7 Figures in 6 Months, Growing Pains, Microdosing & Seasons - Documenting the journey - Episode 21
Matthew Kelly hit seven figures in six months, pivoted to subscriber-focused ads with a £160 lifetime value, and is launching a new product called Dream Dust in December. He's also turning 27, experimenting with microdosing, and wrestling with cash flow constraints while chasing million-per-month targets.
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Yo, right, we're back. It's been a while. Has actually been probably the longest time I've not posted a video since I started YouTube in my year and a bit long YouTube podcast side Hustle Career. It's episode 21 of documenting the Journey. I feel like there's a load of shit to catch up on and as usual, I'm gonna probably try and keep it really brief and concise and actually informative and I'm probably gonna ramble to fucking. But I ultimately started this series because I want to be able to look back on it in years to come. And that means through the good and bad times and times when I want to record and don't want to record. I guess in recent weeks, for many reasons, I didn't want to record as much. Just got myself in a fucking rut, which maybe I'll speak a little bit about and maybe more in the future. But yeah, I didn't really want to film today either because I get into the. It's like when you don't do a podcast for a while, doing the next one's difficult, but you know, fucking hell, I want to do these episodes for myself, if not anyone else, my future self. And that's the reason I'm back on it. So episode 21, I suppose, as usual, written down a bunch of shit I'll talk about. Probably not very useful not sharing a screen. People probably don't even learn much in this. It's just me documenting shit. And you know, the nosy element of everyone in society ultimately finds that interesting, I think in these little niche e comm communities. So yeah, in the interest of that, there's a surprising amount of people that actually give a fuck about what I say have kind of realized in the past week or two again for a few reasons. And I guess that motivates me to keep doing it. It motivates me to probably want to get back on the pod as well, which maybe we'll speak about, but certainly just documenting my stuff and if it inspires people or fucking people find it interesting, then, you know, beyond just my own selfish endeavor to want to look back on it in years to come, then maybe that that's kind of a motivator for me. So, yeah, we're back on it. Every week has always been the plan. I know there's been a bit of chopping and changing, but yeah, what's been going on? So three and a three weeks since I did the marathon, which obviously I wouldn't shut up about. I feel like I had A bit of like gold medal syndrome. After that I was like, which obviously it's not that great of an achievement. It's obviously fucking levels to it. But like athletics wise for me it kind of was. And after that I was like, ah, that was cool. Done that. Now what's next? And I think having goals that are separate to business, obviously like my prime, my primary goal over the next few years is to build a fucking huge business, make a load of money, build something cool, have a big impact on an industry which I care about. But beyond that, I think having goals that are physical, that are more tangible and shorter term and more easily controllable in the short term, which for me running is like the perfect one. Cause it's just me versus me every single day. And yeah, I kind of had a bit of a dip after that where I thought, oh, was that. It was like kind of disappointing I guess. Like that rush of everyone telling you how amazing the run was, blah, blah, blah, kind of wears off and then you think, ah, done it. Now what's next? I haven't decided what's next. I'm kind of going back to a hybrid training routine. I've joined CrossFit, which I'm going to like twice a week. Some people probably fucking hate that. But I just wanted to get away from the gym, like just training by myself, try something new. Still running probably like two or three hours a week with a bit more like cycling as well for my cardio. So definitely not chopping out cardio because I want to stay in shape, but like hybrid training I suppose for me, like weights, CrossFit, bit of running, but not the obsessive 100k a week plus I was doing for the past like three, four months. So yeah, I might end. I meant I've got a place a good for age entry guaranteed now as of like yesterday in April, which I might or might not do, I'll decide closer to the time. I don't know if it's as romantic and poetic. If I was to do a marathon again, I'd obviously have to go like 245 or better. So I sub 245 to make it worth my while in my head or certainly sub 250, but ideally sub 245. So we'll see, we'll see with that where that goes. Obviously this me going on. I mean I don't know if that was triggered by the fucking come down of not doing or finishing the marathon, but I'm not gonna make this a video about this because I don't know if I've just don't know if I'm ready to like speak this openly about my challenges with my mind, as many people are kind of aware of. I've sort of loosely touched on him in like podcast episodes. Probably the episode with Iman in like ages ago, I think about a year ago now, episode that was my friend Lucas interviewing me. Kind of touched on that in a bit more depth if anyone's got to like one hour into that and then probably over time. But yeah, I put a fucking tweet up the other day which was out of character, but it was in the moment and it was a dark moment and I don't know if I regret putting that up. I don't think I do ultimately because it's. It was the reality at the time. But yeah, if anyone knows what I'm talking about, that is something I feel a lot of times and deal with. But I'm probably gonna, I'm probably just gonna grow a pair of fucking balls and do a proper video like half an hour long speaking about this because it's something that is massively affects my entire life and probably a lot of other people. And I think it might be useful to hear it from my perspective because I know from the outside in probably more than I realize a lot of people look up to me in many ways, certainly younger people and, and have looked at my life, I guess historically on Instagram and bits of YouTube and you know, thought it was everything that they might want or whatever, but. And I've tried to be really authentic and transparent and just be myself on the pod and throughout this whole YouTube that's kind of been something I'm proud of, that I've been very open about stuff but probably not to the full extent of like, I guess challenges with my mind and stuff that I've lived with for years kind of privately. And I know it's a controversial subject like fucking mental health and shit, but that's actually kind of why I want to try and like change the world with psychedelics and mushrooms. There's a bigger motive there than just I want to build a DC brand and sell it because that's great, but that's genuinely not the core, the core driver. And I also think it'd be interesting me to speak about my experience with microdosing and macro dosing, but predominantly micro dosing, which I think it's had a profound impact on my life and periods where I have not done that for kind of self research purposes, if you like, and other reasons. I've seen a drastic difference. The past few weeks were one of those times when I wasn't doing that. And, you know, correlation, causation, I don't know. But I'm probably going to put a video together speaking about all that, because that is fundamentally like my own challenges are ultimately the core driver of why I want to build this business in this space. Which sounds like really. It might sound flippant and like delusions of grandeur or whatever, but that genuinely is like why I'm interested in this space in like a 10, 20 year basis, the whole psychedelic renaissance and shit. So maybe I'll do a video speaking about that in depth because I think that could really give people a lot more perspective on what I'm trying to do here. And as much as that's like very personal and probably should be private in many ways, I thought I've got to the point where I've shared almost everything in my life on this fucking channel and the podcast and shit, that maybe I should just grow parables and go one step further and just like really open it up. Because I just think it's probably net beneficial for society and a large portion of people that happen to watch my shit if I was to share a more in depth story from me on that side. So yeah, maybe we can speak about that more in depth in another video when I'm more. When I just fucking grow a pair of balls. I want to speak about it, but for now I'm just implying that there is some shit I want to speak about there. What else is going on? Yeah, Christ, I turned 27 last week, which is fucking mad and don't know about you, but every time I get a year older, I think, fuck. Like, this is going to sound really miserable and pessimistic, but I tend to just think, fuck, I'm not. Every year, regardless of where I am, probably particularly this year, I think, oh, this is not who I thought I'd be and where I thought I'd be by this age. And for me, just to put it bluntly, I don't know if this is just delusional, just the way my mind works, probably, but I thought by 27 I would be way further ahead than where I am right now, which might sound absurd and I'm actually very aware that that sounds fucking absurd to probably 99.9% of society because I have achieved a lot of things, I've done a lot of things, have built a vast amount of experience for my age. I think probably most importantly, particularly on like the fucking on the failures and shit. And I am proud of the things I've done and built and kept my integrity intact through the ups and downs, but I just feel like ultimately, yeah, I fucking keeps me up at night. Sometimes I think, wow, I'm either like, I either need to like work on my self esteem or confidence or I need to get less successful friends. And I'm definitely not doing the latter. So that's probably the first because yeah, I just honestly thought I'd be further ahead by 27 and anyone would look at my life and say that's fucking absurd. And I'm very aware of that, but that's just the way my brain works. And maybe it'll always be like that. Maybe that's the curse of driven people. I guess, like the bar is always moving and it's never enough. But you know, on that note, and excuse this being a rambling episode, but I feel like it's maybe valuable to document it and tell other people. On that note, I looked back a year ago when I felt like I hit rock bottom ultimately on my 26th birthday. And first I don't fucking physically recognize myself at all to the point where I like I was going to do a Twitter thread on it, but I was actually like too ashamed to post it. But secondly, it's like, wow, a lot can happen in a year. So like a year ago I didn't even know I would be getting into the mushroom space. I've now got what is a multi seven figure run rate business after the first six months, you know, raise all funding. Like, like it's kind of the alchemy of entrepreneurship is truly incredible. And I guess when looking back at a year, a one year period, I think is a good time frame to assess things. And yeah, basically the point I'm trying to make, not very concisely is I look back a year ago and I think I was in a much worse spot then and I've definitely changed a lot of things. And yeah, which kind of goes. Which sounds completely hypocritical because I just said I don't feel like I'm ever doing enough or not where I want to be. I guess I'm still not. But like looking back a year ago when I definitely was in the worst place I've ever been, you know, you know the story on that, at least in my head I was, it reflected in like my physique and how I looked and shit. But yeah, I really have fucking turned around and built something in the last year. So that's the, the magic of entrepreneurship, I think. And it just proves that I have the skills. And yeah, I'm pretty proud to have done that. It's never fucking enough. And it never feels like it's enough. Certainly not now. But yeah, the transformation has been pretty biblical, to be fair, at least physically and visually, which maybe some people have noticed gradually. But like, if you saw the side by side, which maybe I will post on my Twitter, it's pretty fucked. So yeah, the point on that is like Christ, in another year when I get to 28, you know, I like to think about where I could be then because I think as well, growth can be like bamboo. Like, you can often feel like not much has happened in a year, even though for me it has. But then you could do like 20x in every way in one year because you know, your efforts have compounded, your network is compounded. Like finally things click, whatever it is. So it's never gonna be linear growth in life, whether that's business relationships, mentally, whatever. But I really think, especially in these sort of vehicles, entrepreneurship things can happen rapidly. But often it can feel like nothing's happening for years or certainly a long period. And then, you know, in a short period, things can change super, super quick. So I, and that is something I was speaking about with a friend and my first and biggest investor in the business. And it's topical. Cause we were speaking about this different acts, we caught up and we hadn't seen each other for like six months, which is Jack, the founder of waveflyer, who is a fucking freak of an entrepreneur and someone that super inspires me to an insane level. And we went for a few drinks and shit and I wrote down like, I do this when I'm drunk. Usually I get all fucking gassed and inspired, but I write it down to the next day when I'm not feeling as drunk and inspired. I can refer back to it and so many things he said, which I'm not going to specifically share. But like, I think that point he drilled into me, you know, things can change so quick because. Don't quote me, I don't speak for him, but he went from being 28 and broke, I think in his words, to now 31, maybe nearly 32. And you know, his net worth is nine figures, like quite literally that that's not even exaggerating. And you can build a business that's valued at billions and you know, 500 plus employees. And that's the fucking alchemy of entrepreneurship. Obviously that's fintech. It's Not. It's not dtc, like, valuations, whatever, Different. But it's fucking insane. And this is like, someone I consider to be pretty normal. And, like, that's kind of the most inspiring part because it's not like you're looking at Elon Musk or whatever. And I just don't think I'm elon Musk. And 99.999% of us are not Elon Musk in terms of, like, IQ level. But, yeah, I'm just super inspired by the people around me. Like, not just him, he's just one example that was relevant because I hadn't seen him until this week. But, yeah, fuck, I think that is my greatest asset. And I'm fucking rambling. But, like, I look around at all my close friends and I'm inspired by them. And I probably don't tell them enough. I think some of them can go to the fucking gym a bit more. But I say that's their face. But in terms of, like, the business shit they're doing, and it really is. There's levels to everything. And so cliche. But cliches a cliche because they're true. And, like, you know, you are the average people you hang around with. And the one thing I've never slipped up on, I think, just by being my fucking self, is, you know, building a great group of people around me and, you know, investors and mentors, I guess, more recently, like, older people, which I've intentionally brought into my life to give me some more wisdom, which I didn't have in the past few years. And that's paying dividends in itself. And, yeah, I just think you can't lose. I actually genuinely believe on a long enough timescale, you cannot lose at all if you have good people around you. I truly believe that. So, yeah, that's kind of a few, like, life topics I was going to speak about. I guess just like, I always write fucking notes, but tries to keep me on track, but it doesn't. And then, like, seasons of life, because I was reflecting on, like, summer and shit and I felt like I was having a lot more fun and Christ, that's pretty normal in it. But this feels like a grind season for me right now. Like, I haven't got any trips planned for a while. Probably go Dubai in, like, December. I was meant to go Bali last week, but it got canceled, which is probably good. And, yeah, I think the life of people in general is obviously seasonal, but certainly entrepreneurs. It's very seasonal. The ups and downs, you know, monk mode, whatever. Enjoy life bit more in summer. That tends to be how it works for me. But I feel a huge opportunity the next few months and I really don't want to fucking mess up and miss it. So going all in I guess coming on to the business a bit more if you're still fucking watching. Sixteen minutes in. We now have six months of data and I should maybe I'll show bits of this going forward but I just don't want to shoot myself in the foot and regret doing it. We now have over six months of data trading wise like six months and two weeks nearly now but six months when we made this switch and essentially have pivoted the entire business to be well certainly turns to the ad account which I guess kind of drives the entire business at this stage to be entirely like subscription focused. So 90% of our ads now I believe I could be wrong. I don't really look in the ad account day to day basis the agency does. But all our ads are now subscription focused. So you know, running ads to acquire subscribers rather than just acquiring one time customers. The reason for that is essentially in layman terms and the numbers might not be exact but the 6 month LTV is 160 quid on average on subscribers. We know that because we've got six months of subscribers. Be better if we had a year because obviously it'd be twice as much data and more reliable and so on. But we know it's more than double the six month LTV of a standard one time customer which obviously means we can go from effectively a CPA target of like 35 quid to I think break even with subscribers after you know, taxes, shipments, all that shit, it's like 90 quid. So you're nearly tripling the amount you can spend to acquire a customer profitably over a six month basis which obviously means we can run cost caps at a much higher bid and scale way quicker and in the past two weeks start to test this and that hypothesis has been proven to be true and that's like ah, hold on, this is how we can scale this to a million a month by like the end of the first year potentially, which is still my goal by the way. That might be aggressive for a few reasons which I come onto. But the challenge then obviously becomes cash flow essentially because if we know we're break even with the subscriber, I have to say between month, probably month four as in up to that CAC level obviously if I cac 60 quid we could be break even our profitable after two and a half, three months. But you get the point. We're not getting paid up front, so we need to plug that gap of two to four months, realistically, until we're break even again, depending on the CAC and level of spend. And then that becomes the challenge and it's like, all right, well, there's a great case to potentially go out and raise a few million quid because, you know, six months of data, solid track record every month has been significantly bigger than the previous. We've got great customer reviews, we've got a lot of data now we've got over 20,000 customers, blah, blah, blah. But obviously I don't want to dilute the fuck out of myself and my early investors. So there's obviously a lot of options, one of them being something like Wayfly, you know, there's loads of cash facility options out there and then it comes down to obviously modeling it all out. And I have two finance guys in the business now and obviously I'm trying to. I'm not running that part of the business, but I'm certainly very on top of it because I know, probably more than most actually, that things can go from very, very good to very, very bad, usually down to cash flow. And yeah, I learned that the very hard way at the end of 2020, so obviously very on top of that and just trying to figure out basically how hard we can go. So I'd say, like, cash flow with subscriptions in mind and stock are the two most challenging things, because I truly believe I could do a million quid next month in revenue if we had enough stock, which don't have enough stock. So I can't do a million quid in revenue, you know, hypothetical. And that's, that's obviously the challenge of econ, and that's challenging enough with one skew Dream dos, Dream Dust. Dream Dust is launching at the start of December. You know, I want to keep it very focused. Rainbow Dust and Dream Dust for like the next six months, probably. I think that's a nice two primary SKU offering, obviously with the accessories and shit on the side to make bundles, whatever. But yeah, that's basically the way I'm looking at business now is like the entire. The North Star metric is subscribers and an LTV to CAC ratio and retention. And it completely changes how you look at the business financially. And like, obviously when we get to month 12, you know, maybe I'll see that the LTV of a subscriber is hopefully like 250 pound plus, and then we could hypothetically spend. I don't know, 170 pounds to acquire a customer, something like that. Which would basically mean the business is lethal. And if we have enough cash we could probably scale it to like 3 million quid a month paper within like a few months after that. But you know, this is all hypothetical at this point of course, but that's the way I'm thinking about the business now. And I've had a lot of advice from a lot of people telling me not even to look at, like not, not to even look at the revenue and certainly not like the net profit on a monthly basis yet look at subscribers. And LTV is like the driving metric. Obviously cash becomes the bigger problem, as I've just said. But then in. I'm rambling here as well, sorry, it's just the way my brain works. But, but then also in like a kind of a yearly or three yearly basis. And I've always thought this way and there's a lot of debate about this on Twitter and stuff. But certainly for subscription business I think it's even more true is the primary financial goal of the business should be to increase enterprise value. How much is it worth to the right investor or buyer for X, Y, Z reasons, not how much EBITDA can we make in the first year or how much revenue can we do. Obviously those two factors, particularly in DT Ecom, like this isn't a tech business revenue and EBITDA of course, and every other financial KPI, those two being the primary ones, obviously lend themselves to an increased EV enterprise value. How much is the business worth? But ultimately the ev, how much the business is worth, the valuation is actually a more important metric. So everything that I do and the reason I say that is because, for example, 3 million a year, that's entirely subscription in the first year, say hypothetically, when we know that The LTV is 300 quid per customer is massively more valuable than 30 million in the first year in revenue. But none of them are subscribers, which is churning 20 mil on fucking Facebook ads, losing money and the LTV 60 quid. So that's the way I'm thinking about it because the first one scenario A might look smaller in the short term, but actually the long term growth potential, like the trajectory is way more attractive for investors, buyers and ultimately the bottom line long term as well. Because you know, if you're a subscription business with high ltv, you could pull the plug on ads and still have all your subscription revenue. Then overnight you can be very, very, very profitable. I'm talking like 50% plus EBITDA on paper. So, yeah, that's basically the way I'm thinking about the business. Maybe I should start doing like iPad drawings or some shit to like illustrate this, but hopefully that makes sense. And yeah, I'm seeing a lot of brands I always read, read about acquisitions, investments, all this shit. Probably like anyone that watches this channel, that's literally like my equivalent of watching fucking Love Island. I read about this shit because I'm genuinely interested and I always have been. I'm reading like certain brands that I know I'm not going to name. There's one or two particularly that been of hot conversation today between myself and a few others, like raising like 10 mil plus. And I know for a fact their numbers are not significantly bigger than mine. And I'm only six months in. Obviously you never know the full picture with like articles that release, press releases, whatever, but it makes me think like, fucking hell, if I can get this to a year or even better, 18 months without having to raise any more capital, which is a challenge, but it's possible, certainly a year if I want to go super aggressive, then, you know, provided the market is not completely, which is out of my hand and all of our hands, of course, then I could probably take this to market and hopefully raise, raise money that makes sense for the business and is required for growth. If that's the case and at a freaking healthy valuation or an inflated valuation in many ways, based on what I'm reading about other brands in a similar space, that is subscription supplements. So have a guess who I'm talking about. There's quite a few applicable brands, but there is one that I was reading about earlier and it just blew my mind. So, yeah, that sort of shit gets me gassed. I think the early stages of a brand are always at the riskiest in terms of just dying and running out of money, fortunately, largely because I've had a lot of experience where that has happened and it was incredibly painful and I learned a fuckload and I was in the boat by myself this time. I'm not in the boat by myself. I, you know, I'm not going to make that same mistake again. Obviously there's a lot of factors involved in that, but yeah, I think I've got a pretty solid chance of building something very valuable over the next few months. And I think, you know, the first six months has proven my concept and my theory, and now it's really just a case of executing it at bigger scale and trying to intentionally keep things as fucking simple as possible. Because, yeah, it's super fucking important. But anyway, I'm rambling. I feel like one final thought I'll leave you with and then I'll just fucking post this and wonder who actually watches this shit. Is I read a tweet the other day or something and it was like deep down everyone knows there's a few things they could do that would completely shift the trajectory, the trajectory of their business or their life or whatever it is, their network, their social life. And you just don't do it because deep down you just have fears. Whether that's like childhood fears, whatever. I'm not entirely sure what those things are that I'm not doing. But one of them is probably not sharing my bigger vision a bit more, which is kind of what I alluded to at the start and like the reasons for that. My own personal struggles that make me want to have an impact in that way. I suppose putting videos out like this and doing the podcast is probably some of the things I've deep down like shied away from in recent months because maybe I just fucking felt like what I was putting out wasn't very good or whatever. But then you get reminded in certain circumstances that actually impacts people and all this. And I feel like other things as well, like just being a bit more controversial, put myself out there a bit more. Like why am I not sending. There's a few investors that I think I would just love to meet and you know, they could be life changing opportunities and for. I've got plenty of great people on my network that I already know. But like, I don't know, there's one or two that come to mind. Why am I not sending them a DM and just asking them for a coffee? Granted they might not ever fucking reply. But why have I not got the balls to do that? Probably deep down I just think they won't reply or whatever it is. And yeah, just think about that because there's probably things that you can do for free that could completely move the needle. Like why am I not buying a. I had this idea of I and I thought it was a joke, but I actually think it's genius now. Like why am I not doing viral stunts where I buy like a 10 meter tall blow up fucking mushroom, put space goods branding on it, put like fuck SSRIs as a slogan or something and then put a QR code to the website. Why am I not doing that in the middle of the night in like Oxford Street? Partly because I could probably go to prison for it, I don't know. But if I really didn't give a shit what other people think. Why would I not do something like that? And like, deep down the answer is probably because I'm scared of what people would say that didn't like it, you know? So things like that I'm thinking about. But yeah, I guess that was kind of my final thought. And yeah, I think a reminder to anyone is you can fucking change a lot of stuff in a year. Maybe I will put a Twitter thread out about me from a year ago, try and make it knowledgeable and shit. But that's a 27 minute video. A lot was covered there in a while. I haven't documented stuff like three weeks, so hopefully that was remotely interesting. If anyone watches the full thing every time I put this up, like comment and let me know because I feel like I should fucking send you like a Christmas card or some shit because this must be painful. But yeah, document the journey, space goods to the fucking moon as always. And just stay on the warpath. I'll catch you next week in the next episode. Peace.
