557: She Went From $0 to $100M Selling Coffee Scrubs | Jessica Hatzis (Best of Foundr) [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. We wanted to create a brand that was like nothing that people had seen before. And so we bounced around a whole bunch of different ideas and came up with this concept of Frank, the character that changed everything. She's one of

1:11You guys kind of went viral on Instagram. Can you tell us a little bit more about that? We knew the power of word of mouth. So we sent product out to anyone and everyone that would take it because we need everybody talking about this to feel that groundswell. Ariana Grande notoriously copied you guys. There were a few interviews where she was talking about Frank Body. Fast forward six months, it's like Ariana Grande has released her own coffee scrub at Ulta. And I thought, fuck, we're done. What are the key elements to building a successful brand? You have to make a strong statement as a brand.

1:42You have to stand for something. You have to be unique. And if you don't do that, that's not the type of brand that is going to be memorable and sustained over 10 or 20 or 30 years. Comparing early days Frank to now, what do you miss?

2:01Hear the stories, learn the proven methods and accelerate your growth and future through entrepreneurship. Welcome to the Founder Podcast with Nathan Chan.

2:15The 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? Tell us the frank story. It's funny, no one ever asks me that, framed that way, how I got my job. It is. It's a job, even though I'm a founder. So it's a two-pronged story. So before Frank Body, there was Willow and Blake. Willow and Blake is a creative and branding agency that we launched, I want to say, 2010 as some very naive copywriters. So I'm a copywriter by trade. I'd been working in-house at a music agency at the time underneath two founders. And I just loved watching what their day-to-day looked like.

2:56And I was really inspired by that. And I had that moment where I thought, I don't want to work for you anymore, even though I love you. I want to be you. Quit my job and started a company with my best friend. And, you know, it was that true, I mean, sorry to all the 25 year olds out there, but we were about 25 at the time. Got up, worked in our pajamas that day, had never set up anything properly from a financial or tax perspective. We just loved writing and that was what we wanted to do. And so we grew that really slowly into a full service branding agency. And after a couple of years of working with clients, they were coming to us because we had a pretty youthful and irreverent and refreshing voice.

3:35But we were finding that they'd come to us for that and they were really scared of these bold ideas that we were putting in front of them. And clients would dilute it all the time. Once you start diluting a bold idea, you kind of end up in no man's land when it comes to developing a really unique and memorable brand. We thought, well, what if we built a case study that was just us owning something from beginning to end. So we came at it from the creative side and then we had a couple of other co-founders at the time who were really interested in e-com and product and the scalability of that versus something that was so dependent on our time, like an agency model.

4:07And so we bounced around a whole bunch of different ideas. We were talking about like alcoholic coconut water at one point and we knew we wanted to do something in, not that it's particularly healthy when there's booze in it, but in that health and wellness space, We wanted to use social media to scale it and we wanted to create a brand that just stood out and was like nothing that people had seen before. And one of my co-founders came up with the idea for the original Coffee Scrub, which was our very first product that we launched at Frank. And we were making it all by hand and, you know, it was just this true no money startup vibe.

4:39We had like$10 ,000 that we'd poured into this to get everything off the ground. You guys kind of went viral on Instagram. There was the hashtag, the Frank effect, and it was just like a marketing machine for you guys. Can you tell us around how that concept came about? It came from our experience at Willow and Blake. We were finding that there was this really strong emerging platform that people think the uptake on Instagram was huge, but brands weren't playing there. They were still sort of stuck in Facebook and other traditional marketing methods. So there is an entirely untapped audience here waiting for people to come in and do something interesting.

5:16But if we're going to come in as a brand on a platform that at the time was dominated by peer-to-peer communication, we can't have this corporate tone of voice. We need to blend in essentially and sort of go into like incognito mode and make people feel like we were their friend and we weren't necessarily trying to sell them something. And we knew the power of word of mouth. So we came up with this concept of Frank, the character, and he would just be able to allow us to talk in first person to people. So then we didn't have that corporate language that would be dominating our posts. We sent product out to anyone and everyone that would take it because we just wanted to create what is now called user-generated content.

5:57But at the time we were just like, we just need friends and we need people taking photos. We need everybody talking about this to kind of build that groundswell. I look back and I am surprised that people did it because it wasn't a normal thing then to take a photo of yourself half naked in the bathroom using a product. Now we see every kind of product spooked on social media, but that was, we were really establishing a new behavior then. But I think people then and still now like to feel part of a community and like they're an early adopter and part of, you know, they're kind of on the in on this secret that other people don't know about.

6:30And the language that we use was so different to what people had seen in beauty, which is what we specialize in, trying to create unique identities for brands. So I think that resonated with people and they hadn't seen it before. And that was kind of how the Frank Effect got going. Lots of photos of our legs covered in coffee scrub. Is the coffee scrub still a strong product for you guys? And like for anybody watching, does it still work just sending product to influencers, you know, product for posts? Like I'd love to hear your take now. So the original coffee scrub isn't as much a focus for us anymore.

7:04And we deliberately wanted our newer, more sophisticated, high-performance SKUs to take over. So we've had our marketing focus on that. We stopped sending out product to influencers last year because we were sending out so much product. People weren't using it. One, it's expensive. And two, it's really wasteful. Like the carbon footprint of just sending coffee scrubs all over the world and no one's doing anything with them. at odds with our sustainability ethos. So now we're very particular with who we do work with. We've created an ambassador program, which it was interesting. When we first launched the ambassador program, the uptake was pretty poor, if I'm really honest.

7:44And we had to play with the language a lot to get good uptake there. So for example, if you were an influencer that I wanted to work with, I'll send you free product all year for you to post. That language automatically devalues your product. But as soon as we flipped that language to say, we'll send you$200 worth of product every quarter, you're giving that product a monetary value. It feels more meaningful to the person receiving it. And that small tweak changed everything for our ambassador program. That wasn't me. That was one of my really clever team who just sat there and looked at this and was like, why isn't it working?

8:21It's because I am not placing any value on this product. so we've found that a nice way to build an ambassador program with people who genuinely want to receive our product and who want to create good content for our community and then we have a lot more paid promotions than we would have previously but we're shifting that focus to TikTok and less on Instagram. Can you tell us a little bit more about that? Yeah so TikTok really required there to be a person or a face to that particular page whereas you didn't me that on Instagram. And we were a brand that had never been developed around the founders' personas.

8:56In the business community, people know who we are, but our customers don't know who Jess is and they don't really care. They care about the product. So we found that sort of a barrier to entry for us. And there was a lot of pressure on the team to try and create very of the moment, funny content. So we've really flipped our strategy to not necessarily be about our content creation, but utilizing the platform of influencers. And it's just with the goal of making the brand famous. So I think there's been some really interesting case studies in the beauty space from like Globe Recipe and CeraVe. They've scaled and basically put their products on the map through that type of strategy, but it wasn't our strength.

9:36I think one of the best things you can do as a marketer is acknowledge your weak points. I thought we're spending so much time creating content it's not gaining traction it's like I always reference that very cliche quote around you know doing the same thing expecting different results is the definition of insanity and we've been doing this for a year and a half like this is just stupid at this point what a waste of time what a waste of money we need to try something else so there's all these amazing and highly respected influencers dermatologists skin fluencers beauty experts on this platform and there's more people listening to what they have to say than the equivalent type of influencer on Instagram.

10:13Let's just put all of our influencer budget into this with the goal of making Frank Body famous on TikTok and honing in on one or two SKUs. Comparing early days Frank to now, what do you miss? There's more pressure now, I think. We launched in a bit of a laissez-faire way because we didn't know what we were getting into so that I miss almost my own naivety about what we could do now after 10 years of doing this. And my job is so different now. I live in spreadsheets and budgets. And it's very interesting in its own way. But there was something about this kind of endless possibility when we were launching.

10:55And I think that early stage, that excitement, that enthusiasm that you have, I know they're so intoxicating. I do miss that because it's hard to keep replicating 10 years in. Yeah, I think that's a common journey for founders, right? Like you start this thing and it's fun to create something. It's fun. Like I remember in the early days, founder was so much fun. Like when you're the CEO or, you know, an executive, you're right, you're CMO, you don't really get to do the fun stuff anymore. It's a lot of people, leadership. And for some people that is fun, but for the founder, I think the idea of creating things and just kind of marketing and selling and just like, yeah, and now you have to worry about numbers, people leadership and inspiring others.

11:47It's very different. It's not probably what we thought we were signing up to. I could not agree more. This had no idea. And I remember about halfway in this journey, my language switched to me. I know I'm still the founder, but now I feel like I have a job because it's this sort of daily grind. I feel really stupid when I use coffee puns and I'm talking about Frank. But it changed from I used to feel like I had more autonomy and flexibility over my own time, my own schedule. and I feel more restricted than I ever have in my life because you have so much responsibility when you have a board to report to and you're a C-suite member in a$100 million company.

12:31It's not fun and games anymore. And you have to sort of pass the baton and let your team have that moment. And now it's about them. And they're probably in the better life space and headspace to be the creatives and really fun, you know, driving members of the team. But it's fun at the Willow and Lakeside because I get to sort of tap in and out of, we work with so many early stage founders. that I get that opportunity to feel that real energy and excitement again by working with them. So, look, it's a different set of challenges, right? And I'm curious around just your co-founders and the different roles they play.

13:06Can you talk us through that? Yeah. Because you originally had four or five co-founders, right? There were five of us. Yes. One co-founder moved on about seven years ago. Yep. Now there's four remaining co-founders and we've been friends for, I don't know 15 or so years and Brie who I co-founded Willow and Blake with um we've we've found it really interesting because our background and our expertise is so similar so it was always more challenging for us to sort of carve out our own unique path at the four of us for the first couple of years it was just a jumbled mess like we're all trying to do everything we had our lanes that we naturally went into but we didn't sort of clarify our roles enough I think that was a really big challenge for us in those early years.

13:51As a founder, you feel like you're supposed to be across everything. So you need to take a step back, clarify your role if you've got multiple founders and just stay in your lane. And when you come together to ask questions, that's your time. But there's nothing more frustrating than someone like sticking their head into your project halfway through in any role as a founder or an employee and then like getting out and like getting in the way and changing what you're trying to do. I also think it's a waste of time. like someone's already doing that job don't just double up and do the same thing do the job that you need to do so now we're much better at that so steve is ceo alex is coo i'm cmo and brie is head of new revenue and growth and that was always a challenge for brie and i too who's going to take on that role of cmo and we sort of naturally found our positions and brie is far far better at people management and seeing projects through from beginning to end than I am.

14:50She just knocks me out of the park doing that. So that role was just so suited for her. So yeah, we finally found our way and we just come together in a founder catch up each week. And that's when we use our time to sort of cross over and work on projects. Are you hesitating to take the next step in your e-commerce journey? Founder Plus has you covered. With proven frameworks tailored to your business needs for fast results, a supportive community of over 30 ,000 like-minded entrepreneurs and weekly live mentorship sessions, Founder Plus is your key to success. Try Founder Plus today for just$1 for seven days and start building your dream business with confidence.

15:25You can visit founder.com forward slash start dollar trial or click the link in the description to claim your trial. What was your role in the original days and how have the roles changed? We didn't have titles. No titles. No titles and we did everything. So every component you could think of that falls into the remit of marketing, myself, Bree and Eri did. And we just did all of it together because in those days it was a volume game. Yeah. So we managed all the PR. We did all of the community service and customer, the community management and customer service. we did all of the influencer posting like sending out product and all the communication all of the content creation emails we just you just don't stop working until we brought on our first employee and they started to do the customer service and then we brought on the next person and they took pr off our hands um and it was about three two or three years in i put my hand up and said i'd really like to take on a formalized role as creative director yes and i did that role for a portion of time, we had an external employee come in and she took on a CMO role.

16:34So none of the founders were doing it. Because we didn't feel that we had that expertise at that time. Fast forward another five years and I really felt ready to take on that CMO role. So I put my hand up again and said, this is how I'd like to evolve my role. I've grown past the point of wanting to be creative director. And I think that's often forgotten about founders. You also have the need and the desire to progress in your career. You don't want be doing the same thing day in day out for 15 years you have a team of leaders underneath you so you're leading a team of leaders talk to me around kind of how you've been able to develop as a leader I think time and mistakes are what led me to be the type of leader that I am now I know my leadership style I like to leave from a place of vulnerability and honesty so if I'm having a crappy day I'm not going to come to the office in a pessimistic and horrible mood, I'll just talk to my team honestly and be like, oh, my daughter kept me up all night last night.

17:32I'm really tired. So I'm struggling to focus a little bit in this meeting. And you create a safe space for your team to then also talk openly and honestly. And when you work in a psychologically safe space, which is how my old two IC talked about our space, people can do better work. So that's my real goal as a leader. My team need to feel safe. They need to feel nurtured. It doesn't mean that they're not ambitious and they're not held to So, you know, they're KPIs and they're a very accountable team, but I don't think anyone can do really great work if they're constantly worried about how they're being perceived.

18:06So that's my leadership style. It took me a long time to get there. I know I don't manage down from a to-do list perspective very well, just due to time. So I'm very fortunate to, and I guess deliberately, we hire people that can manage up really well. It gives them the opportunity to really grow. And it means that my time isn't spent looking at other people's to-do lists. It's being there to answer core questions for them when they need me. Talking about friends and business, how have you been able to manage those relationships? Because people often talk about like don't mix friends with business.

18:40I think when you have that layer of friendship involved, when you need to have difficult conversations, you're worried about how it's going to impact your friendship outside of work. We've gotten much better at that. In the early days, I'd say that we just didn't talk about things that we needed to enough. And, you know, if someone wasn't pulling their weight, which will naturally happen, I would have been that person at one point in time. Like everyone ebbs and flows in the way that they bring motivation and energy to work. We wouldn't have talked about that. Whereas now we're so much better at just having honest conversations with each other and understanding that this is a conversation happening inside the workplace.

19:17And I'm still going to go out and see you on the weekend. and we're going to get all our kids together and have a fantastic time. I think that comes with the level of maturity as you get older as well. You know, 35-year-old me versus 25-year-old me, two different people. And I cared so much about what other people thought. I was terrified of confrontation. So I would never say what I thought. And then if you're that type of person, it will resonate with you when I say you have a lot of anger inside you because you have so many things that you haven't said. They're just building up. And now I just try not to do that and will talk honestly and give my opinion about things.

19:53I think that's true of any workplace, but it's particularly true when there's friendships involved. And making sure you have honest conversations is without a doubt the way to preserve a friendship. Yeah. And it's those honest conversations, that's what builds trust. I think that going back to our previous points around clarifying JDs, simple things like that, frameworks that help everyone understand what each other's doing. So you don't have to ask questions. You can look at someone's JD. You can look at their KPIs. You know what it is that they're working towards. It automatically takes away the, what are you doing every day sort of question that comes up naturally in business.

20:32Yeah. So I'd love to talk about the branding stuff. Ariana Grande notoriously copied you guys. I forgot about that. Can you tell us about that? Tell me the story. What happened? When was it? What happened? Ariana Grande was blowing up and she had been gifted the scrub by someone. I don't know who and loved it. So there were a few interviews where she was talking about Frank Body. And I'm like, this is so cool. Like she's blowing up. She loves us, this tiny brand from Melbourne. This is amazing. This is going to really help us grow in the US. And then fast forward six months, it's like Ariana Grande has released her own coffee scrub at Ulta.

21:09and I thought like we're done she has this platform of millions of dedicated fans that she's talking to like there's no way that we can compete against this this might be the end of Frank and it wasn't because I forgot how strong the brand that we had created was and how easy it is for some celebrities to just slap their name on a product and think that that's going to be enough to sell it to people, but people are clever. And I don't think a lot of brands give consumers enough credit for their smarts. And it showed me that our customer base was so loyal and that we were experts in not only a brand, but we made really, really high quality products.

21:52And as we continued to release new products, that coffee scrub just sort of sat on the shelf, not going anywhere because nothing was done with it. And I don't think it even exists anymore. It just sort of faded off into the background. But at the time, my God, I thought our business was over. So you guys have had a lot of copycats. You couldn't really patent the product, could you, with the coffee scrub, right? We did look at it, but it's, you know, you only have to vary something by 10 % for then your patent to be void. And it was a lot of money and a lot of effort for not a guaranteed protection.

22:28We had so many copycats in those early days. People would copy the product, they'd copy the brand and the tone of voice. We had people rip off the source code from the website. It was just like the lowest of lows in terms of what it takes to launch a business. We were worried about it for a period of time and then we thought all this energy that we're spending worrying about these copycats is energy that could be spent growing our business and focusing on how to differentiate ourselves. And it highlighted the need for us to no longer be that Instagram brand, which is how people refer to us. Oh, you're that brand on Instagram.

23:04This is dangerous because, yes, we are, and it was amazing to launch our brand that way, but we need to build our credibility as a skincare and beauty brand and no longer be talked about as that Instagram brand. So what strategic moves do we need to make to leave the pack of copycats behind and become a serious player in the beauty and skincare space. And so that led us to our partnership with Mecca because who does beauty and skincare better in Australia than Mecca? Not really anybody. So that partnership was one that was sort of groundbreaking for them because their whole business model was taking brands from overseas and offering them exclusively in Australia, but they knew how strong our brand was.

23:45And that alignment was sort of the catalyst for frank 2.0 where we really started to focus on more efficacious skincare that was really solving a lot of body and skin concerns for people and we just obviously instagram still important because that's how we communicate with our customers but we were not that instagram brand anymore and that really separated us how long did it take for you guys to strategically start to kind of re not rebuild but evolve evolve the frank brand because you guys have done really well and i've loved to talk about retail. I know you've made some great plays there, but yeah, how long did that take?

24:24Obviously you had that partnership, but what else did you guys do? How long did it take to get into other products and other SKUs and find more hero products? I'd say it's still going because I think as soon as you think you've evolved and it's done, you're probably dead in the water. I think the major shift in how the brand was perceived took about two years. People saw us in Mecca, at least in the Australian landscape and they thought, oh my God, okay, that's that brand I know from Instagram and look at all of these other products that they have. That was a problem we identified. People knew the copy scrub and they, unless you were a loyal customer, you didn't know a lot about the other SKUs.

24:59And so that was where we came up with that goal. The best thing that can happen is that we move that hero SKU out of the top sellers and we grow the rest of our range. And so we've successfully done that, but that took, you know, that's years of work of developing new products that you think are going to surpass the hero product in sales and really strategic retail partnerships in other regions. So the US is a big place of business for us. So we partnered with Ulta and Target in the US. And in the UK, we worked with a lot of more high-end specialty retailers as well as Boots. Places like Boots and Ulta gave us huge distribution, but then we needed those smaller retailers that weren't necessarily about driving a lot of volume but built clout and credibility for the brand and kept us front of mind for those early adopters and trendsetters.