How this one change made my Business £1M a month

0:00As much as you might hate to hear this, everything your grandparents and your parents taught you is a lie. Looks matter. Vanity is sanity. It's not really what's on the inside that counts. It's what's on the outside because beauty matters. In today's episode, I'm gonna take you through some of the most popular questions I've had over the years in terms of building heights from beautiful design aesthetics and why we think about that stuff and how to implement them into your brand. And we're gonna run through the very simple concept of how when you're designing a brand, when you're designing products, how to stand out in your category and win, because ultimately, that's what matters.

0:42Can you attract attention? So let's get through the most important questions. I'm Dan Murray-Serta. I am your host for today's episode. I'm not joined by my co-host Chris, because it's Christmas. He's still on holiday. He's probably playing his 14th game of paddle right now. And anyway, this episode is all about beauty and aesthetics. So out of the two of us, let's be honest. You want this Adonis teaching you today. Without further ado, let's get into it. So the first question, and it's a very common one, what inspired the Heights bottle design? Let's take it back. Firstly, why? Why do we need different kind of bottles at Heights?

1:19So from a starting point, my business partner, Joel and I, in our last business, we worked in mobile apps. This is really important to say. In mobile apps, you're running a business where all of the metrics are about bringing people back. If you don't bring people back to your app regularly for interactions, you don't have a business. So realistically, you track three core metrics, day zero, day seven, day 30. That means how many people have come back on the first day, on the seventh day, on the 30th day. Now, if you can figure out that and you've got a retention curve, and if you've got customers coming back, enough customers over those periods, and you're constantly trying to improve how many people you can get on day zero, how many on day seven, how many on day 30 and everyone in the company sort of works towards coming up with initiatives and ideas that drives that kind of behaviour.

2:08Why this is important is because this taught us about how to design products around everyday habits and how to build up habits and behaviours from people that actually make an impact on your business. So move over to supplements. When we first started in this industry, we went and did a load of customer interviews. If you're new in your space, the first thing you need to be doing is understanding what the typical customer behaviours actually are in your industry. So in supplements, because Joel and I were not people who understood this space, we went and did 200 customer interviews and we did them with lawyers, bankers, accountants, people in private equity, traders, and journalists.

2:55And the reason we did it with those categories is because we thought those were industries with people who need to be right a lot of the time. So entrepreneurs can sort of go around and find out, as they say. But what people in those professional industries can't really do is the same thing. They need to be right most of the time, which means they need to engage their brain a lot. They need to think a lot and they need to take care of themselves. This is the working theory. So we thought they'd be a really high quality and interesting group of people to ask these questions to. And we went and asked them if they took supplements.

3:25And the ones who said that they did, we asked, you know, very open questions. Can you tell me what supplements you take? Where do you take them? What time of day? What are your general habits and behaviours around them? What we learned was out of the 200 people, pretty much everyone had the same behaviour, which is they all went and bought supplements at the beginning of the month. they all started taking them for the first few days of the month. And that behavior would kind of taper off. And by day 30, most of the people who started on day one and still made it through to day seven had not consistently taken their supplements every single day until day 30.

4:00And we thought, that seems really strange. So no one's forcing anyone to take supplements. Every single one of these people has decided to buy the products based on their own research and their own understanding of why they want to do it. And supplements are kind of a thing that if you're going to take them, you should take them every day because you've identified that you have gaps in your diet and you have a personal reason as to why you want to take them. So why would you stop? And the same thing kept coming up. If these people took their supplements in the office, they went in a drawer. So they went on a drawer and they have this whole, you know, some supplements have to be taken with food, some didn't.

4:36So then some of them, they were remembering to take them in the morning first thing, but others, they had to take them with lunch. And then someone, you know, Sally from accounts comes over and is like, do you want to go grab a pret sandwich? And you're thinking on, you know, in the moment you would go and get it and you'd forget to take your supplements. You'd come back an hour later, you realize you've got to take your supplements with your lunch. So you can't really take them now because they need to be dissolved in fat. And so you're like, oh, right. Well, I sort of forgotten today. Hopefully I'll remember tomorrow.

5:00And, you know, in, um, in atomic habits, you know, they talk about this a lot, but essentially you can miss one day, but if you miss two, you're kind of screwed. You've got to start all over again. That's basically how habit formation works. So you need to be quite diligent on this stuff. For people that were at home, there's also a different story. People had their supplements and they put them in a supplement cupboard and they tried to make the supplement cupboard as obvious as possible. However, no matter where the supplement cupboard was, after a few days, it was out of sight, out of mind, and the behavior was just lost.

5:31So we'd never really thought about this as a problem. We just assumed that what would matter is what you put inside the product. And of course that does matter. But for us, that became a question of what to worry about later. When we were designing our very first product at Heights, which is this bottle, we really fundamentally thought to ourselves, what does, and we called this person an office influencer, what does the office influencer keep out on their desk? What does the person that other people respect in the office like to keep on their desk? What are they proud of showing off about who they are?

6:04Quite often it's stuff that represents some kind of positioning around probably their healthy habits, the things they want people to talk about and they want people to know about. So we thought about designing a bottle that stood out from everything else and also had to be functional. So on the functional side, we live in the UK. We've got post boxes that are a certain size. So we wanted our products to be delivered through the post box. That is one thing. We wanted there to be enough for 60 capsules because actually it's such a potent product. Most of the products people are buying are 30 capsules a month.

6:36Ours was 60. So it needs to be practical. it needs to be small and slick and beautiful and is unique design. How we actually initially designed it, for anyone that hasn't noticed, is as a brain. It actually looks like a brain when you hold it like that. This is a little brain stem. This is the bottle. That was our original thing. We also had the whole doubling up as a light bulb, you know, for your best brilliant idea of the day. But then in reality, when a lot of it came down to it, the most practical way to do it was this. And so we sort of were like, well, you know what? It works. It's functionally designed.

7:09It's beautiful. And it does work. And one of the reasons it works is it's so completely unique. No one else has a bottle like we do. And no one else has anything that even attempts to help you remember with a visual cue how to keep something out of the dreaded supplement cupboard or that drawer in the office. And we took all of our influence from the beauty industry. So when I'm designing products, I like to think a lot about, less about what my industry is doing because my industry is typically the place where ideas have gone to die already. That's why there's an opportunity. So what ideas can I borrow from another industry?

7:45The beauty industry, particularly perfume bottles, does this so well. It is almost indistinguishable and impossible to understand how something smells inside the bottle and what they spend most of their money and marketing budget on are these beautiful bottles. and it works. It works so well. People will just buy bottles. Whether they like the smell or not, whether it's their favorite or not, it's sort of secondary to how beautiful it looks on their bathroom counter. I noticed this behavior in myself. I noticed it in my wife. I noticed it in other people. I thought the same thing must be true about supplements.

8:19I would say with results, it is. So just to take you through the numbers very quickly, when we started, we understood that the typical retention rate is something like this month, one to two. If a hundred people buy supplements in month one, only 40 people are left in month two, which means that 60 % of people have churned in the first month. That is the global average of supplements from month one to two. With heights, in our first few months of selling the product, that number was 8%. So 100 people buy in month one, 92 are left in month two. And everyone that we work with, all of our investors, and everyone was like, that is early numbers.

8:56As you grow, that number will change drastically, and you're going to have a real problem to sort out. Been running Heights for four years now. I can tell you, we've tried to work out many, many, many things meticulously at Heights. The one thing we have never had to spend any time on is retention. We are, like I say, four years in now, our retention number is 9%. So 100 people buy in month one, 91 are left in month two. And we've just gone past 100 ,000 customers. So these are globally best in class metrics. And of course, I think what's inside the bottle really does matter. What's inside those capsules really matter.

9:36The whole packaging of even the pills has been considered deeply. but I think the single most important decision was made right up front, right at the start with a bottle design because out of sight, out of mind and what Heights Vitals does and what the Heights philosophy has enabled is unique bottles that keep products out on people's counters and as a result, they actually see the product on a daily basis and they remember to take it. It's as simple as that. We've made taking a daily habit principle and made it super visual and easy for people. And any consumer company that focuses on how to make something beautiful, well-designed, high quality, and most importantly, above anything, simple for the end user, the customer, is going to win.

10:28So we're, like I say, over 100 ,000 customers in now and we don't ever work on retention because we simply don't need to, probably because of our beautiful bottle design. So let that be the first principle for you. Think about your category and think about how you can stand out and how you can find a way to be different to the competition. So there is one ongoing packaging fail that we've had at Heights. You might notice actually these three bottles. Obviously the one that really stands out here is the least beautiful one. It's this tube. With probiotics, that is a category where to get the the evidence that you need, the claims that you need, you have to have at least 18 months of evidence.

11:09And so for a probiotic product, we're only able to get the claims and the evidence that we want with basically an aluminium tube like that. So we do have an alternative bottle for the probiotics. It's still in testing and it has been for a long time, but it's created a sort of incoherent and inconsistent design aesthetic for the brand. And it's a really interesting thing because we take that stuff so seriously at heights and we think it's really important. But at the same time, there is a constant, you know, to and fro about thinking of yourself as a brand, which is, is your job completely to focus on aesthetics or is it to focus on progress?

11:49When you have a scientific product like this, you know, there's a good enough reason as there was for us to bring out the product in its current form because 18 months extra seemed like a ridiculous amount of time to not have a probiotic out there for. So I guess the first packaging failure is to assume that just because you do something beautiful, consistent, aesthetic, that it will always scale at all times. I think that there is maybe a good argument, depending on what category you're in, to be willing to make some compromises if they're pragmatic and they make sense for the customer. Okay, so this question is basically about how much money should you put into design really as a startup?

12:24You know, what is a practical amount? Now, it's a really good question. I think it's a really hard one to say, obviously definitively you should spend X amount of your budget like you do in other things. What I would say to you is at all times as a startup, you are a challenger brand. So on a fundamental basis, your job is to stand out in a busy category. Anything you can do and invest in that is going to make your product stand out against the competition and make you win over the hearts, minds, and souls of your customers is going to be a worthy investment. Now, if you are, for example, creating new products all the time and you're always going to have to have like these really jaunty different design aesthetics, et cetera, it's not going to be possible.

13:15I appreciate that. And there's also times and really good examples where brands have absolutely managed to build a really strong foundation with unique design. And then they've essentially scaled through a more homogenous design and an innovative business model. So I'm always reminded of someone I learned a lot from in Alan Barrett of Grenade. When Grenade first came out, they had, and not many people will remember this, they had a Grenade bottle. That was their unique design. They very much, like Heights, had a completely uniquely designed bottle. And they backed themselves for having essentially a weight loss supplement, which was inside this grenade bottle.

13:56And the idea was, you know, it sort of exploded like a grenade. I think that was probably a metaphor for giving you the shits. But anyway, the point being, they stood out in the market and it really worked and it took them to a certain point. What they supplemented that with then was obviously they did big PR stunts. They got a tank and they sold these like these grenades and they threw them out from tanks and all this kind of stuff and made a really great noise around it. But when it came time to actually expand the brand, that wasn't really a good brand extension for them. There was a limited amount of customers who'd be interested in that.

14:29This also doesn't work in retail. So they use this whole entire strategy as a springboard to eventually just create essentially healthier protein bars. Well, actually sort of healthier chocolate bars, slightly less healthy protein bars, but they did a really smart job of innovating essentially the chocolate bar space by doing 30 grams of protein in a chocolate bar. And they weren't trying to say it was overly healthy, but it was definitely healthier than a chocolate bar. And they use their innovative brand positioning that they'd earned at that point. And they were able to get in front of all the other chocolate and confectionery brands by providing a really competitive margin opportunity to the sellers, right?

15:09So to the retailers, to the petrol stations, especially. And so just because you can use design to stand out at first, it doesn't mean that design and aesthetics need to be the strategy that carry your brand all the way through. But that is a perfect example about how they got out the blocks. If they'd have just had a product like everyone else, they never would have afforded the opportunity to then create the chocolate bars, the protein bars, and eventually sell to Cadbury's like they did. Right. That just would not have existed for them. so same thing for brands like heights same thing for a lot of other brands which is your job is to go from absolutely no one knowing you to getting a footing on the ladder to getting your first step up there now from that point whether or not you decide to continue with the design or meander from it and follow a different strategy that's up to you but the first job is to stand out against the competition.

16:04And so how much budget should you put into it? And how much is that worth to you as a company? Very hard to answer, but I would say it's at least worth investigating with your time. And to put things into a practical point of view, we invested a lot of money. I think we invested 40, 50 ,000 pounds into tooling and bottling at the start. And it was a huge risk. However, because we'd done our research, like I said, there's 200 customers at the beginning because we'd heard the same things over and over again, because we could see no one else in supplements full stop globally creating a different bottle.

16:40It felt like such an obvious opportunity to us. And that felt like a risk worth taking. So you need to evaluate your own category. Is spending that kind of money going to make you stand out amongst everyone else? If it is, just like us, it's probably a good investment. Okay, so there's a question in here, which is about how do you know if your packaging and design scale? So what might be good for launch, might not be good as a company scales? Now, this is a great question because actually I think that is a problem for heights. This first product, Vitals, is actually moving into a more similar bottle to the magnesium because we learned over a period of time that the bottleneck here is actually a bit obstructive to customers.

17:18And so we've designed a wider neck here on this bottle. Both of these products have 60 capsules in them. So you can see that this one's actually slightly more sensible. And if you're listening, I'm pointing to our magnesium one, that's the slightly updated innovation on the packaging design. Now, in reality, for us to change our supply chain and to change all the different fundamental basis of what was going on with vitals, we needed to get to a certain volume. So obviously, now we've hit a certain volume of customers where making these kind of decisions starts to actually also create more opportunity for us elsewhere.

17:54So this magnesium bottle is also a better design from a filling point of view. As crazy as this is, vitals, beautiful design, outstanding. We've won design awards, like global design awards for this and everything else. However, it has to be filled by hand in factories. So it can't go on, the final part of it could not go on a machine process. So there's also a cost attributed to that. And as we scale and we get to a certain size, it becomes stupid. Magnesium, however, that bottle lid is actually wide enough to be filled by a machine. So the economies of scale and the efficiencies for us matter a lot at this point.

18:31So we are, as of January, when you'll be listening to this, moving from this bottle to that bottle. Now, the next thing to say is that it's not clear to us yet if either of these bottles would be OK in retail. This one would, this probiotic bottle here, because it's slightly closer to what retail shelves are willing to do. Now, what these two bottles would work for is visually appealing to people in retail. So I think customers looking for heights, seeing heights would be like, damn, that looks great. It looks better than everything else. I'm interested and I want to buy it. However, actually, the way that retailers stock their shelves is something that you also need to understand.

19:12And they are typically done on a essentially per centimetre or per inch basis. So the fact that essentially a Heitz Vitals bottle would take up two, maybe three columns worth of products for other people would become less attractive to retailers. So we design the perfect products for direct to consumer and with a direct to consumer subscription model in mind. If and when Heitz needs to think more about how we distribute through retailers, we might have to actually rethink our bottle design fit for retail. So that is something definitely worth considering, which is how you currently have your product set up might really work for one kind of world, but may not for another.

19:54And at some point you need to start thinking with distribution in mind. And for Heights to ever be an enormous brand, we probably do have to think about retail, which means at some point we'll have to think about what this looks like in a retail point of view. Okay, so there's one here that's about, you've worked with designers throughout your career. So what have you learned about communicating your vision to creative teams? and are there any tips for founders working with designers? One thing I will say about working with designers is they are as close to founders as you're going to get in terms of like their creative output.

20:25What does help is giving some context of who the end user is in mind and what problems you're looking to solve. For us, it's about, we need to be so beautiful that we want to pass what's called the wife test. So we want someone's wife to say, yes, this is beautiful enough to keep out on our kitchen counter or on our bedside table. You know, you want your wife to think this is aesthetically pleasing and their beautiful home. If you can pass that test, then you've definitely passed the test for a supplement bottle design. One bugbear I have working with designers is I'll find that designers often will present you work and go, do you like it?

21:02And you're like, well, yeah, objectively, I like this, but what am I comparing it against? So do I like it more than something else? Do I like it more than other options of things that you could have shown me? Or do I just like this one thing that you're telling me is perfect? No matter how many designers I work with, and however many companies, this is a common issue. So as a founder to speed up a process, I think asking for a variety, four or five different versions of the same concepts is very, very important, like the specificity of your brief. And then also, what kind of variation you're looking for?

21:34Is it something modern versus something art deco? Is it something that is designed for a certain demographic of customer or designed to be in a certain room over another one. You know, design this for a living room or a bedroom or a kitchen is a good example of saying, show me three different versions of the same thing. So I think it's just about getting granular and specific with designers and never just accepting the option of, do you like this one amazing thing? Because, you know, they're putting you into a position where you can quite easily offend and damage their ego. And the best option is to explain the thinking behind why this version is better than other versions they present you with.

22:15All right, so an important question here, which is talking about product aesthetics. Can great design actually save a mediocre product, or is it all about having both substance and style? I think this is a really good question. I can't think off the top of my head of any examples of brands that are just saved by great design. On a fundamental basis, you have to have a product that does the job that's expected for customers. You know, a nice analogy of this is movie trailers. You might see an incredible movie trailer with all of the different actors and stuff that you want in there, etc, etc. Brilliant poster.

22:50All the packaging is amazing. If the film's crap, it still bombs because everyone goes and talks about what an absolute load of garbage that film was. So it doesn't work. You can't really genuinely over hype or over produce a product that doesn't actually have substance on the inside. I think that's the same with heights. Like at the end of the day, yeah, it's great that people remember to take it, but if people aren't feeling the benefits of our supplements, they're not going to carry on taking it. Like we're not a design charity. They're not like something that people desperately need to have out.

23:20They need to be remembering to take the products. And so there is a very practical side to this, which is design is your unfair advantage. Design is your way of killing the competition. Design is your way of standing out in a noisy category and giving you an opportunity to win. But if you don't follow through the highest quality product inside and the best service to your customers, you're never going to win. That is a fundamental game that you're going to lose. So it's all about trying to be focused on the core principles of why your product is great and why it's going to serve your customers best.

23:56And then adding an edge that makes you unbeatable and kills the competition and essentially makes you the market leader. The reality is first impressions happen in milliseconds and great product aesthetics are an opportunity for you to tell your brand story before anyone has even opened their mouth. If you like this episode, please share it with someone who is going through this right now, who's in the early stages of building a new product or brand and let them know that beauty isn't just on the inside. It's what's on the outside that counts too. And you might actually help them win and stand out against their competition in a busy market.

24:34Don't forget to hit subscribe, drop us a comment if you like this episode, and of course, follow us on whatever podcast player you're listening to us on. We will be back with a new episode next week. Thanks for listening.