Podcast Summary
Core business focus: Focusing on the core business and direct-to-consumer sales can lead to improved customer experience, valuable feedback, and effective scaling of new products.
When facing growth and prioritizing resources in a business, it's essential to identify the core business and focus on what's working best. Jeff Rader, co-founder of Harry's, shared his experience of feeling overwhelmed with numerous ideas in the early stages of Harry's. He learned that by focusing on their core business of selling products directly to consumers, they could improve the customer experience and gather valuable feedback for future product development. Direct-to-consumer sales allowed Harry's to make adjustments based on customer feedback and scale new products effectively. When dealing with competing revenue channels, founders should assess which area is generating the most success and invest time and resources accordingly.
Resource allocation for manufacturing vs catering: Pivoting from retail to wholesale required Uli to make tough decisions on resource allocation, resulting in catering generating less than half of his revenue this year compared to last.
Uli's successful pivot from running gelato shops to selling wholesale ice cream required making tough decisions about allocating resources between catering and manufacturing. Uli's business journey began when he noticed the lack of flavorful food as an immigrant from Azerbaijan and started making his own gelato. He started his business 12 years ago and faced challenges during the pandemic when foot traffic at his shops significantly decreased. Despite shutting down his stores, Uli's determination led him to pivot to wholesale and expand his business by catering to grocery stores. Last year, catering accounted for more than half of his revenue, but this year, it will be under half. Uli's unique selling point is his commitment to providing customers with great-tasting gelato, even if it means putting in extra effort. While his website showcases his award-winning flavors, he acknowledges that it could be improved to better highlight the process behind his unique gelato.
Business Expansion Financing: Businesses can finance expansion through profitable divisions, external financing, receivables financing, bringing on co-founders or experienced team members.
To grow a small business, there are various ways to finance expansion, such as profit from a profitable division or external financing. Receivables financing could be an option for businesses with large orders and established customer relationships. Additionally, bringing on a co-founder or experienced team member with relevant industry experience can help scale the business and unlock new opportunities. Oli, the owner of Oli's Gelato, is considering these options to expand his catering business and make his gelato brand national. He recognizes the need for additional capital and expertise to grow and is exploring financing options and potential partnerships.
Scaling and Support: Scaling a business and bringing on the right support can lead to significant growth, even in competitive markets. Finding a unique positioning and great product can also create a valuable service and differentiate a company from competitors.
Finding the right support and scaling a business can be a game-changer, even if it means giving up some control. This was highlighted in the discussion about a brand in the ice cream industry that was looking to expand. The brand's focus on good storytelling and product quality attracted attention, but scaling up required bringing on someone with experience to help navigate the next stages of growth. Even in a crowded market like ice cream, finding a unique positioning and great product can lead to success. For another business, Bundle, the founder Travis was discussing the challenges of bringing on new team members as the business grew. While larger buildings might have staff to manage packages, smaller properties often don't. Bundle steps in to provide a solution, managing package deliveries for these properties and improving the overall experience for residents. Overall, the key takeaway is that scaling a business and bringing on the right support can lead to significant growth, even in competitive markets. And for businesses like Bundle, filling a specific need can create a valuable service and differentiate the company from competitors.
Bundle hiring practices: Bundle's success is rooted in its early focus on hiring the right people and maintaining a strong company culture, with the founders setting the standard for customer interaction.
Bundle, a package delivery service, has been able to maintain high-quality service by having the founder and CEO personally handle deliveries and set the standard for customer interaction. They also prioritize hiring the right people to carry on the company culture. The service, which costs around $15 per door per month, includes a resident portal for tracking packages and accepting delivery pauses. The business, which started a year ago, has delivered over 10,000 packages without any going missing. The founders, who are still heavily involved in the day-to-day operations, have not yet established formal quality metrics but aim for bundle employees to know residents by name and complete deliveries on time. The company's early focus on customer service and hiring the right people has contributed to its success.
Building a successful business: Focus on building a strong brand, creating an immersive customer experience, and engaging with the audience to build a loyal community. Invest in people, processes, and customer satisfaction.
Building a successful business requires a focus on both quality and customer experience. Travis from Bundle shared his experience with the importance of creating a personal connection with customers, even if it means taking more time for onboarding. Jeff Rader from Harry's emphasized the need for clear documentation of processes and values, as well as consistent measurement of customer satisfaction. Carly from Full Moon Ferry asked for advice on creating a magical launch for her D2C subscription business. The consensus was to focus on building a strong brand, creating an immersive customer experience, and engaging with the audience to build a loyal community. Overall, the advice given emphasized the importance of investing in people, processes, and customer satisfaction to build a successful business.
Personal Network and Community Engagement: Leveraging personal network and turning it into a referral campaign can be an effective and cost-efficient customer acquisition strategy. Offer incentives and make it a game to tap into friends' networks and build a community of passionate supporters.
Starting with a strong personal network and building a community around your brand can be an effective and cost-efficient customer acquisition strategy. The founder of a children's subscription box service shared how she received inspiration and support from a well-known writer, and how she has been growing her business through word-of-mouth and community engagement. In the early days, she emphasized the importance of leveraging her own network and turning it into a referral campaign. By offering incentives and making it a game, she was able to tap into her friends' networks and build a community of passionate supporters. This approach not only helped her grow the business more slowly but also provided valuable insights into how customers feel about her products and how they talk about them. These insights can be used to inform future marketing campaigns and create long-term supporters or "super fans."
Customer Retention: Target highly engaged individuals and include a charitable element to appeal to socially conscious consumers for effective customer retention strategies. Early retention efforts and understanding customer conversations can also boost virality and loyalty.
Building a successful brand involves both customer acquisition and retention. While acquiring new customers is important, retaining existing ones is where the true value lies. Manduka grew by getting their high-quality yoga mats into the hands of yoga instructors, who then influenced their students to want one. Brands today can use a similar approach by targeting highly engaged individuals in their community, such as mommy bloggers, and including a charitable element to appeal to socially conscious consumers. Early retention efforts, such as personalized outreach to customers, can also lead to increased virality and loyalty. Additionally, understanding how people talk about your product and brand can help inform messaging and advertising strategies. While acquisition may be the initial focus, retention should not be overlooked.
Commitment and Building Business Partnerships: Making a significant commitment, even if you don't have the resources to fulfill it immediately, can help establish credibility and build relationships with potential business partners.
Making a significant commitment, even if you don't have the resources to fulfill it immediately, can help establish credibility and build relationships with potential business partners. In the Harry's episode of How I Built This, the founders shared how they convinced the razor company to take them seriously by committing to buying a million razor blades, despite not having the funds at the time. This strategy worked and helped them establish a successful business partnership. If you're working on a business and looking for advice, consider sharing your story and the challenges you're facing on The Advice Line on How I Built This. Remember to tell them how to reach you, and sign up for the free newsletter at GuyRaz.com for more entrepreneurial insights. This episode was produced by a team at How I Built This, and you can listen early and ad-free by joining Wondery Plus or on Amazon Music. Prime members can also listen ad-free on Amazon Music. Before you go, fill out a short survey at Wondery.com/survey to tell us about yourself.