702: Mark Cuban Calls Us His BEST Shark Tank Deal Ever ($200M+)

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1:03You ran roughly 220 million in sales with just over 20 employees, which is crazy. How do you stay that lean at this scale? We got it to 40 million with three of us. So we're like, well, we had 15 more people. What can we do? None of us had retail experience. We're all working in different industries. Well, we had different skill sets from finance to sales to product development to marketing and so we all kind of complemented each other. I always joke and say like finally becoming a real company because we've always just kind of cowboy things. Three friends, one apartment,$30 ,000. One idea nobody else wanted, wipes for dudes.

1:38Today,$220 million a year and Mark Cuban's best investment ever. Dudewipes becomes the number three trend worldwide on Twitter that night. A testament to us being scrappy and jumping on things and creating our own opportunities and letting the internet kind of do its thing for us. Walmart approached us and said, listen, this aisle is stale and we'd like to disrupt this area. We think you guys are the perfect ones to do it. Already a year in, it's the number one wipe in the baby wipes aisle at Walmart. How are you guys going to get to a billion? What's the plan? We feel like we're just getting started, honestly.

2:10it.

2:14Hear the stories, learn the proven methods and accelerate your growth and future through entrepreneurship. Welcome to the Founder Podcast with Nathan Chan.

2:27Hey, I have a quick ask. If you're loving these episodes, leaving a quick review is honestly the best way to support us. It helps the show grow and means we can keep bringing you the founder stories and insights you tune in for. Please share it with a friend. Thank you so much. Now, let's get into it. Ryan, welcome to the show. In 2011, you and three childhood friends started Dude Wipes out of a small Chicago apartment. You pulled together$30 ,000 to do your first product run. And by 2024, you've built this business to doing close to$220 million in retail sales, just retail alone. So you've built a multiple nine-figure business with just a team of over 20 people, which is kind of crazy.

3:10So looking back at that first$30 ,000 bet, what gave you the confidence to go all in on this idea? Yeah, we had the entrepreneurial itch, right? We all were working regular nine to fives and we're really good friends and always hanging out on the weekends. And we would always seem to get into conversation about wanting to start our own business. And at the time, some of those conversations, frankly, weren't necessarily with each other. It was just that we wanted to, you know, not really work for the man anymore and do our own thing. And, you know, finally, we came across this habit that we all picked up through Sean bringing bulk packs of baby wipes home for the bathroom for Sam's Club and got addicted to that habit of flushable wipes being cleaner and baby wipes being cleaner than, you know, using and toilet paper alone.

4:00So that was kind of our aha moment. And we said, you know, looking at the market, there's only, you know, wipes for babies and for women. So why not for dudes? You know, there can't be, we can't be the only dudes out there doing this. So let's go figure it out. So we found a manufacturer, ended up being just our luck, the best and biggest flushable wipes manufacturer in the world that's still our partner to this day, believed in our vision, uh frankly probably gave us a little bit of a break on our initial moq and uh we put 30 30k together and that ended up being about four or five pallets i think that uh that showed up at the the apartments and we literally box truck pulls up and we're literally the lift gate goes down and we're out there you know one by one moving the cases up three flights of stairs into the spare bedroom and off we went yeah so a humble beginnings i'm curious how did you guys find this manufacturer and tell me about terms.

4:59Were they favorable terms? Because you guys, we talked about this offline and we'll talk about it more. You've bootstrapped the business for a very, very, very long time. So talk me through that. Yeah. So they're out of Northwest Arkansas. Like I said, one of the most respected and biggest flushable wipes manufacturers in the world. Found them just by general Google searches and looking around the internet and kind of stacking things up, you know, of one company versus another of information that we found and making some phone calls and, you know, holding some meetings. And ultimately, we landed on the partner that we did.

5:39And the terms were, they were fair, I'd say for at the time for, you know, just four dudes just, you know, throwing 30k out there out of their pocket with nothing to show for it beyond that. And they had no reason to believe that, you know, we would have any reorders coming, but you know, they were as fair as they could be given that we had no leg to stand on. And so we were thankful for that. But they did make it clear that like, you're going to have to prove yourselves, you know, quickly. And because, you know, we can't be having our machines doing, you know, this and that for you guys, when we got other companies running tens of millions, hundreds of millions of dollars worth of other products and this type of product.

6:23So you're going to have to prove yourselves quickly. Otherwise, we're going to have to move on, but we believe in the vision. We believe that there is a market out there for dudes and let's see if you guys can do something with it. So off we went. And how did you prove it out? Tell me about your first sale. It was retail, Ryan. Kruger. Kruger, Kruger. Yeah. Talk me through that. Yeah, I mean, Kroger wasn't until three years later. So we got those initial pallets in August of 2015. You start out with the sympathy orders from friends and family, right? And you see if you can get through those. And our goal the whole time in those early, early years was just, let's just get to the next reorder.

7:06Let's get to the next reorder. So within a year, we were able to get up on Amazon, get our website going, and then also got up on drugstore.com. So we were able to get reorders through those channels and those sources just enough to keep growing the business. And then, you know, that was kind of during that time, we're all still working our nine to fives for the most part. But we were chasing retail meetings at that time because that was, you know, the goal was to get on a retail shelf. So, you know, I would say that was, you know, really rough times from like 2012 to 2014. But once we got Amazon going in like a good place, we saw steady reorders from them.

7:53And then at the time too, we found a decent amount of resellers on Amazon that we worked with and trusted and bought a decent amount of products. So that kept the lights on until 2015, which was the big year with Kroger where we got our first national retail deal. Yeah. So what was revenue first year? First full year of sales, 2013 was$110 ,000. Yeah, there you go. and you guys yeah you a lot of you guys worked in your full-time job some of you only went full-time like just like around covid time when things really took a big turn uh so so it was you you guys have been incredibly conservative in some ways but the growth has been massive as well if you look at that trajectory from you know early days 2011 2012 2013 all the way up till now so So you've been building the business for about sub-15 years.

8:51So I'm curious, when it came to traction channels, Shopify was just starting to rise to prominence, but not really, not really. It really, I'd say, kicked off 2017, 2018, that era. Facebook ads was a bit more of the Wild West. You could, you know, clicks were under a dollar. You know, it was a good time to be in e-com. So what did that first traction channel look like for you guys in those first few years, even to get to a hundred thousand? Was it mainly Amazon? Yeah, it was Amazon, drugstore.com. And that was basically about it. A couple, a couple other boutique customers. But yeah, that was, that was really just it.

9:41Yeah. You didn't run ads? no we uh somehow were able to kind of thread that needle and uh you know never really ran out um and you know if we did it it wasn't for an extended period of time that uh would would have caused us to lose momentum you know so say a lot you know and you i'm sure you've heard this before too and this has happened a million times over our journey the past 15 years sometimes you just got to be more lucky than good you know what i mean like sometimes the the stars are aligned and the chips fall your way. And, uh, that that's happened a lot for us over the years. And I'm sure we'll get into some of those other instances, but, and then, yeah, in terms of like when we all went full-time, Sean, uh, went full-time towards the end of, of 2013, um, early 2014 ish.

10:29We, we went down to an incubator program in Austin, Texas in, in 2013. Um, and at that time, uh, it was around like the summer of 2013. So that was really great for us because none of us had retail experience. You know, we're all working in different industries and, you know, we're creative guys, smart guys at different skill sets, which I think is another reason we've been lucky enough to be so successful. You know, a lot of times you can get founders with the same skill sets and then they bought heads, right? Well, we had different skill sets from finance to sales, to product development, to marketing.

11:07And so we all kind of complemented each other. You know, even though we all wore many hats for over a decade, those different skill sets, I think, allowed us to, you know, have each of us stay in our own lanes when it came to certain big decisions. And we trusted each other of, you know, like trusted, you know, Jeff's gut when it comes to finance. You know, he trusted Sean and I when it came to sales and marketing and Sean with product development and design, you know, so we're really lucky in that regard that we have this diverse skill set that complements each other. And so we've never clashed because of that, because we all trust each other and relied on that skill set that we were able to kind of make up as a whole amongst ourselves.

11:49Yeah. And I was going to say, the four of you guys, you've still stuck together this whole time, right? Yeah, no, I think, you know, in saying that, there's no egos either. You know, I think founder groups and C-suite groups, you know, the demise is always ego, right? So we've always checked our ego at the door. And if the business wins, you know, we're all going to win personally as well. So we've always checked egos at the door. And that's true to this day. You know, one of our brand pillars and brand morals is, I don't know if I can swear, but it's don't be an asshole. um you know so and and that's something we go through with every single employee when they're hired is our you know our our brand morals and that's one of them is be a good dude don't be an asshole and um you know that something as simple as that could take you a really long way yeah i agree i agree um so talk to me around kroger how did you guys get that deal because that was kind of like your first big break like revenues few years in i assume you know a few hundred thousand half a million ish right a year yeah so 2015 we get the kroger deal around i think april or may is when they give us the final go-ahead um and basically that just came from hustling cold calling cold emailing trying to figure out who the the the category buyer was uh and he gave us a meeting uh it was he was uh his name was kevin darcy and he was on the paper aisle desk for many years and he was kind of on his way out uh he was kind of a cowboy and uh he was just like screw it let's give these guys a chance why not this is a boring stale category you know why not you know what's the worst that happens they they don't sell we kick them out so he gave us that opportunity uh and then mid-june is when we went out in 2015 is when we went out to la to pitch on shark tank so that was a huge point for us to be able to make during our pitch that the Sharks, I think, were shocked by.

13:56They didn't think there was any chance in the world that we had a national retail deal, especially with the biggest grocer in the world at the time in Kroger. So that helped us immensely. So mid-June at that point when we pitched on Shark Tank, we had about$350 ,000 in sales. And we told them we were projecting$1.5 for that year. And we actually hit$1.5 on the nose. So that was our first million-dollar year in 2015. and then scaled things up from there. Yeah. So Mark Cuban has shared that you guys are his best investment ever off Shark Tank. So you asked for$300 ,000 for 10 % and there was a bidding war and you guys walked away a$300 ,000 deal for 25%.

14:48And I'm curious, what was the story that you guys told to really justify that valuation? And can you give us any interesting insights after the show? After the show, when it went live, did sales just go absolutely bonkers? Talk us through that. We've spoken to a lot of founders that have done shark tank usually all of them it ends really well usually a lot of them the deal doesn't actually go through after due diligence um i've spoken to one where it had an adverse effect for his business and uh he got a lot of death threats right so he was one of the he was one of the ones that you know got like like good made good tv basically yeah no we had a we We had a great experience.

15:37It was about our, I think it was our third time that we went through the, like the whole Shark Tank system. You know, we showed up the first time with literally just a prototype box. And we're such clowns, like being ourselves, having a good time, joking around with the producer, Mindy. And she's like, you know what? She's like, this is just, you know, a funny enough idea. Like, if you guys ever do anything, here's my card. Like, give me posted on your progress. So next year, followed up with her and, you know, we have like like 100 ,000, 200 ,000 sales, whatever. So went through the pitch process again, made it all the way through just before getting called out to L.A.

16:14And they're like, you're right on the doorstep. Like, go get go get us something else that we can, you know, get Clay and the rest of the the brass on board. So that next year we had we had Kroger and they called us out. And so, yeah, we pitched and, you know, out there is it's it's crazy. It's I really feel I tell people all the time. I really feel for the founders that, you know, go out there solo. You know, we had three of us that could divide and conquer the room, like how they edit this thing down to like look like a normal free flowing conversation for, you know, a 10 minute segment on, you know, ABC is beyond me.

16:57because these sharks just want to know what they want to know and they want to know it now. So it's like Mark's talking from this side of the room and he's yapping and wants to know X and Barbara's in the middle and Robert and Mr. Wonderful are chiming in. And you just kind of, like I said, we were lucky to divide and conquer the room. And honestly, they were skeptical of us. They're like, guys are never going to use this. What are you talking about? You're crazy. I think Mark was out in the beginning because he didn't think we were going to have enough you know, marketing dollars to scale and get the awareness up.

17:32And then, like you said, there was a bidding war. Robert and Mr. Wonderful wanted 30 % because they were going to go, they were going to team up. So we countered at 27 and a half and back and forth, back and forth. They wouldn't budge. We wouldn't budge. And honestly, I think Mark was just so tired of the conversation going on that you just jump back in. It was like, all right, I'll do it. Like, let's go. Like, let's go, dudes. So we did it. And, you know, afterwards getting to know him and his team, I think they, you know, really enjoyed us and said that this is worth, you know, trying to get done.

18:08And Mark's a man of his word as well. If you don't know, before, in the early days of Shark Tank, ABC used to take, ABC and Sony used to take a percentage of every, a small percentage of every company that pitched. And so Mark put his foot down after like the third season and said, listen, like I'm out if you're going to like gouge these these startups for equity. So they stopped doing that. So just like that, you know, if he makes a deal, he tries his best to get it done, even during due diligence, obviously, unless there's some major red flag. So his team was great to work with. We got the deal done.

18:50Like I said, we pitched end of June. we got the deal done my first week of September. Um, and then, you know, him and his team have been, uh, you know, fantastic to us ever since he's been a great mentor to us. And, uh, you know, as, uh, people say their door or phone is always open. He's just an email guy, doesn't do phone calls, doesn't do meetings. So his email is always open. Uh, and, you know, has really been there for us for, uh, you know, bigger decisions or just, you know, we get in this spot or that spot and want to pick his brain and he's always given us his you know frank feedback uh but at the same time really great working with him because he just kind of lets you operate and do your thing because he believes that you're the expert in your you know particular business so um that's kind of how things went from you know the journey from pitching to you know getting through due diligence and ultimately the deal done uh december of 2015 yeah so 10 11 years on how often do you speak to him i'd say we speak uh once or twice a quarter depending on what's going on um you know we give it we give them quarterly updates and then yeah we'll we'll chime in here and there to pick his brain uh about certain things going on but uh yeah for the most part he just lets us do our thing which is also nice yeah and i guess uh you know he's a great ambassador right like imagine getting him on ads for sure i mean he's like we said he's the dude like he's who we wanted going in there and uh that's why we were willing to you know take you know give up a little bit more equity than we initially uh sought out to give because we we knew it would be worth it and it was worth it because immediately after that we start getting more uh not only shark tank but being with mark you start getting more yeses in terms of uh retailer brick and mortar retailers major chains offering up meetings to us and we walk in a room with a whole different cloud and a whole different respect because of that deal and and being on shark tank and at that time you know it was kind of the gold standard in the states of like startup america right like if you got on that show it was like whoa like you're doing something you know so there was really a lot of credibility that we game coming out of that deal.

21:08Yeah, yeah. I agree. I'm here in Australia. We've interviewed basically every shark, had on the front cover of founder of the magazine and I've interviewed every shark. And 100%, there's a lot of notoriety that the sharks have, right? And that would open doors, that legitimizes what you guys are doing in some way, shape or form. So you guys found it was harder to get doors open and speak to retailers and then that really shifted as as you started to yeah okay totally but to your question too about like you know like the night of our airing like we did i don't know 10 or 15 000 bucks on our website i mean nothing crazy you know and um i think that's a microcosm of a lot of big moments you know i think people and especially in CPG, they think that you get some big celebrity to post for you or this happens or that happens.

22:10And you're just like overnight making millions and millions of dollars. It's still, you know, it's a big win at the time, but it's not going to be a massive needle mover. And our mindset was when we got back is that the work has just begun, you know, that we can't like kick our feet up and think that airing night is like going to change our lives. And this is going to be a 10 million dollar business overnight it's like no the work has just begun like let's put our heads down boys and let's go yeah and you know so you you that year you were quoting i think you were on forecasting 1.5 you hit 1.5 the growth though must have been pretty strong since then right to get to you know multiple nine figures right like you you must have gone from like 1 to 10 or 10 to 30 and 30 to 50 and 50 to 100 like like in these past subsequent years so like 2016 was 3.2 2017 was like 5 2018 was 10 2019 was 15 and then covid went from 15 to 40 yeah so covid was our we call it our brown swan event brown swan i like that that's good that's good they talk about the black swan events but that that was our brown swan event because of the major toilet paper shortages and people were we were the only game in town you know uh just the only product on shelves and uh three out of four people uh 75 percent of folks that tried flushable wipes and dude wipes during the pandemic never left the category they stayed with the category so it was a huge girl trajectory moment for us in the category and big on adoption yeah okay that's a brown option yep okay so talk to me around the ufc fighter tyrone woodley so So you paid him to put a sponsorship of like dude wipes on his underwear, on his trunks.

24:22You paid him 10 grand and that blew up. When was that? And talk me through that. Because you guys have done really well with some of these kind of viral type marketing ambassador sponsorships. Talk me through that. And that was your first one. how did it go more detail the better and then what was that kind of playbook that you've kind of built from there and and you're the cmo so this is kind of you driving it yeah yeah for sure so that was kind of the kickoff of what would become what we're notorious for so yeah we put dude wipes on the on the butt of the trunks of his shorts it was a big pay-per-view fight uh june i believe 14th of 2014, if I'm not mistaken.

25:08And, um, it was the, uh, it was the main event, uh, Tyburn Woodley versus Rory McDonald and just our luck. Like I said, sometimes you gotta be lucky than good. Uh, we, uh, well, first of all, Tyburn contacts us. He was like, have you ever thought about doing this? And, uh, like, you know what? We haven't taken a big marketing swing yet. We don't have a huge budget, but 10 grand isn't, you know, anything crazy. Can we afford it? Probably not, but let's just throw it out there. Let's get eyeballs on the logo and see what happens. So there's going to be a couple million people watching it. So let's do it.

25:43So we decided to do it. And just our luck, it's a boring fight. And they just dance around each other the whole time. So the camera's just on DudeWipes the entire time. And so we're on Twitter and Twitter's just blowing up, blowing up, blowing up. So all the way so to where DudeWipes becomes the number three trend worldwide on Twitter that night. So we literally have, you know, 175 ,000 in sales and we're number three trend worldwide on Twitter. So we're going bonkers watching the fight, watching Twitter. Such a blast trying to keep up with comments, commenting back with our quirky little, you know, our one liners and stuff like that.

26:22And, you know, again, sales, you know, massive needle mover. No, like Google searches through the through the charts off the charts, you know, but nothing crazy from needle mover sales wise. But that really was the the catalyst moment to what would become our famous kind of lightning strikes that you've mentioned that we've done, you know, dropped into a cultural moment over the years and what we become notorious for. And that really kicked things off on that road, on that path. Yeah. So you did$175 ,000 in what, a 24-48 hour period? No, I'm saying in total for that year, we probably did. Oh, wow.

27:07So you did that early days. Okay. Yeah, that was 24. So 2013 was our first full year of sales,$110 ,000. Yeah. 24 teams, probably like$175 ,000,$200 ,000. And so that, that was full year 2014. So yeah, like I was saying, again, it taught us that like even a massive, you know, event like that where millions of people see you, you know, Google searches through the roof, whatever, trending on Twitter, social media, people talking about us translate into massive months sales. Like not exactly. Wow. So what? You would have made like five grand. Yeah. I don't even know if we made our money back to be honest.

27:47Wow. And it was worth it in terms of the brand awareness and getting that buzz out there that was created that night. So, you know what's interesting is most founders would say, hey, I've tried, I don't know if you've, I'm sure you've heard this, say, hey, I've tried the influencer marketing thing. I paid somebody, whatever. It doesn't work. Right. And most founders would be thinking it doesn't work and they would give up. Right. And they say, hey, I tried this influencer marketing. thing i can't see a return um but you keep going exactly the opposite we've always been the opposite we're we brand brand brand brand brand you know there's a whole performance bucket that is a completely different argument that's where you need to get you know see your return but in brand awareness and brand marketing you know we don't lose sleep over that we never counted dollars or tried to track things down.

28:41Sure, we took a look to see what spikes happened, but it never led us, you know, astray from that strategy because we knew ultimately that the, essentially, we're building a category, right? Like we're building something that, a behavioral change that people have never done before, you know? So we didn't let that deter us at all we knew that it's going to take a little bit to convince people that you should try this this is better than toilet paper and you know that first hit of intrigue is the peaks the interest gives a chuckle maybe a google search talking to probably all your friends in the room maybe a text or two or a post and then we'll get you the third or fourth time after you keep seeing us but like that's what kind of starts the first domino effect and we knew that and we saw that and we felt that so like we if you looked at other a lot of cpg companies over the years not a lot of people just go and are gonna if you look at other ufc fights or other other big sports cultural moments not a lot of people just are struck to go straight to Twitter and talk about a salsa brand or this or that.

30:02Like they just don't do it. But for whatever reason, Dude Wipes triggers them to do that. There's an emotional engagement that makes them act on that. And so that's what we saw. And we weren't necessarily worried about the sales because we knew they would come. I love that long-term approach. So you still continued with these campaigns. Can you tell me others that you've done and some of your best performers? Yeah, for sure. So, you know, we went back to the well a couple more times on UFC back in like 2015, 2017. Each time we we trended on Twitter again. And then it got to the point where they ended up doing the uniform sponsorship deal with Reebok.

30:50And so we're like, ah, come on now, our like our little, you know, viral marketing play for pennies on the dollar for the eyeballs that we're getting and impressions has gone away because they did that big deal. So, you know, we had to find other avenues. And that's when we started to do kind of the newsjacking of taking advantage of moments when, you know, what would become our strategy to own the bathroom of when, you know, there were a couple of times UFC fighter, like, shat themselves during a fight. And so we get all over that and we'd, you know, we'd get on Twitter, we'd get in touch with them, we'd send them product, they would post, they would go viral.

31:35This happened, you know, in several different sports and Major League Baseball and other sports that always went viral and then gained us a ton of earned media with different articles and things like that. So those were the things that we were always on our toes about and acting really, really quickly. And a great story in that regard is, I believe it was 2018, NFL player by the name of Isaiah Crowell. He was playing a Thursday night football game in the NFL for the New York Jets. And the Jets were playing the Cleveland Browns, ironically enough, that night.

32:14And Crowell used to play for the Browns. So, you know, he was he had a little chip on his shoulder that night. So Crowell for the Jets scores. And in the end zone, his touchdown dance was wiping his butt with the football. So I'm sitting there in my recliner at my townhouse and I leap out of my chair and I like rewind it real quick. you know get my iphone whatever at the time out take a terrible iphone video of it get it immediately up on uh you know all our socials was like have have his people call our people like where do we send the wipes uh dm him right away and strike a deal with him for like i think 3 500 bucks uh to set him product and he's gonna post on his channels so by the time it takes a couple days to get in touch with him and you know get him wipes and so on and so forth so again being lucky the day he posts simultaneously news comes out that the NFL is fining him like 15 grand so we get all his virality from the post and then the NFL news comes out and everybody thinks that we're paying his fine for him so it goes even more viral so I mean It went everywhere from, you know, you know, nuts on Twitter, every social channel, ESPN shows, Howard Stern, you know, ESPN.com, Washington Post, USA Today, you name it.