663: (Solo) More SKUs, More Problems — The Case for Going Deeper, Not Wider

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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. Hey Founder fam, Nathan here. Welcome back to another Founder to Founder solo episode. These are short bite-sized episodes where I share everything that I'm learning building founder for the past 13 years. So today I want to start with a confession. When I started to get serious about e-commerce, I had this belief that the more products you had, the more successful you would be. And I thought that having a big product catalog meant having a big business. More customers have the opportunity to choose more things.

1:16And I thought having lots of SKUs was a sign we were scaling. I was completely wrong. And luckily, I'd learned this lesson from interviewing a lot of other founders before I launched my own D2C brand. And I built a seven-figure brand from scratch, and then I sold it. And that whole time, we were essentially a one-product company. So that brand was a company called Healthish, and the product was a time-marked water bottle with one simple feature. I want to tell you a story today, and I want it to connect to one of the most insane brand growth stories I've seen in the past year or so because both these stories point to the same truth.

1:54You don't need a huge product range to build a massive business. You need one solid hero product and offer done exceptionally well. So this episode is for every founder who is thinking about launching a second product line before the first one is fully optimized. It's for the founder who is adding skews because they're scared of being too one dimensional. It's for the founder who's over complicating their business when the real answer to go deeper, not wider.

2:17Nathan Chan:Hear the stories, learn the proven methods, and accelerate your growth and future through entrepreneurship. Welcome to the Founder Podcast with Nathan Chan.

2:31So I launched Healthish a few years ago now, and it was off the back of our Start and Scale program, which in the early days, we created it with Greta, and that's now host on the I found a plus platform and we had many different ideas. And one thing that I noticed was this trend with drink bottles. I thought it was crazy how much people would spend on a drink bottle. And then I found this interesting statistic that millions of people are actually chronically dehydrated. And we found a product that was really clever to solve this problem where there were time markers on the bottle. And so I had a friend at the time who was the head of design at 99designs and I got him to come up with like a really cool design on this kind of shell of a bottle that we white labeled from a manufacturer that we found through Alibaba.

3:26And anyways, it worked. We started doing micro influences, product for post, all my Instagram strategies, like the stuff that I know and it just, it blew up. And one of the worst things that we did was launch a glass version of the product. it didn't do well our original plastic bottle did really really well and here's the part that gets me we were not only a water bottle brand like not even close there were hundreds of competitors hydro flask swell all these established brands bigger budgets more resources but we had something that they didn't have and that was a really strong solution to a specific problem and so the time markings weren't just a design feature they were a behavior change tool and that was the power of a hero product it made people want to share it and come back and buy more and it wasn't just a product it was a solution so clear and so specific that almost marketed itself and this is where most founders go wrong they launch their business they launch their brand and this is the key part you need to launch a brand you need to create a brand you don't want to just launch a product but your first product you launch it you get some early traction revenue starts coming in and then the anxiety kicks in what if this product runs out of steam what if a competitor copies me i need to diversify i need more products i can make more money they launch a second product then a third then a whole category and it's kind of like

4:42right more skews more problems and you're not really good at one thing you're mediocre at five things and here's the thing you got to launch more products don't get me wrong but there's a time and a place and you can build a multi-million a million dollar brand multi-million dollar brand with just one hero product and i see this in the founder operators community founder comes in doing solid numbers with their hero product and it is crazy right like like they're doing really well and we help them with ads. We help them with creative. We help them with their offer. We help them scale, just doing more of what's already working.

5:15And I always ask the same question. They want to launch another product and I say, why? And the answer is almost always some version of fear. Fear that the hero product will not be enough. Fear that they are dependent on one thing. Fear that a competitor is going to come in and copy them. Fear that they're not going to be the first to get into that retail chain with epic distribution nationwide. But here's the truth. A competitor copying a product is not a reason to launch five new products. It's a reason to get so far ahead on your hero product that copying you becomes pointless. Go deeper on customer experience, build a community, get so many reviews and so much social proof that you own the category in the customer's mind.

5:53And that is how you defend a hero product, not by diluting your focus. So think about it from a customer's perspective. When you think of AG1, what do you think of? One green powder. When you think of liquid IV, what do you think of? One hydration packet. When you think of Spanx, what do you think of? One shapewear product. So these are brands that built empires off the back of one hero product. The product line expanded later, but the foundation was always the one thing. Now, I just recently interviewed Danny Young and his brand and the growth is absurd. And they've taken this concept to an extreme.

6:31And the numbers are genuinely hard to believe. So IMA, you've probably seen it. It's a supplement brand co-founded by David Beckham. If you haven't listened to this interview, you have to, guys. It is insane. It's episode 652, and this brand is doing$10 million a month. It is crazy. $10 million a month in their first 12 months. And Danny has built and sold multiple companies. He knows what he's doing. He co-founded with David Beckham. They met through a mutual friend. They launched in late 2024. Within five months, they'd shipped over 3 million servings to customers in 31 countries. In their first full quarter of sales, they generated 5.7 million in revenue.

7:20And by month 11, they'd hit 120 million in annualized recurring revenue. $120 million in under a year on essentially one product. That makes iMate the fastest growing supplement brand in history. And here's what Danny said about his product strategy. And this is a quote from this episode. He said, we are not a company that wants to launch 50 different products. We want to focus on doing a few things very well. And if we do not think something is best in class, we will not do it. One product, best in class. This is the whole strategy. Now, I know what some of you might be thinking. You're going to go, oh, well, Nathan, they had David Beckham.

8:01Of course, it grew fast. And yes, the Beckham partnership helped. And I'm not going to pretend that it didn't. But here's the thing, right, guys? There have been plenty of celebrity supplement brands that have flopped. The reason Iron Mate worked was they had a unique mechanism, which I talked about on another solo episode. They also just focused on one hero product. They did so many things well, but this core part of their strategy is so important. And Danny himself said it best. If this product did not work, David would not use it and neither would I. We built it for ourselves. Everything else came after.

8:39That's the hero product mindset. Build something that genuinely solves a real problem. Build it better than anyone else on the market and then let the product do the talking. So how do you apply this to your own brand? Let me give you a simple framework. And how do you know whether you should expand or not? The first question to ask yourself is what is the one problem my hero product solves better than anything else on the market? Not two problems. not five, one. For healthish, it was, I forgot to drink water throughout the day. The time markings solve that. One feature, one problem. For IM8, it was, I have to take too many supplements every day, one scoop, solve that.

9:15One product, one problem. If you cannot answer that question clearly and simply, you do not have a hero product yet. You have a product and that is a big difference. Second question, have you gone as deep as you possibly can on this product before adding more? What I mean by that, have you maxed out your email marketing? Have you built a strong retention and repeat purchase strategy? Have you tested every major ad creative angle? Have you optimized your packaging and unboxing experience? Have you built a community around the product? Have you gotten customer reviews and testimonials to really understand what people love about it?

9:47Most founders I talk to haven't done all these things. They're at maybe 40 to 50 % of the potential for their hero product and they're already thinking about launching something new. Don't do that. Go to 90 % first. The third question is, does your marketing message lead with one thing? And this is where a lot of brands lose the plot. They try to communicate too many benefits at once. Our product is great for energy, gut health, and immunity, and focus, and sleep, and recovery, and the customer hears nothing because there's too much noise. The best DTC brands I have seen have one clear, specific benefit, and they hammer that message relentlessly until it sticks.

10:23Then once the customer is in the ecosystem, you can introduce them to the full range of benefits. but the hook is always the one thing. Now, I'm not saying you should never launch a second product. Obviously, at some point, expanding your product line makes sense. And I and Mate have done that now. They've recently launched their second product, right? But here is my rule of thumb. You are ready to expand when your hero product has strong, consistent repeat purchase rates, when your customer acquisition cost is predictable and profitable, when you have a real audience who trusts your brand, not just your product, and when you have operational capacity to launch something new without taking attention away from the thing that is already working.

10:58Eventually, Healthish added glass bottle versions, and it was a mistake. We shouldn't have done it, to be honest. Very, very bad mistake, right? So IMA, they launched a second product, a longevity-focused supplement, but they waited until the Daily Ultimate Essentials was fully established and the brand had real credibility, and now Daily Essentials is still the hero. The second product is an upsell. It allows them to increase their AOV and LTV. It's not a pivot. So the right sequence is hero product first, prove the concept, build the audience, and then expand from a position of strength. All right.

11:30So guys, I want to zoom out for a second and talk about why simplicity actually is a competitive advantage in the DTC space right now, because I think this is something that gets underestimated. We live in a world where attention is our scarcest resource. When you have one hero product, your operations are simpler. You're not managing five different supply chains, five different sets of packaging, five different inventory forecasts, five different SKUs, all this kind of stuff. Your business becomes so much more simpler. You have mental bandwidth to focus on what actually moves the needle. Customer experience, marketing, community, the stuff that builds a brand that lasts.

12:02And I see founders in our community who are doing millions of dollars every single year in revenue with a core team of a few people. They have their fixed costs. They have a tight roster of freelancer creatives. Their margins are beautiful because they stayed focused. I can't stress this enough. So let me bring this home, guys. we sold tens and tens and tens of thousands of units from a simple idea because we stayed focused with healthish lesson from ima is this one scoop per day can become 120 million dollar in annualized revenue in under a year the product was not complicated the strategy was not complicated one problem one solution executed at the highest level possible so the lesson for you is this before you launch your next product ask yourself whether you've truly maxed out the potential of the one you already have.

12:48All right, guys, if you enjoyed this episode, if you are looking for a community to join of D2C founders that are all scaling up, you want help with Facebook ads and scaling your brand, make sure you go to founder.com forward slash operators and apply. This community is crazy. It is so special what we're building. All right, that's it from me. I'll see you in another episode.