How to Start Optimizing Your Company’s Revenue Growth

0:00I don't know if the business would have survived if we never did the rebrand. I don't think it would have died necessarily in a year or two years, but I don't think you would have seen strong enough leading indicators that I could raise money on or continue to grow the business in a thoughtful way. Hey, how's it going? I'm Shuang Esther Shan, back with a brand new episode of Shopify Masters, your companion for starting and building a business. Today, we're going to talk about rebuilding. How do you start over again when you've already reached your goals? And can you create a business that complements your life?

0:39In 2013, Shizu Okusa left behind her job at Goldman Sachs to open her first business, Drink, making fresh pressed juices that are hand delivered. Eventually burning out, she sold her business in 2019 to launch her latest brand, apothecary, creating healing herbal remedies. She's taking all the lessons she's learned the first time around and tapping into her Japanese roots to grow a business that works for her. Shizu, welcome to the show. Thank you so much for having me, I appreciate it. I'm so excited to hear and share and do all of the things, but it has been a journey. It has been a long journey.

1:20Well, we are so honored and excited to have you. You had so many incredible career chapters, working at a esteemed bank, leaving that behind, and jumping into the root of entrepreneurship for people who are considering to do the same. What are some things that they need to think about before making that leap? Yeah, you know, there was a chapter untold a little bit from my time after Goldman. So I didn't go directly from Wall Street to Well Street, which is like the general sort of story that's been told. I actually spent about a year traveling and I spent nine months of that year living in Maputo, which is, I'm not sure if you know where that is, but it's the capital of Mozambique, which is the country right across Madagascar and out of Africa.

2:15So I lived on a banana farm for about nine months on a farm. And I kind of just like wanted to totally reset who I knew, what I knew, where I knew, and wanted to just like completely hard reset my life from Wall Street where I was focusing so much on my resume virtues. And I kind of lost sight of my eulogy virtues, which is basically just like who I am. And when I die, how do I want people to know who I am? and the work that I've done. And I didn't want to be just known or, you know, reflect on my life as just a Wall Street breaker. And so that time in Africa, I think, really changed and shaped my life.

2:57But I think to answer your question in terms of advice that I would give to people, I think it's always that everything will make sense looking back. But in the moment, nothing ever makes sense, especially in entrepreneurship. And so I actually really think that that was sort of a testing ground to take calculated risks where I was like, OK, the downside of me leaving Goldman is very little. If I want to go back to Wall Street, I can. But the upside of discovering who I am, who I was and what I truly wanted to do by saying yes to the next best thing, that trade was the best trade of my life. And I've always been taught that through finance is like, make a trade that has unlimited upside, but you protect your downside.

3:43And that was the best trade of my life, I think, really looking back. And it's really incredible to hear because once you had that reset, you created drink and it was a success in its own right. I think you were ahead of the trend with the fresh press juice trend. And even when you reach that goal, people would have killed for a job at Goldman. People would have loved to open a successful juice chain. but instead you still wanted to trade up and trade differently and create a new brand. Talk to us about this rebuild, this new chapter. Yeah, you know, Hapakiri was really, you know, drink as well.

4:27Drink was a solution to a problem for me at the time where I was so focused on nutrition, but I was in banking and living a really busy life. Like in trading, you just can't leave your desk when you're a trader from like 5 a.m. until 5 p.m. of market hours. You're like glued to your desk. I wouldn't even go to the restroom. I would dehydrate myself so I wouldn't even drink water. So it was like one of those things where I wanted to stay healthy, though, but I couldn't really move. And so cold-pressed juices was a nice way to like get the nutrition that I needed when I was pressed for time. And so that was a good solution for me at that point in my life.

5:02And I did that for eight years. but I quickly as I was entering my 30s I'm in my mid-30s now but as a female as we age you know there's different kinds of problems and different kinds of things that happen that are beyond nutrition at that point and at the core of it for me has always been around stress like stress shows up in our bodies in so many different ways for me it was like lack of sleep I would I wouldn't be able to fall asleep and I'd always wake up in the middle of the night and then I had digestive issues as well. And I kind of was like, oh, well, I'm going to go to the drugstore then naturally to see if I could find some natural over-the-counter kind of supplements.

5:40But everything that you see in the drugstore today, it's like white bottles and plastic and capsules and pills and pills and pills. And it just kind of, I had this aha moment of, you know, building a plant-based pharmacy that really leans on the traditions of how I was raised, which was plants over pills and leaning into the tradition of using, you know, everyday healing and making that second nature in the world, in mental health and physical health, everything that we do. And so apothecary is really kind of that solution today as I think about women and men and everybody that's dealing with stress.

6:20But it's frankly just showing in our bodies in a really unique and personal way. And we strive to deliver plant medicines for those people. in different ways that meet their needs. And so that's a very high level of like what we are building, which is Mother Nature's Pharmacy, a pharmacy with an F and really bridging Eastern traditional Japanese traditions to Western day ailments. And so, yeah, we're about 55-ish people today and fully remote. I never thought we would grow as fast as that we did, especially after my first company, but you just continue to say yes to the next thing, the next thing.

7:00And there's new challenges. And I frankly have learned so much in this venture already in the first five years. And another area that's so amazing is not only do you have these success metrics and you've grown the team to over 50 people, but you've truly designed a business model that is in tuned to how you want to live your life and also the values that you want to build. Talk to us about kind of having that lens when you're creating a team and building a culture with a company. Yeah, absolutely. I mean, so many people at Apothecary work with me from my first company. I would say about 20 people joined me because we have our own fulfillment center.

7:45So the fulfillment center, I didn't sell that as part of the acquisition for my first company. Actually, everybody joined me for apothecary, took another bet, you know, on me and the future. And I always argue and joke that like cutting fruits and vegetables was a lot harder than pick pack shipping, you know, finished good product. Right. So at the very different model of a business, for sure. I think that, you know, when I think about the values and my lifestyle and making this business kind of work for me, what I really wanted to do and where the most stressful parts, I think, of building the first business was always around money.

8:18It was always around like shelf life and spoilage of product because we have a shelf life of three days. And then labor models because some people wouldn't show up to work to make the smoothie or the juices. So I'd run into the store. And I started to really resent the business if I'm being totally candid. I started to resent the fact that I was creating this problem for myself every day across 15 stores. And I was like, I can't do this anymore. And so as I was thinking about both exit and then my next sort of chapter of building another business, I wanted to really be intentional about the way I wanted to live my life around scalability, every impact of like a photography shoot or a product launch.

9:03We can scale that across the world. So we now ship to 100 countries worldwide. Canada is our second largest market. The UK and Australia are third and fourth largest markets. It's really important for me to be able to diversify away from not just one country, but also be able to scale, again, every effort that we do. And so that's really how I thought about apothecary is like reverse engineering the margins. The shelf life is three years, not three days. Scalability. And frankly, when your margins are really good, you can do a lot with that online. You know, a lot of people are talking about how D2C is dead.

9:40I frankly disagree with that. I think D2C is a channel. It's not a business model. And it always is a case-by-case basis. I know some incredible brands that are only online, but generates 10, 15 % EBITDA. And they're so happy as like a team and entrepreneurs. So I think it just, it's always on a case-by-case basis. You build the business that you want to really operate. And then I think it's really important to be intentional from the very beginning. It also sounds liberating because you're able, to your point, have more freedom with this business model and also experiment with marketing and other aspects that probably were more restrictive with drink.

10:22Yeah, absolutely. I mean, brick and mortar is a completely different beast to digital. I think that my experience working at Goldman as a trader has really lended itself to digital marketing because there's so much about like meta buying, paid media buying that is so similar to stock trading and bond trading. And when I think about sort of, again, like the downside, the model, as you think about acquisition, lifetime value, all of that is just calculations. It's numbers. And so I really, really valued my time and experience from finance to look at the numbers that never lie, but telling a story from those numbers and really thinking about marketing in a really thoughtful way.

11:03So we're primarily digital right now, but we are starting to go more omni-channel. But I would say digital and paid is still a pretty big focus for us, as well as influencer affiliate for us is getting much bigger and then earned across PR and events and community and opening our own pop-ups soon as well. So exciting. And I love the fact that you equated trading to digital ads because there is so much about A-B testing, timing, investing in platforms when maybe they're not as popular. What are some quick tips you want to share about just getting comfortable with experimenting in that digital ad space?

11:45Yeah. So I had my first sort of lesson in digital marketing when I was building drink. we you know cash flow was tight for my first company our margins were like 50 when you have margins of 50 you really can't afford much and then on top of that if you have spoilage for juices like it just it just eats away so you have to be really creative and we couldn't hire an agency I couldn't afford you know the media buying fee um or 7 to 10k even so I had to learn it all by myself and I would say for all founders um especially if you're digital at least digital first that that everybody should learn the basics of at least meta and Google, paid search and paid social, and understanding how to create campaigns, how to think about audience segmentations, how to think about ad set campaigns versus set campaign budget optimizations, and really being very thoughtful about how to keep any media buyer also accountable, because as you grow, you're not going to be able to do it all yourself.

12:44But when you start small and you can start to learn it yourself in the very beginning, you'll be able to be a much stronger steward of capital, especially since at least even for us, like paid is still about 30, 40 % of our entire marketing budget, which is still big. Yeah. So there's definitely a lot of experimentation with digital marketing. And I think that's the same for creating your online experience. You actually started your Shopify journey back in 2012 and there's been iterations and enhancements to apothecary site where the shopping experience is so seamless and you can peruse through different pain points you might have and it's very easy to understand.

13:28So how did you start the design process for apothecary site? Yeah, so we've actually built three different sites for apothecary over the last five years. The first site was a testing ground on Squarespace. The second site was on Shopify. And then we launched that in January of 2020. And then the third site was a rebrand that we did this past July or July 2023. So I can talk a little bit about each, but I would say the first one was like very basic. Squarespace is, you know, just a different platform in terms of like being able to drag and drop and use templates. It's good for anyone that's like very micro scale.

14:08But as we were thinking about growing and as we were really taking our business seriously, it was like, no brainer. We have to go to Shopify. So we started to then build on Shopify and we were using headless campaign, like the headless theme where we could really be creative about building on top of that. But I would say that in the very beginning, you know, the brand was a very woo-woo brand when we first started. And when I say woo-woo, it's kind of like, you know, herbal medicine, you know, witches, Palo Santo, Mercury's and Gatorade, retrograde, whatever. And then as we were thinking about the business and as we were scaling, I think when you're above a certain amount of revenue too, you start to really need to ask yourself, okay, do we want to build a small business or do we want to build a big business, right?

14:55And I knew for myself, I wanted to build a big business.

15:03we also raised capital we raised two rounds of funding and as part of the rounds of funding I was honest with myself to say we can't keep focusing on this niche little market of like woo-woo witchy kind of herbal lovers we needed to think bigger we needed to think broader and as we thought about those sort of questions about how we wanted apothecary to be rebranded we did a whole facelift on the site. Now we're on hydrogen. Now we have three full-time developers. We have a UX designer. We have an entire creative team focusing just on the digital experience. It's a whole stack, I would say.

15:47And so the post-rebrand experience was the website. It was the email flows. It was the SMS flows. It was a complete rebuild of our subscription program. It was complete rebranding of our packaging and then a new format, which is what a lot of people know us for today, which is our tincture format. So it's been a wild year. You know, I candidly, again, like, I don't know if the business would have survived if we never did the rebrand. And I don't think it would have died necessarily in the like in a year or two years. But like, I don't think you would have seen strong enough leading indicators that I could raise money on or continue need to grow the business in a thoughtful way.

16:28So I am so glad that as our team, we were being very intellectually honest with ourselves and asking some really difficult questions and investing about$100 ,000 in an entire rebrand. Because right now it is so seamless and simplified. And to your point, it takes a lot of work to make it seem so effortless. And I think it links back to also how the team is able to distill your whole story, your whole experience into the messaging as well. Any tips there where you have to distill such a big story through a couple of words and visuals to make sure that everything links together? Yeah, it was really important for us to, so we did hire an agency from like a creative perspective that we started there first to say, okay, who are we?

17:22So we went from, you know, I would say apothecary as a herb company to now what I would consider a natural pharmacy, which are very two different things. And so working with the agency on our copy, working on the visuals, working on brand colors and identities, things we will no longer say versus things that we used to say. So I think it's being, again, like you have to ask some really difficult questions, but hiring an agency for us was really important. We hired an agency called Foreigner based out of LA. So they kind of handled the rebrand. And then from there, I would say one or two tips would be probably one is dedicating a creative copywriter that's dedicated specifically to the website copy that then touches on the packaging to ensure then the email flows.

18:10Everything feels very much sort of like a part of the brand and cohesive. So, you know, our tone of voice is a little bit like sassy, a little bit bossy. We want to kind of lean into that authority voice of, you know, we know our shit, you know, and that we know people seek education and learning from us. And so we want to deliver that in a way though that's humorous to some degree. It's a little lighthearted. You know, it's just herbs. We're not trying to be so serious, but again, we want to come across as authoritative. And so that's kind of where we've leaned on in terms of our marketing and copy, which is, again, very, very important.

18:49It's very interesting to get the behind-the-scenes look and understand how apothecary gets its personality. And we're going to dig in even further into your relationship with business and growth. Before that, I would just like to take a moment and thank our wonderful audience. Thank you so much for tuning in. wherever you get your podcasts. Please make sure you're following Shopify Masters. And if you haven't already, give us some feedback, write us a review. We love to incorporate them into new episodes. Thank you so much. You've gone through so much just within your entrepreneurial journey from exiting drink to now scaling up apothecary and fundraising.

19:36What does scaling mean to you today? Yeah, you know, it's a it's an interesting question, especially I think in this sort of economic environment that we're in today. You know, I will be candid and honest that like, you know, when we first started the business, it was 2020 and 2021, which were the days of, you know, lots of funding, a lot of brands raising at very high valuations, you know, and just capital being everywhere and interest rates being very low. That kind of environment, you know, obviously has a different kind of environment for scaling than I would say today where we have to be a lot more thoughtful about the dollars that we have versus I would think that now, especially as our team is also limited in capacity and the brand has grown, we have a lot more inbound coming in as well.

20:23So I always tell the team, like when we say yes to something, we're going to have to say no to something else. So now we're just much more calculated. I think about what are our North Stars and anything we say yes to has to be kind of in lieu or in line with that. So I think as an example, when I think about scaling today, you know, we generally say no to a lot of partnerships that I think are just focused on social play to play kind of games. We don't actually do a ton of macro influencer spending anymore because I don't think that is working as well as it used to. And then even on Meta, we've cut back a ton on our spend so we can be much more thoughtful about being profitable on the first order.

21:07Absolutely. And then I would think that for us, you know, given our margins are quite high, we're able to really focus on how do we grow that down to EBITDA. So this year in particular, we're thinking about profitable growth. I think that the joke right now is that 20 % is the new 80 % of 2020. And so, you know, for us, again, I think it's much more important that we're building a long-term business that thrives versus short-term, you know, growing revenue just for the sake of growing. And so I always tell that to other founders today too. This is your business. If you raise on a valuation or some sort of future revenue number that you not even can grow into, you, you'll do yourself a disservice.

21:51So just be really realistic. And I think with realism comes, I honestly, I think there's a lot of great intellectual sort of unlocks that happen with that. And we understand you've raised 12 million to date, which is so impressive. And also, I think it does add this pressure to growth. But linking it back to what you just said is, you know, once you invest in digital advertising, you can see the impact right away, but it does not equate to long-term growth, investing in more formulations or research and development. So how do you balance the two where you still need to see that immediate growth, but you're also building that road ahead for the future?

22:38One thing that we did, so we used to report to our investors every quarter, and most brands or most companies that raise funding, usually you only really need to report on an annual basis. And our investor reports are very, very in-depth. Whenever I send my investor reports, because we have about 100 investors, nobody responds because it is so detailed that every single question that you could possibly even think of is in there. So I'm always like, if I do get her, I'm like, please refer to the report. Please refer to the report. But we move from quarterly to semi-annual, which has been a huge sort of unlock of like, we're not a public company, but people still kind of want to see quarterly numbers.

23:16But frankly, even for us, like a lot of the initiatives that we're working on are going to be longer than three months. So reporting on a half-baked initiative or half-done partnership yet isn't going to do anyone good. It'll just bring more questions and back and forth emails that, again, we don't want it. So again, that comes down to raising capital from the right investors. I am always very upfront with people about how much we report, how much time they get access to me and my team. I like to think of it this way, where investors should be guests in your guest room. They don't own the house.

23:52They have access as a guest. And I think it's really important that founders own that. This is your house, and your employees are in the house. Investors can't just come in there and request for everything. You need to manage them and you need to manage the right people to have access to that house. And so we've been really thoughtful about that because, again, I've made mistakes about that with my first company. We're in the process now of closing another investment round, a minority investment through a strategic. And, you know, that to me is incredibly meaningful because there's real connection and ties back to Japan.

24:26and we can leverage their R &D and their product insights. Because we're, again, we're at a next stage of this business where we're investing a lot more in clinical studies. We're investing a lot more in R &D and product formats for two years out. It's just, it's a lot less short-term than it used to be. So, you know, it's an exciting time. And again, I've never been in this part of the chapter of a business before where we're trying to approach over, you know, 50 million in revenue. It's incredible to hear. And I love the linkage back to Japan, which is something you've been so purposeful about, including the relationship with suppliers and farmers abroad.

25:05So talk to us about building up that network and really showcasing where the ingredients come from. Yeah, absolutely. So, I mean, this is a really important part, I would say, of how we've built the company. But one thing I would say is that it took me about nine months before Apothecary officially was able to launch because we were just vetting suppliers and vetting the right vendors to work with. Now we're at a scale that like everything is organic certified, third party tested. We have certificates of analysis. I also known as COAs for every single ingredient and every single product that we deliver.

25:41And we never had that in the very beginning. In the very beginning, you're super scrappy. You're kind of just like trying to find anything and everything to just put into the bottle and ship it out. And admittedly, we were there in the very beginning. But as the company grows and as you go into retail and even have conversations with, say, a QVC, there's so many other compliance and sort of check marks that you have to do around your entire supply chain. I think we've been really fortunate that we've had an incredible team that has brought so much of their IP and so much of their experience from sourcing and vendor relationships in a really new and fragmented category.

26:19herbs are very hard you're talking about farmers that grow lion's mane mushroom and rhodiola and random little other herbs that you have never heard of and sourcing that at scale plus ensuring that they have certifications for all of those ingredients it's it's really hard and i would say that that's been one of our competitive advantages and barriers to entry into our business is because it's so hard and the MOQs to then produce our product are also very high. So I actually think, again, like as you're building your business, really think about, you know, again, like when we first started, we were in powders.

26:57Everyone is in powders now. Anyone can make powders. But the tincture format is a very unique one. We own the entire proprietary process of making that, the formulations, everything. The co-packer relationships, again, very difficult to do. So I think it's important that brand founders are really thoughtful, again, about barriers to entry and ensuring that supply chain is one of your competitive advantages. Yeah, really sets you apart. now at this stage of your career and your life, and you're looking back to see all the chapters you've gone through, I guess, like, how do you actually move yourself to that new chapter and let go of something that you've built that was successful and be okay and excited to start from scratch?