Chantal wants to launch an organic body-care line with no money or mentor. Stephen Kelly says find a differentiator and test with friends using high margins. Evan Carmichael counters that no money is a limiting belief, then walks through how Anita Roddick started The Body Shop, how Wrigley's began, and why you should start in your kitchen and sell to a small fan base first.
Chapters
Chantal, I want to be my own company of organic products for the body, but I have no finances now or guidance as to how I start. Who do I seek advice from? I am 28 years old. So starting a company of organic products, doesn't have finances, needs wisdom, guidance, 28 years old.
Chantal, so I think, um, this is an interesting one because this is, you know, you could argue a pretty crowded market. So I think you need a differentiator. What is it you've got around organic products, whether it's skincare or whatever, which is very different. And I think to Evan's point, you've got to really believe in your product. You've got to love your idea. You've got to love your product because that's the first essence you've got to have. You've got to then think secondly, how do I differentiate myself? Because, you know, there's a— candidly, it's probably a sea of mediocre products out there, but it's a noisy market. So what do you do differently? And then all the other things Evan's talked about in terms of kind of market test it, market test it with your friends, market test it with other people. Find the market. And then again, once you've done that, then you can scale up, set up a website, whatever in terms of the distribution mechanism. If you want to use great products like SagePay on your website, you can do all that sort of stuff as well. Now, what I would argue is when you say I've got no money, don't underestimate it because if you've got good products with all these things, golden rule of business is never let expenses get ahead of revenues. So go and do a bit of test driving with stuff. Even your friends, if it's a great product, they'll pay $5 for it. And with these sort of products, typically the manufacturing costs, it should be like 80-90% gross margin business. So if you got the sort of pricing right, you could do test drive and you could get enough money to go to the next stage. And you kind of want to break it down and skinny it down in these little increments where you don't scale up or do stupid stuff. But you just do baby steps on a big idea that you go to a market. But it is a crowded market. And I think Evan's got a lot of experience in this space. So what are your thoughts, Evan?
To me, the lack of financing is similar to somebody saying they're too old or they're too young. It's just another limiting belief. It's another excuse. It's like, oh, I don't come from the right family, or I didn't get the right education, or, you know, in my country you can't do this. And it's never about the resources as an entrepreneur, it's about your resourcefulness. And if you go back and you look at any of the guys who have started the companies that you look up to in the cosmetics business, look at the founder. You know, they started in their kitchen mixing ingredients, putting things in jars and selling them. Like, you may not look at, uh, you know, The Body Shop now and say, you know, well, I, I need to get that kind of distribution and that's not possible. I need to raise millions of dollars to do it. But The Body Shop was started because Anita Roddick, her husband left her to go ride a horse from Argentina to New York City. That was his dream. And so it took him a year and a half to do that. And so she needed to make money to support herself while her husband went on this huge trip. And so she just started selling stuff that she made in jars and that's the start, right? So it's never about how much money you have. Get started now with what you have and start selling to your friends. And to Stephen's point, find something that's different because there are a ton of products out there. But it's— don't, don't hold on to the excuse that I don't have the money to do this, because it's always about how resourceful you are. And the most successful entrepreneurs likely started with less than what you already have right now. You already have all the resources you need to be successful.
Evan, that's so true. I think it's a key, key aspect of the greater— the innovation And the more creative you get, the less money you have because you have to. And actually, even now, you know, Sage is a big company, but I say to people every day, treat the company's money as if it's your own. Think like a startup. You know, what would you do? What would you stop? What will you double down on? How do we make a difference to customers? And I think the greatest entrepreneurs I've met, you know, whether it's the Bransons, all these guys, They just started with nothing. They started with, you know, he's a guy who started with a loan from his aunt, you know, a couple of hundred bucks and that was it. And then built a multimillion empire. Now I do think it's a good kind of culture and philosophy to run your business kind of lean and mean even when you scale up. But starting, you've got to pick something's big idea, pursue your passions, get a product out even if you kind of mix it in your kitchens. Get a fan base and then think about the other innovations, what other mixes, or never think that you're locked into a kind of cul-de-sac where you have to do the same all the time. Early stage of business, you've got to be innovating all the time. You might even change the product every day based on feedback from your customers. And I think the other thing that's really important there is what it does is be open in your mind to where it takes you. 'Cause you'll never know where you end up as a business, and every business that starts with an idea, the end product that they build is very often different from where they started. So be very open to that feedback. And again, through social media, wow, what a great way to get social antennae on what your customers love about your product and what you need to change.
Yeah, I mean, to that point, you look at a company like Wrigley's, made his fortune in gum. They started off selling baking soda and gum was just a bonus that for every, you know, 5 packs of baking soda, you get a free pack of gum and the gum just took off. So he started selling the gum. Uh, you look at BMW and their logo, that circle is, uh, is propellers cuz they started off making airplanes and then they got outta the airplane business and went into cars. And so it's, it's super common to, to switch.
