Raising more Money, Scaling Too Fast & Lifestyle Design - Documenting the journey - Episode 9

Yo. Back with another episode of Documenting the Journey. I think episode eight and the first time I'm not at my desk, I'm in the W Hotel in Barcelona on the third floor because I got finessed and both my mates got like 24 rooms. But we moved. Can't complain. Very nice place actually. Very shit weather tonight. Surprisingly. Was in Barcelona for that Geek out event. Didn't really go to a huge amount of it, but it's been a good little trip. We extended for a day and it turned into a bit of a send, which it seems to always do. But yeah, I'm freestyling this one. Probably do a bit of a quicker one. Was it. It's Wednesday. No, it's not even fucking Wednesday. It's July, Tuesday the 5th of July. I probably shouldn't be doing this update this early, but I'll probably put it out tomorrow night on a Wednesday. It's the first week. I haven't put a podcast up last Sunday for the first time in like 42 weeks, which is kind of deep. But there will be more pods coming, as I've said. But I'm just focusing on this little series right now and what is going on. I should have made a bunch of notes probably I didn't this time. Yeah. Nearly three months until launched the brand. Now we are into the third full month. As I said last last week, June was a frustrating one. July is a lot less frustrating, but has different challenges in different ways. Instagram is fine. Instagram ads working really well. Facebook ads, all that side of things. TikTok ads still not properly running because we keep getting disapproved. Even though I went through like weeks of having to change the landing page to get things effectively whitelisted, that doesn't seem to have happened. So Tick Tock's only spend like a hundred pound a day still, which is ridiculous. Facebook was spending like two and a half grand plus per day now primarily on Instagram and then Google as well, merchants and it's still banned. So I feel like those two channels, once they get sorted, but it's felt like it's been fucking ages once they get sorted. I feel like we'll be. It would be like a fair reflection of what potential the brand actually has with one. SKU stuff's working well, but I feel like if I want to get to that next level, like 3 to 500k a month plus in the next 2, 3 months, which is where I think I can go, then I need those channels running and spending consistently without caps, without limits, without Stuff getting disabled, etc, etc. So that's one big frustration I'm trying to fix this month. I definitely think we'll hit the target this month in terms of sales revenue. Unlike last month which I was off target a little bit. I'm being very aggressive with my targets in terms of where I want to go and I'm starting to realize already that it's going to have cash flow implications. Wanting to go as quick as I want to go because obviously I'm not drop shipping, I'm buying stock, it's a 10 week lead time. You know, if I want to get to 500k a month by like October, which I genuinely think we can do just in the UK with one sku then I need a load of stock and you know, ultimately there's no point having cash in the bank, it's not being used to an extent. But yeah, I realized I could play it very safe and probably just you know, keep it maybe like low six figure level, focus on profitability for the next few months and you know, not need to raise any more money or go and get debt financing or whatever awayfire a pipe, all these sort of solutions. Or I could get some more capital soon, a big chunk again soon and do what I want to do which is go like parabolic with the scale. But obviously it's a fine line between doing that and not and doing it too quick and actually fucking things up. Because I'm aware, you know, that in the past scaling for the sake of it's not always sensible but like key metrics are good, product reviews are good, subscriptions are growing very, very steadily. We're nearly 1,000 subscribers now, which is pretty mad given it's not even three months in. So MRR is solid but obviously wanting to scale super quick and say I want to get to the point where I'm spending 10 grand a day on ads in the next like four or five months, maybe more. You know, CPA is going to go up and with subscribers is all great but if the CPA like doubles for example, then we wouldn't be profitable until like month three, do you know what I mean? So having to consider all these things, it's almost, I'm viewing it almost like a SaaS company a little bit compared to like previous E Comm stuff I've done. And Obviously it's not SaaS but in the sense that the fundamental business model that could be really profitable and will be really profitable long term is the recurring revenue aspect and obviously this is just with one SKU and Then on the product side, like I said before, I decided to focus entirely on just rainbow dust, chocolate flavor, like one sku. Keep it really fucking simple. I've got accessory products in the works. I'm considering just working them with another supplier, source them from another supplier in the UK to make it way quicker. Lower moq, but primarily way quicker. Be more expensive. But I could get stuff in like two weeks potentially to test that alongside current products rather than waiting potentially 16 to 20 weeks with sea Freight for a bunch of like the accessory products I want to do. So yeah, I think, I think my decision to focus entirely on this one skew with accessories is the right one. But yeah, like the biggest thing I'm not worried about, but I put, I put an order in for 20,000 units last week and yeah, that's a big cash commitment at this point, but I think it has to happen. And we've sold like how many units now? 5,000. I think getting close to that, which is pretty fucking good going to be fair. But yeah, it's obviously like I want to grow really quick, but in the back of my mind it's thinking, am I ordering too much stock? Potentially a bit too quick and I'm gonna be sat on it for longer than I thought if, if for whatever reason something breaks or ads don't perform as well. But at the end of the day when it's one skew, it's like, I think it makes sense, like we can, we're always going to sell it and I kind of like the pressure of wanting to scale that quick. But it's a very fine line. I'm aware. So, yeah, trying to keep track of that really. What else is going on? I've decided to launch onto Amazon, which I've had a few people advise me is a good decision in this space. Like Amazon, apparently from the people I'm speaking to and people I respect a lot and have built massive brands, isn't viewed maybe the same way it used to be, which is like, you know, Amazon brands versus Shopify brands. If you're a premium brand, you don't have to be in Amazon on this sort of that. That isn't the case anymore. It's what I've been told. So I'm working with an agency, got 500 units, very small amount going there this week and basically just start building out like a secondary channel because obviously diversification looks better in terms of like potentially raising more money or selling the business long term to have it really diversified and not fully reliant on like Facebook ads or even Shopify, but like certainly not one sales channel. So that's another thing that's happening. I'm still in the process of trying to hire this content manager, which is probably like the single most important thing because I want them to take care of all tick tock organic stuff because I've seen potential with that but don't have the time or brain power to like manage an army of people. Then like UGC content stuff, of course I feel like our content's really good, but I don't want to find that, you know, we haven't got enough stuff coming in because I focus on it at the start, then sacked it off, which I kind of done. And then in like a month or two stuff's drying up because we don't have a system in place in the same way because I'm focused on other stuff because I'm still juggling a billion things, of course, but the main thing I'm focused on is obviously driving revenue and growth and that, you know, if I'm doing everything else as well, like managing creators etc, it's just not as, not as organized, not as focused, not, not as in depth on every section, of course. So that's the person I think I need to hire. I was listening to a comp, a three and a half hour. I didn't listen to all of it. A three and a half hour compilation podcast of all of Naval Ravikant's podcasts about how to get rich. And I just went to the middle and he started talking about. It's funny how like businesses and people and whatever, like other founders will ask you, like how many people are on your team? Right? And people ask me this all the time, how many employees you have? How many people do you work with thinking that a big number means you're a massive business. Whereas actually I'm pretty sure, and I've done it in the past to a certain level. And it's like I think with E Comm and particularly this model with one sku, you could get. Or I could get to the point where we're doing a million a month plus revenue, maybe more with a core team of like four or five people. I really do. Whereas a lot of people think maybe a business has 50 people, it's doing much bigger numbers. I've seen ad agencies, for example, they've got 50 people in an office and they're doing like 5 mil revenue a year. And it obviously works for that model. Like revenue and profit per employee is probably still good or whatever. But it's like just thinking about leverage, like how to leverage the Internet and modern ad channels as much as possible to build a massive efficient business that doesn't require an office, doesn't require 50 people. And that's something actually I want to talk about as well. So I'm going a bit random on this one, so bear with me. But I've been traveling quite a bit. I mean, I've always traveled a lot. I've always fucking loved it. Traveled quite a bit. This year I went Portugal, Brazil, Ibiza, Marbella. I'm here now, I'm going Mykonos next week and then Bali in August. So that'd be like seven trips in like the first eight months of the year and I'll probably do a few more. And I often think, like during COVID I thought, you know, obviously, great time not to have an office. Great time to be flexible. Then maybe like start of this year I thought, oh, it'd be nice to have an office and like 20 people in there and like a real base. And then I speak to other people and I think, actually I don't want that. I don't want that at all. Because then I can't do shit like this, like come to events, come to different places, live how I want to live and ultimately like have that freedom, which I've kind of always had ever since I was like 20, 21. So it's weird because, like, maybe I associate like proper brand, like long term, you know, an exitable business with having that office and 50 pay employees rather than being fully remote, having a lean team of five and scaling to the same numbers. So yeah, I'm trying to, trying to think about what, what, what I want long term with that. I mean, for now, certainly everything's fully remote. I think the working world has changed in that respect a lot. Like maybe long term I would want to have like a small office that people don't have to be in. I could be in now and then. I think probably my view on travel changes a lot during like spring and summer. Like in winter I'm less keen to be going to Barcelona or whatever, for example. But yeah, it's interesting because, you know, I know people running 2 million plus per month brands naming no names and they're fully remote, but they're not going to be fully remote pretty soon. And then I also know people that run much smaller brands, again, naming our names, that have like 15 employees on payroll, an office in London, which is like massively expensive overhead. So it's interesting, it's Just, yeah, I think there's always an element of lifestyle design and just building something that allows you to live how you want to live, but also thinking like, well, the goal with this brand is to make it fucking massive. But do you actually need like you know, a gym shark setup to get to 100 million revenue, say hypothetically? Maybe you don't, but maybe if I got to that point I would want that. I don't know. So it's interesting because I kind of instinctively like the idea of trying to scale to like ridiculous numbers. And I say 100mil revenue because it is ridiculous. And it's like a. If I could do that, then I'd have progressed to a level that I want to be at. But could I do that still being like the fucking kid wearing. I say kid but like the fucking loose don wearing like a shirt in Barcelona, like walking around in flip flops. I don't know, maybe I could maybe like the modern world like post Covid has enabled that even more because team members are more open to it, et cetera, et cetera, et cetera. So yeah, I'll just sit and thinking about not really relevant to what's going on in the business right now, but that's just like longer term things. And I'm just thinking about. Anyway, the next thing that is probably happening in the business is like I've mentioned before, trying to agree what I think are very fair terms with a really experienced angel investor who's also a good mate of mine now to get involved in the brand and primarily help with, well, like everything really. Cause he's been there and done that exactly to the level I'm trying to achieve next few years. But yeah, he primarily helped with that wholesale I think hiring definitely a lot and just, it's just another brain with experience which until you've got a bit of experience, I don't think you realize how valuable that is. It's like the Dunning Kruger curve or whatever. And I was definitely at the top of that first curve thinking I knew everything maybe two or three years ago. Certainly three years ago. Probably less so two years ago, but a little bit. And then now I'm probably. I've come through the bottom bit and now I'm gradually figuring out that I know nothing, but I know enough to know what I don't know and what help I need. So yeah, and that's just something I'm really, really keen to do. And I think having the right people around you is like the absolute most powerful, powerful thing in the world. So and it helps with the business, of course. Opens a lot of doors, probably allows me to dodge mistakes I've made and they've made in the past. So. So, yeah, probably getting one more, one more angel investor involved pretty soon. Within like the next month, to be honest, is what I want to do. So, yeah, that will be good because it will bring their brain to the table. Also put more cash into the business so I can go a bit harder with new products and stuff. And yeah, I just think it makes sense because at the end of the day I'd rather have a smaller part of a much bigger pie long term and a pie that actually survives, like arguably a pending recession and so on. Not that worried about too much than having 100% of, you know, a bedroom brand, which I feel like I've done that twice, you know, to that sort of multi seven figure scraping, eight figure level, granted with Neon Beach. But yeah, I'm trying to obviously go to the next level in terms of like building something truly valuable and bigger and more sustainable with this brand. So the more people I've got on board that have been there and done that, the fucking better, really. It's just logical at this point. So, yeah, I mean, that's 15 minutes. I'm gonna stop rambling, but hopefully that wasn't too disjointed. But yeah, I'm in Barcelona. Probably haven't done enough work today, to be honest. Got a lot of shit to do. I feel like I'm starting to get like slightly scale stress again. But I've been here before, do you know what I mean? So, like plenty of times with certain issues, certain worries creeping into the back of my mind. But overall things are going well, I think probably. I think things are never going as perfectly as you may instinctively want to believe as an entrepreneur because you're the eternal optimist. So now I'm trying to be like pragmatic about certain things. That's why I'm saying, like, maybe I've. Maybe I've gone a bit too bullish ordering 20,000 units because that would kind of assume that everything in my head goes perfectly for the next six months to like, to the scale that requires that now. But at the same time, yeah, it's a fine line between optimism and realism and obviously never being pessimistic about situations. So, yeah, overall things are definitely going well. We're growing and it's nice to have taken, like I've said before, taken a completely new thing that was a fucking idea. And now there's like 5,000 customers, and it's a real business again. That's the alchemy of entrepreneurship. And that's why I love this game. That's why it's the only thing I could ever do, probably. And yeah, chat to you in the next episode. Space gets to the moon. Let's fucking go. Peace.