483: How to Interrupt an Audience with Shark Tank’s Sabri Suby

0:00Hey Founder fam, before we dive into another incredible conversation, I want to share something really special with you. Whether you're just joining us or you've been following us since the beginning, you've been a critical part of our community working to change entrepreneurial education. I started Founder almost a decade ago with the mission to provide entrepreneurs access to the world's greatest business leaders. Our goal was to break down barriers to entrepreneurial education and that's taken us on a journey from Founder Magazine to this podcast and beyond. And today marks the next step in that journey, Founder Plus.

0:35I'm proud to introduce you to Founder Plus, which is an all-access pass to each of our online courses and programs and their proven frameworks for success. It puts every strategy we've compiled from world-class instructors at your fingertips while connecting you to a global network of like-minded entrepreneurs. Founder Plus will take your business to the next level for today and tomorrow. So whether you've just joined our family or you've watched us grow from humble beginnings, We're really thrilled to have you join us in this exciting new phase of making the founder brand and this company the world's best entrepreneurial community to launch and grow your business.

1:16So finally, before we get into today's episode, I'm inviting you to come back, check out Founder Plus and go to founder.com forward slash membership. I'm really excited, guys. This is an incredible new evolution of entrepreneurial education and our mission is really to get as many of these founders that we interviewed to teach and also give back on the founder plus platform and really go more in depth with the knowledge and the experiences and the lessons learned that they're sharing all in founder plus so guys please go check it out if you're enjoying these interviews that's it from me i hope you enjoy this episode now let's jump in What you need is thirst.

1:59You need to be a thirsty human who is intent on learning. It's a really fascinating exploration of human potential. Now. The Founder Podcast. Even the greatest entrepreneurs had help. If you want to learn from the most successful founders on the planet, you are in the right place. Branson, Mark Cuban, Tony Robbins, Tim Ferriss, Ariana Huffington, Steve Case, Gary Vee, Sophia Amoroso, Barbara Corcoran, Damon John. Learn from the greatest minds in business today with interviews hosted by Nathan Chan. This is not your average entrepreneur podcast. The Founder Podcast.

2:42We've got Sabri Subi, recent shark of Australia's Shark Tank, the new version. We're going to hear basically what he's seeing is working in the e-com space. Also, I'm curious to hear his take on up and coming brands, trends in the marketplace, but then also I want to talk about AI, how he's using it in his business, how he's working with other clients and what that looks like and what he's seeing is working in this space because it's growing so fast. Sabri, the first question I ask everyone that comes on is, how did you get your job, aka How did you find yourself doing the work you're doing today?

3:23I got my start because I was raised by a single parent mother in a small beach town, Byron Bay. Me and my sister, I watched my mom hold down three jobs to provide an incredible upbringing for me and my sister. And I knew that I wanted to bring money into the household. And I got my first job grinding peanut butter as a kid. And I knew I was getting paid$2.50 an hour at this health food store. and I found out very quickly that$2.50 wasn't going to really be able to do anything to help my mom. And that's when I started busking at a Sunday market. So I made 80 bucks my first weekend and brought that home, gave it to my mom.

4:02It was a very emotional moment. There was tears going down her face. And then I knew at that point that that money was going to be meaningful for her. And that was the first time that you could say I probably got bitten by that entrepreneurial bug, knowing that I could go work at a Sunday markets for a couple of hours and earn 80 bucks instead of earning$2.50 an hour. And then fast forward, I got my first kind of real serious job in sales when I was 16. And I sucked really bad in the beginning. I figured the sales game out. And then I was a top salesperson and traveled the world doing sales for every type of product that you can imagine I have sold.

4:41And I was always the top salesperson there. And being on the front lines of business like that, being at the very, very tip of the spear and actually converting strangers into customers for businesses is what kind of made me fall down the rabbit hole of marketing, right? Because I was on the front lines doing the like arm to arm combat in selling. And then, you know, people were like, hey, you're really good at this. You should study marketing. I came back to Australia, studied marketing, realized that that's not what I wanted to do. and in terms of the traditional sense of what I wanted to do.

5:18And I started up my first business over a college break, over a summer. And basically, that was selling water filters online. And I had to figure out how to do SEO and paid traffic and conversion rate optimization. And that was when I got bitten by digital marketing, so to speak. and since then, since the age of 22, I have run multiple businesses. I've run some businesses into the ground and had some failures. I've sold some businesses and had some wins and some exits as well. And at all of those businesses, I was always tasked with the number one problem that all businesses face, which is how do we get more customers?

6:03And that was the thing that I always did. And then I realized, you know, I had some e-commerce businesses. I'd read the four hour work week and kind of caught the four hour fever and was like, hey, I can just like run these businesses fully automated and just live in my pajamas. Right. And I got very bored and very lonely doing that. And it wasn't something that really lit my soul up. And I always felt like there was something missing when I was running those businesses and I was still making good money and I was working minimum amount of hours, but I was like, is this it? Like, is this what I'm meant to do?

6:39This doesn't really sound like, you know, my idea of happiness and fulfillment. And that was when, you know, like realistically, like I would say the four hour work week for me was a bit of a mind virus because it kind of looked at work as this negative thing. And it's not something that you want to pour everything in when really the work works on you, And doing the work and focusing on something that lights you up doesn't need to be something that you minimize the amount of time that you do in that thing if you really enjoy that climb and that continual strive for just improving. So then I basically started King Kong, an agency, helping solve that problem for all of these different businesses of how to get more customers and built a team.

7:29And that's kind of how I got the gig. Yeah, incredible. So you've worked with a lot of different companies, helping them grow and scale. And what have you seen is working right now for, and also you've invested like you're a shark on Shark Tank. You've invested in e-commerce companies as well on Shark Tank. You've seen some of the companies that are coming through. something you said to me offline, which I thought was very interesting, is the trend that you've noticed the amount of brands blowing up just from TikTok organic. Like that made my ears perk up when you said that. So, you know, if somebody's starting an e-commerce business now or their early stage, what do you suggest they start with when it comes to digital marketing?

8:15Yeah, it's a little bit controversial, my take on this. The thing that I believe that any digital marketer should start with is not digital marketing. It's actually storytelling. And, you know, if you have a look at the landscape of where we stand right now, TikTok has really come in and has kind of changed the game. Because when I got started, you know, in digital marketing many, many moons ago, you had to basically, there was two ways to get traffic. One was like organic traffic and writing blogs and doing SEO and manually outbound reaching people, doing link exchanges, all of that infographics.

8:56That was the free world of ads, right? Slow burn takes a while, very uncontrollable, but it's very, very good as a long-term underpinning business strategy. Then there was the paid traffic world where you have to go out and buy eyeballs and you need cash to do that, right? And then you needed to know the whole science of conversion to convert that and make it all profitable. Now we're in a day and age where you can literally be good at storytelling and blow up on TikTok, right? If you're good at grabbing people's attention with good hooks, you know how to retain that attention and then deliver on a promise.

9:30You can literally go from zero to hero in three months on TikTok. And there are countless of businesses that are great examples, you know, of this, right? And so that has really leveled the playing field of if you want to get traffic, there's not just like, you know, the slow burn organic route or the quick paid route, right? And if anything, you know, you really want to focus on that storytelling component. Because what I have seen is if you can tell great stories. You're going to be good at organic, right? You're going to be good at getting organic traffic and to be good at YouTube videos, all of this whole organic engine.

10:12And then the organic engine is the best thing to fuel the paid engine. Because if you find out what's resonating in the algorithms for free on these organic platforms, if it's resonating organically, and then you take that and you find out what is the DNA within that? Why is it working so well organically. And then you move that across to the paid side is where things blow up, right? Because it's already tested that ad organically, and then you're moving it over to the paid side. But none of that means anything, right? Running ads, building out funnels, none of that stuff means nothing if you don't know how to tell a good story, because that's all it is, right?

10:57All it is, is communicating. And the oldest form of communication is storytelling. So if you want to have a good ad and a good hook, then you better know how to communicate and tell a story. If you want to write a good VSL, if you want to write good product descriptions, if you want to have good upsells, post-purchase upsells, cross-sells, you better know how to tell stories. If you want to have great ads, you've got to know how to do storytelling. So that is the absolute core foundational skill that will serve you for the rest of your life. It will serve you in your personal life, in attracting a mate or getting a house or getting an upgrade in a hotel room.

11:35It will give you all of those things. And it's basically the leverage point that all of the stuff that you do on e-commerce sits upon. Who's the biggest e-commerce giant on planet Earth? It's Apple. Steve Jobs, the best storyteller when it comes to marketing that there is. If you really study his presentations, he is a master, an absolute master at it. And I'm not talking about like e-com chads that are doing, you know, a million, two million a month. Like we're talking about titans, like billion dollar companies like Apple that dwarf all these companies through e-com. Look at what they focus on.

12:15Look at when they launch a product. Look at the stories that they tell. Okay. Hey, FounderFam, I want to talk to you about something super exciting. We're officially partnered with OmniSend, the email marketing and SMS platform built specifically for e-commerce founders. We've been recommending OmniSend to founder students for a while now because it just works. Whether you're launching your first store or you're scaling the seven figures, it really helps you automate your marketing and get real results. Did you know on average, OmniSend customers make$68 for every$1 they spend? which is an insanely good return on investment.

12:52And because you're part of the founder community, you get 50 % off your first three months with the code FOUNDER50. Just head to omnisend.com forward slash founder without the E to get started. All right, now let's jump back into the show. Love this, man. Really interesting. Didn't think you were going to say that. I thought you were going to say something around paid ads, turning a dollar into three. So, okay. So I'd love to explore this further. So how do you get better at storytelling? Like what do you look for? Is it just looking at creating content, seeing what works? Just use these organic platforms to start with and try and drive traffic to your site?

13:30Yeah, I'd say that the easiest way to learn it and to get quick feedback would be these organic platforms, Instagram Reels, TikTok, YouTube Shorts, because you have to get a lot of reps in, in order to, to get good. And those platforms are easy to get a lot of reps in and to get a lot of feedback in. And no matter what that, those first 100 pieces of content that you put out are going to suck. Right. For me, like the feedback mechanism that I use was cold calling, right. I used to make 300 to 600 cold calls a day in my first sales jobs. And that was like immediately, like the hook is the opening line that you say on the telephone, right?

14:15And it's like, that's the thing that you're testing. Okay. Everyone's hanging up on me. That is not interesting. Right. So then you change up the hook and you keep changing the hook and the hook, and then you get it. Oh, okay. This is what people like. Right. And then you're like, you lose them in the lead in. Like you see that they don't hang up on you immediately. They'll let you talk for 30 to 15 seconds. And then they said they're too busy and they got to run. All right. That lead wasn't strong. And then you change that. So I would say that the best thing to do is to like look at, you know, creators on, on TikTok, because that's just the number one organic channel in the world right now.

14:47Um, and have a look at like, what are, you know, the, the TikToks that are going viral on those things. You can get a Google Chrome extension called sort, and you can go to any TikTok page, click it, and it will sort the most watched videos on that TikTok channel. And then start to have a look at those and start to say, okay, what are they doing? Like how, how often are they changing the narrative? Like what's going on in these things? Um, and then just looking at even YouTube creators, you know, obviously Mr. Beast is very popular. Um, having a look at like some of the things that, that he does and other storytellers are doing, um, in, in that space to really understand through views, right?

15:28That's the, that's the marketplace telling you they're rewarding people with views for their ability to be able to grab and retain attention. And so you're selling a physical product, you think you, the founder, should be face to camera on an iPhone creating content or using ambassadors or like what's... Yeah, I just take like, for instance, like two of my recent Shark Tank investments and both of those businesses have blown up purely as founder-led content creators as the start of that business. So like everyone's like, oh, it's not scalable. It has no like, you know, brand equity and all that.

16:12Man, bro, you don't have any fucking thing that you're going to sell in the beginning. Let's just be real, right? Yeah. Once you, as the founder can like get that content popping and then institutionalize it and then bring in other faces further down the track. Like why are you thinking about selling? because you're not even doing a hundred grand. Like who cares? Like I see these people talking about scale and sitting around, oh, it's like, you want to have other people. It's like, man, you don't have anything right now. Like you need to do any and all things that you need to do to get this party popping, right?

16:45So don't talk about it's not willing to scale. You don't even need to scale yet. You're not even at a hundred grand. You're not even at a million a month or whatever those things might be for that business. But yeah, those two businesses are all founder faced. and then the best thing to do after you've gotten that is then phase in other characters, other people from your business to come in and build it out so it's not just you. But yeah, I think that the easiest and quickest way to get more reps in and feedback is not to be reliant on anybody other than yourself to do it. And when do you start to add in the paid engine, right like so by the time clients by the time you guys are signing clients at king kong they've got product market fit somewhat they've you know they've got sales coming in otherwise they wouldn't be able to afford you guys and they're coming to you guys really around paid or funnels and and that piece of the puzzle i know one thing that you said to me a long time ago was it's all about the average order value and you guys won't take on an average a client unless their X amount of average order value.

17:48Is it about 80 bucks or above? 70. 70. Okay. So when they come to you on the paid side, what do you find is working now in this market? Because it is fiercely competitive. Yeah, it really, really is. And most e-commerce businesses, they try to compete in the ads manager right and if they do that they're gonna have a very stressful life because that is just like you know the ads manager is not the thing that is gonna be the the thing that your business lives and dies on but that's what everybody thinks right they need to you know get another facebook ads course just to keep their heart beating right like they're just obsessed with like the latest ad strategy.

18:38And what you realistically want to do is be competing on economics, right? And then if you compete on economics and you have sound economics in your business, then it makes all the ad strategy and all of that stuff so much easier, right? So I'm going to give you those golden economics that you need in your e-commerce business, like in order to basically be able to scale aggressively. Okay. Right. You need to basically have gross margins of at least 70%. If you do not have gross margins of 70%, you're never going to be able to scale hard because you just, the margins are too low to cover the customer acquisition cost.

19:24Right. Then the next thing is you got to have an average order value, an AOV of 70 bucks or more. Yep. Right. So that your net dollar amount, right, your 70 % gross margins on the 70 bucks is enough to cover the CAC. Yep. Right. Otherwise, again, it's going to be a hard life. And you need to have a healthy repeat purchase rate on the actual product. It's a consumable or the caveat is you've got to be selling something that has an AOV of$400 or more if you don't have a healthy repeat purchase order right yep wow okay yeah um you need to have you know a unique mechanism or a good brand story that you can leverage across your ads and across your funnel and everything that you have on offer if you don't have those things and you've just got a gadget or a gizmo it's over you're never ever going to be able to scale hard either.

20:28Because you're scaling something that is old and boring. There's not something that I call that is new leaf, right? There's new, unique, easy, exciting, predictable, and huge. And unless someone looks at that and goes, yes, that is new, that is unique, that is exciting, then you're never going to be able to get their attention to be able to sell them in the first place. Yeah, man, this is awesome. And then the last part of it is that you've got to be selling something that's good. And so that the reviews and the word of mouth grows over time and then fuels in that conversion engine on the back end, right?

21:09Because like in e-commerce, the two biggest variables that are going to move the needle the most is price and social proof, right? They're the two levers that you really want. If you're split testing an e-commerce product or a site and you're doing conversion rate optimization, there's nothing that you can do like simplifying the checkout, all of that stuff that's going to move the needle more than price. That is the most leverage that you can get. However, we obviously want to have the price as high as we possibly can and the AOV and the ROAS as high as possible as well. so the other part of that is like you know you look at how many people add products to cart and don't check out right um and a big part of that is that they get unsure they get cold feed or you're charging shipping which you shouldn't be doing um that are all they're all things that hold back it's like the invisible hand that kills conversions um and the way that you you get around a lot of that as well is having lots of reviews and lots of social proof that you can use across the whole funnel and ads as well.

22:16Yeah. Wow. All right. This is gold, man. Thank you for sharing. Few things I've got to unpack. The first thing was if you're charging for shipping, you shouldn't be doing. What do you mean by that? Well, yeah. Like it's like we're living in a day and age where like, you know, I think it's like 51 % of Americans have as an Amazon prime account. They don't, they don't pay for shipping. Right. So our homeboy, Jeff Bezos has set like the standard of like you don't pay shipping right and it's like they have so much brand trust and equity in the marketplace and they don't charge shipping if you're a prime member right so how can you charge shipping when you don't have nowhere near as much trust like it's like you know people don't want to pay for shipping like if anything just burden that cost and absorb but in the cost of the product, but don't have a hidden surprise on the checkout of like, yeah, we're going to charge you or put your postcode in and we're going to charge you.

23:17Like just work out what the blended cost of it is and factor it into your shipping, factor it into the actual price of your product so you can slam free shipping everywhere. And you've seen from numerous split tests that you get a better outcome from your experience. Yes. Okay. You've Talked about healthy repeat purchase rate. Can we put some numbers on that? No, because it varies dependent on like the category of business that they're operating in, right? It's like if you're having a protein powder, you're going to have an insanely high repeat purchase rate versus somebody that might be doing like teeth whitening or maybe skincare products or, you know, some kind of lotion or it's sunscreen or whatnot or it's clothing.

24:05So it does vary, but what I would suggest that, you know, the viewer does do is have a look at the category that they operate in and have a look at what is the benchmark for a repeat purchase rate in that industry that they operate in because there's lots of e-commerce that's publicly available around this and just to make sure that you're 10 % higher than the standard. Yeah. Okay. And when it comes to paid ads across all your clients, where do you see most of the spend going? Is it still Facebook? I know Google search has made a big resurgence. A lot of people spend there now as well. TikTok, I don't really hear that many stories of people doing really well with TikTok paid ads.

24:50Where do you find what's working now? Yeah. It's still for all the flack that they get, it's still meta. It's still Facebook. It's still that sweet. They are the 800 pound in the gorilla in the room. Um, Google shopping and all of those things are great. Um, you want to have a look at the landscape that you operate in on Google and have a look at like, who are the people that are running shopping ads? Who are the people that are running text ads? Does my price, is my price able to compete with these people? Um, and how do you kind of, What's that little entry point into the market on that, right?

25:26And let's just say that you do have a good entry point and your product is good and it sells and the conversion rate is there. Wonderful. Get to a 90 % impression share on your ads, meaning that 9 out of 10 times when people search for those keywords that you appear on Google, right? But then the reality of it is in any given market, that is just you're limited by the volume of people that are searching for that. And the real opportunity to scale and blow up for most businesses is being able to master interruption-based marketing, where they're pushing a message in front of a market like Facebook ads, like YouTube, like TikTok, where they're not necessarily looking for it, but you're so good at storytelling that you can grab their attention, agitate a problem they didn't even know that they had, and then basically make a compelling offer to them to get them to buy, right?

26:25Because you're not limited then by the number of people that are jumping onto Google and searching for those things because the average CTR on a Google ad is around five and a half percent in today's day and age. Meaning, you know, if there's 100 ,000 people searching for what it is that you've got, and for a lot of products, there isn't 100 ,000 searches, then you only get 5 ,000 of those 100 ,000, right? And that becomes like a challenge. And it's also you're competing in a place where everybody's prices are visible in the get-go, and they're already pre-framed. That traffic is pre-framed, right?

27:08And because Google Ads has the most amount of dumb money on it because it was the first ad platform. And what people do is they're very stupid, unfortunately. And they basically, the lever that they pull, because they don't know how to do marketing and conversion and optimization properly, they pull the easiest lever, which is price, right? And then they just basically, it becomes the race to the bottom. And so they kind of wreck that little marketplace of traffic by dirtying it by just pulling down their price or they do the other thing which is they're so unsophisticated that they just spend more money to get more traffic and to just outbid people right so then they end up selling like shittier products to be able to afford to be able to pay that much to get the click and then because they keep bringing the price down they keep on needing to make the product shitter and shitter and shitter right um so there are marketplaces for those things but it's typically not in the brand building space of like building d2c brands yeah and building a brand's where it's at right like i know drop shipping can work as a lifestyle business and stuff like that but the the real if you're going to build a business you want to any commons you want to build a brand 100%.

28:31Okay. So I have to ask you, you've done incredible with your ads, right? A lot of people have seen your ads and you keep upping the game, upping the game, upping the game. What advice would you have to anybody in the earliest stages that can't effectively afford the high production value? Do you have a formula when it comes to your ads that you could share or anything that people should be thinking about when it comes to having ads that really just can scale and convert? Yeah, I think that some of the best performing and disproportionately the highest converting ads are low production ads, right?

29:16They are shot on the iPhone and edited ads, right? So don't let that be a barrier. I just got the new iPhone, right? The camera on this thing is just ridiculous. Like it's, it's so insane. Um, you know, I, one of my, the, the, the other sharks on Shark Tank, Jane Lou, who runs Shopeo, like I went over to her office, um, recently to be on her podcast. And even when we were shooting Shark Tank, she had her, like her media crew come and they don't have any cameras. They all shoot on the iPhone. They shoot the whole eye. They shoot the whole podcast on the iPhone and they just put stands like their whole thing is pure iPhone and very native right and they're crushing it so it's like that that is the world now like even a lot of the brands like a lot of huge brands out of the states like it's like they shoot all on the iphone because that's the native platform it was i i read some stats some crazy stat the other day it's like 90 of all content that people consume is shot on the iphone or on a smartphone because if you think about it.