Simple Modern CEO on Competitive Markets

Mike Beckham sees the benefits of competitive markets. Simple Modern, a company he co-founded in 2015, sells insulated drinkware, competing against Yeti and other large providers. He says markets are competitive because many consumers value those products.

He told me, “Capturing a small percentage of a competitive market can make you insanely successful.”

Beckham and I recently spoke. We addressed his ecommerce journey, Amazon, physical-store selling, and more.

The audio of our entire conversation is embedded below. The transcript is edited for length and clarity.

Eric Bandholz: Tell us about your journey.

Mike Beckham: I grew up in Oklahoma and received a finance degree. I went into a nonprofit ministry job after college. I thought I’d work it for one year, but one year turned into 10. When I turned 30, around 2009, my brother approached me with a business idea. That business [QuiBids, a retail auction site] got big and quickly hit a million dollars in revenue. The company had many highs and lows, but I gained experience and learned much about ecommerce.

Around 2014, we realized competing against Amazon was an uphill battle. We began looking at companies to buy on that marketplace. The more we looked, the more we thought, “We can do this. We have the skillset.” I helped my brother build the company — the Beckham Hotel Collection, selling mostly pillows — on Amazon. We have close to 300,000 reviews. It’s been the bestselling pillow for years.

In mid-2015, a group of guys I’d worked with approached me about starting a side project. We had no idea what we wanted to do or sell. We just knew we wanted to sell on Amazon as our first channel and to have a culture and commitment to generosity. We decided to sell insulated drinkware. We bootstrapped the company and called it Simple Modern. I put my life savings in, and we have grown rapidly. We now sell in many places, including our own ecommerce site, major retailers, and Amazon.

Bandholz: Why Amazon?

Beckham: We had several years competing against Amazon [with QuiBids], spending a lot of money driving people to our website. I don’t know of any consumer retail brand that spent more between 2010 and 2014 on direct response advertising than we did. We learned the trials and challenges of driving traffic daily and gaining awareness, especially when competing against Amazon.

With Simple Modern, our posture was letting Amazon do the heavy lifting. We would optimize for their system because we’ve built websites and understand algorithms.

Bandholz: Insulated drinkware is hyper competitive.

Beckham: Yes. When we launched, Yeti was crushing it. Hydro Flask, Corkcicle, and S’well were there as well. But they all focused on brick-and-mortar retail and higher prices. We focused on a premium insulated water bottle at an affordable price, available online. Many of those competitors had built their business models around physical distribution. We built ours around digital.

We sold multiple sizes, SKUs, and colors. Those became a competitive advantage with more selection, better pricing, and the same quality as the leading brands. Competition is a two-sided coin. Most entrepreneurs see only the downsides. But highly competitive markets exist because many folks want to buy that product or service. Capturing a small percentage of a competitive market can make you insanely successful.

I teach entrepreneurship at the University of Oklahoma. Students almost always aim for something with little competition. I always tell them that no competition occurs because their idea is unique, which is unlikely, or something about that market makes it toxic.

To be sure, you have a higher chance of succeeding in a small market. Simple Modern wasn’t my first rodeo. I’ve learned the benefits of starting and focusing in a niche. As you build operational skills, challenge yourself to larger, more competitive markets.

When we launched Simple Modern, a full-frontal assault against Yeti would’ve been disastrous. There’s no way we would’ve won. But we’ve carved out market share in many ways. Yeti has not focused on colors. The average guy has a black Tumbler. When your market’s big, there’s room for many winners.

We have competitors that are better at some things than us. But there are things we’re better at. You need a sense of humility and accuracy and to take stock of what you can do at an exceptional level. Do you have something that the market’s going to reward you for? We’ve been successful at parlaying digital success into physical retail placement. We’ve built Simple Modern around that.

Bandholz: Where can people follow you and support you?

Beckham: The website is SimpleModern.com. Check out my podcast. Follow me on Twitter and LinkedIn.

Brand Building Is World Building

Joe Anhalt is a New York-based copywriter turned designer turned all-around marketer. He consults with direct-to-consumer ecommerce companies on growth strategies, including branding.

He emphasizes storytelling and conveying a brand’s point of view. “You can bring shoppers into your world,” he told me. “Brand-building is like world-building.”

Anhalt addressed multiple growth tactics in our recent conversation, including marketing channels, design essentials, multichannel selling, and, yes, the importance of the brand.

The entire audio of our discussion is embedded below. The transcript is edited for clarity and length.

Eric Bandholz: Tell us your story.

Joe Anhalt: I ran growth and marketing for six years at Koio, a direct-to-consumer luxury footwear business. I’ve recently left the company and have been doing freelance growth-marketing consulting for smaller DTC companies, from $3 million in annual revenue to $50 million.

It’s been fun being on the other side. I’ve only worked in-house at brands throughout my career.

I started as a copywriter, studied advertising, and minored in film in school. I’ve always gravitated towards the arts, specifically the visual arts, whether it was still photography or video. I loved it, and I still do. But as a copywriter at an early-stage tech startup, I evolved into search engine optimization, email marketing, social ads, and content marketing. That morphed into a generalist growth marketing hacker.

Bandholz: How do entrepreneurs manage the design aspects of their business?

Anhalt: First, founders have to set expectations. They must lose their ego and admit they’re not creative or design experts. Suppose you have a finance or consulting background and are trying to build a brand. In that case, you should educate yourself and experiment. There is a level of talent with creatives and art, but a lot of that you can learn. You can learn taste, style, aesthetics, and simple things like composition, the rule of thirds, coloring, storytelling, and depth of field, all of which you can learn in a cinematography or photography class.

You can start going to museums and learn about the history of art. I’m blessed to live in New York City. I can go to the Met or the Whitney. Every city has beautiful art. You must keep learning to succeed and acknowledge that you’re behind the design eight ball, but you can learn and tackle it like any other school topic or business challenge.

I encourage people who are less skilled in creative or art direction to start educating themselves. The beautiful thing about art and design is that it surrounds us and hits us in the face. A beautiful landscape can inspire you.

Bandholz: Many businesses are trying to save money. How can they produce quality photos or videos affordably?

Anhalt: The iPhone is a good investment if you’re shooting content and want it to be high quality. Lighting is super important. Never shoot midday. The shadows and the light are way too harsh. Location matters. Location, much like real estate, helps improve production value. For example, someone in Austin, Texas, can drive two or three hours west to a remote landscape. It’s similar to Palm Springs or Joshua Tree, where many luxury brands shoot campaigns.

Going to obscure locations and using the natural surroundings and practical effects is a great way to elevate the production value. We were fortunate at Koio because we live in New York City. If you shoot in Tribeca, you slap a logo on the image, and suddenly it becomes luxury. With the iPhone, if you have great lighting, a good wardrobe, and an excellent location, you’ll get 90% of the way there without spending $20,000.

Bandholz: A lot of ecommerce brands struggled in 2023. What marketing channels offer the most opportunity in 2024?

Anhalt: The market is sifting out the winners and losers. There are still many winners. 2024 is about profitability, not growth at all costs.

Facebook and Google ads remain the top channels for growth. There’s a lot of optimism for TikTok, but success there depends on the product category. TikTok could be a home run if you’re a beauty product and your average order value is less than $50. However, higher AOVs have to get creative with channel allocation.

I’m pushing my team to think about visual channels, such as YouTube and television. Those are some of the best places to tell a story. Facebook can drive a ton of data, traffic, and conversions, but I question long-term brand building with Facebook alone.

If you aspire to be a household brand such as Nike or Apple, at some point you’ve got to develop a multichannel approach with retail, wholesale, and collaborations. DTC is a good strategy as a launch, you’ve got to make some bets to be a big player. Give retail a shot. It’s one of the best, if not the best, places to tell your story and your point of view as a brand. You can bring shoppers into your world.

Think about Apple. They’ve built these beautiful retail stores in amazing locations with amazing architecture. Walk in there, and you enter their world.

Brand-building is like world-building.

Bandholz: Where can people hire you, support you, follow you?

Anhalt: My website is AnhaltAdvertising.com. I’m @joefromnormal on Twitter and Instagram. You can reach me on LinkedIn, as well.

Help for Mediocre Writers

David Perell helps folks improve their writing skills. His company offers an online course, YouTube author interviews, and a weekly newsletter. But his broader goal is supporting excellence.

He told me, “It’s worth doing exceptional work with whatever you do. The modern world is polluted with mediocrity.”

He and I recently spoke. We addressed writing and speaking and their impact on entrepreneurial success. The entire audio of our conversation is embedded below. The transcript is edited for length and quality.

Eric Bandholz: Tell us who you are.

David Perell: I help folks become better writers. I offer an online course called “Write of Passage.” Roughly 1,000 learners every year from all levels of expertise sign up.

My YouTube channel contains multiple playlists for authors. One is called “How I Write,” where I interview notable bloggers, journalists, and teachers.

“North Star Podcast” was my audio show. I published 90 episodes from 2017 to 2021. I started the podcast after having been laid off from a job. I didn’t have a sense of purpose or a competitive edge. I couldn’t find my North Star, so I started the podcast.

Over the next few years, I interviewed folks about who they are, what they do, and how they think. I ended up shutting the podcast down because it didn’t align with the other stuff I was working on, but it helped me figure out what to do with my life.

Bandholz: You have notable entrepreneurs on your YouTube channel.

Perell: I spend a lot of time thinking about what I have a knack for. I come alive when I’m around successful people in a way that’s hard to explain. I’ve always enjoyed being around older men. There’s a certain peace and a sturdiness amid the chaos around them. I used to love playing golf when I was younger because I could go to the course and hang out with guys in their sixties, seventies, and eighties. We’d walk 18 holes, hit balls on the driving range, and talk about life. I think that’s the best way to learn.

I recently had Marc Andreesen on the show. I sent him the trailer for my channel, which I had carefully assembled. Aesthetics instantly communicate a sense of seriousness and quality, and a trailer makes a stronger impression than a text description. I wrote Marc a note with it, saying I had just launched a YouTube playlist called “How I Write.” I included the names of prominent guests and stated that I would love to interview him. Then, I let the video do the talking.

It’s worth doing exceptional work with whatever you do. The return to being the best in the world at your chosen profession continues to increase. The modern world is polluted with mediocrity and a sense of casualness that hurts creators.

Bandholz: How do you help folks improve their writing skills?

Perell: I use a three-pillar framework that I call POP — Personal, Observational, and Playful. “Personal” is telling stories about yourself that provide credibility. For example, no one wants to read the person discussing his Harvard PhD. It’s much better to share a personal story. “Observational” conveys your insights. How is your writing helpful? What are you teaching your readers? “Playful” implies bringing personality and characteristics that make you distinct. Writing and speaking benefit from having all three.

It’s simple to improve speaking skills. I’ll listen to this entire podcast, observing my speech patterns, cadence and storytelling, anecdotes, and tempo. Did I need to speed up or slow down? For video interviews, I’ll watch myself speak.

Phenomenal CEOs are good at sloganeering and telling the same stories repeatedly. They make tweaks. They look at people’s eyes. They notice where they get a laugh and where listeners are interested in what they’re saying. They’re similar to comedians — telling the same things repeatedly. It’s an art.

Bandholz: What’s the vision behind “Write of Passage,” your course?

Perell: I’m invested in being around smart, ambitious individuals who want to write and get their ideas into the world. Intelligent people read, and successful people read the most. Therefore, writing will remain relevant among thinkers. I want to be their go-to resource.

I try to attract the most valuable audience within that niche. I’ve learned much from my friends David Senra, who runs a podcast called “Founders,” and Patrick O’Shaughnessy, with his “Invest Like the Best” show. I want with writers what David has with entrepreneurs and Patrick has with investors.

“Write of Passage” is a five-week online course. It costs $3,995. We get a few hundred signups. We have about 35 contractors who edit every piece from enrollees, with an average turnaround time of 18 hours. We have mentors who help students overcome the emotional challenges of learning to write and instructors who focus on specific aspects, such as how to find your voice and tell a story.

Bandholz: Where can people support you?

Perell: My website is Perell.com. You can find the “Write of Passage” course there. Check out “How I Write” on my YouTube channel. My Twitter is @david_perell.

Postscript SMS Aims for Best in Class

Postscript is an SMS marketing provider for Shopify brands. The company launched in 2018 and has since raised a whopping $106.2 million across four funding rounds, per Crunchbase. Alex Beller is Postscript’s president and one of three co-founders.

Postscript’s marketing platform is SMS-only and Shopify-only. To Beller, that translates to “best in class” performance.

In our recent conversation, he and I discussed the company’s focus, regulatory compliance, and more. The entire audio of our discussion is embedded below. The transcript is edited for length and clarity.

Eric Bandholz: How was 2023 for Postscript?

Alex Beller: Postscript’s business is a reflection of the Shopify ecosystem. We only work with brands built on Shopify, so we’ve felt a lot of what ecommerce brands have felt this year. We’ve seen growth in terms of brands adopting Postscript. It feels like 2023 is the year we carved out our niche in the market. It’s been challenging, but honestly, as I reflect with my co-founders, every year has been challenging. That part doesn’t change.

We’re an SMS provider for brands built on Shopify. We don’t work with any other platforms. We don’t do email. We’re best in class for SMS on Shopify

Our platform is built for brands to connect SMS to order and conversion data. That gets fed into Postscript from Shopify, and it’s anonymized. Roughly 12,000 brands of varying sizes use Postscript. That’s not nearly all Shopify’s customer base, but it’s an excellent snapshot.

This year, we’ve seen inconsistencies. On the one hand, headwinds certainly seemed present. We’ve seen more brands go out of business than in prior years. We also saw aggregate growth slow down. The last few years we’ve had high annual growth rates. This year’s growth is smaller. Many merchants were closer to flat. Still, ecommerce did not fall off a cliff. It was a bit of a retrenching.

Bandholz: In 2021, Florida passed a sweeping SMS compliance bill. What are the legalities merchants should be aware of?

Beller: There are many compliance rules in the SMS industry. One is governmental regulation that creates legal risk for brands. At the U.S. federal level, it’s through the Telephone Consumer Protection Act or TCPA.

The other is carrier regulation — T-Mobile and Verizon — to impact deliverability. Carriers might shut a phone number off if a brand breaks their rules. Those companies are protective over their airwaves and inflexible when dealing with an appeal from a small to medium-sized business.

Then there’s the legal regulation. Historically, TCPA ensured companies never texted anyone who didn’t explicitly opt in or had opted out. State regulations have popped up over the last few years, adding new risks. Florida is one of the leaders in this, along with Oklahoma.

Much of the risk involves sending the messages and a higher threshold for opt-ins. Our approach is to upgrade our backend compliance so brands don’t have to worry as much.

Unfortunately, the state regulations have triggered a groundswell of lawsuits. We address this in our product and have an in-house legal effort to help brands if they need it.

Bandholz: Talk more about the risks to merchants.

Beller: Florida has longer quiet hours for subscribers in the state — from 8:00 p.m. to 8 a.m. There’s also a limit of three messages within 24 hours for a specific campaign or product. Those state-level regulations in Florida don’t exist at the federal level. They apply to any brand with operations in Florida. The penalties are meaningful — $500 to $1,500 per message per subscriber.

Unfortunately, there are plaintiffs who buy deactivated and old numbers to receive texts they didn’t sign up for or are in the quiet hours. These plaintiffs partner with law firms to certify it as a class action. If successful, they can run down everyone who received that text, greatly increasing the penalty, which, again, is based on every message and recipient.

Brands have multiple prevention options. Postscript won’t deploy messages during the quiet period in Florida or elsewhere. We also advocate that brands adopt terms of service that include a class action waiver, wherein subscribers agree not to participate. That would limit liability to a single subscriber, the plaintiff, at $500 to $1,500.

Bandholz: Postscript is SMS only. Do you plan to diversify?

Beller: It’s the early days for SMS, and we’re working on driving performance across the entire customer journey. We focus on subscriber lifetime value and list growth. There’s much opportunity for my co-founders and me if we can differentiate our product from competitors. We can be dedicated players.

Bandholz: Where can people find you?

Beller: Our site is Postscript.io. I’m on LinkedIn and @ringmybeller on X.

Bushbalm Normalizes Bikini-line Skincare

In 2016 David Gaylord was a Shopify employee looking for a side hustle. Then he came up with a funky idea: skincare lotions for hair removal along bikini lines. The business name was funkier: Bushbalm.

Fast forward to 2023, and Bushbalm is booming, selling lotions and trimmers directly to thousands of consumers and wholesale to Ulta Beauty and 3,000 waxing salons. It spends a whopping $200,000 per month on Facebook ads.

In our recent conversation, I asked Gaylord about sales channels, marketing, and, yes, the name. The entire audio of our discussion is embedded below. The transcript is edited for clarity and length.

Eric Bandholz: Tell us what you do.

David Gaylord: I’m the co-founder and CEO of Bushbalm. We focus on bikini line skincare — below-the-belt products for ingrown hairs for razor burn. We also have a trimmer for down there. Our primary business is skincare, whether oils, exfoliants, or serums. We have a hydrogel mask called The Vajacial, which is quite popular.

We launched in 2016. Before, I worked in my family business in Canada selling hardwood flooring. When I was in university, my dad wanted to try ecommerce. I thought it was ridiculous. But I did what he said and looked at platforms such as BigCommerce and Magento. We chose Shopify because it was Canadian.

Four years later, I graduated from university and got a job at Shopify. From there, my partners and I started Bushbalm as a funky idea. It took us four years to gain traction. We didn’t quit our jobs until 2021. We were entirely bootstrapped and remain that way today.

During the four years, we spent very little on marketing. We did an Etsy show, which was good for talking to folks and learning what they wanted to say about us. When we spoke about “pubic oil,” they said, “That’s disgusting.” We tried “bush oil,” and they didn’t like that either. We got more into skincare and asked questions like, “Do you get waxed? You probably have irritation.” And they’d say, “Yeah, totally.” So that’s where we focused the business. In 2020 and 2021, we pushed hard on Facebook ads. In the last two years, we’ve leaned away from that. But we still spend at least $200,000 on Facebook monthly.

Bandholz: Do you get much friction with the name of Bushbalm?

Gaylord: We interviewed someone for a job here who said, ” I think you guys should change the name. And we were like, “You’re not hired.” A lot of folks we talk to appreciate that we’re blunt. The brand is kind of in your face with our TikTok channel. Sometimes, one in a hundred people will say, “That’s gross.” The other 99% say, “Why is it gross? Everybody has these concerns.” So, I think the name’s pretty powerful long-term.

Bandholz: You’re exploring brick and mortar, setting up your own salons.

Gaylord: We’re about 50% direct-to-consumer, and then 25% is wholesale from selling to about 3,000 waxing salons. We’re also in Ulta Beauty, the giant retailer, and Amazon.

We’re looking to double down in our own physical-store waxing salons. We’re not here to build 100 salons and be a huge chain. In a studio, we’ll learn more about the products and how people use them. We’ve been more eager on the content side. We don’t do much on YouTube. We do a lot of TikTok and Instagram, but having an in-store space is something we’re trying to figure out.

We have an excellent path to long-term wholesale growth. Ulta Beauty was the first domino to fall. They’re awesome. What’s good about Ulta is the shave section we’re in, which is basically the same style as CVS, Walgreens, Target, and Walmart. Five years ago, the taboo was so strong that no one would be around us because of the name. Now everyone’s like, yeah, that’s cool, you guys are funky. I think Manscaped, for male hygiene, paved the way for the taboo to go away.

Bandholz: Walk us through your content production.

Gaylord: We have a few folks on our team who connect with waxing salons and film content, or we’ll pay the salons for a photo and video shoot. Usually, 80% of the stuff doesn’t work, but 20% is excellent. We’re looking to scale. The need for content nowadays is insane. It’s the hardest part of Facebook ads.

We hired a part-time in-house aesthetician, a skincare pro. That has been a tremendous addition. She helps us with content. Otherwise, a lot of it’s sourced from content producers. The best thing we’ve done is ask photographers to subsidize photo shoots. They get photos, and we get photos. Everything works out. Obtaining videos that way is hard, but it works for photography.

We’ll buy content from folks. Communication style, personality, and entertainment are so important. It’s more intriguing to follow along a person’s journey instead of, for instance, the art of doing a leg wax. That type of video might be interesting, but building a character or persona to grow a brand does better.

The iOS and Facebook privacy changes were an easy hurdle for us. We’ve got 3,000 wholesale accounts, with one salesperson and one account manager. So it’s a super-efficient lead and very automated. Folks are eager to find something that works. There are no distributors for it either. So it’s very niche. The U.S. has 10 times more waxing and nail salons than Starbucks stores. I think it’s 330,000 salons, which is mind-blowing.

Direct-to-consumer was about 95% of the business three years ago; now it’s 50%. So we’re growing way more on this professional channel. And Ulta is doing well.

Bandholz: Do you worry about advertising attribution and tracking?

Gaylord: On the wholesale side, it’s hard because when we advertise on Facebook for our Ulta business, we don’t get sales data for a week — every Monday at 8:00 a.m. So we could run Facebook ads on a new launch at Ulta without knowing if they’re working.

Bandholz: Where can people support you?

Gaylord: Our website is Bushbalm.com. We’re on Amazon and Ulta. I’m on LinkedIn.

Argentina Suppliers Fuel Palermo House

Merchants often default to China for outsourced manufacturing. Yet competitive suppliers exist worldwide. For Palermo House, a direct-to-consumer provider of luxury furniture, Argentina is a natural source.

Marco Ferro is the company’s California-based founder with Argentina roots. He was born there, as were his parents, co-owners of the business.

In our recent conversation, I asked Ferro about importing goods from South America, shipping to customers, bootstrapping challenges, and more. The entire audio of our conversation is embedded below. The transcript is edited for clarity and length.

Eric Bandholz: Give our listeners a quick rundown of what you do.

Marco Ferro: I am the founder and CEO of Palermo House. We are a direct-to-consumer home goods furniture brand launched in 2020. We’re known for our Dune Lounger, a mix of a beanbag and a vintage chair. It comes in vegan leather, velvet, and some outdoor options. It’s stylish and comfortable, and people love it. Architectural Digest featured us. That’s been our hero product, although we have a vision to expand into other products.

My dad, my co-founder, designed the chair a few years ago. He comes from a family of architects. He created the lounger chair with a mid-century modern look. It fits well with that vibe and is minimalistic, functional, and comfortable. It’s not super rigid and yet stays in one shape. It molds to your body and changes when you sit on it.

Bandholz: Your suppliers are in Argentina versus China, like everyone else. What are the logistics hurdles in dealing with South America?

Ferro: I was born in Buenos Aires, Argentina, and so were my parents. My dad has many connections to Argentina and feels comfortable working there. It’s not the easiest country to transact with, with challenges around payments and political instability. But the situation is generally favorable. The exchange rates have been reasonable, so we’ve stayed for two-plus years.

As we scaled, we didn’t want to go to China or other countries that may require huge purchase orders. We wanted to scale comfortably. The good thing is that we have a lean and agile supply chain. We can acquire the lounger covers almost just in time, avoiding excess inventory. The filling that takes up more space is made here in California. The covers are made in Argentina, and we recently brought on a supplier in Columbia. But that’s not to say we haven’t ruled out going to China, India, or some other place where we can potentially find more cost efficiencies.

We ship customer orders unassembled in two boxes because large dimensions incur ridiculous oversized fees.

Bandholz: How do you acquire customers?

Ferro: We invest in paid marketing. Our primary channel is Meta — Facebook and Instagram. We also use paid search on Google. Our average order value is over $1,000. That gives us more room to cover acquisition costs.

We do organic Instagram, email, and SMS. We believe our products drive strong word-of-mouth referrals. We don’t have much data to validate that, but furniture, especially a product like ours, stands out in a home. When inviting friends over, it’s pretty visible, a mini showroom for future customers.

Bandholz: You’ve gone beyond the chair, offering home accessories, rugs, and throws.

Ferro: It’s been hard to sell anything that’s not the lounger. We haven’t found the right supplier for those products from a quality and price point. The rugs, for example, are 100% wool and hand-woven, made by artisans in the north of Argentina. I have a rug in my home. It’s thick and beautiful. But making these takes a long time, which is not great for business. They require some investment upfront as well.

Bandholz: Your product photography is fantastic.

Ferro: We shoot most photos ourselves. My dad plays a significant role as an architect. He has an eye for houses, and we will do some location scouting ourselves. It’s a collaborative effort, and we’ll choose the house. It’s mainly been here in Southern California. We use Peerspace — Airbnb is mainly for staying the night. We only need a couple of hours during the day. Peerspace is tailored for that use case for a premium price.

You have to get a lot done in the shoots in a limited time. We have big products. So it’s renting a U-Haul, going to the location, and moving big products around. At least they’re super light. We use male and female models as well as kids and pets. We try to show our products are for the whole family.

Bandholz: You’re bootstrapped?

Ferro: Yes. My dad, mom, and I are the owners. We haven’t raised any outside funding, so entirely bootstrapped. We’ve tripled annual revenue every year since our 2020 launch. That’s created funding challenges. We are starting to talk to potential investors. We like the idea of a partner in the space that can add value, capital, and talent.

In the meantime, we’ll continue running the business as bootstrapped. We’re working on our gross margin and specifically on our product cost. But we never compromise quality and feeling.

Bandholz: Where can people buy your stuff or reach out?

Ferro: Check out our website — Palermo.house. I’m on LinkedIn.

Beard-care Founder on Juggling Brands

In 2014 Eric Steckling launched Brio, a Michigan-based direct-to-consumer seller of beard trimmers. In 2022 the company acquired Ollie, a subscription-based provider of teeth whiteners.

The brands are seemingly complementary. Both sell grooming products. But merging them was challenging. Having been combined post-acquisition, they now function separately.

In our recent conversation, Steckling addressed launching Brio, acquiring Ollie, and lessons learned along the way. The entire audio of our discussion is embedded below. The transcript is edited for clarity and length.

Eric Bandholz: Tell us what you do.

Eric Steckling:  I run two direct-to-consumer businesses. Our core brand is called Brio. We make grooming tools for men, namely a beard trimmer. Ollie is an oral care company that started as a subscription-based teeth whitening strip. We acquired that brand in 2022 and then rolled all of our toothbrush stuff into it. Since then, we’ve developed our own toothpaste and related products.

Initially after the acquisition we ran both brands from Brio’s site. But we realized it made sense to separate them, with the oral-care content on one site and the trimming and grooming items on another.

Ollie was on its own when we bought it. I made some missteps in integrating it with our business. We switched subscription platforms twice and lost many subscribers. We merged it with Brio, but now it’s on its own.

On the Brio side, we can acquire customers profitably from the first sale, but beard trimmers last for years. We have to acquire new customers constantly.

Ollie is the opposite. Getting folks to buy an electric toothbrush is tough. But they come back and purchase brush heads for years.

Bandholz: You’re in a competitive space. How do you stand out?

Steckling: My perspective has changed after 10 years. We can stand out because the big brands have made terrible products in the last 15 years, not necessarily on the high-end, but the $30 versions. The $20 to $50 trimmers from major brands are not very good. That leaves the door open for us. Plus, our customer service is superior. If a customer has a problem with his trimmer, I will help immediately. He would never get that with a major company.

I did a deep dive into Andis, a legacy U.S. trimmer brand. It’s a fascinating story. The company started in Racine, Wisconsin, about 100 years ago as an electric motor supplier. They were good at making motors. But they eventually shifted into a big-box retail business, making $20 items.

It’s an example of big companies leaving gaps in the market that ecommerce brands like us can fill.

Bandholz: You sell on your own sites and on Amazon.

Steckling: All of our Amazon sales are from our own marketing, more or less. In 2014 our revenue was 100% on Amazon. It’s shifted over the years. It’s now mostly on our websites.

We’re not getting any free sales on Amazon. Everyone that buys there looks for us. Our listings are not showing up when folks search for beard products. Still, if we’re not there, we’ll lose the sale for branded searches.

So we’re leaving money on the table if we’re not on Amazon. But it’s a huge pain. There’s a ton I hate about Amazon. We’ve had so much trouble. They lose inventory, deactivate listings, hackers take over our listings, change the photos. You name it, and it’s gone wrong. String and tape hold the system together. It was built 20 years ago and has so many unfixable legacy problems. Although this year, Amazon has been much better.

Bandholz: You have a good system for finding influencers.

Steckling: It helps to have relationship managers coordinating affiliates, influencers, and content.

The most important thing when finding the right influencers is the niche. What is their expertise relative to your products? That, to me, has been the most significant differentiator for conversions. We almost ignore the number of followers because expertise and persuasiveness are much more critical. We’ve had videos with millions of views that didn’t sell anything and others with thousands of views that sold a lot.

With Brio, the best influencers focus on men’s grooming. We’ve tried fitness, automotive, and other male audiences. They don’t work as well. For Ollie we’ve had dentists address niche topics and include our product. The video might get just a few thousand views, but conversion is massive.

Bandholz: Where can people buy your trimmers and teeth whiteners?

Steckling: For the trimmers, go to Brio4life.com. To buy our whiteners and Sonic toothbrushes,  OllieSmile.com is the place. Find me on LinkedIn.

Disputifier Founder on Winning Chargebacks

Mark Wagner believes the best chargeback recovery systems are automated and data-driven. He founded Disputifier, an Austin, Texas-based chargeback software company, on that premise in 2021.

He told me, “We’ve developed an intuitive system over the years. It combines data from the transaction with our testing and identifies an appropriate response.”

He and I recently discussed the state of ecommerce chargebacks and how merchants can recover false claims. The audio of our entire conversation is embedded below. The transcript is edited for length and clarity.

Eric Bandholz: Tell us what you do.

Mark Wagner: I run a software company called Disputifier. We’re an automated chargeback recovery agency. We see over 60% of chargebacks being fraud. These are not impossible to win. It’s more about separating the valid credit cards. Say a crook bought someone’s credit card info on the dark web. That’s a very different situation than a customer trying to get free stuff.

We help with duplicate chargebacks [where a cardholder wins a chargeback, then loses it, then refiles it], which are hard to prevent but easy to win. Duplicates are our highest win rate — around 90%. We attach screenshots of the checkout page and the purchase process for duplicate responses. We submit all the evidence to the card issuer after testing. We have a ton of data identifying the exact way to format a response, which can have a huge impact.

We present the evidence via PDFs. So, instead of using the Shopify Payment’s response, we built our own from scratch. We can highlight specific areas and make it almost like a lawsuit with different sections. We try to format it differently from Shopify.

Bandholz: Do real people at the issuing banks read the documents?

Wagner: Yes, the banks will print your chargeback response and throw it on someone’s desk. That person will manually flip through it and decide whether to side with the merchant when he or she has already agreed with the cardholder. So the formatting and images matter. We keep text to a minimum — two to three sentences. Folks are visual. It’s all in the format, the graphics, the images, and how it’s presented.

We’re software-based, meaning we programmatically ingest data from Shopify and other sources and then add those into our automated response. We manually review our responses to ensure they’re up to par and if we have any custom evidence, but typically over 90% of responses are unchanged from what our system generates.

Bandholz: Can’t you just use Shopify’s fraud analysis?

Wagner: Shopify’s fraud analysis is too basic and not always helpful. It might have 10 data points without explaining the reason for flagging a chargeback as low or high risk. For instance, Shopify might mark a chargeback as low risk even if the order was placed outside of North America and shipped to California. It doesn’t make sense. Conversely, many are flagged as high risk with no serious indicators. If you’re refunding those, then you’re losing money. We’ve run tests. Roughly 7% of Shopify’s medium-risk orders (and 35% of high-risk) turn into a chargeback. So the vast majority are legit buyers.

Bandholz: How much effort should merchants put into fighting chargebacks?

Wagner: It depends on your size, business model, and average order value. It becomes a necessary but labor-intensive process if we’re talking about higher average order values — hundreds to thousands of dollars. If your AOV is lower, you should not spend time on it.

When I ran ecommerce brands, we had an employee who would try to determine if an order was fraudulent. She’d call everyone in the office and say, “Guys, look at this.” End of the day, we still had a ton of chargebacks. It’s an imperfect process that is better not done by humans.

Bandholz: What’s Disputifier’s approach?

Wagner: We’ve developed an intuitive system over the years. It combines data from the transaction with our testing and identifies an appropriate response. It merges the two. It’s a customized response for every order but matches the template. That format has worked for us. It then goes through a manual review and gets submitted on a merchant’s behalf.

We make money by taking a percentage of orders we win.

When Shopify brands come to us, they’re winning around 25%. Our win rate is a bit over 50%, depending on the processor. Alternate payment methods seem to have a fair dispute process, whereas credit card issuers can be unpredictable.

Merchants should always require customers to agree to terms and conditions, including the refund policy, during the checkout. Customers cannot complete their order unless they click the box to agree. Sellers can then reference it if a customer falsely claims a refund. It significantly helps the win rate.

Again, this is for high AOV. I wouldn’t do it on low AOV. Plus, for very high orders — $5,000 or more — merchants should make an actual contract with the customer. This will help with a win, too. Never take a chance with a big purchase.

Merchants should test and determine what that winning response looks like. It’s tough for brands to figure out the entire chargeback process on their own. It’s murky. Every bank has slightly different rules.

Bandholz: Where can folks get your software?

Wagner: Our site is Disputifier.com. Follow me on Twitter at @themarkwagner or on Instagram and LinkedIn.

Swing Dancing Business Booms

Ryan Hunter Masters is a Colorado-based musician who loves to dance. In 2015 he launched Show Her Off to teach swing dancing online. The business sells video courses — streaming and DVD — to booming success.

I first interviewed Hunter Masters for the podcast in 2019. In this second conversation, we addressed the origins of Show Her Off, customer acquisition channels, and his internal litmus test for starting any new company.

The entire audio of our conversation is embedded below. The transcript is edited for length and clarity.

Eric Bandholz: Give us a recap of what you do.

Ryan Hunter Masters: I have a company called Show Her Off. I sell video courses that teach couples how to dance. I won’t turn you into a professional dancer or get you on Dancing with the Stars, but I will teach you in less than 60 minutes how to dance with your partner and have her smiling and laughing. More importantly, couples feel closer and more connected compared to spending time looking at screens or watching Netflix and not engaging.

I teach entry-level social swing dancing. Many couples use it for their first dance. We have hip-hop, pop, classic rock, and country. You can dance to any music genre with this style, which is why it’s so popular and accessible.

Many couples who’ve never danced will start with this program. Some catch the dance fever, the dance bug, and they’re like, oh, wow, this is a lot of fun. Some take it to a local studio and learn professional dancing one-on-one with an instructor. The goal of what I teach is to have fun and give couples the confidence to step out on the dance floor and look good.

I do things that excite me. I love to learn and try new adventures. That’s how I got into this business. I ran a marketing firm managing Facebook and Google ads campaigns. I moved to Colorado, learned swing dance, and thought, “Gosh, this is so fun.” I already had the infrastructure to make videos because I had a fitness YouTube channel called Sparta Strength. I realized I could make videos teaching folks to dance. No business intention. It was purely organic and fun.

Someone told me I should throw the YouTube videos onto Instagram. Those posts got a lot of response and engagement. I made more and then decided to do a full-on shoot. I hired a videographer and a photographer, gathered friends, and found a romantic background for a cinematic shoot in the mountains of Colorado. That content did well. Show Her Off is a romance brand. I look for romantic cinematic landscapes in the background to add that extra emotion.

The business wasn’t making any money for a couple of years. But it was fun. Folks liked it, and I was having a good time. My marketing agency paid the bills. We eventually turned a corner. The business started to blow up. On the side, I’ve been exploring making music and singing.

Bandholz: You seem to follow your passion.

Hunter Masters: My litmus test is, “Would I do this for free because it’s so fun?” Sometimes, you don’t know until you start doing it.

That’s something that traps many entrepreneurs who are starting. They don’t know how an idea will make money. There are so many options, but an alternative way to think about it is there’s something you can do or are willing to do for free because it’s fun. Can you build an engaged audience of 10,000 to 20,000? Somewhere in there, as long as you’re paying attention and listening, there will be an opportunity to make money. You have followers who like you and your products or services. You can solve a problem for them and provide value.

Bandholz: How is the online course set up?

Hunter Masters: We have an online date night program. It began as an in-person romance tour where my friends and I would go around the country to wedding venues. We’d sell tickets, couples would come, and we’d teach three dance moves they could mix and match. I would have a photographer on-site with a lovely backdrop for the couples to get their own selfie photo, and we’d pose them in a dance photo so they had something to remember by, and then we’d have open dancing for the rest of the night.

We always sold those events out. A couple from California traveled to an event outside of Dallas. Our tickets were $35, so they spent 10 times that to get there. Another couple drove eight hours. I realized if folks are investing this kind of time to attend, maybe I could turn it into something else. That’s when I decided to offer digital instruction.

Bandholz: What are your busiest times of the year?

Hunter Masters: The week before Valentine’s and the week before Christmas we have a 400% increase in business. It’s a huge surge in customer support, ad management, and paid traffic. During those periods, I’m up at 7:00 a.m. and go to bed at midnight; for the most part, I’m on the computer all day. I call it my day trading hours.

For the busy weeks, I use a bid cap strategy for Facebook ads. It’s very technical, but it’s basically manual bidding inside Facebook. I bid way more than I would pay, and that pushes out other advertisers. I know from tracking my historical data this is the time I can do that.

It’s still a gamble. I stand all day and refresh analytics, monitor Facebook ads, check Stripe, and ensure everything’s trending up. If an ad starts to drop, I’ll immediately pull it down. Experienced advertisers advise bidding one and a half times your cost per acquisition. If your CPA is $100, bid $150. I might do three, four, five times my CPA. I’ll start with $500 to get it rolling.

Bandholz: Where can listeners buy your program?

Hunter Masters: Go to ShowHerOff.com. We are on Instagram, YouTube, and Facebook. Check out my music at Hunter Masters on Spotify.

New Beginnings for Beardbrand

The last time I discussed my company in an episode was in July. Things were close to their worst. We had furloughed our team for a month. But now, thankfully, the team is back to full-time. Our current strategy is focusing on Facebook as an acquisition channel. We switched our Facebook marketing approach from multi-phase testing to bid caps, something I learned from Andrew Faris.

We made the change at the beginning of October, and we’re seeing our cost per acquisition fall in line with our expectations for profitable growth. The downside is we’re getting only a few conversions daily due to the negligible budget. We’re still trying to figure out bid caps and how to create content that scales on Facebook.

New Channels

I’ve learned we constantly need to try new tactics from a tiny percentage, but not at the rate of putting our business at risk. Paul with BK Beauty was on the show a couple of weeks ago. His company continues to blow up — TikTok Shop has been a significant player in their successes. We’ve been trying to get our TikTok Shop up and running, but thus far TikTok Shop has been the buggiest software I’ve used.

Beardbrand launched on Amazon in January of this year with the hope of replacing the volume we were doing on Target. Amazon ramped up within the first three months. We stayed at that mark for the next six or seven months. We’ve had some growing pains with Amazon shipping the wrong products and a few review issues. It’s been a challenging platform. Nevertheless, as of a couple of days ago, it looks like we’re approaching a seven-figure annual run rate on Amazon, which is halfway to our goal.

Inventory

In July we had just hemorrhaged a ton of cash. Fortunately, we’ve seen our cash flow even out, and we’re in a better position. I’m not losing sleep anymore. We’re not throwing a lot of money back into savings, but I don’t want to significantly scale back the business from where it is now. I want to stay lean. That means ordering smaller inventory amounts than I would typically feel comfortable with and being okay with selling out to ensure that all my cash is not tied up in inventory that might not move.

One of our strategies is to be heavy on cash and light on inventory. There is the risk that we won’t make any money if we don’t have any products to sell. But if we’ve got all our capital tied into inventory that’s not moving, that’s not good either. It’s nice to have the flexibility to allocate resources to opportunities that may significantly impact us. We won’t go out of stock on our top-selling products. But we will delay ordering slow-moving items into the holiday season and focus on your best sellers. As this recession moves behind us, we hope to have a fuller inventory again.

Incentives

I’ve always wanted to build Beardbrand without incentivizing through discounts and promotions. However, being inflexible with discounts did not allow us to grow as we wanted, so we’re exploring offering discounts to new customers and subscribers. As a result, we have seen nearly a doubling of our subscriber list and some success driving up our average order value, too. We did that by raising our prices and launching a bundling program. We compared the bundling offer to a percentage-off tiered bundling system where you spend more and get a bigger discount. The free items drew more action from our customers.

The downside of the bundling program and the higher price point is that our conversion rate has decreased. Overall, our net revenue is down. However, we are not hemorrhaging cash anymore. With a higher order price, we’re doing fewer orders, so we’re putting less of a burden on our team, and we have fewer customer service tickets to fulfill. If you’re planning to build a business that you want to run and operate for years, think about developing a pricing and service structure for the customers at a higher price point.

As we approach Cyber Monday and Black Friday, we historically have an ongoing promotion called Decembeard. It’s a daily giveaway. Customers enter by placing an order, and depending on the order number, one out of 10 buyers will win a $25 gift card. We’re doing it for the first 10 days. When we go to the 10th of the month, we raise that to a $250 gift card, where one out of 100 will win.

Perspective

Beardbrand is now at a breakeven profit-wise. That’s not what I expected after 11 years, but I’ve come to terms with the fact that this is essentially a new business. I have to look at Beardbrand from a startup perspective. What worked for us when we launched in 2012 is entirely different than now.

I have to remind myself that being in the arena is the goal and to focus on the wins. The benefits of a win, such as a higher AOV, will compound for the business. If you’re struggling now and things seem hopeless. I’m right there with you. It is not fun or confidence-inspiring. But fight forward. Find opportunities and make your business what you want it to be.

To check out how we’re incentivizing this holiday season on our website, visit Beardbrand.com. Feel free to follow my Twitter for updates.