6 Lessons from my first DTC Brand
My partner and I recently sold our first DTC brand (celebration emoji!!!)
…. Not so fast, we aren't rich, we barely recouped our investment. What we did get are many lessons on what not to do and valuable insights on how to operate a DTC brand. Here are the top 6 from my experience.
Do it Now
In 2013 I was on the Founding team of an early stage SAAS company and our office was in the Chicago entrepreneurship hub 1871. My business teacher at Depaul, Raman Chadha was a mentor there. I got to spend a few 1 on 1 sessions with him discussing the current business. It must have been obvious that I wasn’t entirely into the SAAS biz because he paused once and simply asked me, “what is it that you actually want to do?”...
I thought for a moment, and my answer was, “sell a physical product on the internet”...
It was more of a hunch, I didn’t actually know anything about how to start. I didn’t have a plan, nor a product to sell. Since I didn’t know how to do it, it caused me to not do anything. Many "wantrepreneurs" can sympathize with that, but in reality, that is the exact time where you just have to start.
In hindsight, it was the absolute perfect time to start a DTC brand. My inaction caused me to miss a golden era of opportunity in ecommerce. In 2013, Shopify was 6 years old and gaining traction largely due to Facebook creating the most targeted ad platform ever.
The invention of Facebook created a direct line to the most targeted consumer advertising network we have ever seen.
Back then FB ads weren't saturated. It was a simple equation to throw a bed in a box, slap a brand on it, and run ads with a highly profitable ROAS. Had I acted on my intuition and interests I would have been an early mover in a budding industry. 7 years later I finally started a brand and it was not nearly as "easy"....
Lesson 1: If you really wanted to do it you’d find a way and start now.
You Can’t Just Automate Everything
I had the perception that ecommerce was easier than other businesses because you can automate most of the steps. It’s true, you can use technology in many ways, but the expectation to punch a few keystrokes a few hours a day and make it happen is not the case. You have to be dedicated and ready to commit hours a day to get your business off the ground. Once live, you must continuously analyze data to refine your processes and win more customers. Like all other start-ups I've been a part of, it is an exercise in experimentation.
Lesson 2: Entrepreneurship is harder than you think and DTC is no different, be ready to commit.
Do it Yourself
To the above point, you are better off doing most things yourself, at least to start.
We tried to outsource web development, advertising, + website analytics and it ended up setting us back more months than I even want to tell you. I didn’t know the first thing about Shopify so I got some help with it and it turns out I was working with a complete fraud.
I didn’t take the time to teach myself enough to know that I was being scammed.
With ads & web analytics I didn’t get duped. It ended up creating a great relationship with the Founder of the agency. But if you don’t understand how to effectively run Facebook ads or install GTM on a website you have no business running a DTC brand.
No one has more skin in the game than you, the founder. In the beginning stages you have to have an intimate knowledge of every facet of your business.
Lesson 3: Learn the basics, get it working, then automate.
Founder Market Fit Matters
My first brand sold kid’s couches. I’m not married nor do I have any kids. The target buyer persona of kid’s couches is an affluent mother in the suburbs. I could not be farther from this.
To be fair, my partner in the business is married with 2 kids and is an expert in the furniture textile industry. He was the product ops guy and I was supposed to be the website and marketing person. For as much success as we had getting it off the ground we would have been 10X more successful had I had burning interest for kids couches.
Lesson 4: You simply cannot fake Founder market fit.
Speed to Market
We had the idea to create a kid’s couch brand in late 2020. The incumbent brand could not stay in stock, and with stay at home orders in effect, interest for these couches was off the charts.
My partner had the product connections and I was working in the ecomm space so we decided to try to fill the supply gap in the market. For many reasons, largely associated with the above, it took us over 10 months to launch. By that time, there were countless new market entrants with the same goal to capture demand in this new product category.
Lesson 5: DTC ecommerce moves extremely fast. Once there is an indication a product is working you can expect many more brands to pop up very quickly. See this post on the proliferation of consumer brands.
Traffic is Easy, Conversion is Hard
The main issue we had with sustaining success was an inability to convert website traffic at an acceptable rate. We could get traffic to the site (even Jennifer Love Hewitt bought a couch from us!), but we were horrible at converting the eyeballs to customers.
I tweaked all sorts of images, copy, you name it. It taught me what to do next time, but it was humbling.
Lesson 6: Use landing pages and eliminate all unnecessary steps to the buy button on the website to optimize conversions.
There's so much more, but these are the top lessons that come to mind.
In the end, it was an invaluable experience that I would do again in a second.
More to come soon on the next one :)
