What a Near-Bankruptcy Taught These Founders About Growth and Grit

0:00The fact that I'm here means I wiggled out of it, but it was the scariest six months of my life. Hey everyone, I'm Shwaying Esr-Shan and thanks for tuning in to Shopify Masters, your companion for starting and building a business. Our guests today are Jazz Fenton and Jamil Bouya, the husband and wife team behind Other Half Studio, a design agency helping e-commerce brands build beautiful high converting websites. But before launching Other Half, they built businesses of their own. Jazz in the beauty space with Yellow Beauty and Jameel with a fast-growing restaurant chain, Burgers and Fries Forever.

0:40Both businesses that were built with Shopify. So how did they make this pivot and what's it really like running a business with a spouse? Here to give us the details are Jazz and Jameel. Welcome to the show. Thank you. Thanks for having us. Thank you. Well, Well, excited to have you both on to the show. We have so much to get through. Jazz, we'll start with you. You actually worked at Shopify as a designer, and then the both of you co-founded Yellow Beauty. How did the combo of tech and building a brand shape your approach when you're thinking about e-commerce and design today? Yeah, I mean, that's an interesting question.

1:20When we started Yellow Beauty, we definitely went in with a very naive approach. I mean, I had the design background being on the other side, working on the dashboard and all things Shopify admin. But starting a business was, you know, we kind of went in, dove in headfirst and figured out a lot of things along the way. I think from a design side, it really, really helped. So definitely my strengths were, you know, from the branding side, the website, all of that kind of stuff. But in terms of the actual marketing, that was where we kind of had no idea what we were doing and figured things out along the way.

1:58But yeah, from the design side, I felt very confident. And that's what really always made me really excited about the brand was the visual part of things and how that helps users convert and all that good stuff. I feel like as someone who's gone through the brand building process, it gives you an additional perspective when you're helping other brands to do so or enhance their online experience. And then, Jamil, full disclosure, all three of us went to the same university. Jamil, I very distinctly remember you professing this passion of yours wanting to start a fast food company in undergrad, and this was your dream, which you've actualized with BFF.

2:45So this isn't really related to tech at all, but Shopify was also in that journey. how did that experience teach you about branding and customer connection? Yeah, I think the interesting thing about branding is, you know, we all talk about it kind of like as its own like intangible, inanimate thing, but branding is the soul of a corporation. I don't know why I do that in air quotes, but like it's essentially like a way to create something that's very like emotional and intimate that someone can understand because like at the end of the day it's just an inanimate product or a tech solution and I think even a lot of Jazz's experience at Shopify kind of really helped think about like the online experience so BFF was actually one of the first restaurants in Ottawa to run Facebook ads and we actually hosted our website on Shopify.

3:45So we're able to use it to like give out tickets to free events and soft launches and like really gather like valuable information to like shape our voice and tone of like, yeah, we're a burger joint, but we wanted to just feel like your BFF and kind of give it that soul and personality. Yeah. I want to say it's like, it felt truly like something you actually wanted to like on Facebook and follow on Instagram because it was exciting and you did get those exclusive events. So Jazz, we kind of like open up the topic of like challenges with scaling yellow beauty a little bit. You kind of mentioned marketing.

4:25What were some other things you were thinking about when you were trying to scale? Yeah, I think if we want to go into our biggest mistakes, I think not tapping into the community was a big one. I think that's what we've realized more recently with what we're doing today, just talking to other founders, being part of that community. We didn't do that at all when we started the business and we started the e-com brand. Obviously, I was still very much in the Shopify ecosystem, like I said, on that other side. But in terms of other merchants, we didn't really seek out help from other people or learn from others.

5:03We just kind of thought, hey, we can do this ourselves. We saw a lot of success in the early days. So we were just kind of like, okay, let's just, let's just keep going. And we just expected naively that it would continue. So I think if we did it again, we would much, you know, I think the key thing again, is just connecting with other people who've been there and done that and can tell you really early on what mistakes they made so that we wouldn't have done those things. So yeah, that's definitely what I would do differently is just be more vocal about it and not just kind of operate in a silo with each other.

5:38Yeah, I think entrepreneurship is a very lonely task to take on. You do so many things in solitude. And when you're gaining momentum, you just want to work more on the brand versus trying to build a community or reach out when you have different hurdles that come your way. One thing I wanted to highlight is the two of you, when you started Yellow Beauty, it was scaling a lot. You got so many retail partnerships and you still do. Any advice there when new founders are trying to build connection with retailers and actually get their brands into stores? The main big lesson that we learned early on, we did get a lot of interest just like directly through Instagram, which was pretty wild back in the day.

6:22That was a bit more of a lower barrier to entry. But we got into anthropology pretty early on. And again, naively, we were just super excited about the opportunity. They placed a really, really big order with us. And at the time we only had one SKU. We were trying to obviously play it really safe. We were bootstrapped. So we kind of just went into it being like, okay, great. Anthropology is putting us on shelves. Awesome. And we just kind of rode that wave. What we quickly realized is they want retailers want more innovation. They want more products coming out, if your product is doing really well, which ours was, they basically approached us and were like, hey, what's new?

7:02What other products do you have? And we had to tell them, oops, we actually don't have anything. We thought this product was doing really well. And that actually ended up eventually a few years later, them dropping us because we didn't have that innovation. So I think it's important to think about your whole product mix and where you're going if you're going to enter into retail. And another big thing was our packaging. We didn't think early on about how to translate our online experience to retail. Obviously, online, you have so much more that you can do. You can be on social, you can be telling that story in other ways.

7:39But retail, your packaging is super, super important. And you have to stand out against everyone else. So we had to redesign our packaging quite a few times in order to make a difference there. So, and also last thing, thinking what type of retailer you want to go after. There's so many different levels. There's kind of that mass market, which you would think of for skincare as an example would be target. And then you have that kind of more mid mastige market, which is kind of those like middle, more like independent retailers and kind of that like middle price range. And then you have the Sephora's and, you know, those, those higher And so really thinking about how are you going to price your products to enter into the space that you want to be in.

8:22If you're too low in pricing, then you'll actually probably never get into a Sephora, for example, because they don't want to carry those kind of lower price products and vice versa. So planning early for that, I think, is really key. And we definitely didn't know that early on. And that was just like a learning process along the way. and i think further to jazz's point you know a couple solid pieces of advice would be take the momentum of that first massive order and like reaching out to the community getting investment getting mentors and really um attending trade shows like we did not attend trade shows we thought it was you know too large of a cost or we always thought you know we're too small to be doing what we're doing and it was always like we were kind of holding back our own growth but really like it was taking like that success and almost selling it to new retailers which is what we found out was something that we kind of did inadvertently online but we didn't translate that IRL to like the actual trade show and like convention world which is where a lot of like presence and you get access to like super warm buyers with like high intent to like discover new products and brands.

9:37That's something that we didn't really know about or capitalize on because it's like there's an emotional experience to retail where it's like you're trying to sell trends. You're trying to sell like the next big thing to these buyers who also have a job to like look out for innovation and like new segments of the market to break into. Yeah, you have to like build on that snowball effect while you have that momentum. When Yellow Beauty was on its like wave of momentum, you were also scaling Burgers and Fries Forever, BFF, and turning it into a franchise. However, with any sort of food and bev company during COVID, it was a really tough time.

10:20And Jamil, you talked really openly about almost being bankrupt, maybe having some authorities trying to trace you down. Like, why is sharing these stories so important to you? I think sharing it is important because when I first came into the business of entrepreneurship, I think there's a lot of pressure out there. There's a lot of success stories that are, I don't want to say they're fabricated or manufactured, but it can be very hard, like, to compare yourself. And I grew up in a culture, you know, my family's from Bangladesh and we're very comparison driven. So I would always struggle to see like super successful people and like figure out that gap between like, you know, I'm here, I'm small fry.

11:06Like, how do I get to like 100 restaurants or, you know, 10 ,000 retailers, whatever that case may be. I met a lot of people along the way that were very honest and the their honesty really actually took a lot of pressure off my shoulders where it's like, okay, we're all screwing up. You know, it's just not everybody's admitting it. And I think that authenticity that like, other people extended to me really made it easy for me to realize I'm just human, like I'm going to make mistakes and not to have like this high threshold of perfection, which I think is very like psychologically crippling. and it also like devalues all the success I have had.

11:45So I actually enjoy talking about it because once you get to like a certain level of success, everybody's screwed up and it almost becomes like a screw up Olympics where they're like, oh yeah, you almost went bankrupt. And it actually like really creates camaraderie and it's quite fun in a weird way because like those are the challenges that made us who we are. So reflecting on them and how tough they were is kind of like a blessing, weirdly, in hindsight, because we're here now and we made it through. I feel like our listeners need to hear about how this near bankruptcy story unfolded for you.

12:25In the summer of 2022, I was pulled into a boardroom with my investor and partner at the time. And And I'm going to preface this with saying we have a great relationship now. So, you know, that's what I do. I build and keep relationships. But I was pulled into a boardroom and I was told that there's no more cash left. And I was like, okay, what does that mean? And because I'm not the one who's checking the books, even though I'll check them. I am more of a P &L guy versus a balance sheet guy. And for those of you who are out there who've read P &Ls and balance sheets, quite often you'll know what I mean.

13:10And I started getting calls from the CRA. And I was like, hmm, what do they want? So I finally picked up the phone. They're like, hey, you're in collections. I was like, collections? For what? And I find out over six figures in collections. so another thing I found out was that as the director of the company I am personally liable for any taxes owed to the CRA this presents to be a problem because as I started digging through the books and really looking I realized we are seven figures in debt and I knew we were in a lot of debt because this was COVID but sometimes when things are going bad you just tend to kind of retreat and this is when kind of hit the fan i had to basically figure out how much cash we had left we had enough for maybe a couple more months at best and this was when like things went wild i had to fire my coo i had to fire myself because i was on salary and collect ei because that's how little cash we had.

14:22I had to fire sale one of my underperforming stores that was paying 10k a month in rent. We had sold it twice, but my landlord had killed the deal based off a technicality in the lease where they owned some of the assets. I wanted to pay out those assets at fair market value. And they're like, nope, we don't want it at fair market value. We want it at the book value at which we bought it at. So we had sold one of our locations for nearly 150k and we fire sold it for 50. Then the landlord wanted 30k to terminate the lease. So out of the 50, 30 was gone. 10k went to my real estate agent as their fee and 10k went to my landlord.

15:04So I netted out at nothing. From there, I found out that we defaulted on a six-figure loan from a Schedule A bank. and they came to collect after I had sold the location. So Jazz and I were actually in Mexico City and I got served at my partner's office, at one of our restaurants and at our headquarters. And I found out that they were trying to sue me personally for defaulting on this loan that was actually government backed. without getting into a ton of details i called several lawyers on a free consult because we had so little cash i couldn't afford a lawyer so i would cross-reference what the first lawyer said to the 10th one i'd gone through 10 different calls and i was like okay the first one wasn't lying and i put together a little strategy on how i was going to wiggle out of this the fact that i'm here means i wiggled out of it but it was uh the scariest six months of my life I had to call a dozen suppliers and beg them for payment terms.

16:13I had to call the CRA and beg them for a payment plan with interest accruing. I was able to get rid of an underperforming store and slowly but surely, by getting rid of that store, the one that I had fire sold, it instantly boosted the sales at the other store because during COVID, they were too close to each other. Pre-COVID, things were great. But during COVID, everything went delivery. So the delivery radiuses were so close that they're actually cannibalizing sales. My sales went up 30 % on my other store once I got rid of the underperforming store. And then I was able to actually increase the profits at my Toronto based location.

16:54So I had one in Ottawa and Toronto. Long story short, because I could literally do an entire hour on this, we're able to get back into profitability at both locations. It really took like a year, year and a half of just clawing out of it. And that's eventually led to our acquisition because, yeah, profitability wise, we were doing great. But our balance sheet was so messed up that I had to restructure. So we eventually end up turning it around. It took about a year and a half. And we actually recently got acquired about five months ago. Holy crap. Yep. I mean, how exciting because I feel like both of you have lived so many different lives.

17:39And now we're at this efflection point where you decide to launch Other Half, a design-first agency. And you have this philosophy where having this design-first approach actually converts better. How do you explain that to clients? So many merchants are spending a lot of money on paid, other channels of acquisition, email, retention, all of those things. I think a lot of the time the website can be almost like an afterthought. It's really easy to get a website up and running with Shopify, which is amazing. It's really easy to customize. But the optimizations that can be done, especially if you're doing, you know, quite a bit of revenue can be, you know, it can really, really lift your overall conversion rate.

18:24And because you're spending all this money on all this other paid traffic, everyone is coming to your website at the end of the day. That's where everyone is landing. So there's so many opportunities to tweak that experience. And I think a lot of the time, even as a founder, like when we were doing Yellow, it's really easy to maybe forget and not have that outside perspective about what customers might feel or think about your brand when they come to your website because you know everything about your brand. You're very in it. Um, so speaking to that person who's just landing on your website for the first time and really telling that story is a really, really important thing to just get that conversion or to just get people really interested and then they'll come back later.

19:07So as we kind of look at websites and more of the custom builds around it, it is still really thinking about how can we increase conversion rate throughout your website? How can we increase your AOVs, your average order value throughout? So thinking about how can we bundle better? How can we merchandise better? How can we leverage your amazing assets on social media that maybe aren't featured on your website in an enticing way? So thinking of all of those pieces, coming in with an outside perspective and just like throwing everything at our clients and basically, you know, it's a one time cost essentially for, you know, very, very long term returns.

19:52we explain it as simple as like you have a beautiful house you just bought it and you know the layout the floor plan it's like it's not letting a lot of natural light in you know maybe the the washrooms don't make sense where they're located and like you can decorate it and make it look nice and pretty but the layout's not efficient but instead what a lot of people do especially those who are willing to make the investment it's like they're gonna rip that thing down to the studs and then they're going to make an open floor plan they're going to put the washrooms exactly where they need it and then they're going to optimize to their needs for a better layout and flow but even once the optimization is done they're still going to take their time carefully decorating and curating so that it feels like home and that's kind of how we like to describe like websites right it's like the themes are great but they're not customized to the needs of the actual client.

20:46And so design and data to us are not mutually exclusive. Jamil, how do you take Jazz's experience and bring in those contracts and have people trust you with this investment, this remodeling of their online house? I think Jazz is quite humble about her actual experience. I'll speak to it because this is my job uh you know uh just being a product designer at shopify she knows the ins and outs of how shopify itself works she's very familiar with liquid and she's just great at knowing the functionalities the limitations and everything about the platform her experience at sharma brands where she was the director of design like those two things really go hand in hand and uh you know there was a lot of things she was able to kind of learn there and it's really just like listening to people and like creating a relationship right like uh sales especially in the world of high ticket is like relationship building uh nothing happens quickly and overnight so i think it just made sense to myself to actually go looking for partners versus brands because we've been brands and we know your guard is always up like when a vendor come came pitched to us as yellow beauty or even burgers and fries forever like i don't really trust them the first time i meet them but if i have a mutual between us i'll go and ask them like hey have you worked with so and so how are they and my strategy from day one was like hey take all of her experience you know her portfolio her work everything we've done and create a network of partners that really understand like the value of what we provide and then when the timing is right um you know really execute on that and just build that trust the social proof and all the things that come with it it's crazy when you like see how decisions are sometimes made i think a lot of times it's over complicated with data and all these other things they're needed but a lot of it just comes down to emotions do i trust this person do i like them do i actually believe that they can deliver because at the end of the day like that's what makes us human so like that connection is super important.

22:59And a connection is like such a strong foundation for so many other aspects of business as well. Jazz, because you've been able to help so many brands redefine their online experience for our listeners, they might be early on their journey. Maybe one day they'll be able to work with other half, but if they're thinking about building their store for the first time, what should they focus on in aspects of design or brand as someone who's just starting out? Yeah, I mean, I think the big thing that people miss is definitely that focus on UGC. So any user generated content, I think is massive. And I see a lot of people, their social is amazing.

23:42They have so, so much great content from actual customers. And then when you go to their website, it's just super curated. And you don't get that, that kind of human to human feel. So I think integrating, it can still be very curated UGC, you know, it can still really feel like your brand, you don't need to just kind of take, take your just all your content and add it to your website, I would never recommend that. But really integrating those pieces into your website from day one is massive, I wouldn't always just, you know, it's very typical, with a lot of kind of out of the box themes, you just kind of have your your social media grid at the bottom before your footer, I would definitely challenge people to, you know, use those other content blocks where they might put more of a curated editorial image and maybe play with some UGC video or having more of a visual type of review.

24:32So incorporating that for sure. And then also just thinking about copywriting. That's super important. I also have an English lit background, so that's really, really helped me with all of these things. I never realized it could actually come into good effect, but definitely just crafting that story and really thinking about, I don't know anything about my own brand. When I first land on this website, above the fold in the hero, what's the main problem that I'm trying to solve? I think a lot of people tend to maybe focus on pushing a promotion, which is great, but there are other spots that you can do that on your site, maybe in your promo bar or a pop-up.

25:09I think your hero should really explain what are you trying to solve? What makes you different? That's another huge thing that people kind of forget because they just assume that everyone knows because they know it so well. So yeah, just really focusing on what makes you different, focusing on pulling in that social proof, whether that be, like I said, UGC with video is great. If you don't have that written reviews, testimonials, and just bringing that further up the fold. Another piece to really think about is a lot of people on their product page, they basically just don't use the real estate fully.

25:44So obviously we have the shopping section at the top of your page. If someone happens to scroll past that, it's a perfect opportunity to just keep trying to sell. So almost think of your product page as another landing page experience where just continue to tell that story as you go. Every scroll that someone takes is another opportunity to grab them again. So just reinforcing that story, maybe think about, okay, let's dive more deep into ingredients. Okay. They're still scrolling past that. Let's tell them a little bit about the brand ethos. Just use all those moments. A long page is not a bad page.

26:18I think a lot of people have that perception that, oh, we need to keep shortening the page. I say if someone's scrolling that far down, just keep feeding them more content. So yeah, that's kind of the things that you guys can do early on. And it's pretty low lift that you could just use Shopify themes for. I love those tips. Build social proof with your social media, linking it properly, telling customers who you are, and also don't be scared of having a long product page. Jamil, I know that you're heavily involved in the tech space, and I'm sure a lot of people are also asking the question of how AI kind of is helping or maybe not so much in terms of brand building or sharing stories.

27:05How are you thinking about this conversation, whether it's like talking to potential clients or just members in the community? AI is going to definitely transform the landscape. But I think what it's going to do is it's going to reduce the barrier to entry for startups, right, where it's going to actually increase the quality of work out there. And what I mean by that is it's not going to get rid of everybody, right? There's still going to be great photographers out there, great videographers, great designers people who are you know in the upper echelon but what it's going to do is it's going to get rid of all those people on fiverr it's going to get rid of all the people on upwork and what we've noticed working with larger brands is larger brands still need someone to manage things for them and they still are going to need like the high level creatives the agencies the freelancers.

27:57Because at the end of the day, if you're not an expert in something, whether you have access to the tool or not, like, there's many examples of this, even in society, right? Like before, we used to cut trees with like axes. Now we have all these crazy power tools, I'm still not going to go out there and cut a tree with these power tools, even though it's made my life 10 times easier. And it's a similar thing with a tool like AI. Startups will use them It'll really, you know, lower the barrier to entry for a lot of things like, you know, photography, graphic design, you know, gen AI, like it will make things better.

28:34But it's also going to really increase the demand for, you know, those who are in the upper echelon out there, if that makes sense. I think from a creative side, it's pretty interesting to me to think about where this is going as well, because I think we're going to start to see people craving and still wanting that human touch. And people are really quick to identify, oh, this is like, this is AI. Someone didn't make this. And I think kind of to Jamil's point, the premium things that people will seek, I think will still be more informed by that human touch. I don't think that'll go away. I think it'll just almost create this kind of homogenous baseline where the entry point to creative will improve.

29:21But I think we're still going to see a lot of sameness potentially. I think I'm already kind of seeing that with a lot of things that are developed through AI. Unless you really know how to use the tool and you're prompting really, really well and you're really massaging, it kind of does spit out pretty generic things. I'm sure that'll really improve over time as well. But I think, you know, still having those experts to come in and use it as a tool to create something even more amazing, I think that'll still be there. I think it'll just kind of increase that landscape of, you know, now everyone can at least do something, but what about kind of the more elevated premium human touch pieces?

30:02And I'll make a quick point to Hammer at Home. It's kind of like people crave authenticity and that human connection. So it's like a fake Google review or fake Amazon review. No matter how great the product might actually be, as soon as someone recognizes like these are fake reviews, you just feel like you feel a betrayal and an anger. Or it's like that product or that brand where it's like, hey, you broke my trust. Like you're out. Right. And I think that's going to be that kind of feeling that people are going to have with something like AI. it's not going to replace humans and I think that's our monkey brain that's the fight or flight where it's like as humans that is the experience we want no matter what and I think that is almost like a survival instinct weirdly not to make this like overly scientific or anything but like that that that's my gut feeling on it yeah I think these are all really great thoughts and I think it's so important to hone in on your expertise to both your points.

31:03There will be an ease to entry, but that expertise is still very much valued. Before we close, I do want to wrap things up and talk about the fact that both of you are high school sweethearts. You've been through so many chapters of change together and all the chaos that comes with entrepreneurship. what has been great for the both of you to stay grounded and be able to navigate all those change together i think it's forced us to have extremely difficult candid conversations where because there's financial pain involved and your ego can be hurt in a public realm if you screw it up that it really forces you to like take the emotions out of certain conversations because those emotions can hurt your livelihood.