228 - How 2 Guys Turned Baby Wipes Into a Million-Dollar Empire with Samuel Marcus Ne’bel

0:00Our first year in business, we did$150 ,000 in sales. Year two was like$172 ,000, followed by$270 ,000, followed by$870 ,000, then into$1 million and beyond. But it can be a long grind and you really got to love what you're doing. In Walmart alone, we brought 40 % of our customers that we brought to the category have never shopped the category before. So we are clearly doing something different and better than others. This summer, we did a summer PR box, and it's the Good Wipes Juicy Booty Beach Club. So there's a hat, there's a towel, there's product in there, and we send it to 300 to 500 influencers, and they repost it, and you get millions of organic impressions from that.

0:40And that is, honestly, has been our biggest lever.

0:46All right, I am here with the founder of Good Wipes, Sam Nebel. the thing that is blowing my mind right now is their product good wipes they've sold a crap ton of them i'm really excited because we're gonna be having a lot of puns today they are a personal hygiene product i think you can guess what it is i'm gonna let sam explain what it is but they're currently in 2.2 million households they were founded in 2013 and last year in the last 12 months alone they've added 430 000 households just from their walmart channel that's omaha Nebraska coming on board to the flushable wipes revolution. And it's mind blowing.

1:22Sam, did you ever think that you would be helping as many people clean down there as you have? Nick, I actually have thought that we would be helping this many people clean down there. I don't think I ever thought of the order of magnitude of thinking that within 52 weeks, we'd have 430 ,000 households, the size of Omaha, Nebraska coming on to join our brand. We've always had this desire to make wipe the world better. Did you say wipe the world better? That's the phrase. That's the phrase. I literally just came up with it. Oh my gosh, dude, that is, we're going to wipe the world better. I freaking, we're going to wipe the world better.

1:58You started in 2013. Your founding story is pretty freaking amazing. Like you've, you've grown like crazy. Obviously you've raised some money. You're the fastest growing brand in the, in the flushable wipes category, which is growing like crazy right now. It's like a$5 billion a year industry within 10 years is going to be an$8 billion a year industry. But take me back to the founding. How did this even come about? What was the impetus behind it? Before we had all the numbers and the data and the sexy glam behind it, it was a very unsexy category. I met my co-founder, Charlie, in the upstairs bathroom of a fraternity house at Florida State University.

2:31We were freshmen in college. We met and we said, we both use baby wipes. All these guys are using this savage, thin sandpaper, see-through toilet paper. and we said, let's embark on this journey to start bringing new people into using this amazing hygiene routine, and people initially thought that we were crazy. Was it like the scene in Step Brothers where you're like, wait, wait, wait, you have baby wipes? Did we just become best friends? Yes, yes, it was exactly like that, Nick, and we were, it was like the Spider-Man meme, and we're in the bathroom, and we're like, wait a second, we gotta tell everyone, so we start telling everyone, everyone thinks we're crazy.

3:13within 30 days, guys, girls, word spread, people would start coming up to us because we would have baby wipes in Ziploc bags and we would carry them around with us in our backpacks. And we were the baby wipe guys among, you know, being, being other entrepreneurial endeavors and journeys. Yeah. So it was, it was pretty wild. And did you become a baby wipe pusher? Were you like selling, you know, package packages of a hundred baby wipes? You like go to Costco, you get the big packages you you know piecemeal them down everything for free man just hey we're here we're it's a philanthropy we knew we'd make our money on the back end when we start a brand around it hey oh you made your money on the back end did you start it as a joke were you like hey this is fun let's let's let's do this crazy thing and like at what point was did you have the idea of maybe this could be a business yeah it was a couple years after college so charlie and i my co-founder Yeah, we started with a franchising brand called Complete Nutrition, ironically based out of Omaha, Nebraska.

4:11So we had spent a period of time there. We were traveling around, working for them as consultants while waiting to open up our franchise. And this idea kept gnawing at us in the back of our head in 2012 and 2013 that we could come to market and address these issues that we saw with ingredients, with lack of flushability from baby wipes being made out of plastic or long fibers. address the concerns that I had as someone with IBS, knowing that a lot of other my peers and Americans had it, Charlie with sensitive skin, and really come up with something that we felt would wipe the masses and bring this cool factor and this modernization factor of saying, hey, it's permissible to use wipes and we can talk about it.

4:54And so after we left, we left Complete Nutrition said, we want to start this company. We had no idea what we were doing in 2013. We started it out of my parents house in Orlando, Florida. Shortly thereafter, put one foot in front of the other hustled grinded to figure out how to bring this this this brand to where we are now, which is in over 14 ,000 stores like you and I were talking about earlier. You worked your butt off. You hustled and grinded. I don't know how many of them I'm going to get in, but I'm going to get in as many as I can. I think we're at like six right now. That's going to be the title of this episode is like, hey, this is a drinking game.

5:29Anytime you hear a play on words or a dad joke, a pun about butts, like just take a shot. What did you do in that first year? So when you made the decision, you're like, all right, let's go mom and dad's house. We're going to launch out of Orlando. Let's not do nutrition franchise anymore. What were sales year one? Oh my God. Sales year one. I think they were the first six months were like$42 ,000 total. That's the thing that, you know, I want entrepreneurs to, to understand. And there, by the way, there are so many people that I know that started with more resources or were way smarter about how they approached market and had a more relevant go-to-market and product-market-fit strategy than we did.

6:05But our first year in business, I think we did 150 ,000 in sales. Year two was like 172 ,000, followed by 270, followed by 870, then into 1 million and beyond. But it can be a long grind and you really got to love what you're doing. And by the way, it doesn't have to be as slow and laborious and tedious as it was for us. But if you really care about something and you believe in something and you're not just doing it for, hey, I see this opportunity that I'm going to exit in three years, knowing that it took us maybe five or six years to get to our first million or four or five years is something that I think people should really keep in mind that you got to be dedicated to the passion and the craft in order to be able to grow something.

6:50There were a couple of things at play here. There were a couple of kind of big macro trends. Number one, you were riding the wave for this personal hygiene. I don't even know what to call it. People using baby wipes to wipe instead of toilet paper. Yeah, that's right. Right. Which I won't divulge them, but somebody very close to me who lives with me 24 seven, it has been a, an avid user for years. So that's happening, right? That's a, that's a good macro trend. You have this other macro trend where people are being shipped subscription boxes. You probably remember this cause you're going to college around the same time.

7:20Do you remember when dollar shave club launched? I do remember when dollar shave club launched. Dude, like an amazing launch, irreverent humor. If anybody can go check out like their original launch, I don't even know what to call it, but like the subscription of, Hey, I can sign up. and every month I get my Dollar Shave Club kit. And like, oh, now I have hymns, which is for men because I can, whatever, fix my male pattern baldness, et cetera. So you had like these two things, but they weren't major trends in 2012, 2013. They were kind of like in the beginning phases of it. So you've like taken advantage of that over time.

7:52I promise I'm getting somewhere with this long-winded question. How did you know that that was going to be a thing? Like, how did you know that those trends were going to come to fruition? Or did you not know and you just thought, you know what? I like this business. I'm just going to go all in on this business. It was less about the model and more about knowing that, seeing the authentic residents of our peer group right in college, knowing that if we gave them a baby wipe, that they would take it and use it. And that there was that near immediate, that second trial coming back to us and saying, hey, I got to get more.

8:27I don't want to go to the store and get it. Let me get yours. It was that repeat situation over and over again. That's what gave us the confidence. And so that intuition, that gut that we had, that then as we materialized and professionalized the company, five years later, we started getting access to the data that gave us that rigor and that institutional knowledge that backed up our intuition to get to where we are today. Right. Understanding the size of the category. You launched the business on intuition, though. You didn't see the numbers until a few years in. Oh, yeah. Crazy. That is so crazy to me.

9:03Yeah. I feel like we, Charlie and I do feel like we've always been at the forefront of trends. At least it's something that we used to say early when we started the brand to say, Hey, we believe in our gut of all the ups and downs and sideways and personals and this and that. One thing I was thinking about this recently that has always felt true to myself. And I could speak for Charlie as well is we've had unwavering confidence that this brand would work and develop into the vision that we have for it. We've always known that since day one. We didn't know the roadmap. We didn't have the path there, but we were so convicted in every bone in our body.

9:40We never had to convince ourselves that this would work. It was all the details within that we didn't have the visibility to that we had to figure out along the way. And we're still figuring out things. We always just knew. And so I think we're fortunate to have had that conviction in the market and in what we're building? Well, I think people talk down on passion. They're like, oh, passion doesn't matter. Pick the right business. Passion does matter, especially when you're launching something in a new category that is, there's not a lot of adoption to it. And you've got to stick through things in the face of a lot of adversity.

10:13And you guys really, you'd been using the product for years. You liked the product. Or at least at the time, there was a big need for change because you can't just flush baby wipes down the toilet. Well, you can. You're not supposed to just flush baby wipes down the toilet. I think that was one of the funny things in my research just finding is like, is there like a responsible flushing federation? Was that, is that the name of, I was just going to say, actually, as someone who's on the board of the responsible flushing Alliance, I can't even say that you can, you can, you cannot flush baby wipes.

10:40And we have so much data that backs us up knowing that when, when we do wastewater surveys, if you go into the sewage systems of any municipality across the country, Northern California, Southern California, Jacksonville, Maine, Bronx, anywhere, London, that when you go into those systems and you start parsing out the particles, those sewer systems, what you will find is that over 99 % each and every time are either paper towels, feminine hygiene products like pads and tampons, baby wipes, and paper towels. I got to say this. I never believed that people actually flush paper towels until I was at the doctor's office yesterday doing a little, you know, pee pee sample.

11:24And I look in the toilet and lo and behold, there's a paper towel. And I took a picture of it. I'm like, I cannot believe people are doing this. Do not do this. Do not do it. You can't do it. But did you post to the responsible flushing federations, Instagram? Were you like, Hey guys, we can't be doing this. Let's spread awareness. I haven't yet. I need to figure out. I'm probably going to just post on LinkedIn with no contacts. I think that's what I'm going to do. The thing I love about your business is I've always wanted to have a company or start a company that I could do irreverent marketing with.

11:54So I'll give two examples. One was dollar shave cup club. You know, he's got the video where he's marketing it and he was like, your grandfather only used one blade and he was handsome as hell and you know, throws it. One of my favorite ads of all time. I don't know if you've ever seen the Kmart ad where they were advertising free shipping, bro. No, I got to go look this up. Oh yeah. These people in the store and they're talking to each other as free shipping and they go like this. I can ship my pants. Yeah, you can ship your pants. I can ship my pants right here. Really? Hey, Mark, it's free shipping.

12:26I just shipped my drawers. I just shipped my bed. You're like, wait a second. Did he just say what I, I think what he, I don't even, it's one of my favorite ads all the time because it's funny. It's a, like, you know, it plays on it. I think your brand is ripe for that. Did you know it upfront or did you just make a decision at some point? You're like, I got to lean into this. Again, that was that intuition. And we We were really, by the way, that Kmart commercial, I haven't seen. I need to see it. That sounds amazing. Way to go Kmart, wish you guys were still around in the US. That should be heralded for generations to come.

12:57We were very lucky. You know, Charlie and I, we like sales. We like marketing. We like being in front of people. We knew we needed help. And so I think it was a year and a half or two years into the business. We were able to bring on our creative director, Maria Gilbo. Maria G. The Hustlebee. She's been with us for nine years now, almost 10. Actually, I think 10, yeah, nine and a half years. She's been amazing. Maria B, the hustle G? Maria G, the hustle B. So like buzzing around. I love it, dude. I love it. She did so much for us. She does all of our packaging. She now has a design team at the company that really sets our brand apart.

13:32And we lean into that high aesthetic, high design, married with the irreverent, elegant copy, and creates a really unique formula that no one in the category is doing. It's actually, I think, really unique to consumer branding in general. Well, I mean, worked out for Dollar Shave Club. They got acquired by Unilever, I think, for like a billion dollars. That's right. I think like 10 years ago at this point or something ridiculous. So are you going after that Unilever money or what, dude? Is that the goal? We're focused on building the biggest and best brand that we can for consumers. That's what we care about.

14:03And we work with retailers to make sure that we achieve that. That's all that matters to us. In the beginning, what was your North Star metric? Because it would seem to me, you know, if you have a brand like that, you kind of would just just focus on marketing. You're like, oh, we could blow this up. If we go to Facebook ads or if we go to Google, whatever, pay-per-click, we'll just blow this thing up and the business will work. Was that your North Star when you started out or what? No, no, no. Okay. So, and this is something I want. I think I'm hoping that the audience takes away something that's important is while in hindsight, I wish we had this professional KPI that we have now, which is it's households, household penetration.

14:41For us, then it started out, it started as survival. I would say phase one, phase two, phase three of the companies, we need to survive. Yes, we have revenue goals. Yes, we want to grow by 50 to 100 % year over year, every single year from a revenue basis. But it's about survival and building a story that just gets us to that next level to get us to win. And so eventually we became focused on philosophy. So dollars per ACV per door or units per store per week to start in the retailers that we were in. What's ACV? sorry. ACV is all commodity volume. It's a weighted measurement across, let's say you say Walmart.

15:17What's your Walmart ACV? Well, if you're in 2000 stores, not every store is the same. Maybe a store in Miami, Florida might do a hundred times the volume of Spokane, Washington, just because of the laws of power dynamics of the population, right? So that's what ACV does, is it equivalizes everything for you. And so it wants to look at how much product are you actually moving out of the store, which is what retailers care about for a brand. So that was our, I would say, you have survival, then you have what's your velocity focus. And now we're focused on, hey, let's go get households. We know we're a great brand.

15:52Let's go get more households and get deeper within those households. So that was the strategy first is like, hey, let's go sell into these retailers and then we can go direct to consumer. So we said, hey, what's a way that we can grow Bootstrap as efficient as possible with a little of angel money. And we felt like retailers was the best avenue. And we would do a couple of retailers, prove out, a couple more, prove out, a couple more, prove out. It was very methodical. We were comfortable being a little bit slower back in that day, building a foundation. And also, quite frankly, Charlie and I's skillset was we understood and we learned how to develop relationships with retailers and how to work that system and ecosystem.

16:29Start learning how that works and knowing that that would be where the bulk of the business was anyway. So the first couple of years, if I remember correctly, you were like year one, 150, year two, 170, year three, 270, year four, 770, somewhere in those numbers. And then you hit above a million dollars. What was your main customer acquisition channel in those first few years? Because it sounds like you weren't doing the, hey, what was our ROAS? How much money did we spend on ads? It sounds like you're going the distribution model. What we began with was this idea that we were going to start going to these trade, like America's gift mart in Atlanta and just say, we need to sell into retail now.

17:06And because we didn't have a lot of money, I think we exceeded it with like$12 ,000. And we're like, let's just buy product and sell it. Buy product, sell it. So we buy product, sell it at these trade shows. You know, then after 18 months and going to 20 or so of these trade shows across the country, we realized this product should be moving a little bit faster. Like, you know, a retail pharmacy in so-and-so Colorado says that it's doing well, but they've only ordered$500 from us and ordered three times this year. We need to get more product moving. And so we partnered with this with a startup accelerator in 2016 called The Grandery out of Cincinnati.

17:42That's where we really learned this institutional knowledge. We got set up with Kroger to have meetings with them, to learn with brokers how to work within the systems of presenting what a retailer wants to hear. and actually providing us with strategy that we would take with us for the next few years to build out businesses that win with retail. We had mentors that worked at Procter & Gamble, worked on the world's biggest brands, global brand manager of Pampers, a number of other folks in that Cincinnati ecosystem, which is truly still the best CPG city probably in the world, maybe tied with Bentonville, just based on the dual factor of P &G plus Kroger and a number of other ones that have presence there.

18:21Was it just different back then? Because if I talk to anybody today, they're like, oh, dude, your customer acquisition costs can be so low if you go to Meta. They do such a good job of targeting and your ROAS can be four times, blah, blah, blah. Back then, was it different? Is that why you decided, hey, instead of the DTC, let's go and try to sell into retail? I think we were right at the early cusp when people weren't even talking about ROAS. People weren't on Meta. There was not a big e-commerce world. It was the first few were starting out, the Birchboxes, a few of those Ipsy, the sample boxes and Dollar Shave Club.

18:55And that was about it. I think Harry's started a few years later, maybe 2016 or 17, which is like three or four years after Dollar Shave Club. There really wasn't like a big ecosystem. And again, no one should forget all those brands raised millions and millions and millions of dollars to the tune of not five, not 10. You're talking 50 to$100 million for some of those brands that launched their customer acquisition. So whenever someone says, you know, it was easy, like, yes, maybe the ROAS were higher, there was less competition, but people were still utilizing additional incremental resources to achieve their goals, right?

19:35And I'm not demonizing that at all. I just want people to think about that. Yeah. Hey, I don't know if you remember this, but when we started this podcast, we entered into a social contract. I would spend time, energy, and money producing this podcast, interviewing these individuals, and giving you insights into how to build, buy, start, grow your business. And you would like, subscribe, and leave me a five-star review. Now, out of that, we both get to talk to really cool people and hear really cool insights. We both get a ton of value. But I just want to help you keep your word. So would you do me a favor?

20:06Will you go leave a five-star review for me on Apple or Spotify? It would really help. and if you want even share this with a friend a crazy stat is like 50 almost of all venture dollars raised go to google or meta because they need customer acquisition they need to grow the brand they need to grow awareness right like that it takes a lot of money to grow brand awareness so i totally get it from that perspective but many times like you're saying they're just pouring money into a fire and hoping that it works out as opposed to having a tactical approach let me ask you this so the the year that you went from like 250 to 750 let's just say triple the business how did you do that because there's a lot of companies that get to the low six figures and they just don't know how to scale or they make they might get a large purchase order and then all of a sudden they're like crap i i don't know how to fulfill this and so they kind of just stay stuck at this one two three hundred thousand dollar mark but you accelerated really quickly did you have good supplier relationships i don't even know like how you manufacture these Yeah, so we were doing some stuff overseas at that time.

21:11We had a global supply chain network. What we were doing was we would get these retail deals and then we would go sell them another. So we had some up and down. We gained some distribution, lost some distribution. It was actually in the feminine hygiene category. We ended up getting in there first because honestly, flushable wipes were not growing as much at that time to where retailers were letting it in. They say, yeah, okay. Then our first real big break was 2019 when we got into HEB, or maybe it's 2018 we got into HEB, and then more retailers. Then we got into Raley's in 2020, and Market Basket in 2021, and Hannaford in the end of 2021.

21:50We would add a retailer, a couple regional retailers every year, absolutely kill it, and have a better story to tell. Then Then all of a sudden, we were in Target with chain-wide distribution. I think that was two years ago. But 2021 was our first year that we launched in Target in the flexible white space. Walmart, we launched three years ago. How much of killing it is just because you're benefiting from tailwinds of, hey, this product category is growing? And how much of killing it is like, well, we knew exactly which spot on the shelf to put it on and how to communicate that to the distributors.

22:23I don't know anything about placing product into retail. So in my mind, it's like, well, you just put it on the shelf and you see if it sells. But there's probably more to that than than my just stupid perception. Right. So, you know, if you think of marketing, it's the four P's. It's price, product, placement and promotions. We mastered those. We absolutely mastered those and said, hey, we're a boot shop company. We have finite resources. We need to win on the four P's or we're screwed. And I think those fundamentals are really important. And so we did a really, really sound job of managing those four P's, picking the right category and coming with the right packaging approach to ensure that whether we were on the top, middle, or bottom shelf, that we would stand out on the shelf.

23:05And we've achieved that. Like I showed you, no one else has a pink rosewater package, right? And that stands out to consumers. We've even seen studies of some friends of ours on LinkedIn that show that in Target, our products are actually the most eye-catching. So we've leaned into that heavily. That was a huge amount of the tailwind. I think I was sharing with you earlier, Stat, that in Walmart alone, we brought 40 % of our customers that we brought to the category have never shopped the category before. So yeah, there's tailwinds, but we're actually bringing more new customers and households to the category than any other brand.

23:42So we are clearly doing something different and better than others. And I think part of that is due to, again, the bootstrap influencer PR box strategy that we're doing. And again, the four Ps and how we present ourselves on shelf. What's the PR box and the influencer strategy? I don't know that. I mean, I know what those words are. I just don't know what your strategy is. So our PR strategy, every, let's call it every one to two months when there's a big holiday or seasonality, we'll do a PR box really well designed. I don't happen to have one on me right now. Let's say for example, this summer, we did a summer PR box and it's the good wipes juicy booty beach club.