Who Gives A Crap Founder on Challenger Lessons - Danny Alexander

0:00Danny Alexander:Ladies and gentlemen, welcome back to the Uncensored CMO. Now, regular listeners will know one of my favourite brands is Who Gives a Crap and we had the amazing Emily Craftman on to talk about it just a couple of years ago. Well, I'm joining this episode by one of the co-founders, Danny Alexander. Welcome to the show. Thanks. Great to be here. Good to have you. Yeah. And I've been looking forward to this because I'm a really big fan of your brand, Who Gives a Crap? And I have been for a while. I love anyone who's disrupting a category and doing things differently and marketing in the way that you've done.

0:29Danny Alexander:So take us back to like, how did you meet the other founders? How did it all happen for you? Yeah, we have a pretty atypical founding story. I think some of our employees are shocked when they find out that, you know, I would guess for the first seven or eight years of the business, the three co-founders were in the same room maybe three to five times. You know, we met in 2010. We launched a crowdfunding campaign together in 2012. We did everything virtually over Skype and email. What happened was I was looking for my next thing. I just moved back to the States. I was living in Argentina for a couple of years and wanted to get an MBA and decided on my way back to the States that I wasn't an academic learner.

1:12I was always good at my studies, but I was a hands-on kind of learner. And so I decided that if I really wanted to learn how businesses worked, that it would be best to do it on the job. And so I figured I'd look for startups that were doing interesting things that I could help get off the ground. And I came across Simon and Jehan, my two co-founders at this business plan incubator program in Colorado. They had come from Australia with this idea, met them, instantly fell in love with the idea. We got along great and we decided to do it together. And so that was 2010, which is about 15, 16 years ago now.

1:44It took us a few years to get started. Like I said, it was a side project and we were doing it nights and weekends over Skype and email. All of us jumped in full time several years later. I think it was probably about 2015 or 2016 when I made the leap, probably about the same time that Simon made the leap. He was doing other things. Jehan came on full time a few years after that. And so it was a very unusual first few years of the business.

2:05Danny Alexander:That is unusual. And again, I mean, a lot of people talk about developing a side hustle for a while, see if it works, then jump full time. So you're effectively doing the side hustle together, weren't you, for what sounds like five years before you took the plunge? And, you know, I think I often get asked by young founders, I think there's this perception that founders have to be really risk tolerant and have to do crazy things and really be willing to put it all on the line. And that just wasn't the case for us. We all had other jobs. We all, for the first few years, we all had something else paying our bills.

2:37And so we could afford to take some of the risks comfortably and do it at our own pace. And so, yeah, I think in some ways it gave us a leg up on the competition. In some ways, it was maybe we were slower than we would have been otherwise. But, you know, it was a really great way for us to get started and figure out how to run this business.

2:55Danny Alexander:And what's the advantage of having three of you versus, say, one of you? And also, how do you divide up responsibilities between you? Do you focus on different parts of the business or do you bring different kind of personality traits to it? Yeah, it's definitely evolved over the years. I mean, I could never start a business alone. There are some people who are able to do it and good for them. It's a really lonely journey even with three of us, right? I think you're often the one in the room who has to make really difficult decisions. You're often the one defying best practices and deciding, you know, I know that the industry says we should do this, but we should do that.

3:32And so I think it can be really lonely and challenging to own those decisions constantly. So I feel like having co-founders really helped give us the confidence and support and camaraderie that we could really do difficult things. In terms of how we split things up, I think it's just really happened naturally that, you know, my background is in product design. And ultimately, everything kind of customer facing was kind of my bread and butter. So the brands, the website, the creative, the copywriting, all of that stuff sort of was in my domain. But I've always been a relatively academic designer, right?

4:06So I know just enough about business and spreadsheets and strategy and everything to get myself into trouble and to appreciate that, but not really enough to do it. Jehan, on the other hand, he's got a background in strategy and management consulting. Honestly, I would just pay to watch him run a spreadsheet. He's just a wizard at calculating things and figuring out how to run things effectively. And I think Simon is somewhere in between. He really appreciates both of them and can find the synergies between them. And then he's also just really strong operationally, figuring out how do we need to leverage capital to grow?

4:45How do we need to think about our distribution center strategy and really leverage that to help us grow? How do we maximize the volume of our shipping footprint to really drive profit? And so I think there's enough overlap between us that we can really collaborate well, but not so much overlap that we ever step on each other's toes. Yeah, that sounds great.

5:02Danny Alexander:We have to talk about the name, of course, right? So when did the name come about? And was it an immediate, this is genius, we're going to have to do it? Or did you have any alternative names? Yeah. So the original story is not, unfortunately, not that interesting. It's just kind of an epiphany moment that Simon had, where he was looking for a business that he could start that would have some social impact. He wanted to find a product that he could attach a donation model to that everybody used, right? And so he walked into the bathroom one day, saw toilet paper, and he said, that's it. Toilet paper.

5:32we could donate half our profits to help build toilets around the world and we can call it who gives a crap so it was just like as he describes it kind of a one-shot epiphany when i met him and jehan they already had the name i thought it was hilarious i never thought it would work if i'm being totally honest and i think a lot of our early team and our early advisors didn't think so either i think you know we're talking about 2010 it was a very different media landscape it was a little bit more proper than we expect now. I was just watching the Super Bowl the other day and Levi's had an ad that was just all butts, right?

6:06And that in 2010 would have been radical. And so I think the idea of the name who gives a crap felt a little too edgy to me. When we launched first in Australia, it became a huge hit. It's a very Australian brand name and identity. A few years later in, I believe, 2017, we were launching in the US and UK. We were really nervous about whether the brand name would work or not. So we actually did test several other brand names. We, you know, launched a few basically parallel websites and pointed a few Facebook ads at the sites and saw like, is there any difference in the brand name in terms of like intended, you know, intention of purchase?

6:42And we saw that the difference was pretty minimal. We tested like role model and who gives a crap and WGIC. We tested a bunch of different things and ultimately they were all pretty comparable but who gives a crap gave us the advantage of like the the virality the the ability to talk about it um you know if you see it on someone's bathroom shelf or on the back of someone's toilet you want to pick it up and read it so it gave us a lot of the halo benefits of having a global brands that was kind of worth talking about well i mean i i think from a

7:09Danny Alexander:challenger brand perspective i mean one of the things that challenger brands always do is they think about how everything that they make can be used as media yeah and effectively your your print campaign your outdoor campaign your viral campaign it's all wrapped up in the packaging isn't it oh it does so much of the heavy lifting for you um let's talk about the packaging as well because um it's very disruptive and different so it's hard to it's hard to miss and also if anyone doesn't know you individually wrap every role don't you which is quite quite different i presume that comes at quite an expense as well so what was the thinking behind a the design look and feel which is disruptive and also going to the effort of wrapping the role yeah so i originally started my career as a packaging designer at a company called method it's a cleaning products company i think it's pretty widely distributed in the uk as well yeah so i was one of the first um i was like you know employee number 60 there or something we saw this tremendous growth of the product and the category in that time and one of the greatest learnings i had there was that the product should be the billboard right and that we had we had a heavy focus on earned media and and shareability and word of mouth growth over paid media.

8:16I think when we started Who Gives a Crap, we had the opportunity to do something similar. And the original idea was I was walking through San Francisco where I lived at the time and Simon, my co-founder, was visiting and we were trying to figure out like, how do we design packaging for this? We hadn't thought of the individually wrapped rolls yet or anything. And I remember being in a bar and seeing in the bathroom, they had like paper wrapped rolls there and i realized like why can commercial toilet paper be wrapped in in paper instead of plastic but when i go to the grocery store it's always wrapped in plastic and so we realized it must be possible and let's let's figure it out let's do it and so that was the moment where we realized like let's let's run with this paper wrapped um roll thing and then you know later that day or another day i was again walking down the street in san francisco and i passed a barbershop and I saw those in kind of the twisty poles outside and I was like what if when we stacked a few rolls up in the bathroom it made that kind of stripy barber pole aesthetic and so that was the original kind of design insight it was that we could actually not only individually wrap them but we could make kind of a sculpture or a statement out of them and so that weekend Simon and I went into my office in San Francisco and we printed out 48 wrappers basically that had stripes on them and we put them together and it was such an eyesore there were just 48 insanely brightly colored wrapped rolls in front of us all with stripes and it was just it was too much and so we realized okay we need to bring a little bit of variety in here and so we started prototyping and printing different patterns and i was pushing for like 48 different patterns in a box simon again the operations person pushed back and we you know he's like what about two and i was like what about 12 and we ended up on six in the original packaging and so that was the early idea we've since expanded from that we now do limited edition packages a few times a year we do you know holiday edition which started as a joke when we first did it but is now one of our biggest moments of the year and then i think one of my favorite features was developed by one of our early copywriters who she was a copywriter at innocent drinks back in the day innocent juices and is a good friend of mine and she did all of our early copywriting she had this idea what if we put emergency rolls in the bottom of every box what if you put like three rolls wrapped in bright red paper and just said don't run out like don't forget to order more and so ever since then we've put emergency rolls in the bottom of every single box we ship and it's always a huge hit um to this day you know almost

10:37Danny Alexander:15 years later i love that that's so good i mean again because it's the sort of thing you'd only do if you were thinking like a challenger brand because any big business would just strip the cost out right they look at it and go well that's you know adding x number of dollars per bag yeah per uh you know per container so we'll strip it out but but there's a value in doing that isn't there that's what makes this good is because it's the surprise it's talking it's the the copy that you read that makes people share it as well which is so cool um let's just touch on the purpose as well because um that's a very big part of this story as well so what are you trying to do you know through the brand so you know our long-term goal as a business is to ensure that everyone on earth has access to clean water in a toilet so um for for those who aren't aware over two billion people in the world don't have access to a toilet, a basic necessity.

11:24It's not just a problem of inconvenience or disgust. It's a matter of public health. I think we all know that access to clean water is important, but one of the reasons it's important is that if people don't have toilets, that waste ends up in waterways, which is the main reason for people getting sick. And when we were getting started, we realized this fact that over 2 billion people lacked access to toilets. And so we decided to donate 50 % of our profits to help build toilets. That was the original goal. Now we've added clean water because a lot of water and sanitation projects are done in partnership with each other.

12:00Ultimately, by donating 50 % of our profits, for the record, I was skeptical of that as well in the early days. There was a lot of early day debates about what are the right ways to do these things. It seemed too ambitious to me in the early days. It seemed like we could probably reinvest we donated 10 it would still be hugely ambitious but we would have a lot more money to reinvest in marketing or other things and i think to his credit simon was um was was pretty adamant and basically said like the the boldness of it is kind of that's the marketing right like it's the it's the story that people will will get hooked on 10 is great but like that's not big enough to really generate stories from and so by donating 50 of our profits it's It's ambitious enough that people talk about it and believe in it.

12:42It's ambitious enough that our team are really motivated by it and really see that we intend to do good. And it's just crazy enough that we were able to get our investors to be on board with it.

12:53Danny Alexander:Well, that's a really good question, though, because how do you raise money when effectively you're telling investors that 50 % of the return that they might have a share of is being given away? The reality is in the first few years, we weren't sure we could. You know, ultimately with a big goal, like trying to ensure everyone on earth has access to a toilet and clean water, we needed to grow massively. And so we always knew that capital would be a really important part of our journey. But I don't think we believed we could do it in the early days without really proving this business model. And so we bootstrapped the business through to 2021.

13:28We were doing really well. We did really well and grew exponentially through all of that time. And then COVID was an absolutely manic period in the toilet paper world, as you may have heard. And so we came out of 2020 just in the best possible position to raise capital. And so we were in a great position to really go out and find investors who were truly aligned with our values and really believed in the power of a purpose-driven brand to not only do good, but actually deliver meaningful returns. And so we've never looked at our donations as a marketing expense or an employee retention expense.

14:01But I think if you were to take a cold, hard measurement look at how we've grown versus how we would have grown if we spent that on marketing, I'd bet that we've grown more and retained our employees better, you know, more effectively because we've donated half for a profit. So I think it's a win-win that we've been able to prove over time.

14:19Danny Alexander:That's such an interesting way of looking at it, isn't it? Like, you know, how many consumers are buying into the brand because of your donations? How many retailers are stalking you because of that? Totally. How much brand awareness do you get because the story, you know, so on. So from an investment point of view, they need to factor that in. Absolutely. You know, as part of it, you know, not see it as a cost, see it as an investment. Yeah. Now talking about fundraising, you've got quite an entertaining story, haven't you, about how you raised your first, is it$50 ,000? $50 ,000, yeah. How did that all take place?

14:47Yeah. So, you know, like you mentioned earlier, as a challenger brand, really any bootstrap brand, you really need to be creative about how you use every touchpoint of your business to drive growth and to really be efficient. And so in addition to the product being the billboard, we really needed to think like, how do we make our marketing deliver disproportionate gains? And we had a marketing budget of zero. And we knew we needed to raise a crowdfunding round of capital to pay for our first production run. And with zero budget and very ambitious goals, we realized that we needed to do something crazy.

15:22And so we convinced Simon, my co-founder, to sit on a toilet on a live stream for as long as it took to raise our first$50 ,000. And it took about 51 hours. And we did it live. It was broadcast around the world and picked up in every media outlet we had identified as like a dream target for us at the time. And we were kind of off to the races from there. That was kind of our first introduction to the public. And then, you know, we fulfilled those products about eight or nine months later. And then we started to see retention and word of mouth growth and everything kind of snowballed from there.

15:57But it all started with Simon on the toilet. Did he actually sit there for 50 hours? He did. Yeah. There were a few moments where he had to get up. So he did not use the toilet on that toilet. We had a staged toilet because we needed to get cameras all around him and everything. And so he had a separate toilet that he would get up and use every couple of hours. Other than going to use the toilet, that was the only time he got off of that toilet.

16:20Danny Alexander:Well, fair play to him. I mean, that's pretty impressive. He still complains about it. He still claims that he's got back problems and leg problems and he's never been the same. But we wouldn't be in business if it weren't for that. That's brilliant. It sort of reminds me, actually, I did this presentation at Cannes a couple of years ago called The Extraordinary Cost of Being Dull. You know, and that is literally the antidote to dull, isn't it? Oh, my God. I think it's like even, you know, the name, the humor, even the fundraising. I think the fact you're having fun and doing something kind of funny as part of it is all part of the story, isn't it?

16:50Danny Alexander:Oh, yeah. Yeah. And I, you know, our brand promises make it fun to do good. I think it's, it's fun for our team, but it's also, you know, if, if we, you know, to take a step back when we first started eco toilet paper as a, as a category or, or do good toilet paper, however you want to call it was like less than, less than a fraction of a percent in, in all of the markets we sell in. We knew that if we really wanted to appeal to a wider audience, we needed to make it fun. We needed to remove all of the barriers of quality and price and convenience and then over deliver on delight to really get people across the line.

17:24And so I think that's always been our goal is let's remove all the barriers, make it so that people have no reason to say no to our product. And then let's over deliver on all the fun stuff that only we can do. And that's how we win people over.

17:35Danny Alexander:Yeah, you've done a great job with that. Now, you mentioned in your answer there before about COVID. Yeah. And of course, the thing everybody remembers when COVID just started is like a national shortage of toilet roll. It was like it was headline news everywhere. So what happened in terms of your business during that time? I think I can answer that in a few ways. One is in terms of like the experience of running the team and running the business. I think, you know, in 2020, we probably had maybe about 35 or 50 employees around the world. And so on the one hand, we went through it the same way everyone did.

18:08It was a really scary time. nobody knew what was going on we were all scared for our health and the health of our parents and our children and everything like that we were figuring out how do we deal with kids being at home and like running around while we're on while we're on skype calls or zoom calls i guess we'd advanced to zoom by then i so i on a personal level it was really challenging on the other side of that though was that we were in probably the best industry in the world to be in then we were a we started the company remotely so we were comfortable working remotely we were d to c first so we could ship products from anywhere and didn't rely on retailers.

18:42And we were in toilet paper, which all of a sudden was everyone's favorite product. And so, you know, we started to see some crazy spikes in other countries. Like I believe Singapore was one of the first countries where we were reading news stories about like the shelves being cleared. And then, you know, within hours of reading those stories, you know, we would look at our data in Shopify and all of a sudden we'd see growth, growth, growth. And it just, there was just a vertical line. It was like nothing anybody I know has ever seen before. You know, we at one point we were selling, you know, orders of magnitude of toilet paper more than we were selling at any other time that we realized this is great.

19:19It's also going to be a real challenge to fulfill.

19:22Danny Alexander:How do you fulfill that? Because presumably you hadn't planned the stock to. Yeah, well, you know, I mean, even before we got to fulfilling the orders, we as a toilet paper business, we'd always sought to we'd always strive to always be in stock. Right. And so we'd never built the functionality of marking any products as sold out. We physically couldn't do it. And so immediately we realized, okay, we've got to mark the site as sold out. Let's build a team who can solve that. And let's capture emails for when we do have stock, we can redeliver. We saved enough stock to fulfill all of our subscribers' orders.

19:55So we were able to keep subscriptions flowing steadily. And then we put up that pop-up that just said, sorry, we're out of stock. You know, if you want to sign up, we'll let you know when we have more. I think within a day or two, we had over half a million people sign up. And this is for like a small brands that nobody had ever heard of back then. We were able to convert, I think, something like 75 % of those leads within the next few weeks. And so we did a number of things. It was just like really working. This was the benefit of working remotely. We were working around the clock to figure things out.

20:26And so one day we realized most of our orders are 48 roll boxes. we'll have plenty of toilet paper in two months time. People don't actually need 48 rolls of toilet paper to get through this. What if we delivered everyone who's ordered 48 rolls, 12 rolls or 24 rolls and said we'll deliver the other in a couple of weeks. And so we were able to really help sort of streamline deliveries and really kind of keep things running through that period. But it was not easy. It was definitely a challenge. It was exciting. I think we took out our first full-page ad in a paper in Australia. When we sold out, we basically took out a full-page ad.

21:07We'd been wanting to do something forever and just really never had a moment. And we basically took out an apology letter and said, you know, by the way, this newspaper is also made of recycled paper just in case you're in a pinch and really need a wipe.

21:17Danny Alexander:And we put a few perforated squares at the bottom. So, yeah, it was both a really terrifying time and a really exciting time for us. And what did that do to your trajectory? I think like many D2C brands, we saw sort of, you know, we were growing pretty exponentially before that. Then we saw this insane peak. And then we saw a bit of a regression to that previous curve, right? And so I think we are definitely better off as a business than we would have been had that period not happened. We're definitely at a steeper incline. But it didn't maintain that craziness. I think, you know, the supply chains globally sorted themselves out.

21:52People started to return to shopping in their normal grocery stores. And, you know, we've definitely seen and felt some of the benefit of that period. But, you know, we're back to crazy growth instead of absolutely insane growth.