How Two Students Started a $56 Million Company in College

0:00We started running ads before we even had actual physical product because I wanted to make sure there was a product market fit before we spent cooking Tattoo Bowl in Oliver's college. department. Hello, welcome to Shopify Masters, your companion for starting and building a business. I'm Shuang Estersham. A lot of founders enter the e-commerce space with a dropshipping business. It's usually low cost and helps owners to learn the basics of marketing and logistics. That's how Salam Agbator and Oliver Zak started out as well. They ran a dropshipping business in college, it was so successful they were able to sell the company after a few months, which led Salam and Oliver to start Mad Rabbit, a direct-to-consumer skincare brand aimed at tattoo aftercare.

0:52Salam is joining us today to talk about his journey from dropshipping to running a multi-million dollar skincare company. Welcome, Salam. Thank you. Thank you for having me. I really appreciate it. Well, thanks so much for being here with us. So you actually started a few businesses before you ever graduated from college. Where did that spark for entrepreneurship come from? Yeah, so my spark for entrepreneurship didn't really come until college. I met Oliver after rushing a business fraternity my second semester freshman year. And we were friends then, but then we didn't really start talking about getting into business together until about maybe a semester or a year after.

1:33During that time, what sparked my interest was a lot of kids in my regular social fraternity have their own side hustles. Most of them are drop shipping different items on the internet. And I didn't really know what drop shipping was, but it was intriguing to look at what they were doing and not having to work physical jobs at a college bar or like in the cafeteria or like in the store. They're just making money off the internet. So it was really intriguing and drew my attention to that.

2:02I could be sitting for my exams. I could be in class and working on my side hustle at the same time. So that's what caught my attention. And I presented this idea to Oliver, who also had a little bit of experience in the e-commerce world, but his was through just like posting as like an influencer on social media. So we combined our expertise and launched our first business, which was dropshipping swimsuits. And what we do is we obviously use AliExpress or Alibaba, mark up the items, probably five to 10x on our website, customers would order, then whatever we owed the manufacturer, they would take their cotton and ship it to the customer.

2:40So that was our first foray into e-commerce. Also, your childhood played a big part. How did your experience as an immigrant from Ghana affect how you see entrepreneurship? Yeah, so growing up, like most immigrants, parents wanted you to become a lawyer, doctor, or engineer. For me, I was going down the path of wanting to become a lawyer. And then I did one summer as a law intern with my uncle in Chicago and realized that it wasn't for me. So then came the time to start applying for college and figure out what you're going to major in in college. I decided to give accounting a shot. Didn't want to do that.

3:19So I changed my major to supply chain, then turned it to econ, and then finally finance and settled on finance. And then after settling on finance, that's what I ended up graduating in. But at the same time, I was focused on dropshipping. I was focused on e-commerce. But then I fell more in love with the marketing side of the business. And was it a tough process trying to highlight running your own business was also as successful as those traditional occupations to your parents? I would say yes and no. After graduation, they were happy that I was able to find a job in finance. and I'm sure like most parents, like they're happy that, they get happy that their kids are graduating from college and not dropping out or not having to take an extra year or just straight up quitting.

4:06So I graduated with a full-time job in corporate finance and I held on to that job for about a year and a half and then ended up quitting to go full-time with Mad Rabbit. But then I didn't tell them when I had quit my full-time job. I think I probably would like a month or two before I told them, hey, I quit my full-time job and I'm doing my side hustle full-time now. So when you were experimenting with dropshipping in university, it was also a good time for you to test out and learn a lot of things. What were some of the lessons you took with you when you started Mad Rabbit? Yeah. So with dropshipping, we learned a lot.

4:46The first thing was building a social media channel. So making sure that you could build an Instagram channel, make sure you You can build Facebook or any other form of social media presence. And you also have to be resourceful with dropshipping. Most of the reasons why you're starting a dropshipping company is because you don't have the cash up front. So you have to figure out where to get pictures from or also learn the things that you need to be able to do instead of hiring people to do it for you. So like, for example, for the social media side, we used a website called Unsplash to post royalty-free pictures because we didn't have access to money to pay a photographer to take photos of our swimsuits.

5:23So we just repost things off of that website every single day. We also taught ourselves Facebook and Instagram ads, Google ads, because it would be expensive to pay an agency or pay someone a percentage of ad spend to run those ads for you. And most of our learning came from Google and YouTube. Just whatever questions we had, we would type it into Google. And then whatever popped up, we'd read into it. We'd test it out. We'd try it out. Obviously, back then, you have really low budgets. You have to make sure it ends up working out because you're already low on cash. So you have to make sure there's a return on that investment.

5:58So it was stressful. But at the same time, it was rewarding when you got something to work. We also learned proper customer service, how to talk to customers, how to make sure customers are happy. Those, I would say, were the two or three main things that you needed to be six as phone dropshipping. It was nice because Shopify had so many themes back then that you could pick and then you could drag and drop different pictures or different text in it. And you could make it look like it was a professionally done website. So that was a big lifesaver instead of having to pay someone to come code a website for you from scratch.

6:30It sounds like you had all the key pillars of running a successful e-commerce brand. which means you needed a new idea. And Oliver was very keen on the concept of Matt Rabbit. How did you then do research to justify the market fit to actually validate the idea for yourself? Yeah, so Oliver had texted me about getting to tattoo aftercare. And I originally said no. I think I ended up ghosting him for about a week.

7:04During that week, I was really unsure. So I spent my time researching into the tattoo aftercare market. And so there were a few other companies in the space that had big social media channels. They obviously looked like they had a connection with the tattoo artists. The ads that they were running on Facebook and Instagram also weren't the best ads. And I could tell that if I were to come into this space and make ads, I knew exactly what customers we were going to click on and what would make customers convert. I knew exactly how to run the Instagram page to make sure it was aesthetically pleasing for people to want to come follow, consume content, reshare, repost, comment, and also how to build a better looking website that was focused on driving conversions, but at the same time teaching and educating customers about proper tattoo aftercare.

7:54So those were the main things that I looked into and I was like, okay, like we can do all of these things better than who is currently in this space. So why not give it a shot? At the same time too, I was afraid because I had zero tattoos. Oliver had a stick and poke tattoo on his knee that his mom wanted him to take care of. Another thing too was I was like, well, this isn't dropshipping. We're going to have to invest money up front to be able to make sure this is successful. So how would we go about that? Like, how do we know what ingredients to put together to make sure we can make an effective tattoo balm?

8:28We're going to have to order different mailer bags. We're going to have to order tins. stickers, like there's going to be cash up front. So we have to make sure we do this effectively. Luckily, we didn't have to hire a chemist or anything. His mom had years of apothecary experience. So she helped us pick the initial first seven ingredients to go into the tattoo balm. We still use those ingredients today in our tattoo balm because it's been extremely popular. So figuring out, okay, like what cash are we going to use to run the ads, order the materials, order the inventory. So luckily, prior a few months before, we had sold our dropshipping business off of the Shopify exchange, which I don't think exists anymore, correct?

9:07The platform doesn't exist anymore, but it used to be a place where you can buy and sell Shopify businesses. And it was really cool to hear that you were able to use that service. Yeah, the service was a great research tool because when we sold the swimsuit business, we were trying to figure out what we wanted to do next. Going back to the subject of Mad Rabbit. So we figured out how to cook the product. And the next thing was, all right, I want to make sure this is not as risky or not that risky. So we decided to build the Shopify website. We took pictures of people with tattoos from Unsplash, create the website, created the social media pages, loaded the pictures up.

9:49And we started running ads before we even had actual physical product because I wanted to make sure that there was a product market fit before we spent time cooking Tattoo Balm in Oliver's college apartment. So within the first week of running ads, orders started coming through. So then we were like, okay, there's a proof of concept right there. Like it's valid. Let's actually invest in ordering these ingredients, ordering the supplies. So what we did was we'd spend probably one or two days every single week, a full day of just skipping class to cook Tattoo Bom in Oliver's college apartment. And after cooking all of it, we end up shipping them out to customers.

10:27So we could only ship out orders probably about once a week. So instead of customers getting their orders shipped out the day after they had ordered, they'd have to wait about a week or two for us to actually end up cooking everything and then shipping it out. And then that was also difficult because we couldn't really scale. We were at mercy of our bandwidth and how much time we could spend in cooking Tattoo Bone to ship out to customers. It's crazy cool to see how far you have come with Oliver, especially when you mentioned switching from dropshipping to actually running a skincare company. There's so many expenses that didn't exist before.

11:05What are some tips you would give to founders in similar positions to be savvy and scrappy with their finances in the early days? The main tip would be to learn as much as you can on your own before paying someone to do it. The reason why I say that is because there are a lot of people out there who claim to be experts, but then they're just teaching you information or showing you things that are recycled from other actual experts. So we spent a lot of time on Google, a lot of time on YouTube. Whenever we had a question, we type it in there and hopefully there was an answer. Most of the time there were answers.

11:38There's a lot of videos on there to teach you how to do things, how to run ads. Like the main thing you need to run a business successfully is running efficient, effective ads. And also you have to find a way to relate to your audience. I didn't get my first tattoo until three months into Mad Rabbit. And then a year or so later, I had about 17 here and there tattoos just like all over my body. And I finally committed to getting a full sleeve about a month ago. So I spent 40 hours in the tattoo studio, back-to-back sessions, and got my entire leg done. And after doing all of that, I could relate with my audience more.

12:13And I didn't do it because I wanted to relate with the audience. I did it because I grew a passion for what I was selling.

12:25I ended up thinking tattoos are really cool. Putting something like this in my body is an investment and it's a worthwhile investment. And it's nice also knowing really well how my products work on my skin.

12:43I was going to say, it sounds like the perfect opportunity for you to test out products firsthand and go through the customer journey that you were also educating on, writing about, marketing about. So did you learn anything new through that process? Yeah, I guess I learned that tattoos were a lot of pain because I would get like small here and there tattoos, which were about like an hour to two hour long sessions. So those I didn't really, I didn't feel like I could really fully experience what it felt like to be actually fully tattooed. And then a month ago, because I'd been waiting for a while to find the perfect artist to get my entire leg down because it's a big investment.

13:25I wanted to make sure it was the right artist that could do exactly what I wanted in the style I wanted. And that's when I started to actually feel real pain and feel like what the actual OGs in the space went through. And that was also without numbing cream because a lot of people in this space, when tattoos first started, no one really had access to numbing cream. So I did my entire leg 40 hours without numbing cream and then it was six to 10 hour sessions. So I'd be an entire day in a tattoo parlor just getting stabbed for six to 10 hours. And I felt closer to the world I was in because of that.

14:00Which also is a great segue for the company to start creating this numbing cream as well. Yeah, the numbing cream is probably the one product that I haven't, I think I'm the only one on the team who hasn't gotten to use it yet, but Oliver's used it multiple times and he says he actually doesn't feel anything when he's getting tattoos. I don't know if I'll end up using it. I think I might just stick with doing what the OGs did and just going in without numbing. super intense well i'm speaking with salam agbator co-founder of mad rabbit we're going to get into his partnership with oliver and also different tattoo shops and retailers i hope shopify masters is a partner in your journey while you're listening give the show a follow or subscribe if you haven't already and please leave us a review or feedback for the show thanks so you You were in college at the time when you were running these businesses and starting Mad Rabid.

15:00How did you balance school and starting businesses at the same time? It was kind of difficult because in college, like, obviously you want to focus on school. You want to make sure you have good degrees, but at the same time, you want to have a social life and whatever events are going on, you want to be able to show up and hang out with your friends, party, do all of that. So it was basically sacrificing one or the other. And obviously, we had to sacrifice a bit of each. So taking an entire day of not going to classes was a sacrifice on school. And also taking an entire weekend to making sure customer orders are also a sacrifice in your social life.

15:42So I think we were able to spread it out evenly to make sure it wasn't too detrimental to our college experience. We started a great college experience in the end. And I think we did it the right way. It just depends on what you want to focus on. I know people who decided, okay, I'm just going to drop out of school and fully focus on running my business. Or I'm just going to cancel my entire social life, not talk to anyone and focus on my business. But there is a way to figure out how to do it both ways. And I'm happy we're able to figure it out. And I think it just comes to effective time management, which is a skill that I would say you need to be able to run a successful business.

16:19You have to make sure you're focusing your time on the right things. And to your point, it's a lot of time commitment and time management, also a lot of work. But you actually recommend college students to think about it because you say that it's a good time to start a business. Why do you think that is? I would say that you probably have less responsibilities while you're in college. You're not having classes for a full eight-hour days. There are some days where you have one class. Some days you have none. And some days you have to pick your own schedule in college. So I would say that's why a college is the most effective time to go to run a business.

16:55And there's a lot of students in college who don't have to, I guess, work a physical job in college to support themselves. Their parents end up supporting them. Or there's kids like me who actually have to find a way to make money in college because you have bills to pay. You have your tuition to pay. So that's why I was able to resort to dropshipping and resort to e-commerce. That's why I would say college was the best time to be able to do this. And then after graduation, you're in a full-time job. And what you want to do is impress your bosses. You want to make sure you're on top of it. So that's also not a good time to start a business.

17:30You met Oliver in college as well. How did you know that he was the right person to start a company with? We both had really calm personalities. We weren't really too fiery. We both had different skills. So that way we weren't stepping on each other's toes, which I think is the perfect fit for a co-founder situation. They're co-founders who they both have the exact same skills and there's fights breaking out because one person thinks they're right, other one says, no, you're wrong. So it caused a lot of issues in the beginning. Or one person is just extremely aggressive or fiery, and that's their personality.

18:08But I think Oliver and I's personalities were the perfect fit to be able to make sure this is successful because we knew that we were working towards a common goal. So the headbutting, we could resolve extremely quickly because it was our personalities to try to resolve it and not try to escalate it. And I think that's why it worked out really well for us. And both of you were very committed to the business. You started out working full-time jobs. So how long did it take for both of you to realize the business is actually taking off? And when did you feel comfortable to be full-time entrepreneurs?

18:42So Oliver and I ended up graduating 2019, I think in May. We had about three months off before our full-time job started. So what we decided to do was make sure that we could find a manufacturer to end up manufacturing a bomb for us. Because we couldn't cook anymore if we started our full-time jobs. So we ended up finding one. We're still with him today. He's been a great manufacturer. We went off to our respective full-time jobs. And during that time, COVID also hit. So because of that, we ended up working remotely. And it helped me focus on growing Mad Rabbit because I would wake up, go out of bed, and do whatever I needed to do for my full-time job right away.

19:25And then once I got all of that done, I could focus on Mad Rabbit. So I would say it was good timing because it helped me see what we could really do with growing Mad Rabbit to where it is today. because I was able to focus more time on research, on making sure ads were running correctly, listening to customers, taking that feedback into account, and then using everything that I've learned to help grow Mad Rabbit into a better place. So that was ongoing for about a year. And then in 2020, around October, that's when I ended up quitting my full-time job and going full-time with Mad Rabbit. Oliver had quit his full-time job in January of 21, and then Drew also quit his full-time job.

20:06Drew's our CEO. So the taste of almost working on it full-time during COVID have emphasized that it was the right decision. And at that time too, we were talking with Shark Tank and going on the show and pitching Mad Rabbit also helped solidify that it was a good time because we had a great pitch. We knew that there was going to be an investment coming in. So why not make the jump into going full-time? And of course, I imagine the appearance on Shark Tank would give a huge boost to the company. How did the opportunity come about and what was your filming experience like? I had randomly applied one night.

20:45I think it was late 2019. I randomly applied. I saw an ad to apply for Shark Tank on my Instagram piece. So I applied. And a few months later in about April, I got a phone call and I didn't pick up. I listened to the voicemail. I think I still have the voicemail, but I thought it was a prank. And I called Oliver first. I was hey, like, are you behind us? And he said, no. I ended up calling back the casting producer. He said, this was Shark Tank and they'd love to have us on the show. So we started by sending them a video pitch. We sent multiple different video pitches for them to end up being happy with one.

21:16Ended up getting to pitch to the Sharks. We got a deal from Mark Cuban and the show was really great in helping us gain that awareness to people in America, to our customer base, to let people know that Mad Rabbit was out there and a proper tattoo-of-the-care solution was also out there. And the response for the show was great. In that four days of the show and that three days after, we did more revenue than our previous probably two or three months combined. Amazing to hear. It sounds like Shark Tank was one of the huge growth points for the company, but you actually look after the marketing efforts and the growth efforts at Mad Rabbit.

22:02How are some of your strategies, ads, or channels evolved over the years? Yeah, so with the strategy on ads and marketing, we try to be as proactive as possible because we learn very often that if you're reactive, you're just waiting for someone else to do something for you to copy. So we try our best to make sure that whatever we were putting out there was a new concept. And we also made sure that we were testing a lot of different things to try to find what was working. And that was the key to being successful is testing and making sure whatever you're putting out, your audience can resonate and engage with it to end up purchasing from you.

22:45So I would say that's what put us at an advantage. And I think something that was happening that we were able to see, yeah, what we're doing is working, that we started seeing people in our space start to copy our ads. And we didn't really take offense to that. We were kind of happy about that because we were like, well, we're definitely doing something correct. They're definitely watching. And this means that we're always going to be ahead because they have to wait for us to innovate before they can innovate. And I think once you stop innovating, I feel like you end up being comfortable and you just never want to be comfortable.

23:15Yeah. And I think now that Mad Rabbit has a eight-figure valuation, is there more added pressure to actually have more growth year over year, month over month? And what are some of the new ways that you're evolving and growing now? Yeah, there's definitely pressure to keep growing. The main thing is that we have to try to make sure that we're growing sustainably. The other main thing is that we have to make sure we keep innovating. Mad Rabbit, we started in 2019. A lot of the people that were in this space when we started still have the same core item product base that they currently have. Whereas we started with one product for the first two years and we're up to about 10 products now.

23:58So we were in only one part of the tattoo care process, which was when you already have tattoos, you use the balm to make sure it looks brighter and last longer. Now we have the numbing cream for even before you get a tattoo. We have a soothing gel for right after you get a tattoo, then the bone for after it's healed, sunscreen to protect your tattoos from the sun. So one thing that has helped, I guess, set us apart was that we wanted to make sure that we weren't comparable to who else was out there because once it's comparable with someone else, it's no longer Mad Rabbit. If someone else is doing the exact same thing as us, we have to innovate and what's happening is that people are looking up to us.

24:41And our main thing was to make sure that like, you're happy about the tattoos on your skin. And it's, it's a story that you want to keep telling. So whenever you see someone with a tattoo, you want to go ask like, Hey, like that looks cool. Where'd you get it? When'd you get it? Or tell me about it. If your tattoo is faded, no one's going to see, no one's going to want to ask you a question. But if it's popping, people are going to come up to you and ask questions about it. Yeah, not only with products, you're experimenting, innovating and expanding. You've also found a unique customer acquisition channel working with tattoo shops themselves.