#10 - Using $1k to Build $100M Deodorant Business

Season 2 of The Hustle's podcast is here - and we're talking to Moiz Ali (@moizali). Have you ever looked at the back of your deodorant stick and read the ingredients? Aluminum zirconium trichlorohydrex? PPG-14 Butyl Ether? Well, Moiz saw that and created Native, a natural deodorant without all the chemical junk. He built the company from his brother's dining table - doing sales, marketing, operations & customer service as a one-man-show. His hard work paid off, as he sold the company for $100M to Proctor & Gamble just 2.5 years after it launched. Listen in to hear the backstory of how he started using just $1k, how the company almost died (twice), and how he negotiated a $100M sale of the business! See acast.com/privacy for privacy and opt-out information.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:03Speaker 00

  At some point, we tried to raise more money and the investor was like, "The entire natural deodorant industry is something like $30 million a year. So why would anyone be interested in investing in a category that only has $30 million a year run rates?" And I was like, "If the natural deodorant industry is $30 million a year, we're the entire natural deodorant industry. We're doing $30 million a year at this point."

• 0:30Shaan Puri?

  Okay, I gotta say it. This was my favorite episode of the podcast. What you're about to hear is an episode I just recorded with Moiz Ali. He is the founder of Native Deodorant, which is a natural deodorant brand. It's basically a $12 stick of deodorant. My wife just bought it. She doesn't know that I know Moiz. She bought it because she didn't want to use deodorant that had aluminum in it or parabens, all kinds of funky chemicals that you see on the back of a deodorant stick. So this is the story of how he started it from his brother's dining room table, essentially where he was doing the packaging, he was doing the sales, the marketing, the customer service, as a one-man show for a very, very long time. And over two and a half years, he built this company raising very, very little money, mostly because investors

• 1:13Shaan Puri?

  were kind of just laughing him out of the room, like, "Okay, you're starting a deodorant company? Like, what is that?" And so he sold it two and a half years later to Procter & Gamble for $100 million. I liked this episode, not just because the story is great and the tactics that he shared are actually quite insightful, but because he's a very entertaining guy, very charismatic. In fact, there's a portion at the end of the episode where he is talking about how some people who didn't believe in him, and he named some names that we had to bleep out. So we left the story in, but we had to bleep out the names, which is a podcast first. But I think you guys are gonna love this episode. Let me know what you think. As always, you can tweet at me, I'm @SeanVP, or email me, [email protected]. Love to hear from you guys. All right, enjoy this episode.

• 2:00Shaan Puri?

  Native deodorant, you build a deodorant brand of all things.

• 2:03Speaker 00

  Yeah.

• 2:04Shaan Puri?

  You build it from scratch, from a dining room table. You build a actually good enough business where Procter and Gamble, one of the biggest companies in the world, looks at it, makes an acquisition and buys Native Deodorant for a hundred million dollars. So that's the end, but we're going to rewind to the beginning. The beginning is what? Set the scene. So where are you when you have the idea for Native Deodorant?

• 2:25Speaker 00

  So I'm in New York City, running another e-commerce business. I'm buying like Axe deodorant from a Duane Reade at 14th and 3rd in New York City. You know, I've, I've lived in the same place for like four years and so I'm really familiar with this place. I go buy it, I'm waiting in line, I flip over my deodorant and I can't pronounce a single ingredient on the back of that thing, other than the word aluminum. And you know, I, I've been seeing this problem for the last four years since I've been buying the deodorant from Duane Reade. And you know, I'm an attorney, I, I'm not a dumb guy. I know how to read English and I cannot pronounce a single one of these words. And so I'm like, if this product is going to stay on my body all day, every day, you know, I put it on right after I get out of the shower.

• 3:06Speaker 00

  It's on my body for 23 hours and 45 minutes and it'll be on my body for 23 hours and 45 minutes for the next 60 years. I should at least be able to pronounce some of the ingredients in this thing. And so that's really where the problem starts. And then my sister gets pregnant and you know, she's telling me how she's using Dove. And she's like, I'm really scared of Dove because I'm about to start breastfeeding and what happens with the ingredients in my Dove? And do they like get into, you know, my baby as a result of me using this antiperspirant? And so I'm like, okay, now this is a, not a hair on fire problem, but a problem large enough for me to solve.

• 3:39Shaan Puri?

  Right.

• 3:39Speaker 00

  And that's, that's how Native starts.

• 3:40Shaan Puri?

  So my wife is currently eight months pregnant and she started using Native and she was like, yeah, I just bought this like $12 deodorant. And I was like, is it native? And she's like, yeah. And I was like, dude, I'm gonna, I'm about to have him on the podcast.

• 3:53Speaker 00

  Amazing.

• 3:54Shaan Puri?

  And then she was like, I was like, why did you choose to buy it? And she was saying the same thing, like, oh, you know, because of the baby, I'm like, I have a heightened awareness around what am I putting on my body and in my body? And she was like, it's paraben free. And I was like, what's a paraben? I have no, what is a paraben? I actually don't even know.

• 4:09Speaker 00

  It like, um, the, the real thing that we shoot for is like, we're aluminum, paraben and phthalate free. Aluminum is probably the largest thing that we're like, people are concerned about when it comes to the deodorant category. And what it does is aluminum acts as like a plug to block your sweat glands from excreting sweat.

• 4:25Shaan Puri?

  I see.

• 4:26Speaker 00

  And so if you think of your sweat glands as like a duct, aluminum acts as a plug. And as a result, you can't sweat. And that's why when you use an aluminum based product, it's called an antiperspirant. It stops you from perspiring. And the way I always liken it is, look, if you could take a pill to make you stop urinating, would you take that pill? Doesn't that sound so weird? Like if your body is trying to expel a fluid from itself, shouldn't you let it? I'm like, yeah, okay, I want to go to the bathroom. Like this is a bodily need. I don't want to take a pill to stop going to the bathroom. I just want to go and pee. And so that's the way I thought about sweating. I was like, look, if your body wants to sweat because it's really hot, let it sweat. Let the deodorant sort of absorb the sweat and block odors. But we don't need to prevent it from sweating.

• 5:06Speaker 00

  And so that, that was like the genesis of like, okay, look, we think we can create a deodorant that does the job of an antiperspirant. The other way I thought about it was, look, like a lot of us work in office environments where we commute in a car. We get to an office, we sit at a desk and work at a computer. And, you know, using an antiperspirant every day, we're generally not in an environment where we're going to be sweating a ton. So it's like taking an Advil in the morning when all you need is a glass of water. You're like dehydrated. And so all you, what you should be doing is drinking a glass of water. But instead you're like, let me take an Advil to cure my dehydration. Just take the glass of water. It's a lot simpler and safer. And so that's the way I liken using native to an antiperspirant. I was like, look, you're probably working in an office job or a lot of, a lot of our customers are working in office jobs.

• 5:50Speaker 00

  You don't necessarily need all the effects of an antiperspirant. Aluminum free deodorant will do the job for you.

• 5:56Shaan Puri?

  And so you say we, but at the beginning it was just you, correct?

• 5:59Speaker 00

  That's right. So we launched the company in July 2015. I remember I bought the domain name on my birthday in July 2015.

• 6:06Shaan Puri?

  Why the name Native? Why that domain?

• 6:08Speaker 00

  Yeah, sure. I really liked what it stood for, which was like, we wanted to use ingredients that were like native to the earth. Like, we weren't trying to say, hey, this is owned by Native Americans. And we weren't trying to say we're a natural product and we'll never use an artificial ingredient because I don't think that that's necessarily the case. What we wanted to say is like, look, we want to use ingredients that are native to the earth and we want to make those ingredients part of our deodorant as opposed to using ingredients that nobody can pronounce. And so that was the genesis of the name. Bought the name in July 2015. Basically 12 days later, launched the business. I was like, you know what? I think we can launch this business really quickly and see if it works.

• 6:40Shaan Puri?

  But what do you mean, what do you mean, launch the business? Because how do you even have deodorant? If I wanted to launch a deodorant brand, I'd be like, okay, I guess I need to manufacture some deodorant or buy some up, you know? How did you do something 12 days later?

• 6:52Speaker 00

  Yeah, great question. So launched the website, had zero deodorants in stock, was speaking to a couple manufacturers about using our deodorant formula and having them make it. But initially I was like, look, I don't think this business will work out. Like, are people gonna buy a deodorant online? Generally, they're buying it at Duane Reade's and Walmarts and Targets. So I was like, we'll launch it and we'll see what happens. And so we had contacted some manufacturers, particularly like small mom and pop ones. And our first mom and pop manufacturer was basically making the deodorant out of like their hobby room in their house. Somewhere in Southern California. I've launched the product on Product Hunt. And so day one, I was like, you know, it's late July, I put it on Product Hunt. Product Hunt has multiple pages and I don't even realize that. We're on page two of Product Hunt.

• 7:34Speaker 00

  We get one sale and I'm like, okay, this business is over. Forget about like, I'm not gonna do all this hard work to sell $12 of deodorant every day. I can open up a lemonade. Like, I'm 30 years old and I'm basically having a revenue of $12 a day.

• 7:46Shaan Puri?

  Right. So you literally launched like without a bang?

• 7:49Speaker 00

  That's right.

• 7:49Shaan Puri?

  The opposite of a good launch.

• 7:50Speaker 00

  Yeah, exactly. The opposite of a good launch, one sale, had zero product in inventory. I was gonna email the guy and basically be like, look, we were trying this out. It didn't work out. We're gonna refund your order. Have a nice life.

• 8:01Shaan Puri?

  Right.

• 8:02Speaker 00

  And then what happens is I'm working out of this coworking space called The Founder's Dojo. And one of my friends in that coworking space is like, hey, I know an employee at Product Hunt. And what I'm gonna do is I'm gonna have him try and put you on the first page of Product Hunt again tomorrow. And usually you're not allowed to do that. You're not allowed to be on Product Hunt two days in a row. But he got me an exception and I'm on the first page of Product Hunt the day after I was on the second page.

• 8:24Shaan Puri?

  And what was the little tagline at that time? Cause I know that for businesses, the pitch evolves. Like right now, when you described Native, it was like really compelling. I loved it. Made sense to me. It was kind of inspiring. Yeah, I should use products like that. But I know at the beginning, our pitches like kinda suck. Are they, you know, over time they suck less.

• 8:41Speaker 00

  Yeah, yeah. Oh, it was terrible.

• 8:42Shaan Puri?

  What was it at the time?

• 8:43Speaker 00

  I think it was like invest in yourself. I'm not even sure. It was like, and you know, we had gotten.

• 8:47Shaan Puri?

  Financial product?

• 8:48Speaker 00

  Yeah, exactly. And we got in a photo, like, you know, we didn't take any photos at the time because we didn't have any products. So we got some guy to like 3D render the image of what a native deodorant bar would look like. And like, that's the image that we have associated with Product Hunt. On our website, we have a hero image and the hero image is just a bathroom. It doesn't even have a photo of native deodorant on it because no native deodorant exists at this point. But on that second day, we get like 50 sales and I'm like, you know what? Maybe this can be a real business.

• 9:15Shaan Puri?

  Right.

• 9:15Speaker 00

  So as a result, now we have like 51 sales. We got 50 sales day two, one sale day one. We contact our manufacturer and we're like, okay, we're gonna buy a hundred of these things.

• 9:24Shaan Puri?

  Right.

• 9:24Speaker 00

  Ship them over.

• 9:25Shaan Puri?

  We have a tangled history with the guests that you're gonna talk about. So you, you mentioned Product Hunt. We had Ryan Hoover on the podcast.

• 9:31Speaker 00

  Yeah.

• 9:32Shaan Puri?

  You mentioned Founder's Dojo, I think earlier when we were talking. Sam was on the podcast earlier. And your brother was the first episode of the podcast, actually till this day, the highest, highest sort of listened podcast.

• 9:42Speaker 00

  Oh, good for him.

• 9:43Shaan Puri?

  And so he said that, he said, told a story on the podcast, which was that at some point you guys were like ordering deodorants off Etsy. And like you're just testing deodorants. You were like, put one under one arm, the other under the other arm and like go run around the block and see which one worked better. Was he full of shit or was this real?

• 9:58Speaker 00

  No, that was definitely real. We were like, before I launched Native, I was like, okay, you know what? I want a natural deodorant that works. Um, so does my sister because she's pregnant. So I started testing every deodorant I could find. I tested like the Toms and Mains of the world, the Schmitz of the world. The, uh, you know, the Etsy deodorants of the world. And I was just like, look, these products aren't cutting it. I'm not sure if it's my personal body chemistry or what it is. But yeah, we were testing natural deodorants left and right from Etsy and from every store you could possibly imagine.

• 10:25Shaan Puri?

  Gotcha. So you ordered those, that first batch.

• 10:26Speaker 00

  Ordered that first batch.

• 10:27Shaan Puri?

  Fifty customers.

• 10:28Speaker 00

  Yeah, I'm. Living out of like Solomon's apartment. I I moved to California like, you know, during that time period, basically. Moved to California, living out of my brother's apartment, order a hundred units, start packing him on a dining room table. So I get like U line boxes delivered to the house. I get a bunch of crinkle paper delivered to the house. What's wonderful is my brother is the messiest person in the world. When I moved in, he had a birthday cake from like three birthdays ago still in his refrigerator. I moved in and I'm like, I can't live like this. You're you're too much of a pig to like, I can't live like this. And then I was like, you know what? This is perfect because I've got all this crinkle paper and all these shipping boxes and all this stuff floating around here. And it's making a huge mess and my brother's the only person in the world who wouldn't care. Yeah, he doesn't even notice the mess because he's just like living in a pigsty himself.

• 11:12Speaker 00

  And so we're shipping these boxes out. We ship sixty out and then sales start dropping because, you know, we're off of product. Yeah, and I'm like, okay. And my last business, we had built the entire business on PR. I start contacting all these like reporters and I'm like, hey, do you want to write about native? And they're like, no. Uh, this is a deodorant. Let's let's take a chill pill over here. This isn't that compelling. And this is in twenty fifteen, you know, like today, there's a new natural deodorant that launches every day. In twenty fifteen, we're basically one of the few guys out there. And so we start like, we start running a bunch of Google ads and, you know, we haven't fundraised, so it's all my own money. I spent five.

• 11:46Shaan Puri?

  How much money? Yeah, it sounds like you're gonna answer that. How much money did you decide like? I'll put into my kind of testing and figuring out if this is real budget.

• 11:53Speaker 00

  Yeah, I'm the cheapest person in the world, so I probably spent like a grand launching the business. So the first five hundred dollars was to buy products and the next five hundred dollars is to like buy Google ads. And I'm buying Google ads and I spend five hundred dollars and I get like a hundred dollars in of sales and I'm like, this is not working out well.

• 12:12Shaan Puri?

  I found a way to.

• 12:13Speaker 00

  Yeah.

• 12:14Shaan Puri?

  Burn money.

• 12:14Speaker 00

  Yeah, exactly. And this is the like, my mom would be so upset at me right now. She'd be like, go quit this business tomorrow. And so I'm like, okay, Google ads aren't working. So we start advertising on Facebook. And like pretty clearly, we get some product market fit on Facebook. Facebook ads start going well. And like what happens is I created this Excel spreadsheet where every day I tracked every single ad I had. The click through rate, the CPA, the return on investment. And I start doing that every day, starting, you know, probably August twenty fifteen or maybe September twenty fifteen. And like, that's really how I started getting good at Facebook ads. I was tracking every single ad we ran on a daily basis.

• 12:53Shaan Puri?

  And I'm gonna guess, you're now, you know, company got acquired, company's much larger, lots of people in the company. Do you still get hands-on with the Facebook ads?

• 13:02Speaker 00

  Definitely. You're saying today? Yeah, absolutely. Yeah. Uh, I mean, that, like, that's, that was our bread and butter, and I really enjoyed it. And it's something I'm good at, and it's not just a job for me, it's something I really enjoy. In fact, I was at Facebook's headquarters like, two days ago, talking about Facebook ads with a bunch of their execs. And it's great, like, to understand what products that they're launching and how they're thinking about the business. It's insane. But in any case, so we're like, running these Facebook ads, we see a ton of product market fit. And then our manufacturer, you know, scales from a hundred, a hundred units a week to about 500 units a week. She calls me up and she's like, Mois, this is a fantastic business. I used to be selling, you know, products at a farmer's market, and now I'm making 500 deodorants for you a week. You know, they're charging me about $6 a unit. So it's pretty expensive.

• 13:43Shaan Puri?

  Right.

• 13:43Speaker 00

  And I'm like, okay, great, I'm glad this is working for you. And she's like, we're gonna scale this business, we're both gonna like, hit home runs with this business. And I was like, great, this is like, I really appreciate your commitment to this. Two days later, she calls me and she's like, my son is sick, I'm out. Like, uh, forget it, I'm not making any more deodorant. And I was like, are you kidding me? We had a conversation 48 hours ago when you were in, 48 hours later, you're out. And so, that was really jarring, and I'm like, okay, you know what? We're selling 500 units of deodorant a week, which is, you know, a few grand in revenue. And it appears to be working well, but like, it's a few grand in revenue, you're out, how do I replace you? I don't really wanna be making these deodorants in my apartment. Like, at some point, well, Solomon doesn't have, he doesn't even have pots, we're not gonna be able to make this over here. And so, I'm like, okay, maybe this business is over.

• 14:28Speaker 00

  And then I'm like, uh, then I go on vacation with a girl that I was dating at the time. We go to like, the Dominican Republic or something. We get back, I'm a little bit more like, patient now. I call the manufacturer and I'm like, okay, look, how about you make 500 units a week for the next four months? And then afterwards, I'll pay you like, a few thousand dollars bonus. I think it was like, a five grand bonus, I'm not entirely positive. I was like, I think I'll pay you a five grand bonus, and, and then I'll find another, I'm committed to finding another manufacturer in that period of time. And you know, she's like, okay, that sounds fair and reasonable, and so let's do it. And so she starts, you know, making the 500 a week again. And in the meantime, I'm like Googling, and I'm like, who makes deodorants? Like, I've got a formula I wanna make, who, who can I get to make this?

• 15:09Shaan Puri?

  All right, quick break in the action to talk about HustleCon. So as you guys know, this podcast is published by The Hustle. They send out a daily email newsletter with the best news of the day, everything you need to know about tech. But that's not all they do. I've been two or three times to HustleCon. It's a conference. It's happening December 2nd and 3rd in Oakland. They rent out the Paramount Theater, which is really amazing venue. I saw Chris Rock there, Jerry Seinfeld there, and I guess HustleCon is happening there. They have a stacked lineup of speakers. So when I went, founder of WeWork was talking. Let me look at the list for this year. Founder of Hims, the founder of Madison Reed, Strava, Calm, Method and Ali, Lime. A bunch of CEOs and founders of multi-billion dollar companies and startups that come on stage and share insights about how they did what they did, how they got started.

• 15:53Shaan Puri?

  And HustleCon is very different than a normal conference. Normal conferences are kind of stuffy. You wear, you know, you see a lot of people in suits, like shallow networking going on. HustleCon is very different vibe. You meet a ton of people who are guests in attendance, but also the speakers are very approachable. So they are not only sharing good insights on the stage, but you get to meet them afterwards. And that's a really cool experience. So highly recommend coming. In fact, I'm bringing out the editor of this podcast to come because I just think it's a really great opportunity. He's 19, 20 years old. This is an amazing way to sort of get in the mix. If you're thinking about starting an idea, a business, or you are, you want to do that someday, or you're doing it right now. Either way, listening to speakers tell their stories, being in the audience amongst a bunch of other like-minded people, that is a really, really good way to get amongst it. So that's my genuine recommendation for HustleCon.

• 16:38Shaan Puri?

  They gave me a promo code. Let me give this to you guys so that you can get a discount if you do want to get a ticket. The promo code when you check out is MYFIRSTMILLION, all caps, all one word. Again, that's MYFIRSTMILLION. That'll give you 50 bucks off a ticket to HustleCon. And you know what? If you are listening to this and you want to go to HustleCon and you can't afford the tickets, I will buy four tickets for, for guests myself and I will send you to HustleCon. You got to figure out your travel to get there, but I'll buy your tickets to the conference itself. Email me, [email protected]. Happy to give this as a gift to anybody because I think that going to HustleCon, it can really like sort of change the trajectory of your business life. One meaningful relationship or one key insight while you're there, that can make it worth it. That's been my experience with conferences in the past. So, okay, you guys know the deal. HustleCon, December 2nd and 3rd.

• 17:23Shaan Puri?

  Try to get there if you can.

• 17:27Speaker 00

  I call some guys up, like there was a guy in Chicago, I'll never forget, I called him up. It was like an hour-long conversation and I probably said five words. He talked the entire time and he's like, "Yeah, so we'll make your deodorant." And I'm like, "You don't know anything about my needs and you spoke for 59 minutes and 55 seconds." So like, I don't think you're the right guy for me.

• 17:44Shaan Puri?

  Red flag.

• 17:44Speaker 00

  Yeah, terrible red flag. Finally, we find a contract manufacturer that's like, "Yeah, we have a low minimum order quantity, a low MOQ." I think their MOQ is 80. And so I was like, "Great, we can, we want more than 80." "I'm not gonna like, you know, bankrupt the business." "I don't have to mortgage my house based on this." And so she starts making 500 a week for us in this tiny, like 800 square foot manufacturing facility in the United States. And things start going well. And so like, you know, we launched, like, you know, in July 2015, we were doing a couple hundred dollars in revenue a month. By January 2016, we're probably doing around 75K in revenue a month and things are starting to scale well.

• 18:24Shaan Puri?

  Wow.

• 18:24Speaker 00

  Then like, you know, the first, the beginning of the summer hits in 2016, in May 2016, and somehow all of our deodorants start melting. I go to our shipping facility, which is located in San Leandro. It's like these two guys called Fulfill Co., nicest guys in the world. You know, I call them all the time, like, you know, they're a small business. I'm a small business, easy to talk to the owners. I go over there, they're like, you know, it's probably an hour drive, I rent a Zipcar and I go over there. And I'm just looking at our deodorants and I put my finger in one of the deodorants because it like, looks weird. And it turns out it's got the consistency of lotion. You can just put your finger all the way down to the bottom. And I'm like, "Holy shit."

• 18:59Shaan Puri?

  And you have like, how many, how many units are we talking here?

• 19:02Speaker 00

  You know, we probably have a couple thousand units, which is a lot of money at the time because that's like, you know, we're not, we're not doing a ton of sales.

• 19:08Shaan Puri?

  That's a lot of lotion.

• 19:09Speaker 00

  It's a lot of lotion, yeah. It's no deodorant and a lot of lotion. And so our manufacturer, at the time, like she didn't, like the woman who ran it didn't fly. So she was randomly had driven up to San Francisco to have a meeting with me, like the day beforehand. And so like, all of this is just like, works out randomly. So like, I call her up and I'm like, "Hey, are you still in San Francisco? I want to have another meeting because I think there's a problem with the deodorant you just shipped me." And she's like, "Yeah, I'll come by your office later this afternoon." She comes by and I'm like, "Here, I brought a few of the deodorants." And she's like, "Holy shit, what happened to these?" Like, you know, she sees it immediately. She calls up her facility and she's like, "Stop making deodorants, we've got a problem here." And I'm like, okay, well, maybe this business is over again. Like, you know, we we've moved to a new manufacturer. Like, what are we gonna do here?

• 19:52Shaan Puri?

  And are you the type to get down on it? Uh, what's the, like, when stuff like this goes horribly, awfully wrong?

• 19:59Speaker 00

  Yeah.

• 20:00Shaan Puri?

  Are you, some people go inwards, they get very quiet, some people get angry, some people get sad.

• 20:05Speaker 00

  Yeah.

• 20:05Shaan Puri?

  What's your reaction?

• 20:06Speaker 00

  I'm like, all three of those. Anger is the number one thing, for sure. Like, I I'm fuming. But I think for like, the first hour, I'm just like, forget it. Uh, this isn't worth it. And I think, oh, every time I have a major problem like that, for the first hour, I'm less like, this isn't worth my time anymore. I I'm quitting.

• 20:21Shaan Puri?

  Right. Divorce right away.

• 20:22Speaker 00

  Yeah, exactly. Divorce right away. And then like, hour two comes along, and you start getting like, determined, and you like, you know, grit your teeth, and you're like, wait, I I I'm better than this. I'm gonna fix this problem. I've got something that's working for me. This is not gonna stand in my way. I don't care what it takes, I'm gonna fix this problem. So like, hour one, I'm like, forget this business. Hour two, I'm like, nothing can stop this business. We are gonna, we are gonna succeed.

• 20:43Shaan Puri?

  You're like, thank you. Thank you. Bring it on.

• 20:45Speaker 00

  Yeah, exactly. Yeah, I'm like, problem? Don't worry about it. You've got the best problem solving in the world, right here. And so, you know, uh, like, what had been happening is that, over the course of the last eight months, since this, or like, last four months, since this woman had been making deodorant for me, like, we'd gotten a lot of customer feedback, basically saying our formula was kind of mediocre. There were a lot of problems that we were trying to solve for. People were like, look, uh, it does a great job at absorbing wetness and blocking odor, but it's really flaky. It's hard to apply. Men in particular were like, look, uh, I've got hair under my arms. I, like, this pulls the hair under my arms out. And they're sticking to the deodorant. And so for a while, we've been attempting to make a better deodorant, like, a better formula. And I'd been sending out samples to people and saying, like, you know, our best customers who were like, communicating with me, and I'd be like, hey, what do you think of this formula? Is it any better than like, you know, the formula that you actually paid for?

• 21:31Speaker 00

  And a lot of people, like, you know, we had said, we had done hundreds of these formulas. I I was at home, I would rub the formulas on T-shirts, throw them in the washer or the dryer and see if they stained shirts. And like, you know, I I have a thousand of these stained shirts. Solomon's like, you're running the washer and dryer every day. What's going on over here?

• 21:46Shaan Puri?

  And you're not a scientist or biochemist, so how are you even figuring out the formula? Right? Like, whenever I listen to a guest tell these stories, I think to myself, could I do this business? And I think there's a lot of things that are relatable, right? Because you started this with, essentially, no, you didn't have to be a programmer, right?

• 22:00Speaker 00

  Yeah, that's right.

• 22:01Shaan Puri?

  You created an ecommerce site, that's great. You didn't make the stuff yourself, you found a manufacturer just by Googling who the heck makes deodorant.

• 22:07Speaker 00

  Yeah, that's right.

• 22:08Shaan Puri?

  But then, when it comes to like, figuring out the right formula to prevent flakiness, that's one where I'd be like, well, I don't even know what's, I don't know what to do there. So how were you figuring this out?

• 22:17Speaker 00

  Yeah, that's really interesting. Like, I remember starting the business, I told one of my friends from law school, I'm starting this business, and her husband was like, what the hell do you know about deodorant? Like, you know nothing. And I was like, yeah, you're right, and in the next six months, I will be an expert on deodorant. And really what happens is, like, you email all of these customers, like, you know, the customers are like, hey, here's the problem. Customers will even like, do diagnoses, and they're like, hey, I think it's because of this. And I'm like, oh, wow, great. Thank you for like, doing the, like, the science that I was supposed to do. But in reality, here it was a little easier, because like, one, working with our contract manufacturer, they did have a chemist, and two, it was easy to diagnose the problem, because with deodorants, you want to balance the amount of powder and the amount of oils you have in that deodorant, to make a product that like, absorbs wetness, blocks odor, but

• 23:01Speaker 00

  still glides on really easily. And so like, you know, sometimes we'd make a bad batch of our deodorant, and we'd be like, oh, how did this batch turn out? Because like, you know, oh, we forgot to add this amount of oils, and so we start pouring, like, you know, we take a look at it, and we're like, oh, this is what, we forgot to add oils, and it's way pow, like, way more flaky. So you're like, you know what, it's the oils that make it glide well.

• 23:19Shaan Puri?

  How frequently were you going to the actual manufacturer? And also, it sounds like it really paid off that you weren't just using a Chinese manufacturer that's hard to speak with, hard to work with, and doesn't guarantee quality.

• 23:29Speaker 00

  Definitely. Uh, so one, we've never used a Chinese manufacturer, all of our deodorants are made in the United States, uh, for two reasons. One, you're right, it allows us to have a really flexible supply chain. Two, it allows us to have like, faster demand creation, so like, you know, when we, we give them a purchase order, they're able to make it much faster. And three, I would be scared as hell using Chinese deodorant, like, that is something I don't want to do. I don't know what quality control looks like over there, and it may look great the day I go over there, and terrible the next day.

• 23:55Shaan Puri?

  Yeah.

• 23:56Speaker 00

  And we didn't want it. We didn't want any of that kind of stuff. Like, the whole point here was, we want to avoid the doves of the world, and in order to avoid dove, to dove anti-perseverance, make it in the United States with ingredients you know, like, you know where they're being sourced from, and you know what they are.

• 24:09Shaan Puri?

  Right. Okay, and we're gonna jump back into the story, but one more tactical piece. When you, when I build, I build products that are like software.

• 24:15Speaker 00

  Sure.

• 24:15Shaan Puri?

  And with software, it's pretty easy to iterate, it's pretty easy to try, you know, A/B test. We can send one, one visitor of our, of our app to see one experience, and the other visitor to see another experience. Very easy to do that sort of thing. How, can you talk tactically about how you iterate with a physical product?

• 24:31Speaker 00

  Sure. Uh, I'll talk tactically about how we did it at the beginning first, and then how we do it today. In the beginning, what we do is we'd send out samples to our best customers, who would like, were vocal and be like, hey, I love your deodorant. I'm gonna be a customer, but I wish it did this. And we'd say, hey, we're trying to solve your issues. Here are two, like, I, I remember we were doing this, I was like, this is version seven of the deodorant we produced, and this is version eight of the deodorant we produced. They're, like, you know, you don't know what's in them. We're giving you free samples, compare it to the one that you purchased from us, and tell us what you like more. And like, that's the type of feedback that we would do early on.

• 25:02Shaan Puri?

  And that's unusual, right? Like, I've bottled deodorant my whole life. I've never had anyone from the deodorant company ever reach out to me. I've never spoke to them, they never sent me different variations, so this must have been kind of unusual for people, I guess.

• 25:13Speaker 00

  Yeah, I, I guess that's true. I, I mean, the way I think about it is if you buy-

• 25:16Shaan Puri?

  In a good way.

• 25:16Speaker 00

  Yeah, if you buy deodorant from like, Target, and you, like, you know, you, you buy an Axe deodorant from Target, you're never gonna contact the manufacturer. If you buy it directly from us, we were following up with every customer. Like, you know, if you purchase from us, twenty days after you purchase from us, I sent an email to every single customer saying, hey, how do you like this deodorant? Do you like it? Do you hate it? If you like it, leave a review on our website, we'd really appreciate it. And if you hate it, please reply back to this email. There's a human being on this side of the table, and we want to make this product better. And so that's how we got feedback from consumers. And today, what we'll do is we'll actually run those A/B tests along huge swaths of the population. So we'll send, you know, the Shaan of One World, baking soda that's milled to a certain particle size, and Sams of the World, a baking soda that's milled to another particle size.

• 25:59Speaker 00

  And we'll, we'll monitor your reviews six weeks after you purchase, and your repeat purchase rates twelve weeks after you purchase, and say, you know what? The Sams of the world are buying again more frequently than the Showns of the world. And as a result, it must be that the formula that we sent to the Sams of the world are better. And that's how we can monitor what is the best baking soda particle mill size that we should have.

• 26:19Shaan Puri?

  That's kind of amazing. Is that standard? Because I've never heard.

• 26:22Speaker 00

  It's definitely not standard because like we have this direct relationship with consumers that allows us to monitor repeat purchase rates and have a direct line of communication with them. It's been really phenomenal for us because things like baking soda particle size are unique and you have no idea what's better like, you know, in a laboratory versus in a consumer setting, you're going to have very different results. And so that's how we A/B test formula changes today.

• 26:42Shaan Puri?

  That's amazing. So you guys are sending different versions of native deodorant formulas to batches of people, cohorts of people. And then you're able to see these guys repeat purchase rate at 28% versus this one at 21%. Therefore, we believe this formula is better.

• 26:55Speaker 00

  That's exactly right. Yeah. But we're doing like tiny changes, like, you know, like changes that wouldn't even influence the ingredient deck. That we're like, hey, look, do you think we should put in, you know, 1% of this ingredient or 1.05% of this ingredient to see what's better?

• 27:09Shaan Puri?

  Like nerdy deodorant stuff.

• 27:10Speaker 00

  Yeah, exactly. We're getting into, yeah, we're getting into the weeds as much as possible.

• 27:14Shaan Puri?

  Right. Okay. All right. So we're going to hop back in. So rewind to that part of the story where deodorant lotion, oh my God, we got to fix this. And you guys are starting to troubleshoot. So this is sort of like near death experience number two in business. Take it from there.

• 27:27Speaker 00

  So we talked to our manufacturer and we're like, look, let's first, we're not setting out any more of these deodorants that are lotion. We're either going to refund the customers and close the business or do something. And so what happened is we had been working on a different deodorant formula to fix poor consistency. And so we're like, look, we think we have good feedback on here. We don't have as much feedback as we would have liked. You know, we still had a bunch of samples that we'd sent to customers and hadn't followed up with them yet. And so we're like, look, push is coming to shove. We're either going to close this business or switch formulas. Let's switch formulas and see what happens. So we switch formulas basically because we have to. And we think it's supposed to be better. And we start shipping that out. We email all the customers and we're like, hey, look, your product was supposed to ship out today. We had a problem. It's now going to take two weeks to ship out.

• 28:10Speaker 00

  Customers are irate, just absolutely irate. And I don't blame them. Like, you know, deodorant. It's not something you can really go without, like, you know, it's like toothpaste. I, I, I need this, um, so I'm gonna go get another product. They're irate, um, but a lot of them are really kind and they're like, hey, we appreciate the, you know, the honesty. We're, we're willing to be patient for it. Two weeks later, we start shipping it out. This is May 2016. Uh, we're probably doing around a hundred K in revenue at this point. And immediately we see, uh, reviews go up, uh, like the, the quality of our reviews has gone up significantly. Um, you know, six weeks later, we'll start seeing repeat purchase rates, uh, go up as well. Like, we can monitor the cohorts and early on, we get a really good indicator that repeat purchase rates are gonna be substantially better with the new version of our formula as compared to the old version.

• 28:54Speaker 00

  And so we're like, you know what? Maybe this like, you know, this terrible experience has led to something really good. A much better formula. And then like, you know, May 2016, we're doing a hundred K in revenue a month. I'm still the only employee at the company.

• 29:06Shaan Puri?

  Yeah, I was gonna say, how many people are there? So you're saying we, but we is me in this case.

• 29:08Speaker 00

  Yeah, just me, just me, doing a hundred K in revenue a month or something like that. Just me at the company. I'm doing like customer service. Have a really good idea of what the problems are at the company. Doing the operations. So I'm talking to the manufacturer all the time. Doing Facebook ads to understand like product market fit.

• 29:23Shaan Puri?

  So, so let's talk money for a second. This podcast is called My First Million.

• 29:26Speaker 00

  Yeah.

• 29:27Shaan Puri?

  It's called My First Million because since, you know, when I was growing up, I wanted to have a million bucks.

• 29:32Speaker 00

  Yeah. Who doesn't?

• 29:33Shaan Puri?

  Who doesn't? Exactly. Uh, I was not, uh, you know, in Silicon Valley, there's a lot of people that cool thing to do is say, I'm here to change the world. I'm down with changing the world for sure. But let's be clear, if I'm starting a business, I'm trying to make money.

• 29:45Speaker 00

  Definitely.

• 29:46Shaan Puri?

  Um, I'm not afraid to say that. So my whole startup career was around, how do I build a business that makes money for me, for my investors, for my employees? And in order to do so, we're gonna have to make an amazing product that customers love. Otherwise, why would they give us their money? And so I like to think, I like to get, give my listeners an understanding because a lot of the people who are listening to this podcast right now, they're commuting to work. They work at a nine to five job. They have aspirations of either leaving that job and going and starting a startup. Or they're doing a startup, but it's not quite taking off. You know, they hear you say, "We're only at a hundred thousand a month in revenue," and they're like, "Oh, my God, I wish I could get to a hundred thousand a month in revenue." So let's talk money for a second. Before you started the business, what was, you know, were you already doing well financially? Were you comfortable? Where were you at before? Let's start with that question.

• 30:30Speaker 00

  Sure. I was an attorney in New York for a couple of years, and during that time, I'd basically paid off my law school student loans. One of my law school classmates and I left our jobs, you know, back in 2012 to start an e-commerce business. We sold that business for a seven-figure sum, and like, we hadn't raised any money. So I would say I was comfortable, certainly, but like, you know, wasn't a, you know, wasn't going to be able to say, "Okay, you know what? I'm going to retire for the rest of my life." I was in a position where I was like, "Okay, I bought myself a couple of years of not having to worry about rent and not worry, having to worry about, you know, food or vacations, but I haven't bought myself, you know, 50 years of not having to work."

• 31:05Shaan Puri?

  Right. And so now you get to this hundred thousand a month of revenue.

• 31:09Speaker 00

  Yeah.

• 31:09Shaan Puri?

  And it's taken the business about how long at this point?

• 31:11Speaker 00

  It's taken about 11, 10, 11 months.

• 31:14Shaan Puri?

  10, 11 months, great. And what does that mean for a deodorant business? So you, you know, you make a hundred thousand, but margin-wise, what were you do, you know, what were you able to take home at the end of that?

• 31:23Speaker 00

  Sure.

• 31:23Shaan Puri?

  Were you break even? Were you better than that? How were you doing at that time?

• 31:26Speaker 00

  Yeah. So we were selling a hundred thousand dollars of deodorant a month. You know, the deodorant was costing us a lot of money at the time because we didn't really have any economies of scale. I was the only employee, and I wasn't taking a salary. But I'd say on a hundred thousand dollars in business, I'm guessing, because I don't really remember, I'd say the company probably made about eight thousand dollars in net profit.

• 31:42Shaan Puri?

  Right.

• 31:43Speaker 00

  Selling a hundred thousand dollars of deodorant.

• 31:45Shaan Puri?

  And you and your brother are very business savvy. You've invested in, I don't know, 80-plus businesses.

• 31:50Speaker 00

  Yeah, something like that.

• 31:50Shaan Puri?

  Something, something like that. You've started multiple businesses. So what was your mindset around this? Did you think, "Man, this is going to be a big business"? Were you like, "This is just kind of a fun project"? I guess, how were you thinking about it when it was at that stage? Because 100K a month is good revenue, but you're only taking home 8K, maybe. It's not clear at that time, and there's not a whole bunch of other examples you could go look at, other big deodorant businesses that were startups. So how did you think about this business?

• 32:15Speaker 00

  Definitely. I think the first, like, four months of the business, I was like, "Look, let's see if, let's launch this." Business, I'm bored, I don't have a job, let's see what happens when I launch the business. Pretty early on, I thought that there could be product market fit. And I was like, you know what, we're seeing good return on investment when we buy ads on Facebook, not necessarily on Google at the time, and even on Pinterest, we're seeing a good return on investment. The problems that we have are, we have a low repeat purchase rate, a good product, but kind of mediocre, and like, you know, a decent review average, something like four stars.

• 32:46Shaan Puri?

  Right.

• 32:47Speaker 00

  And so I was like, look, if we can improve our product, we really have something. I saw product market fit with the product, but I also saw that there was a larger opportunity if we could just make our product better.

• 32:56Shaan Puri?

  And why not hire people? I think a lot of people like to rush to hire people. I'm anti hiring people. I want to maximize these sort of earnings per capita in my company.

• 33:05Speaker 00

  Yeah, definitely.

• 33:05Shaan Puri?

  And like, how did you resist that? What was your thought process around that? Because you're doing it as a one man show.

• 33:11Speaker 00

  Sure. One, we like, you know, in Silicon Valley, a bunch of people raised money. We also raised money, to be clear. We raised about $50,000 in November of 2015, so like a few months after we started, and then another $250,000 in about April of 2016.

• 33:25Shaan Puri?

  And this was friends and family, or this was?

• 33:27Speaker 00

  These were both outside investors that I had just met. Like, you know, I had, somebody introduced me to them and both of them invested. And, you know, so we had about $300,000 in the bank account, plus the $1,000 I kicked in, so probably about $3,000, $301,000. And so we're like, you know, we've got some cash, but not a ton of cash. I didn't hire anyone for a couple of reasons. One, was super busy trying to run the business. Like, if you're doing marketing, operations, and customer service, that's a full time job. On Saturdays, I would spend the entire day, basically, I'd go to workshop cafe and crank out a bunch of customer service, like inquiries, so people got responded to within 24 hours. So one was really busy, and then two, I was afraid that the business wasn't going to survive much longer.

• 34:09Speaker 00

  I didn't want to hire someone and then fire that person three months later because the business was collapsing. And four, I wasn't sure I could afford them. Sure, we had $300,000 in the bank account, but we had $8,000 in net profit. If I hire someone, between employment taxes, their salary and benefits, we're certainly giving up that $8,000. And so I was like, I don't know how long we're going to be able to afford this person. The future of the business doesn't have, like, we don't have a ton of profit right now, so I don't know how long I'll be able to afford you.

• 34:34Shaan Puri?

  And what was your schedule like? So you're saying Saturday, Saturdays is customer service day.

• 34:38Speaker 00

  Yeah.

• 34:39Shaan Puri?

  When you are the one doing operations, marketing, and customer service. Plus everything else that goes in, all the little things that go into a business. How were you organizing your time and your day? Are you like a, I work 18 hours a day kinda guy? Or tell us about like kinda your schedule.

• 34:53Speaker 00

  Yeah, I was like, I was waking up and going to work. Yeah, I mean, I'd work until like, you know, 7, 8 PM. Early on in the business, probably the first four or five months, I was doing all the packaging as well, the shipping as well out of my apartment. And so like, I'd go home at 7 PM, turn on Netflix, and while I was watching Netflix, I'd be packing boxes and shipping them out.

• 35:10Shaan Puri?

  Right.

• 35:11Speaker 00

  And so it was long days.

• 35:12Shaan Puri?

  So you were Michael Scott, you were Dwight on sale.

• 35:14Speaker 00

  That's right, yeah.

• 35:14Shaan Puri?

  You were Daryl in the warehouse.

• 35:16Speaker 00

  That's right, yeah.

• 35:16Shaan Puri?

  You were the whole office.

• 35:17Speaker 00

  Yeah, yeah, and Toby being like, you know, this is a terrible company. So, long days at the beginning. We get to June, we've got a higher repeat, like, you know, we've got, oh, we've got a higher repeat purchase rate, better reviews. You know, in June of 2016, so about 11 months into the business, we hire our first employee, and she's helping doing customer service. And I'm like, great, this is, I, I need so much help here, cause like, customer service is endless. And I can't like reply, like, you know, it's just taking up so much of my time. So she comes on board, we do 250K in revenue that month. So we've basically doubled the business between May and June. And the customer service inquiries have gotten to be even more than she can, she and I can handle together. I thought I was done with customer service, we doubled the business, and it turns out, she and I are both doing customer service all day.

• 36:00Speaker 00

  So we hired a third customer ser-, we hired another person, a third, the third person to join the team, and he's doing customer service. And I was like, great, this is wonderful, now I can really stop doing it. And by like, you know, by November 2016, we're doing a million dollars a month. So we go from 100K in like, May to a million in November. And now we've got a bunch of customer service people, including me, you know, just crazy customer service. Like, we have these things called power hours, where we're like, everybody does customer service. And it's not entirely their fault, like, a lot of it was, we were not able to keep up in terms of production with the demand that we had. Cause we didn't expect to 10x the business over the course of five months. And so our manufacturer's running behind. If you buy the deodorant on a Wednesday, it probably gets made Friday and shipped to you, you know, the, the following Wednesday.

• 36:44Speaker 00

  Um, we're doing, like, we don't know what's going on. The business is growing really quickly, but we can't keep up with it. And, and I certainly can't, like, I'm like, well, I have to do customer service, I have to make- Sure that I'm trying to produce more deodorant. I'm trying to run our advertising and you know, I have no idea what our business will look like a year from now.

• 36:59Shaan Puri?

  So what caused the business to grow from that hundred K a month to a million a month?

• 37:04Speaker 00

  Yeah.

• 37:04Shaan Puri?

  Uh, that's a huge jump. Was it just spending more on ads? Did you guys, obviously the formula is getting better. So obviously the product is getting better, but is it just, is it just like that? It's a million little things getting better or was there a breakthrough or a point of emphasis that really was high level?

• 37:18Speaker 00

  There's three things. One, word of mouth is growing a ton. Like, you know, it's, it's small. It's hard to have word of mouth when you're doing 50K a month. It's a lot easier to have word of mouth when you're doing 250K, 500 a month. So that's growing a ton. Two, we're spending more on ads because we understand product market fit and we understand that we're profitable when we spend money on ads. So we're spending more money on ads. And then three, we have a higher repeat purchase rate, uh, which was the most important thing.

• 37:40Shaan Puri?

  So it's compounding.

• 37:41Speaker 00

  Yeah, exactly. This is a huge snowball effect. I remember in like, so in January 2017, we're doing just over a million dollars a month. And I was like, by December of 2017, I want to do a million dollars in repeat purchase revenue a month and we hit that million dollars in like March.

• 37:54Shaan Puri?

  So it sounds like focusing on repeat purchase was a key insight that obviously if you're in D to C businesses, that's, that's kind of known as a good standard. But if you're new, you know, that's something to hone in on. How, did you know that at the start? It's a mentor tell you, hey, repeat purchase rate is the thing to, to key in on?

• 38:11Speaker 00

  I, I think for like, uh, it depends on the product you're in. If I was selling Casper mattresses, I would be concerned about new customer acquisition. Cause how many mattresses is someone gonna buy? You know what? I bet Casper is doing a really good job with repeat purchase rate. But like, when you're selling a consumable by like deodorant, the whole point is that people are brand loyal. And once they find a deodorant, they're going to stick with it for a really long time. I used Axe deodorant from like, you know, probably 12 years old till I was 30 years old.

• 38:36Shaan Puri?

  Right.

• 38:37Speaker 00

  Like 18 years. And so for me, I was like, look, we have to find, like, if we're producing a deodorant, we need to make sure that people love it. And they don't just churn and go back to their doves or degrees of the world.

• 38:46Shaan Puri?

  And, uh, why were you able to charge $12 for deodorant? Is it still $12 by the way?

• 38:50Speaker 00

  It's still $12. Um, it's $12 at Walmart, $12 at Target, $12 at our own site. And I really, the way, the way we did it is I worked backwards. Like early on, the deodorant cost us about $6 to make. It cost us, uh, $3. Dollars and some change to ship and then it cost us like another dollar fifty for random expenses like the box and like a, you know, a card in there and a bunch of other expenses. So we were looking at an all in cost of like eleven dollars and some change. And so I was like, look, I can't lose money on every deodorant I make. I'm not brandless. So I have to charge twelve dollars. Otherwise, we're going to lose money on every single order. And so that's really where it came from.

• 39:25Shaan Puri?

  And a normal deodorant, you know, Axe or Old Spice or whatever, they're not, I mean, what's the, I almost don't even think about it. I just pick it up off the shelf typically. It's three bucks.

• 39:34Speaker 00

  Yeah, three to four dollars is like a traditional priced anti, like a traditional priced anti.

• 39:38Shaan Puri?

  So when you were going into this, weren't, you know, if I was your friend at that time, I would have been like, hey bud, you sure you're going to be able to four X the price of deodorant? Like, are we sure that's a good idea?

• 39:49Speaker 00

  Yeah, I guess really what happened is by the time people started asking that question.

• 39:52Shaan Puri?

  They've already proven it.

• 39:53Speaker 00

  I was like, we're doing a million dollars a month. So I think, I think we're okay.

• 39:57Shaan Puri?

  Okay.

• 39:57Speaker 00

  But I do remember like we had this one question from an investor. At some point, we tried to raise more money. And, you know, the investor was like, the entire natural deodorant industry is something like thirty million dollars a year. So why would anyone be interested in investing in a category that only has thirty million dollar a year run rates? And I was like, if the natural deodorant industry is thirty million dollars a year, we're the entire natural deodorant industry. We're doing thirty million dollars a year at this point. And so I think from, from our perspective, we were like, look, there's a lot of external factors that say we should not be doing this. Yeah, twelve dollar deodorant is really expensive. The entire natural deodorant industry when we launched was Toms of Maine, which was thirty million dollars. And we're just like, I think this is a product that people want and need and like, you know, let them tell us that we're doing something wrong and we'll try this anyway.

• 40:42Speaker 00

  And that's how it worked out. Like, you know, by the time people were telling us it's a thirty million dollar total addressable market, we were doing that much revenue.

• 40:49Shaan Puri?

  And so you, you've said the phrase customer service a bunch.

• 40:52Speaker 00

  Yeah.

• 40:53Shaan Puri?

  People are playing the drinking game at home, taking a shot every time you say customer service, they're dead. And so a lot of people like, you know, we just got acquired by Amazon. Amazon has this phrase, you know, customer obsessed is what Jeff Bezos says. A lot of people say that, but I think you guys are doing some things specifically that your actions back up your words. I see all some little things like, you know, you know, first the stories you told about reaching out to customers 20 days later, saying, what could we be doing better? Sending them different formulas to try out, working with them. But also, right when you sign up, you get a funny email from you guys. Like, talk about some of the things you guys have done on the customer service or customer obsessed side.

• 41:31Speaker 00

  Sure. I guess like, one of the goals or one of the values we really have is to try and build a human business. Like, we want you to know that when you communicate with us, there's a human being on this side of the business, and it's not some corporate entity. And you're not going to like, get one of those, you know, Comcast-like responses where people are like, "I don't care about this. Let me transfer you to some other customer service representative and like, they'll deal with it and they'll transfer." Well, when you contact us, a real human being who sits in our office responds. And then we try to build a really human element in a few ways. Uh, one is when you order from us, we send you this over-the-top order confirmation email and or over-the-top shipping confirmation email. When you order from us, we say, "Hey, we're popping bottles of champagne and this is fantastic." Um, and when you, when we ship the order, we say, "Hey, look, um, we're writing your

• 42:15Speaker 00

  name over the Golden Gate Bridge. We're putting a sign in our parking lot that says 'World's Best Customer' with your name and photo on it." And it's really over-the-top to meant to be playful and to, uh, so you know that the brand that you're purchasing from sort of subscribes to your values as well, which is, "We don't take this too seriously, but at the same time, um, we're really..."

• 42:34Shaan Puri?

  We take it very seriously.

• 42:36Speaker 00

  Yeah, exactly. Yeah. Like, this is deodorant, and so like, we know that this isn't like product that you're gonna, is gonna make a huge impact in your life. This isn't like having a kid, but at the same time, it's important that you use a deodorant that works and you, you know, you're buying from a brand that really resonates with you.

• 42:49Shaan Puri?

  So, you've hit the scale that really matters now. You're doing a million dollars a month.

• 42:53Speaker 00

  Yeah.

• 42:53Shaan Puri?

  This point, you know, any non-believer at this point has to sort of be thinking, "Okay, there's something real here." And the company's size at this time was still pretty small, right? How many people were at Native at this time?

• 43:04Speaker 00

  There's probably around five employees.

• 43:05Shaan Puri?

  Wow. And, and so you're, you've got this business on your hands, and you ultimately decided to, to sell. What was the thinking around that? Why, why decide to sell when things are sort of, when the going is good? And I'm gonna ask you how you sold it, because as I've learned, selling a company is both art and science, and I'm curious to hear how it all went down. But why, why decide to sell in the first place?

• 43:25Speaker 00

  Well, what happened is that like, somebody came knocking on our door in about February of 2017, indicating that they wanted to purchase the business. And we're like, look, I never heard of them. And I'm like, hey, you know, we're growing. I don't know who you are. I think this is like, you know, this isn't serious. And it turned out that they were like, you know, this is a privately held company doing a billion dollars in revenue and it was very serious. And so that really kickstarted the process. They started knocking on the door and like the knock became loud enough that we couldn't ignore it any longer. And that's when the process got kicked off. It turned out that they were a lot less serious than I anticipated. I went out to meet with them and, you know, they're like, okay, great. Send us all of your, you know, financials and your information. I sent it out in like June of 2017.

• 44:06Speaker 00

  They don't even reply back for like 90 days afterward. Like they're just radio silent. I follow up with them. I'm like, hey, is this still going on? If it's not, no problem. Just give me a heads up because, you know, at this point, you know, we've started a process and we're talking to a bunch of other parties. I mean, I don't say all that. I just say if you're not interested anymore, no problem. Just let me know. But just radio silence, like being ghosted from an ex or from like a, you know, a Tinder date is what's happening to me.

• 44:29Shaan Puri?

  And were they, you think they were just picking your brains to get the, the numbers from you? And then they were like, great, thank you very much. Or what, or were they just bureaucratic internally?

• 44:37Speaker 00

  I think they were just like, I, I think there was like a little bit of a brain drain going on. And I think that it was also just like, uh, you know, they have their own business and they're like, you know, maybe this is too small. We're a billion dollar business. Uh, maybe the, oh, you know, the right person internally was like, we don't really care about this business. I think it was a bunch of factors, but at some point, like, you know, we started going our own way and we're like, okay, because you knocked on the door so loud, we started our own process and we've got all these other suitors. They ended up coming back like, you know, a few months before we sold the, or like a month before we sold the business. And they're like, okay, yeah, we're interested again. And I was like, no, uh, I'm not going through this again. We're really far along in the process with a bunch of other guys and you guys don't have the credibility to continue doing this.

• 45:17Shaan Puri?

  Right. And so you're, you're selling the business. Do you feel like you know how to do this process?

• 45:21Speaker 00

  Definitely not. Um, this is like, you know, like there are so many different emotions that happen all of the time when you're trying to sell a business. I was really thankful that like, you know, my brother was there with me. He had just sold his business. He had hired a banker and sort of gone through the transaction and knew what to expect. So we start this process ourselves. You know, we create a one-page document that's like a teaser. We send it out to a bunch of potential acquirers. It doesn't even have our name on it. They say, yes, are you interested? Or they're like, yeah, we're interested in this business. They're like, no, we don't care about the deodorant category. Get out of here. The guys who are interested sign an NDA and we send them a book that's like, you know, probably 120 pages long, telling them all the information about our business. This is what our financials look like. This is how many people we have. This is where our business is growing.

• 46:02Shaan Puri?

  The banker put that together or you put that together?

• 46:04Speaker 00

  Uh, the banker, the banker and, uh, and our team, uh, put that together. So a bunch of people have this book and then, uh, what happens is that they, they send us letters of interest where they're basically like, yeah, we are interested in this business. If they are, if they're not, they just go away. Um, but if they are interested in the business, having looked at our financials, they say, we're interested in this business. We think that we would purchase this business between, you know, 10 million and $20 million or something to that effect. And then what you do is you say, you know what, these are the, these are the guys who I think are really serious about this. Like if some guy's offering you 10 to 20 million dollars and you're doing 40 million in revenue, probably don't, not worth a conversation. So, you know, we, we take a bunch of these and I think there's 12 suitors at the time, maybe 14. And so we say, okay, everyone come to our office in San Francisco and have

• 46:48Speaker 00

  a conversation with Mois. And so I'm saying-

• 46:50Shaan Puri?

  This is like The Bachelor. You're, you're sitting there with the roses and you invite them all to the party.

• 46:54Speaker 00

  Yeah. I'm not sure if they have the roses or I have the roses. I still don't know. But yeah, we invite them all to the party and they're here and they're like, you know, I, I talked to them, uh, and like, you know, businesses send out, like some businesses will send out one guy who's like the head of North America and P and G will send out like, well, you know, we, we were sitting in my brother's, we were squatting in my brother's office. He has a large conference room. They can probably seat like 18 people. P and G sends like 25 people and I'm just like, there's, this is standing room only here. We didn't expect this. And don't expect me to pick up the tab for lunch.

• 47:24Shaan Puri?

  Right.

• 47:25Speaker 00

  And so, so we go through this process with a bunch of these guys. And then what we say is like, look, here's all, look, if you're still interested in this business, here's all the data, here's all the diligence that you need in the business. Here's all of our contracts. Now we're a two and a half year old business. We barely have any contracts.

• 47:39Shaan Puri?

  Right.

• 47:39Speaker 00

  You know, we have probably three material contracts, no change of control provisions. Like the whole, like there, there's very little data in the data room.

• 47:47Shaan Puri?

  Yeah.

• 47:47Speaker 00

  And we say, go through all the data. Here's the draft merger agreement. Mark it up. Give us an offer and you should be ready to sign that. You should be ready to close that offer. The day you give it to us and you know, but like, that's really aggressive, incredibly aggressive. We're basically like, look, we've got, we've got this awesome business. You want it. There's a bunch of you guys. There's one of us.

• 48:04Shaan Puri?

  Right. 12 of those guys in that room are paid to like, do a 90 day diligence process.

• 48:09Speaker 00

  Yeah, exactly.

• 48:09Shaan Puri?

  Oh, what am I doing here?

• 48:10Speaker 00

  Yeah, that's exactly right.

• 48:11Shaan Puri?

  I'm out of a job here.

• 48:12Speaker 00

  And so we're super aggressive about it. During that process, a couple of the guys drop off for one reason or the other. A couple of guys realize, hey, look, we're not going to be aggressive enough. Like, we think there are going to be better strategic fits for this business and it's not worth our time to put in an offer. A couple of guys just get scared at the price. You know, I remember one potential acquirer was looking at one of our competitors and they're like, your competitor is selling for $5 a Target. How are you like, and at this point, the entire business is online. You know, we sell deodorant and only deodorant. We sell it only through our own website and we sell it only in the United States. And so one of the things that we sell is like the sizzle, right? We're like, look, if you, you know, how to sell in, you know, P and G, do you know how to sell into Target? If so, imagine how Native would do a Target. Do you know how to make other products with the word native on them? Help us do that and we can make this a bigger business.

• 48:57Speaker 00

  Do you know how to sell in Canada? Great. This is going to be a bigger business. So we sell that sizzle.

• 49:01Shaan Puri?

  That's strong. I like that.

• 49:02Speaker 00

  Yeah, that is really strong. And so like a couple of guys are like, you know what? Your competitors are selling for $5 a Target. You're not going to be able to sell next to those guys, so we're out. Or we drop our price by half. And then push comes to shove and P and G hasn't done a deal in like 10 years. This is the first acquisition they're making in 10 years. So our banker is like, look, I have no idea how these guys operate. Like, I know how, you know, Unilever operates and I know how these private equity firms operate. But P and G, nobody's seen them in the world in 10 years.

• 49:29Shaan Puri?

  Yeah, they got a pop of Viagra just to do a deal like this.

• 49:31Speaker 00

  Yeah, exactly.

• 49:32Shaan Puri?

  They're not used to this.

• 49:33Speaker 00

  Yeah, exactly. I like, I don't even know how to like, get a reference on P and G to see if they're serious because no one has seen them in the market.

• 49:39Shaan Puri?

  And at this point, had you put out a price yourself of like, this is our target?

• 49:43Speaker 00

  No, no.

• 49:44Shaan Puri?

  You're letting everybody come in with bids. And did you, what did you internally, what did you internally think about this? You know, are you dreaming about a certain number? How were you internally thinking about the price?

• 49:54Speaker 00

  Great question. I'm not sure. Like, you know, there are, there are times where I'm like, okay, like the month, a month closes and I'm just like, we generated, you know, 4 million in revenue this, this month. Add another zero to that price, buddy. Add two more zeros. And then there'll be like one bad day where I'm like, you know what? Uh, we had this like hiccup because of operations and like, you know, something happened and, and now I'm like, okay, I'll take anything.

• 50:17Shaan Puri?

  Yeah, take it off my hands.

• 50:18Speaker 00

  Somebody come in and give me anything. And like, you know, it's, it's like a roller coaster and the roller coaster isn't even week to week. It's hour to hour. And like, you know, during diligence, people are asking for random. There was one company that asked for every email that we had ever sent out, a copy of it, the open rate, the click through rate and the revenue generated from that email. And I'm like, look, at this point, we have a million customers. We send out millions of emails a month and you want this from the beginning of the time that we launched the business? And they're like, yeah, that's just to make the first board meeting really productive. And I was like, the board is going to go through emails? Because even I, I bear like, I, I mean, I look at that, but I don't look at that on like a quarterly basis. And so, you know, they're just like, uh, so, so you're up at 2am preparing these things for them. And there's like a bunch of these acquirers, so there's a bunch of them.

• 51:01Speaker 00

  Some guy, like the, the guys who were most interested in the business, ended up dropping out in the, uh, during the, during the acquisition conversations. And I was like, I don't know why you did that. And so, you know, all of these things are happening and you're, it's like a roller coaster. The thought, the company that you thought was going to marry you, like gets up to the altar and they're like, we're out of here. And you're just like, oh my God, who's going to marry me now?

• 51:21Shaan Puri?

  And I remember, uh, when we were going through the process just now, cause it's pretty fresh on my mind, this is a couple of months ago. There are these moments where you're having a conversation and certain things, it's like, they say something and you, in your head, you're like, this is the moment I need to say something. And whatever I say right now is going to really actually swing the way this whole process is going. And, uh, there are these like key moments that are just happening over a coffee or on the phone or whatever. Do you remember any of those kinds of conversations or key moments along the way?

• 51:49Speaker 00

  Yeah, well, there's two. One was with everyone, which was an issue we had with our trademark. And I'll get to that in a second. And two, I remember one guy who, who was like the CEO of the company was like, you know, trying to judge my marketing ability. And so he's like, if you were, uh, if your brand was represented by a celebrity, who would that person be? Uh, and I was like, I know that, uh, like I was like, this is one of those things where you think either I'm intelligent or I'm an idiot. And I remember, I hadn't even thought of this, but I was like, Michelle Obama? And he's like, okay, you got it right.

• 52:16Shaan Puri?

  Wow.

• 52:16Speaker 00

  He's like, that's a good answer. And I was like, great. But in reality, we had a trademark issue until we sold the business. This was a serious part like that delayed the transaction with everybody and that I think made it harder for us to sell the business. We simply didn't own our trademark.

• 52:30Shaan Puri?

  Yeah.

• 52:30Speaker 00

  Until five days before we sold the business. So we bought our trademark on like, we sold the business on like November 8th. On November 3rd, we purchased the trademark and that was the one thing that we still had to do in order to sell the business. Like P and G was like, we will not buy this business until you own your own trademark.

• 52:46Shaan Puri?

  Right.

• 52:46Speaker 00

  Which was completely fair of them. And we were like negotiating with the person who owned the mark.

• 52:50Shaan Puri?

  Simultaneously.

• 52:51Speaker 00

  Yeah, exactly. In order to get done.

• 52:52Shaan Puri?

  I feel like a deal is not close to being done. It's not real until the deal almost falls through. That's like the test. If your deal hasn't fallen through yet, it's not a real deal yet. Like I was talking to, so Michael Birch was on this, he's sitting where you're sitting a couple of weeks ago and he sold Bebo to AOL for 850 million bucks. And I was, I didn't ask him this on the podcast, but I've asked him this before. I said, you know, was it smooth? How did it go? And he was like, you know, he was kind of like, you know, I just let the bankers kind of do their thing. It was such a big transaction that there's all these lawyers, all these bankers. It's not pleasant, but we almost got, he's like, we got to the very end. And then with Bebo, which was a social network, they started getting sued by the music companies at the 11th hour.

• 53:30Speaker 00

  Oh, God.

• 53:30Shaan Puri?

  And the music companies knew, hey, these guys are about to sell. We have all the leverage in the world right now to just, just go ahead and sue and they'll have to pay, they have to settle because they want to close some big deal.

• 53:39Speaker 00

  Sure.

• 53:40Shaan Puri?

  So, you know, they, they go and sue and I think it's like a 15 million dollars, like settlement is like needed or whatever. So Michael goes to the investors, the VCs and he's like, hey, um, I might've got the numbers wrong, but it's something like 10, 15 million bucks. He goes to VCs, he's like, hey, look, to close this deal, we really need to just settle this, this issue and then, you know, we can go sell this company. These guys are not going to go away unless we do this. And they were like, yeah, you know, you're right. You really gotta settle with them. And he's like, we gotta settle with it.

• 54:07Speaker 00

  Sure, yeah.

• 54:08Shaan Puri?

  And they're like, no, no, I think you're gonna settle with it. And so he ended up, basically out of his own share, had to like settle with these companies in order to settle the lawsuits to get the deal to close. And of course, he holds it against those VCs like, you know, to this day.

• 54:19Speaker 00

  Definitely.

• 54:20Shaan Puri?

  But these are the crazy stories that happen at the end of the deal, you know, right when you think you have it.

• 54:25Speaker 00

  That's really terrible, because like, I never felt it wasn't a we with my investors. Like, they were all like, super happy and super excited about getting the deal done. And, you know, if someone had come to me, if one of our investors had been like, "I don't love this, and I'm gonna try and vote no and fuck this up," I would have like, been devastated.

• 54:42Shaan Puri?

  Right.

• 54:42Speaker 00

  And like, felt like there was a knife in my back.

• 54:44Shaan Puri?

  Right.

• 54:44Speaker 00

  So I don't know who those investors are, Michael. But I hope he should mention their name everywhere he goes.

• 54:50Shaan Puri?

  Yeah. So this is actually, that mindset, your brother's told me about this. He says, he's like, "Yeah, my brother, boys, you know, he's great, he does a great job." He's like, "But if you flip the temper switch," he's like, he has this like, retribution streak.

• 55:04Speaker 00

  Yeah, yes.

• 55:04Shaan Puri?

  Where it's like, "If you wrong me, I will publicly right the wrong."

• 55:08Speaker 00

  For the next 50 years, I'm devoted to it.

• 55:10Shaan Puri?

  So give me an example of this.

• 55:12Speaker 00

  Yeah, sure, I'll give you an example right now. There's this company called [BLEEP]. They said no to us, because I was like, "Hey, I wanna launch this refillable deodorant." Early on, when we were launching the business, I was like, "Yeah, we're launching this refillable deodorant." And they're like, "No, this is terrible, get out of here." And like, you know, in the last six months, I don't even remember what, but they invested in a refillable deodorant company. And I'm like, "Well, I see that you're doing a refillable deodorant now." Now it's such a bad idea, huh?

• 55:33Shaan Puri?

  You reached out?

• 55:34Speaker 00

  No, I didn't even say anything. I was like, "This like, stands by itself." Like, you know, "You know that you're doing this, and I know that you're doing this."

• 55:41Shaan Puri?

  Right.

• 55:41Speaker 00

  But like, you know, do what you gotta do. But you could have had the oppor- you had the opportunity four years ago.

• 55:46Shaan Puri?

  I also heard the sort of, once you get to Procter & Gamble, obviously, they have a sort of much tighter, you know, view of risk tolerance around Twitter and some of your tweets. How's that been for you since joining, you know, the mothership?

• 56:01Speaker 00

  Basically, what happened was [BLEEP]. Sent us this letter and so I tweeted it and I was like, if you're wondering when I decided to destroy your business, it was when you sent me this letter. Like before I was like, you know, you guys are a gnat and I don't care about your tiny business and I'll let you exist. And now it's personal and I like, you know, my life's mission is to make sure that you regret sending this letter. Every morning you should wake up and you should be like, fuck, I sent that letter and now my life is fucked. Someone, it's called someone at P and G and they're like, you have to take down these tweets. And I was like, why should we take down these tweets? We should show how competitive we are. When people come after us, you know, we like go after them 10 times harder. You know, like Donald Trump is always like, we're building this wall 10 feet higher. That's basically what

• 56:45Speaker 00

  I was like, you come after us, we're building this wall 10 feet higher.

• 56:48Shaan Puri?

  And where did that come from? Where did that strategy or mindset come from? Is it like at an early age where you're doing this with your brother, like competitiveness with him or where's the?

• 56:57Speaker 00

  I think it came from him. I think he's just does a better job of like hiding it. Yeah, he's just more charismatic than I am. So he says it and everyone's like, oh, you know what? You know, Solomon's like funny and like this is good and good humored. And when I say it, people are like, Mois is vicious. He's just more charismatic. So it comes off nicer, but he's got it himself for sure.

• 57:16Shaan Puri?

  I love it. Okay. So company finally does, the offer does come through, was serious. Take it from there. How did it end? How did it feel? And where are you guys at now?

• 57:25Speaker 00

  Yeah, sure. So one, I think one of the issues with these types of companies is always about like, or with a deal is like deal certainty. How comfortable are you that the other guys are going to close or trying to do something at the 11th hour? Cause like, you know, if you say no to all of these other companies and then your deal doesn't get consummated, you come back and you're like, hey, do you want to do a deal? They're like, what's wrong? Why did the first acquirer not end up buying you? I've got the leverage here.

• 57:47Shaan Puri?

  Damaged goods.

• 57:47Speaker 00

  Yeah, exactly. And so there was a lot of deal certainty with P and G. Like they were fantastic partners throughout this all. They were like, you know, they came out to San Francisco. We met with them. We went to dinner with them. They made the offer. They came back again before the deal signed and they're like, this is how it's going to be post-acquisition. Like this is how you're going to report to us. This is how we're thinking about the business. How do you feel about it? And I was like, wow, you guys aren't trying to like hide anything or be at like, you guys are just genuinely. Nice midwestern people who are honest and like mean what you say.

• 58:16Shaan Puri?

  Right.

• 58:17Speaker 00

  And so that was, that gave me a lot of comfort going into the deal and that was wonderful. And as soon as we bought the trademark, I basically knew the deal was gonna, I mean, there was only five more days, but I knew the deal was gonna close. Since then, you know, we've grown the business a ton. We've launched into Target and to Walmart where like the number one selling natural deodorant in Target, the number one selling natural deodorant in Walmart. Native coconut vanilla is the best selling deodorant SKU at Target over the last 52 weeks. And we haven't even been there for 52 weeks.

• 58:44Shaan Puri?

  One, one question on this, the sort of, what's a, it's not flavors, what's the?

• 58:48Speaker 00

  Scent.

• 58:48Shaan Puri?

  Scent.

• 58:49Speaker 00

  Yeah.

• 58:49Shaan Puri?

  You had these like, I saw something like a pumpkin spice latte scent.

• 58:53Speaker 00

  Yeah, definitely.

• 58:54Shaan Puri?

  Is this like, is this just like your marketing genius or what?

• 58:56Speaker 00

  Yeah, it's super fun because basically we're like, look, why are we taking this stuff too seriously? And like, you know, you can use a scent for a season and you don't have to go through the entire deodorant stick before you can get rid of it in the same way that you're not like, if you open up a Diet Coke because you want to like treat yourself, you don't have to drink the whole thing.

• 59:12Shaan Puri?

  Right.

• 59:12Speaker 00

  Or you don't have to have an entire like, you know, Snickers king size bar. So we're like, look, why don't we launch these really fun scents? They work and they're effective, they're good for PR. And hopefully you find out about the deodorant through native pumpkin spice latte. And then you're like, this is a great deodorant. I don't want to smell like pumpkin spice latte in April. Maybe I should buy the, you know, coconut vanilla scent.

• 59:30Shaan Puri?

  This is what I love about businesses and startups is if you're Procter and Gamble, you're not afraid of Unilever. You should be really afraid of the Mois at his dining table thinking up pumpkin sized latte scents and getting PR and really getting this thing off the ground. Like it's, it's the, you know, one or two people in a bedroom.

• 59:50Speaker 00

  Definitely.

• 59:50Shaan Puri?

  Who are actually the threats to these like giant multi-billion dollar companies because you have creativity and you have nothing to lose.

• 59:56Speaker 00

  Yeah, exactly.

• 59:57Shaan Puri?

  A fresh perspective.

• 59:57Speaker 00

  Yeah.

• 59:58Shaan Puri?

  And like, all the things you've told me so far just fall into those buckets. And if I'm listening to this, I'm taking one thing away is like, do not be afraid and do, do not sort of conform to the sort of practices of the industry. You didn't know anything about deodorant. You went in with basically no money, no staff, no nothing, and you figured it out. And I like, what do you think is the message for, you know, the next you who maybe doesn't have the sort of confidence today? What is your message to that person who's thinking about an idea like this?

• 1:00:26Speaker 00

  Yeah, it's really like stop listening to other people and start listening to yourself. I remember when we were growing the business, people were like, look, you're not going to be able to sell this until you launch a second product outside of deodorant that really is a home run again. So people, so you can prove this is a repeatable model. Other people were like, hey, you need to do influencer advertising. This brand is not going to have any legs and no one's going to care without influencer advertising. Other people were like, you need to launch pop up stores like, you know, the all birds and a ways of the world. That's the only way to do this. Other people were like, you haven't fundraised. What are you doing? This isn't a real business until you've got some cap, like, you know, millions of dollars in your balance sheet. And I was like, you're all probably right. And I have no, like, you know, I don't have the time for any of this kind of stuff. We have a business that's working and so like, give your advice to somebody else. I, I like, I, I know what's working at my company and so I'm going to keep doing that.

• 1:01:10Speaker 00

  I, I don't want any of this advice. Like, I, I appreciate the advice. I'm not going to take any of it. Right. And like, it's really hard to sort of be like, hey, look, these other people that have a lot more money than I do and that have a lot more experience than I do. I'm, are going to give me advice and I'm going to reject it. And I'm like, okay with that. You have to have a lot of like independence and be okay with what's going, like, okay with like living and dying on your own intelligence. And for me, like, what gave me a lot of confidence was, you know, things were working early on. And so when people were giving me this advice, I was like, look, what's working, like, what's working for us is working. We're going to double down on that instead of doing anything that you suggest. Right. And it's hard, like, you know, for us, we had that great safety net of like, uh, success already or like momentum. And so it's, it's, if you don't have that, trust your gut.

• 1:01:54Speaker 00

  Nobody's going to be able to like come into your business, talk to you for 20 minutes and give you an amazing idea that you haven't thought of. People would be like, have you thought about influencer advertising? And I'm like, I only live and breathe this business every day, like, uh, you know, from morning to night. What a genius idea. Tell me more about this. I was like, yeah, I've thought about that, but we just did a million dollars a month and we're, we're going to try and do $2 million a month next month. And, and so I'm focused on that and don't really have the time to like contact influencers on Instagram. And so, you know, you've just got to trust your gut and like, listen to yourself. Other people's advice can help you like, you know, get through the rough patches. And I think our investors did a great job of that. But ultimately like, um, it's up to you and like your, like live and die by your own merits. Love it.

• 1:02:36Shaan Puri?

  Was it like when the deal closed day of? Money hits the bank. This is my first million.

• 1:02:42Speaker 00

  Yeah.

• 1:02:43Shaan Puri?

  People want to know, what is it? What changed? What did it feel like? What did you do? Did you start balling out of control? Like, tell us you started balling out of control a little bit.

• 1:02:51Speaker 00

  Sure, yeah. Well, let me tell you the story of one of our investors. I'm telling all of our investors we're selling the business. It's a couple of days before we actually closed the deal. Our first investor is this Chinese guy named Wago. Doesn't speak a ton of English and the nicest guy in the world. I text him and I'm like, hey, I got to chat with you. Do you have a few moments today? And he's like, is this urgent? And I was like, yeah, kind of. I need you to sign documents in like the next 24 hours. And so he's like, okay, great, call me. So I call him up. I was like, we turned your 50K to a million dollars. And he's like, fuck, this is awesome. You know, he's like, all these people in China told me I didn't understand American consumers. I'm going to go back to them and show them this deal. Fuck them. And so, you know, I tell him, you know, I need you to sign these docs in the next 24 hours. He's super excited. At the end of the call, he's like, you know, I asked you if this was urgent via text message earlier

• 1:03:35Speaker 00

  because my wife just gave birth to my first kid. But this is the best news I've gotten all day. It's so amazing. I'll never forget him saying that. Anyway, we closed the deal. You know, money hits the bank. Like, we haven't raised a ton of money at that point. We've raised about $500,000. So have the vast majority, like, you know, 97% of the company is controlled by me. And like, my family's in town to help celebrate, which is really fun. We go to this like Thai restaurant for dinner, which is really fun. But like, what's shocking is like how little life has changed. Like, you know, I still live in the same apartment. I still have no car. I still rent, you know? Like, very little of my life has changed despite the financial windfall. And like, one of the things I realized afterwards, because, you know, all these people are like, oh, being rich is not that great. And I'm like, no, fuck you.

• 1:04:18Speaker 00

  You just say that because you have money and you can't appreciate it, you dumb idiot. I'll be able to spend it really well. And then you're like, you know what? Like, the journey of like the friendships I made with all the employees that I have and like a bunch of, like, most of the team is still there. You know, like, when we were building Native and we did, you know, the month that we sold the business, we did like a million dollars in net profit, which was insane. A million dollars in net profit. And I was like, you know, if a bus hits me on the way to work, I'm still going to get to work because I love this job. Like, there were so many. Many great things that were happening with the business and it was that journey that was really amazing and like the thing that I really appreciated. And even today, I mean, I'm still, I'm still running native on a day to day basis. It's like the people that work there and how devoted they are to the business. That's amazing. Like getting them, like seeing a bunch of people sit down and they're like, this is a problem.

• 1:05:03Speaker 00

  How are we going to solve this? How do we delight customers? How do we meet like, you know, we had this contest internally to make another email funny and very human. And I was like, wow. These people like care, understand the business and want to make other like, you know, this company better. I have no idea how they got that way. I have no idea how they were motivated to do that and they're that way. And it's really fun to see that. And like, that meant so much more than the money and that's still surprising to this. Like even when I say today, I'm like, this guy's an idiot and it's myself saying it, but it did.

• 1:05:31Shaan Puri?

  Yeah, I trust you when you say it because there's a lot of people that say it that I'm like, okay. You don't have to say the politically correct thing around me. It's cool to just like, hey, money is amazing. Yeah, I do this, this and this, this change. But when you're saying it like, I believe you, I believe what you just said because I think you're wired like me and that you thought it would be X. And it is good, but man, Y is a lot, actually has made a bigger impact on me.

• 1:05:54Speaker 00

  Yeah, it just makes me happier. Like being in the team makes me happier. And like, you know, now when I go to restaurants, uh, like one of the, the best thing is I'm just like, I'll order whatever I want. I don't care if this entree is $14 or $22. I'm like, I don't care. I'm taking the $22 one because I want shrimp tonight. And like, that's definitely something I do. Like, you know, I'll, I try and spend a lot more time with my family. So I like, will go and fly and visit my family more often. Cause I'm less worried about where the next paycheck is going to come from and I'm less worried about the cost of airfare. So it's not like nothing has changed, but it's not like there's a Lamborghini sitting in my garage where I own a car. It's just like, things are like easier when it comes to doing what you want to do. But at the same time, you realize what you want to do is build those businesses and that's like an amazing, amazing high.

• 1:06:38Shaan Puri?

  If you were 21 today, starting from scratch, it's, you know, you have the intelligence you have today. You have the knowledge about the world you have today, but you didn't have the resources. And you have all the, you know, time and exuberance of a 21 year old. If you were 21 today, what business would you want to go start? What, what space would you want to go into?

• 1:06:53Speaker 00

  That's a great question, and I think that it can be answered in a bunch of different ways. Like, if I had no resources, I would say, start dropshipping something. Find something that on Alibaba that you can purchase and sell more in the United States on Amazon or something else, and arbitrage that difference. I've seen so many people do that, and so many people do that well. And that's a great way to get your feet wet into e-commerce and understand what's going on without having any personal capital at risk. And if you're more ambitious, and you're like, "Look, I can quit a job. I can quit my job and I want to do something." I can tell you, for me, I could never start a business, I could never start a new business until I quit my old one. I would say, "Look, e-commerce is amazing. You don't need a developer. Everything is really cheap out of the gate. Figure out product-market fit, and be obsessed with your consumer, and you will find something that works."

• 1:07:37Speaker 00

  Even if you have to go through a bunch of products, and you're like, "You know what? I tried to sell them shampoo, or I tried to sell them toothpaste, and that didn't work out. Now I'm trying to sell something like deodorant." Go for it. Be obsessed with consumers. And the biggest problem that I think direct-to-consumer businesses have is that the founders disconnect themselves with customer service. Then you're just like these CPG giants, where you're like, "I don't have a direct line of communication with people who use my product every day. We have that direct line. A thousand people email us every day, and we're like, 'Hey, look, this is what they're thinking today.'" It gives us incredible insight into what we should be making and how to fix our product. So, I think e-commerce is amazing. I would do that again. I love e-commerce. If you don't have any resources and don't have any technical knowledge, you can still do e-commerce.

• 1:08:21Speaker 00

  The one feedback I'd give after you chose that, if you chose that category, is do not disconnect yourself with the consumer.

• 1:08:27Shaan Puri?

  Love it. If I'm listening to this, and I'm like, "This guy's awesome. I want to talk to this guy. I want to send him my ideas. I want to send him my company right now. How should they get in touch with you? And really, who should get in touch with you? What's the, who do you want to hear from?"

• 1:08:41Speaker 00

  Sure. Look, if you're in e-commerce, and you're like, you've got some legs under you, and you're thinking about raising money, or looking for an advisor, or just want to bounce ideas off of, please reach out to me. I love when people have gotten skin in the game. I think the hardest part for me is to have conversations with people who are still, I used to be a lawyer, who are still lawyers, and they're like, "I'm thinking about doing this." I'm like, "Look, if you're thinking about doing this, quit your job. If you want to do this, quit your job." The biggest telltale sign that you're in. If you're not in, like, don't, like, don't go around asking everybody, "Should I do this? Should I do this? Should I do this? Should I do this?" Do it or don't do it. That's your own call. And like, that depends on your personal financial situation, how old you are, and how much energy you have, and all a bunch of things. But if you're in, and you're like, starting a business, and it's got some traction, and you're like, "Hey, how do I start scaling this? How do I get from that 100K to a million dollars?"

• 1:09:25Speaker 00

  Uh, happy to answer any questions, happy to talk to you. You can find me on LinkedIn, certainly. I'm @MoizAli on Twitter. Love talking e-commerce. You know, you and I are in this room on a Saturday. I had a bunch of e-commerce calls earlier today. This, this is what I like to do on the weekends.

• 1:09:40Shaan Puri?

  Love it. All right, man, uh, this was fantastic. Thank you so much for coming on.

• 1:09:43Speaker 00

  Thanks for having me.