My First Million - Greatest Hits #2 - How to Build a $100 Million Deodorant Business Starting With Only $1,000

Episode Date: May 10, 2021

Shaan (@ShaanVP) talks to entrepreneur Moiz Ali (@moizali) on today's episode. 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!  --------- * Want to be featured in a future episode? Drop your question/comment/criticism/love here: https://www.mfmpod.com/p/hotline/ * Support the pod by spreading the word, become a referrer here: https://refer.fm/million * Have you joined our private Facebook group yet? Go to https://www.facebook.com/groups/ourfirstmillion and join thousands of other entrepreneurs and founders scheming up ideas. --------- Show notes: * 12:40 - How Moiz got his first product made and first few sales * 21:00 - The highs and lows of entrepreneurship * 27:40 - How to iterate quickly with a physical product * 32:55 - Shaan rapid fires questions at Moiz to understand his mindset and business at the time * 46:33 - How Moiz sold Native * 58:30 - Moiz talks about his doubters and how it fueled him

All right, what's happening? This is another edition of My First Million Greatest Hits, where we look back at some of the past episodes and do some callouts of my favorite parts and explain to you why they're interesting. And well, you'll, you'll understand in a second. But this episode, Sean actually said it's his favorite episode of all time. Last week, we just did one with Suli Ali. So Suli Ali, if you go through your Spotify or iTunes feed, you'll see the Suli one. He started and sold this company for $100 million. And it was really great. Awesome guy. I love him. I know him. I think he's great. But this episode is actually with his brother, his younger brother, probably three years younger.

And he sold his company for $100 million, except this company, sorry, Suley, is more impressive. And it's more impressive because he sold it for $100 million with zero money raised. So he, um, well, they actually ended up, they raised like $400,000 like weeks or months or something like that before they sold. But basically he started the company when he was at his early. 30s for like $1,000. And in only two and a half years, he scaled to a $30 million run rate. And then he sold the company for $100 million in cash to Procter & Gamble. And he did that all in two and a half years. And I was actually with him. So Moise and I, we actually shared an office when he started the company. It was like a really small space called Founders Dojo. And if you

look up like Sam Parr Founders Dojo, you'll see an article in a video I made on that spot. But it was basically like eight of us working out of a small office. And Moy's was tinkering at first. He was like, maybe I'll sell mattresses. Maybe I'll sell. I forget all what he wanted to sell. And somehow he came across, you know, maybe deodorant would be cool. And so we started this company called native deodorant. And he didn't know really much about anything. And in the podcast, he goes, I don't know anything about deodorant. And all the critics were like, why are you launching this? You have nothing about deodorant. You don't know what you're doing. And he goes, you're right. I don't. But in six months, I'm going to be an expert on this. And I'm going to know more than all

you combined. And this is him talking to people saying, like, what are you an idiot? Don't get into deodorant. That's, that's silly. We know what we're doing. You don't. Stay away. And so anyway, it's a great episode. And the reason why this episode is great is for actually two different reasons. One, Moise is in a, this is like a compliment, but he's kind of unhinged. He's kind of a nutcase. And you're going to hear that. Not necessarily in a bad way, but he basically says who doubted him. and he like even names names, but he'll say who his fulfillment centers were and who his early manufacturers are. This is like a question that a lot of people say. He's like, hey, I'm going to start this company. Who do I get to fulfill this product? Who I get to make it? Well, he just

actually says who it was. He goes, hey, I found this person on Etsy and he says their name and I contacted them and here's what I sent them. He also gives away numbers. So he's like on launch date, we got on product time and we actually made $1,000. But then for the next three weeks or something like that we made like a hundred bucks a day and i was spending this much money in ads and it wasn't working and see i he names all of it and it's incredibly interesting and he also will say yeah these 14 people try to buy us here's how i sold the company and what i told them and what i wrote to them in the email he gets very specific so i think that's great also what you're going to hear is moise is a fucking animal like in a again in a good way but he's pretty ruthless about he's like this is my goal

i'm going to get after it and he oozes with confidence and i think that has always worn off on me whenever I hang out with them. And yet, in this podcast, you'll say, when this thing happened, I thought, this is over, I'm quitting, I'm out, I can't do this. And so it's kind of fun to hear, or maybe fun's not the right word, but it's kind of, I don't know, helpful to hear people who you look up to and think are the best. And these incredibly confident people have doubts. You know, it's helpful to know that everyone has that. And so I think you're really going to like this episode. It's pretty amazing. So this is Moyz Ali. He started and sold the company called Native Deodorant in two.

two and a half years for $100 million. And just so you know, here's a few of my favorite parts. At minute 10, he talks about getting his first testing bits of deodorant. So his first sticks of deodorant to test and how he found them on Etsy. At number minute 12, he talks about the first few days of sales and how they got their first $1,000 in sales. And then what happened after that? At 20, he talks about the emotions of winning and how he felt on top of the world.

But then hour by hour, it changes from like, oh, no, I can't do X. I'm going to quit. This sucks. and then the next hour, oh, I can get this done. I can do this. Oh, the next hour, oh, this is done. I'm over. It's pretty interesting. And then in minute 43, he talks about selling the company. He goes incredible depth about what it took to sell the company and the process.

And I actually listened to this when I was selling my company and kind of learned how to do it. Minute 49, he talks about the way he strategically placed his company to get bought. So he said, like, you know, if we're doing this amount of money on revenue online, what would happen if you plugged us into Target, which you guys are experts at, you know, the outcome could be much bigger. And that's actually how we use the sell. And then at minute for 56, for the next 20 minutes, he goes unhinged. He talks about the people who doubted him.

And he names names. And we actually had to go back and bleep this out. It's pretty amazing. So anyway, give this podcast a listen. I think you guys are really going to like it. And make sure to on Spotify, click follow. And then on iTunes, click subscribe to this podcast because we're going to be releasing about four or five more of these.

And then we're actually going to do a few other special. edition episodes that you're going to you're going to have to keep your eyes out on or keep your ears open for and it may not be every week it may not be every day it could be three a week and then zero for the next two weeks it all depends on you know we got to go back in time and actually listen to all these episodes that make sure that they're good and find the the gem so click subscribe click follow and enjoy the episode I feel like I can rule the world I know I could be what I want to I put my all in it like no days on At some point, we tried to raise more money.

And, you know, 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. Okay, I got to say it, this was my favorite episode of the podcast. What you're about to hear is an episode I've done. just recorded with Moise Ali. He is the founder of native deodorant, which is a natural deodorant. It's basically a $12 stick of deodorant. My wife just bought it. She doesn't know

that I know Moise. She bought it because she didn't want to use deodorant that had aluminum in it or paraben, 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, over two and a half years, he built this company raising very, very little money, mostly because investors 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 and Gamble for $100 million. I like 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 going to love this episode.

Let me know what you think. As always, you can tweet at me. I'm at Sean v.com. Or email me, pure.com. Love to hear from you guys. All right, enjoy this episode. Native deodorant. You build a deodorant brand of all things.

Yeah. 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 $100 million. 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? So I'm in New York City running another e-commerce business. I'm buying like Axeodorant from a Dwayne Reed at 14th and 3rd in New York City. You know, 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've been seeing this problem for the last four years since I've been buying the deodorant from Dwayne Reed. And, you know, I'm an attorney. 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.

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 not a hair-on-fire problem, but a problem large enough for me to solve. That's how Native starts. 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, I'm about to have him on the podcast.

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? What is paraben? I actually don't even know. Look, the real thing that we shoot for is, like, we're aluminum, paraben, and phallate-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. I see. 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 it an aluminum-based product, it's called an antipersprint. 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. And so 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 antipersprone every day, we're generally not in an environment we're going to be sweating a ton. So it's like taking an Advil in the morning when all you need is glass of water. You're like dehydrated. And so 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 likened using native to an antiperspirin. I was like, look, you're probably working in an office job or a lot of our customers are working in office jobs. You don't necessarily need all the effects of an antiperspirant. An aluminum-free deodorant will do the job for you. And so you say we, but at the beginning it was just you, correct? That's right.

So we launched the company in July 2015. I remember I bought the domain name on my birthday in July 20, 2015. Why the name native? Why that domain? 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. But what do you mean launched 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? Yeah, great question. So launch 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 didn't think this business will work out.

Like, are people going to buy a deodorant online? Generally, they're buying it Dwayne Reed'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 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. We get one sale, and I'm like, okay, this business is over. Forget about it. Like, I'm not going to 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. Right.

So you literally launched without a bang. That's right. The opposite of a good launch. Yeah, exactly. The opposite of a good launch, one sale, had zero product in inventory. I was going to email the guy and basically be like, look, we were trying this out. It didn't work out. We're going to refund your order.

Have a nice life. Right. And then what happens is I'm working out of this co-working space called the Founders Dojo. And one of my friends in that co-working space is like, hey, I know an employee of Product Hunt. And what I'm going to do is I'm going to 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. And what was the little tagline at that time? Because I know that for businesses, the pitch evolves. Like right now when you describe 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 kind of suck. Are they, you know, over time they suck less. Yeah, yeah. Oh, it was terrible. What was it at the time? I think it was like invest in yourself. I'm not even sure. It was like, and you know, we had gotten a financial product. 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 Deodorumum. 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. Right. So as a result of 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 going to buy a hundred of these things. Right. Ship them over. We have a tangled history with the guest. that you're going to talk about. So you mentioned product hunt. We had Ryan Hoover on the podcast. Yeah.

You mentioned Founders 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 sort of listened podcast. Oh, good for him. And so he said that, he said to hold 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 work better.

Was he full of shit? Was this real? No, that was definitely real. Before I launched Native, I was like, okay, you know what? I want a natural deodorant that works. So does my sister, because she's pregnant. So I started testing every deodorant I could find. I tested like the Tom's and Mainz of the world, the Schmitz of the world, the, 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. Gotcha. So you order that first batch. You're trying to fulfill the first 50 customers.

Yeah, I'm living out of like Solomon's apartment. I moved to California like, you know, during that time period, basically. Move to California, living out of my brother's apartment. Order 100 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 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 pig style himself. And so we're shipping these boxes out. We ship 60 out. And then sales start dropping because, you know, we're off a product on. 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. This is a deodorant. Let's take a chill pill over here. This isn't that compelling. And this is in 2015. You know, like, today there's a new natural deodorant that launches every day. In 2015, 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 spend five. How much money? Yeah, it sounds like you're going to 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. Yeah, I'm the cheapest person in the world, so I probably spent like a grand launching the

business. So the first $500 was to buy products, and the next $500 is to like buy Google Ads. And I'm buying Google Ads and I spend $500 and I get like $100 and I'm like, this is not working out well. I found a way to burn money. Yeah, exactly. And this is 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. We start advertising on Facebook. And 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 2015 or maybe

September 2015. 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. And I'm going to guess you're now, you know, company got acquired, companies much larger, lots of people in the company. Do you still get hands on with the Facebook ads? Definitely. You're saying today. Yeah, absolutely. Yeah. I mean, that, like, that's my, 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 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, Moy's, this is a fantastic business. I used to be selling, you know, products at a farmer's market. And now I'm making 500 dealers for you a week. You know, they're charging me about $6 a unit. So it's pretty expensive. Right. And I'm like, okay, great. I'm glad this is working for you. And she's like, we're going to scale this business. We're both going to, 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, 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 want to be making these deodorant.

in my apartment. Like at some point, well, Solomon doesn't have, he doesn't even have pots. We're not going to be able to make this over here. And so I'm like, okay, maybe this business is over. And then I'm like, 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. 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 want to make who can I get to make this I call some guys up like there was a guy in Chicago I'll never forget I called him up he 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 I'm like you 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.

Red flag. 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 want more than 80. I'm not going to, 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. Wow. 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 Fafilco. 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. 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 zip car 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. And you have like, how many units are we talking here? 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. That's a lot of lotion. It's a lot of lotion. Yeah, it's no deodorant and a lot of lotion. And so our manufacturer at the time, 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 deodorants 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. 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 move to a new manufacturer. Like, what are we going to do here? And are you the type to get down on it?

What's the, like, when stuff like this gets horribly awfully wrong. Yeah. Are you, some people go inwards. They get very quiet. Some people get angry. Some people get sad. Yeah. What's your reaction? I'm like all three of those. Anger is the number one thing for sure. Like I'm fuming. But I think for like the first hour, I'm just like, forget it. This isn't worth it. And I think 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'm quitting. Right. Divorce right away. Yeah, exactly. Divorce right away. And then like hour two comes along and you start getting like determined and you like, you know, grate your teeth and you're like, wait, I'm better than this.

I'm going to fix this problem. I've got something that's working for me. This is not going to stand in my way. I don't care what it takes, I'm going to 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 going to succeed. You're like, thank you.

Thank you. Bring it on. Yeah, exactly. Yeah, I'm like, problem. Don't worry about it. You've got the best problem solving the world right here. And so, you know, 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, 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, I've got hair under my arms. 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? And a lot of people, like, you know, we had done hundreds of these formulas. I was at home, I would rub the formulas on T-shirts, throw them in the washer, the dryer, and see if they stained shirts. And, like, you know, 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? 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? Yeah, that's right.

You did an e-commerce site. That's great. You didn't make the stuff yourself. You found a manufacturer. sure just by Googling who the heck makes deodorant. Yeah, that's right. 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 are you figuring this out? 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 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, is 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 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 it, 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, like, way more flaky. So you're like, you know what? It's the oils that make it glide well.

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. Definitely. So one, we've never used a Chinese manufacturer. all of our deodorants are made in the United States 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 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. 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-perspirant, 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. Right. Okay. And we're going to jump back into the story, but one more tactical piece.

When you, when I build, I build products that are like software. Sure. And with software, it's pretty easy to iterate. It's pretty easy to, 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. It's very easy to do that sort of thing. How can you talk tactically about how you iterate with a physical product?

Sure. 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, we're vocal and be like, hey, I love your deodorant. I'm going to 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 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 purchase from us and tell us what you like more. And like, that's the type of feedback that we would do. early on. And that's unusual, right? Like, I've bottled deodorant my whole life. I've never had anyone from the deodorant company ever reached 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. Yeah, I guess that's

true. I mean, the way I think about it is if you buy... In a good way. Yeah, if you buy deodorant from Target and you, like, you know, you buy an ax deodorant from Target, you're never going to 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, 20 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? 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 AB tests along huge swaths of the population. So we'll send, you know, the shons of one world, baking soda that's milled to a certain particle size, and Sam's of the world, a baking soda that's milled to another particle size and we'll monitor your reviews six weeks after you purchase and your repeat purchase rates 12 weeks after you purchase and say, you know what? The Sam's of the world are buying again more frequently than the Shons of the world. And as a result, it must be that the formula that we sent to the Sam's 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. That's kind of amazing. Is that

standard? Because I've never heard. 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. 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. 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, uh, 1% of this ingredient or 1.05% of this ingredient to see what's better. Like you're like nerdy deodorant stuff. Yeah, exactly. We're getting into, yeah, we're getting into the weeds as much as possible. 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. So we talked to our manufacturer and we're like, look, 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'd been working on 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. 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. Customers are irate, just absolutely irate. And I don't blame them. Like, you know, deodorant's not something you can really go without. It's like toothpaste. I need this. So I'm going to go get another product.

They're irate. But a lot of them are really kind and they're like, hey, we appreciate the honesty. We're willing to be patient for it. Two weeks later, we start shipping it out. This is May 2016. We're probably doing around 100K in revenue at this point. And immediately we see reviews go up. The quality of our reviews has gone up significantly.

Six weeks later, we'll start seeing repeat purchase rates go up as well. We can monitor the cohorts. And early on, we get a really good indicator that repeat purchase rates are going to be substantially better with the new version of our formula as compared to the old version. 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 100K in revenue a month. I'm still the only employee at the company. I was going to say how many people are there. So you're saying we, but we is me in this case. Just me. Just me. You're doing

100K 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 operation. So I'm talking to the manufacturer all the time, doing Facebook ads to understand, like, product market fit. So let's talk money for a second. This podcast is called My First Million. Yeah. It's called My First Million because since, you know, when I was growing up, I wanted to have a million bucks. Yeah.

Who doesn't? Who doesn't? Exactly. I was not, 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. Definitely.

I'm not afraid to say that. And 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 going to have to make an amazing product that customers love. Otherwise, why would they give us their money? And so I like to 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 9 to 5 job.

They have aspirations of either leaving that job and going and starting a startup or they're doing a startup and it's not quite taking off. You know, they hear you say, we're only at $100,000 a month in revenue. And they're like, oh, my God, I wish I could get to $100. $100,000 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. Sure. I was an attorney in New York for a couple of years. And during that time, I 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 having to worry about having to worry about, you know, food or vacations, but I haven't bought myself, you know, 50 years of not having to work. Right. And so now you get to this 100,000 a month of revenue. Yeah. And it's taken the business about how long at this point? It's taken about 11, 10 or 11 months. 10 to 11 months. Great. And what does that mean for a deodorant business?

So you make $100,000, but margin-wise, what were you able to take home at the end of that? Sure. Were you break even? Were you better than that? How were you doing at the time? So we were selling $100,000 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 $100,000 in business, I'm guessing, because I don't really remember. I'd say the company probably made about $8,000 in net profit selling $100,000 of deodorant. And you and your brother are very business savvy. invested in, I don't know, 80 plus businesses at this point, 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 where 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 deerrant businesses that were startups. So how did you think about this business. 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.

Right. 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. 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. Yeah, definitely.

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

And this was friends and family, or this was... 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 $3,3001,000. 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 a 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. 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. And what was your schedule like? So you're saying Saturday, Saturday is customer service day. 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, I work 18 hours a day kind of guy? Or tell us about like kind of your schedule.

Yeah, I was like, I was waking up and going to work. Yeah, I mean, I'd work until like, you know, 7, 8 p.m. 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 p.m., turn on Netflix. And while I was watching Netflix, I'd be packing boxes and shipping them out. Right. And so it was long days. You were Michael Scott. You were Dwight on sales.

That's right. Yeah. You were Daryl in the warehouse. That's right. Yeah. You were the whole office. 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 purchase. Like, you know, we've got a higher repeat purchase, right? 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 need so much. help here because 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 it together I thought I was done with customer service we double the business and it turns out she and I are both doing customer service all day so we hired a third customer service or we hire another person a third uh 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 the, 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. Because we didn't expect to 10x the business over the course of. five months. And so our manufacturer is running behind. If you buy the deodorant on a Wednesday, it probably gets May Friday and ship to you, you know, the following Wednesday. 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 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. So what caused the business to grow from that 100K a month to a million a month? Yeah. 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 isn't getting better.

But 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? There's three things. One, word of mouth is growing a ton. Like, you know, 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, which was the most important thing. So it's compounding. 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 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. So it sounds like focusing on repeat purchase was a key insight that obviously if you're in DDC businesses, that's kind of known as a good standard. But if you're new, you know, that's something to, hone in on. Did you know that at the start? Did a mentor tell you, hey, repeat purchase rate is the thing to key in on? I think for like, it depends on the product you're in. If I was selling Casper mattresses, I would be concerned about new customer acquisition because how many mattresses is someone going to 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 but 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 ax deodorant from like, you know, probably 12 years old till I was 30 years old, 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. And why were you able to charge $12 for deodorant? Is it still $12, by the way? It's still $12. It's $12 at Walmart, $12 at Target and $12 at our own site.

And really, the way we did it is I worked backwards. Like early on, the deodorant cost us about $6 to make. it cost us $3 and some change to ship. And then it cost us like another $1.50 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 $11 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 $12.

Otherwise we're going to lose money on every single order. And so that's really where it came from. And a normal deodorant, you know, acts 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. Yeah. Three bucks.

Yeah. What is it? Three to four dollars is like a traditional priced antipers. Like a traditional price antips. So when you were going into this, if I was your friend at that time, I would have been like, hey, but you're going to be able to 4x the price of deodorant? Like, are we sure that's a good idea? Yeah. I guess really what happened is by the time people started asking that question, I was like, we're doing a million dollars a month.

So I think we're okay. Okay. But I do remember, like, we had this one question from an invest. 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.

And so I think from our perspective, we were like, look, there's a lot of external factors that say we should not be doing this. Yeah, $12 deodorant is really expensive. the entire natural dealer in industry when we launched was Tom's of Maine, which was $30 million. 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. And that's how it worked out. Like, you know, by the time people were telling us it's a $30 million total addressable market, we were doing that much revenue.

And so you've said the phrase customer service a bunch. Yeah. 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 something specifically that your actions back up your words.

I saw some little things like, you know, you know, first the stories you told about reaching out to customers. Yeah. Many 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. Talk about some of the things you guys have done on the customer service or customer obsessed side. 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. 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. One is when you order from us, we send you this over-the-top order confirmation email and over-the-top shipping confirmation email. When you order from us, we say, hey, we're popping bottles of champagne and this is fantastic. And when we ship the order, we say, hey, look, we're writing your 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. 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, we're really happy. We take it very seriously. Yeah, exactly. Yeah. Like, this is deodorant, and so, like, we know that this isn't like product that you're going to, is going to 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. So you've hit the scale that really matters now. You're doing a million dollars a month.

Yeah. At this point, you know, any non-believer at this point has to sort of be things. You know, 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? There's probably about five employees. Wow. And so you've got this business on your hands and you ultimately decided to sell. What was the thinking around that? Why decide to sell when things are sort of when the going is good? And I'm going to 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 decide to sell in the first place? 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'd 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 was 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 they're like, okay, great, send us all of your financials and your information. I sent it out in like June of 2017. They don't even reply back for like 90 days afterward. Like they're just radio silent. I follow up with them and 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 X, or from like a, you know, a Tinder date is what's happening to me. And were they, you think they were just picking your brains to get the numbers from you? And then they were like, great, thank you very much. Or what, or were they were just bureaucratic internally? I think they were just like, I think there was like a little bit of a brain drain going on. And I think that it was also just like, you know, they have their own business and they're like, you know, maybe this is too small. We're a billion dollar business. 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 down 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 a business or like a month before we sold a business. And they're like, okay, yeah, we're interested again.

And I was like, no, 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. Right. And so you're selling the business. Do you feel like you know how to do this process? Definitely not. This is like, you know, look, 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?

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 were interested signed 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. The banker put that together or you put that together? The banker and our team put that together. So a bunch of people have this book. And then what happens is that they send us letters of interest where they're basically like, yeah, we are interested in this business. If they are not, they just go away. 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 guys who I think are really serious about this. Like, if some guy's offering you $10 to $20 million and you're doing $40 million in revenue, probably don't

not worth a conversation. So, you know, 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 a conversation with Moyes. And so I'm saying, this is like the bachelor. You're sitting there with the roses and you invite them all to the party. 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 talk to them.

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&G will send out like, we, you know, we were sitting in my brothers. We were squatting in my brother's office. He has a large conference room that can probably seat like 18 people. P&G sends like 25 people. And I'm just like, there's a standing room. here we didn't expect this and don't expect me to pick up the tab for lunch right 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 that 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 right 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 yeah 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, look, that's really aggressive, incredibly aggressive.

We're basically like, look, we've got this awesome business. You want it. There's a bunch of you guys. There's one of us. Twelve of those guys in that room are paid to, like, do a 90-day diligence process. Yeah, exactly. Oh, what am I doing here? Yeah, that's exactly right.

I'm out of a job here. 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 a aggressive enough. Like, we think they're going to be better strategic fits for this business, and it's not worth our time to put in an offer. A couple 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&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. Do you know how to sell in Canada? Great, this is going to be a bigger business. So we sell that sizzle. That's strong. I like that. Yeah, that is really strong. And so like a couple 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 up price by half. And then push comes to shove. And P&G hasn't done a deal in like 10 years. This is the first acquisition they're making in 10 years. So our bankers, 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&G, nobody's seen them in the world in 10 years. Yeah, they got a pop of Niagara just to do a deal like this. Yeah, exactly. They're not used to this.

Yeah, exactly. I don't even know how to, like, get a reference on P&G to see if they're serious because no one has seen them in the market. And at this point, had you put out a price yourself of like, this is our target? No, you're letting everybody come to the price. We're letting everyone come in with beds. And did you, what did you internally? what does you internally think about this? Are you dreaming about a certain number?

How are you internally thinking about the price? Great question. I'm not sure. Like, you know, there are times where I'm like, okay, like the month closes. And I'm just like, we generated, you know, four million in revenue 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?

We had this like hiccup because of operations and like, you know, something happened. And now I'm like, okay, I'll take anything. Yeah, take it off my hands. Somebody come in and give me anything. And, like, you know, 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 launch 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 barely, like, 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, so you're up at 2 a.m. preparing these things for them. And there's like a bunch of these acquirers.

So there's a bunch of them. Some guy, like the guys who were most interested in the business ended up dropping out 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 it's like a roller coaster. 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? And I remember when we were going through the process just now,

because it's pretty fresh on my mind just a couple months ago, there are these moments where you're having a conversation and certain things, it's like they say something. And 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 there are these key moments that are just happening over a coffee or on the phone or whatever.

Do you remember any of those kind of conversations? are key moments along the way. 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 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, if your brand was represented by a celebrity, who would that person be? And I was like, I know that. 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. Wow. He's like, that's a good answer. That was great. But in reality, we had a trademark issue until we sold the business. This was a serious part that delayed the transaction with everybody and that I think made it harder for us to sell a business. We simply didn't own our trademark 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&G was like, we will not buy this business until you own your own trademark, which was completely fair of them. and we were like negotiating with the person who owned the mark for a simultaneously yeah exactly in order to get done 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 your deal hasn't fallen

through yet it's not a real deal like i was talking to so michael birch was on this sitting where you're sitting a couple weeks ago and he sold bibo to a well 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 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. Oh, God. And the music companies knew, hey, these guys are about to sell. We have all the leverage

in the world right now to just go ahead and sue and they'll have to pay. They have to settle because they want to close something to the deal. So, you know, they go and sue, and I think it's like a $15 million, like settlement is like needed or whatever. So Michael goes to the investors, the VCs and he's like, hey, I might have got the numbers wrong, but it's something like 10, 15 million bucks. He goes to the VCs, he's like, hey, look, to close this deal, we really need to just settle 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 got to settle with them. And he's like, we got to settle with it. And they're like, no, no, I think you're going to settle with him. 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. Definitely.

But these are the crazy stories that happen at the end of the deal. You know, right when you think you have it. That's really terrible because, like, I never felt it wasn't a Wii 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 going to try and vote no and fuck this up, I would have, like, been devastated. Right. And, like, felt like there was a knife in my back.

Right. So I don't know who those investors have. They are they're not great. But I hope he should mention their name everywhere he goes. Yeah. So this is actually that mindset. Your brother has 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. Yeah. It's like, if you wrong me, I will publicly write the wrong for the next 50 years I'm devoted to it. Give me an example of this. Yeah, sure. I'll give you an example right now. There's this company called.

They said no to us because I was like, hey, I want to launch this refillable deodorant. Early on when we were launching a business, I was like, hey, we're launching this refillable deodorant. They're like, no, this is terrible. Get out of year. And like, you know, in the last six months, I don't even remember what, but they invested in a refillable deodorant. And I'm like, well, I see that you're doing a refillable deodorant.

Now it's a bad idea, huh? You reached out back? No, I didn't even say anything. I was like, this like stands by itself. Like, you know that you're doing this and I know that you're doing this. Right. But, like, you know, do what you got to do. but you could have had the opportunity four years ago.

I also heard the sort of, once you get to Procton 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? Basically, what happened was sent us this letter. And so I tweeted at, 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, 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's called someone a P&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 I was like, you come after us, we're building this wall 10 feet higher. Where did they come from? Where did that strategy or mindset come from? Is it like at an early age where you doing this with your brother, like competitiveness with him? I think it came from him. I think he 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 people are like, Moise is vicious. He's just more charismatic, so it comes off nicer. But he's got it himself for sure. I love it. Okay. So the offer does come through. Procting Hable was serious. Take it from there. How did it end? How did it feel? And where are you guys at now? 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 try and do something at the 11th hour? Because 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. Damaged goods. Yeah, exactly. And so there was a lot of deal certainty with P&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. Right. 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 going to, I mean, there was only five more days, but I knew the deal was going to 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 deodor in Target, the number one selling natural deodor in Walmart. Native coconut vanilla is the best selling deodorant skew at Target over the last 52 weeks and we haven't

even been there for 52 weeks. One question on this, the sort of what's a, it's not flavors. What's the sense? Yeah. You had these like, I saw it something like a pumpkin spice latte scent. Yeah, definitely.

Is this like, is this just like your marketing genius or what is it on here? 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.

Right. 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 sense? 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 and vanilla scent. This is what I love about businesses and startups is if you're proctor and gamble, you're not afraid of Unilever. you should be really afraid of the moyes 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 definitely actually the threats to these like giant multi-billion dollar companies because you have creativity and you have nothing to lose yeah exactly a fresh perspective yeah 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 as like do not be afraid and do not 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? 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 can 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 are 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 have a fundraised what are you doing this isn't a real business until you've got some 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. Like, I know what's working at my company. And so I'm going to keep doing that. I don't want any of this advice. 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 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 as 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, success already or like momentum. And so it's, it's, if you don't have that, trust your gut. 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, you know, from a 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 going to try and do two million dollars a month next month. 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 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 it's up to you and like your like live and die by your own merits. I love it. And what was it like when the deal closed day of money hits the bank? This is my first million. Yeah. People want to know what is it, what changed? What did it feel like? What did you do? Did you start bawling out of control? Like tell us you started bawling out of control a little bit. 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 days before we actually close the deal. Our first investors, this Chinese

guy named Waygo, 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, 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, every 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, 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 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 close 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, 90-some percent of the company is controlled by me. And like, my family's in town to help celebrate, which I'm a lot. 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. You just say that because you have money. 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 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, 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. How are we going to solve this? How do we delight customers? How do we make, 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 the 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 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 why is a lot actually has made a bigger impact on me. Yeah, it just makes me happier. Like, being in the team makes me happier. And like, you know, now when I go to restaurants, like, one of the, the best thing is I'm just like, I'll order whatever I want. Right. 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 try and spend a lot more time with my family. So I, like,

we'll go and fly and visit my family more often because 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 or 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. If you were 21 today, starting from scratch, 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 time and exuberance of a 21 year old. If you were 21 today,

what business would you want to go start? What space would you want to go? into. 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 drop shipping 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 and to,

I can 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. Like, you know, even if you have to, like, 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 a toothpaste,

and that didn't work out. Now I'm trying to sell something like, you know, deodorant. Go for it. Like, 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. The one feedback I'd give after you, chose that category is do not disconnect yourself with the consumer love it and 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 my my 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 sure look if you're in e-commerce and you're like you know 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 like you know 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. Like, if you want to do this, quit your job. That's the biggest telltale sign that you're in. If you're not in, like, don't go around asking everybody, hey, 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? Happy to answer any questions. Happy to talk to you. You can find me on LinkedIn, certainly. I'm at Moyz Ali 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 is what I like to do on the weekends. I love it. All right, man. This is fantastic. Thank you so much for coming on. Thanks for having to me.