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The Hybrid Flywheel of Ecom and Retail with Joe Johnson - Honest Ecommerce Ep. 158

Joe Johnson believes that he was born to be an entrepreneur. 

From the age of 5 years old he was creating his own businesses and he loved every second of it. 

Joe has been featured on ABC's Shark Tank, Forbes 30 Under 30, USA Today and others. 

As a student athlete, he was the Captain of the Michigan State Wrestling team, while achieving the highest honors and graduating with a degree in Finance from the Honors College with a perfect 4.0 GPA. 

Joe is the husband to an incredible wife and father to two wonderful kids, who are going to change the world. 

In This Conversation We Discuss: 

  • [00:00] Intro
  • [01:17] Entrepreneur since 5 yrs old
  • [02:28] The unflattering side of owning a business
  • [03:23] Where the idea of Vade came from
  • [05:20] Novel ideas vs improvements
  • [06:54] From proof of concept to multiple launches
  • [08:32] The focus on getting the customer educated
  • [11:38] Using curiosity as a selling point
  • [12:14] Sponsor: Electric Eye electriceye.io
  • [12:34] Sponsor: Mesa apps.shopify.com/mesa
  • [13:18] Sponsor: Gorgias gorgias.grsm.io/honest
  • [14:45] Sponsor: Rewind rewind.io/honest
  • [15:17] Sponsor: Klaviyo klaviyo.com/honest
  • [16:04] When VADE picked up the pace
  • [19:28] The past few years of growth for VADE
  • [21:41] Propping up Ecom through expanding retail
  • [22:09] VADE’s 2022 goals
  • [22:57] How has Joe’s role changed over the years?
  • [24:35] Leadership is different from entrepreneurship
  • [27:30] Where to find VADE 

Resources:

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  Transcript:

Joe Johnson  

Instead of creating a whole new industry, it's [about] perfecting what's being done currently in the industry and doing it better.

Chase Clymer  

Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game. 

On this podcast, we interview founders and experts who are putting in the work and creating real results. 

I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.

Let's get on with the show.

Hey everybody, welcome back to another episode of Honest Ecommerce. I'm your host Chase Clymer. And today I'm welcoming to the show... 

Joe, you're a very special guest by the way. You're my last interview for 2021. So thank you for being on the show. 

Joe Johnson is the CEO of VADE Nutrition, which has become one of the fastest growing nutritional supplement companies in the world. Welcome to the show, Joe.

Joe Johnson  

Thank you. I see you save the best for last.

Chase Clymer  

Absolutely. That is exactly how it worked out. So in your onboarding information, you shared a pretty, pretty funny story. So I want to break it up. 

So according to your resume here, you have been an entrepreneur, since you are at the ripe age of 5 years old. What were you hustling back then?

Joe Johnson  

Yeah. Well, I would say it's been a family... A family trend to be entrepreneurs. I have 3 other brothers and all of them run their own company. 

So my first business when I was 5 years old, was with my 3 other brothers and we actually sold puppies, which was the cutest job I've had. But we've bred dogs and sold the puppies. So that was a great job for a 5-year old. 

But since then, I just had that itch my whole life to create something and to do something different. Something that other people aren't doing and running something. 

And so since that point till now, running Vade, I [have probably] started about 10 companies, and most of them very unsuccessful. But fortunately, we got one to hit.

Chase Clymer  

Absolutely. So let's go back to, I guess, what was going on in your life right before the concept for Vade popped into your mind? 

I think that some entrepreneurs out there know that they want to be their own boss. They want to live that life more for the glorious sides of it. 

Not a lot of people talk about the “un-glorious” sides of being an entrepreneur. But, where did you kind of come up with the idea from it?

Joe Johnson  

Yeah, so you made a good point. And I touched on the point you just made about why people want to become entrepreneurs. 

And I think nowadays, it's becoming even more and more that it's a sexy thing to do. It's "I want to be my own boss at flexible hours." [and] all that stuff. But it's not that glamorous. 

For long-term even, it's just hitting success. It's still not that glamorous. As far as my own schedules, it's just [about] working more. 

But the idea came actually while I was in college. I was wrestling at Michigan State. I'm always trying to look for new ideas and concepts. 

But this concept really hit home for me because it fit with what my passions were outside of entrepreneurship. It fits with my lifestyle. It was a real problem that I had.

 And so just to explain what it is that we do at VADE, we create nutritional supplements that are pre-packaged in a dissolvable food grade film. Every serving of... 

Whether it's a protein powder, a meal replacement, a pre-workout, it's measured in this dissolvable food grade film. So you just toss the pack into water, shake it up, and you have your drink. So there's no scooping powder, there's no measuring, there's no mess. 

And the concept came actually from a pivot of a different idea. I was traveling with my wrestling team and drinking protein shakes and had a... I always was left with the smelly shaker bottle. And so I was trying to solve the problem of a small shaker bottle. 

And as I was developing that concept of how to make it seem that you didn't have to clean out your shaker bottle, I started to think through “How do we make it even more convenient for people to take nutritional supplements beyond just the shaker bottle inconvenience?”

So long story short, is that we actually pivoted from an original idea. And when I say we, I also got married after my junior year of college and so my wife and I worked on the start of this company together. 

But we pivoted to this concept while we were still, while I was still in college and said, "Okay, we're done with looking at shaker bottles. We're gonna start this nutrition supplement company. We're going to make nutrition more portable and convenient.”

Chase Clymer  

Yeah. And what I love about the concept that you move forward with is a commonality that I've been trying to highlight between a lot of my guests lately. 

It's that you're not necessarily coming to market with a brand new thing that nobody's ever heard of, you're just taking something that's out there that there's already a market for and making the product better. 

And I think that's something that a lot of entrepreneurs need. You don't need to come up with the next Facebook, you could just come up with the next thing that's better than Facebook... That might be just as hard (laughs). 

Joe Johnson  

(laughs)

Chase Clymer  

But maybe you have a better or more poetic way of trying to get the point across that I'm kind of trying to [say].

Joe Johnson  

Yeah, yeah. So there [are] industries that have... Especially, the nutritional supplement industry is a very old industry. It's been around for a long time. And there's not really been any innovation within the industry. 

So instead of creating a whole new industry, it's perfecting what's being done currently in the industry and doing it better. Like you said, I think, that's the key here is we get questions from some people that... 

Whether it's on social media or whatever, review or something, and they're like, "Why? Why would I want to use this?" 

And the answer is, "Why not? Why would you not want more convenience, more portability? It's just one step better than having to just keep your powders."

Chase Clymer  

Absolutely. And that one step, you built a business on the back of honesty. 

So you came up with this awesome idea and it's innovative. How much time was it before you're like, "Wait, this is... I think this is the thing we're going to do." 

Until you actually sold some to people that weren't your friends or family.

Joe Johnson  

Yeah. (laughs) It's a long story, but I'll make it short but from the first day that we went headfirst into this and said, "This is exactly what we're gonna do." It was about a year of development with different manufacturers and trying to find the right combination of partners to work with to actually bring the product to life. 

And so it took about a year to find those partners. We tried to launch... We tried to launch, about a year after we came up with the idea and we got a cease and desist the day before we tried to launch for our name, which was an old name that we don't use anymore because of it. So we had to pull back our launch. 

So then we tried to launch again, with another name, the name we currently have but... And that was about 6 months later, I believe. 

We tried to launch again and our manufacturer that we were working with when I was going out of business, so they sold us a faulty protein powder that we couldn't sell. So then we had to restart again. 

And by the time we actually started selling products and we launched online, it had been, I would say close to 2 years.

Chase Clymer  

But you stuck with it. That's the thing, though. You had countless setbacks, beyond setbacks, that I think that the one thing highlighted is that you... Again goes back to the glory... Entrepreneurship isn't always [about] glory. 

You had quite a few uphill battles to kind of get through to even just get the product out there and try to start selling it to people. Once you got there, though, how did you find those customers? How are you getting people to be aware of your new products? 

And how are you trying to get those first couple of sales? Because I think that one of the hardest things about starting a direct-to-consumer brand is getting those first couple sales and figuring out how to crack that code. 

Joe Johnson  

Yeah. And transparently, it wasn't quick. It wasn't easy. It was slow growth. It was just friends and family for a while. And there was a lot of... As I would say there's just as much concern of "Is this going to work after we launched?" Before we watched there was so much optimism.

I think that I had a bout that "This had to be the best thing in the world." before we actually launched that then going through all those trials in launching and not seeing it just blow up and everybody wants it and is buying it or in every retailer. 

That was just as difficult for me because my optimistic forecasts in my head was like," Okay. Year one we're gonna do a million dollars in sales. That's easy." It was like $17,000. And so there was definitely a learning curve. 

But the reality for what we were doing, what we learned is education was key because our industry, nothing's changed, like I said, and so on. And so although people thought it was cool. 

People were nervous about it actually. "That sounds cool, but does it actually work?" And so, what we learned is that we had to educate customers right off the bat, or else, they would just think it's cool and move on as one of those trinket type of things that [is like] "This is cool, but I'd never use it." 

So we focused on education and we focused on getting people that had tried to be our ambassadors be our voice, because that was... That was the key tipping point was getting that credibility. That it's not just a good idea but it's a good product.

Chase Clymer  

Absolutely. I think that the product is... It could be met with some hesitation, especially with just in your industry, people are very cognizant of what they're putting in, what they're putting in their body. 

So introducing some sort of new food grade film like that, I think, is something that is an interesting challenge that you have to educate your potential customers on. 

But from there, once you start becoming that subject matter expert, I'm assuming that  goes into your whole marketing strategy as a whole of more content plays are what you're after.

Joe Johnson  

Yeah. Yeah, it was something that... It was something that started off as a negative. Now, I think it's a positive actually. In the early days, there were countless people that would write saying, "I don't eat plastic, I'm not gonna consume this." 

And now that we've grown our customer base, we've grown our development, even our knowledge of how to explain the product and everything, it's a huge selling point instead of a setback of being concerned about consuming it.

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Chase Clymer  

So you mentioned that you had this amazing optimism. You're gonna do so much in year one. And it didn't hit when you thought it was going to. 

But when did it feel like "Alright, this is starting to work" Were there certain choices that you haven't made as a business, or anything else that was just like, "Alright, I think we're cooking with gas here. This is definitely going to be something cool."

Joe Johnson  

Yeah. So I would say that there were multiple points in the company where I really felt that confirmation that this had worked. And granted, I was still being optimistic. It was really actually true. But the first time was... Actually, [it was] our very first time that we tried to launch and we didn't launch... 

We went to an expo, we were supposed to launch in that expo and we got a cease and desist for an old business name. So we went without a business name. We just went and listed samples. 

And we met the buyers at Vitamin Shoppe and they have about 800 locations somewhere around there. 

And they said, "This is the best thing we've seen at the expo. We're going around looking for unique products to sell. We'd love to have you guys fly up to New Jersey and present to our team." And so being that... Being in the mindset of fake it till you make it... I mean, we were not being fake so it wasn't... 

We didn't have much to fake but we hadn't even tried to sell to one location in our little neighborhood. And we were pitching to this massive player in the specialty retail space. And so it didn't go great because we had no idea what we were doing but it was confirmation that the market was excited for it. 

We just had to figure out how to execute on that. And so that gave us the...The first year, $17,000 in sales was very discouraging. But there was that piece at the beginning that we knew. 

We just haven't figured it out yet how to gain those customers, but we knew there was demand for it. And then I would say the second real big moment that we realized we were onto something was we ran ABC’s Shark Tank almost about 3 years ago now.

And that was really exciting. Because like I mentioned before about credibility, that gave us so much credibility because the Sharks loved the products. They loved the products. They were very enthusiastic about it. 

And we made a deal on the show with Mark Cuban and A-Rod. And that gave us that boost that we thought "Okay, now we've made it. Now we've got that credibility." But actually it was a huge boost in sales. 

And then we leveled out. It was this spike and then a steady decline. And then we really started to figure it out on social media and that was more…

[It was] not a moment of feeling like "We were credible [or a feeling like] "We're gonna do it." but a slowly evolving customer base that's growing and growing and growing and that felt... 

[It wasn't] as high of a high but it was the most exciting overall because that's when we knew that things are starting to catch on, not just a one-time purchase or one time exciting event.

Chase Clymer  

Absolutely. I'm still... I knew about the Shark Tank thing, but I... Congrats, by the way. But being able to get a product that's nameless into the boardroom or whatnot of Vitamin Shoppe. That would just give me so much drive. 

It's like, "Well, we can get it here. We can do anything we want with this thing." So that's really cool and inspiring. 

Let's fast forward to now. Obviously, 2021, 2020 was probably a crazy year for you guys. What are you looking forward to doing next year in 2022? 

Where are you guys investing your time and energy to try to get new customers or bring back existing customers? 

Anything that you can share there?

Joe Johnson  

Yeah, it's been a wild year. It's been a wild year and a half. The growth that we saw in 2020 was insane. It was just too hard to even keep up with. We were just trying to stay afloat while growing like crazy. Our social media was blowing up. 

We were doing over 200 million impressions a year. And we have a very small team. I think last year, we had 5 people on our team or so. And then fast forwarding to this year, we were... 

Coming into January of this year, we were spending a ton of money on Facebook advertising every single day. And there were then a lot of adjustments that were made to Facebook's privacy policy and how the ads are being delivered. 

And all of a sudden, our growth and our budget that was being spent on Facebook wasn't working anymore. So just as soon as things started [looking] really good, we had to figure out another way to pivot because our one channel that we were really focusing on sales growth wasn't sustainable there. 

But at the same time, this year, we've launched 88,000 retail locations across the country. And that's been our pivot of still focusing on Ecommerce but putting more of our budget into this retail expansion that's giving us more visibility and will in turn help our Ecommerce model. 

So as of recently, in the last, I would say month, month and a half, I've hired an entire national sales team. And we're growing out that model to be able to support all the retail locations and grow that way. 

And so moving forward, our goal is to expand our product line. I always tell people, "We're not a protein powder company." We launched with protein powder, because it's the easiest thing to saturate... The market is saturated. They're easy to make... 

But we're a nutritional supplement company. And we want to be able to provide convenient nutrition for anybody in any walk of life, whether they're young or old, whether they are vegan or keto or they're trying to gain weight for any reason. 

See, if you're taking one of our products, you should be able to take any powdered supplements that you take, you should be able to take those with VADE. 

So our expansion this year next year is really going to focus a lot on product development and expanding our product line.

Chase Clymer  

You mentioned that you guys had about a team of five last year, the year before, and it's since grown a bit. How has your role changed since inception and now?

Joe Johnson  

A lot. Honestly, it's been a big change for me going from being just an entrepreneur, to being a boss, into not controlling everything. 

And I think that's actually something that can be really difficult for an entrepreneur to do because a lot of people get into starting their own business so that they can control everything. 

And there's that tipping point where that becomes not possible anymore. And so now with growing our team to where it's at right now, there's a lot of things that I don't do anymore and I just manage it. 

And so I've learned a lot about being a manager. There's a lot to learn. 

And so I think that's a really important pivot point for any entrepreneur to understand and realize that growing a company is going to come with changing your responsibilities as the business owner in a good way. But it just comes with new struggles, new challenges. 

And so it's been important for me to continue learning. Continue learning what I don't know because there's a lot that I don't know and hiring people that are a lot better than I am to do what they're in their space to do. So that's been huge for me. And I'm excited to see that continue to grow.

Chase Clymer  

I couldn't agree with you more. And it just reminded me of... I forgot when I saw this but it was basically the gist of it was... 

Just because you started a business doesn't mean you're a good CEO, which is definitely something that people don't realize until they start growing a team and they start dealing with management and like how to be a manager. 

And it's just a different skill set. And like you said, you have to constantly learn, you have to work on your skills as a person to be a good manager, or maybe that's just not your wheelhouse and you need to hire someone that's way better than that to assume that role.

Joe Johnson  

Yeah. No, that couldn't have been said better. I totally agree. It's totally different to want to be an entrepreneur and know how to manage people. And some people are fine with continuing to be just an entrepreneur and run things themselves. 

And so there is definitely a difference. But I would also add to that and say that in the early stages of the company, I had a lot of people that were just good at tending people that were trying to get me to hire somebody to run the company, allowing me to be the creative person. 

And for one, I have too much pride to feel like that was a good idea because I felt like I knew what I wanted the company to be and I felt like I could do it. 

But secondly, it would have been a bad decision to take that advice, because the core of the company comes out of the character of the founder. And so the challenge is pivoting from that core of what the company is to actually be able to run the company, as well. 

Everybody's different. Every entrepreneur is different. Some people need to hire a CEO, but they're still the core creative person. But for me, I definitely am glad that I didn't take all the advice that I got in my first years of entrepreneurship.

Chase Clymer  

Absolutely. No. And that's absolutely correct. There's no one way to do it. And you could end up in... Not particularly your position. I'm just saying entrepreneurship in general is... There's like a million different ways to do it, and you could still end up successful. 

And that's one of the cool things I like about doing this show is I just get to interview so many awesome people. And they say, "Well, this is what worked." And sometimes they also say "This is what didn't work and this is how we ended up here." So it's always a fun journey to...

Joe Johnson  

[Take] everything with a grain of salt. (laughs)

Chase Clymer  

Yeah. That's a whole other thing. Cloning your competition is never going to result in anything good. 

Joe Johnson  

Yeah, exactly. 

Chase Clymer  

Awesome. Joe, thank you so much for coming on the show today. If people are curious about the products, where should they go to check them out?

Joe Johnson  

So you can buy them online on our website, vade-nutrition.com. You can buy them on Amazon, you can buy them on GNC.com. We're also in all GNC stores. We're in CVS and other groceries. If you're going to buy it in person then just go on our website. We have a store locator. But yeah, hopefully everywhere soon. (laughs)

Chase Clymer  

That would be fantastic. Hopefully that sales team gets up and running. And you guys take it over and 2022 

Joe Johnson  

Absolutely. Thank you. 

Chase Clymer  

Awesome. Thanks so much for coming on. 

Alright. I can't thank our guests enough for coming on the show and sharing their knowledge and journey with us. 

We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes. 

Make sure you head over to honestecommerce.co to check out all the other amazing content that we have. Make sure you subscribe, leave a review. And obviously if you're thinking about growing your business, check out our agency at electriceye.io. Until next time.