From College Dropout to $100M Brand Owner : A Founder’s Story

25:38So we felt like, let's just keep layering on whatever we need to do to fuel this growth. And then all of a sudden when the sales dried up, we're like, whoa, stop all superfluous spending. Like, let's like comb through this. Let's like get rid of everything and just be as lean as we can. because we started to realize we have no idea how long this thing is going to last. And the survival of our business relied on it. So we had all of this advertising that we set up and all this marketing and all this website copy. And the whole positioning was, we help you pack less so you can experience more. Now this messaging is useless.

26:14The meta advertising algorithms were all based around stuff that worked for travel ads. All useless. All of our best ads don't work. nothing works and our sales just tanked and we felt like we had to go into the war room and figure out like what how do you deal with this kind of like as much of the superfluous spending as we could and we just focused our energy on this slight pivot to focusing on the features of the clothing instead like how comfortable it is and breathable and anything that didn't really relate to travel, but it's like the thing before the benefit. There's a whole sales thing where it says features, advantages, benefits.

26:56So the features are just like, it's a t-shirt, it's this weight, it's this color or whatever. And the advantages are, well, it's antibacterial and it's odor resistant. And then the benefits are you can pack less stuff and you're live free or that's the stuff you want to sell on because people can put themselves, they can envision their lives with those benefits. And we always sold on benefits and we're like, now we're going to sell on features for a bit. And that was a really weird time for all businesses because while if you're in the travel business, everything is sinking. However, if you're in the e-commerce business, everything was growing.

27:34So more people were buying stuff online, but they weren't buying travel stuff. So we had this kind of weak messaging, but so many people were buying stuff online that we were able to kind of stay afloat. And we were used to this huge explosive growth from year one. But when COVID hit, at the end of that year, we grew 1%. And I remember looking at that and thinking, we grew. I don't care if it's 1%. If this was under normal circumstances, that growth rate would be abysmal compared to what we were used to. We were growing over 100 % every year since we started the company. And on 1%, I'm like, you know what?

28:14I'll take it. We looked at that as a win. And I think it almost helped make our business better and more bulletproof because we realized we don't need to spend on all these things we were spending on. We could be smarter and leaner. And that carried into the years ahead. We'll do 60 million this year. 60 million. Yeah. Which in and of itself is insane in under a decade. So in nine years. And what's interesting about your business, and you're talking about Meta, and you were very early to Meta, I'd say very early to paid ads there. And we're investing there in terms of customer acquisition and growth.

28:51And yet that still remains the predominant channel. We're spending more than$20 ,000 a day on Meta. A day. So in a way, what I find interesting is, yes, you had these challenges and these bumps in the road, but by and large, the business has still continued to grow at this steady clip. And in terms of the general foundation of the business is the same. It's still e-com. It's still D2C. Most of your customers are coming through meta. do you feel like there's a certain consistency to your strategy that you've held to that's responsible for the success that you've had? We're always looking for new opportunities in marketing.

29:36So it's not just Meta. Meta is just the biggest spend by far and it's done the most for us and we figured it out the most. We had a huge period where Meta was kind of flatlined. It still was pretty significant for us, but we weren't increasing the spend. And again, this entrepreneur communities I'm involved in, you end up meeting people who are like, what are you doing? Like, you could be doing so much more here. You should be doing more creative. And let me show you how this company is doing it. And I just learned things along the way. So with Meta, we just tinkered and tried to figure out how can we continue to add more ad spend while maintaining a good return on ad spend ROAS.

30:14And our ROAS was high. It was like over four. So I'm like, if we break even on the first purchase, I think that's worth it because the customers come back. We know that. With a four row ads, we're quite profitable on the first purchase. I'm like, just keep scaling, keep scaling until it's break even. So we slowly start scaling and scaling, adding more creative, finding winners. And we just ended up figuring out this system where like by adding more and more ads and making more iterations of the winning ads and killing the loser ads and just really staying on top of it, we can just add a little bit of budget every week.

30:54So we do one and a half percent every single week we add. And our ROAS has never dipped below three, like it just keeps going. So the challenges become like projecting how much are we going to sell and making sure we have the right inventory and all the inventory planning. But that kept just growing and we sort of figured that out with a really good system. All the while we're still trying. TikTok, Google's really good for us, influencer and affiliate. Some of these with pretty good success. They're not as big as Meta, but pretty successful. And some of them we're terrible at. We're terrible at TikTok.

31:30And we laugh every quarter. We're like, all right, what's our TikTok strategy? Because we just keep throwing money at it. We can't figure it out. But the way I look at marketing is like you're walking down like a hallway with a million doors. There's a million opportunities and you kind of got to just nudge the door open with your foot. See, is there something in there? Nope, just keep going. You have to never stop trying. And sometimes if you just keep doing that, you open a door and you're like, boom, here it is. Some amazing insider opportunity or win. And we're always just constantly trying new things.

32:02So meta, we've unlocked and figured out how to scale it. And that's a huge part of our business now, but we don't rest on our laurels because sometimes the algorithm stops working for a bit. We can't have all our eggs in that basket. So we're always looking, where are the influencers? Where are the affiliates? How do we figure out TikTok? Is Pinterest worth trying? We're always just trying everything. When you say that your goal is to break even on the first purchase, right? So let's say you're at net zero. You're hoping for the long tail, right? You're hoping for some lifetime value, some repeat purchase behavior.

32:39What do you do to win back those customers to bring those folks back for a repeat purchase? Depending on who you ask, you're going to get a different answer to this question. Some people are going to say, well, you got to have a really good email flow that cross-sells and this and that. This stuff all helps, but it really just comes down to quality of the product. That is the thing that gets people to come back. So we obsess over that because people will typically try one T-shirt and then they'll try it on and then they'll buy three T-shirts, a long sleeve and a hoodie. The second purchase is bigger or they're just buying more of the same.

33:18But if we were making a bad product, no one's coming back. So I think as far as lifetime value and retention goes, that's the thing. Everything else is fluff. The quality of what you're selling matters. Everything else is just an optimization. What do you think is the most promising acquisition opportunity beyond meta? If you were to have to predict. People are always looking for that easy answer. But I mean, it depends. It depends on what you're selling. If you're selling something like chocolate bars or something, you might be best off selling it on Amazon, you know, and doing Amazon marketing or maybe it's influencer stuff.

33:54It just depends on your business. I just don't think for any particular business, you can say this is the best opportunity. I think you have to do what I said is just try everything always. It's always on creative exercise to try to figure out how to make it click and find that product market fit. I think that's challenging for a lot of brands when they have, as you point out, have unlocked something. So if you know Meta is working and you can just double your ad spend there and generate north of four to one ROAS or north of three to one ROAS? Why kick in all these other proverbial doors and risk marketing dollars there?

34:34Even on meta, you're risking marketing dollars. So the whole strategy is to double down on the ads that are working and make other iterations of those. All the while, you need to be doing creative testing of new stuff. The best ads you have will atrophy at some point. If you're not filling the pipeline with new concepts and figuring out which ones are duds and which ones have potential, Then when your other ads atrophy, your whole account's going to dry up. So even on Meta, you're taking risks. That's what marketing is. It's taking swings. Sometimes you get winners, sometimes you get losers, but you have to keep trying.

35:09And it's fun, but you should be trying everything. So you're now up to$20 ,000 a day on Meta, roughly. What works? What doesn't? Well, when you spend$20 ,000 a day on ads, you have to be really on top of what's working, what doesn't. And really sometimes, here's what I learned. The stuff that you get most attached to creatively, that stuff doesn't work. The stuff that you think is sort of like really like pitchy and like kind of cheesy, that works. One thing unfortunate for me that seems to work is stuff with the founder in it. So they keep putting me in videos. And that gets uncomfortable sometimes when you're spending that much money on ads and people start to like, they recognize me, but they don't know where they know me from.

35:52So I'll be sitting in a sauna and someone will be like staring over at me. And I remember one time I was so uncomfortable. The guy was like, you're that guy from the internet, aren't you? Like, oh, I hate this. The trends change so fast. If you asked me this three months ago, I'd say the user generated content look, it's like that will work. And now it's starting to not. Pictures sometimes work. I can't tell you today what works and that be applicable in a month. You're constantly, it's constantly changing. and shifting. And the approach is that you have to be on top of it and see every single day how things are going and start dropping things and adding things and tweaking things.

36:31But in general, some things, some trends will stick. And I think the founders thing or the people that work at the company, that's doing really, really well. Dan, you've been the CEO of the business all the while, But you said earlier that this is the first time that you're actually going to behave like a CEO. When you have five people on your team and you call yourself a CEO, it's like technically you can put what you want on your business card. But are you really? Right. I think there's a difference between being a founder or an entrepreneur and a CEO. You have to figure out what a CEO is at some point because where we're at in business right now, all of these founder qualities I have, that optimism, that appetite for experimenting with new things, it's basically chasing shiny objects, is not that helpful to the team right now.

37:27I get excited by shiny objects all the time. It's still my thing. Every quarter I come up with new ideas of, we should try this thing. And it's not in line with the plan of the business, but it's worth talking about. But what the team really needs is me to remind everyone where we're going, what the vision of the company is, to make sure we're doing the right things to get there, to make sure they are looked after and they have the resources they need to execute, that they feel they have autonomy and they have my support and the team support. And I'm starting to learn that these leadership qualities of CEO are the things that are completely new to me that I need to develop.

38:06And I'm crossing that line from founder to CEO. And I'm loving it. It's a new challenge. And I want to be the CEO of this company. But I have to work really hard and learn a lot to be worthy of the team. Because the team is amazing that we have. So I feel like it's a whole new identity. I'm leaving like this entrepreneur founder personality that comes completely easy to me. And I'm learning that new skill set. So now I'm giving myself permission to be that and I'm trying to own it. And, you know, I used to be uncomfortable saying CEO and I felt like it was like it made me cringe to say it because I started saying it too early in the company.

38:47I didn't feel like a CEO. Now I feel like it and I'm going to own it and I'll learn to be great at it. And that's an everyday learning experience. It takes a very different set of skills and leadership traits to start something versus scale something versus optimize something, right? Like that profile is different, right? And very few individuals are good at all of those phases, right? Are good at the founding phase, are then good at the scale up phase, are then great at the optimization phase. I think that is a really tough transition for a lot of founders, which is why a lot of founders cycle out of a business and then a business brings on, you know, perhaps they bring on investors and they bring on a different CEO or a different set of senior execs or whatever.

39:38For you, as you step into that transition and think about the qualities that you need to be a good CEO, and you talked about the idea of having certain leadership qualities that you're working on, what does that mean? There was a phase where I sort of had to ask myself, do I even know what a CEO is? I started Googling it, putting it into chat GPT. Like, what is a CEO anyway? And there's so many different ways you could show up as a CEO and different styles. Some are very operational. Some are very marketing heavy. I really just wanted to figure out, like, what does a good CEO look like? what would I have to be for the people on my team to talk about me when I'm not there and be like, our CEO is, he's awesome.

40:21Like he established like the best culture in which we can work and thrive. And I remember we sat down with our VP product, who I think is one of the most talented people I've ever met. And one of our first one-on-ones, I asked her, I said, basically what I just said to you. I'm like, what would it take for you to think I'm a great CEO? Cause I'm going to be honest with you. I don't even know what I'm supposed to do. And she's like, it's this. It's just you give the time to like hear me out and talk and you want me to thrive. I don't micromanage. I have a lot of trust in the people. I feel like it's very important to give people autonomy and the feeling like they can make their own decisions and they can make mistakes.

41:03I get out of the way. I prefer it that way. Some people say it's hard for the founder to let go of the record. Take it. I don't want it. You do it. I hire people who are better than me at the thing. well, who am I to say like, no, this is how you should make clothes to a person who's done it for 20 years for all these amazing brands. I just know what our brand's supposed to be. So what I've come to realize is I just need to make sure that I'm fostering a culture where people feel like they know this is what our brand is. And you have autonomy in helping us achieve whatever these things are and do your work, do your best work here.

41:40We'll support it. and getting out of the way and just knowing that I should stay out of the way almost all the time, but know those times when I should go in there and help and be of assistance. It's just this process. I'm just learning day by day by day. There's always a zillion things to do. But one of the things I realized that is the most valuable is just being present, not overbearing, just there, checking in, giving praise where it's actually due and making sure the strategy is really tight. Like we know where we're headed, what we need to do this year, as far as like things we need to accomplish, metrics we need to hit.

42:17And then just asking the questions. Are we on track? Are we going to do this? How are we going to do this? Cool. That sounds like a great plan. Just being, I think I'm partly a cheerleader. Just like, this is great. And I mean it though. Like I really just, I see the team around me. I'm like, this is amazing. And I think that's the one thing that I have done really well. my partners have also have done really well, is we are thrilled to let people just do everything on their own without getting in the way. Over the course of the company's life cycle, you will have done cumulatively roughly$100 million in revenue.

42:52You'll do$60 million in top-line revenue this year alone. And a very large percentage of that$60 million, I think north of 50 % or something like that, That's coming from women only? Yeah. Two years ago, we launched women's and it surpassed men's already. How? Well, first of all, women buy a lot more stuff. That's the true answer. We had so many women customers before we had women's clothing because they were buying the stuff for their husbands, boyfriends, sons, et cetera. And we're getting all these emails saying, where's women's clothing? Where's women's? So that was why we did it. We kept getting emails.

43:30We kept getting Instagram comments, Instagram DMs, constantly saying, where's the women's line? I'm like, guys, clearly there's a demand here. Let's take a stab at this. And then it's just a matter of getting it right. But once it was there, just like launching our Shopify store, we had sales right away because we already had the crowdfunding campaign behind us. So there was like a bit of word of mouth that existed. Once we launched, it was off to the races. And it just took a life of its own. It wasn't hard to get into that market. it was obvious that the market was ready for it because they were telling us.

44:02Do you look back and say, why didn't we do this? I don't know, five, six, seven years ago. I never thought of that, to be honest. I think we did it at the time when we were ready to do it. I mean, of course I can say, oh, we should have gone in early. We'd have made more money faster, but it's just the, you know, the truth of the matter is we were designing this stuff ourselves with the help of a couple freelancers here and there because I was the core customer. Like I'm making it for me. This is obvious. T-shirts. The next thing we needed to make, hoodies, long sleeve T-shirts. I knew intuitively what needed to come next, but it was also not that hard to figure out.

44:38T-shirt, long sleeve T-shirt, hoodie. And I know how I want it to look. I know how I want it to fit. It was easy. When it gets into women's clothing, I don't know. Like I can't honestly say I know what the fit should be, the style should be. It's like I know who our consumer is. I know what the use case is. But I'm not arrogant enough to think, oh, don't worry. I know what this is supposed to be. I knew I didn't know. So when we started making women's clothing, we needed to lean on a designer who was – our choice was a woman who we felt understood, I guess, the ethos of our brand. and the aesthetic of our brand and lean on them.

45:17And so it was, you know, first it was a part-time contractor that helped us and then getting into having full-time designers on our team and building a design team. But once we were able to afford having that team in place, that's when the women's line took off because we had brilliant women designers who knew how to take our brand and design for the women in mind. And they lead the vision now. We've been putting this money into marketing and into our product development for so long that more and more and more people know us, more and more people have bought from us. And the more people that have bought from you and want to come back, there's just more people coming back, more people telling their friends.

45:57It's just more and more and more. So it's just, I feel like we've sort of hit this like exponential blast in the past year. I mean, we're not going lighter on the marketing, we're going harder, but it doesn't take as much to get more because there's just so much more of us out there. more word of mouth, more people coming back. So we've sort of felt this like kind of explosion in the past couple of years. Can you measure word of mouth from your female customer base versus your male customer base? Do you feel you get a better word of mouth from that demographic? You see it. With women's customers, you see more conversation online.

46:35I get alerts on Google from when people mention Unbound Marino anywhere. and I've noticed in the past couple of years, the frequency of Reddit conversations about our brand are way up and they're all women's clothing. Men talk less about this stuff in general, at least from my vantage point, but I see it. And also if you think about people who are social media influencer types or like to share the things that they bought, women seem to do it more than men. So I think there's a little bit more of the conversation around stuff. with our women customers that I'm noticing. I mean, this is not something I can measure with actual numbers or data.

47:17I'm just telling you, I do see it. It's very clear to me and very obvious. So that probably contributes a ton to it. The 100 million number to me, it makes my brain explode. It's so insane to me. And I feel like you're the type of person that regardless of whether the company is doing 60 million, 100 million, 500 million, you're still the same guy. Like, how has this changed you? Has it changed you? Zero. Zero. Unless I'm delusional. But sometimes I sit there. I had this moment two days ago. We had this amazing meeting in our warehouse with our head of product. And we're looking at actual first samples of all the stuff that's coming out in the next year and a half.

48:00And I couldn't even believe this was our brand. And as I was looking around this team and how organized it was and how unbelievable this product was, it hit me. I'm like, we built this? Like, that's insane. I was humbled by how unreal the stuff I was seeing around me was. And sometimes I'll look at the numbers and I'll see it's like, whoa,$100 million in total cumulative sales or what the revenue is this year, which we think we can hit$60 million in sales. I see the number and I try to put myself back to the beginning and think of how astounding that would be to me. and it is it feels insane sometimes when i stop and actually think about it but the day-to-day feels normal to me because it's still the same i'm still just calling up dima like dima is my business partner he lives across the street i see him every day we go for coffee we talk about the business it's no different than when we first started and the revenue was a fraction of what it is now it's just buddies solving problems and hanging out and having fun and now it's gotten bigger Dima the other day said it's like we're the garage band who finally like hit it big and like we're just on this adventure together so like there's moments where it's like you feel that it's like you're able to do more and it's like bigger and you see your product on the street and people know who your brand is and that stuff's like whoa that's cool but it's the same I feel like it's the same challenge, the same fun.

49:31It feels exactly the same today. We're just surrounded by more talent. So to bring this conversation back full circle, going back to the origin story with you and Justin at Biz, you start Unbound with Andrew and Dima. Justin's still running Biz Media. And to my knowledge, he has now joined you in Unbound. When did he join? I'm so bad with timelines, but it was probably two years ago now. and it's been amazing. Amazing. What is it about the dynamic in your case amongst best friends that has worked so well? I mean, you asked 10 people whether or not it's a good idea to go into business with your best friends.

50:11Nine out of 10 of those people will be like, that's a bad idea. Yeah. In your case, incredibly well. I think they're so wrong. It's insane. Conventional wisdoms, business and friendship don't mix. We're having the time of our lives. It's amazing. In fact, we have the time of our lives when the thing's failing. I've had little projects fail. Like, who cares? So we had fun doing this. I've been thinking about this a lot lately. I asked Andrew, like, why do you think this works? Like, really? By the way, it comes with challenges, too. But why do you think this works? Like, us working as best friends, running a business, like, why is that a good idea?

50:50When everyone says it's a bad idea. He's like, well, and this sounds like a very simple answer, but it's true. at the core. It's like, well, you like your friends, right? Like, yeah. It's like, well, isn't it fun to go to work with people you like? Yeah. Like that's great. You spend more of your waking hours working than you do anything else. Why would it be a bad idea to want that to be with your best friends? Now people say, oh, well, what if the business doesn't work out? Well, that's not a friendship issue. That's a business issue. And in fact, if you get into business with your friends, it's most likely going to fail because most businesses fail.

51:26Just don't blame your friends. Just give it your best shot. Make sure you have complimentary skill sets. And if it works, it's incredible. It's you get it every day, go through hard things and do it with people that you enjoy being around and have fun. And I think it's one of the biggest mistakes that as far as like conventional wisdom goes, that you shouldn't do that. I think everyone should take a stab at trying to start a business with their friends. I would even go so far as to say it's an advantage because you work with your friends and they come with baked in core value alignment. You guys have similar ways of being.

52:03You have similar ways of looking at the world. They say good business, you're hiring and firing on core values. Well, if you start it with your best friends, you guys start with a pretty good chance that you have alignment there. What's next for you guys? What's next for the brand? We're at the stage where some people think, whoa, should we be building this thing to sell? And I am so against it. I feel like, guys, this is so fun. We're making money. We enjoy being around each other still. We're not tired of this. I now feel like recently we've reset the vision and put the new goalposts because we got into this place where we've grown this eight-figure business.

52:44This is exactly what I wanted to do when we first started. I'm like, we'll build this business that makes money while we sleep. And it's going to be entirely direct to consumer. And I'll be able to go to bed at night and the cash register will ring and all that stuff. And one day, maybe it'll be an eight-figure business. And then I got here. Whoa, that's pretty cool. But now I'm here. And we had to reassess, well, where do we go from here? And I think when I look around at the team and I see how much talent is right around me at all times, I feel like there are some brands that become the greats, you know, they could be like one of the great brands for what they do.

53:24And I see us being there. And I'm like, that's sort of the next thing. It's like, how do we take it to the point where we're just kind of universally known and we establish a whole new lifestyle for Merino wool clothing. And that's us. Like when people think of Merino wool apparel, that's not the base layer for skiing or the shirt you go portaging and they think Unbound. That's like the premium, merino wool, high quality, timeless, classic kind of clothing. Maybe we'll have stores, maybe we won't, but I see us being that. And for the first time, I think we have the team that can get us there. And I want to be a part of that.

53:59I don't want to sell. I don't even get why people are so obsessed with selling. It's like, make some money. I'm like, just do the thing. This is the fun part. So I'm stoked on that. Incredible. It's been an unbelievable journey to watch over the course of nine years. It's really remarkable. Congrats, man. Thank you, man. And thanks for spending the time. Thank you. It's been a lot of fun. Thanks for tuning in to Shopify Masters. Drop us a comment and some feedback right here below. Make sure you're subscribed and we'll see you at the next interview.