How To Find Customers When You Can’t Afford Marketing

0:00The customer is everything to us. And so being able to physically bring that customer journey into our HQ, into our decision making even more is something I'm super excited by. Hey everyone, welcome to Shopify Masters. I'm your host, Shuang Esser-Shan, and this is your companion for starting and building a business. My guest today is at the forefront of an amazing industry focused on women's well-being, and this category is expected to reach over$120 billion by 2033. And Arjun Sofat was way ahead of this movement. His journey launching Free Soul sparked after watching his mother go through a health crisis, leaving her feeling frail and low energy.

0:42His company is now the go-to spot for women's health needs across the globe. And after eight years, he scaled to eight figures in revenue and stayed largely bootstrapped. Arjun, welcome to the show. Thank you so much for having me. It's just very exciting to be here. so excited to have you. I know you actually had a corporate job working that nine to five. But after seeing your mom go through her health crisis, it got you really invested to find a solution for her. What about this opportunity got you so motivated? Well, the thinking really wasn't commercial in that way. While I was in my sort of corporate job, my dad had this very serious health scare.

1:25And my mom, to deal with the stress of the situation, started going to the gym and exercising. I don't know if you've done a Barry's boot camp class, but it can really take the stress away. But she went on the wrong side of that journey whereby she was overdoing it quite dramatically. So she was doing two or three HIIT classes a day. She was weightlifting. She was going for long walks. But along with that, she wasn't really nourishing her body. And through that whole cycle, she started to find her hair going very kind of brittle. She was losing a lot of weight. She began to feel very weak and her mental health wasn't in a good place either.

2:00and my grandmother at the same time has has been a nutritionist for her whole life she graduated in the 50s or something long time ago in India as a nutritionist and so growing up the power of nutrition and natural foods being supplements to your diet has been something that's really close to our heart but despite that when we started looking around for things that could support her journey from a female perspective the market just wasn't catering towards her and that was something that we both felt so passionately about i came home one day and there were all these shakes and various tablets and whatnot that that were on our our kitchen cabinet because i had to move back home and all this stuff but we'll get into the journey later on and it just lacked innovation and care and attention for female health and well-being and that's where the concept and the idea idea for free soul came from i was i think 21 at the time and I essentially just started cold calling nutritionists with my mom.

2:59She did like the morning slot, I did the evening slot and we were looking for nutritionists that could help us formulate a range of supplements to support female health and well-being because at the very core we believed that there were other women out there who were also frustrated at the lack of support that the nutrition industry was giving to them specifically and so we started FreeSold together to be able to have a positive impact on female health and well-being. And that's what we do today through our range. Yeah. I mean, there has been so many new research and books and articles written about the fact that the medical industry in general do not actually have women participate in a lot of testing.

3:39And even for the supplements and health and wellness industry, a lot of it weren't really with the idea of creating products with female in mind. So when you were in the early days of formulating, how did you start approaching production partners and actually get them on board with your idea? So full disclosure at the time, it was very much my or our first adventure together. And so I had no experience and neither did my mom in terms of finding suppliers. So there's this directory online in the UK of various manufacturers. So if you want to get something made, there's a long directory online. And essentially, we just went through all of the manufacturers in the UK for powder supplementation.

4:26And kind of we had this criteria around, well, this is how much money that we have in the bank. And therefore, this is how much we can invest. It was through my savings and through some of my mom's savings as well. And there was this concept of MOQs. I don't know if you've come across MOQs, but I certainly had not back in the day. You have to hit a minimum amount of things that you have to order before they actually say okay to your production. Exactly. And so I remember we found this incredible factory, but their MOQ was 20 ,000 units. And the idea to us of selling 20 ,000 units of any product was just mind blowing to the extent to which one, we couldn't afford it.

5:06But two, we just felt that that was way too ambitious. and so we ended up having to say no to that or it was a very mutual no in those days and we ended up finding this husband and wife team that was willing to take a bet on us and amazing production standards and they were willing to bend their moq rules for us to the point where they said right you can buy one pallet of stock and we'll support you within that journey but again having no supply chain experience no business experience we went to the factory and it was like going to Willy Wonka's kind of factory whereby there were amino acids in one corner.

5:40There were creatine powders in another, protein powders in another and we were mixing all these different flavors and we created something that we genuinely loved and we obviously made the foolish mistake of telling the manufacturer how much we loved their products and how big fans we were of them and how much we loved their team and so naturally they increased their prices and they increased their prices so much where we couldn't actually afford that first pallet of stock anymore. And so we ended up starting a side hustle on top of our hustle, which hadn't even begun, to be able to afford the stock to be able to fund FreeSol.

6:13And so we started this little construction business. My mom ended up fixing washing machines. I ended up installing cupboards. And we were just trying to gather enough capital to invest in stock. And that's how we afforded our first pallet of stock and FreeSol started going. It's such an incredible hustle and journey to get to that point. So before we kind of dig into how you were selling this first palette, but talk to us about just the mentality of managing a side hustle in addition to try to get Freesoul off the ground. How are you keeping yourself motivated and just still excited about the idea while there's a lot of hurdles happening as well?

6:55So it's a great question. And it's one not many people tend to ask. That was one of the hardest parts of Freesoul. I think the inception journey prior to launching and also probably the first year, I would say, are incredibly difficult times because when you're young and inexperienced, you're not necessarily sure what you should be doing. You're not sure about that journey and how to start a business and how to put one foot in front of the other. And therefore, it's very much the antithesis or the opposite of a job whereby you go in and you know exactly what you have to do that day because you'll have a manager that you can lean on and guide you and all that good stuff.

7:30and so I didn't really know what I was doing but YouTube was very much my gospel I have a self-proclaimed degree in YouTube or in Shopify thanks to YouTube yeah and we would just stay up late into the night watching YouTube videos about how to start a Shopify store how to edit the add to cart buttons how to edit the colors and we built on themes we built on motion and that's sort of how we got started there was a channel called the nomad millionaire who kind of talked about the journey of shopify and online commerce and that's how we got started just by looking at these youtubers and following their steps so um big shout out to all the youtuber you all the youtubers talking about e-commerce it was a big help yeah and i love that the community is so supportive right it's like fellow founders helping each other out um and then also i wanted to illustrate how hard your mom and yourself have worked.

8:27Like how many suppliers do you think you've contacted before reaching the end partner that you were happy to work with? Honestly, hundreds. I remember my mom had this stack of papers where she would write it down and it was like a makeshift Excel. And it was just notes and ticks and crosses. And there were reams and reams of these sheets. So hundreds, easily hundreds. And I think that it helps to know that because if you're just starting out in your journey and you've phoned five people and it's not really working, it's important to take into account the required volume. So the volume required to be able to reach out, understand supply chain and educate yourself is in the hundreds.

9:04And so that's really important to realize. Yeah, the amount of effort that you put in to get that one partner who also have given you a little bit of hurdles with higher pricing, but you do have that initial palette. So now that you have the end product, you're happy with it. How are you convincing strangers to also take a chance? Well, not very well at all, to be honest. Not well. So there were two things that happened. One was we ended up building up a bit of a database through our Shopify store of email subscribers. And I remember it was launch day. And my mom said, right, well, why don't we send out an email for 30 % off?

9:41It's a big, it's a big discount. But you You know, all these people have been waiting to buy. It's the least we could do. They've subscribed to our mailing list. So I said, all right, fine, let's give that a go. So I sent the email out and nothing. Like no visitors to the website, no clicks, and certainly no sales. So clearly we weren't off to a good start. But how did you even start building that email list to begin with? There was a lot of LinkedIn posts in the early days. And so organically, there was a lot of sharing stuff through WhatsApp groups, a lot of friends sending friends things but you quickly realize that the network of people that can buy into your products and can benefit from your brand that pool probably sits outside of your immediate circle and that was a good kind of framing of the mindset to understand that actually you need to think wider than your immediate circle because I was only 21 at the time and so still gaining a lot of life experience um so yeah we we didn't we didn't have a great launch whatsoever um what we ended up doing is we'd wake i had to move back home from my corporate job because i was young and didn't realize that you actually need money to afford rent and so anyway moved into my parents house and we ended up waking up at like four in the morning every day driving to gyms uh very near this studio actually in east london and just handing out samples and leaflets and that that was the organic marketing and we would do that for hours and hours and months on end.

11:07And eventually, we got our first sale. I think it was two to three weeks later, we got one sale. And I just remember that signature sound of the Shopify app pinging off and I was brushing my teeth and just toothpaste everywhere screaming like I ran downstairs, I found my mom. I was like, we got an order. Can you believe it? And it was just the best feeling. Oh my goodness. Also, like so much lead up to that so much dedication and so much grunt work, like literally boots on the ground visiting gyms. I think like even through that process, right, did you ever feel like we invested into a pallet?

11:44We've built all this site. There's so much time, financial investment. Like again, yeah. How do you keep yourself feeling motivated to move forward? It's all about the impact that we have on our community. And so I get emails personally every single day at this point where customers are saying, you know what, I really had a hard time managing my cycle and managing my energy throughout the month. But now thanks to your products, I'm feeling X, Y, Z. I'm feeling so much better. There are so many stories about women that struggle with fertility. And then they took care of their nutrition, Freesoul helped them get control of their nutrition.

12:21And now they have children. There's so many Freesoul babies out there now, which is just the most incredible feeling. But even the smaller things such as realizing that increasing your macronutrients, such as protein in your diet can have such an impact on how you feel every single day. And those little reviews and emails, that's what keeps us going when times are hard. And I think that's so important. If you're doing a business purely out of commercial motivation, you're not going to keep pushing when times are hard and times do get hard. And so that's what kept me going in the early days. That's what kept my mom going in the early days and it still does today.

12:57So it sounds like initially the marketing efforts were very organic. At what point did you start experimenting with like digital ads and social ads? I think it was at the point where we could afford to take cash and put it into something else. So we all of our cash went into stock, so we couldn't do any digital marketing. But as soon as the organic started to come through, we started to make a few sales. And that's when we were reinvesting and putting money into ads and into Facebook and Google and all these different things. And that's when momentum started to build. But it is a very slow process.

13:30We didn't raise money for, I want to say, two years probably. And we haven't raised in four years at this point. And so it was all out of our savings and out of realized cash from stock. And so we had to go slowly. But because of that, we learned the lessons that I think we needed to learn. And between the two of us, we would, again, watch all these YouTube videos about how to manage meta accounts and Google accounts. And because of that, the two of us can run the entirety of our paid media outlets. And that's so important, right? Because when you're trying to understand later on in your journey how to structure your accounts or how to have a proper conversation with senior marketing people, it helps having that in-depth knowledge.

14:14And thanks to the early hard days, we now have that now. I think it's also sounding like you were very financially responsible with experimenting with digital ads, which is so important for new founders. What is your advice there where, you know, they can manage their own budgets, allocate enough for experimentation and actually have more impact from the digital dollars that they throw in? so we had this same sort of struggle in the beginning whereby my mom and i would literally ask ourselves the same question but i think you need to strip away the noise a lot of the time and focus on unit economics and so if you if you purely think about your product and how much gross margin that you can make off that product in the early days your cost of acquisition must be less than that you have to be profitable off that first order if you don't have money from vcs or something like that.

15:09And everything else to the side, you need to make that work. That's the kind of thesis that we built. And that's how we grew FreeSol. But I would uncomplicate things and focus on your unit economics as a first step. Yeah, yeah. Because again, to your point, without VC dollars, you can't, you know, bankroll free samples for the end of life, you actually have to make sure that the sale that you get makes sense for the dollar that you spend. And then in the first few years of bootstrapping, what other kind of advice would you give people when they're trying to build out their own runway? I think it's really important to know every detail of your business and surround yourself with founders and other entrepreneurs and people that are further along on your journey.

15:54In other words, the first few years of your journey should be very learning focused. It's never a good time to stop learning, of course. But just in the early days, become like a sponge because there is so much you don't know. and the more you learn the more you realize that you don't know and so to this day we're still learning and still being very active learners but that's critical in the early days because unless you're aware of what other people are thinking and doing you're not going to be able to implement those great learnings into your own business one of the best things that happened to free soul is being invited by natwest into their incubator program and so we were invited into that i think around our first round of funding and we used to go we used to travel an hour and a half in and an hour and a half back just so we could be surrounded by founders all day long and we'd be there seven days a week but that was so helpful because we got to speak to 20 different founders every single week all who are all of which were at a really similar size of business and so we got to talk to each other each other about the different experiments we were running the different sales channels we were operating through and share mutual learnings so that was an amazing time but not everyone can have that.

17:00And so if that's not something that's available to a founder, I'd really recommend even listening to podcasts this, but I've been listening to this podcast for years and years. So that's why it's such a surreal moment to be here. But through listening to the podcast, you get to learn from entrepreneurs. Everyone's been on a very similar journey. So just taking it all in is really important. Yeah, yeah. I mean, it's so inspiring to hear different founders share their story. And to your point, like when you're in a space like that, it's so energetic and they're just spontaneous synergy that could happen.

17:35And then that was a part of the fundraising that led you to that opportunity. And I believe the latest fundraise, which was four years ago, is around a million pounds. At that point, what was that process like pitching and trying to get more investors on board? The last round was not as brutal as the initial ones so the initial the initial the initial rounds of funding were relentless and bruised I remember we walked into this fancy hotel to pitch to someone and it's nothing like dragon's den there were no stacks of money on the table it was just um husband and wife investor team and we got there we put our business cards down we put our pitch decks down and they literally laughed and we had to leave and so being laughed out of a room up until that point was very much just a saying but we literally we literally got there they laughed and we had to leave so we got laughed out of the room and this honestly exactly that happened more than once i think it happened three or four times over the years and so developing that rhino skin whereby you can take the nose and you keep going and you keep going is so important because it is tough but it's helpful to remember that if it isn't if it wasn't tough everyone would have thriving businesses but it's meant to be difficult.

18:50Yeah. I also think that is a great self-selecting process because you want to work with someone who is kind, excited, and understanding of what you're trying to build. So I know it's tough, but I always feel like saying to people who are going through rejection is like, this is them self-selecting for you to find the right partners to work with. Absolutely. And we found that. So we were introduced through KPMG to a couple from Manchester. So Manita and Sunny Aurora. And Manita has PCOS. And so I actually met Manita first, and we started talking about her PCOS journey and the various ways in which FreeSoul was involved with the PCOS community.

19:32And we got along so well that she wanted to take the investment a bit more seriously. And so I then met with her and her husband, and they came to our little one kind of, it was a tiny office. There were two desks in there. And they came in and Sonny grilled both of us so hard on the numbers. It was the most intense meeting of my life. There was this little shower around the corner from my desk that no one ever used because it was like in this tiny, like cupboard-esque room. But I sweated so much during that first meeting with Sonny that I had to go have a shower afterwards. But we... It's so handy.

20:07It's so handy, right? Like it finally finally came in use. But Manita and Sunny have been the perfect investors for the business. They believe in the mission. They're so passionate about what it is that we do. And they've been incredibly supportive. So all those no's were for a reason. And I'm very grateful for the people that have supported us so far. Yeah. And it also sounds like, you know, initially the business was inspired by your mom, but you're also listening to customers in the wider audience and hearing what health care kind of, or what health categories or health concerns that they need support in.

20:42How are you thinking about innovating and expanding to new product categories today? So it's, in the initial days, we used to take a nutritionist developed approach. Now, what's changed since then is we now have an in-house nutritionist, Nat, who goes through all of our ingredients and not just our formulations, but on an individual level to make sure quality is paramount. But we want to put the customer at the forefront of and at the very center of our business. And that's why we launched Design by Her. And so all of our new product innovations are informed by our community and by our customer.

21:16We literally have feedback sessions and panels and events where we call our customers in and we discuss new product innovations and they're at the heart of that. And so our new innovations and our new products come directly from the FreeSoul community. And they work with Nat, our nutritionist, to be able to bring them to life. Yeah. Well, it sounds like, you know, research and innovation is one part of what you're investing in. So when you did secure that million pound funding, what else were you excited to expand and scale with? team was a big one. And so Lucy and Gio, who have been in the business for the longest time out of everyone, apart from me and my mom, it's really nice to be able to actually offer great people a salary.

21:58And so we couldn't have done that without the funding. So I think my mom and I worked for free in essence for two and a half, three years or something like that. Like it was very, it was very tough. But you can't expect that from your team necessarily, or obviously that would be super unfair. And so it was really nice to be able to actually employ a team and pay them and be able to invest in their development. So that's been an incredible thing, but also bring the brand to life. And so invest in brand activations, invest in our community, invest in events to be able to actually meet the women that are responsible for our growth, which is incredible.

22:35And obviously invest in marketing too. Yeah. Yeah. And I think, you know, even from day one, you were very financially disciplined, thinking about unit economics and also, you know, using the fundraising to grow the team and also grow the brand through marketing. So important in today's kind of economic climate because funding is a lot harder to come by, especially for direct-to-consumer or product-based businesses. I guess, yeah, what's your kind of word of advice for people who are thinking about fundraising today? I think it's really important to fundraise for the right reasons. So during the height of COVID, there have been so many entrepreneurs that raised up very high valuations.

23:18And that looks great on LinkedIn, and it makes you feel good in the moment. However, when valuations normalized, it became very difficult for those same companies, even though fundamentally, they had great businesses both during and after COVID, just because of the market. And so I wouldn't necessarily chase the highest valuation at all times, which may seem like strange advice. But you should really be aiming unless it's some sort of event at the end of your journey. You shouldn't necessarily just be chasing valuation, you need to pay real attention to the people that you're working with, that chemistry to be able to lean on your investors and for them to be able to trust you to run your business.

23:56If you get that wrong, there's no valuation that can really compensate for that dynamic being wrong. So raising for the right reasons, i.e. do you actually need the funds? What are you going to use them for? Don't overraise, don't underraise. that's number one. So the quantum and the reasoning is really important. Number two is the valuation. So going too high sounds great. Having a very high valuation sounds great, but you need to be balanced and fair and responsible there. And finally, that the whole package needs to be considered with your team as well. So when you consider fundraising, it's important to understand whether the goals of your team align with the goals of the investor, because if there's a significant mismatch there, that's going to be a problem.

24:39So for example, if your team are very brand aligned, but your investors are extremely growth aligned and don't value brand, that can cause tension and vice versa as well. Luckily, we've not experienced that, but I have seen that play out a few times. Yeah. And I think it's very smart what you've done as well for, you know, the past four years, you've been able to be self-sufficient and you're building still largely bootstrap business. If you're looking at things today, what would you say is fueling that flywheel for you to scale independently more or less? I think it's thinking long term. So we're not here for the short run.

25:19We're here to be able to build, God willing, a business that lasts longer than we do. And so having that long term view and making decisions on the long term allows you to be able to think about how to invest your funds in a way in which you don't need to be constantly raising funds. So we're not chasing growth at all costs. We care about our unit economics. And that means that we're quite prudent when it comes to asset allocation and capital allocation. And that's something that's been drilled into me by my mom. So she has a bit more of a conservative way of thinking about finance. And she's always drilled that into me.

25:53So we were able to be self-sufficient in that way. And you come a long way, right? Initially hitting up the gyms, experimenting with digital ads. What do you think is the majority of things you're excited to experiment in within mixing up marketing strategies and things like that? I think it's being able to involve our customer more and more and more in our decision making. So I still do customer service once kind of every two weeks. I'm in the emails, I'm in the DMs almost every day, reading reviews every single day. and so being able to bring that customer journey into our hq and bring people in on a regular basis is going to be amazing ben francis from gymshark did this he did this big post around we want customers to come to the office i'm going to give people tours personally and it's just i feel quite a good discipline to have because it's easy to try and run a business without thinking about that end customer but really free soul is that mission driven business whereby the customer is everything to us.

26:55And so being able to physically bring that customer journey into our HQ, into our decision making even more is something I'm super excited by. Yeah. I mean, the investor perspective is like, wow, you're building lifetime value. People are returning, but I think you're building with their needs in mind and also, yeah, involving them into the process of building FreeSoul, which is so special. Absolutely. Yeah. Well, we have to talk about your relationship with your mom okay because it's so special right you're you've been building together for almost a decade yeah um through fixing washing machines um side hustling and fundraising like all of it um yeah what made the dynamic of you two working together work for so long i mean i might have a different i might have a very different story to what my mom says uh because maybe i drive her mad once in a I know I definitely drive her mad, but I always knew somehow that we'd end up working together in some capacity because I think we've taken our entrepreneurial spirit from my mom's mom, my grandma.

28:01So my grandma was a nutritionist in her education and in her training, but she actually started a furniture business. And so she found herself in hard financial times, maybe 20 years ago. And to be able to get herself out of that situation, she started a furniture business where she would import furniture from Europe into India and then distribute. So I remember being in her house in Mumbai and there were like tags on everything because everything was up for sale. And so I would sit there and watch her sell and watch her educate her customers around different quality types, different woods and different stones.

28:38and all that sort of stuff. And what I didn't realize that I was witnessing, but also my mom was witnessing, was a bootstrap startup. And so those lessons came through to both of us. And so I think business is very much in our blood. And I've always believed that business should do good for people. And so does my mom. And so that's why it's been harmonious. That's not to say that there aren't challenges because we'll have a hard time for my wife and her husband, my dad, about the fact that we'll be at dinner and talk about nothing but business. But we love it. We love Free Soul. We love the impact that we have.