Depressed and drinking early …
That’s how Scotty Arellano and Wyatt Thurston describe a dismal moment at their University of Arizona fraternity house three years ago after an entrepreneurial dream of theirs was crushed by the harsh reality of steep startup costs.
“It was going to take more than $100,000 in development costs,” Arellano recalls. “We spent six months sketching out this tutoring business, but it was going to be too expensive to make happen.”
The two shotgunned a beer.
And then another.
That’s when a light went off.
“We shotgun beer all the time, but we always use a key to open the cans which is really gross,” Arellano says. “No one has ever made a beer shotgun tool.”
Turns out drinking and depression can result in epiphanies…
That is until the entrepreneurial hangover hits.
A Better Way to Shotgun Beer
“The first products were terrible,” Arellano admits. “They were huge and could barely even open a bottle.”
Still, Arellano and Thurston threw up a website they say was just as terrible and pronounced themselves in business as Raging Mammoth; seller of what would ultimately become the Sabertooth.
The founders soon got confirmation they were on the right track as a crowdfunding campaign resulted in more than 1,400 backers and $23,000. “It just blew up,” Arellano says. “We beat our goals and decided we should take this serious.”
They ditched the old site for Shopify and relaunched their online beer shotgunning store. “The old site was garbage,” Thurston says a bit sheepishly. “My buddy actually designed it, but it was the ugliest site I had ever seen.”
Raging Mammoth did $4,000 in revenue right off the bat but wasn’t throwing off enough cash to grow quickly and sustain two college seniors who were about to graduate. “We were really bummed thinking we’d have to get jobs,” Arellano says.
But that’s what they did.
They quit the business they started to take a shot at getting rich with a Silicon Valley tech startup. The two moved to California, took an equity stake, and adopted the frenetic pace expected of hot tech prospects.
Raging Mammoth was no longer the rage.
Reviving the Mammoth
“We lost track of Raging Mammoth,” Thurston says. “We were partners with two other people at the tech startup and had a lot of responsibility.”
It didn’t take long though for the two to understand the ten percent equity stakes they received in the tech startup paled in comparison to their partners. Thurston says he and Arellano were working days, nights, and weekends and seeing little payback.
Then one day there was a blow up at the office.
“We had to take a walk and vent,” Thurston recalls.
On the way to lunch, Thurston began thinking about Raging Mammoth and learned Arellano had been having similar thoughts. “What if we just quit and focus one hundred percent on Raging Mammoth,” Thurston remembers asking Arellano.
A couple of phone calls to their fathers later for approval and the duo had a plan; they’d save all of their money, pledge not to take a salary, and take a stab at reviving the Mammoth.
There was one big problem though.
The two didn’t have enough money for rent in California let alone any left over to grow an ecommerce business.
Relocating the Rage
“It’s not just about drinking,” Arellano says of the Raging Mammoth brand. “It’s about making the fun times we have even better.”
But if fun times were in the cards for Arellano and Thurston they wouldn’t be in California. To avoid winding up homeless, the two packed up and headed for Texas and found the only place they could afford in Austin. Needless to say, the first global headquarters for Raging Mammoth was a mess.
“There were holes in the walls, and it was moldy,” Thurston says. “The floor was about a foot and a half higher on one side, but we were there to grind it out and we did.”
The change of scenery, mold and all, seemed to work. The pair learned all they could, ramped their marketing, and the orders began coming in. “The first month that we brought in ten thousand dollars blew us away,” Arellano says. “That was a lot of money to us at the time, and we couldn’t believe it.”
The revenue record soon doubled.
Then it doubled again.
In January 2016, Raging Mammoth generated $52,000 and was growing so quickly it could no longer keep pace. “We were like, woah,” Arellano says. “We sold out of everything and had no inventory left to sell in February.”
Besides fraternity brothers, the Sabertooth can and bottle openers caught fire among tailgaters and others interested in downing a brew quickly:
- Wedding parties
“We were blown away,” Arellano says.
The company was shotgunning growth and setting its sights even higher...
Scaling With Shopify Plus
“It was a nightmare when we were outsourcing our development,” Arellano says. “It was a chore just to get the developer on the phone to fix a typo in a product description.”
Raging Mammoth ditched its old site for Shopify long before it began its hyper-growth phase but recently upgraded to Shopify Plus, an enterprise-level ecommerce solution for high volume merchants.
Besides saving time and money on development, Arellano and Thurston say Shopify’s robust app store provides them the flexibility to add custom functionality that improves margins and the user the experience. The ability to quickly implement features frees him to focus on what really matters; the product.
For example, of the ten applications Raging Mammoth uses on its site Thurston suggests Notify, an app that boosts sales using social proof, has been particularly impressive. The app can improve conversion rates by highlighting items other customers have purchased and creating a sense of urgency.
“Shopify Plus is 100% the best platform for ecommerce,” Thurston says. “We have loved our experience with Shopify and will never leave.”
Raging Mammoth is also leveraging the ease with which Shopify Plus integrates with agency partners to boost sales. The company depends on its email service partner, Klaviyo, to send targeted email based on user behavior. “We have an entire pipeline of email sequences ready to go,” Thurston says. “We automatically send an email to customers who spend a certain amount or who we haven’t heard from in a hundred days. We’re also split testing messages to see which convert at higher rates.”
The company also has plans to customize and make improvements to the checkout experience to improve its off and online marketing efforts:
- Influencer marketing on Instagram
- Facebook ads comprised of user-generated content
- An ambassador program that partners with college students to promote the brand on campuses
“We went from four thousand dollars a month to $52,000 in just a few months,” Arellano says with a hint of disbelief in his voice. “We’re proof you can scale really quickly with the right partner.”
The Talk Future Millionaires Must Have
Compared to its 1,300% revenue growth this next statistic might seem a bit modest; Raging Mammoth’s average order value has increased 52% from $21 to $32. Sure, you can attribute the success, in part, to driving more traffic to the site and the addition of new products like apparel, branded merchandise, and beer sleeves.
But what if there’s something more?
The “bro” speak on the company’s website is perfect for its target audience. The company has also mastered the potentially tricky transition of its customers from beer guzzling frat brothers to responsible and employed college graduates by positioning the Sabertooth as a must have for tailgating and other life events that involve alcohol.
But the real reason behind the company’s jaw-dropping growth isn’t something that can be hacked, purchased, or even stolen.
Arellano and Thurston recently had the talk- the one entrepreneurs often have when they’re on their way to becoming millionaires and are confronted with whether to take big salaries now, later, or hold out for a sale and an even bigger payday.
“Our margins are really healthy,” Arellano points out. “Should we start paying ourselves lots of money?”
It’s certainly tempting.
But the choice between putting piles of cash in your pocket or back into a business that, like any, is one bad break away from being gone isn’t black and white though it may seem like it when you hear the decision Raging Mammoth’s young founders made.
“If we paid ourselves now we’d be cheating the business in the future,” Arellano suggests. “We decided to put everything we have into this so that in ten years we won’t even be able to regret buying a bunch of dinners and cars now.”
So this company, born in a frat house, will soon do some hiring.
It’ll also spend big in an effort to never run out of inventory again.
It’s a far cry from Arellano’s job of just two years ago as a pizza server in desperate need of a few extra bucks to make ends meet. Especially when you consider the two people who created Raging Mammoth, which one day hopes to become a lifestyle brand on par with Red Bull, almost gave up on it.
“The coolest thing about this is we were going to quit this company nine months ago when it wasn’t working,” Arellano says.