521: They Made $20M selling Perfume | Raquel & Adam Bouris [VIDEO]

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0:39Just head to omnisend.com forward slash founder without the E to get started. All right, now let's jump back into the show. Day one of Who is Elijah was me taking photos of my one product, uploading it to Shopify, pressing go live, and then crickets. literally crickets of course no one's gonna buy it online no one knows it yet like how do you sell a smell one day just started walking into like boutique stores in sydney and like nine out of ten of them like said yes two years in we're probably doing like forty thousand dollars a month but you know just because you're growing revenue doesn't mean you're growing profit our revenue was growing but our profit was going the other way you have to be so like disciplined with like what is actually happening.

1:28I don't know how we got to where we are today, everyone, but we somehow managed it. I guess that's kind of like leads into where the name came from. It was called Raquel and Elijah. No one's name was Elijah. So one day I just said, who the fuck is Elijah?

1:44Before we dive in, I want to extend a warm invitation to join our thriving founder community. It's the perfect place to discover more insightful interviews aimed at helping you build, grow, and scale your business. So don't forget to hit subscribe. Your support means the absolute world to us. Thank you so much for subscribing. Let's get stuck in today's discussion. Hear the stories, learn the proven methods, and accelerate your growth and future through entrepreneurship. Welcome to the Founder Podcast with Nathan Chan.

2:20wow Raquel and Adam thank you so much for joining us today on the founder podcast thank you studio thanks for having us you're welcome you've come down from Sydney it's always good to do interviews in person way better you can build a you know just a better rapport connection so you guys have built this incredible brand who is Elijah the first question I usually ask is how How did you get your job? But we're changing it up. Okay. So can you describe your first 60 days of business? Okay. First 60 days, like day one or like the first 60 days of like. Let's talk about launch. First 60 days post-launch, right?

3:01Crickets. Yeah, crickets. Crickets. Like day one of Who Was Elijah was me taking photos of my one product on an iphone and uploading it to shopify and pressing go live or whatever the button was and then um nothing happened because i didn't do any marketing um but i remember my first sale which would have been in the first 60 days you probably remember it too i think i was pregnant and adam came home it was like 9 p.m and i had like an order like packed on the dining table like label printed and everything because i was so excited someone bought a 10 mil um i still remember the name but then I feel like the first 60 days of maybe when we like from maybe when I went full time into the business we were still working in our garage we were two I was two and a bit years in um we had one employee that I paid cash um and then we had we're moving into a storage unit in Cornell like near Cornell where we lived um and we were just about to launch into David Jones but that's two and a half years in which I call day one yeah I mean the storage shed was one third the size of this setup and so cold cold and dark dark no electricity one little shelf in there so probably the same size as the bookshelf and um there was like four products on it thought I was killing it yeah but when um David Jones happened Adore Beauty happened um those were big moments for the business um and i think you know momentum really kicked for us after that wholesalers started to take notice of us um we started to make more content online um when we were selling in david jones it was a big moment for raquel to be fair like she just walked into david jones you know found the buyers online in linkedin hustled them just said here's my product put it in your shelves they just said yes without smelling it but you're kind of living out a lot we we um i dm'd the buyer on linkedin and she wrote back within like a day or two and then she said oh this sounds really great can you send me a brand deck and i was like what the fuck is a brand deck i don't know what a brand deck is um but then i went i was still working full-time at the time so i went to like my marketing team that worked there and um i said oh like can you help me build like a brand deck like this person wants a brand deck and I was like kind of hiding the fact that I had a business on the side but some are like my work friends knew um and I just sort of paid them on the side and um they made a brand deck for me so the marketing manager and a graphic designer and um I sent it to David Jones like within like five days and um they said it was the best brand deck they've ever seen and they said yes straight away and then I was like can I send you samples and they're like oh yeah like if you want but we can launch on this date so that was pretty cool and i still speak to that buyer now she doesn't do fragrance anymore but she still works with david jones and now we're like one of david jones like best-selling fragrances yeah and doing doing that now getting into a new retailer is is it oh it's so much harder it takes 12 months yeah that happened in five days which is like yeah it's unheard of yeah well you don't know if you don't ask though right that's right yeah yeah so how'd you guys come up with the brand so it took a couple years to get to get traction how'd you guys come up with the brand how'd you come up with the idea why'd you decide to i was partying my little butt off at coachella i had just asked adam to be my boyfriend he was too scared to ask me but we coincidentally had the same trip book he was going on a bucks party which is maybe why he didn't want to ask me to be his girlfriend um but we were both going to vegas and we're both going coachella same hotel like so yeah meant to be yeah um but i i went with my friends and one of my friends brought along a friend from queensland and she just smelled amazing so then i took a photo of it and um when i got back home to sydney i tracked down this oil perfume that was from india and bought like 40 bottles of it because i had to buy it wholesale that was the only way i could buy it and then i started wearing it like to bars restaurants just like anywhere i went and so many people coming up to me like tapping me on the shoulder and asking like excuse me what fragrance are you wearing because it was so strong wasn't it and like very unique and that was sort of like what sparked the idea to do it um that's a whole other story in itself but that's sort of like the the the origin story and then um I actually started it with a friend who I went to Coachella with Matt I love you Matt um but he decided very early on that he didn't think it was going to go anywhere and didn't want to go ahead with it when it came down to i think like when it comes down to having to like financially put into a business i guess that's you know makes people think a little bit more about it and it was it was like day one it was very early it wasn't even called who was elijah then it was called raquel and elijah so then um yes and matt decided to not move forward with it um but he would have been a great business partner because he's so good in retail so he's like um one of like the head buyers for tommy hill figure now but he still helps me he's still my best friend and he helps us a lot i feel like he'll work for us one day and like as like a gm like he's like he'd be an amazing gm um but i guess that's kind of like leads into where the name came from um no one's name was elijah so one day i just said who the fuck is elijah the name just kind of stuck um but that's sort of like the origin story And so how long did it take for you to go from ideas, you said you're working with Matt first, to actually launching in 2019?

8:54We launched October 2018. Coachella was April 2017. Okay. And then it was sort of like a couple of months after Coachella, like just over a year from when I said like, oh, I think this could be something to launch, was going to be just over a year. Yeah, okay. So it took about a year to bring the product to life. Find a perfumer. Yeah. Talk us through that process because people are always really curious because it looks really intimidating. To launch a physical product like a fragrance, make it unique. You said you found the wholesaler or you're wholesaling with the oil. The oil fragrance. Yeah.

9:29So talk us through that. Yeah. That was a journey. Lots of tears actually. I was pregnant as well. So I was hormonal. Or was I pregnant? Yeah. No, no. I wasn't. Sorry. I wasn't at the start. And finding a perfumer was actually quite easy in Sydney, but then that's a whole other story as well that we should talk about. We'll come back. Tell us. We'll tell this one now. So I found a perfumer in Sydney quite easily, and we worked with him for like probably two and a half to three years. And then I always said to Adam, I don't think he's a perfumer. Like I don't think he's the perfumer. And I did.

10:07I said it for so long because he wouldn't give us the IP to – The recipe. Like the recipe. The makeup of the product. Because we needed it because we're registering our products overseas in the UK and Europe and it's like quite a like a hectic process and they were asking for like the full IP and I'm like, well, we don't own it. Like it's not ours. And this guy wouldn't give it to us. And he's like – and then I was like fucking like he doesn't own it. But like otherwise like this, because we were like, we'll give you whatever money you want. And he's like, no, no, no. And I'm like, everyone has a price.

10:41And then I was like, he mustn't own it. It's not his to give then. Anyway, turns out he wasn't the perfumer. He was like the middleman and getting it made by the perfumer who we now work with. But his middleman, there's nothing wrong with being a middleman, right? Because lots of them. Just that he was deceitful about it. He had a website that said he had 170 years of family history in the fragrance industry. and it was deep to his core of who he was and all of that. And, you know. He really was believable. He was believable. And every time we'd meet him, like, it was at a WeWork office or something like that.

11:16Nothing wrong with that, but, like, sort of wasn't starting to piece together. Yeah. And then we had a call with him about, like, the next products that were coming. And I looked at the background of the call. I'm like, that's a fake setup. Like, you had, like, a. like a girl had a lab coat on and she was walking around this like circle table with like products displayed all over it i'm like because we started thinking about like this is not right and then i'm like looking like pausing the video i'm like this is bullshit yeah so we got off the call and we're like something's fully up with this um and then obviously we get lots of people reach out to us you know throughout the process once they see the brand like suppliers and stuff like we want to make your fragrance we want to make your fragrance and you never want to sort of disrupt that product because it's fragrance and it's so like you know important that it stays the same all the time so we say no to all these people that reach out all the time and then one guy just was very persistent and he sent an email he sent a dm to raquel's personal page once and he said and at the time we're having a problem on quality control with Nomad, our bestseller.

12:33And he messaged Rico and said, I know what's wrong with Nomad. I'm like, obviously no one knows. Can you please call me? I need to speak to you guys. And we were like. I was in a meeting and I stopped the meeting and go, Adam, this guy makes our fucking perfume. I know it. And he did. I called him. I was on the phone to him and he told me everything. Like our other perfume, I certainly said his name, our other fake perfumer. Like, we would get emails from, like, Sylvia, Amanda, like, all these different people. They were all him just on fake emails. Yeah, so it was just him and he was, like, and he was, like, charging us, like, triple the price.

13:09Yeah. Actually, none of the time I talk about it is very angry at you. Yeah, he was dictating, like, payment terms and things with us even though those terms weren't what he was being provided by our now perfumer. We had to pay up front. Every time we would launch a new product, he would say, it's just more expensive because it's a new product, even though it wouldn't need to be. And he would say, I've got to source ingredients from Dubai and from all of these magical places around the world that just didn't simply exist. So for the first two years of Who's Elijah? Catfished. We were catfished by our supplier.

13:47And the product was still good because it was getting made from the good guy. but just the way it was being filtered into us like it the payment terms were terrible he was hard to work with i had to just be super patient and just be like well this is our product i'm just gonna have to deal with this guy because i don't want to stop it now yeah and but we had started looking at different perfumers and we're sending our perfumes to people to like try and see if they could match it to get the same scent and no one could but thank god for brad and brad's like such an awesome dude to work with isn't he and now perfumer he's great but yeah that was kind of yeah that was a lot yeah that's how it that's how it happened and that first process to go back to your question about how it how long it takes to to bring a product to life so in the beginning the first one it was 12 months as we said so it was you know from idea Raquel found the fragrance oil from India and wanted something similar or the same to be made and then went to our then you know fake perfumer and he sort of steered me away from that because it was sort of it was a unique type of fragrance and he said I think like you know you should make something a little bit more mainstream and like a bit more wearable to the masses which which was good advice because then we created um his her which was our bestseller for like three years and still one of our best sellers so yeah um but i feel like that process was actually quite quick um but then sourcing the bottles was actually okay i found a like an italian like online um retailer and i could buy 100 bottles at a time and i think they weren't like i mean they're a lot more than what we pay now but it was still like a good price i forget how much it was um but then we had to figure out like i didn't bring a perfume bottle but like you know like the spray is like that gets like crimped onto the bottle so it doesn't come off, right?

15:44Yes. And we're like, we bought a machine from China and had to have like a, it was like a generator or something in our spare bedroom in our apartment and it didn't work. You know, there's loud generators you get from Bunnings to like do your car ties up. Like we had one of them going at like 10 o 'clock at night trying to figure out how to like keep these perfume bottles for the first like 50 bottles. And for Adam, like Adam had his own business. Like he wasn't, who was Elijah then? He was just my boyfriend. And he tried to fix it so much. But then I ended up tracking down these like hand tools that did the same job from South Africa.

16:22We've still got them today. They sit on my desk as a reminder. But then I thought when that machine didn't work, I was like, fuck, what am I going to do? Like the business is over. And then I found these little tools and they were like$200 and we used them for years. There you go. So you guys effectively were hand-making to bring to life. Yeah, yeah. That's right. So the fragrance was – or the liquid was made. Got delivered to us. Got delivered to us, our little apartment in Canola. Yep. We'd get the glass bottles, the sprays, the lids, the labels. Yes. And – We'd fill. We'd fill it. Fill it by hand with like little syringes or little like funnels.

17:04Like the reusable sauce bottles. Yeah, yeah. Yeah, yeah. and we'd like we had like this timber table where if it would spill it would like wreck the table and i'll put a mat down and all these little things like you know it was so intense at the time because we're trying to get our first orders out raquel's first orders out and we had like how do you make how do you fill a perfume bottle yeah you know into google that's how much we We didn't know. But it worked. And, you know, I think that we just followed the demand that people liked the product. So we were going to keep going because we were continually told that people liked it and we just figured it out.

17:46And I think, look, that naivety is so incredibly important because if you guys knew, and I found this when I started Founder, like if you actually knew how much was required, you wouldn't do it and you approach things differently. And that different approach is what makes you and the brand different and what attracts people. Yeah. So MOQ, talk to me. Like what was the first minimum water quantity? Can you share kind of like how much it cost? So for fragrance, it's 20 liters because they come in 20 liter drums, which was fine. The bottles we could – I think it was like 110 minimum that you could buy, which was like very low.

18:26And that's kind of it. And then I was like – I didn't have packaging back then, like proper perfume out of packaging. I just went on Pat Queen. I think it's actually in Melbourne. Everyone's probably heard of it. And just got like a LaLavo style brown box. I hand stamped it, put tissue paper in it and I could just buy whatever I wanted of all of that. So the MOQs were essentially like 200 bottles basing it off the fragrance quantity, but quite low. So very low risk. I was working full time. So it was quite easy when I think about it now. Like it was actually quite an easy start, but getting all the bits and pieces together of how to actually do it was a lot.

19:05And I probably should have gotten in trouble because I didn't have any ingredients on my packaging or any of that. So, yeah. So, like I didn't know any of that. So, yeah, lucky I didn't get into trouble. And then it was just me and like these tools that we bought. like Adam just renovated our kitchen and had this like beautiful like nice stone and he'd come home and I'm banging like the perfume bottle lids on the stone and he's like don't do that. Hey founder fam I want to take a quick break from the show to tell you about something we're really excited about our Black Friday offer because this Black Friday deal is different.

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20:22Picture this, with the help of Founder Plus, you could be running your own Black Friday sale this time next year, or you could be smashing it out of the park, smashing all-time records. So don't miss out. This deal closes soon. Start building your business today at founder.com forward slash plus. That's P-L-U-S, or click the link in the show notes. All right, now let's jump back in the show. but I do that at like 10 o 'clock at night because I was working full-time in the city and then coming home and like I don't know if I had like 30 bottles to fill I thought like oh my god this is so much but yeah it was really cool we should have filmed it we didn't film any of this which I like hate myself for because it would have been like so cool to see to show everyone yeah yeah okay so you said it took a while to get traction so you got your first sale within what 60 days Yeah, definitely within 60 days.

21:13But I reckon we got our first store within 60 days. Yeah, so we went in. Oh, actually, no, that's a lie. Yeah, I think it's important like that was 2017. 18. 18. But like starting an Instagram account, you know, didn't have all the tools that there is now. Influencers were like probably peak, like peak effectiveness then the high smile guy like that's around that time right and we were brand new to everything so just know what no knowledge of how to or why to and also know like how do you sell a smell yeah through a picture yeah so we had to figure out Raquel said well I need to get it into stores so that people can just go and smell it.

22:06And that's like the wholesale strategy just started on the back of, well, of course no one's going to buy it online. No one knows it yet. We don't have thousands of dollars to give to influencers. We only just figured out how to make the thing. So let's like go and find some retailers that will stock it for us. And we didn't even think of Facebook ads back then like that. I think about it now. I'm like, oh, it was so dumb. Facebook ads for the first two years. I don't know how we got to where we are today, everyone, but we somehow managed it because we didn't start Facebook ads until like two years in.

22:37I just didn't even think. That's a good way to go though. But yeah, I mean it worked. But again, if we didn't do the wholesale strategy, we wouldn't be sitting here today for sure. But yeah, I just one day just started walking into like boutique stores like in Sydney and like nine out of ten of them like said yes, which was really cool. And there were small orders, which was fine, but that started to grow and then I think we got to like when two years in when I left right before David Jones when I left my full-time job we're probably doing like $40 ,000 a month yeah in not like in wholesale which was like huge and not like it was probably 100 stores at that point yeah and Raquel was still full-time I wasn't in the business like officially yep I was still running other things yep um and yeah there was it would have been 100 stockists at that time yeah so it's like I felt comfortable leaving but I sort of gave myself that goal like if I can get into David Jones I'll quit my job because that was like the year of COVID yes and um I was just like sick of working for like rich old men and I was like I don't want to do this anymore I was like I've got a good product like I know I can like make it I just need to make a little bit more money and then like that's cool and then so I got into David Jones and I was like oh shit I thought that was going to take months so I walked into the CEO's office and I was like I'm going to leave.

23:57And he was disappointed. But I did love working there. And now like my old boss who also worked there, she now kind of works for us, which is cool. As an heir, like a consultant. But we became really good friends. She was a director of HR there. And then she left there as well around the same time. And, yeah, it's full circle. Yeah, there you go. So that's really interesting that the brand was doing like$40 ,000 a month. and it was only then you went full-time can you talk us through that thing because most it all happened really close together i think oh no but then covert happened as well so i think we're doing pretty good but then cover it happened and obviously all the stores shut down yeah so in the just to back up yeah in the lead up to to that again recur was full-time and i was i had a um a kitchen design company that was like i'd been going for eight years and i had an app and a few other things that was going on that was like funding us and raquel's had a really good job that paid really well as an ea to these four c-suite guys so it wasn't like there wasn't a need for raquel to go full-time because like we needed money we weren't like wealthy or anything we just lived in a small apartment in Cronulla and we just like we didn't have kids or anything so it was just you know less risk and it was more just out of like a world the business is going now and we do have a little bit of you know safety behind us like let's just go and $40 ,000 a month was was plenty you know to keep us within our means of what we were doing and you know we had a hundred stockists so there's that part of us that was like we believe that people want the product like you're always constantly i think these early founders you're just unsure you can't even believe that people will come and buy you buy a product when they do it's so like rewarding and ensuring that we can keep going this one extra person likes it or this one retailer that this this head buyer for this retailer is a significant buyer and they like it so that must mean we're doing good so we just sort of kept following that we never took any like crazy risk and like anything based on like well we hope this retailer does this so we're going to quit in the hope that they do this yeah it wasn't wasn't like that and i think sometimes founders can get a little bit caught up in the in the what they want their story to be and how they want to be as an entrepreneur versus like just what's actually happening and can i leap or can i not leap so at the point yeah there's 100 stockers david jones is on board adore beauty you know was near was near and their first purchase order was like so we launched with adore beauty in january 2021 so like four i was like four ish months after david jones and their first PO was probably like$10 ,000 but then they sold out like straight away and then they ordered again and then again and again and they just like all of it sold out over like was it like a four three or four week period and probably all of that money was probably like 60, 70 thousand dollars but we spent all of that money on getting air freight because we didn't have the stock so we didn't make any money but it was like we didn't want to not fulfill those orders because it was like going on such a role um but yeah so i think like a lot of like the side of the business we were making good money but we were not knowing how to use the money properly like we were air freighting a lot because we we didn't have enough money to buy the the packaging up front like 10 000 units my parents gave me a little bit of money and that helped but um we were just air freighting everything so we were like making no profit um but it was yeah i was like thinking of as nice to like reflect back on it but um but it was i don't regret it because we were building we built the brand from that point quite quickly it felt like but with like adore beauty was a really big help like they really got behind our brand and like um like their community is so loyal to them so we're still with adore beauty now and like we we grew really big with them i think what adore beauty showed us that we didn't believe was that perfume could be sold online yeah all right because they were they were they're online only and we we hadn't figured it out yet we were selling online at the time it would have been about 80 wholesale 20 online so 20 grand a month maybe online like maybe like you know we were still thinking a thousand dollars a day we could do that easily online and it was so that was the goal it was so much further away than that than than we thought but they proved to us it could be sold at somewhat scale online and we took some tips and tricks from them that was they had a risk-free purchase so you buy the perfume because of course you don't know what it smells like you would they would give a two mil free sample with every order and if you test the sample and you don't like it send it back ah so that's the samples so we that's when we clicked for us like well we'll do that too because we're doing it for them because we're doing it for them so let's do it for us yes so we figured out how to get samples done correctly and you know we do that all in-house anyway so we turn the messaging onto our site to be like that yes um i think it was at that time we started doing the influencer stuff too right well we did influencers on it like when covid covid happened yep we had 300 stockists at the time yep 80 of revenue gone overnight see you later and committed to start our staff and we had stock and we had plans right like everyone so like just have to deal with it and move on and obviously in hindsight online was essentially going to boom but no one knew at the time what was going to happen so we had just started to figure out how to do online how to post properly on instagram like this sounds so stupid but like this was 2020 like and we were just figuring out how to make money online and we'd already made we'd already made organic everything was organic at the time which was great so we went into i think um one of the uh hembrow oh emily hembrow we are we gifted her and she did a post and it was coincidentally we were having an after payday sale or something and we did like$40 ,000 in like two days and we were like, what?

30:50We can do it. So that was like a sliding door moment for us and then that's when we really started to like gift a lot. We had no choice about retail because it was shut. So we just had to be online and we leaned into influencers right at the end of the peak, 2020, 2021. Yes. um ugc was just becoming the new thing um and we also had a product which we still have called our discovery set again on the back of the samples you know working let's put all the samples in one product and let's like give that product away for free because you can't give a t-shirt away like a t-shirt brand can't sample a t-shirt we can sample fragrance so let's lean into that so we got these influencers to start doing discovery set giveaways yes right so it was that we would we would not be trying to make revenue from their post even though that was good we were giving the discovery sets away for free which turned out we learned later was not the right thing to do financially but it did good our customer base our customer base we were giving away almost a thousand maybe two thousand a month wow so straight away on the back of covert and all of that that was our plan that's that's what helped us get the product into people's hands obviously during covert people still bought like things for themselves even though they were at home perfume was one of those things that people just kept buying even though they had nowhere to go and he still wanted to smell nice um so that discovery set product was huge leaning into influences was really big at that time that gave us confidence online then wholesale opened back up and it was just like then straight away we went from you know managing a somewhat small-ish thing maybe a million a year and you know the next year following year was like six or seven million because we sort of figured out we can sell online we do it through influencers discovery set retailers like our product build the team let's go yeah sounds easy there's a lot in between all of that and now it's like now we're unraveling that so yeah there's lots um lots of things now You said also interesting, you said the discovery set, working with influencers, giving them away was a bad move in the end.

33:22Yeah. But I don't know if it was bad. I'll let Adam talk about this, but it's something that we've sort of like discovered recently. Yeah. I'll let you talk about it. Yeah. So as a business scales, like these costs associated to different moving parts can become significant when we're talking about much higher volumes, right? so we we knew that discovery set was a wanted product and it was an introductory offer into the brand so like how do we get it to as many people as possible at this point in time the business is you know pretty much every small boutique in australia has who's larger in it and priceline is circling adore beauty is killing it david jones is outselling creed eventus and we're like let's go right so we decide not that long ago that let's let's do let's give away a million discovery sets right this was the plan thank god we didn't do it we didn't even get to a tenth of it but let's give away a million discovery sets right yeah because this low cost of goods and it's an introductory product people love it and we'll just be really good at bringing them back in through our own channels email sms instagram whatever it is let's just get the product in the people's hand because it's our biggest weapon and what we did in america we turned on a free discovery set post like ads free discovery set guys we had about 2 000 of them over there and turned it on overnight there's one dollar acquisition on facebook one dollar and i'm I'm like, oh, my God, this is going to go.

35:09And the customer's just paid for shipping, so it was$7. Customer's just paid for shipping. So you're breaking even. So we're breaking even, right? Not really. We're breaking even on raw product costs. Okay. But not on the acquisition and shipping. So shipping was getting us, fulfillment was getting us, and distribution to get to the 3PLs was getting us. When you go from doing that to 100 or 200 people, it's not too bad. 6 ,000 orders in three hours, turn it off quickly. Yeah. First thing is we're out of stock over there. We've got to get 4 ,000 units over there tomorrow. That didn't happen. It took us like a month.

35:44It took us too long to do it. And all of these extra costs like fulfillment, pick and pack, and all these things went from being a$5 ,000 expense to$50 ,000,$100 ,000,$150 ,000. This has just cost us to do this exercise because we didn't charge anything for it, you idiots. Right? Right. So you've got to use it as a learning, right? And we pissed off a lot of people I think as well because the delivery wasn't quick, which we're very proud that we do do quick delivery, but we didn't know that. I think at the end it was like 7 ,000 discovery sets in like less than a week. Yeah. And like, yeah. It takes a long time for us to fill that many discovery sets because it's like.

36:29So we have to go into hiding again and fix it. Yeah. But also take a breath with a good team and think what was the positives of it. People wanted it. And then we dive further into it. Were they the right people? Or did they just want a free product? Or did they just want a freebie? Right? It's a very different kind of customer. That's right. So our brand is accessible luxury to someone who has somewhat of a disposable income. You know, so they're earning good money. They like to look after themselves. They're young. And, you know, they like to keep up with brands and trends. not a free you know a free product that we're just going to essentially throw out on the street to someone essentially that's what it sort of was doing right so then we switched it up we waited for five weeks and we thought we would change it to free work but let's like make it seem free but not actually be free so they can pay 30 for it and we'll give them a 30 voucher to go towards a 100 mil or 50 mil bottle to go towards 100 mil 50 mil bottle um and then we thought that was working but essentially it's still free right so we're not really making revenue from it the 30 dollars the cost of goods on it is 35 40 percent now because the original cost is based off a hundred product now it's only 30 dollars 50 of our sales came from that product so all of a sudden our cost of goods has gone up to 35 percent that hurts right and then our fulfillment cost as a percentage has just gone through the roof so our total cost of sale has gone and in a six-week period you have to really be careful here because now we're doing 20 000 a month this is hurting us badly so you know and this is current this is what we're dealing with right now current funds you know so we last week pulled all the unit economics apart from it did all of the customer analysis on it who are they what is the lifetime value of some of these people is this product like cannibalizing our business even though it's a product we thought was the best product for our business and then we look at someone that comes in and just buys a hundred mil product straight out of the gate doesn't need to doesn't need to sample it because it's that type of customer.

38:53Disposal income, likes trends, will spend money and doesn't matter. That person's lifetime value is huge. The person who buys this discovery set at$30 or even full price, that person never comes back and spends. So it's not until you start to figure this stuff out that you start to unravel these questions. And that's what business is, right? We've always got to be asking these questions so you know it's very important that you look at this all the time not just like think something that's producing revenue like or getting new customers or getting new customers is the best thing for your business so it was a lot of forever learning forever learning you know that's that's that's the game yeah yeah yeah so it's been it's been a lot of that these last last 12 months but yeah there's a lot before that you know it's got us to this point where we can test those things but um yeah it's been a lot of a lot of that this year i think we've like i think like our one of our biggest regrets that we've discovered lately it's like i we've we speak to other business owners and they're like they've got like three people in their team and like we've got 40 and it's like that's a lot of people like we and like not saying that like we're like changing that but like i think there's like things that we would have changed of like being a lot more lean and outsourcing maybe a little bit more.

40:18And I think like learning, you know, we can get the same job done with 10 people in the warehouse versus 20. So it's like let's have 10 then. And like this learning. Yeah, I think you can get caught in this like this growth mindset and growth doesn't, you know, just because you're growing revenue doesn't mean you're growing profit. and for us it was actually going the opposite way you know our revenue was growing but our our profit was going the other way because we weren't like focusing on on these big questions that get highlighted to you when you start to get to these bigger revenue numbers because you see the impact of them so it was you know instead of having like Raquel said it good the other day she's like it's not a flex to have 40 people it's a flex to have four people to do this it's not a flex to have all this cool stuff it's flex to have revenue without all the cool stuff yeah so it's just you know we're going backwards in a good way though like getting back to this rebuilding rebuilding phase fortunately we have this viral product that people love it's a great product and we have a good team that we can do this with now and now we can feel like we keep saying it but it goes back to, we go back to day one again.

41:37We want day one again. We said we're going to start day one again this month. And then because it's like day one of the next phase of the business. At lunch yesterday, we were talking like, we just hired a head of marketing. And she was the global head of marketing for GHD in the UK. Like, that's fucking cool. Like, we've got someone with a lot of experience that sits in our office. We need to utilize that. And she's great. but we need to get her a marketing manager because I feel like she's like spending all of her time doing like the nitty-gritty not like the big stuff so just like those sort of changes but yeah we sort of said to Lucy yesterday we're like let's start day one again like imagine like starting a business with you've got a bit of money you've got a really good product you've already got customers like a great brand got a great brand like trust a lot of trust like let's start day one again like day one phase 25 but um that's sort of like and i feel like nothing gets us down which i feel like is really good about us like we'll go through like a really tough thing in the business and we'll just look at each other and be like all right what is this teaching us let's get out of it and we actually get excited about it almost it's like this like weird thrill thing that we have it's like sensitive excited about the next relief and it's like we're both very aligned with with each other obviously we're we're in it every day uh together so it's easy for us to have these big you know conversations 24 hours a day because we're right next to each other all the time so you know we get to this point we both get this sense of like this is the right move to make and it's not like a one-hour meeting that has to happen over five weeks we can have five hours of conversations together very quickly to make these changes.

43:25Yeah, look, I really appreciate your honesty, guys. Sometimes we get a bit too honest, don't we? No, no, this is good because, like, honestly, I've been there too, right? Like when you meet somebody and you say, oh, I run this company, a lot of the times the first question somebody asks is, how big is your team? Yes. Right? And why do they ask that? They think that's more money. Because in our culture, for whatever reason, societal norms, it's like, oh, if you have a lot of people, that means you must be doing well. Yeah. Right? And so you get caught up in that crap. It's like, oh, yeah, I've got 40, 50 people.

44:02Oh, wow. That feels good. No, it doesn't anymore. No. Yeah. And like I've been there too. Like more people, more problems. Yeah. And look, especially when you're first starting, it is hard to scale a business and these are all lessons like i've spoken to spoken to so many founders this is this is a common thing that happens right you hire all these people you get caught up in the excitement of growth and you go okay wow profits not what it used to be we're not making the same margins we've got to kind of have a bit more efficient right because it becomes this this huge bloated thing um so i appreciate that i appreciate the honesty yeah yeah we're only five years in like you know i think i think that we because people tell you how good you are and i think that that's like a bad thing i'm always just searching for the truth because there's truth in numbers there's truth in in what is actually happening and it is good to come and chat with really good people and when when other people who have done things significant before tell you that you're on the right track and that's great but i think you have to be so like disciplined with like what is actually happening and we've we've got to this point where probably the last 12 months ago we were just like saying yes to everything yes let's launch into the uk full send straight away go yeah let's launch into the you all right let's take the whole team to america maybe let's go this let's there's something happening in america let's let's go there yeah it's so dumb you just like you spend all this money and all this effort um and nothing comes from it nowhere and you know yesterday i was we were talking and i said we need to just make decisions that have impact and it needs like boring words but like control and impact that's what that's what good businesses have they have control over their numbers control over their teams control over their outcomes and all the decisions that they make they have a significant impact on the business you can go through months and months of making these fluffy decisions about you know this thing here and this thing here but if we just focus solely on a handful of decisions and a handful of things that need to be looked at i think you'll find much much greater progress than if we just try to spread ourself too thin.

46:30Yeah. Yeah. Well, it's like they say, simple scales. Yeah. Yeah. A million percent. How can you keep it simple? Yeah. And a lot of the time when you try and scale naturally, and this is a rite of passage, every fowl that goes through it, you think, how can I do more? How can I add more? Yeah. And you feel invincible. When you get all these wins, you feel like everything you touch turns to gold. I never forget. All the stuff you guys are talking about, I've been through as well. How did we get out of it? Look, it's just learning. We're doing it. It's just time. It's just lessons, right? And I literally remember once someone wrote a post and they said, like I launched something and they literally wrote in the comment on Facebook saying like, I swear everything Nathan touches turns to gold.

47:17Gold, yeah. And that's when you know, right? It's got you. Yeah. Right? and you just keep hiring more people, like all these different things, adding more products, all these different things. So I really appreciate your honesty, guys, because this is the real stuff. This is what happens because, you know, I've looked at the headlines. You guys have gone from zero to$20 million in five years or the business value to$20 million. And it's just like, you know, it's tough. There's a lot in between all of that, isn't there? Yeah. And, you know, fortunately, again, we have this great product at the bottom of all of it.

47:51you know so at the core of all of it is a great product and if you have urgency and you really want to dive deep into what's going on and then additionally like we are so excited about the future because of this new way of thinking for us and it feels like a sense of relief actually and like that what we're now going to work on is going to be impactful for the business because is we are going to say no to most things and we are going to make new products and we are going to just lean on this great brand that we've built like i say that we're so fortunate to have a good brand obviously we didn't just come out of nowhere we worked hard for it but it's it's like a once in a lifetime thing when you can have this brand this opportunity at this time you know social media all of it that's happening right now we're in the best driver's seat to be in so like i'm so grateful and excited about about what's coming because we're in this new frame of mind of like thank you for everything that's happened to us we've made every mistake we've done yeah we should write a book about that have a podcast it's like the what not to do podcast um and then just keep growing forward yeah and we i think like i feel like we say this a bit like we'd rather it happen now than like maybe in three years when something bad could really happen because we're not in a position like we're nowhere near losing the business.

49:18Like there's nothing – we've never been in a terrible position by all of these like mistakes that we've made. But like, you know, one day like if we hadn't learned it all now, like maybe in like three years' time like when there's more risk, maybe we had like 80 staff and like that's a lot harder. Yeah, and we have good people around us. So, you know, we have a really good advisor, Paul. He comes in once a month and he just calms us down. Picks us apart. pulls it apart throws everything on the table and says guys like you guys are doing great still but we need to fix this this and this and you know having good people around you it's and for founders that are listening that are just starting out it's hard to find these people because no one listens to you in the beginning but you have to go searching for these people you just have to because if we had people like like paul and they won or if we had any of these like basic fundamentals that we knew that we we now know on day one oh my god yeah game changer and it's obviously hard there's people there's courses there's all of these things there's a lot of noise but i think you should you know invest in trying to find the right place to learn while you're still in the garage yeah 100 because somebody out has done what you guys are doing and they've seen those problems yeah and if you can learn from that person that is the best shortcut out there 110 if you try and figure out on yourself you just move so much slower right so it's really like when you think about the journey of entrepreneurship it's like a personal development journey yeah right like where you're learning about yourself and all the things that you should be doing and like the speed of learning the speed in which you can learn is a reflection of the speed in which the business can grow yeah yeah so key yeah yeah and i think you should intentionally do hard things you know like comfort and balance like doesn't produce growth like go hard at hard things because like you know i know for me personally i'll always start in the gym if i've got a problem i'm going to the gym you know i'm going to go do something really hard that's not associated to work because then I can breathe and I can see things clearly and then I'll come and apply it to work.