Scaling Spacegoods from Zero to £12m and Lessons Along the Way, Supercar Q&A - Doc the Journey Ep 79

We're in a green Audi R8, reminiscent of 2019. I'm here with Flo, who's the first team member of spacegoods, runs the whole operations. Don't know what the fuck his job title is, but couldn't run the business without him. Gonna do a Q and A because I'm clutching at straws for content, really. But, yeah, Flo's gonna ask me some random shit. No idea what he's gonna ask me. I'm gonna focus on the road, obviously, and, yeah, we'll get started. Yeah.

All right. A few questions.

I have no idea what you're gonna ask me.

ChatGPT helped us better be shit questions. Yeah. Starting out in early lessons and all that. What's one personal habit or routine that contributed most to your success?

Probably writing the Andy Frisella Power list, which is just writing the three or five things you need to do that day. Right. The night before to move the needle. And it's not a to do list? Well, it's kind of a to do list, but it's more like you wouldn't put the stuff you need to do every day on it. You put the stuff that's needle moving that you need to do that day on it. And I don't know, it just helps. I probably don't do it as much as I used to. I haven't been doing it this week, but just helps you stay on top of shit and make sure you're actually progressing rather than just coasting or thinking you're doing work that's valuable. So, yeah, probably that, but I'm definitely not a productivity guru. I'm probably very ADHD on the spectrum or something, which. Well, I definitely am. So, yeah, there's definitely people that are more on that shit than me, but I used to do that years ago and I've done it since then, so I don't know, seems to work.

And did you try to do that every single day when you were starting out?

Well, I do it every single day each now pretty much, unless I miss a few days, like I have done recently because I've been out here in Dubai. But, yeah, I think it's a good habit. Otherwise, I find, especially my personality type, get very distracted. I just coast and don't really do much. As in you think you're working because you're answering emails and all this, but are you really doing the main things that move the needle? I don't know. Putting out a job ad would be an example, like hiring someone, stuff that actually changes the course so yeah, I'm still guilty of not staying on top of a lot of stuff though.

Yeah. And you managed to get most of the stuff done and then on a daily basis.

The thing is that it starts with three or five things and then it ends with 15 to 20 things and then it's never any list basically. But if you focus on the main things then I think it's a useful habit, especially when you're getting started out. So, yeah, pretty basic shit.

What are the main things right now that you're working on on a day to day basis right now at this stage of the business?

It's a good question because everyone. Well, people often ask me, how do you spend your time? I'm not really fucking sure how to spend my time half the time. I think now probably two main. I'd say like products in general, product direction, which I definitely feel like I'm not doing enough on. Even though I've got an MPD manager, I'm still leading that. So I got a bit clearer on the direction of product because that's the most important thing. And then probably hiring. So I've spent a shitload of time interviewing people, which is a skill set in itself, which I wasn't very good at before. I hope people can hear us by the way. It's very loud. So yeah, probably like hiring product, trying to. There's always a fine line between trying to delegate and work on the business versus being founder mode and micromanaging and all that. And I think that's a very hard balance for everyone, especially at our scale at the 10 million mark where you're like, you're not a tiny brand but you're not a big brand yet. You don't want to behave like a big brand. So think big, act small. But yeah, I think hiring is a super important one, especially because I've gone down the route of committing to trying to build a 50 million pound a year business which we're nowhere near yet, but that's definitely the ambition. So I think hiring is a huge part of that because it's physically impossible to do that yourself. Yeah.

How did that change to when you started the business?

Left or right?

I just go straight. Is it mostly hiring now like in terms of what's different now to back then two years ago or.

Yeah, probably. I mean, more leading people. There's more people in the business working on the business. Yeah. When we started it was just me. Then it was just me and you for the first, I don't know, six months or something or even Longer, potentially. But yeah, I suppose now we've got VC investors as well. It changes the dynamic slightly, mainly because the clear goal is to get it to say, 50 million plus in revenue, whereas if you're bootstrapping a brand and you own the whole thing and so on, the ambition might not be so clearly that. So hiring and scale becomes more of a focus. So, yeah, I guess everything I do is trying to figure out how we get it from like 10 million this year to 50 million in, I don't know, three or four years. So, yeah, I haven't done it before and it's definitely not easy. I'm not saying I can do it, but I'm saying I'm trying to do it and working on it.

What's the biggest hurdle, like the biggest obstacle that we have to overcome to go to 50 million?

I think the foundation of it is how big is. Is the tam, the total addressable market? And it sounds like a fucking buzzword, but at the end of the day you can't get to that scale no matter how good you are at performance, marketing or bigger if you don't have a product range that appeals to enough people. So really, and to widen the tam, there's kind of three things. There's product market and channels. So like products, we're doing new products away from just mushrooms shortly, which I'll talk more about later. We've launched in Germany, for example. We've been going broad in Europe for a while, but Germany is now focused. We want to nail a second market. It helps that you're German because you've. I can translate everything. And then doing more retail because that's like an entirely new channel with potentially massive scale that we'd never done before until about a year ago. So that's growing nicely. So, yeah, I think it's relatively easy to get a brand to like circa 10 million in the UK and probably easier even still in like the US if you're good at performance market and you've got a decent product. But I think to go to like 50 plus, oh, fuck, I've gone the wrong way. Am I going straight then? You need to just think about how big's the market basically. And it's a combination of the three things I mentioned.

Any insights on localizing the website, the store, the brand and everything into Germany? Like any early learnings?

Well, I think it's a massive fucking ball ache, which is why a lot of people go to America or just do America from day one, because it's as big, if not slightly Bigger than Europe, but they speak one country and one currency, right? And it's culturally the same or similar. So yeah, it's definitely a headache because if we wanted to do the whole of Europe, I don't know off the top of my head, what 20 plus countries, probably different languages. Languages and different currencies and it's different website and back end, as you know, it's a fucking headache. So there is an argument to say do you just do America or do you focus and double down on the uk? But yeah, currently we've decided to focus on Germany and it's growing pretty well. It's not easy because all the ads are in German as well, etc. Etc. So fuck, am I going here? Straight?

Yeah, just go straight. Turn around. Yeah, interesting question here. If you could go back to when you were 18 years old, what are three very specific actions you would take right away to start a business or set yourself up for success? Like three very super specific actions.

I'd get on Twitter and YouTube and document everything. Even if I didn't post it, I would post it privately so I could release it later. Because I think having some sort of presence online just allows you to meet people, which is probably the biggest thing at the start. So the original thing is just putting content out. Even if you think no one's gonna watch it and they probably won't watch it, at least initially. I think the next thing is just start dropshipping store. To be honest, it's the easiest way to start in E commerce basically with no money or with very limited money. And then the other thing probably is like leave your fucking hometown and go to Bali or something, honestly. Because then again it comes back to exposing ourselves to other people doing similar shit. The irony is I don't live in Bali, but I've done Bali a lot and I think it's very useful for people getting started. So.

Another question, if you compare yourself now to five years ago, how did the definition of success change for you?

Like Australia or.

Yeah, just go Australia doesn't matter.

As in down air.

Yeah, doesn't really matter. Just drive anywhere. So for example, you as a 20 year old and now you as yourself in the very present moment. How about the success definition? Change the definition of success?

I don't know. I think it's broadly always been the same. It's freedom and freedom is a combination of working on stuff you choose to work on, being able to do it where you want, but having enough money to do it. Really. Yeah, I suppose like building a big business has always been a goal of mine, especially building a big brand. And there's definitely easier ways to make money than building a brand, for sure. Especially in terms of short term cash flow. Agency is probably easier. Info stuff is definitely easier, in my opinion. Probably hasn't changed too much, I guess just the practical reality of how hard it is has become more poignant. But also I've learned a lot about how to realistically get there. Whereas before it was a pipe dream. Whereas now I've done a few things about some success, a lot of failure, and I'm working on building up again. So I don't know, maybe I thought I'd be retired by 25 when I was 20, which definitely isn't true. And maybe just you realize that I think a lot of when you're like 20, you're like, oh, I want to be retired and just chill and drive cars all day. But you realize that's really fucking boring. So there's a reason, like, I don't know, Donald Trump and all these billionaire entrepreneurs keep going when they're like 70s because they fucking love the game. So I think if you can. It's cliche and I've not really understood this myself until recently, but just try and love the game, I guess. So hopefully you do something that you would broadly do if money was no object. That's probably more success.

Yeah. Do you reckon you'll ever retire? Or do you think you're so deep in the game and love it so much that you always keep going?

I mean, it's a nice idea. I'd love to not have to work again and I'm working towards that and be financially secure forever and all that shit to a decent level. But I've also got angel investors who are very much done that. They made tens of millions in their early to mid-30s, which puts them in the 0.001%. And they've done like the year or two off and they've been like, fuck me, I'm bored. And this is their words, not mine. And then they've started new businesses or got involved in new businesses. You might not want to be in the trenches so much and do it slightly less stressfully, but ultimately I think, yeah, you're going to want to do some shit. There's only so much, so many beach clubs and fucking fast cars you can rent in Dubai like we're currently doing. Yeah, I think you'd always do the next thing to some extent. It may be just less involved in the real trenches phase. You might just hire Good people. Right off the bat.

How do you analyze whether a market or a niche is worth entering? Which criteria do you use? Is it gut feel?

Yeah, I definitely never used to do this when I had my jewelry business, then my neon line business, it was more just I wanted it. And maybe that was also a side effect of just naturally having quite a good feel for niches, which I feel like maybe I do this one with like mushrooms and functional beverage. I definitely thought about a bit more, but even since I've run this business, I thought there's definitely better niches. Honestly, broadly gut feel and stuff I'm interested in, which is probably also, like I said, a combination of knowing the market and speaking to people and like my subconscious being aware of what works and stuff, so.

And probably also creating products for yourself. Right? Like stuff that you're interested in.

But even now, like we were speaking last night about some niches we think could be massive, like next year.

Yeah.

And yeah, I think a lot of like semi experienced founders would probably agree on them because they've got experience in certain areas. Whereas I'm trying to think of example that something I think wouldn't be good. I mean you can do anything anytime really. But like I probably wouldn't do something like super, super niche in a super niche small country because it's going to be impossible to scale it past a certain point. And I'd also always come back to the unit economics. For example, I don't know, a five pound product will probably never work on DTC because you want to use Meta as your main acquisition channel and the cap would be too high, generally speaking. So there's basics like AOV gross margin that are going to define if something could work and then the product and TAM and ultimately the founder skill set will define how well it works and at what scale.

What's your overall gross margin target when you restart your new brand? When you restart a new brand, is it like, is there a specific one?

Yeah, I mean just people say gross margin is different. So when I say gross margin, there's like GP1, which is like product margin itself, GP2 or GP3, however you want to define it. It's like after fulfillment, shipping, cogs, transaction fees, everything. True gross margin. I think you want to be minimum like 50% plus in any business, ideally like 60 to 70%, which is where we are. I think cosmetics probably got the most crazy margin or even like jewelry. I think my margins were like 75%. But obviously you might have a higher CAC if your margin's Bigger because you're probably putting a much bigger markup on the product, so maybe the aov is higher, etc. So I think it's all relative. But ultimately just understanding the basic unique economics, like I've seen businesses, and there was a big famous one in the UK naming no names, that recently went into administration, which is business bankruptcy and it raises a fuckload of money. I'm not going to say how much people can work out what it is, but the gross margin of that business is like 20%. It was born to fail from day one, in my view, unless you've got some insane retention or insanely low cac, which just isn't realistic. So I think gross margin is definitely a good place to start. So you want that to be high?

Yeah, Correct.

Melting in traffic right now.

Yeah, Melting in traffic. Melting in sun. What did your typical day show?

That slightly left.

Oh, yeah. What did your typical day look like when you were just starting out? Was it different to now? How was it back then?

As in with this brand or like back in the day?

Back in the days?

Well, I guess it's just me doing everything myself. Right. And I think you have to do that to some extent. Like customer service, media buying, website stuff, creative even everything that and logistics.

How many hours per day did you spend back then, like working, grinding, setting up?

Probably like 12 to 14 hours a day. I don't know, like there's obviously like breaks in there and gym and stuff, but pretty much just work and sleep.

Yeah.

And it's basically what it is at the start still for like broadly that's my default. But obviously I don't think working. I don't think the amount you work should be at flex. I think a lot of people think it is and I think probably should be at the start because you have to get into those habits. But it's more like the quality of work and the actual output. Like I'd rather work afraid a day and do good work or even fucking four hours a day now and then, which I don't do regularly and produce good results, then fucking slave away for 15 hours a day if you're not doing the right things. So you need to work hard, but also on the right things. If you're working on the wrong things, you could be wasting your time. You'll probably learn a lot and pivot. But yeah, I think it's a weird flex to be working all the time.

Do you still remember your first ever sit?

No, no, actually maybe it was my fucking clothes. Clothing brand called Gentry Club. Which was the shittest thing ever. It was in 2015.

It's very. Such a special feeling.

Yeah. And everyone in school took the piss out of it. So, yeah, don't know how good it felt at the time, but it's a long time ago.

All right, that's a funny question, but it's not my question. It's from ChatGPT. What's a tool or software?

Cop out.

What's a tool or software you can live without that beginners might not know about? Like a tool or software?

Good question. I mean, Apple Notes is like. Actually, no, no, that's a legit one because everyone knows that. The one you got me on granola recently called Granola AI. You should get a fucking affiliate link. There's loads of these AI note taking tools. The great thing about this one is it doesn't join calls. It does ask for consent and stuff, but it doesn't join calls. People don't know it's on. And it makes a really good summary. It's like you've hired a fucking Oxford graduate to be your assistant. But then you can also, it transcribes the whole thing. So if it doesn't summarize bits you need, you can search inside the transcript. I don't know, like example, say you were speaking to a supplier and you're asking them like potential pricing minimums, like lead times. You don't want to be sat there typing the whole time, which used to be me. You can just speak, ask the questions you know the AI will get and then it'll summarize for you. And if it doesn't have a certain thing summarized, you can even change the style of summary. And you can also search the entire transcription through like a chat afterwards. And it's just basically it keeps a record of all the calls you've had. And these days most people are just on calls all day and you can share it with people, et cetera, et cetera. So yeah, it's a fucking good tool. I think it's like 10 quid a month as well. So it's cheap. Yeah, it's granola AI. Get an affiliate link for that shit.

All right then, one closing question. Now that we're here in Dubai, any closing thoughts on Spain versus Dubai versus the uk?

Yeah, it's the age old debate and it's something I deal with. I feel like Marbella, Dubai, London, Bali is the ultimate trifecta. Well, it's four things. Not trifecta, but the ultimate four. When I get to where I want to be, maybe I'll have a place in all four. I think they all have pros and cons. That's the reality of anywhere in life. I think Dubai feels like a nice balance in the sense that it's like very first world. Everything's so convenient. Time zone is quite good. Marbella is a bit lonelier. I did that in winter for a while. Didn't rate it as much. I know it's more like European, obviously and greenery and shit, which Dubai definitely lacks. But for me it wasn't amazing. It's more of a summer place. London is definitely the hustle bustle. It feels like you can lock in and work a lot more, especially during winter when it's horrible, but at the same time it's kind of depressing. And often find myself there in winter wishing I was just somewhere sunnier, which just raises my baseline mood. And then like Bali is like the ultimate fucking nomad place. But tend to find I'm there for a month and I want to leave, you know, everyone. You get Bali belly or Dengue fever or something, which I've had before. Time zones are a nightmare if you've got a UK based business. So yeah, the reality is I think you need a base somewhere, which I've been trying to figure out since I left my London flat two and a half months ago, which I probably shouldn't have done in hindsight because now I'm like, fuck, I probably should have just kept it, it was pretty cheap, it was good, etc. So I don't know, I think when you've got business based in one place, it's hard to constantly be on the move. And I definitely think moving all the time is not good for productivity or anything. But I think the optimum is having a base and having the option to go to other places semi regularly if that's what you want. Just what I'm basically doing now, so. So, yeah, that's my view. Cool.

All right. You want to close the Q and A?

Yeah, good. Q and a, 20 minutes. I don't know. I'm putting out more videos now. It's pretty consistent. Subscribe to the pod. Maybe I'll go through like a Dubai guru arc in the next year or so. Probably not, but we'll see. We're off on a yacht later, which is the ultimate Dubai flex thing with a bunch of agency and E comm guys. It's going to be an absolute cockfest, but I'll probably film that as a separate video, so subscribe to the pod. As always, I say this every time. But more videos actually coming soon. I seem to have broken the cycle now. I'll catch you in the next one. Peace.