Bootstrap Your Way to a Multimillion-Dollar Business

0:00I think something that people really discount is the importance of whatever they're learning in their day to day, whatever your nine to five is. What skills can help you as you're building your side business or your startup? Hey, I'm Shuang Esther Shan, and you're listening to Shopify Masters. Having a different perspective is not only key in building a thriving business, but it's also essential to creating change. For Lindsay McCormick, she wanted to help eliminate the 1 billion plastic toothpaste tubes that end up in oceans and landfills every single year. She had the idea of making toothpaste in tablet form, a foreign concept back in 2017.

0:41But Lindsay was determined to launch Byte, a line of environmentally conscious personal hygiene products that actually work. Since then, Byte has expanded into new product categories and became a multi-million dollar company, all because she leaned into what made her ideas different. Lindsay, welcome to the show. Thanks. Happy to be here. I'm super happy that you're here. I'm very excited to chat about Byte because the concept you had about tablet toothpaste was something that was quite foreign to our everyday consumers. Can you talk to the founders who are trying to enter into a legacy industry, something that's established, but they want to create a change?

1:29Absolutely. I think something that actually worked really well for me when I was creating Bite was the fact that this was my first business. I wasn't really intending this to be some successful business. I really just saw something that didn't make sense to me when I started looking into toothpaste and the way it comes in a plastic tube and there's a bunch of harsh chemicals, artificial flavors, ingredients that come in it. And I was like, I feel like I could do this better, right? I could make something that's better for the planet, better for our body. And I just went into making it.

2:03I bought a tableting machine. I started talking to dentists, dental hygienists, and I just, I spent a lot of time on YouTube and Reddit and just looking up, you know, what is a tablet? How do I make these things? And none of it, there was nothing in me that's being like, is there a good business case for this? It was more just like, I would use this product. Like, I think this should exist. And I have friends who would use it. You know, my background, I was in TV as well as surf and snowboard, which sounds like that doesn't, um, that doesn't mesh at all. But the dots kind of ended up connecting where it's like when you're surfing and snowboarding, you're traveling all the time.

2:37And same with when you're producing a TV show, you're traveling all the time. And so using little travel toothpaste tubes and caring about the planet just because being in the water all the time as a surf instructor, it all kind of came together where it was like, I know there's people on this planet who will use this product. I will use this product, so I'm going to make it. And I think that, you know, it's one of those things that if I was looking for a business case, I would have said like, wow, the biggest of the big guys are in this industry. I'm going to be going up with the biggest of the big companies.

3:08And not only that, but I'm doing something that in like business 101, you should never do, which is ask consumers to change behavior.

3:23so not only am I going up against the biggest people in the industry but I'm asking consumers to make a huge change in their behavior and I didn't think about any of that I was just like I feel like toothpaste should be in a tablet and I'm going to make it and I did and it was you know I started selling it online and other people wanted to buy it and I think what ended up being something that was, when you look back, something that seemed kind of crazy or really not like the best business case ended up being the white space that I was able to fill, right? Because the big guys were like, we don't want to try to change people's behavior.

3:58We know that people won't change their behavior. I didn't know that people wouldn't change their behavior. Turns out that was incorrect. People are okay with changing their behavior. And, you know, I think that was kind of like a very like long way of saying if there's something that you think you could do better or that is being done in a way that you can improve upon who's who is to say that you weren't the one to do it yeah and I think it's so important because we shouldn't view our inexperience as a weakness, it's actually giving us that optimism to try something out. But I also want to point out to your point, when you're looking at things from kind of the rear view mirror, you can see how things tie together.

4:45Being a producer in film and TV, that actually armed you with crazy good research skills. So talk to us how you prepared yourself and really educated yourself to gain more knowledge in the industry? Yeah. So I feel like if you can produce, if you can pull together a TV show, there's a lot of things you can pull together, you know, cause it's all, it's, you know, dealing with a bunch of different personalities and a bunch of different skill sets, pulling it together to make this creative vision that's pretty amorphous come to life. Right. And so there's a lot of hard skills and soft skills and being able to be calm under pressure.

5:21You really only get one shot to film, especially because I was in reality TV. So it's like it's happening in the moment. And you also have to know how to make it work, right? Like things never go the way you expect them to. And you have to improvise, you have to still figure out a way to tell the story to get it to get it going and to deliver a product that's on time, entertaining and on budget. And I think that that was something when I look back, was really helpful. And I think that, you know, there's a lot of things that I think something that people really discount is the importance of whatever they're learning in their day to day, whatever your nine to five is, what skills can help you as you're building your side business or your new business or your startup?

6:03Because I think that there's a lot of things that no matter what job you're in, if you're in management at a company or if you're in customer support, customer service, there are so many transferable skills into building a business because building a business takes so many different skills. What can you use and what can help you as you go? But I definitely think I'm really thankful to have had the background in TV and media because of that, because it's a lot of a business is storytelling and bringing complicated things together.

6:38Yeah. And like being really adaptable to whatever hurdle you might have. So early on, the biggest hurdle was that first investment into machinery that didn't quite go as planned. So yeah, talk to us about that process. Yeah. So when I was making the tablets in my living rooms, I decided that I wanted to make toothpaste that was better than what was on the market, but I didn't know if it was going to be a powder or a ball. And I really didn't want it to be a tablet because tableting machinery is actually very expensive. The cheapest one that I could get that was even remotely reliable was a thousand dollars, which at this point was a hobby.

7:15That's a lot to spend on a hobby. And it was also, you know, the ingredients and everything that you needed for that. And I had to also teach myself how to tablet. So I was very much like, I didn't want it to be a tablet, but after experimenting, trying to make these little, I literally tried to use coconut oil and powder and make like a ball and like put it in my toaster oven and like dehydrate it and be like, could I make toothpaste balls like with it? And like, none of that was working. So I was like, okay, I need to buy a tablet machine.

7:45So I bought one. It was a TDP zero. If you're familiar with these, which I'm sure you're not, because why would you be? But it's a tableting machine that you literally, you have to pull a crank handle and it makes one tablet at a time. And at the time I had 90 tablets per jar. So I was like slinging this thing around 90 times trying to get this to work. But so the one that I bought, I had waited so long. I had found a manufacturer in China. It was already really expensive and it showed up and it was used like just like rusted out disgusting there was no way and so I showed photos and the company was actually really great they're like so sorry I can't believe this happened but we'll send you another one but I was like it took like three months to get here I can't do this again because they're really they're a few hundred pounds and so that's when I started realizing like you know if you're going to do something make sure that you like think a little bit more ahead so I found a company that is out of Texas.

8:44They had customer support where I could fly there and I could learn how to use the machine. They would QC it. And so eventually I got the same machine for more money, but from a company in Texas where they were able to teach me how to use it. And that was invaluable. So that was that whole thing. You think something's going to be easy and it ends up being a little bit more complicated than you think. Yeah, but great learning experience. And And I'm sure that kind of opened the door to having connections with more manufacturing partners and also more connections within machinery. I think what's interesting here is you say it was a hobby.

9:20So you had a full-time job that funded this business. What advice do you have here for people who are having a normal nine to five? How can they balance fulfilling this dream, but also having a life and having a full-time job? Yeah, I think having a full-time job while building your business is like an incredible asset. You're able to maintain control of your business because you're the one self-funding it with your own money. I've really been thankful that I've been able to do that. The work ethic that you build while working a nine to five and then building your company at night, it's a really important muscle to build.

9:59And when Byte ended up going viral and really taking off, it's a lot of long days. you're waking up at eight in the morning and you're working until eight o 'clock at night, minimum, it's like a lot of stress, especially when it's like a growing business. But because I had been managing like a pretty stressful job as a TV producer with building bite on the side, I was able to, you know, when I was able to quit my TV job, it wasn't like all of a sudden I was taking on this gigantic responsibility. I had already been doing a lot for over a year and a half. And so I think that that was really helpful in terms of just like that, almost like muscle management, the discipline of muscle management of like, of building a company.

10:41But also the fact that you can really do things the way you want them to be done. You can build in a slow, sustainable way and you can kind of build the way you want to without the counter of raising money and then having investors around the table and having to spend that money very quickly and scale very quickly and hire all these people. And that is something that I just had never really had an interest in doing and was able to completely avoid by having a nine to five. Yeah. Because I think it's a lot to do with building up that mental stamina because you have to make so many small decisions that really shape the bigger picture for the business.

11:22And I love that you touched on fundraising and actually funding the business because this is the perfect segue. I think what's special about Byte is the fact that you are bootstrapped and you made conscious decisions to keep the business that way. What is your advice for those who are trying to manage their own cash flow, having their own runway and making sure that their finances actually go that extra mile for them? Yeah, I would say having online D2C business is the best way to remain bootstrapped. That's something that's from Byte from the very beginning. The first website was literally iPhone photos on a Shopify template.

12:05And we were just like, here you go, here's our product. When I say we, it was me, like, here you go, here's the product. We found people in the zero waste space who believed in my mission, who wanted to support it, who understood the problem with plastic and wanted to be part of the solution. And it grew from there. I was able to take those profits. When you sell online, the money's in your account a few days later. And I can kind of counter with what it looks like if you are in a retail environment. But when you're selling online, you sell the product and then the money's back in your account.

12:36So you're able to reinvest that into more products, into better customer support, into staff. And so I think that when you're in a retail environment, which is like big box or even kind of maybe some smaller scale things, you're on 90 day terms, right? So you have to have money that not only you're going to need to pay your manufacturer to make your product, but then you're going to get your product, which means you're out of your money until you get your product. And then you're going to be out another 90 days until you are paid from your wholesaler. And so it ends up being much harder to bootstrap and to have cash management as opposed to just building a really strong online business.

13:18And I think one of the things in our industry right now is it is more expensive and it is harder to build online businesses right now with the way that things are going with ads. But at Byte, we truly believe having that relationship with that customer and being able to tell our story and have that relationship is better business. And then adding in, being able to remain bootstrapped because we don't have any cashflow issues because of that really tight turnaround. So I would say that if you are starting your business from home, if you're starting it as a side hustle and you want it to be your main business, selling online is a really helpful way to go because of that quick, tight cash loop.

13:57Yeah, and you truly own your customer channel and you have that direct relationship with them. Really appreciate the bootstrapping advice. And I know a lot of listeners will appreciate that as well. we're going to take a quick break from our conversation to thank our amazing listeners for tuning into the show wherever you're listening now make sure to give shopify masters a follow give us a review with your thoughts on today's episode and we'll make sure to read all of your comments and appreciate all the feedback you want to share thank you so much so i do want to touch on the fact that you said wholesale does have this big pressure of investing in inventory and also your cash flow is harder to manage because you're investing in this relationship and bite has actually been very selective so talk to us about your philosophies there and who you choose to partner with yes so that's something that's been really important to me from the very beginning.

14:58So one of our things at Byte is I started this because of being an advocate for I'm vegan. I live a low waste lifestyle. Like this is something that's really important to me. So as we wanted to expand and get into wholesale, we wanted to be with partners that are really aligned with us. And the two major ones that we're with are Erewhon and Credo. Both of them have incredibly high standards to get in. They're in alignment with our values. And we still do deal with the, okay, you're out of cash for a little longer. Okay. But we're able to manage it. A, it's a smaller part of our business as opposed to our D to C business.

15:32So it doesn't, from a cashflow management perspective is not an issue for us, but also we really believe in them. And it's been really exciting to see us grow and them grow. And like they're opening more doors. We're acquiring more customers, but we're like supportive of each other. And I think that that's been something that's been really, really amazing to see because you get to align yourself with these companies that maybe were, when we first started with, you know, Air One in 2019, they weren't this like TikTok viral brand, you know, it was this, this kind of offbeat brand in LA. And I lived right down the street from the one in Venice.

16:03And I was like, I love what you guys are doing. And I just think it's very cool. And so I think the most special thing is to see brands that you really believe in win and be part of that. And so another thing that we, you know, we're also in small scale retails, like zero waste stores all over the US. And so we're able to kind of see how they're growing and we're able to say, how can we support you? And what can we do? A lot of times we have a bigger social media following than them. So we'll be like, Hey, we want to talk about your zero waste store in Austin, or we want to talk about your zero waste store in Oregon.

16:35And we're able to kind of push it out to our customers who are bigger, who might want our, like a bigger reach than what they have. And so I feel like it's kind of this really fun, really supportive system that you end up getting in if you decide to do business with brands that align with your values. It sounds like you found a network of retailers who share the same values and you actually had main pillars that you had in mind before launching Byte. Can you tell us why they were so important for not just yourself, but anyone going into a product-based business? From the very beginning, we wanted products that were not only better for our bodies, better for our planet and efficacious.

17:18So you can have the most sustainable product in the world, but if it doesn't work, or if it's not something that people want to use on a daily basis, you can't change much, right? So one of the things we wanted it, we wanted our products, like our packaging is very minimal. It looks really nice on your bathroom shelf. And like our deodorant cases, like this sleek kind of mirror finish. And we wanted things that you feel really good using, not only from a delightful experience, but then also with clean ingredients packaged in a sustainable way and efficacious. So we've done clinical testing our deodorant because we want to not only have something that is better for the planet, better for our bodies, but also scientifically backed.

18:02And I think that's so important because you're making it enjoyable. Therefore, we're willing to change our consumer behavior and they're also going to actually stay using these products because they're effective. And I love it. I love how everything ties together. So for those who might be kind of nervous, like you entering into a new industry before launch, and they're thinking about research, they're thinking about maybe some values or pillars that they want to have for their company. What is on a checklist pre-launch that they should have? I think the first thing is making sure that you make a product that you believe in.

18:49I know that sounds very basic, but once you get into the formulation stages, you're talking to manufacturers, there's going to be, as a founder, a million shortcuts that people are going to try to get you to do because it's cheaper, it's easier. I remember one time somebody was like, well, why don't you just put it in plastic bottles? It'd be so easier to ship. And I'm like, that is not the point. So it's like, first you have to make sure that you stand by your values, that you know what your values are. You make a product that are in alignment with it, then that you're able to communicate those values to your customers in a way that makes sense to them.

19:19I think that that's something that's really important as well. And then it's being able to reliably get that product to them in a way that is in line with your values. So like we don't do rush shipping. For us, it's the carbon emissions. But whatever it is, you want to make sure that you end the customer journey, get the product in the customer's hands and you maintain the consistency throughout. So I would say it's knowing your values, making sure you have a product that you believe in, making sure you can communicate those values to your customer and making sure it's consistent through the whole experience for them.

19:56I think those pillars are very important. And I think it's really interesting to think about how traditional toothpaste is packaged and you were mentioning how they're all bright and bold to try to grab attention. But I think that also helps Bite to stand out. So talk to us about your branding, packaging, and how you conceptualize the brand identity visually. So the idea is we have toothpaste tablets that come in refillable paper component that you can rip open and pour into a glass jar. So your first shipment, you get a glass jar and it has tablets in it. And then you just keep refilling those tablets with our compostable refill pouches.

20:35If you're going to have your glass jar sitting on your vanity for hopefully a really long time, you want it to look beautiful. And I think that's something that DTC brands, especially, we can really have something that is more understated. I think if you, actually, this is a great exercise. If you go into like a big box retailer toothpaste aisle and you look at what that looks like, it is a sea of red and blue and like the brightest colors like ever, because it's there to get your attention. And the thing is, is that like, that doesn't look really great in my beautiful, like earth toned bathroom.

21:12You know, those are the types of things where it's like, what gets your attention in store is not necessarily what you want in your home. And I think that when you're an online business, you're able to, you know, for us, like having our website, we're able to have something that is understated, but it looks like on the website, it looks beautiful. We're able to kind of really lean into the understated design of it and then also tell the story. So, you know, tablets are weird. People haven't really seen toothpaste in a tablet. So we're able to explain why do you want a tablet? How do you use a tablet?

21:43All of these things that for us on a back of a box would be harder to do. And that's something to kind of to bring this like full circle with our retail partners is one of the reasons we also went with like a Erewhon and a Credo is because there's so much employee education. Their employees really love their products that they sell and they'll tell the customers the story of the product, which is needed when you're selling a toothpaste tablet in a glass jar. As a business owner, it's understanding your product and then the confusion that a customer would have seeing your product and being able to kind of make close that gap.

22:18So whether you're putting it in a glass jar or a compostable pouch or a box or whatever any of anybody who's building a business is, it's like, okay, what can I do to make this make sense to the customer and make it fit in their life. I love that because I think when you say everyone is so bright to get your attention in a toothpaste aisle, I feel like having this different look also is a point of conversation and advocacy because if I'm visiting someone with bite in their bathroom, I'm definitely going to notice it versus a traditional tube. So I love that as well and how it ties into the brand identity.

22:57At the beginning, we talked about the lack of experience into personal hygiene products and all of that industry. But for your business model, it actually is really smart because you're creating a product that needs to be replenished and people will come back to. So that is definitely a win in a business investor's eyes. So I guess from your perspective, you didn't think about that in the beginning, but now you're also expanding into new categories in personal care. How do you approach entering new product lines now? And what do you think about when you do so? Yeah, it's very similar to how it was before where I'll work on something and I can use our deodorant as an example, but I'll kind of look at what is on the market and what I've been using, right?

23:48Like what's kind of, I've been like using that I don't love and I'll be like, okay, this is what I think we should do and we should change. And then we bring in the experts, which is kind of the same thing, like with our tablets, making these tablets in the living room, went into production, brought in, you know, got some dental like advice on what ingredients we need and then go to there. And same with like our deodorant where I was using cardboard tubes that like most eco-friendly deodorant comes in a cardboard tube. And I liked the brand I was using, but it was just getting like soggy and I couldn't get the lid on.

24:18And I was just like, wait, and it was kind of in a cylinder. so I'd only be able to stick like one finger up there and try to hold it. If anyone's used these deodorants, I'm sure they like know what I'm talking about. And I was like, wait a minute, like someone needs to make this easier. Like this should be a more pleasant experience. And I was like, oh, that's literally what my company can do.

24:40So like, okay, how would we do this? If Bite was going to make a deodorant and that was the first time we went from oral care into personal care, I was like, if we were going to make a deodorant, what would it be? And so we went into custom componentry, which we had never done before. It's, we've made like a, it's a metal case for our deodorant and inside is the cardboard applicator. So it's basically, it's very similar. So when you look at cardboard deodorant in the store, we have something similar, but you can actually put your fingers in it so you can get more up. So it's not just like one finger trying to like hold up the deodorant and it goes into the case and then the cardboard never touches your armpit.