£1m/month target, 20k Units, New Products & Avoiding Disaster - Documenting the journey - Episode 8

Right then back with another episode of Documenting the Journey. A few people said I should film this throughout the week. So it's like up to date because I tend to forget what I'm actually talking about. What happened in the past week when I did it once a week. But I wrote down a few notes. I think it's a good way to do it. It's reflective for me writing the notes down. It's fucking reflective doing it. And obviously looking back in like two, three years time, hopefully this series will be mad with some cult following and it'll get turned into the next Kanye documentary when I've made it big. But yeah, a bunch of shit to go through episode eight, I suppose. July 1st today. So just a load of fucking invoices for the month came in. I like to start a new month because just feels like fresh start fresh time to prove myself. Doing things on a monthly basis is definitely like where I like weekly is relevant but 30 days a month is what I'm really looking at, like trailing numbers, all that sort of shit. June was very frustrating. In summary, as I kind of spoke about with a lot of shit that broke, primarily Instagram going down for a week. That was a nightmare. Learned from it, had my bank account say I was spending too much money, which I tweeted about again, never seen that before. So nothing was going through ads wise for again like a few days. So completely killed momentum on that because anyone running ads at scale knows momentum is key when you stop and start and it kills data. That was super frustrating but I guess learned massively from it. I just did a shareholder update for my investors this morning. Sentence them at like half nine. And that's one of the things I said. You just, you know, know issues like that. I'd never had an issue with Instagram account getting taken down for that reason. Now I have. We learned from it. Never had a bank account stopping me spend my own money. But now we have, we learned from it. We changed things. We've got a new account opening somewhere else very soon. And I went through and did something very boring but probably very useful for a lot of e Comm founders and just did like a full risk analysis of what could go wrong that would fuck up the business. Mainly they would look at the business majorly and what to do with like three different options in each case. So for example, obviously one being for me, ad account goes down. Like fix number one was we need to switch to monthly invoicing. Fix number two would be like have a rep on hand. We didn't have a reps, the accounts knew the whole bm, super new, all that sort of shit and just going through everything in the business that could cause major, major issues. Because in the past as well and even now it's like I feel like almost the biggest thing that's going to stop this from being successful is like major disasters along the way rather than just the brand never making it and not producing good enough content. Not produce, producing good enough products. I feel like that stuff, if I'm consistent, like right now I feel like it is good enough. Like the results are there, stuff's doing well, product feedback's great, the brand looks sick. In my opinion, the content we're pumping out some of the best I've seen from a new brand. I think credit to people that are making it, mainly Brad. But avoiding major issues, you know, that's the thing that's gonna trip me up and has tripped me up in June and yeah, just being aware that like if we can avoid all that and know what to do when that happens. For example, ad accounts, Instagram going down, you know, worst case scenario, what happens if the website goes down? Like everything like that, just covering all bases and just, yeah, kind of having like a, almost like a fucking war sheet. Like if this happens, this is what we do that don't work. We do this, you know, everything's covered. And I've considered every scenario because I think for a lot of people in ecom, it's particularly in newer brands and new stuff where you're getting set up, you don't necessarily have reps, you don't have history on an account, et cetera, et cetera. That is what's going to kill you rather than just not being good enough. Like genuinely in my opinion, obviously you need to be good as well and like stuff needs to perform. But for me, if I can avoid major disasters, I feel like as long as I'm consistent then it's going to work. So yeah, that's one thing. Gym is frustrating. Another thing I'm really trying to do at the minute is hire a full time person for performance Content manager, which I've called it, which is basically managing all the content coming in. Like UGC, TikTok creators again, I've tweeted about this. I've been kind of doing it myself before and I literally just haven't had the time to stay on top of it properly and even when I have been doing it, it's not been done to the best of, you know, as well as it could be. So I'm trying to hire someone full time now for that, but hiring is not my strong point at all. I mentioned that in the previous episode I looked at working with a recruiter that my mates referred to me. Not sure about recruiters. I worked with them in the past. The fee is going to be like 7 grand for like a 30 grand a year job, which, plus that, which is quite a lot I think. And maybe using a recruiter at this stage, I feel like I'm hiding away from the opportunity to get better at hiring myself by just, you know, grunt work, figuring out a system to do it and obviously just going through the motions, interviewing, reviewing CVs, all that sort of shit. So I think I'm going to do it myself. Had a bunch of good applications on LinkedIn. It's just I've been getting like advice from mates that are much better at hiring. I. Everyone I fucking know is much better at hiring than I am and just really trying to build out like a replicatable system, you know, step one, step two, interview, task, whatever it is, culture fit, all this sort of stuff. I think for me hiring I just get massive imposter syndrome, to be honest. And again, I've spoke about on the pod in previous episodes of this and I just need to get the fuck over it because I'm not going to get to a big scale where I want to be without a good team and hiring new people. Especially because like Brad for example, who does all the creative stuff for me, I worked with him for years, so like that's fine. Once I've got someone I know and I trust and we go on well and we work well together, it's great. But it's hiring new people. But at the end of the day it's a big hurdle I gotta get over. So that's another thing I'm working on part time. FD Simon has started, he pumps out like this mad Excel model of the entire business. It took like a week to do that. And it's like a five year plan, you know, hypothetically, with the unit economics being as they are, you know, certain key assumptions, like we're dropping new products, like payroll, getting more expensive, all this sort of shit. It basically just shows, you know, if we spend this much on marketing, we invest this much in xyz, this is what could happen. And it's like super, super granular shit that I would never even know where to start with and stuff that like a standard accountant wouldn't do. So the setup there is like, well, obviously you got an accountant that does all the statutory stuff, VAT returns, you know, standard filings, PNLs, all that sort of shit, like end of year filing. But then he does the more like strategic planning shit. So he'll do management accounts as well in like really rigorous detail and much quicker than my accountant would have done it before, which is always a problem. But he'll also do things like budgeting and I guess mainly scenario planning and like investment potential planning. So you know, working out with that model and other stuff, you know, if we were to raise 2 million quid, let's say in six months time when we've hit 2 million in revenue, for example, what would we actually do with that money? You know, what does that look like as an investment narrative if a PE fund comes in, all that sort of shit. So yeah, he's in place. I've written down bullet points of the main things. I'm probably rambling but I made decision about a bunch of different products in the pipeline like since before I launched and since launch a gummy and another flavor, another powder. Products that were like fully sampled, fully done, like ready to go. But I've made the decision to focus entirely on the rainbow dust, powder skew and the one flavor. So literally one skew for now and rather than building out, rather than dropping like new entire products, ie gummy, you know, another flavor, another category altogether, like a sleep product which is in the pipeline for now I want to focus on rainbow dust and build out accessories around that to just boost the aob, encourage subscriptions, build out like a gift set. And the reason for that is just learnt from the past, trying to keep things simple. It's also less of a cash risk, you know, I know this product is working, let's just double down on this. I'm pretty sure we could get to a million a month just in the UK just selling chocolate rainbow dust. I really, really do, especially when I add in a bunch of accessories. So I got a bunch of accessories are in the works. Like I mean this is a shit sample, so ignore this. But there's like a really wavy like pink gradient cup I've got in the works which is gonna look sick and like a Starbucks style mug, all that sort of shit. So yeah, I just think that makes more sense. Feels like the obvious choice for me now maybe wouldn't have done in the past when I hadn't had such bad experiences with loads of SKUs quickly which I'd done with my previous brands. Another thing got over 20,000 units on the way. It's a Big cash commitment. But at this point, you know, I know how quick we can scale based on the data I'm seeing. And if I don't have a stock and if I'm not planning for stock ahead of time based on where I want to be, then you know, quite quickly if you run out of stock, we'd have a fucking business. Right? So obviously stock planning is, is hard. I've tried to get software to do it. It's easy with one sku, which is why I'm intentionally keeping to one skew for now. That's a big reason. But none of these softwares are really doing much for me. So at the minute it's just spreadsheet job to be honest. But yeah, 20k units on the way. Working out better. Better and fucking speaking weird. Working out better payment terms with suppliers. Originals in 75% up front. Now it's 50. 50. Then it went to 50. Actually it was 50, 50 on a recent order. Now it's gone to 50%. 50% with 30 day net. So that's where the order goes to production with no payment for 30 days, then it's 50% then 50% on delivery, which is pretty good. I know a lot of I've seen on Twitter people speaking about like brands like Gymshark having like, I think it's negative cash flow cycles or something, cash conversion cycle, which effectively means they get to sell the product before they even pay the supplier. I think something like that, that's probably something I'll look into more with the new FD that's come on board and probably have more of a, you know, more of a case to do that when, when we've been working with this supplier for longer. I think right now we're kind of having to play fair in both sides. It works for both sides. Another thing got the space goods username on Instagram finally. That cost me a fair chunk as well. And I know it seems ridiculous just getting rid of co, but I think, you know, in terms of brand ip like I spent eight grand on the dot com before we launched again. This might seem ridiculous and we had the dot CO before, but I think it does matter long term because you just want to fully own the brand. So got that on Instagram. Finally got that set up yesterday evening actually, which I'm pretty gassed about. I know it's a tiny detail, but got that sorted, which is nice because yeah, when you come to sell the business or raise more money, it's just owning the IP more basically. So. And Instagram's obviously a huge one. Still trying to get the tick tock. I actually think I set up an account at space goods TikTok but forgotten the password and I can't get in trying to sort that out. Another thing, kind of a boring thing but again something that I learned from the past. I've got a full suite of business insurance now which it didn't have which might seem ridiculous launching a consumable product without all that. So you know, cover up to like 10 million quid plus for like basically anything that goes wrong. Legal cover, directors cover. A big one being obviously like product liability cover which means that someone gets ill taking the product and tries to sue us which I guess will happen at some point. It's kind of inevitable. That's all covered. Another thing about to do. I mentioned on Twitter again like the Instagram was the thing that flagged. It turned out that was because obviously one of the reels I posted had psychedelics and it had the word psychedelics. So we basically have to remove that from all advertising and branding even on the website to an extent. It's kind of annoying because that was like the narrative I'm trying to push but at the same time gotta play ball with these platforms because I need to have, I need to be running a business and generating revenue. So if I can't, you know, psychedelic gets in the way of that and just got to remove that and play a bit, play a bit more vanilla with it for now in terms of like just pushing the coffee angle which does work as well to be fair. But it's just kind of annoying when the whole mission of the brand was like long term vision to like bring psychedelics to the mainstream and stuff. But I think that's just gonna have to take a back seat for now. So yeah, I've done all that. Supplier email me the other day saying They've had like 20 inquiries referencing space goods to them saying can we effectively copy the products? They're telling me they're not accepting any new brands but you know I think it's. That is actually a compliment if people think the brand is worth ripping. I'm sure there's going to be a bunch for example people doing the gradient packaging. I've not seen that before like in this space. But yeah, it's just a sign that what I'm doing is getting people's attention is good and is an early market. So kind of annoying. But yeah, it's just part of the game. I think it's going to happen with anything that is starting to do well, what else is going on? So I guess and I tweeted about this again. I fucking tweet half the shit I say probably. But obviously pre brand launch is really like focus on like creators. Like that 80 shoot we did for example. I love doing that sort of stuff. But then you get into like the nitty gritty. Like we're into month three now, as in like the start of the third full month, like 10 weeks since we launched. And I need to just focus on what's working. And what's working is great quality UGC ads in the UK on Instagram primarily right now. So you know, there's no point doing another 1980 shoot which is like a movie and get all excited about this stuff when actually the stuff that works is just basic shit that converts. So it's getting that balance right between like brand slash like vibe marketing or whatever and actually just stuff that fucking converts. I think Moyes Ali spoke about it and I agree wholeheartedly. It's like until you get to like 10 mil plus, brand marketing just isn't a thing. You need to be performance marketing. Like does this pound I put in get £2 out effectively? Rather than thinking oh you know, let's do this. This whole campaign and this whole movie. Kind of like the thing I launched with the nothing exists until you create it vibe because that just doesn't drive sales and it's cool to have and it's definitely, I think that was worthwhile at the start because it made clear like what the aesthetic and vibe and like long term brand mission was. But that's not stuff that gets you sales and like cash is king. Revenues king obviously in the start. Revenue profit is king in the start and going forward of course. But like I need to be more and more focused on that than anything else right now. So yeah, just focus on what works. Which means that the process is slightly less creative and it can't always be super creative and fun and like visionary shit. It just needs to be what fucking sells. So that's ultimately what I'm focused on right now, you know, like 8020 on everything. What's working, do more of that, what's not working, sack it. Another thing that I think is cool with ecom and you know, just always has been the case is that like overheads and team cost. I think for me right now, granted, I want to hire this performance person that'd be like five full time people in a bunch of agencies right now pretty much. I think four full time people. And I think that can Stay. I think the overheads and team size can stay the same up to like a million a month in revenue. And that's the beauty com, obviously, like a lot of automation, a lot of leverage when you start to scale, obviously economies of scale with things like ad costs. You know, the same ad reaching a million people as opposed to 10,000 people, it costs you the same to make it, but it's going to drive a lot more revenue, all that sort of shit. So that's one thing which I think is cool, which is why I'm keen to scale pretty quick because the profitability as a percentage actually will. Well, ad costs will go up, but overheads will stay the same for me pretty much as we scale to like a million a month in like the next year, which is like the target really. So, yeah, just keen to scale because everything gets cheaper effectively, like percentages come down, like payment processing, etc. Etc. Etc. So, yeah, that's interesting. Future investment options and plans. And I've spoken about potentially getting another angel investor on at the minute. I mean, long story short on that, I think they want a price which isn't fair right now and I don't need the money. So I don't know if they're watching this. I will do a deal with them just probably in a few months. And yeah, because obviously got angel investors on board for this, which is massively valuable already, by the way, particularly some of them, which are a bit more like time intensely involved, just aside from the money, it's been massively valuable. But yeah, I am thinking about, you know, what, what's the roadmap for future investment? Because it's a fine line between, you know, hypothetically, If I had 5 million quid in the bank right now, would we grow much quicker? In ways, yes, but in other ways probably not. And it would just. We'd probably just waste more money. So yeah, it's getting that balance right between do we need more cash to go quicker as soon as possible to reach that like 100 million revenue in like three, four years, which would be chaos as a goal. Or. Or do I bootstrap a bit more, you know, maintain more equity, focus on profit, but be smaller scale. And it's a fine line. I think, you know, in the past I scaled too quick, obviously, different business model. But with this, I think the benefit to scaling like really quick and trying to get to like a million a month plus in like the next six to 12 months, which I think is a billion percent doable, can I do that without further investment probably could I do it in six months if I got a bit more investment? Maybe, Because I'd probably release more SKUs quicker, be slightly more aggressive with ad spend. Maybe you'd hire maybe one or two more people, maybe more like more expensive people a bit sooner. So yeah, I've got options and plans for that. It's just right now trying to time it because I think I want to get six months under the belt of like progressively bigger and more profitable months every month for like minimum six months. And then I think there's a better case to raise more money probably from angels and stay away from like private equity and VCs for now. Even though I am getting emailed by those guys already because I think they probably track a lot of brands that look interesting. So yeah, I mean right now that's 17 minutes already, I suppose. Yeah. Get into grips with like how the business is running now. Obviously got a lot of data. Got like the first 4,000 customers now in like the first. I think it's 11 weeks actually, not 10 weeks, which is pretty solid going bunch of subscribers. Everything's moving the right way, everything's growing and yeah, just excited to keep doing it. I'm enjoying the trenches. I think one of the reasons I spoke about what wanted to do less of the podcast is because I feel like there's such an opportunity here with the brand to like really do something special and big and really just. Yeah, I don't want to fucking miss the opportunity. So I feel very much like all in on this. Like very all in. I think doing this, these weekly episodes is great for the YouTube. I will keep doing the pod. It's just not gonna be every week. In summary, I think that's. That that's the best thing to say right now. But yeah, a lot going on probably. I'm probably rambling a fuckload in these videos if you would prefer a better. If you want to see like certain things, I think I should do this differently. Write a comment. But for now it's just bullet points. Me chatting shit about what's going on the past week and yeah, off to geek out this weekend. Apparently I'm speaking on a panel or something which I got invited to by Rabba at Triple A. That'd be exciting and interesting. I'll probably be the smallest brand and least intelligent person speaking there by far, but always keen to do shit I've never done. So public speaking is one of them. If you're going hit me up. I'm sure we'll see each other there and I'll catch you in the next episode. Cheers for watching. Peace.