Top 10 Things I Learnt Scaling to £2m+ In The First Year with A New DTC Brand -Doc the Journey Ep 50

Yo back with episode 50 of Documenting the journey and I'm actually doing something relatively productive and reflective and slightly different to normal because normally I just ramble for like 10, 15, maybe even 20 minutes every single episode. And I always talk about doing stuff that people want to see and a few people messaged me asking about this and it's a pretty general topic, but it's good for me to reflect as well. I mean I would love to be saying episode 52 having been exactly a year since I launched the brand or the other series, but I've not been perfectly consistent with it as everyone knows. But I'm gonna like a proper YouTube is saying this, I'm gonna do like certain type of video but top thing, top 10 things I learned in the first year, scaling brands over 2 million quid in revenue in a new niche, in a new space. Something I've never done before in a consumable as well. And I'll just preface this by saying this is not me trying to flex or whatever. It's not even a flex at all because there'll be two parties, people that say I'm trying to flex. That's not the intention, it's really just reflection and trying to give insight into something that is actually probably quite useful for a lot of people. But then also there's plenty of drop shippers and other brand owners that are doing way, way, way, way, way big, doing a little over 2 million in the first year. I was pretty happy with that given where I'd been previously and with it being a brand new product completely from scratch, etc, but obviously, you know, there's plenty of dropshippers doing much bigger numbers, which I don't think is comparable. And there's obviously way, way bigger brands, but they probably didn't do this in their first year or much more in the first year. So yeah, I mean it's a pretty solid first year. I think it's, it's not fucking huge. I think arguably if I'd launched it in 2019, knowing what I know now, maybe I'd have done three or four times that. But to launch a brand in arguably a recession, in a new space with a product that I'm pretty proud of, I think to do first year of a little over 2 million was pretty good. And with that said, I want to talk about the top 10 general things I guess that I learned in the first year. I mean there's many, many, many, many, many that I probably miss and not on here. And maybe I won't go into enough detail on them. But I'll dive right in. A little presentation on screen. I think the first thing and it's pretty fucking obvious, but I actually think so many people miss this and the whole culture of like money, Twitter and marketing, bros and E Comm scaling and shit. Everyone seems to talk about marketing when don't talk to a product. So product first over everything. And with Rainbow Dust I feel like I got it right. We made fucking itchy eye. We made one change. Getting rid of Sucralose, switching to Stevia, which was just an error. I shouldn't have put Sucralose in in the first place. But that just shows my naivety and newness consumables and supplements at the time. But then other than that it's been really good. Like generally really well received with Dream Dust, if I'm honest. The second skew that I brought out, I rushed it and I didn't follow this principle and I didn't get it right. I kind of just wanted to launch a new SKU and I'll come on to again later. Why does maybe a bad idea as well. But product, first of everything. I think it's so, so important. I think a lot of people skim over this and think you can just polish a turb with ads. You absolutely cannot. So this isn't in order by the way. This is just like top 10 things in general that I learned in the first year. And that's definitely the first one because I think the product was really good. And without that I wouldn't have been able to scale at all. And particularly when you put so much money and time into one thing. If the product had flopped, the business would have flopped because it's not like I was gonna go and test a new potential winning product, a new drop shipping gadget or whatever. So the product was good and product's super important. Number two. And these might sound really cliche, but the fact that I'm saying it when I'm trying to be as honest as possible and they still sound cliche probably rings true to the fact that cliches are just fucking accurate. And they are cliche because a lot of people say them because they're true. Keep it as simple as possible. And I mean this in every area. So like product. I just mentioned I wanted to launch one product. We did that. In hindsight, I probably shouldn't even launch Dream Dust. If I could go back, I would probably would have waited longer to do a second SKU to would have kept that more simple. I think in other areas as well, like marketing channels. I started playing around with like Pinterest and Snapchat ads at one point and thought, hold on, what the fuck am I doing? Like, you know, everything's coming from Instagram, Just stick with that. Even TikTok to an extent felt like a bit of a distraction. But then even other things like the messaging on the website, I was trying to overcomplicate stuff when really the angle that was working was just coffee alternative, which isn't as romantic or dramatic as I would like, but it just worked. And what else? Like the way we were offering different bundles on site. Like, I mean, it's still way too complicated. By the way, we're getting our website redone right now. But, you know, there's. There was like 55 different bundles on site at one point. Now I've got like 25, which is still way too many. But really, you know, I look at businesses like Huel Athletic Greens, I always reference them when I'm talking about stuff. But super simple. And simple isn't always the best, but at least for me, I think in this space, with a new product, I think keeping it simple and focused as possible was super fucking important. And there's so many areas that this can be applied. And I guess focus and simplicity are kind of, in a way similar but not the exact same. But yeah, if you can keep something simple, do one instead of two. Do one sales channel instead of two to start with, do one marketing channel instead of two. And that brings me on to the next one. I think 8020 principle applies in all areas. Again, cliche, but again, also very fucking true. 80% of results come from 20% of inputs or time or work, whichever way you want to slice it. And yeah, a great example of this is more than 80% of our revenue is still rainbow dust instead of dream dust. Obviously that's not 8020 in the sense of 20% of inputs, but it's a similar idea. And 80% of market results come from probably 20% of the ad creatives we test. And it's always going to be the case, like you have to have 8% of stuff that isn't working as well, so to speak, to get the 20% of stuff that is working really well. But yeah, I think just bearing that in mind with everything, it's the same with like hiring, you know, I found that generally a smaller percentage of the team are probably having a much bigger impact than others, and that might always be the case. It's not to say they're not good at what they do. It's just the jobs they are doing are more impactful and the things they're focusing on. And it's the same with my time. You know, I'll find an example that's something that's really valuable for me. I mean, hiring the right people is super valuable rather than me maybe slaving over. Like right at the start, I spent about six months doing all the creative myself running the creative operation. Then I brought someone in who was really good and overnight, you know, that bit of effort had a massive dividend. So yeah, again, a pretty basic point, but this is just, this is just actually based on my experience and this is a huge, huge one. The next one that people love talking about because it's relevant to ads and marketing and scaling and chat. Scaling content is the single biggest lever to scale spend and revenue from ads because it's the single biggest driver of performance and therefore spending more and more, doing more in revenue from ads. You know, and generally you're growing a business from ads, especially D2C to start, to start with. Right. We haven't done much influence stuff or any other channels just yet and I'll get onto that. But yeah, you know, there's so many different things that you could try and throw into the meta or tick tock machine. But creative, as probably most people know, it has definitely been creative and content has definitely been the single biggest lever. So like when we started focusing way more on different angles, split testing certain stuff, trying entirely new creatives, content creators, just getting banging ads, some of which are probably evergreen and still some of our top performers, then that just paid off massively rather than maybe trying to run one idea to like 20 different countries. Like nah, stop, stop trying to, stop trying to game the algorithm and just give it what it needs, which is content. There's countless examples of this, I think like Jack Rubin, who runs Purdy and Fig, who's a much smarter guy with a much better business than me at the minute, spoke to him the other day and you know, and he tweets a lot about this stuff and he's very fucking wise. But this is a huge takeaway from my own experience. And if you are trying to scale something, I think content, whether that's doing it yourself, doing it with a team or outsourcing it to an agency, it's like the most fucking important thing. And there's no point trying to run ads unless you have your content down. In my opinion, you have the creative machine as well. So you're able to test new stuff quickly, feedback quickly, etc. Etc. So that's probably a very media buying specific point. But yeah, it's a huge one. Number five, in my opinion, choose one market to dominate first. Again, this might seem obvious, but we launched just in the uk and I say launches in the uk, like you could buy anywhere. I thought it was in the uk, but we're only running ads in the UK for the first six months. But then I chucked in like America and Europe and a bit of Australia and shit. Just trying to test. And the problem with that is your messaging just gets watered down. Because we hadn't localized the website, it wasn't a fair test. We didn't have the same amount of eyeballs six months in in other countries that we had in the uk. Granted, only six months of eyeballs in the UK then, but you get the point. Like we weren't compounding our efforts in one place. And in the past with all my brands, Midnight City, Neon beach, even my clothing brand before that, I would just run like worldwide. And I think that had some merit. But when you're trying to, I think when you're growing something in a harder market, which it definitely is now, and I can say that because I was growing brands in 2017 and it was fucking way easier. I'm telling you, when you're growing it in a harder market, I think you have to just choose one. And we've only just started running ads in Germany and the Netherlands. Can't speak Germany, Netherlands recently, and the rest of Europe. But it's still very much like secondary. Like we're spending like 20% of budget there, tops. I'm not trying to scale EU at the same time as Ukraine because I just don't think it makes sense. I mean, I met with the VC the other week as well and this is one massive bit of what was their opinion. But it's a bit of advice they gave and they were like, just get to a million a month in the UK first and then look at EU and America potentially down the line. Don't try and get to 300k in three markets. Say they'd rather see a million in one market. And I think there's a lot of benefits for it because, you know, compounding effects of more eyeballs in one place, you become more of a household name brand, potentially like a million pound a month scale. I mean, probably wouldn't be household name, but you get the idea. Fulfillment's way more simple. You don't have to translate any of your shit. Not that you have to do that. For other countries, but you probably would if you want to get a fair test. So yeah, this kind of comes back to keeping stuff simple but on a bigger scale, just choosing one market to dominate and I guess within that as well. I'm talking like geography really. But you could even go further and say choose one niche to dominate and you know, my product is pretty relevant to a lot of people. Could be like fitness market, it could be the kind of the entrepreneur market, it could be the burnt out worker market. Really the angle that's worked and we've focused on is just a bit, a broader one I guess, and it's just copy replacement and like choosing that angle and that mission to dominate as well to start with has been pretty helpful. This is maybe a controversial one and again it's just my opinion, but I'm kind of, I always find it a bit funny when I see, I guess like TikTok dropshippers who run TikTok Organic, they're like talking about how it's like the new Facebook ads and shit. And maybe I'm just jealous because I haven't cracked it, but I just don't think you can scale a business on a, on a, with a market with a primary marketing channel that isn't repeatable because the algorithm changes and you don't have a business. And that's the way I've always thought about organic stuff. And I could be wrong, but this is my opinion. Like I said from in my experience in the first year, like we had a few videos go viral on TikTok in the first few months, say viral, but you know, one of them got to a bit over 2 million views and I definitely saw an influx of traffic and revenue and I was like, oh fuck, this is great. This is a mad new channel and it brings down your NCPA on your paid ads as well, of course. But then I never got a video that hit ever again. I don't know if we got Shadow banned or whatever but you know, it's like, it's great when it happens and it can supplement. So the right word, it can supplement, it can complement your paid ads with work. And generally it brings, and it does that by bringing down the ncpa, increasing your roas, et cetera as a top of funnel thing. But I've said here it's aside, not the main course. I don't think you can like sustainably grow a brand with organic is the main thing. Unless you know something. I really don't. And this, this was my experience in the first year. So yeah, I just think organic is like the cherry on top. And, you know, paid is the fucking cake. It's like. It's the meat and potatoes is another way to put it. Many different metaphors, but that's just how I think about it. I think organic is great as an addition, but it's never gonna be the main thing to drive revenue, particularly in the start. I think when you want something repeatable, you wanna know what your CAC is and spend more on Facebook. That's pretty much been my experience. So, yeah, maybe a controversial take. Controversial take. Can't speak today. This is a huge one, and it's probably the most painful one that I've learned and I'm sharing for free. Might be a pretty fucking obvious one. But avoid fluff and extra costs that add up. I put examp here because I tweeted about this other day. There's so many temptations to do new stuff, like brand collabs or influencer partnership or sponsor a fucking Barbie Runway photo shoot, which we nearly did recently. And I was like, no, let's not do that. Even though it'd be very fun. Probably not. So lots of nice women there. Yeah. Fluff, in my opinion, is anything that isn't, like, directly impacting the top or bottom line. You know, stuff that looks like it's important, but actually if you took it away, you wouldn't see any impact financially other than saving money. That's fluff. And there's so many things, like. And there's so many things that often, if you're inexperienced, and I have been in the past, I still am to an extent, but if you have no experience, you might think, for example, doing, I don't know, a giveaway with a certain brand would be massive. And then you do it and you realize it was. You spent like a month setting up, and it literally drove nothing. You should have spent more on Instagram. A big example for me this year. And it was just a fucking expensive l, in my opinion. I'm not gonna say who the PR firm was, but I was pitched by PR firm in, like, November 22nd. So when the brand was a few months in or maybe a bit before that, and I was all PR great. Like, I've never done that before. This will make our brand seem way more legit, all this bullshit. It was like 6k a month for, like, I think we did three months, which is like the shortest period, and I cancelled it. But honestly, it was just a waste of time. You know, in hindsight, it should have been obvious. We got a Few articles didn't drive any revenue. I'm not saying that stuff's not relevant at a certain point, but I think right at the start you just, you can't afford to be wasting time and money on shit that isn't like absolutely, definitely driving growth, which is the most important thing. I think, particularly in the first few years, if you're a much bigger business like gymshark say, then yeah, I'm sure investing in PR has much more long tail, long term effects on like SEO, consumer sentiment, perception, whatever it is. But at this stage, and I should not have done that in the first year and honestly that's just one of those things, I think, fuck, if I'd not spent that money, I would, I would have not noticed anything. I would have just saved the money. So that was a big L. And there's plenty of other examples of that, but that was one example I think was important to give. Number eight, Create an enemy internally and externally. The internal one I have is probably something I shouldn't share, but maybe it's a big, a certain big brand in the space and they're not an enemy. But I think you should operate a team and a business like a sports team. And I think, you know, having just going back to my rowing days, we used to always talk about St. Leonard's School when I was at York City Rowing Club. And they were like, there was a school that we'd always come up against who were like similar level to us, one of the best in the country, but certainly one of the best in the North. And we ended up coming, we got gold and they got second and they got silver in the National Schools Regatta, which is the national championships when I was 16. But yeah, I remember just training and we were like, go one more because I want to beat the fucking enemy. And I think creating an enemy internally for team culture is good, but also externally and externally, the enemy for space kids has been coffee. Because, you know, a lot of our landing pages, us versus them. And it familiarizes the concept. Everyone drinks coffee pretty much. So replacing or upgrading your routine or adding to your routine Rainbow Dust by Space Goods, which is a new concept and a very potentially confusing product. A lot of people, people get it because they are okay, I drink coffee and I understand that. So it makes it familiar to an extent, like what we're about, when you would drink it, etc. But then it's like, well, actually you're already taking coffee, you're already drinking coffee, but this is way better. So it's creating an Enemy out something familiar and it just kind of anchors it in people's mind, I think. And it's a bit controversial because a lot of people say, oh, you've got coffee in the products. We do, we have coffee extract, but we have seven other active ingredients as well. So it's kind of like comparing a shot of vodka to a really nice cocktail. They both have vodka in certain cases, but the cocktails way nicer and probably better for you as well. So that's the way I've thought about it. We have a big brand. It's like we always talk about what are they doing, how can we beat them. But then external customer facing is coffee number nine. And this is probably the hardest pill to swallow for me. And as I've said, sadly, the boring stuff is what moves the needle in brackets, not 80s movies. So when I launched the brand, and I've spoke about this loosely in multiple episodes of this obviously made the 80s movie. Nothing is two career. Probably the most fun I've had since launching the brand. And then the second movie, I chase my dreams while I'm awake Fucking so over the top. But also the most fun I've had making this. Well since working on this brand. In fact, more, more fun than the first movie because I was the protagonist in the movie. Rather self indulgent and retarded in hindsight. But yeah, one of my investors said to me and they were like, how much you spend on that? We spent like 10 grand in the movie. Which to be honest, given what we got, wasn't that bad. But it was like that's the biggest waste of money ever. And he's probably right, doesn't sell products. Maybe long term we could run YouTube ads to it. We probably haven't utilized it as much as we could, but the reality is if we'd spent ten grand more on UGC ads or, I don't know, website conversion rate work or something, which we are doing now, got a new website coming next month, probably would have driven away bigger roi. And the sad thing is I wish I could work on the romantic stuff all the time, the movies, hiring beautiful models and creating cool shit with them, but you just can't. And I think especially at the start, and that's some I've had to accept. And not just with movies, you know, like, I would love to be always working on product, but at the same time it's like maybe launching a new product is not the answer. Maybe doing market research and fucking making our website convert better is actually the answer. And just doubling down on what's working. So yeah, I've always found I think I'm pretty good at having the balance right at times but I've always found it a bit of a struggle to balance. Being a pragmatic, business focused operator and then also being a creative at heart wanted to just make fucking movies and trying to use the business and entrepreneurship vehicle as an excuse to make movies to satisfy and fulfill the mind of my 10 year old self. So yeah, but I don't be a starving artist, right? You don't want to be the guy that's like wanting to make movies but can't. So if I build a great business that facilitates those creative ambitions in ways but also sells products and scales, it's finding that balance between the two. How can you do both? But yeah, as I've said, the boring stuff is what moves the needle generally. It's not all sunshine and rainbows or glitz and glamour. I mean that's obvious. But this is a specific example I guess number 10. I mean I could probably list 50 fucking points and there's probably some I've missed that should have been on here. But retention, LTV and LTV to CAC ratio are the most important metrics I think especially for consumable business but for every business really. But probably LTV's CAC is more relevant specifically to consumables and subscription businesses like mine. But yeah, I think too many people get caught up in certainly in a marketing perspective, just ROAS or just ncpa which is obviously the cost to acquire the customer but less people tend to talk about retention, ltv, lifetime value and then lifetime value to CAC ratio. And that's what I'm thinking about a lot. It's like well we're acquiring, in fact we haven't been doing enough of it recently. We're acquiring a front load new subscribers. We are doing that but we've not. We've definitely let slip focus on retaining existing ones and if they have canceled getting them back or getting them back on another product or increasing AOV and LTV on existing subscribers through new products cross sells upsells membership to something which I'm working on the minute and yeah, LTV to CAC is the metric that will make your business very investable. At least that's the advice I've had and it's way harder to get that ratio really good. I think a good one is like four plus. So as in like your LTV is 200 quid. Your CAC was 50 quid for new customers so it should be LTV to NCPA, LTV to new customer CAC. And yeah, that's like a North Star metric for me because it will allow you even to not be profitable first order in many cases. But if your LTV to CAC ratio is really good, then you've got an argument to raise either debt or equity funding to scale really quick, which is how a lot of brands have done it. I mean I imagine that's how Athletic greens raised like fucking 120 million or something. I know nothing about that deal, don't quote me. But yeah, these are the most important things I think about, like KPI wise. Obviously revenue and profit and so on are relevant as well. But if you can show that your business is not only growing but your LTV to CAC ratio is increasing in a positive fashion, then you're always going to be able to raise money and not necessarily have to be super profitable in the short term. At least that's the way I think about it. That's relevant to my business subscription business and the advice I've had. So yeah, I hope that was useful. I could probably bang on forever and maybe I've said loosely many times I want to be a bit more specific on videos I make actually give some more value. Obviously this is all relevant entirely and probably exclusively to space goods, but I'm sure certain bits are of course relevant to other brands and your brand or brands you want to build. And yeah, as always, subscribe to the pod. This was episode 50 of Dr. Journey which is pretty mad making progress. We're actually about 15 months in since I launched the brand now, so a year and three months and I'm making a one year reflection video about three months late. So apologies. Maybe I'll do more of a rundown of the year, but this is just 10 things I've learned. I said top 10 things I learned but 10 good things I learned in the first year and hopefully I'll have way more to share and evidence of acting on these things I learned at the end of the second year. So yeah, hope that was useful. Subscribe to the POD as always. Cheers for watching and I'll catch you in the next episode.