#10 - Using $1k to Build $100M Deodorant Business

At some point we tried to raise more money and you know the investor was like the entire natural deodorant industry is something like thirty million dollars a year. So why would anyone be interested in investing in a category that only has thirty million dollar a year run rates? And I was like if the natural deodorant industry is thirty million dollars a year, We're the entire natural dealer industry. We're doing thirty million dollars a year at this point. Okay, I gotta say it, this was my favorite episode of the podcast. What you're about to hear is a episode I just recorded with Moise Ali. He is the founder of Native Deodorant, which is a natural deodorant brand. It's basically a$12 stick of deodorant. My wife just bought it. She doesn't know that I know Moys. She bought it because she didn't want to use deodorant that had aluminum in it, or parabens, all kinds of funky chemicals that you see on the back of a deodorant stick. So this is the story of how he started it from his brother's dining room table, essentially where he was doing the packaging, he was doing the sales, the marketing, the customer service. as a one man show for a very, very long time and uh over over two and a half years, uh he built this company raising very, very little money, mostly because

investors were kind of just laughing him out of the room, like, okay, you're starting a deodorant company? Like what is that? And so he sold it two and a half years later to Procter and Gamble for a hundred million dollars. I like this episode not just because the story is great and the tactics that he shared are actually quite insightful. But because he's a very entertaining guy, very charismatic. In fact, there's a portion at the end of the episode where he is talking about how some people who didn't believe in him, and he named some names that we had to bleep out. So we we left the story in, but we had to bleep out the names, which is a podcast first. But I think you guys are gonna love this episode. Let me know what you think. As always, you can tweet at me. I'm at SeanVP or email me hurry. Love to hear from you guys. All right, enjoy this episode. Native deodorant, you build a deodorant brand of all things. Yeah.

You Build it from scratch, from a dining room table. You Build a actually good enough business where Procter and Gamble, one of the biggest companies in the world Looks at it.

makes an acquisition and buys native deodorant for a hundred million dollars. So that's the end. But we're gonna rewind to the beginning. The beginning is what? Set the scene. So where are you when you have the idea for native deodorant? So I'm in New York City running another e-commerce business. I'm buying like axe deodorant from a Dwayne Reed at fourteenth and third in New York City. You know, I've I've lived in the same place for like four years and so I'm really familiar with this place. I go buy it, I'm waiting in line, I flip over my deodorant and I can't pronounce a single ingredient on the back of that thing other than the word aluminum. And you know, I I've been seeing this problem for the last four years since I've been buying the deodorant from Dwayne Reed. And you know, I'm an attorney. I I'm not a dumb guy. I know how to read English and I cannot pronounce a single one of these words. And so I'm like there if this product is gonna stay on my body all day, every day, you know, I put it on right after I get out of the shower.

It's on my body for twenty three hours and forty five minutes. And it'll be on my body for twenty-three hours and forty five minutes for the next sixty years. I should at least be able to pronounce some of the ingredients in this thing. And so that's really where the problem starts. And then my sister gets pregnant and you know, she's telling me how she's using Dove, and she's like I'm really scared of Dove because I'm about to start breastfeeding and what happens with the ingredients in my dove and do they like get into you know my baby as a result of me using this antiperspirant. And so I'm like, okay, now this is uh not a hair on fire problem, but a problem large enough for me to solve. Right. That's that's how native starts. So my wife is currently eight months pregnant. And she started using native and she was like, Yeah, I just bought this like twelve dollar deodorant. And I was like, Is it native? And she's like, Yeah. And I was like, dude, I'm gonna about to have him on the podcast. Amazing. And then she was like, I was like, Why did you choose to buy it? And she was saying the same thing, like, Oh, you know, because of the baby, I'm like I have a heightened awareness around what am I putting on my body and in my body. And she was like, it's paraben free. And I I was like, what's a paraben? I have no what is paraben? I actually don't even know. Aluminum is probably the largest thing that we're like people are concerned about when it comes to the deodorant category. And what it does is aluminum acts as like a plug to block your sweat glands from excreting sweat. I see. And so if you think of your sweat glands as like a duct, aluminum acts as a plug and as a result you can't sweat.

And that's why when you use an aluminum based product, it's called an antiperspirant. It stops you from perspiring. And the way I always liken it is look, if you could take a pill to make you stop urinating, would you take that pill? Doesn't that sound so weird? Like if your body is trying to expel a fluid fr from itself Shouldn't you let it? I'm like, Yeah, okay, I want to go to the bathroom. Like this is a bodily need. I don't want to take a pill to stop going to the bathroom. I just want to go and pee. And so that's the way I thought about sweating. I was like, look, if your body wants to sweat because it's really hot, let it sweat. Let the deodorant sort of absorb the sweat and block odors, but we don't need to prevent it from sweating. And so that that was like the genesis of like, okay, look, we think we can create a deodorant that does the job of an uh antiperspirant. The other way I thought about it was look, like a lot of us work in office environments where we commute in a car, we get to an office, we sit at a desk and work at a computer and You know, using an antiperspirant every day, we're generally not in an environment where gonna be sweating a ton. So it's like taking an Advil in the morning when all you need is a glass of water. You're like dehydrated and so all you what you should be doing is drinking a glass of water, but instead you're like, Let me take an Advil to cure my dehydration. Just take the glass of water. It's a lot simpler and safer. Right. And and so that's the way I likened using native to an antiperspirant. I was like, look, you're probably working in an office job or a lot of a lot of our customers are working in office jobs. You don't necessarily need all the effects of an antiperspirant. An aluminum free deodorant will uh do the job for you.

And so You say we, but at the beginning it was just you, correct? That's right. Uh so we launched the company in July twenty fifteen. I remember I bought the domain name on my birthday in July twenty fifteen. Why the name native? Why that domain? Yeah, sure. Uh I really liked what it stood for, which was like we wanted to use ingredients that were like native to the earth. Like we weren't trying to say, hey, this is owned by Native Americans, and we weren't trying to say we're a natural product and we'll never use an artificial ingredient, because I don't think that that's necessarily the case. What we wanted to say is look, look, we want to use ingredients that are native to the earth and we want to make those ingredients part of our deodorant as opposed to using ingredients that nobody can pronounce. And so that was the genesis of the name. Bought the name in July. Basically twelve days later, launch the business. I was like, you know what? I th I think we can launch this business really quickly and see if it works. But what do you mean what do you mean launch the business? Because how do you even have deodorant? If I wanted to launch a deodorant brand, I'd be like, Okay, I guess I need to manufacture some deodorant or buy some you know. How did you do something twelve days later? Yeah, great question. Um so launched the website, had zero deodorants in stock, was speaking to a couple of manufacturers about using our deodorant formula and having them make it. But uh initially I was like, look, I don't think this business will work out. Like are people gonna buy a deodorant online? Generally they're buying it at Dwayne Reed's and Walmarts and Target's

So I was like, uh we'll launch it and we'll see what happens. And so we had contacted some manufacturers, particularly like small mom and pop ones, and our first mom and pop manufacturer was basically making the deodorant out of like their hobby room in their house somewhere in southern California. Launch the product on Product Hunt. And so day one, I uh the you know, it's late July, I put it on product hunt. Product Hunt has multiple pages and I don't even realize that. We're on page two of Product Hunt. We get one sale and I'm like, okay, this business is over. Forget about like I'm not gonna do all this hard work to sell twelve dollars of deodorant every day. I can open up a lemonade like I'm thirty years old and I'm basically um have a revenue of twelve dollars a day. Right. So you you literally launched like without a bang. That's right. The opposite of a good launch. Yeah, exactly. The opposite of a good launch, uh one sale has had zero product in inventory, I was gonna email the guy and basically be like, look, we were trying this out, it didn't work out, we're gonna refund your order, have a nice life. Right. And then what happens is I'm working out of this co-working space called the founders dojo. And one of my friends in that co working space is like, hey, I know an employee of product hunt

And what I'm gonna do is I'm gonna have him try and put you on the first page of Product Hunt again tomorrow. And usually you're not allowed to do that. You're not allowed to be on Product Hunt two days in a row, but he got me an exception and I'm on the first page of Product Hunt the day after I was on the second page. And what was the little tagline at that time? Because I know that for businesses the pitch evolves. Like right now, when you describe data, it was like Really compelling. I loved it. made sense to me. It was kind of inspiring. Yeah, I should use products like that. But I know at the beginning. Our pitches like kinda suck or they you know over time suck less. Yeah, yeah. Oh, it was terrible. What was it at the time of the year? I think it was like invest in yourself. I'm not even sure. It was like

And you know we had gotten financial product. Yeah, exactly. And we gotten a photo. Like, you know, we didn't take any photos at the time because we didn't have any products. So we got some guy to like three D render the image of what a native deal bar would look like. And like that's the image that we have associated with product hunt. On our website we have a hero image and the hero image is just a bathroom. It doesn't even have a photo of native deodorant on it because no native deodorant exists at this point. But on that second day we get like fifty sales and I'm like, you know what, maybe this can be a real business. Right. So as a result of now we have like fifty one sales. We got fifty sales day two, one sale day one. We contact our manufacturer and we're like, Okay, we're gonna buy a hundred of these things, right, ship'em over. We have a tangled history with the guests that you're gonna talk about. So you you mentioned Product Hunt. We had Ryan Hoover on the podcast. Yeah. You mentioned founders Dojo, I think, earlier when we were talking. Sam was on the podcast uh earlier. And your brother was the first episode of the podcast, actually till this day, the highest

highest sort of listened podcast. And so he said that he said told a story on the podcast, which was that At some point you guys were like ordering deodorants off Etsy and like you're just testing deodorants. You were like, put one under one arm, the other under the other arm, and like go run around the block and see which one worked better. Was he full of shit or was this real? No, that was definitely real. We were about like before I launched native, I was like, Okay, you know what? I want a natural deodorant that works. Um so does my sister, because she's pregnant. So I started testing every deodorant I could find. I tested like the Toms and Maines of the world, the Schmidt's of the world, uh, the uh you know the Etsy deodorants of the world and I was just like look these products aren't cutting it. I'm not sure if it's my personal body chemistry or what it is. But yeah, there were we were testing natural deodorants left and right. From Etsy and from every store you could possibly imagine. Gotcha. So you order those that first batch just fifty customers. Yeah, I'm living out of like Solomon's apartment. I j I I moved to California Like you know, during that time period basically, move to California, living out of my brother's apartment, order a hundred units, start packing them on a dining room table. So I get like U line boxes delivered to the house. I get a bunch of crinkle paper delivered to the house. What's wonderful is my brother is the messiest person in the world. When I moved in, he had a birthday cake from like three birthdays ago still in his refrigerator.

I moved in and I'm like I I can't live like this. You're You're too much of a pig to like I I can't live like this. And then I was like, you know what, this is perfect because I've got all this crinkle paper and all these shipping boxes and all this stuff floating around here. And it's making a huge mess, and my brother's the only person in the world who wouldn't care. Yeah. He he doesn't even notice the mess'cause he's just like living in a pigsty himself. And so we're shipping these boxes out, we ship sixty out, and then sales start dropping because you know, we're off a product hunt. Yeah. And I'm like Okay. And my last business, we had built the entire business on PR. I start contacting all these like reporters and I'm like, Hey, do you want to write about native? And they're like, No. Uh this a deodorant let's let's take a chill pill over here. This isn't that compelling.

And this is in twenty fifteen, you know, like today there's a new natural deodorant that launches every day. In twenty fifteen, we're basically one of the few guys out there. And so we start like we start running a bunch of Google ads and you know, we have a fundraise, so it's all my own money. I spent five how much money yeah, it sounds like you're gonna answer that. How much money did you decide like I'll put into my kind of testing and figuring out if this is real budget. Yeah, I'm the cheapest person in the world. So I probably spent like um a grand launching the business. So uh the first five hundred dollars was to buy products and the next five hundred dollars is to like buy Google ads. And I'm buying Google ads and I spend five hundred dollars and I get like a hundred dollars in r uh of sales and I'm like, This is not working out well. I found a way to burn money. Yeah, exactly. And th this is the like my mom would be so upset at me right now. She'd be like, Go quit this business tomorrow And so I'm like, okay, Google ads aren't working. So st we start advertising on Facebook. And like pretty clearly we get some product market fit on Facebook. Facebook ads start going well. And like what happens is I created this Excel spreadsheet where every day I tracked every single ad I had, the click through rate, the you know, CPA, the return on investment. And I start doing that every day starting, you know, probably uh

August twenty fifteen or maybe uh September twenty fifteen. And like that's really how I started getting good at Facebook ads. I was tracking every single ad we ran on a daily basis. And I'm gonna guess You're now you know, company got acquired, y company's much larger, lots of people in the company. Do you still Get hands on with the Facebook ads. Definitely. You're saying to Yeah, absolutely. Yeah. Uh I I mean that like I like that's my that was our bread and butter and I I really enjoyed it. And it's something I'm good at. And it's not just a job for me, it's something I really enjoy. In fact I was at Facebook's headquarters like two days ago talking about Facebook ads with a bunch of their execs. And it's great, like uh to understand what products that they're launching and how they're thinking about the business. It's insane.

any case so so we're like running these Facebook ads, we see a ton of product market fit. And then our manufacturer, you know, scales from a hundred a hundred units a week to about five hundred units a week. She calls me up and she's like Moys, this is a fantastic business. I used to be selling, you know, products at a farmer's market and now I'm making five hundred dealers for you a week. You know, they're charging me about six dollars a unit. So it's pretty expensive. Right. And I'm like, Okay, great. I'm glad this is working for you. And she's like, We're gonna scale this business. We're both gonna like hit home runs with this business. And I was like, Great, this is like I really appreciate your commitment to this. Two days later she calls me and she's like my son is sick, I'm out. Like, uh forget it. I I'm not making any more deodorant. And I was like, Are you kidding me? We had a conversation forty eight hours ago and you were in, forty eight hours later you're out. And so that was really jarring and I'm like, Okay, you know what? We're selling five hundred units of deodorant a week, which is, you know, a few grand in revenue. And it appears to be working well, but like it's a few grand in revenue, you're out. How do I replace you? I don't really want to be making these deodorants in my apartment. Like at some point Will Solomon doesn't have he doesn't even have pots. We're not going to be able to make this over here. And so I'm like okay, maybe this business is over

And then I'm like uh then I go on vacation with a girl that I was dating at the time. We go to like the Dominican Republic or something. We get back, I I'm a little bit more like patient now. Uh I call the manufacturer and I'm like, Okay, look, how about you make five hundred units a week for the next four months? And and then afterwards I'll pay you like a few thousand dollars bonus. I think it was like a five grand bonus. I'm not entirely positive. I was like I think I'll pay you a five grand bonus and and then I'll find another I'm committed to finding another manufacturer in that period of time. And you know, she's like, Okay, that sounds fair and reasonable and so let's do it. And so she starts, you know, making the five hundred a week again. And in the meantime, I'm like Googling and I'm like, Who makes deodorants? Like I've got a formula I wanna make. Who who can I get to make this? All right, quick break in the action to talk about HustleCon. So as you guys know, this podcast is published by the Hustle. They send out a daily email newsletter with the best news of the day, everything you need to know about tech, but that's not all they do. I've been two or three times to HustleCon. It's a conference. It's happening December 2nd and 3rd in Oakland. They rent out the Paramount Theater, which is really a amazing venue. I saw Chris Rock there, Jerry Seinfeld there, and I guess HustleCon is happening there. They have a stacked line Up of speakers. So when I went, founder of We Work was talking. I think let me look at the list for this year. The founder of Hims, the founder of Madison Reed, Strava, Calm, Method and Ali, Lime, a bunch of CEOs and founders of multi-billion dollar companies and startups that come on stage and share insights about how they did what they did, how they got started. And HustleCon is very different than a normal

conference. Normal conferences are kind of stuffy. You wear you know you see a lot of people in suits, like shallow networking going on. Hustle con is very different vibe. Meet a ton of people who are guests in attendance, but Also, the speakers are very approachable. So they are not only sharing good insights on the stage, but you get to meet them afterwards and that's a really cool experience. So highly recommend coming. In fact, I'm bringing out the editor of this podcast to come because I just think it's a really great opportunity. He's 19, 20 years old. This is an amazing way to sort of get in the mix. If you're thinking about starting an idea, a business, or you are you want to do that someday or you're doing it right now. Either way, listening to speakers tell their stories, being in the audience amongst a bunch of other like minded people, that is a really, really good way to get amongst it. So that's my genuine recommendation for HustleCon. They gave me a promo code. Let me give this to you guys so that you can Get a discount if you do want to get a ticket. The promo code when you check out is my first million, all caps all one word. Again, that's my first million. That'll give you 50 bucks off a ticket to HustleCon. And you know what? If you are listening to this and you want to go to HustleCon and you can't afford the tickets, I will buy four tickets for guests myself and I will send you to HustleCon. You gotta figure out your travel. to get there but I'll buy your tickets to the conference itself. Email me hurry.shawn at gmail.com. Happy to give this as a gift to anybody because I think that going to HustleCon, it can really like sort of change the trajectory of your business life. One meaningful relationship or one key insight while you're there, that can make it worth it. That's been my experience with conferences in the past.

So okay, you guys know the deal. HustleCon December 2nd and 3rd. Try to get there if you can. I call some guys up. There was a guy in Chicago, I'll never forget, I called him up. He gave it was like an hour long conversation and I probably said five words. He talked the entire time and he's like, Yeah, so we'll make your dead one I'm like, You don't know anything about my needs and you spoke for fifty nine minutes and fifty five seconds. So like I don't think you're the right guy for red flag. Yeah, exactly Terrible Red Flag. Finally we find a contract manufacturer that's like, Yeah, we have a low minimum order quantity, a low MOQ. I think their MOQ is eighty. And so I was like, great, we can we get we want more than eighty. I'm not gonna like uh for you know bankrupt the business or I I don't have to mortgage my house based on this. And so she starts making five hundred a week for us in this tiny like eight hundred square foot manufacturing facility in the United States. And uh things start going well. And so like, you know, we launched like you know, in July twenty fifteen, we were doing a couple hundred dollars in revenue a month. By January twenty sixteen, we're probably doing around uh seventy five K in revenue a month and things are starting to scale well. Wow.

Then like you know, the first uh the beginning of the summer hits in twenty sixteen, in May twenty sixteen and somehow all of our deodorant start melting. I go to our shipping facility, which is located in San Leandro. It's like these two guys called Fafilco, nicest guys in the world. You know, I call up all the time. We like, you know, they're a small business. I'm a small business, easy to talk to the owners. I go over there, they're like, you know, it's probably an hour drive. I rent a zip car and I go over there and I'm just looking at our deodorants and I put my finger in one of the deodorants because it like looks weird. And it turns out it's got the consistency of lotion. You can just put your finger all the way down to the bottom and I'm like Holy shit. And you have like how many how many units are are we talking here? You know, we probably have a couple thousand units. Which is a lot of money at the time'cause that's like uh, you know, we're not d we're not doing a ton of sales. That's a lot of lotion. It's a lot of lotion. Yeah. It's no deodorant and a lot of lotion. And so our manufacturer at the time, like she didn't uh like the woman who ran it didn't fly. So she was randomly had driven up to San Francisco to have a meeting with me, like the day beforehand.

And so like all of this is just like works out randomly. So like I call her up and I'm like, Hey, are you still in San Francisco? I want to have another meeting because I think there's a problem with the deodorants you just ship me. And she's like, Yeah, I'll come by your office later this afternoon. She comes by and I'm like, Here, I brought a few of the deodorants and she's like, Holy shit, what happened to these? Like, you know, she sees it immediately. She calls up her facility and she's like, Stop making deodorants. We've got a problem here. And I'm like, Okay, well, maybe this business is over again. Like, you know, we we move to a new manufacturer. Like what are we gonna do here? And are you the type to Get down on it. Uh what's the like

When stuff like this gets horribly, awfully wrong. Yeah. Are you Some people go inwards, they get very quiet, some people get angry, some people get sad. Yeah. What's your reaction? I'm like all three of those. Anger is the number one thing, for sure. Like I I'm fuming. But at the same I I think for like the first hour, I'm just like, forget it. Uh this isn't worth it. And I think oh w every time I have a major problem like that for the first hour, I'm less like This isn't worth my time anymore. I I'm quitting. Right. Divorce right away. Yeah, exactly. Divorce right away. And then like hour two comes along and you start getting like determined and you like you know grit your teeth and you're like wait I uh I'm better than this. I'm gonna fix this problem. I've got something that's working for me. This is not gonna stand in my way. I don't care what it takes, I'm gonna fix this problem. So like hour one, I'm like forget this business. Hour two, I'm like Nothing can stop this business. We are gonna we are gonna succeed. Thank you, bring it on. Yeah, exactly. Yeah, I'm like problem, don't worry about it. You've got the best problem solve in the world right here.

And so, you know, uh look uh w what had been happening is that over the course of the last eight months since this or like last four months since this woman had been making deodorant for me, like we'd gotten a lot of customer feedback basically saying our formula was kind of mediocre. There were a lot of problems that we were trying to solve for people were like, look, uh it does a great job at absorbing wetness and blocking odor, but it's really flaky, it's hard to apply. Men in particular were like, look, uh I've got hair under my arms. I like this pulls the hair under my arms out and they're sticking to the deodorant. And so for a while we've been attempting to make a better deal, like a d better formula. And I'd been sending out samples to people and saying like you know, our best customers who were like communicating with me and I'd be like, Hey, what do you think of this formula? Is it any better than like you know the formula that you actually paid for? And a lot of people like you know, we had said we had done hundreds of these formulas. I I was at home, I would rub the formulas on t shirts, throw them in the washer or the dryer, and see if they stained shirts. And like, you know, I I have a thousand of these stained shirts. Solomon's like, You're running the washer and dryer every day, what's going on over here? And y you're not a scientist or biochemist or something. So how are you even figuring out the formula, right? Like whenever I listen to a guest tell these stories, I think to myself, could I do this business? And when I I think there's a lot of things that are relatable, right? Because you started this with essentially no you didn't have to be a programmer, right? You that's a e commerce site. That's great.

You didn't make the stuff yourself. You found a manufacturer just by Googling who the heck makes deodorant. Yeah, that's right. But then when it comes to like figuring out the right formula to prevent flakiness That's one where I'd be like, Well I don't even know what's I don't I don't know what to do there. So how are you figuring this out? Yeah, that's really interest like I remember starting the business, I told one of my friends from law school I'm starting this business and her husband was like, What the hell do you know about deodorant? Like, you know nothing. And I was like, Yeah, you're right. And in the next six months, I will be an expert on deodorant. And really what happens is like you email all of these customers, uh like you know, the customers are like, Hey, here's the problem. Uh customers will even like do diagnoses and they're like, Hey, I think it's because of this. And I'm like Oh wow, great. Thank you for like doing the like the science that I was supposed to do. But in reality, here it was a little easier because like one, working with our contract manufacturer, they did have a chemist. And two is easy to diagnose the problem because with deodorants you want to balance then uh the amount of powder and the amount of oil

you have in that deodorant to make a product that like absorbs wetness, blocor, but still glides on really easily. And so like you know, sometimes we'd make a bad batch of our deodorant and we'd be like, oh how did this batch turn out? Because like, you know, oh we forgot to add this amount of oils. And so we start pouring like you know we take a look at it and we're like, oh this is what we forgot to add oils and it's way power like way more flaky. So you're like, you know what, it's the oils that make it glide well. How frequently were you going to the actual manufacturer and also It sounds like it really paid off that you weren't just using a Chinese manufacturer that's hard to speak with, hard to work with, and doesn't guarantee quality. Definitely. Uh so one, we've never used a Chinese manufacturer. All of our deodorants are made in the United States, uh for two reasons. One, you're right, it allows us to have a really flexible supply chain. Two, it allows us to have like faster demand creation. So like you know, when we we give them a purchase order, they're able to make it much faster. And three, I would be scared as hell using a Chinese deodorant. Like that is something I don't want to do. I don't know what quality control looks like over there. And it may look great the day I go over there and terrible the next day. Yeah. And we didn't want it we didn't want any of that kind of stuff. Like the whole point here was we want to avoid the doves of the world and in order to avoid dove to dove antiperspirant, make it in the United States with ingredients you know like you know where they're being sourced from and you know what they are. Right. Okay, and we're gonna jump back into the story, but one more tactical piece. When you

When I build I build products that are like software. Sure. And with software it's pretty easy to iterate, it's pretty easy to try you know A B test we can send one c one visitor of our of our app to see one experience and the other visitor to see another experience. Very easy to do that sort of thing. How can you talk tactically about how you iterate with a physical product. Sure. Uh I I'll talk tactically about how we did it at the beginning first and then how we do it today. In the beginning, what we would do is we'd send out samples to our best customers who would like were vocal and be like, Hey, I love your deodorant, I'm gonna be a customer, but I wish it did this. And we'd say, Hey, we're trying to solve your issues. Here are two like I I remember we were doing this, I was like This is version seven of the dealer we produced and this is version eight of the dealer we produced. They're blunt like you know, you don't know what's in them. We're giving you free samples, compare it to the one that you purchased from us and tell us what you like more. And like that's the type of feedback that we would do early on. And that's unusual, right? Like I've bottled deodorant my whole life. I've never had anyone from the deodorant company ever reach out to me. I've never spoke to them. They never sent me different variations. So this must have been kind of unusual for people, I guess. Yeah, I I guess that's true. I I mean the the way I think about it is if you make it that way.

Yeah, if you buy deodorant from like Target and you like you know you you buy an axe deodorant from Target, you're never gonna contact the manufacturer. If you buy it directly from us, we were following up with every custom. Like, you know, if you purchase from us w twenty days after you purchase from us, I sent an email to every single customer saying, Hey, how do you like this deodorant? Do you like it, do you hate it? If you like it, leave a review on our website. We'd really appreciate And if you hate it, please reply back to this email. There's a human being on this side of the table, and we want to make this product better. And so that's how we got feedback from consumers. And today what we'll do is we'll actually run those A B tests along huge swaths of the population. So we'll send you the Sean's of one world baking soda that's milled to a certain particle size and SAMs of the world a baking soda that's milled to another particle size. And we'll we'll monitor your reviews six weeks after you purchase and your repeat purchase rates twelve weeks after you purchase and say, you know what? The SAMs of the world are buying again more frequently than the Shawns of the world. And as a result it must be that the s the formula that we sent to the SAMS of the world are better. And that's how we can monitor what is the best baking soda particle mill size that we should have. That's kind of amazing. Is that standard? Because I've never heard of it. It's definitely not standard,'cause like we have this direct relationship with consumers that allows us to monitor repeat purchase rates and have a direct line of communication with them. It's been really phenomenal for us because things like baking soda particle size

are unique and you have no idea what's better like you know, in a laboratory versus in a consumer setting, you're gonna have very different results. And so that's how we A B test formula changes to it. So you guys are sending different versions of of native deodorant formulas to batches of people, cohorts of people. And then you're able to see these guys reproach trade at twenty eight percent versus this one at twenty one percent. Therefore, we believe this formula is better at the end. That's exactly right. Yeah. But we're doing like tiny changes like you know, like changes that wouldn't even ch influence the ingredient deck that were like, hey, look, do you think we should put in, you know Uh one percent of this ingredient or one point zero five percent of this ingredient. Yeah, to see what's better. Like you're like nerdy deodorant stuff. Yeah, exactly. We're getting into the weeds as much as possible. Right. Okay, all right, so we're gonna hop back in. So re rewind to that part of the story where deodorant lotion, oh my God, we gotta fix this. And you guys are s you're starting to troubleshoot. So this is sort of like Near death experience number two. Definitely. Take it from there. So we talked to our manufacturer and we're like, look, let's first we're not setting out any more of these deodorants that are lotion. We're either going to refund the customers and close the business or do something. And so what happened is we we had been working on a different uh deodorant formula to fix for consistency. And so we're like, look, we think we have good fees.

feedback on here. We don't have as much feedback as we would have liked. You know, we still had a bunch of samples that we'd sent to customers and hadn't followed up with them yet. And so we're like, well look, push uh push is coming to shove. We're either gonna close this business or switch formulas. Let's switch formulas and see what happens. So we switch formulas basically because we have to and we think it's supposed to be better. And we start shipping that out. We email all the customers and we're like, Hey, look, your product was supposed to ship out today. We had a problem. It's now gonna take two weeks to ship out. Customers are ups Irate. Just absolutely irate. And I don't blame them. Like, you know, deodorant's not something you can r really go without. Like you know, it's like toothpaste. I I I need this, um, so I'm gonna go get another product. They're irate, um, but a lot of them are really kind and they're like, Hey, we appreciate the you know, the honesty. We're we're willing to be patient for it. Two weeks later we start shipping it out. This is May twenty sixteen. Uh we're probably doing around a hundred K in revenue at this point. And immediately we see uh reviews go up. Uh like the the quality of our reviews has gone up significantly. Um, you know, six weeks later we'll start seeing repeat purchase rates uh go up as well. Like we can monitor the cohorts and early on we get a g really good indicator that repeat purchase rates are gonna be substantially better with

the new version of our formula as compared to the old version. And so we're like, you know what, maybe this like, you know, this terrible experience has led to something really good, a much better formula. And and then like, you know, May twenty sixteen, we're doing a hundred K in revenue a month. And I'm still the only employee at the company. I'm going to say how many people are there? So you're saying we, but we is me and Just me. Just me doing a hundred K in revenue a month or s uh something like that, just me at the company. I'm doing customer service, have a really good idea of what the problems are at the company, doing the operation, so I'm talking to the manufacturer all the time, doing Facebook ads to understand like product market fit. So let's talk money for a second. This podcast is called My First Million. Yeah. It's called My First Million because since you know when I was growing up I wanted to have a million bucks. Yeah. Uh Who doesn't? Who doesn't, exactly. Uh I was not Uh, you know, in Silicon Valley there's a lot of people with that cool thing to do is say, I'm here to change the world. I'm down with changing the world for sure. But let's be clear.

If I'm starting a business, I'm trying to make money. And um I'm not a afraid to say that. So m my whole startup career was around how do I build a business that makes money for me, for my investors, for my employees. And in order to do so, we're gonna have to make an amazing product that customers love. Otherwise, why would they give us their money? And so I like to think I like to give give my listeners an understanding because a lot of the people who are listening to this podcast right now, they're commuting to work. They work at a nine to five job, they have aspirations of either leaving that job and going and starting a startup, or they're doing a startup and it's not quite taking off. You know, they hear you say, We're only at a hundred thousand a month in revenue and they're like, Oh my God, I wish I could get to a hundred thousand a month in revenue. So let's talk money for a second. Before you started the business. What was it you know, were you already doing well financially? Uh were you were you comfortable? Where were you at before? Uh let's start with that question. Sure. I was an attorney in New York for a couple of years and during that time I basically paid off my law school student loans. One of my law school classmates and I left our jobs, you know, back in twenty twelve to start an e commerce business.

We sold that business for a seven figure sum and like we hadn't raised any money. So I would say I was comfortable certainly, but like, you know, wasn't uh you know w wasn't gonna be able to say, Okay, you know what, I'm gonna retire for the rest of my life. I I was in a position where I was like, Okay, I bought myself a couple of years of not having to worry about rent and not worry having having to worry about, you know, food or vacations. But I haven't bought myself, you know, fifty years of not having to work. Right. And so now you get to this hundred thousand a month of revenue. Yeah. And it's taken the business about how long at this point? It's taken about uh eleven, ten, eleven months. Ten, eleven months. Great. And what does that mean for a deodorant business? So you y you know, you make a hundred thousand, but margin wise, what were you do you know, what were you able to take home at the end of that? Sure. Were you break even, were you better than that? How were you doing at that time? Um so we were selling a hundred thousand dollars of deodorant a month. You know, the deodorant was costing us a lot of money at the time because we didn't really have any economies of scale. I was the only employee and I wasn't taking a salary. But I'd say on a hundred thousand dollars in business, I'm guessing because I don't really remember, I'd say the company probably made about eight thousand dollars in net profit, right uh selling a hundred thousand dollars of deodorant.

And you and your brother are very business savvy. You've invested in I don't know. eighty plus businesses. Yeah, something like that. Something something like that. You've started multiple businesses. So what was your mindset around this? Did you think, man, this is gonna be a big business? Were you like, this is just a kind of a fun project. I guess how were you thinking about it when it was at that stage?'Cause Hundred K a month is good revenue, but you're only taking home eight K maybe. That do it's not clear at that time. And there's not a whole bunch of other examples you could go look at at other big different businesses that were startups. So how did you think about this business? Definitely. I I think the first like four months of the business, I was like, look, let's see if the let's launch this business. I'm bored. I I I don't have a job. Let's see what happens when I launch the business. Pretty early on, I thought that there could be product market fit.

And I was like, you know what, we're seeing good return on investment when we uh buy ads on Facebook, not necessarily on Google at the time. And even on Pinterest we're seeing a good return on investment. The problems that we have are we have a low repeat purchase rate, uh good product but kinda mediocre. And like um, you know, a decent review uh average, something like four stars. Right. And so I was like, look, if we can improve our product, we really have something. I saw product market fit with the product, but I also saw that there was a larger opportunity if we could just make our product better. And why not hire people? I think m a lot of people like to rush to hire people. I'm anti hiring people. I I want to maximize these sort of earnings per capita in my company. Yeah, definitely. And h like how did you resist that? What was your th thought process around that? Because you're doing it as a one man show. Sure. One, we like you know, in Silicon Valley, a bunch of people raise money. We also raise money to be clear. We raise about fifty thousand dollars in November of twenty fifteen, so like a few months after we started, and then another two hundred fifty thousand dollars in about April of twenty sixteen. And this was friends and family, or this was these were both outside investors that I had just met. that like you know I had uh somebody introduced me to them and both of them invested and you know so we had about three hundred thousand dollars in the bank account plus the thousand dollars I kicked in so probably about three thousand three hundred one thousand dollars and and so we're like you know we've got some cash but not a ton of cash

Uh I I I didn't hire anyone for a couple of reasons. One was super busy trying to run the business. Like if you're doing marketing operations and customer service, that's a full time job. On Saturdays, I would spend the entire day Basically I'd go to a workshop cafe and crank out a bunch of customer service like inquiries so people got responded to within twenty four hours. So one was really busy. And then two, I was afraid that the business was wasn't going to survive much longer. I didn't want to hire someone and then fire that person three months later because the business was collapsing. And four, I wasn't sure I could afford them. three hundred thousand dollars in the bank account, but we had eight thousand dollars in net profit. If I hire someone between employment taxes, their salary and benefits, we're certainly giving up that eight thousand dollars. And so I was like I don't know how long we're gonna be able to afford this person. The future of the business doesn't have a like we don't have a ton of profit right now, so I don't know how long I'll be able to afford you. And what was your schedule like? So you're saying Saturday Saturdays is customer service day. How do you when you are the one doing operations, marketing and customer service plus everything else that goes into all the little things that go into a business, how were you organizing your time and your day? Are you like a I work eighteen hours a day kind of guy, or tell us about like kind of your schedule. Yeah. I was like I was waking up and going to work. Yeah, I mean I'd work until uh like, you know, seven, eight PM early on in the business, probably the first four or five months, I was doing all the packaging as well, the shipping as well out of my apartment. And so like I'd go home at seven PM

turn on Netflix and while I was watching Netflix I'd be packing boxes and shipping them out. Right. And uh you were Michael Scott, you were Dwight on sale. That's right. You were Daryl in the warehouse. You were the whole office. Yeah, yeah, and Toby being like yeah, that's a terrible company. It's a long day to the beginning. We get to June, we've got a higher repeat purch like you know, we've got oh we've got a higher repeat purchase rate, better reviews. You know, in June of twenty sixteen, so about eleven months into the business, we hire our first employee and she's uh helping doing customer service. And I'm like, Great, this is I I need so much help here,'cause like customer service is endless and I can't like reply like you know, it's just taking up so much of my time. So she comes on board. We do two hundred fifty K in revenue that month. So we've basically doubled the business between May and June. And the customer service inquiries have gotten to be even more than she can she and I can handle together. I thought I was done with customer service, we double the business, and it turns out she and I are both doing customer service all day. So we hired a third customer service we hired another person or third uh the third person to join the team and he's doing customer service. And uh I was like great.

This is wonderful. Now I can really stop doing it. And by like, you know, by November twenty sixteen, we're doing a million dollars a month. So we go from a hundred K in like May to a million in November. And now we've got a bunch of customer service people, including the uh you know, just Crazy customer service. Like we have these things called power hours where we're like everybody does customer service and it's not entirely their fault. Like a lot of it was we were not able to keep up in terms of production with the demand that we had because we didn't expect to ten X the business over the course of five months. And so our manufacturers running behind. If you buy the deodorant on a Wednesday, it probably gets made Friday and shipped to you, you know, the the following Wednesday. Um we're doing like we don't know what's going on. The business is growing really quickly, but we can't keep up with it. And and I certainly can't. Like I I'm like, well I have to do customer service. I have to make sure that we're I'm trying to produce more deodorant. I'm trying to run our advertising and you know I I have no idea w what our business will look like a year from now. So what caused the business to grow from that hundred K a month to a million a month. Yeah. Uh that's a huge jump. Was it just spending more on ads? Did you guys

Obviously the formula's getting better. So obviously the product is getting better. But is it just is it just like that? It's a million little things getting better, or was there a breakthrough or a Point of emphasis that really was high level. There's three things. One word of mouth is growing a ton. Like you know, it's it's small, it's hard to have word of mouth when you're doing fifty K a month. It's a lot easier to have word of mouth when you're doing two hundred, fifty K, five hundred a month. So that's growing a ton. Two, we're spending more on ads because we understand product market fit and we understand that we're profitable when we spend money on ads. So we're spending more money on ads. And then three, we have a higher repeat purchase rate. Uh which was the most important thing. So it's compounding. Yeah, exactly. There's a huge snowball effect. I remember in like so in January twenty seventeen, we're doing just over a million dollars a month, and I was like by December of twenty seventeen, I want to. do a million dollars in repeat purchase revenue a month. And we hit that million dollars in like March. So it sounds like focusing on repeat purchase was a key insight that obviously if you're in D to C businesses, that's that that's kind of known as a good standard, but if you're new, you know, that's something to hone in on. How d did you know that at the start? Did a mentor tell you, hey, reper purchase rate is the thing to to key in on? I I think for like uh it depends on the product you're in. If I was selling Casper mattresses, I would be concerned about new customer acquisition,'cause how many mattresses so is someone gonna buy? Uh you know what, I bet

Casper's doing a really good job with re repeat purchase rate. But like when you're selling a consumable bite like deodorant, the whole point is that people are brand loyal and once they find a deodorant, they're gonna stick with it for a really long time. I used Axe Deodorant from like you know, probably twelve years old till I was thirty years old. Like eighteen years. And so for me I was like look, we have to find like if we're producing a deodorant, we need to make sure that people love it and they don't just churn and go back to their doves or degrees of the world. And uh uh why were you able to charge twelve dollars for deodorant? Is it still twelve dollars, by the way? It's still twelve dollars. Um twelve dollars at Walmart, twelve dollars at Target and twelve dollars at our own site. And uh really the way the way we did it is I worked backwards, like early on the uh deodorant cost us about six dollars to make. It cost us uh three dollars and some change to ship and then it cost us like another dollar fifty for random expenses like the box and like a uh you know a card in there and a bunch of other expenses. So we were looking at an all in cost of uh like eleven dollars and some change. And so I was like, look, uh I can't lose money on every deodorant I make. I'm not brandless. So I have to charge twelve dollars. Otherwise we're gonna lose money on every single order. And so that's really where it came from.

And a normal deodorant uh you know, Axe or Old Spice or whatever, they're not I I mean, what's the I d I almost don't even think about it. I just pick it up off the shelf typically and it's three bucks. Three to four dollars is like a or a traditional priced anti pri a traditional price anti. So when you were going into this, weren't you know, if I was your friend at that time, I would have been like hey, but You sure you're gonna be able to for X the price of deodorant? Like are we sure that's a good idea? Yeah. I guess really what happened is by the time people started asking that question, I was like, We're doing a million dollars a month. So I think I think we're okay. Okay. But I do remember like we had this one question from an investor. At some point we tried to raise more money And you know, the investor was like the entire natural deodorant industry is something like thirty million dollars a year. So why would anyone be interested in investing in a category that only has thirty million dollar a year run rates? And I was like if the natural deodorant industry is thirty million dollars a year, we're the entire natural deodorant industry. We're doing thirty million dollars a year at this point. And so I think from from our perspective, we were like look, uh there's a lot of external factors that say we should not be doing this. Yeah, twelve dollar deal run is really expensive. The entire natural dealer industry when we launched was Tomza Main, which was thirty million dollars. And we're just like I think this is a product that people want and need and like you know th let them tell us that we're doing something wrong a and we'll try this anyway. And that's how it worked out. Like you know, uh by the time people were telling it's a thirty million dollar total addressable market, we were doing that much revenue. And so you you said

the phrase customer service a bunch. Yeah. People are playing the drinking game at home. taking a shot every time you say customer service, they're dead. Um and so A lot of people like you know, we just got acquired by Amazon. Amazon has this phrase, you know, cust customer obsessed, is what Jeff Bezos says. A lot of people say that. But I think you guys are doing something specifically that

Your actions back up your words. I saw some little things like, you know, you know, f first the stories you told about reaching out to customers twenty days later, saying what could we be doing better, sending them different formulas to try out, working with them. But also right when you sign up, you get a funny email from you guys. Like talk about some of the things you guys have done on the customer service or customer obsessed side. Sure. Uh I guess like uh one of the the goals or one of the values we really have is to try and build a human business. Like we want you to know that when you communicate with us, there's a human being on this side of the business and it's not some corporate entity. And you're not gonna like get one of those uh you know Comcast like responses where people are like I don't care about this. Let me transfer you to some other um customer service representative and like they'll deal with it and they'll transfer Well when you contact us, you the a real human being who sits in our office responds. And then we try and build a really human element in a few ways. Uh one is when you order from us.

We send you this over the top order confirmation email and or over the top shipping confirmation email. When you order from us, we say, Hey, we're popping bottles of champagne and this is fantastic. Um and when you when we ship the order, we say, Hey, look, um we're r uh writing your name over the Golden Gate Bridge. We're putting a sign in in our parking lot that says world's best customer with your name and photo on it. And it's really over the top to to meant to be playful and to uh so so you know that the brand that you're purchasing from sort of subscribes to your values as well, which is we don't take this too seriously, but at the same time, um, we're really Yeah, exactly. Yeah. Like this is deodorant and so like we know that this isn't like product that you're gonna is gonna make a huge impact in your life. This isn't like having a kid, but at the same time it's important that you use a deodorant that works and you you know you're buying from a brand that really resonates with you. You hit the scale that really matters now. You're doing a million dollars a month. Yeah. this point, uh you know, any non believer at this point has to sort of be thinking, Okay, there's something real here.

And the company size at this time was still pretty small, right? How many people were at Native at this time? There's probably about five employees. Wow. And and so you're you're you've got this business on your hands and you ultimately decided to to sell. What was the thinking around that? Why why decide to sell when things are sort of when the going is good? And I'm gonna ask you how you sold it,'cause I as I've learned selling a company is both art and science, and I'm curious to hear how it all went down. But why why decide to sell in the first place? Well what happened is that like somebody came knocking on our door in about February of twenty seventeen indicating that they wanted to purchase the business. And we're like, look, I I never heard of them and I'm like, hey, you know, we're growing. I don't know who you are. I think this is it like, you know, this isn't serious. And it turned out that they were like, you know, this is a privately held company doing a billion dollars in revenue and it was very serious. And so that really kickstarted the process. They started knocking on the door and like the knock became loud enough that we couldn't ignore it any longer. And that's when the process got kicked off.

It turned out that they were a lot less serious than I anticipated. I went out to meet with them and you know, they're like okay, great, send us all of your you know, financials and your information. I sent it out in like June of twenty seventeen They don't even reply back for like s ninety days afterward. Like they're just radio silent. I follow up with them, I'm like, Hey, is this still going on? If it's not, no problem, just give me a heads up because you know, at this point, uh, you know, we've started a process and we're talking to a bunch of other parties. I mean I don't say all that. I just say if you're not interested anymore, no problem, just let me know. But just radio silence, like being ghosted from an ex. Or from like a you know a tinder date is what's happening. And were they you think they were just picking your brains to get the the numbers from you and then they were like great, thank you very much. Or what or were they just bureaucratic internally? They they have their own business and they're like, you know what, maybe this is too small, we're a billion dollar business. Uh maybe the oh, you know, the right person internally was like, We don't really care about this business. I think it was a bunch of factors. But at some point, like, you know, we we started going our own way and we're like okay. Because you knocked on the door so loud, we started our own process and we've got all these other suitors. They ended up coming back like, you know, a a few months before we sold the bus or like a month before we sold the business and they're like, Okay, yeah, we're interested again and I was like, No, uh I'm not going through this again. We're really far along in the process with a bunch of other guys and you guys don't have the credibility to continue doing this. Right.

And so you're you're selling the business. Do you feel like you know how to do this? process? Definitely not. This is like you know, uh look there are so many different emotions that happen all the time when you're trying to sell a business. I was really thankful that like, you know, my brother was there with me. He had just sold his business. He had hired a banker and sort of gone through the transaction and knew what to expect. So we start this process ourselves. You know, we create a one page document that's like a teaser. We send it out to a bunch of potential acquirers. It doesn't even have our name on it. They say, Yes, are you interested? Or like they're like, Yeah, we're interested in this business. Or like, no, we don't care about the dealer and category. Uh get out of here. The guys who are interested sign an NDA and we send them a book that's like, you know, probably 120 pages long. telling them all the information about our business. This is what our financials look like, this is how many people we have, this is where our business is growing. The banker put that together or you put that together? Uh the banker uh the banker and I uh and our team uh put that together. So a bunch of people have this book. And then uh what happens is that they indicate they send us letters of interest where they're basically like, Yeah, we are interested in this business. If they are, if they're not, they just go away. Um, but if they are interested in the business, having looked at our financials, they say, We're interested in this business. We think that we would purchase this business between, you know, ten million and twenty million dollars or something to that effect. And then what you do is you say,

You know what, these are the b these are the guys who I think are really serious about this. Like if some guy's offering you ten to twenty million dollars and you're doing forty million in revenue, probably don't not worth a conversation. So you know, we we take a bunch of these and I think there's twelve suitors at the time, maybe fourteen. And so we say, Okay, everyone come to our office in San Francisco and have a conversation with Moys. And so I'm This is like the bachelor. You're you're s is the bachelor with the roses and you're you invite'em all to the party. Yeah, I'm not sure if they have the roses or I have the roses. I still don't know. But yeah, we invite'em all to the party and they're here and they're like you know, I I I talk to them, uh and like you know, businesses send out like some businesses will send out one guy who's like the head of the North America, and P and G will send out like Well you know we we were sitting in my brother's we were squatting in my brother's office. He has a large conference room that can probably seat like eighteen people. P and G sends like twenty five people. And I'm just like this is standing room only here. We didn't expect this. And don't expect me to pick up the tab for lunch. So we go through this process with a bunch of these guys. And then what we say is like look here's all Look, if you're still interested in this business, here's all the data that w here's all the diligence that you need in the business. Here's all of our contracts. Now we're a two and a half year old business. We barely have any contracts. Right.

You know, we have probably three material contracts, no change of control provisions, like uh the whole like there there's very little data in the data room. Yeah and we say, go through all the data, here's the draft merger agreement, mark it up, give us an offer, and you should be ready to sign that. You should be ready to close that offer. the day you give it to us. And you know the look that's really aggressive, incredibly aggressive. We're basically like look, we've got we've got this awesome business. You want it. There's a bunch of you guys. There's one of us. Twelve of those guys in that room are paid to like do a ninety day diligence process. Yeah, exactly. Oh, what am I doing here? Yeah, that's exactly out of a job here. And so we're super aggressive about it. During that process, a couple of the guys drop off for one reason or the other. A couple of guys realize, hey, look, we're not gonna be aggressive enough. Like we think they're gonna be better strategic fits for this business and it's not worth our time to cr put in an offer. A couple of guys just get scared at the price. You know, I remember one potential acquirer was looking at one of our competitors and they're like, Your competitor is selling for five dollars a target. How are you like if it and at this point, the entire business is online. You know, we sell deodorant and only deodorant. We sell it only through our own website and we sell it only in the United States. And so one of the things that we sell is like the sizzle, right? We're like look

If you uh you know how to sell in you know P and G do you know how to sell in Target? If so, imagine how native would do at Target. Do you know how to make other products with the word native on them? Help us do that and we can make this a bigger business. Do you know how to sell in Canada? Great, this is gonna be a bigger business. So we sell that SISL. That's strong. Yeah, that is really strong. And so look a couple guys are like you know what, your competitors are selling for five dollars a target. target, you're not gonna be able to sell next to those guys, so we're out. Or we drop our uh price by half. And then push comes to shove and PG hasn't done a deal in like 10 years. This is the first acquisition they're making in ten years. So our banker is like look I have no idea how these guys operate. Like I know how you know Unilever operates and I know how these private equity firms operate But P and G nobody's seen them in the world in ten years. Yeah. So at a Papa Viagra just to do a deal like this. Yeah, exactly. They're not used to this. Yeah, exactly. I I like I don't even know how to like get a reference on P and G to see if they're serious because no one has seen them in the market. And at this point had you put out a price yourself of like this is our target? No. You're letting everybody come in. And did you uh what did you internally what did you internally think about this you know, you are you dreaming about a certain number How are you internally thinking about the price? Great question. I I'm not sure. Look, you know, there are pun there are times where I'm like, Okay, look the month a month closes and I'm just like, We generated, you know, four million in revenue this y this month. Add another zero to that price, buddy. Add two more zeros.

And then there'll be like one bad day where I'm like, you know what? Uh we had this like hiccup because of operations and like, you know, something happened and and now I'm like anything. Yeah, take it off my hand. Somebody come in and give me anything. And like, you know, it's it's like a roller coaster and the roller coaster isn't even week to week, it's hour to hour. And like, you know, during diligence, people are asking for random there was one company A copy of it. The open rate, the click through rate, and the revenue generated from that email. And I'm like, look, at this point we have a million customers. We send out millions of emails a month, and you want this from the beginning of the time that we launch the business. And they're like, Yeah, that's just to make the first board meeting really uh productive. And I was like the board is gonna go through emails? Because even I I barely like I I mean I look at that, but I don't know. don't look at that on like a quarterly basis. And so You know, they're just like uh so so you're up at two AM preparing these things for them and there's like a bunch of these acquirers, so there's a bunch of them. Some guy like the the guys who were most interested in the business ended up dropping out in the uh during the b during the acquisition conversations and I was like I don't know why you did that. And so you know, all these things are happening and you're just it's like a roller coaster. The g the thought the company that

you thought was gonna marry you, like gets up to the altar and they're like, We're out of here. And you're just like, Oh my God, who's gonna marry me now? And I I remember uh when we were going through the process just now,'cause it's pretty fresh on my mind just a couple months ago, there are these moments where You're having a conversation. And certain things it's like They say something and you in your head you're like This is the moment I need to say something. And whatever I say right now is gonna really actually swing the way this whole process is going. And uh there are these like key moments that are just happening over a coffee or on the phone or w whatever.

Do you remember any of those kind of conversations or key moments along the way? Yeah. Well there's two. One was with everyone, which was a an issue we had with our trademark. And I'll get to that in a second. And two, I remember one guy who who was like the CEO of the company was like, you know, trying to judge my marketing ability. And so he's like If you were uh if your brand was represented by a celebrity Who would that person be? Uh and I was like I know that uh I was like this is one of those things where you think either I'm intelligent or I'm an idiot. Uh and I remember I hadn't even thought of this, but I was like, Michelle Obama and he's like Okay, you got it right. Wow. He's like, That's a good answer. And I was like great. Uh but in reality we had a trademark issue until we sold the business. This was a serious part like that delayed the transaction with everybody and that I think made it harder for us to sell the business. We simply didn't own our trademark. Yeah. Uh until Five days before we sold the business.

So we bought our trademark on like we sold the business on like November eighth. On November third, we purchased the trademark and that was the one thing that we still had to do in order to sell the business. Like P and G was like we will not buy this business until you own your own trademark. Right. Which was completely fair of them. And we were like negotiating with the person who owned the mark simultaneously. Yeah, exactly, in order to get that. I feel like A deal is not close to being done. It's not real until the deal almost falls through. That's like the test. If your deal hasn't fallen through yet, it's not a real deal yet. Like uh I was talking to so Michael Burch was on this sitting where you're sitting uh a couple weeks ago and he sold Bebo to AOL for eight hundred fifty million bucks. And I was uh I didn't ask him this on the podcast, but I've asked him this before. I said You know, was it smooth? How did it go? And he was like, you know, uh he was kinda like, you know, I just let the bankers kinda do their thing. It was such a big transaction that there's all these lawyers, all these bankers. It's not pleasant, but we almost got'cause we got to the very end. And then with Bebo, which was a social network, they started getting sued by the music companies at the eleventh hour. Oh god. And the music companies knew, Hey, these guys are about to sell, uh we have all the leverage in the world right now to just Just go ahead and sue and they'll have to pay they'll have to settle because they want to close some deal. So you know, they they go and sue and I think it's like a fifteen million dollars uh like settlement is like needed or whatever. So Michael goes to the investors, the VCs

And he's like hey, um I might have got the numbers wrong, but it's something like Ten, fifteen million bucks. He goes to the V Cs he's like, Hey, look, to close this deal, we really need to just settle this this issue and then, you know, we can go sell this company. These guys are not gonna go away unless we do this. And they were like, Yeah, you know, you're right. You really gotta And he's like, No, we gotta settle. Sure. And they're like, No, no, no, I think you're gonna settle with it. And so he ended up out basically out of his own share had to like settle with these companies in order to settle the lawsuits to get the deal to close. And of course he holds it against those VCs like, you know, to this day. Definitely. But uh these are the crazy stories that happen at the end of the deal or you know, right when you think you ha you have it. That's really terrible'cause like uh I never felt it wasn't a we with my investors. Like they were all like super happy and super excited about getting the deal done. And you know, if someone had come to me if one of our investors had been like

Uh I don't love this and I'm gonna try and vote no and fuck this up. I I would have like been devastated. Right. And like felt like there was a knife in my back. Right. So I don't know who those investors are that David Michael. But he I hope he should mention their name everywhere he goes. Yeah. So so this is actually that that mindset. Your brother's told me about this. He says he's like, Yeah, my brother boys, you know, he's he's great. He does a great job. He's like, but if you flip the the the temper switch, he's like He has this like retribution streak. Yeah. It's like if you wrong me, I will publicly right the wrong for the next fifty years I'm devoted to it. Yeah, sure. I'll give you an example right now. There's this company called Uh they said no to us'cause I was like, hey, I want to launch this refillable deodorant early on when we were launching a business and I was like, Yeah, we're launching this refillable deodorant and they're like, No, this is terrible. Get out of here. And like, you know, in the last six months, I don't even remember what, but they invested in a refillable deodorant company and I'm like well, I see that you're doing a refillable deodorant now it's such such a bad idea, huh? You reached out back. No, I didn't even say anything. I was like uh th this like stands by itself. Like, you know, you know that you're doing this and I know that you're doing this. Right.

But like, you know, d do what you gotta do, but you could have had the opportun you had the opportunity four years ago. I also heard the sort of once you get to Procton Gamble, obviously they have a sort of much tighter, you know, view of of uh risk tolerance around uh Twitter and some of uh some of your tweets. How's that been for you since since joining, you know, the mothership? Basically what happened was Sent us this letter and so I tweeted it.

And I was like If you're wondering when I decided to destroy your business, it was when you sent me this letter. Like before I was like, you know, you guys are a gnat. Uh and I don't care about your tiny business and I'll let you exist. And now it's personal and I like you know, my life's mission is to make sure that you regret sending this letter. Every morning you should wake up and you should be like fuck, I sent that letter and now my life is fucked. It's called someone at P and G and they're like you have to take down these tweets. And I was like, Why should we take down these tweets? We should show how competitive we are. When people come after us, you know, uh we we like go after them ten times harder. You know, like uh Donald Trump is always like we're building this wall ten feet higher. That's basically what I was like. You come after us, we're building this wall ten feet higher.

Wh where did that come from? Where did that strategy or mindset come from? Is it like at an early age were you doing this with your brother, like competitiveness with him, or where where's the I think it came from him. I think he just does a better job of like hiding asking it. Yeah, he's just more charismatic than I am. So he says it and everyone's like, Oh, you know what? Po you know, Solomon's like funny and like this is good and good humor. And when I say people are like Moise is vicious. He's just more charismatic, so it comes off nicer. But he's got it himself for sure. I love it. Okay, so company finally does the the offer does come through, Procter Hable was serious. Take it from there. How did it end? How did it feel? And where are you guys at now? Yeah, sure. So one I I think one of the issues with these types of companies is always about like or w with a deal is like deal certainty. How comfortable are you that the other guys are gonna close or try and do something at the eleventh hour? Because like you know, i if you say no to all these other companies and then your deal doesn't get consummated, you come back and you're like, Hey, do you wanna do a deal? They're like, What's wrong? Why did the first acquirer not end up buying you? I've got the leverage here. Damaged goods. Yeah, exactly. And so um there was a lot of deal certainty with P and G. Like they were fantastic partners throughout this all. They were like you know, they came out to San Francisco, uh we met with them, we went to dinner with them, they made the offer, they came back again before the deal signed, and they're like

This is how it's gonna be post acquisition. Like this is how you're gonna report to us. This is how we're thinking about the business. How do you feel about it? And I was like, wow, you guys aren't trying to like hide anything or be at like you guys are just genuinely nice midwestern people who are honest and like uh mean what you say. Right. And so that was a that gave me a lot of comfort going into the deal and that was wonderful. And as soon as we bought the trademark, I basically knew the deal was gonna I mean there was only five more days, but I knew the deal was gonna close. Since then, you know, we've grown the business a ton. We've launched into Target and to Walmart, where like the number one selling natural deodorant in Target, the number one selling natural deodorant in Walmart. Native coconut and vanilla is the best selling deodorant skew at Target over the last fifty two weeks, and we haven't even been there for fifty two weeks. Yeah. You had these like I I saw something like a pumpkin spice latte scent. Yeah, definitely. Is this like uh is this just like your marketing genius or what is it? Yeah, it's super fun.'Cause basically we're like, look, why are we taking this stuff too seriously? And like You know, you can use a scent for a season and you don't have to go through the entire deodorant stick before you can get rid of it. In the same way that you're not like if you open up a diet coke'cause you wanna like treat yourself, you don't have to drink the whole thing. Right. Or you don't have to have an entire s like a Snickers King size bar. So we're like, look, why don't we launch these really fun scents?

They work and they're effective and they're good for PR, and hopefully you find out about the deodorant through n native pumpkin spice latte and then you're like, This is a great deodorant. I don't want to smell like pumpkin spice latte in April. Maybe I should buy the, you know, coconut and vanilla scent. If you're Procter and Gamble You're not afraid of Unilever. You should be really afraid of the moys at his dining table thinking up pumpkin sized latte sense and getting PR and really getting this thing off the ground like it's it's the

You know, one or two people in a bedroom who are actually the threats to these like giant multi billion dollar companies because you have creativity and you have nothing to lose. Yeah, exactly. You have a fresh perspective. And like all the things you've told me so far just fall into those buckets. And if you're I'm listening to this, I'm taking one thing away as like do not Be afraid. And do do not sort of conform to the sort of practices of the industry. You didn't know anything about deodorant. You went in with basically no money, no staff, no nothing. And you figured it out. And I like what do you think is the message for the you know, the next you who maybe doesn't have the sort of

thinking about an idea like this. Yeah, it's really like stop listening to other people and start listening to yourself. I remember when we were growing the business, people were like, look, you're not going to be able to sell this until you launch a second product outside of deodorant that really is a home run again. So people pro so you can prove this is a re a repeatable model. Other people were like, hey, you need to do influencer advertising. This brand is not going to have any legs and no one's going to care. without influencer advertising. Other people were like, you need to laun up stores like, you know, the Allbirds and Aways of the world. That's the only way to do this. Other people were like, you haven't fundraised. What are you doing? This isn't a real business until you've got some ca like, you know, millions of dollars in your balance sheet. And I was like, You're all probably right, and I have no like, you know, I don't have the time for any of this kind of stuff. We have a business that's working, and so like give your advice to somebody else. I uh like I I know what's working at my company and so I'm gonna keep doing that. I I don't want any of this advice. Uh like I I I appreciate the advice. I'm not gonna take any of it. Right. And like it's really hard to sort of be like, Hey, look, these other people that have a lot more money than I do and that have a lot more experience than I do um are gonna give me advice and I'm gonna reject it and I'm like uh okay with that. You have to have a lot of like independent and be okay with what's going on like okay with like living and dying on your own intelligence. And for me, like what what gave me a lot of confidence was You know, things were working early on. And so when people were giving me this advice, I was like look, what's working like what's working for us is working. We're gonna double down on that instead of doing anything that you suggest. Right. And it's hard like you know, for us we had that great safety net of like uh success already or like momentum. And so it's it's uh if you don't have that.

Trust your gut. Nobody's gonna be able to like come into your business, talk to you for twenty minutes, and give you an amazing idea that you haven't thought of. People would be like Have you thought about influencer advertising? And I'm like, I only live and breathe this business every day, like uh you know, from a morning to night. What a genius idea. Tell me more about this. I was like, Yeah, I've thought about that, but we just did a million dollars a month and we're we're gonna try and do two million dollars a month next month. And and so I'm focused on that and don't really have the time to like contact influencers on Instagram. And so you know you just gotta trust your gut and like listen to yourself. Other people's advice can help you like, you know, get through the rough patches. And I think our investors did a great job of that. But ultimately like um it's up to you and like your like live and die by your own merits. I love it. And what was it like? When the deal closed.

Day of the M. Money hits the bank. This is My first million. Yeah. People wanna know what is it what changed? What what did it feel like? What did you do? Did you start balling out of control? Like

Uh tell us you started balling out of control. Sure. Yeah. Well uh uh uh let me tell you the story of one of our investors. I'm telling all of our investors we're selling the business. It's a couple days before we actually close the deal. Uh our first investor is this Chinese guy named Way Go, doesn't speak a ton of English, and the nicest guy in the world. I I text him and I'm like, Hey, I got a chat with you. Do you have s do you have a few moments today? And he's like Is this it and I was like, yeah, kind of. I need you to sign documents in like the next twenty four hours. And so he's like, Okay, great, call me. So I call him up. I was like, we turned your fifty K to a million dollars and he's like fuck this is awesome. You know, everything he's like all these people in China told me I didn't understand American consumers. I'm gonna go back to them and show them this deal. Fuck them. And so uh you know, I tell him uh you know, I need you to sign these docs in the next twenty four hours. He's super excited. At the end of the call, he's like, you know, I I asked you if this was urgent uh via text message earlier because my wife just gave birth to my first kid. But this is the best news I've gotten all day. It's so amazing. I'll never forget him saying that. Anyway, we close the deal, you know, money hits the bank. Like we haven't raised a ton of money at that point. We've raised about five hundred thousand dollars, so have the vast majority like you know, ninety some percent of the company is controlled by by me. And like my family's in town to help celebrate, which is really fun. We go to this like Thai restaurant for dinner, which is really fun. But like what's shocking is like how little ch life has changed. Like you know, I l still live in the same apartment, I still have no car, I still rent, you know, like very little of my life has changed despite the the financial windfall. And like one of the things I realize afterwards because you know, all these people are like, Oh, being rich is not that great and I'm like

No, fuck you. You just say that because you have money and you can't appreciate it, you dumb idiot. I'll be able to spend it really well. And then you're like, you know what? Like the journey of like the friendships I made with all the employees that I have and like a bunch of like most of the team is still there. You know, like when we were building native and we did you know, before the month that we sold the business, we did like a million dollars in net profit, which was insane. A million dollars in net profit. And I was like, you know, if a bus hits me on the way to work, I'm still gonna get to work because I love this job. Like there were so many great things that were happening with the business and it was that journey that was really amazing and like the thing that I really appreciated. And even today, I mean I'm still I'm still running native on a day to day basis. It's like the people that work there and how devoted they are to the business. That's amazing. Like getting them like seeing a bunch of people sit down and they're like, This is a problem, how are we gonna solve this? How do we delight customers? How do we make like you know, we had this contest internally to make another email funny and very human. And I was like, wow, these people like care, understand the business and want to make other like you know this company better. I have no idea how they got that way. I have no idea how they were motivated to do that and and they're that way and it's really fun to see that. And like that meant so much more than the money. And that's still surprising to this like even when I say it today I'm like

This guy's an idiot and it's myself saying it, but it did. Yeah. I tr I trust you when you say it,'cause there's a lot of people that say it that I'm like, Okay, you don't have to say the politically correct thing around me. It's cool to just like, hey, money is amazing. Yeah, I do this, this and this, this change. But when you're saying it like I believe you. I believe what you just said because I think you're wired like me and that You thought it would be X.

And it is good. But man, why is a lot m actually has made a bigger impact on me. Yeah, it just makes me happier. Like being in the team makes me happier. And and like you know, now when I go to restaurants, uh like one of the the best thing is I'm just like, I'll order whatever I want. Right. I don't care if this on trade is fourteen dollars or twenty two dollars. I'm like I don't care. I'm taking the twenty two dollar one'cause I want shrimp tonight. And like that's definitely something I do. Like you know I'll s I I try and spend a lot more time with my family, so I like a will go and fly and visit my family more often because I'm less worried about where the next paycheck is gonna come from and I'm less worried about the cost of airfare. So it's not like nothing has changed, but it's not like there's a Lamborghini sitting in my garage where I own a car. It's just like things are like easier when it comes to uh d doing what you want to do. But at the same time you realize what you want to do is build those businesses and that's like an amazing, amazing high.

if you were twenty one today, starting from scratch, you know, you have the intelligence you have today, you have the knowledge about the world you have today, but you didn't have the resources and you have all the p you know, time and exuberance of a twenty one year old. If you were twenty one today what business would you want to go start? What what space would you want to go into? That's a great question. And I think that it can be answered in a bunch of different ways. Like if I had no resources, I would say start tr drop shipping something. Find something that on Alibaba that you can purchase and sell more in the United States on Amazon or some other something else. And arbitrage that difference. I've seen so many people do that and so many people do that well. And that's a great way to get your feet wet into e commerce and understand what's going on without having any personal capital at risk. And if you're more ambitious and you're like, look, I can quit a job. I I can quit my job and I want to do something, I can tell you from me, I could never start a business until I could never start a new business until I quit my old one. I would say look, look, e commerce is amazing. You don't need a developer, everything is really cheap out of the gate, um figure out product market fit. And be obsessed with your consumer and you will find something that works. Like, you know, even if you have to like go through a bunch of products and you're like, you know what, I tried to sell them shampoo or I tried to sell them a toothpaste and that didn't work out. Now I'm trying to sell something like uh, you know, deodorant, go for it. Like the be obsessed with consumers.

And and that like the the fur the biggest problem that I think direct to consumer businesses have is that they like the founders disconnect themselves with customer service. Then you're as like, you know, you're just like these CPG giants where you're like, I don't have a I don't have a direct line of communication with people who use my product every day. We have that direct line. A thousand people email us every day and we're like, Hey, look, this is what they're thinking today. Um it gives us incredible insight into what we should be making and how to fix our product. So I think E commerce is amazing. I would do that again. I love e commerce. If you don't have any resources and don't have any technical knowledge, you can still do e commerce. The one feedback I'd give after you chose that if you chose that category is do not disconnect yourself with the consumer. Love it. And it if I'm listening to this and I'm like, This guy's awesome. I wanna talk to this guy. I wanna send him my ideas, I wanna send him my by my company right now, how should they get in touch with you and Really?

Who should get in touch with you? W who do you want to hear from? Sure. Look, if you're in e commerce and you're like, you know, you've got some legs under you and you're thinking about raising money or looking for an advisor or just want to bounce ideas off of please reach out to me. Like, you know, I love when people have like gotten skin in the game. I think the hardest part for me to is to have conversations with people who are still I used to be a lawyer who are still lawyers and they're like, I th I'm thinking about doing this. I'm like, look, if you're thinking about doing this, quit your job. Like if you want to do this, quit your job. That's the biggest telltale sign that you're in. If you're not in like don't like don't go around asking everybody don't I do this should I do this. Do it or don't do it. That's your own call. And like that depends on your personal financial situation, how old you are and how much energy you have and all a bunch of things.

But if you're in and you're like starting a business and it's got some traction and you're like, hey, how do I start scaling this? How do I get from that hundred K to a million dollars? Uh hap happy to answer any questions, happy to talk to you. You can find me on LinkedIn, certainly. I'm at Moy Z Ali on Twitter. Love talking e commerce. You know, you and I are in this room on a Saturday. I had a bunch of e-commerce calls earlier today. This this is what I like to do on the weekends. Love it. All right, man. Uh this is fantastic. Thank you so much for coming on. Thanks for having me. Colour, colo.

What you see above is a preview of the first minutes. One unlock costs 3 credits and covers this episode forever: full segment and word-level timestamps on this page, plus .txt, .srt, .vtt and word-level JSON downloads, as many times as you like.