How Glamnetic Went From $1 Million to $100 Million—And Nearly Lost It All in Between

18:12Kevin Gould:This is debt financing through Clearco? Exactly. Like we had, I mean, we've been through them all. We've had Clearco. We've had Amplo. We've had, you know, the typical founder journey where we've had Wayflyer. We've had three or four of these different vendors over the years. And they're great at that period of time. But if you buy a bunch of inventory in one category and now have to scale another category, you're going to run into a cash crunch. So I think as we went into nail, we had to make difficult choices on how much we ordered and when purely from the basis that we didn't have enough cash to do it.

18:46Kevin Gould:And so we actually had to be way more conservative as opposed to when we were scaling Lash, we were a lot more aggressive and we got stuck with a lot of inventory. And so I think it was a great learning lesson for us when that happened to us in Lash because it forced us to be a lot more strategic about picking points of where we see opportunity and then being a little more conservative on, you know, on other SKUs. And Nail is a SKU intensive business, right? We have over 600 SKUs on the site now, right? So you kind of have to pick and choose where you're going to lean in and then where you're going to have to run lean because we're not fortunate enough to have enough cash to buy everything that we want.

19:26Ann McFerran:What is it about nail that's attractive? So like to me, it's complicated as a category. It's SKU intensive, as you mentioned. I would think it's got to be pretty damn competitive. That's the other thing. So you're constantly having to be aware of your competitors. There's, I don't know if it's a race to the bottom or not, but how do you differentiate yourself?

19:48Kevin Gould:Yeah, I think you're totally right. It's a highly, highly, highly competitive category. And it's funny because we, you know, kind of cut to four or five years later after we launched nail, we're now one of the biggest press on nail brands in the world. It's weird making that transition from, I still feel like we're a startup in the space, but I know that these other brands that are trying to catch up to us, look at us as like the incumbent, right? Like now we're one of the top brands in the category doing over a hundred million a year. and the perception from all these competitors is they're trying to come and eat our lunch, right?

20:18Kevin Gould:And so I'm very mindful that this is a super competitive category. I think that where we've always stood out is not any one thing. I think that Anne is incredible at quality design of the nails and being on trend. And I think in the nail category, it's really important that you have an evergreen core of nail styles that are always on and they last forever. And you infuse with that the other side of it, which is infusing newness into the mix. And so we do a lot of seasonal collections. We do a lot of collaborations. We do a lot of limited edition drops, but that supports the long tail of all of the evergreen and core skews that we know sell over and over and over again over time.

21:06Kevin Gould:So there's this element of stability through a core collection infused with this like fashion-like element of trend. And you have to figure out the way to kind of nail both.

21:20Ann McFerran:Can you point to your social media to assist with this? I mean, can it act as a forecasting tool in terms of what is likely to be next, so to speak?

21:31Kevin Gould:Oh, 100%. Like we have a Facebook group called the Glam Fam with 40 ,000 members in it that are like our diehards. And I think that, you know, there's, there's proactiveness of us surveying them. And then there's just like, their proactiveness of them telling us what they want. And it's really like this incubation of ideas that we, we see what they want, what's trending in the market. And then we kind of, you know, we do a lot outside of that now from a data and analysis perspective, but never discount like the qualitative feedback from your diehard customers of what they want to see. And that's been like an amazing source of ideation for us as we think about how we build new collections.

22:18Ann McFerran:Yeah, that's very cool. Going back to what you were saying earlier about the importance of team as you're scaling, you at some point bring on a cfo a coo so chief financial officer chief operating officer and then a vp of retail when do you make these hires and do you feel like that was the right time

22:37Kevin Gould:to bring these folks in yeah different we have a pretty built-out leadership team now and again like kind of trying to take this back to like early stage founders the hardest part it's at different stages of the business the hardest part is always going to be you need more people than you can afford at a certain time. So like when you're a$10 million business, you can probably afford like one really good, like high level person, and you're having to kind of fill in and wear a lot of hats. And so we kind of strategically did it over time, we kind of skipped that 10 million step, we went like one to 40 really quickly.

23:10Kevin Gould:At the time, we brought on someone to run the retail division, we brought on someone to run growth marketing. And then I've had, you know, with me for the last nine years now, my like right-hand guy, who's our CFO and COO. Um, so he's been with the business since day one. And then over the years, we've kind of slowly built out the team more. Like I think, um, again, as a founder, you have to pick and choose probably the areas that you have the least expertise in are the ones that you should try to fill the holes and gaps first with people that are smarter than you and have more experience in those categories.

23:43Kevin Gould:And so that's kind of the, the way we tried to do it in where I didn't have a ton of retail experience at the time. And I knew I didn't know what I didn't know. And I knew that we needed to bring on someone really strong that could lead the charge on retail. And so we brought that person in.

23:58Ann McFerran:What about on the supply chain side? Have you always maintained the same relationships with your manufacturers?

24:05Kevin Gould:I think the most interesting part of supply chain was we had to very quickly, I think on both sides, right? Because it was COVID and most of our manufacturers are overseas and, you know, in China, both sides had to create a trust level very fast because on the Lash side of the business, we started at this small vendor with them when we started and then imagined for them like how quickly we're scaling. And so, you know, I think that we had a few trusted suppliers on both Lash and Nail that we worked with for a while. The challenging part was not being able to get out there and go there during COVID.

24:43Kevin Gould:And so like, it was really hard for, for Ann and the product development team trying to develop products all virtually. And it was a huge unlock when we were finally able to get out to see our suppliers and like deepen that relationship and having amazing relationships with your suppliers is super important because there's going to be problems that arise. And like you, um, the value of relationship equity is real.

25:08Ann McFerran:Where are you going? Are you going to China?

25:10Kevin Gould:Yeah.

25:10Ann McFerran:Yeah. What can you learn before you meet your, let's say, shortlist of manufacturers in person? Like how much due diligence can you do upfront locally to shortlist, I don't know, the four or five manufacturers that you think want to produce X product before you actually get on a plane and travel and meet them in person? How much can a founder learn upfront?

25:36Kevin Gould:I think you can learn a lot upfront now. I think that, you know, a lot of these suppliers are willing to send, you know, send samples over and you can kind of heat check and quality check the product from the jump and narrow it down. And, you know, it's interesting. Every supplier is different. But for us, right, like I think one way to kind of shortcut it was there's events like Cosmoprof in the beauty space, which is where all suppliers, you know, in beauty go to and you can meet them in person. and it's a lot easier to narrow it down there without having to kind of fly over to Asia and meet with them to start.

26:09Kevin Gould:So like I'd encourage founders to like really do that research in the beginning. And I don't want to say it's easy, but it's easy-ish to kind of narrow down to five suppliers. I think then it kind of comes to like product output and what they actually put out from a product perspective to narrow that down farther and then kind of pick the one you're going to go deeper with. And I would say start small with all suppliers. Don't go out the gate, you know, with some huge PO. Like, I think you need to earn their trust and they need to earn your trust.

26:39Ann McFerran:Makes total sense. Let's rewind back and talk marketing and acquisition. So when you guys go from one to 50 and then from 50 to 100, what do you feel like were the most important marketing or customer acquisition strategies that were contributing to that kind of growth? Yeah.

27:01Kevin Gould:At the time, the lion's share of that budget was most likely going to meta. So that first year, we probably spent$20 million on marketing, right? Which in our category is a lot of dollars flowing into, you know, the TAM of lashes is not like a supplement business or not like an apparel business, right? It's a really nice size TAM, but it's nowhere near that. And so$20 million flowing into that is just a lot of pure dollars going into, you know, marketing and brand awareness. But the lion's share was going to what at the time was the cheapest source of acquisition, which was growth marketing. But what we did was in the background on the other side of it, Anne was on social every day telling the brand story, right?

27:52Kevin Gould:She really was the founder face of the brand and was building the community. Because I think what a lot of brands make the mistake of is they try to like growth marketing everything out. And then you're left with just like a brand that's running a lot of ads, but that's not a brand and that's not a community. And so I think like we got scale through growth marketing, but then we really built the community, the social following, the founder relationship with Ann. and then like a plethora of influencer relationships through both like larger influencers as well as like a lot of micro influencers that I think really fell in love with the brand.

28:29Kevin Gould:And so it's always like a balance. The easiest place for any brand to get to scale or at least it was back then was through scaling on the paid acquisition side. The hardest thing, which also just takes time to build is that brand affinity. Whenever like I go and just like research a brand and I'm trying to see like what kind of love do they actually have in the market. I don't just look at their social, I go to all their tagged images and I look at how many people feel so into this brand that they wanna tag them on Instagram and tag them on social and it's a vibe thing, it's a feeling thing. And those are the harder things to build.

29:08Yeah, I mean, I think that's a really important point

29:12Ann McFerran:to hammer home. So for those that are listening, if your business is 100 % growth marketing based, you don't have any organic word of mouth, you don't have a robust community. And so eventually, you know, should there be, I don't know, another iOS 14 update or whatever, and your CAC jumps from, you know, 30 % of your top line revenue to now 50%, you're kind of screwed. On the flip side, if you've got a really sticky customer base, a community, organic following or whatever. I mean, that alone is a standalone marketing organism that supports your brand because those consumers are now telling their friends about you.

29:57Ann McFerran:And their friends who now buy from you, in this case, buy from Glamnetic, have a$0 customer acquisition cost associated with them, right? That is unbelievably powerful at scale and something they don't think a lot of founders think about when thinking, you know, how do we scale acquisition? Like they're not hammering home these points. They're not thinking about like, do we have a community? Do we have really organic following, et cetera? So I think it's an excellent point.

30:27Kevin Gould:When it's all these small things that add up, right? It's like the little, it's like doing the little things that compound and they continue to compound over time. And I think that, you know, it became so sexy to launch a brand and, you know, try to scale as quickly as possible. And it, you know, I feel like sometimes people don't see the forest from the trees where it's like, it's, you can build an amazing brand in seven to 10 years. It's really hard to build an amazing brand over one to two years. You can scale, you can plug a lot of growth marketing in, but to build that engine, to build all those small things, those touch points.

31:06Kevin Gould:We do these things, for example, called like just because gifts where every month we pick like 10 or 20, you know, random customers and send them a gift out of the blue. Well, doing that for one month is great. Well, imagine doing that for seven years, right? And the affinity that that audience now has for you and the brand love that builds over time. But those aren't short term things. So those are things that just take time, you know?

31:29Ann McFerran:Yeah, no, totally agreed. Do you think about nails as a high repeat purchase category? And how do you generate repeat purchases? And can you even move into sort of like auto subscription sorts of business models for something like this?

31:48Kevin Gould:Yeah, a lot of good questions and things to unpack there. Yes, it's, you know, nail is an amazing category for consumability. So, and there's multiple different ways a consumer can do their nails. One is obviously for a long time been the salon. And usually when someone's getting their nails done in the salon, they're going every three, maybe four weeks because their nails grow out and, you know, they have to get their nails redone. The big macro shift that's been happening is that salon prices in nail salons have risen 50 % over the last four years. So there's a real cost issue that's in play for a lot of consumers there, which is one of many reasons that's driven people into the press-on category.

32:27Kevin Gould:but, um, you know, press-ons, you know, usually last up to two weeks. And I think nail is one of those interesting categories where if you look around, usually you'll see probably, uh, at least when I look around nine out of 10 women do something to their nails, whether it's polish, whether it's press-ons, they're doing something to it. And generally it's highly repeatable, right? So usually they want to switch designs. They want to switch colors and that's happening once or twice a month. So just from the nature of the product usage, it's highly consumable. And then to your question on the subscription piece, subscription is not that big for us.

33:06Kevin Gould:And it's partly because it's not like a skincare product where you buy the same serum over and over again. The consumer loves to switch up their designs and nails in the nail category. So what we actually see a lot more of is bundling different collections, different drops that we do. We can have a solids collection for a consumer that loves solids. We have a French tip collection for people that love French tips. It's more like what we see more success with is bundling than subscription. But that doesn't mean there's not high consumability via the consumer just having to come back again and again because they need new nails.

33:44Ann McFerran:All right, Kevin, let's do some rapid fire before we close off. Okay. Okay. What is the most overrated growth channel right now?

33:52Kevin Gould:Most overrated growth channel right now? I think it's meta. I think that meta will get you scale, but it goes back to like all of those other things. It doesn't build you a brand. So, so, so like it's, it's underrated in that, you know, you can get scale out of it, but it's overrated in that it's not going to, you know, it's not going to fully build the brand that you want. All right. Other side of the corn, most underrated. I mean, I don't know. I don't know how underrated this is anymore, but I think like most brands still don't understand the opportunity and the arbitrage that's on TikTok right now and TikTok shop and the brand halo that funnels over to retail, to every other channel of the business.

34:43Kevin Gould:And obviously there's a lot of brands that are doing a great job on there now and have scaled there. But I see a lot of brands still kind of looking at it as like something that's interesting, but they haven't jumped into. And that arbitrage gap and that attention gap is going to close quickly. So my advice would be like, that is the one place where you can still get arbitrage. One hire every founder should make early on. Mm-hmm. Product strategy and innovation. I think like your future pipeline, you're only as good as your future product pipeline. And I think that the strategy that goes behind that a lot of times is a little underrated.

35:24All right.

35:24Ann McFerran:Last one. One mistake you would never repeat. So many mistakes I would never repeat.

35:33Kevin Gould:I don't think I ever want to scale that fast again. I think like it honestly sounds amazing. And, you know, there is nothing wrong with growth like this that goes up into the to the right, but in a healthy way. And I think it's scale fast, but not one to 50 million overnight was was a lot.

35:54Ann McFerran:Well, you're now north of 100 million.

35:56Kevin Gould:So well done. Congrats. By the way, it took us five more years to get there than we thought, right? And we thought we were going to 100, you know, in 2022. And it, you know, ultimately, again, you always end up in life directionally where you want to be. You just never know when exactly that's going to happen.

36:10Ann McFerran:Okay, well, you took your own advice. It sounds like going to 50 from 50 to 100 was more controlled, even though that still is insane growth. So well done. Thank you. Kevin, great to chat with you today, man. Thanks for being here. You too, Adam. Thanks a lot. Our show is produced by Schwang, Esther Shan, Gogo Zogar, and Alicia Clark. Our engineers are Miku Bedlam and Matt Schwartz. Rachel Reich is our senior content lead, and I'm your host, Adam Levinter. For more Shopify Masters, hit that follow button. We drop every Tuesday and Thursday. Plus, be sure to follow and subscribe to our YouTube channel so you can catch our video interviews in real time.

36:44Ann McFerran:Thanks so much.

36:56sheriff