What's stopping you from launching your business? The success of your business idea could depend on how fast you launch it and how well you validate it.
In this episode you’ll learn from an entrepreneur that believes you should launch as soon as possible. He launched his profitable store within just one month with only $500.
Matt Geddie co-founded Skinny & Company in 2013, and after a trip to Vietnam, the idea of Skinny Coconut Oil was born—the only 100% raw coconut oil on the market.
In this podcast you’ll learn:
- How to work with and incentivize bloggers to review your products
- How to retain an existing customer rather than expensively getting a new customer
- How to test if your product, brand, or store can be a viable business
Felix: Today I’m joined by Matt Geddie, President and Co-founder of SkinnyAndCompany.com. Skinny & Company sells skinny coconut oil, which is the only 100% raw coconut oil on the market. Skinny & Company was started in 2013, and are based out of Indianapolis, Indiana. Welcome Matt.
Matt: Hey, thanks a lot Felix. Good to be on. As we were discussing earlier, I love your guys’ podcast. I personally have learned a lot just from other entrepreneurs and kind of their tactics and stories, so it’s great to be on.
Felix: Awesome, yeah, great to have you on. Tell us a little bit more about your store, and what is the most popular product that you sell?
Matt: Yeah, so we are a coconut oil company. We manufacture coconut out of Vietnam. My brother and I started the company two years ago. We are completely vertically integrated, and we bring our products through three channels, one of those being Shopify and our online store. We have a raw coconut oil, and with that coconut oil we do a lot of compounding into coconut oil based cosmetics. We have facial oils and body butters things and things along those lines that are great for your skin. Also everything is edible as well. Those are kind of our most popular products. We have soaps, shampoo bars, some other unique things that we offer to our customers. Everything we do is natural, organic, wild harvested from the jungles of Vietnam. It’s been an interesting thing to start up, and complicated and everything like that. So far, it’s good to go.
Felix: I read a little bit on your website about how you, not stumbled upon this, but came up with the idea while you were abroad, while you’re traveling, and it was a really interesting story. Can you tell us a little bit more about your experience when you were traveling, and how you came up with this product, this idea?
Matt: Yeah, absolutely. About five or six years ago, my brother and I, we were backpacking around Southeast Asia. We actually kind of saw there were some business opportunities. Before that, we had some experience with an import-export internationally from Thailand, and so we actually started to decide to start a business, brokering raw materials out of Vietnam. We started brokering to the United States and India, and then from there we started brokering more and more coconut oil. What we recognized is that the coconut oil I was sourcing, there was a lapse in quality, consistency, and so we were sitting around like hey, you know what? If we can develop a coconut oil process that’s going to make it a healthier coconut oil, you don’t have so many additives, there’s no solvents, we may be able to bring this to market ourselves.
Prior to that, my best friend and I had started another company, that’s based on Shopify, called Balls of Steel. It’s OriginalBOS.com. Shopify based, and so that was before that. We’d had success with Shopify before, and so when we were like, okay, we’re going to bring coconut oil to the market ourselves, my first thought was well, let’s do Shopify. We’ve had success with them in the past and, with how Shopify’s grown and kind of adapted with the new apps and making it so much more user friendly, it was kind of an easy synergy. When we started, we were just gonna start just a strictly online e-commerce store through the base of Shopify.
We’ve developed our technology with an engineer from Lockheed Martin in Vietnam. We were able to patent it, or it’s patent-pending. We should get the patent here next year. Then we launched Skinny coconut oil. We launched online and then have just since then, over the past two and a half years, just been developing more and more, developing new products to push through online, trying to find the online following. Then it’s been pretty cool, just because I think when I first started Balls of Steel four years ago, Shopify had, I don’t know, 10 or 15,000 stores. Now it has 200,000 stores, and so there’s a huge community behind it all, which is absolutely wonderful.
That was the background of the story and how … I think anyone who’s used Shopify before will know, I can’t imagine starting another business on a different platform other than Shopify.
Felix: Yeah, certainly takes a lot of the technical work and obstacles out of your way, and let’s you focus on growing the business, so I think that that’s definitely a good point to make. I’m trying to put together the timeline here, because it sounds like you had a lot of different things going on at the same time. You already had an existing Shopify store, OriginalBOS.com. We’re taking a look at it right now, which is basically a way to chill your drinks, is that right?
Matt: Yeah, it was a drink chill … They’re basically steel balls that bring your alcohol, or favorite beverage, to the perfect drinking temperature to release the notes that, for say whiskey, if it was too cold it’s not getting released, or it’s too warm it’s not getting released. Then within those proceeds it gives back 15% to testicular cancer, and so there’s a big social cause behind that and a big social change. That was my buddy Grant, he’s the one who runs it now, that was our first business. Yeah, we had Balls of Steel, and then we had the import-export business my brother and I started, and then from there that kind of led to Skinny & Company.
We’re what we call opportunity addicts. We always like to have different things going. We’ve calmed down a bit now, just with how quickly Skinny & Company’s growing, and really focusing on Skinny & Co. Yeah, but during that time, at the startup phase, running around, we were definitely very serial entrepreneurial, had a couple different ventures going, just kind of utilizing Shopify and its existing reach to bring new products to market.
Felix: Yeah, I want to talk about this a little bit more, about how you call yourself opportunity addicts. I haven’t heard someone say it that way before, but it makes a lot of sense. That a lot of entrepreneurs have this gift and a curse essentially, right, where everything seems like an opportunity to pursue. While you were doing this import-exporting business, you said that’s when you identified that coconut oil made sense to bring to the market in a better way. How did you recognize that that was an opportunity versus probably all the other products that you were importing-exporting? What kind of questions do you ask yourself to determine if something is actually an opportunity worth pursuing, versus putting to the side or at least putting like the back burner?
Matt: The first question we always ask is bootstrap. Can we bootstrap this? Is it intense? Is it going to be a capital intensive startup? Is it going to be a cheap startup? If it’s a cheap startup, that’s something we try to do. We don’t want to try to invest a lot of money before we do proof of concept. We want to make sure we get the product to market as cheaply as possible, and then once we start selling, we’re saying, okay, boom. This is a consumable good. Now let’s look at putting some funding behind it to make it into a real business.
First and foremost, that was kind of the opportunity with coconut oil. Second was, can we disrupt the market? Is there something there that can be fixed, and then that can be unique to us? If it’s an easy fix and someone can see it and do it immediately, that’s typically something that we don’t look for. It’s like anyone says, do something that you can actually make a difference and that actually matters. Within the process, we kind of saw that coconut oil was the main thing, that the quality in the States and in all western countries we were getting, we have no idea. I mean every other brand of coconut oil in the country is contract manufactured, and so we are the only true tree-to-table coconut oil. We saw that as a unique selling point that we could bring to the market.
It was inexpensive to start, just because we could get the product to the market. I think we started in September with nine jars of coconut oil.
Felix: Nine different products, or like nine actual jars?
Matt: No, nine actual jars.
Felix: Wow, okay.
Matt: We launched the store with nine actual jars, and then, for instance, now just for scalability I think we just brought in 16,000 jars.
Matt: Just within the two years. Yeah, so we started super inexpensive, super cheap. We recognized there was somewhere we could make a difference. Then, within the marketability of coconut oil, by the time we were starting, Coca-Cola just bought Eco. They were putting a lot of money behind coconut water marketing, and so we foresaw being, okay, well everyone’s gonna jump on the coconut oil, coconut water bandwagon. Most likely, people are going to start assuming that coconut oil’s good for you. It was kind of a gut feeling and we played out, and also we just did some analytics on Google, like coconut oil was one of the top searched terms in 2013, within new things being looked around at. We say, "Hey, you know what? We see that we can make a better product. We can do it fairly inexpensively to start, and we think people are looking for it, so let’s give it a try.
That’s where we wanted to it, initially just strictly e-commerce, just because I think starting an e-commerce store is one of the most inexpensive yet effective ways to get a business to market. Utilizing Shopify and all the apps and everything like that, we were able to get it to market, give it a test, and then as soon as it launched in September, it was hit the ground running, and ever since then it’s basically trying to play catch up. Making sure that the supply we’re producing ourselves reaching, matching the demand.
A lot of it’s luck too. I mean the fact that like, oh, coconut oil. Oh, we’ve got a supply of coconut oil. Oh, the market’s wanting more coconut oil, and then the FDA banned trans fats, and so coconut oil’s kind of the replacement for that, and so that’s a big boost for us as well. It’s one of those externalities that you don’t really foresee happening. All of a sudden you’re like, oh the FDA just got behind coconut oil. This is good for our business. Now, if you look around I think, it’s like everyone and their mother has a coconut oil brand, but we still have the unique selling point of we are the only tree-to-table brand on the market.
Felix: Yeah, I really like what you’re saying about how you saw that other companies, or bigger companies, were promoting coconut or coconut oil, coconut water, and you just noticed that that was almost like a wave that you could ride with their promotions. You don’t have to promote the benefits. You relied on other, much larger companies to do it as well and that helped you a lot to build that wave. I like that approach.
You were saying as one of those three question that you ask yourself, again, one is can you disrupt the market? Can you do it for cheap, or can you bootstrap it? Third is is there a growing demand for it? When it comes to the can you do it for cheap, do you remember how much capital you needed to start this up? I think that’s a, I don’t wanna say necessarily an excuse, but a obstacle that a lot of entrepreneurs run into, where they don’t know they can start because they don’t have enough money to start, they don’t have enough time. Tell us how much bootstrapping you really did at the very beginning.
Matt: When we started Skinny, the Shopify monthly payment is $14 a month. Getting the nine jars over here, getting the labels, probably cost a couple hundred dollars. Before, with my experience with OriginalBOS, and then I just taught myself how to basically build the On Shopify website. That was basically it. I think we launched Skinny with $500. I think we spent $100 on little marketing cards that we passed around Indianapolis, and then that was it. We basically, my brother, the guy who started it with us, Chris, myself, and then Eric, who connected with you. We sat around the table, launched it September 1st, and then within that one day, someone came in, bought a jar on the site, so that was it. It was 500 bucks. Since then, with the scale and the growth, we’ve invested a lot more and we’ve raised outside capital.
I think there’s a common misconception that I need a lot of money to go start this company. I need a lot of money to bring this to market. Nowadays, with as many wholesalers and with Alibaba and AliExpress, I mean you can literally bring a product to market with Shopify with a couple hundred bucks, and then once you have a proof of concept, once you’ve sold ten, you’ve gotten feedback that nine out of ten people enjoy the product, you’re like, hey, this is something that we can maybe get more capital behind, or I go get friends and family to help put in a couple, not a couple hundred thousand dollars, a couple thousand dollars for us to do it.
We did it for extremely cheap just to test, and that’s kind of the mentality we’ve had as we grow too, is every time we introduce a new product or we introduce a new idea, is, hey, you know what? Here is a $200 budget to go launch this product. If it works, great. Go sell ten of them and then we’ll invest $10,000 into it, or something like that. That was kind of the strategy. We were able to launch a business that’s now growing and being successful and we started with $500.
Felix: I want to stay on this topic a little bit more, because I think it’s really important for entrepreneurs to recognize what you’re saying, which is that you really don’t need to spend that much money at all to get started. I want to also emphasize how much time it might take just to get something going, because we sometimes build all these obstacles, like we’ve do this, we have to set up this, set up that, before we can officially launch. You guys went with what do we need to do right now just to prove that we should move forward with it? Can you tell us a little about how much time it took, or maybe a quick timeline of the day you decided to start pursuing this, and then the day you got your first sale. How much time did that take?
Matt: Just because we did our own manufacturing ourselves in Vietnam, the whole plan took a year, however bringing the product to market took us about a month. In July we all met in Indianapolis, towards the end of July we decided on the brand name, the look of it, and then from basically August to September I spend about 30 day building the website, making sure that things were set up. We got in, basically, just flat rate boxes from USPS, got our nine jars over, and then launched it. If we didn’t do our own manufacturing, we could have probably done everything in 40 to 30 days, and that’s just how we move. I’m a big believer in don’t waste time on something that’s not going to make a difference in the world, and that’s not going to make a profit for yourself, and so if you can try to fail as quickly as possible, that’s a success.
We sat down and said let’s bring this to market as quickly as possible, as long as the website looks good, even if it’s not super functional, just launch it. As long as someone can buy something, it’s going to happen. If it does happen, then you know what? This is something that we want to spend more time in, we want to look at.
I think that’s important for entrepreneurs is because there are so many different opportunities out there, and there’s so many different avenues to pursue, and so being able to focus on one, spend 30, 45 days on it testing, getting it to market, delivering it, and then saying hey this works. It doesn’t work, hey, boom let’s move on, or let’s stick with this, it’s a pretty good judgement.
Maybe some people are out there saying, hey I could do this in 10 days. Fantastic, maybe some people will be like, hey 90 days is more for me. That’s awesome. My other businesses, they were running pretty automatically, and so I didn’t have a 9 to 5 when I was building the website, and so that obviously would have delayed it. Yeah, it was super quick.
Felix: Yeah, and I think when you do have a lot of time, or when you do set a timeline that’s so long, you tend to fill up that space with busy work, things that don’t actually matter, like you were saying. I think it does make sense to have a deadline, or at least try to push things out, get things out as quickly as possible, and don’t dwell on making everything perfect before you launch.
It sounds like you run a lot of these tests, where you have an idea for a business, have an idea for a product, put it out there. Have some small scale test, some small scale store, and then see what happens. If it works out, meets your threshold, then you pursue. Have their been failures in this test, where you try something out, and it hasn’t worked. A product or a business that hasn’t worked, and you shut it down? Can you talk about that?
Matt: The whole customized t-shirt thing was happening, I started to build an online store. I think the online store is up, it’s called AmericanTees.com, and so I launched that in about 45 days, and then I think it’s been up for almost a year, and yet I have to yet to reach one sale. I followed the similar practices we do with Skinny, too. I just don’t think anyone wants the product, which is totally understandable. I mean that was a failure, a fail to quick, let it happen, no sales, and then I just moved on.
I did that with the t-shirt business, and then with regards to skinny too, we launched a couple different products that people just don’t like, and so it’s a lot easier to swallow something that cost you $500 to make than it is to, maybe, something that cost you 10 or $50,000 to make because a lot of times … I mean we did this once, and luckily, but we invested a lot in to a new product, had a lot of inventory. Luckily it was a success, but if that product would have been the other product that failed, and we’re sitting on $25,000 worth of inventory, that would have sucked. Whereas if it’s $500, and you’re like hey, people hate this, you’re like, oh okay, that’s totally fine. It wasted some time, your feelings get hurt because people don’t like what you made, but other than that it’s no big deal.
Felix: Is there, you run these tests to find out if they work or not, launch very quickly. If someone wants to follow these footsteps, sometimes the concern is that maybe you’re giving up too soon, right? Maybe you haven’t tried what you needed to try, really, to test if this is actually a viable business or not. Is that a concern that you ever have, or how do you make sure you’re not, maybe closing down the task, or closing out the part of the product or the store too soon?
Matt: Yeah, that’s a great suggestion, something … I think there’s a couple things we’ve abandoned too quickly. My biggest thing, and my biggest metric I judge it on is if people like it. If I can, what I should of done for the t-shirts is just handed out free t-shirts to see if people actually like them and say, okay this is a potential.
Same with our coconut oil, we would typically want to abandon a SKU until we sold a hundred of them, and we’ve gained feedback from those 100 people, and if 75% of the people like them, we’re like okay, this is something we want to pursue. I don’t know, if 25% of those people, and the 75% say I don’t think I would ever buy this again, that’s our judgement. Over time our metrics have grown, whereas originally, when we launched, it was 10. 10 units, I mean there was even a point where we would just ship new products for free, with existing products, let the customer know, say hey, you’re going to be getting our body butter. We’re going to ship this to you for free. If you like it, please let us know.
I mean just set small metrics, I mean it’s basic statistics that you can figure out if things are scalable, things are quantifiable, your, basically, error margin of the test you’re running. That’s where we’re at. We started off with 10, now with 100. Yeah if someone has a new product, I would encourage you, go give 10 of those products for free to somebody, and have them do a test for you, and let them give you honest feedback. If even 6 out of 10 people like it, that means you probably have something that the market is going to like.
It’s also, I mean, with regards to our coconut oil, our coconut oil is $30 a jar. We’re not a mass market type of product, we’re a very niche type of product, yet you can have a very successful business in a niche type of product. You give 6 out of 10 people, and there’s only 100,000 of those people in the country, that’s totally fine because that means you have a potential market capital of 60,000 people, and if you’ve got a good enough margin, I mean that’s a successful online business for you.
Felix: Yeah, makes sense, so when you’re giving out these products, or you’re selling these products and then trying to get their feedback, what exactly are you asking them? Are you just asking them do you like this? How specific do you get with the, when you are surveying, I guess, your customers?
Matt: It depends, I mean if we’re giving it away for free, we have the expectation that it’s going to be very specific, like what did you like about it? Did you like the scents? Do you like how long … Let’s take body butter for instance, one did you like consistency? Did you like the scent? Did you like the size? Did you like the packaging? Did you like how it arrived? Did you like how it arrived in your package? Did it look well branded? We typically get 20 to 25 questions that people can just basically go yes, no, yes, no, yes, no, yes, no, yes, no, and get some real feedback. If people were buying them, maybe we’ll send a five question survey that we’ll send via email after the product has been for two weeks, saying hey, do you like the taste, etc. etc. etc.
It’s like whatever you’re giving to the consumer, basically the level of care you’re giving to that person that you want to do the survey is how in depth we make the survey. If we’re giving a free product that’s worth $30, and we’re saying hey, please take these 25 points. If they’re buying a new product, we’ll say hey, please just answer these three questions. Just because, I mean, people are busy, everyone is getting lots of emails, everyone is getting lots of surveys these days. I think a lot of times, if you’re giving away something free then that customer is going to almost feel indebted, saying hey, you know what, yeah I really want to help you out, and that’s where it is.
If you can get it as in depth as possible, that’s the best thing because then you can make those little tweaks, but overall if people, even just a do you like this, yes or no is still a pretty good judgement of we might have something here that we can build a business off of.
Felix: Got you, so the more specific the better, and get as specific as you can based on the circumstances that they got your product, whether they bought it, maybe you don’t want to bother them, so much, with a long survey, but if you gave them something for free then they might feel indebted to you, and will be much more willing to answer much longer surveys, that makes sense.
Matt: Yeah, absolutely.
Felix: Yeah Skinny and Company is something you’re running. You had the import export business. You had Original BOS, or the Balls of Steel. Was there anything before this that you were running before because it sounds like you’re, obviously like you were saying before, a serial entrepreneur, you were launching a bunch of businesses. Was there something before this, or was that your first three businesses?
Matt: The only thing before that is that my Brother and I, we ran an online textbook business where we would actually buy textbooks direct from the factory, university textbooks from the factory in Thailand, ship them over, and then sell them for half price online. When [half.com 00:22:02] launched, we were the first major ebook sellers on there, and that was our first experience, one, with international business, and two, with eCommerce. I think that was 2004, or five, maybe 2006. Not that long ago, but that was the first venture, and then from there led to OriginalBOS.com, our import-export business, and now SkinnyAndCompany.com.
Felix: What was the original goal when you started this, your very first business with, you said, your Brother?
Matt: Mm-hmm (affirmative).
Felix: What was the original goal? You’re starting these businesses, and you’re starting a bunch after that, what’s the end goal or the dream that you’re trying to achieve by starting these businesses?
Matt: Our motto through everything is, and my personal motto is basically, social change, changing the world. I mean I think our motto, ever since growing up, is basically hey, let’s make sure that we’re doing something that’s impactful, but impactful and benefiting people in a positive way. For one, the textbooks, we were giving poor college students 50% off their textbooks, Balls of Steel, supporting testicular cancer, the import-export business we give back a lot to Vietnam, and then the same with Skinny and Company. We do a lot of initiatives with coconut oil for Alzheimer’s, Dementia, feeding kid’s brains. We support a lot of our jungle villages in Vietnam, building houses, and bathrooms, and things like that. It’s like our overarching theme, or my personal overarching theme is, do something that matters. Do something that’s going to make a difference.
I think it’s easier, out there, just to go … I mean anyone can go buy a thousand t-shirts from China, mark them up %100, sell them online, but make sure, if there’s a social change behind that, I think that one, you’re going to have a stronger brand, two, you’re going to be making a difference, and three, you’re going to have a company that you’re proud of to look back, and say hey, this is what we did, this is what we built, and because we did this, this helped this amount of people.
With coconut oil, it’s super healthy. Coconut oil is one product that I can give you, that you don’t really have to change your whole lifestyle, it’s going to make your overall body much healthier, it’s going to boost your immune system, it’s going to boost your metabolism. We look for key products like that that one, disrupt the marketplace, but how can I disrupt this person’s life to make it better? That’s the overarching theme with everything we do.
Felix: Got you, so when you launched Skinny and Company, you said that you got a sale the very first day you opened the store, was that correct?
Matt: Yes, and it was some random person too, which I thought it was going to be a family member because we had been telling everyone, but ironically no one in my family bought on that day, so I was a little bitter, but it was somebody was just combing the web. I guess there was something she typed in … Actually I called her, and I was like oh, hi. She was like, yeah I heard that coconut oil could make you skinny, so I was typing in can coconut oil make you skinny. Then one of our blogs that we had preloaded was about that, and so the tag words matched up, she saw Skinny Coconut Oil, and she bought a jar. It was super lucky that the first day we got an order, but it felt pretty good.
Felix: I see, so you actually had some content, some blog articles already on your site before you opened up the store portion of it. Is that how you got, I guess the ranking and the initial traffic.
Matt: Yeah, yeah, yeah so within the month of us building the store, we put up three blog post, and so I had Eric, who does a lot of our analytics, look up hey, what are some low competition key words that people are going for that we could potentially write a super specific blog. I think this was before the time when Google changed. I don’t know if it’s Google’s SEO system is called Panda now, or it was Panda before, but which ever one where meta-tags and SEO targeting still mattered. We wrote three blogs, made them super specific, and just said hey, let’s see what happens. I think it’s 45 people are searching for this, so let’s hope one of those 45 people are going to fit our demographic, and so one of those three blogs had actually worked.
THat’s the thing, when you’re starting a business and you don’t have a to of money, there’s no way we’re going to compete with the big guys. I mean we’re still not going to compete with the big guys, and we never will. Just finding those areas that nobody is at, that larger corporations, larger companies, are not going to go to because it’s not worth their time, because selling 1,000 products of one SKU is not worth it to them, whereas to us, that’s a huge deal. That’s what we always look for. When we’re looking at analytics it’s being like hey, what has a really low competition that we can super focus target, and hopefully 10% of those people that we’re targeting are interested in our product.
Felix: Yeah, definitely, that makes sense where if you can focus, you can always beat the competition, the bigger competition because you are so narrowly focused on serving one particular market. I think that’s a good point to make.
How successful was the business today. It sounded like getting started 2013, got sales immediately, and it sounds like this is a big portion of your day now, so tell us a little bit more about how successful your business is today, and share any numbers that you can.
Matt: Yeah, yeah, yeah, so yeah we launched in 2013, September, so 2013 we were able to do around 60,000 for the year, and then 2014 we did, I think, 350,000, and then this year, 2015, we’re looking to crack about 800,000, and so we’ve been growing about 100% a year, and we’re looking to remain that trajectory. It’s become a full time thing for all the partners in the business, and it’s the day to day, 9 to 5. We have an office and a staff of, probably what, there’s 10 people here, I think. I’m looking around. That’s where we’ve gone, and it’s basically making sure that we’re working hard on the business. I mean we’re still working 15 hours a day, but it’s fun when you’re doing something that you like, and that’s making an impact.
We’re always trying to keep our head up, being like hey, who is trying to encroach upon us, and then where is that super fine niche that we can target? Where is nobody else going? I think if everyone looked around, like I said everyone and their mother has a coconut oil brand, but where are those coconut oil brands not targeting. Everyone, right now, is targeting the cooking, where our niche, and the fact that we’re an alkaline oil, and the only alkaline oil on the market, we’re able to attract more of a supplemental, regimen, doctors, dentists, wellness practitioners, also, some other big box stores as well.
Then our store, our bread and butter and where we get the highest margins, is online, and so our biggest focus is building that Shopify channel, building our customer base, building our email list to email market them, and then using everything that Shopify has been able to give us, and now we have a little retail shop as well, that we use Shopify POS, so it’s great that everything links together.
Yeah, that’s where the business is at. We’ve gone up 100% every year, in 2016 we’re looking at actually, hopefully, growing 150%. Just trying to maintain that growth, and keep delivering the product, and figuring out logistical issues. There’s always a million problems a day, but I think so far it’s going all right.
Felix: Yeah, I mean those are some amazing growth numbers there. You were saying that each time you, once you reevaluate the direction of your company, you decide to target specific problem. Like you were saying you identified things like cooking and all that, so once you identify a particular problem that your company is either positioned to, or your product is positioned to solve, what do you do next? Do you create marking around that problem, or you create new products. I mean what’s the next step?
Matt: Typically both, and so our main focus, well one, it’s new products. New products, for us, are cheaper to create, cheaper to test, and so we like upselling our existing marketing base, and we get a lot of input from our existing customers of what they want to see, what they would like, and so we try to focus heavily of customer retention. It cost a lot of money to get a customer, our main focus is to keep those customers.
Then in regards to marketing, we do a lot of shows. I mean we do some Google AdWords, but it’s expensive so we try to use unique ways of marketing. YouTube videos, how to use … A big thing for us is blogger collaboration, and so reaching out to bloggers, having them review our product, having them, write about us, doing co-share blogs. Have someone write a blog on our blog, we’ll write a blog on their blog. That’s that network, is tapping in to those existing digital footprints, and just weaving that web of everywhere that Skinny is.
Like I said, our highest margin is retail, and that’s delivered through our website, so reaching out to blogger, reviewers, YouTube reviewers, and just saying hey, you know what, it’s a business for a lot of people, we do not necessarily want to pay you to review our product, we actually just want you to review it if you really like it. I think a lot of times readership can actually view that and say, hey they actually seem like they genuinely like this product, that they’re getting paid $1,500 to just say hey, this is coconut oil, I like it.
Yeah, so we try to be picky with that, and to make sure that we’re aligning ourselves with people that love the product, and that want to tell people about it, and then the more voices we can get out there, and the more back links and everything like that, the more our digital footprint grows, and the more traffic we get to our site, and then we try to convert those people.
Felix: Yeah, that’s definitely a great plan for somebody out there that doesn’t have a large budget, is to do what you are saying, which is just to collaborate with other bloggers, or reviewers, YouTubers that already have an audience that you’re trying to go after. First of all, how do you identify or find these collaborators that make sense for you to work with?
Matt: Honestly just Google. I’ll Google coconut oil, and I will see who is writing about coconut oil. I’ll Google health products, and I will see who is writing about health products. I’ll Google certain things, like oil pulling, or cooking with coconut oil, and there’s always people writing and reviewing. I mean there’s millions of blogs out there, and basically we’ll Google, we’ll come up with a list, and then we’ll start targeting those lists. We’ll write emails, we’ll send them out. We’ll specifically send samples to follow, and follow back up, and say hey if you like it, we would love you to talk about us, but if not, just here’s the product anyways, just building that out there.
Our big thing, too, is not blog is too small. A lot of times we’ll we’re like, well I don’t want someone to review my product unless they have 5,000 people, but some of our biggest successes, and some of where we’ve ended up is because we reach out to somebody, they have 100 readers, yet one of those readers is either a celebrity, or a top influencer in a certain sphere, and it’s their kid sister’s blog that she just decides to read. It’s like the tadpole effect. You drop a stone in a still pool and it ripples out. I mean starting small, and just getting bigger, and bigger, and bigger is how our focus has been, and it saves us a lot of money.
Just because reaching out to bloggers, you reach out to a blogger that has a million followers, they’re going to say well I want $5,000 for this, and then you just choke. You’re like all right, well I guess you’re not for us, so sorry, but if you start with somebody smaller, and all of a sudden that top blogger sees, oh all the small blogs I follow, they’re all writing about the same product, let’s reach out to them, that’s where you are able to get the leverage back in your hands. Saying hey, we just reviewed your product, we don’t want to pay you, but here you go. Even though we’re making a little money, and things like that, we always try to do everything just as cheaply as possible, and maintain that bootstrap feel. Even though it’s more effort, it wins over in the long run.
Felix: Yeah, I like that idea of going after the smaller bloggers because if you look at an imaginary graphy, there’s a tipping point where when you’re a smaller blog, what you care most about is content, and care about getting more content to your audience. Then you get to a certain point where what you care more about is making money, monetizing that blog. If you can get those bloggers that are in those beginning stages, that care more about getting great content out there, then they’re much more likely, much more primed for you to approach, and ask them to review it because then they’re not looking for some monetary reward, or whatever, for writing about you. They want to produce this content, so I think that’s a good point, to go after those. Once you get those, then it’s a lot easier to and approach larger blogs to say hey look, I already got featured on these places, and we got a great response. Now it’s a much easier pitch to go after the bigger guys, that makes sense.
Cool, so what you were saying earlier, it obviously costs a lot more money to get new customers then to retain existing ones. Can you tell us a little bit about how you, what you do to retain existing customers?
Matt: Yeah, so we utilize a couple different Shopify apps. One is just like an analytics app that we’re able to see customer retention, email marketing. I mean we’re making sure that we hit our customers a couple times a week, just with different recipes, touching base, letting them know what’s going on. We try not to heavily discount our customers, giving them discounts, or else they’re not going to buy unless there’s a discount present, and then customer loyalty. Then we also will send out referral, or if you do this. We try to do, just a lot of social media campaigns as well, just customer interaction, getting those core followers.
I mean it’s not everyone. Within our customer base we probably have five or 6,000 really dedicated followers, so we treat those differently than other people, and so it’s just making sure that we’re touching base, making sure that we’re transparent, what’s going on, what’s happening, getting their input, and making them feel like they’re a part of the business, and that they’re a part of our success, because they definitely are.
I mean as a entrepreneur, you technically don’t have a boss, but your boss is your customer. That’s what we’ve done, and how we keep up the customer retention. It’s also within marketing, and so when someone is buying a product, just putting in a hand written not, or hand writing a note and making a hundred copies of it, and slipping it into everything, saying hey thank you so much. This is who we are, this is how you’re helping us. I mean that goes a long way. I mean now with an era that everything is digitalized, taking the time to do something that’s really personalized, that’s someone is going to appreciate and read.
I think anyone who receives an eCommerce package you always look it up, and whatever marketing shows us, you always give it a look over, and so writing something that’s personalized has been successful for us as well, in the past.
Felix: Makes sense, you were saying before that you were sending them a lot of things, like recipes on a weekly basis. Is that through email marketing, or how are you getting in front of them on a weekly basis?
Matt: Yeah, it’s email marketing, and then starting 2016 we’ll be doing a lot more videos. It’s more video marketing, and then video email marketing, YouTube cooking shows, etc. Just quick 15, 30 second basically hits of hey, this is how you do it, this is an update, this is who we are. Putting a face behind the product as well is big. I think eCommerce is taking over, but people still like that customer face to face interaction, and so figuring out a way to creatively give them that face to face, even though it’s through a package, or through online, is a way to be successful.
Felix: Right, yeah, I’m not sure if you’ve heard of this concept of, I think maybe Seth Godin that says, you just need 1,000 true fans, where if you have 1,000 true fans, than you can build a business off of that. I felt you said something earlier about how you don’t necessarily have a large following, you have five, 6,000 dedicated fan base, and you build a business on top of that. Do you think that’s applicable for any industry where you don’t necessarily need a huge fan base, you just need a dedicated fan base to grow a business, or does it only apply for certain industries?
Matt: No, I think it’s across the board. I mean if you have 1,000 people who are going to buy your product, you can figure out how to build a business around that. You can upsell them, you can cut your costs, you can create a product with a higher margin. Even with 500 people, if you have 500 people who are buying your product, you can build a business off of that. That’s where, even if it’s an app, or technology [clearance 00:37:50], something like that, get the customer base, and then be flexible with your business model to build that around that customer base, so you could build something that profitable and sustainable.
Felix: I want to talk about your [SAS 00:38:01] year by year, so you said that you launched in September 2013, the $60,000 in sales in basically four months, how did you get traction so quickly?
Matt: It was blogs, and then we did a tonne of blog outreach. I mean we were probably reaching out to a couple hundred blogs a week, and that was basically just our sole focus, was hey let’s try to build our digital footprint as organically as possible, and as quickly as possible. I mean the blogger industry has changed so much in the past three years. It’s a little more difficult, I think, to do that because people are now more monetarily focused, but I think even three years ago people were like hey, would you review our product? Oh yeah, I absolutely would love to review your product. That was where that traction hit, and that was basically our sole focus was blogger reviews, product reviews, and just getting the product out there on as many digital eyes as possible.
Felix: Is that they way, a marketing channel for you, to go after these bloggers and get that press, or do you focus on something else today?
Matt: No, that is still our number one. It’s nice, because we have a unique product. When people try ours you can see, smell, taste the difference of our coconut oil, and that is our number one focus, is just getting it out there. You also have to think, a lot of times if a blogger even doesn’t do a review, you hopefully will have a new customer for the rest of your life, and so that’s how we approach it as well. Any marketing act within that blogger’s sphere is not a waste.
Felix: Right, if you did have the funds, if someone out there has the funds for something like this, or they want to spend money on it, would you ever pay for reviews? Does that make sense at any point?
Matt: Yeah, I think so. I think there are a couple commercialized, heavily commercialized, blogs out there that have PR firms, that are their own business, that basically it’s a requirement. Even if they love your product, they say hey, you know what, this is our normal fee, we’re going to discount it to here, however with our staff of 10, this is what we have to be making, and this is our sole income. Within that, I think, there’s just sometimes you just have got to do what you’ve got to do. No matter how much you say, oh we don’t pay, we don’t pay, we don’t pay, it’s like okay, well listen if you want us, or not let us go. I think as long as the like the product, and they’re going to be passionate about it, it’s great.
In a larger sense, too, when you pay somebody you have a lot more control, you can say hey can you let us see the blog before you write it, or before you release it. Things like that that gives you a little more leverage, making sure that the piece coming out is exactly what you want, just because it is a business transaction now.
Felix: Makes sense, so that was 2013, how you got traction so quickly. Then between 2013 and 2014, you made that big jump, right from 60K to 350,000, and then again $800,000 in this year. What do you think is a key for those big jumps, going from basically 5x, and then over 2x the next year. What was the key to getting those big jumps in revenue.
Matt: So in 2014, we invested heavily in our affiliate program, so we created an affiliate program, and really went out there to a lot of top people who were getting a lot of traffic, and saying hey, you know what drive the traffic your way, and I think we were doing 15%, which was, I think, literally 10% higher than anybody else. We went out there and said hey, we’re going to make sure you’re making this if you send people our way. In 2014 affiliate marketing was big.
Then 2015, well also in 2014 we had one super successful blog where, I think, Yahoo did a release on coconut oil, and they featured our coconut oil, and that was the biggest day of sales we ever had. It still is the biggest day of sales we ever had. Some one offs like that made us successful, and in 2015 it’s just maintaining that steady growth of, we’ve got this system in place, and the wheels are turning, and just making sure that we’re growing incrementally. The nice part with online, too, I mean one successful blog could drive an extra 700 orders to your website, whereas that doesn’t happen in brink and mortar places. It’s one for one, one for one, whereas eCommerce and the digital sphere, your $1 could equal $15. I guess now it’s a little more trackable, but sometimes it’s just like wow, that was super successful, or sometimes you think it’s going to be really successful and it totally flops.
It’s just been tweaking our recipe of blogger outreach, affiliate marketing, email marketing, email list growing, and that’s it. 2014 was affiliate marketing, and 2015 has really been growing our email list, and doing a to of email marketing.
Felix: For anybody out there that wants to try affiliates out, and try starting an affiliate program, once you have one, how do you find the affiliates? How do you find these people that are going to basically push your product?
Matt: One, we tie blogger outreach and affiliate marketing hand in hand, so when we’re reaching out to a blogger we’re like hey, we would love for you to review our product. After that, set this link up on your site, and you will be making money residually over time. Two, reaching out to larger websites, basically going on Alexa.com, figuring out who are the top searching term websites for health food or coconut oil, going to their website and saying hey, you know what, we would love for you to be our affiliate, and it’s just reaching out. It’s almost like a sales technique.
I refer to it, basically, as just digital sales reps. Our team here that does that is blogger outreach, finding those affiliates who drive traffic back. I mean we just approach it like a normal sales team would, of hey, we want this many bloggers, we want this many affiliates, let’s figure out a way to target it, and let’s make it happen.
Felix: Yeah, I like that you tie the affiliate and the blogger outreach together, because it’s a way to provide them a monetary benefit from feature, from working with you, but it doesn’t come out of your pocket up from, it comes out based on their performance, essentially. I think that’s a great way to have a win-win on both sides.
I want to talk about running the store itself. When you first launched, you said that you now have like 10 people that are in the office working with you. How quickly did you scale that up? Did you need to hire right away? What were the first hires for your business.
Matt: I mean, yeah the first hires for our business were a graphic designer. I didn’t have any experience in that, and so as I look back now, I should have gotten a partner that I could have just given equity to who was a graphic designer, because it would be a lot cheaper. Our first hire was graphic design, and then we brought on, basically, a marketer copy-writer, I’m terrible writer. We just figured out, within the partners we had, who had started the business, what we could not do, and what we really needed.
Now, when you’re trying to portray your brand, making sure that everything looks pretty, and basically almost as successful. I mean as a small business, the nice part about the website is you can build a great looking website, and it can basically be you sitting in your underwear at home, and nobody knows, just because they’re like oh wow, this looks like a professional organization, and realistically you’re packing orders in you underwear.
Bringing a graphic designer on, or even contractive a graphic designer through [Five 00:45:04] or something like that, was our first hire, and then it was marketing, and then eventually, when we started getting enough orders we brought in someone to help pack orders with us, and then over time it’s just incrementally grown. We’ve gotten to the point, and my idea too, is let’s not hire somebody until one of us is literally working 20 hours a day, and then we’ll hire somebody that then can take a little more time, and allow us to do something else.
Now it’s to the point where a lot of my day in, day out is to the point of strategy, making sure that production is happening. We’re vertically integrated, and so a lot of our time spent is my Brother lives in Vietnam full time, he manufactures he oil, we just bought our third factory, and so a lot of managing those day to day.
Starting off it was figuring out what we didn’t have, and then basically working as much as we could until we couldn’t work more, and then bringing somebody else on.
Felix: Makes sense, so what is you day to day like today?
Matt: It’s basically, well right now we’re just moving to a new warehouse, and so setting up those operations, we are building a new FDA approved filling facility, and so we like to do everything ourselves just to keep your hands on it, and so we control the quality all the way through, and so a lot of my day to day is basically working with FDA compliance, sitting down with our marketing team, figuring out what we’re going to go for, what we’re going to strategize, what new products we’re going to develop, or products we’re going to launch, and trying to build a more of a business that isn’t just reactive. Be a proactive type of business where we have things planned out two weeks a month, two months in advance. A lot of times, as a small business, and as an entrepreneur you’re like oh that’s something we’re going to need, let’s do it right now.
As we grow and as we bring more people in, we’re trying to almost keep the same entrepreneurial vibe, but then create a little more structure, and so that is, right now, what we’re working on is developing that.
Felix: Right, and it sounds like the site itself has gone through many interactions where you put it out there, then you start to work on it slowly, and you improve it more and more. Can you pinpoint to something that you’ve done recently that has had a big impact on your sales?
Matt: Yeah, so I think last Summer we updated our theme, and then another big thing that’s helping our sales is product [inaudible 00:47:12], and I think when we first … I’m looking at our website now, and some of our products don’t like very good at all. There’s a lot of apps, I think Shopify even has an app or something like that, that you could literally send people your product, they’ll take a picture of it, create a white background, send it back. That’s so important, I mean making sure that the product looks good, and looks professional is huge.
Whenever we launch a product, and things like that, we make sure the products look good, and also the same thing with the videos. Putting more videos on our site has helped a tonne, just because I think with our product, we have a lot of education behind it, and so basically telling somebody in 30 seconds what it’s going to take 2,000 words to write has been a major success for us, and something that took us a long time to get to, for some reason. I mean it was like, yeah we should do videos, yeah we should do videos, who really knows? Hey let’s write another 2,000 word blog post, and let’s have one person read it.
Now our goal is to release more and more videos, and get them out there to fill people in on what’s happening, too. I mean the world is [lickity-split 00:48:15], everyone has 15 seconds to look at something, and so creating those videos is going to allow more traction for us than just writing traditional blog posts. Although traditional blog posts are still important, just for SEO ranking. It’s a double edged sword of hey, why don’t we write a blog post, no one is going to read it, but Google is going to read it, so that’s going to help me, but then we’re going to do a video that Google doesn’t really care about, but that people are actually going to care about.
Felix: Right, so it sounds like video, and then obviously you were saying you want to have a lot more structure int he company are your big plans for the next year. Anything else that is in store for 2016, for you guys?
Matt: Yeah, I mean we’ll be launching some new products. We’ve got some new food products coming out, and then we’ve got a full, complete facial line as well that we’re pretty excited about. Our focus in 2016 is develop our product SKUs, and then invent some really unique products, and we’ll bring some things to the market that aren’t on there right now, so we’re pretty excited about that.
Felix: Awesome, thanks so much Matt, so SkinnyAndCompany.com again is the website, is a store. Anywhere else that the listers should check out if they want to follow along with your story, and with your brand?
Matt: No, I mean Skinny and Company is our main conduit, and so from there you can check out our social media, blog posts and things like that. Yeah we try to focus it all just on one main webpage.
Felix: Awesome, thanks so much Matt.
Matt: All right, thanks Felix.
Felix: Thanks for listening to Shopify masters, the eCommerce marketing podcast for ambitious entrepreneurs. To start your store today, visit Shopify.com for a free 14 day trial.
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About The Author
Felix Thea is the host of the Shopify Masters podcast, the ecommerce marketing podcast for ambitious entrepreneurs, and founder of TrafficAndSales.com where you can get actionable tips to grow your store’s traffic and sales.