The Sneaky Simple Way To Build A $50M Ecommerce Business transcript

the best operators I know in e-commerce right now all share one thing in common Brands especially that are getting from sort of mid earlier stage seven figures past initial product Market fit and really clearly on the path to taking their business into the mid eight figures the best operators in that space that I know of right now who are starting to create that kind of success share this one thing in common and that one thing is simple it's something that anyone can do regardless of of your background regardless of your um statistical thinking regardless of your understanding and sophistication of meta ads regardless of your financial training all those things it's something that actually anybody can do and has an outsized effect on your business and that one thing is they are obsessed with creating clear and good quality experiences at every step of the journey with their customers and I want to tell you what I mean by that today because what I've come to believe is that one of the most important ways that you can generate success in your business and one of the ways that you can actually catalyze all of the employees and partners and everybody who's working on your business in fact the way I would think about this is really it's a multiplying force in your business is if you can just get really good and really obsessed with making as sure as possible that you are creating experiences for your customers that do a great job both communica ating the promise of your product and then delivering on that promise over time now it is simple in the sense that there is actually nothing um hidden about that right there's no there's no secret tactic here um all it is really is just listening and caring and uh caring for your customers experience uh deeply and and seeing how they are interested in their own outcomes and how they're interested in getting value out of your brand and out of your product and then seeking to provide value and communicate how you provide that value to them there's there's nothing uh there's nothing tricky about that right there's nothing about that that's going to make you go like oh I don't know if I can do that you can do that you can do that no matter where you are in your business right but uh it is not always easy on the other hand and there are a bunch of roadblocks along the way now there's a lot of tools that help you do this but what I think is that this is one of the crucial ways for you to cut through the noise of all the things that are out there if you think in your mind that the number one way that you are going to get your business from let's call it $3 million in Revenue $2 million in Revenue to $50 million in revenue is to keep delivering uh to keep clearly communicating the promise of your brand and then delivering on that promise to your customer if you do that and if you combine that with Baseline financial model I did an episode recently about what I'd call p&l Design you know you have you have a clear sense of where there's financial leverage in your business okay um again you don't have to do every possible little thing along the way but you just have BAS basic Clarity to the financial leverage that your business can create the basic way your business creates profit and you see a place where you can do that and then you obsessively try to make it so that your customer experience can be great then I I think you will have a lot of success growing your business if you do not do that you will get sucked into a million different tactics in a million different directions in ways that end up pulling at um the your ability for for your brand to make profit this is what I see happen all the time this is probably the number one way that this actually doesn't work out for Brands um you know I am a huge fan of DDC Twitter dcx of e-commerce fuel of um you know my friends at workspace 6 like there's these there's these uh you know it seems like Andrew Foxwell does a great job with Foxwell Founders there's these communities out there where people are learning from one another sometimes paid sometimes free there's all this information and admission that I talk about there's courses there's my podcasts there's a bunch of podcasters The Operators whatever and uh and so there's a sort of non-stop flow of information and all of us every person I've talked to in this who is trying to create content to help other brands grow is doing that not from a pure mercenary perspective like look it you know I have sponsors on this podcast I it's it's definitely one of my revenue streams I'm not going to be dishonest about that it's important but I really do turn on this mic and turn this camera and think to myself how do I as clearly as possible communicate to you in a way that that distills the things that I'm seeing across the brands that I'm working with and the other people that I'm talking to in the space that is going to be translatable for your brand so that you can generate a Better Business for yourself right like it's it's sincere in that respect right we're really trying to do that but there's this problem in the software providers I know of are doing the same thing the software providers see something going on in the e-commerce space and they go you know what we could generate software that makes that easier for people and so there's massive amounts of stuff out there to do these things but it becomes overwhelming and it's really hard to filter uh all of that stuff through and so this episode is a reminder to you of the core driver of your business's success that I see over and over in these conversations and interviews that I do um with different uh different operators and different other folks in the space with the things that I'm seeing with my clients I'm just watching over and over as customer obsessed people and customer obsessed operators who build their teams and their brands around how to deliver value to their customers do this let me give you a couple examples okay um so first there is the actual product level PR okay and this is sort of obvious in one respect some some people will say something oversimplified like if you have a great product you'll win and that's like the key above everything else that's not actually totally true right um you know I think of a product like Coca-Cola which is like killing you you know so just take cigarette companies okay something like that right it it's not a great product okay it's not a great product um you know and and yet those those companies for a long time made a lot of money you can make a lot of money selling garbage there's no question about that uh you Pro now your job is probably easier if your product is great uh but uh but you know even that is not always true um so a great product may help but I I think actually even more than a great product per se it is a product that delivers on the specific Promises of the customer in a way that generates value for them and so in that respect yes it's another way of phrasing the phrase great product but what I really mean by that is not that your product has to be you know unique your product has to be groundbreaking or whatever what I mean is there's an attention kind there's a kind of attention that some customers pay or some operators pay to how customers are interacting with their products in a way that uh ends up helping them deliver more deeply on their promises so like for example um you know I I saw uh some reviews of a skincare brand at one point where customers were talking about how they didn't like something about the texture of the way the product was being applied um on their skin and um and there's a way of approaching that issue where it was a common enough comment in the reviews that there's a way of approaching that issue where you go ah you know some customers are going to have complaints whatever there's another way of approaching that issue where goes like wait a minute maybe a huge volume of our customers are having an experience of the product that is not ideal for them and we need to fix it we need to make it better so that they have an experience with the product that is great now you have to figure out whether or not that represents a vocal minority or whether or not that's actually a real complaint or whatever but you might have to go reformulate your product at some point is what I'm saying right if there is something happens if you're an app Peril brand and you get complaint after complaint that your clothes are falling apart fast you may have to make a decision about whether we charge more for better products or whether we keep things the way they are because yeah it's just going to happen because we're we're at a lower price whatever but those are decisions you have to decide you know make as an operator about your business but there is a way of receiving that feedback and hearing it loud and clear and becoming obsessed with it at the sort of Baseline level of the promise that you're delivering but then there's a second step of that which is this example I've been talking about a lot recently which is to actually start seeing not only the basics of how your product is hitting people but actually to see the unique ways in which customers are interacting with your products so I work with a supplement brand for example where um where a bunch of customers are calling out that they had bought this particular supp for sleep that they were hoping to sleep better and and even though that wasn't the original reason the supplement was developed there was an ingredient in the in the supplement that had good scientific basis to say it helps your sleep and so the supplement brand could turn around and and say wait a minute this means our customers care a lot about sleep what happens if we go back to the well and we look Beyond just this one ingredient and one product that really this wasn't the main reason that supplement was formed but we actually start thinking about instead how do we develop products that are going to really help our customers to sleep well or or maybe they say hey take this supplement that already has this in it and here's how to take it here's how to um integrate it into your life here's how to eat and drink alongside this that so that you get the maximum sleep benefit from this because of course there's no magic pill right there's there's these things all work together or or um you know you know you could do this a million different ways and and I've watched brands do this where where they start to see the unique ways in which uh customers are operating with their products and they hear that and they recognize that that that that element of the customer's experience with the product um you know if that shows up in three reviews or five reviews it probably isn't a vocal minority it's probably actually a larger percentage of people because people's experiences while while they resonate strongly to themselves they feel strong to themselves they actually aren't that unique honestly I've said this before honestly I do not know why you would not be considering hiring talent in the Philippines with my friends at more Staffing if you are growing an e-commerce business and you are already remote there's a very simple value proposition here is a win for both sides of this equation and it goes like this uh there are people with deep e-commerce resumes in the Philippines if you are thinking about Filipino Talent entirely as $5 an hour virtual assistance you are thinking about it wrong there is way more opportunity than that and you're missing out on it and people with great talent who want to work in your business and you you can attract high-end Talent people with Deep resumés by offering what is top dollar in the Philippines but is still meaningfully less than that same Talent would would uh would cost in the US to be in your business that creates a win for both parties because you can pay a great salary and at the same time you can make it so that your books are not fat you are trying to run a lean e-commerce business with a lean offex and you can do both at the same time go to Mor staffing.com love them they have added a huge amount of value um I'm hoping to get to the Philippines soon to go meet in person they are like really crucial parts of my business they should be in yours as well more Staffing is uh people I trust to go help you identify that Talent recruit them train them onboard them coach them and if you hire somebody with more Staffing and they don't make it in your company for a year like it's a hire that doesn't work out because hiring is hard uh they will help you replace that person for free at no additional recruiting cost so go to Mor staffing.com to get started with more Staffing today the point is what great operators will do is then they'll think about their product development pipeline they'll think about um the the way they uh the way that the they can better equip customers to have success with their product if there's a specific way it needs to be used to get the value they're trying to get um and and they'll begin to think that way you know um this is where like sometimes I've seen people in food and beverage use samples really effectively where um or or sort of some anything that involves smell use samples really effectively where it's like wait a minute the customer wants the product but you know it's not really best to buy just one version if there's multiple flavors okay um and so what we're going to do instead is develop a way to make it so the customer can have the best experience possible because they are interested in your food product or whatever right but they don't know which flavor they're going to like best and so uh you know a brand will turn around and create a sample pack and that sometimes means you know a separate separate if you depending on the the brand and stuff that might develop mean developing SE separate packages it might mean developing separate like operational flows it might mean working with your 3pl differently it might change how you do Pick and Pack might change your margin Etc um but but customer obsessed Brands will do it and they will see success I remember hearing from Shireen Alber at one point talking about this when she was at Bobby she said the thing they realized at some point was that the way to get customers in the door was was around a sample offer like like a trial kind of offer so that customers wer ready to commit all the way to this formula and it makes sense it's formula the customer probably wanted to make sure even if they liked the idea of Bobby as a formula they they wanted to make sure that their their um baby liked the formula and would drink it Etc you know moms are going to be really concerned about that sort of thing with their babies and um and so a sample offer probably meant retooling large parts of how their business operated but they knew that that was the best way for the customer to experience the product in a way that reduce friction for the customer that's a great experience for the customer if they have a real concern about this to be able to sample it first to spend a little bit less money up front and and to try that out and they said that became the offer through which they got all of their customers and if you think about that right um that you know exploded helped explode their business you know the good kind of explode right helped them grow their business massively and if you think about that what that requires is just paying careful attention to how your customers interacting with your product and then doing everything you can to make that experience as good as POS possible and as accessible as possible reduce friction Etc so many operators need to go through that process with their product and their customer they need to whether it's with surveys whether it's getting on the phone whether it's reading reviews sending emails like whatever you have to do to learn how customers are interacting with it where are they coming from what other products were they coming from what's their understanding of the category is it a new category what are all the questions they have and what can you do at the level of product and formulation and you know samples and initial offers and offers starts to move us towards the marketing end of this which I'm going to talk more about in a second but um but you know really thinking through all of those things to go how do we do that it is amazing how far that gets you it is amazing how far that gets you and and people underrate this because it sounds sort of squishy it's not very quantitative you know it's I can't sit here and give you an example of something like uh you know customer doing x with this thing generated 30% growth and and then those stories probably exist but people hold them a little bit close to the vest so it's I I don't have that number for you I'm just telling you I'm watching good operators do this over and over again they're seeing this I watched another operator of mine completely uh this is a client of mine completely retool their 3pl situation they have a complicated um shipping supply chain basically right the logistics chain okay um because the their product needs to be kept cold and so and so there's they have to find a really specific 3pl um provider Etc but like within like two months of moving to a 3pl that could really consistently ship cold products get them delivered very very fast from the warehouse to the customer they sped out the shipping time which made it so that um it reduced um uh essentially like problematic deliveries where the the product didn't come right right all of those things they saw their um their returning customer Revenue drastically increase like to the tune of like 80% within a couple of months now it's not the only thing they did they did a lot of other stuff as well um but it made a huge difference now it was a huge job like like my my client was stressed out for like a month and a half and is maybe still kind of stressed out about it um to do that but it clearly made a gigantic difference to the customer's experience and so they like they like dug really deeply into it because this was core to the way the customer interacted with the product was core to the way that the customer um uh the the product the brand delivered on its promise to the customer made the experience better for everyone and what happened customers came back more often suddenly the returning customer rate goes up Suddenly your whole business is more profitable because now you're generating Revenue apart from ad spend every customer you get is worth more money and you are now much better set up to to um approach and and produce a larger scale okay that's what you've got to think about you've got to think about this in your business and you've got to care about it a lot and and look to those places now some of you may not have as big of wins or whatever in that particular spot but like if you're an apparel brand understand where and how your customers are wearing your products right like understand it deeply no are they wearing it to work are they wearing it around the house are they wearing whatever um I I once worked with another brand that um really loved this one particular product of theirs and yet it wasn't really clear to me that the customer cared that much about it and so there was this mismatch between the thing that the brand cared about and thought was great and what the customer cared about and thought was great and and there's all of these different so you know that's normal in one respect right you go to market with an idea in your mind and you think to yourself this is going to be great for the customer you have an idea but maybe the customer doesn't care about it the way that you do and so you have to retool and reshape and and rethink along the way becoming obsessed with that and watching how to um do this will make it so that you and delivering more on your promise more easily to your customer is going to make every channel you advertise on work better it's going to make every channel you sell in work better it's going to make every customer or every uh uh member of your team who touches anything be more effective because at the end of the day customers are having a great experience with your brand and this gets us to the concept of brand right I saw Sean Frank tweet this the other day something the effect of on Day Zero he said brand is your ability to deliver on your promise to your customer and on Day Zero therefore it is worth nothing on day 1,000 it's worth a lot and I think that's totally right for how DDC Brands as they're growing in their seven and early eight figure stages of their businesses need to think about the concept of brand for themselves right it is this ability to deliver on your promise at scale to your customer so that your customer has a great experience with you loves it talks about it um you know leaves positive reviews all those things and that's what you've got to dig into um a little bit more brand is not a pretty picture on your website it's not beautiful photography that may be helpful in building a brand but it's not really the main thing um it is actually this ability to do this over time and that's how you establish something that people really care about resonate with and that can actually grow all right having said all that there is another element of this that is easy to lose sight of which is the marketing side because once you can deliver on that promise now you have a challenge okay which is to actually communicate about that promise that you were delivering okay once once the customer is going to have a great experience the product now you have to tell them that because a customer who's new to your brand doesn't know that they don't know that you've worked really really hard to solve all these problems what they instead uh think probably is the same thing they think about every other brand in your category they don't really understand why you're differentiated and they don't really understand how you've made a point of making it easier for them Etc so you have to go and dig into that a little bit more and that this is another thing I've watched really clearly with brands of uh brands that I'm working with where the brands that I'm working with that are really successful one of the things that marks them is that they like they care so much that when the customer goes from the ad to the website it's a great experience almost all of them are putting real money and real time and real effort into thinking through more how do I do this one client of mine recently uh uh was building using sort of a custom they had a they had an element of their product that included a custom custom like box that you could build right with a bunch of different products all at once um and so you could select them all all in one page you know and select a bunch of different products put them all in one Box Etc and the Builder that they used for that like sort of custom build your own product thing in their telling was pretty crappy it it was not a very good Builder it was limited in what its capacity was um and so they were frustrated and yet that Builder was a really good way for a customer to experience their products so they had this problem which is that the the the custom builder is a good idea because for the customer um building a a build your own sort of box uh approach was really useful on the other hand um the actual software for that box wasn't very good so what did he do he couldn't find a developer who was willing to work on it very well so he just went and learned figured out how to code it himself and I don't know that he has like a super deep coding background like or anything like that but he just decided this matters too much for the customer experience for me to just let this sit here and be a crappy experience I am going to knock down whatever problems I need to knock down if there are barrier walls in the way of me deliver delivering uh value to the customer like this I it's it's a problem because if the customer can check out easier if the customer can build their box easier it's going to make a big difference to their experience that's going to generate value for the customer and make it easier for them to get the things they want which is in turn going to generate value for my business and so they solved the problem they they wouldn't let it just sit there and deal with it this is another thing I I watch happen all the time there's this inertia with your website brands have their website and they go like like uh well it's just like just kind of is what it is and and that's that's the best experience we can have and you know and and or or just sort of nobody updates things or whatever and that's a real problem like if you care about growing your business keep pressing in resist the urge to make sort of broader um broader adjustments to your website and think more about how you build really tight well- messaged funnels to customers that's going to make it easy for them to find the things that they need that's going to present an offer that makes sense this gets back to the thing I was mentioning earlier right um and become obsessed with driving that all the way through your business the again the brands that I see that do a really good job of this realize that those elements like communicating clearly on a landing page having an offer that makes sense making sure that all of the you're creative is messaging down to people's really specific really direct experience I did also an episode recently about this idea that like you want to go deep if you want to to as as a way of going wide no exactly how your customers are interacting with your brand speak to those situations know how they're interacting with other brands in the category speak to those situations and do it all the way through the funnel take do the hard work of building the Lander building the offer building the custom PDP like this is where this is where I think like um somebody like fmad who I've taken as a sponsor recently is going to be a crucial player in this space for years to come because brands that are good and effective are going to use fmat which is the best tool I know for this um to build these extremely custom carefully designed experiences that speak really specifically to customers into their experience with your brand and your product at scale um and and and that way they're going to um to make it easier for the customer to see the value that you're promising and then of course you turn around as a brand and deliver that value to them again if you think about this if you think about what I'm saying there's a way of approaching the total e-commerce game that goes something like this okay um to job number one to get to one1 or $2 million in revenue is basic total is basic product Market fit okay um this is not about getting going deep with a subset of customers in order to go wide it's not about creating the massive amount of scale or whatever it's just about proving out that your idea works that's phase one of your business okay but phase two lasts for a really long time okay and scaling up the operations to go reach more and more customers if you've reached a million or $2 million dollars in sales in a year you probably have Baseline product Market fit it's very hard to sell let's call it a million dollars worth of stuff in a year at any kind of anything close to profitable if you don't have product Market fit okay you you probably have that now how much scale you have who knows it depends on too many other factors I can't can't answer that in the aggregate but it means that you've done you've accomplished something and now the game becomes how do I scale the business there's Financial elements of that there's operational elements of that there's all these questions in there but in the midst of that I really think the journey from like 1 million to 50 million is really this simple number one get clarity to your p&l design and how you're going to generate profit along the way so you don't get fat so um with your business so that you are thinking carefully about how to make it so that your unit economics get better over time you're generating high margin all those things you know be on top of your cash flow there's some basic management stuff there that is really important for running your your DDC brand well I seriously believe that if you are actually going to care about delivering value to your customers at scale and communicating that effectively for many Brands there is no better tool to doing that than by building incredible tight well-considered funnels with format you go to format commerce.com the link is in the show notes of course but format is a mix of the best software in the game for building full funnels the same way that you build ads that means well if you are uh running some creative angle on your ad and you want to communicate that creative angle all the way through the funnel then you should want to do that right if you're listening to and enjoying this episode then you uh you should want to do that right you can build custom landing pages and then custom pdps attached to those landing pages and then custom carts with custom upsells attached to that same flow all with massive speed on the fastest loading software I've ever used incredibly easy built-in testing it is way easier to build different offers different bundles things like that because they've built the software to make it as easy and fast as possible for you to do exactly this kind of marketing that I'm talking about plus it is not just software it is a service there's an agency component to what format does which is that they give you an account manager who will build these things out for you direct you towards where the best opportunities are for your business relative to the dat set they have work with a lot of successful businesses it is really the very best software of which I am aware and the very best service of which I am aware for brands that are serious about building their marketing all the way through their funnel communicating value all the way through their funnel to customers exactly in the ways I'm talking about on this episode go check it out right now for mckc commerce.com that is a really important Lane I try to put out content about that and I'm not saying anything to devalue that okay number two for a lot of Brands it's to pick one channel one ad Channel and to relentlessly focus on being great at it and this is another thing that happens a lot the brands uh diversify channels way too early way too often when I listen to Jack Rubin on my podcast talk about how they got to you know a couple million dollar um spend per month on meta ads I mean it was a huge amount of focus on meta for a very very long time before they opened up any other channels and by the way that's $2 million of spend per month just in the UK which has a quarter of the number of people as the US does Okay so um so that's a a monster spend ac across not that big of an audience so the uh so that meant just like focusing focusing focusing digging in more and more and more building up better and better advertising and when you listen to Jack talk about this by the way um he talks about it and exactly the terms I'm talking about in this episode they C they thought carefully about how customers were interacting with their product how their product was delivering value to the customer and then message that clearly and at scale okay and that's what pushed them all the way through that phase of business and now eventually they're adding other channels so there's just focus on this one channel as they go and and if you dig those two things right Financial basic financial literacy p&l design Etc be really good on those things focus on one ad Channel and then in the midst of that as you do that okay you put the bul like the bulk of your effort towards continuing to get to know your customers deliver value to them at the level of product and then to communicate that value in that one channel that can get you extremely far in DTC can get you really really far before you open up any other channels and and look there might be reasons to add Amazon in there there might be reason to to add retail wholesale whatever but like like in the end pushing really hard through that one channel with a great customer experience where your product meets the customer where they are let nothing get in the way of that and then do that at the level of your actual marketing and advertising you will have success if your financials make any sense at all in the business you really will and that's what it comes down to push really hard there uh at as much scale as possible become obsessed with delivering value to your customers become obsessed with it and then become obsessed equally with communicating how you're doing that you do those two things you can build a really good really high quality business uh really really effectively hey thanks so much for watching or listening wherever you are doing that don't forget to subscribe wherever you're are doing that and also go check the backlog there's a bunch of stuff that I think if you like this episode will be helpful to you there and don't forget to also follow up with my sponsors that's formont by format commerce.com /af is the place to go follow up with them if you liked uh what I talked about in this episode you will really like their software um and go to my friends at more Staffing uh hire incredible virtual professionals from the Philippines don't settle for virtual assistance that's more staffing.com thanks so much I'll see you next time [Music]