself.”

It wasn’t until she moved to San Francisco and became immersed in its culture that she began believing she could become an entrepreneur.

“I kind of joke that in San Francisco, everybody has a business plan in their back pocket. It was contagious, that entrepreneurial spirit,” she says. “It was the first time in my life that I thought, ‘Whoa, I could start a business.'”

But as a first-time entrepreneur and a woman, she realized the deck was stacked against her. To date, Stembel has not been able to raise any outside funding.

“I’m a female founder. I have a less than 2% chance of raising capital, statistically speaking,” says Stembel. “I’ve tried several times thus far and have not been successful. I didn’t graduate college. I didn’t work at one of the big tech giants. I didn’t have the connections.”

Instead, the operation remains self-funded. Farmgirl was launched eight years ago with $49,000 of Stembel’s own savings. This year, it’s expected to log about $23 million in annual revenue — and it’s turning a profit, she says.

Still, Stembel is vigilant about keeping costs under control. The business relies on social media — mostly Facebook and Instagram — for 90% of its marketing efforts.

Another cost-saving measure: “We opt to use empty coffee bags from local roasters [and] cut them down to size for wrapping. We love the look it gives the arrangements and it is compostable on the customer’s end.”

“We are reinvesting all of our profit into our growth and bootstrapping,” she says. “I’m really proud of that now.”

One area where she doesn’t skimp is hiring.

Stembel says she hires only full-time employees and offers a 401(k) plan. The startup currently employs 100 people.

“I am very passionate about creating good jobs,” says Stembel. “But the challenge is that it is so much more expensive. Our workers comp is more expensive than our medical insurance, and we offer full medical.”

Stembel says she looks to the future one day at a time, but has no plans on immediate selling the company or taking it public.

“I don’t know if we’ll be acquired, or [do] an IPO, or grow really big. I don’t know that I’ll always be the CEO,” she says. “I hope that I can learn enough to be a really good leader at every level.”

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