Colin McIntosh is Founder & CEO of Sheets & Giggles™, a fast-growing direct-to-consumer brand in the $12B US bedding space.
Launched on Indiegogo in May 2018 with a $284,000 crowdfunding campaign, S&G became one of the few companies to make $1M in sales in its first 12 months (and millions more in the following 12).
As a millennial and an inaugural member of Good Business Colorado, Colin also regularly lobbies for progressive issues and causes with a group of over 200 progressive CO business owners.
It's been about 3 years since Colin founded Sheets & Giggles after getting laid off from his last job at 1pm on a Monday. Prior to that, he worked at the world's largest hedge fund (Bridgewater Associates), was a tech recruiter, and had been fired 3 times in just 5 years in the workforce.
He's a founder/entrepreneur to the bones, which makes him a terrible employee.
In This Conversation We Discuss:
- [00:00] Intro
- [00:56] Getting fired and founding a business
- [03:01] Colin’s unconventional founder’s story
- [05:33] Sponsor: Gorgias gorgias.grsm.io/honest
- [06:39] Colin’s best advice to startup founders
- [08:11] How Colin formulated his business model
- [11:22] Why Colin chose Indiegogo
- [12:01] Sponsor: Klaviyo klaviyo.com/honest
- [13:30] S&G’s Indiegogo strategy with real numbers
- [17:27] Email list is essential
- [18:33] Sponsor: Rewind rewind.com/honest
- [19:16] Trusting the gut vs data
- [21:12] Time and money invested in crowdfunding
- [24:38] Sponsor: Avalara avalara.com/honest
- [25:28] Expenditures on the Indiegogo campaign
- [26:40] Be careful with crowdfunding agencies
- [28:33] Russell Marketing vs other agencies
- [31:58] A founder’s hat vs a CEO’s hat
- [37:23] No shame in hiring a CEO
- [39:08] Delegating outcomes
- [41:52] Try and build your own thing
- Colin’s LinkedIn: linkedin.com/in/colindmcintosh
- Sheets and Giggles website: https://sheetsgiggles.com
- Visit gorgias.grsm.io/honest to get your 2nd month with Gorgias free!
- Visit klaviyo.com/honest to get a free trial!
- Visit avalara.com/honest to find out how your business can be sales tax ready!
- Visit rewind.com/honest and enter your email to get your first month absolutely free!
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Build a business model that you feel truly passionate about. Make it a one or two-pager. Don't worry about the product for now. The product will evolve to fit the business model.
Welcome to Honest Ecommerce, where we're dedicated to cutting through the BS and finding actionable advice for online store owners.
I'm your host, Chase Clymer. And I believe running an online business does not have to be complicated or a guessing game.
If you're struggling with scaling your sales, Electric Eye is here to help. To apply to work with us visit electriceye.io/connect to learn more. Now let's get on with the show.
Hey, everybody. Welcome back to another episode of Honest Ecommerce. I'm your host Chase. Clymer.
Hey! Thanks so much for having me, Chase.
Awesome. So we are going to start this in a very fun place. Let's talk about when you got fired and what led to the beginning of Sheets and Giggles.
Sure. (laughs) Sure. The day I got fired. So that was September 25, 2017. It was a Monday. It was warm outside. I remember it like it was yesterday (laughs).
So basically, at 1:00 on a Monday, about just over 3 years ago, I actually got laid off from the longest job that I had ever had, which was at a startup that I had helped co-found with a few friends of mine. And that was really painful because I actually had spent about 3 years and my mid to late 20s there.
I had given a lot of blood, sweat, and tears. [I] had gone through Techstars with that company. I raised millions of dollars from great venture capitalists. And we had hired a team of about 20 people working in downtown Denver.
And unfortunately, it all came crashing down very suddenly when my friends and I all got laid off at 1pm on a Monday afternoon. And it was coincidentally right before holiday so I was running all of our retail partnerships at the time.
Really great partnerships with folks like Target and Brookstone and we had on-air deals with HSN and QVC and we were nationwide in stores. Those phone calls I had to make that day to those partners letting them know that suddenly that was my last day.
And they had a lot of questions about "What about the units we're expecting? The shelf space? Holiday?.." Really brings back a lot of tough memories from that day. And so I did what most people would do getting laid off in the afternoon on a Monday.
We went and got tanked at a local Margarita place just down the street, my friends and I, after I made all those calls.
And that night with all my friends from the company, I started telling them about what I was going to do next. And the one thing I could not stop thinking about was Sheets and Giggles and I got laughed at a lot that night by my friends.
But 3 years later, it's... I think I incorporated the company 3 weeks after that day. And now 3 years later, it's a dream come true. No pun intended.
Well, so I guess this idea, you didn't have this idea in the 7 hours between...
...being fired and going and having a few drinks. So where did this idea come from? How long have you been stewing on it?
I think it was more than a few drinks, actually. But (laughs) I had been stewing on that idea for probably about 3 or 4 months at that point. I remember I actually had bought the domain one night.
This is a true story and it's the most bizarre founder story. A lot of people are like, "Oh, I had this very personal problem." Or a lot of people in the bedsheets space are always like "Oh, I stayed at a hotel and the sheets were so nice and I thought there has to be a better way."
But for me it was actually kinda funny. I was watching a movie called War Dogs with Miles Teller and Jonah Hill. Have you ever seen it?
I have. I have. it's a good one.
Yeah. It's a great one. And I would give it a 7 out of 10 9 (laughs). But so Miles Tellers' character is selling bedsheets out of the back of a pickup truck in the beginning of the movie, if you remember.
And he gets turned down by all these retirement homes you know they're saying "Oh, I don't need great bed sheets. My people at the homes can't feel their backs." Yada yada yada. Very mean customers.
And Miles Teller's character has like 10,000 units of inventory that he has to sell or he's gonna go broke and go bankrupt. And I got so frustrated with this guy's character, I turned to my now ex-girlfriend because this is the type of person that I am.
And I was like, "This is ridiculous. He... (laughs) Ge bought all his inventory he didn't do any market research. He didn't do any pricing research and he doesn't understand his core customer, his demographics. You know what, pause the movie."
And I wrote a business plan for a bedsheets company that night. And whenever I read the business plan, I always think what is a funny name for blank, for this company?
And I thought I just snap my fingers and I was like "Sheets and Giggles. That's a funny name." And I bought sheetsgiggles.com. I bought... Not bought. But I got all the social handles @sheetsgiggles everywhere. I love that it matched up.
No "and" in the URL or the social handles. And I just became enamored with this idea over time. It worked its way into my head brain of a funny-first bedding company that was also sustainable premium products.
And when I got laid off, it was this opportunity to take what I had learned from my prior company, which was a consumer electronic that was heavily physical retail, and bring it online with a more direct-to-consumer model with a very different product category, and basically do all the things that I wish we could have done differently at that company, differently for my own company.
That's awesome. So you just jumped in feet first after you had this just in your back pocket.
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Yeah. And that... and going from zero to one is, I think the hardest part of any company. It's also my favorite part of any company. And so for me, I'm like a very methodical person when it comes to business planning.
I think a lot of entrepreneurs do it opposite of the way that I do it, which... It's a very typical founder story, "Oh, I saw this problem. And I built the solution. And I invested tens of thousands of dollars in it, and I got it patented. And then I bought some inventory."
And now I get this question all the time in Denver? And it's a sad question, because it... The question is, "How do I sell it?"
And I can only think of how many pre-orders people... I know somebody who invented this box for on-the-go tissues and it's actually quite brilliant. It's a really cool invention. And I hope that they're successful.
But it was at Startup Week in Colorado last year, where I did a panel and they asked me. They said, "Hey, I've spent $50,000 on the patent for this as well as the initial manufacturing run. I've got (laughs) 20,000 of these in my basement, and I'm trying to get deals with retailers or funding from venture capitalists, but I'm all out of cash. What do I do?"
And the answer is you go back in time, and you don't patent it, and you don't create the inventory. And you'd use that $50,000 to do a banger of a crowdfunding campaign. And so long story short, I would...
As of right now, if you're someone who has a product idea, my best advice is to build a business model that you feel extremely passionate about, make it a one or two-pager... Don't worry about the product for now. The product will evolve to fit the business model.
Understand your COGS, your fulfillment, your return rates, what your bottom line looks like at the end of the day, what your fixed costs might be, therefore, what your breakeven is going to be from a per unit perspective…
And you'll hear me start to name things when it comes to business model, brand identity map, and financial model that are very concrete, tangible things that I did in October and November of 2017, that don't cost you a cent.
And then once you're convinced that the financial viability is there of the business model and of the product that you want to build, then you can start backing your way into it from that perspective.
So for me, my perfect business model was a massive commodities market with no brand differentiation or loyalty that had no switching costs, --so customers could adopt my product without any pain-- that was largely traditionally physical retail, so I can help bring it online with a direct-to-consumer model that also was something that didn't have any good sustainable options so I could differentiate on the sustainability and preferably something that was highly fragmented, so no market leader that I had to chip away at.
And that was really the business model I built. And I was partial to Sheets and Giggles and I already had the idea at that point. But I looked at sunglasses, I looked at tables, I looked at other different verticals,in different commodity spaces that I thought might be interesting. Apparel...
And at the end of the day, I was just so in love with the brand of Sheets and Giggles that I went forward with the bed sheets plus the bedding was a perfect fit. $12 billion US commodities market growing 10% year over year. The top 5 players only own 27% of the space. It's so highly fragmented.
And at that point, I didn't see any good sustainability options. There were only cotton and polyester as the main options in the market. And so from there, once I built the brand identity map, the financial model, the business model, I passed it around to people, mentors, people that I respected. I got advice on it.
People said, "Why not this? Why this?" Challenging me with some of my assumptions. And then from there, I began doing materials research and sourcing. I did some initial designs in terms of what I wanted my bed sheets to look like, feel like, extra deep pockets, corner tags that said different things, what the packaging should look like...
And then from there, in the home textile space, specifically, there's a manufacturing conference every year in March in New York City that I went to and met with different manufacturers.
I found someone from both an ethics perspective and a capabilities perspective with what I needed to produce the materials and the quantities that I needed and the colors that I wanted. My designs. And signed... I think our initial purchase order was like a $300,000 purchase order (laughs) which was terrifying and went off from there.
But there's also a couple things I'm leaving out that I'm happy to dive into like, Why I signed the purchase order? The confidence I was feeling with the pre-order that we were gearing up for, the crowdfunding campaign we ended up doing... And this is all happening in tandem around Q1-Q2 2018.
Yeah, let's just dive into outside of doing this business feasibility exercise all over the place. A lot of great stuff you shared there. You were also launching an Indiegogo (campaign) so dive into that a bit.
Mm-hmm. Well, so specifically, I chose Indiegogo over Kickstarter for a number of reasons. The main ones are that Indiegogo is more geared towards sales and variants of items, so sizing, colors... Whereas Kickstarter is more like a project basis crowdfunding platform.
Kickstarter does have, I think 3x the daily visitors of Indiegogo, so you do lose some traffic, but you are more discoverable because there are fewer projects on Indiegogo.
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So those are some of the reasons why I chose that over Kickstarter in case anybody is wondering. We began gearing up for this crowdfunding campaign, we give ourselves 12 weeks to prepare.
Normally, you want to do 8 to 12 weeks for preparation for a crowdfunding campaign. And the number one thing that people I think get wrong with that is they rely on their friends and family to finance their entire project, which is just not how it's going to work.
People forget the day of, maybe they don't love you as much as they thought they did. Or at the end of the day, even if you have 100 people who really deeply love you and who are going to give you $100 out of their pocket, that's still only $10,000.
And for most companies, you're gonna need far more than that in order to be successful. So generally speaking, for a crowdfunding campaign, it's all gonna rely on your email list in terms of success or failure.
And so for me, my goal internally was $100,000. Externally, we made it $50,000 because we wanted to anchor on something that was a little bit lower so we could then do goals to unlock and do bed covers and comforters. It was a strategic thing.
And I can get into the goal setting if you want. But internally, we want to make $100,000 because we knew that with a $300,000 PO, we can break it up into 3 shipments. And the first shipment will be $100,000.
And basically I knew that, 1, we could get to market and actually deliver a product with that. And then 2, was that that would be enough, in my opinion, to convince external investors that there was a market for this punny, ridiculous brand that I was building.
And so from there, we just went and worked backwards from the goal. So $100,000 goal, average unit price is going to be $70, average order is going to be 1.5 units, therefore average order value is $100.
On day one, you generally want 30% of your overall goal on a crowdfunding campaign. That's just how the math works. So if you have a $100,000 goal 30% on day one is $30,000 on day one is what you need to make over a 30 day campaign.
And at $100 average order value $30,000 on day one, that's 300 distinct individual customers I needed to pull out their credit card and give me their money on day one of this Indiegogo.
So therefore, if you need 300 customers, and an email list reasonably converts at about 3%, then I needed 10,000 emails of interested qualified people who had bought into the brand in order to guarantee, without a doubt, that we were going to be successful for this.
And so for 10 weeks, that's all we did. We created content, landing pages, photography, videography, all low-cost stuff. I had a photographer friend of mine for $500 come out and do our photo shoots for a couple days.
Really, really awesome work by Megan. And I got all my friend's models, very cheap. Paid them in pizza and whiskey. And we got bedsheets that I don't even think were our brand (laughs). They were just light bed sheets. And we had a blast.
We drank whiskey, smoked cigars, played with dogs in bed all day... That was back in February of 2018. We put that content on landing pages that we created with Shopify and KickoffLabs, which is a great landing page software.
And then we went ahead... And when I say we, I mean me and my intern, Haley. And then also we hired a crowdfunding agency named Russell Marketing, who I trust with my life. And we set about gathering emails and we ended up capturing 11,000 emails in 8 weeks.
So it was just under $10,000 spent in preparation for those 11,000 emails. And on day one we launched and we got 4.5% conversion from our list just like clockwork and we got $45,000 day one. And that ended up snowballing into a $284,000 crowdfunding campaign.
Colin, I cannot thank you enough for literally walking people through the math behind doing a successful launch. Thank you so much.
No yeah. For sure. It's just like... I know, I rambled there for a little while but it's such a specific formula and I feel like a lot of people just think "Oh yeah. I have 1000 emails plus my LinkedIn contacts plus my Facebook friends..."
It's like, "No. You gotta think that your social followers are gonna convert at less than 1%." They're not people that have bought into this. People bought into you but not into this, and so it's really... That email list and gathering that is so crucial.
So I always tell people, make sure you have 30x the emails that you want for day one sales if you convert at 3% and model it out. If you convert at 2% or 4%, what does that look like? And God forbid you convert at 1%? What would that look like, too? So...
Oh absolutely. Yeah. That's like why I like this industry. It's because you can get very nerdy with the math. And it also makes... It's easy to pull your gut away and just look at the numbers and make a choice based upon data.
But you could also argue that sometimes the best decisions are the ones that are [where] you're ignoring the data and going with your gut.
Yeah. All the time.
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So with launching this campaign... So it took you...
Oh, sorry. Can I tell you a quick funny story about the trusting of the gut versus the data?
Yeah, let's do it.
Although I think the data were probably for this too. So it literally happened today. And for those that don't know, we're recording this the week before Black Friday, or the week of Black Friday.
But we basically... We're going to do a discount plus donation deal, which is what we do every Black Friday. We do some percent discount, some percent donate and that goes with our sustainability, corporate social responsibility brand. We're a very giving brand. We've donated $40,000 to COVID relief this year.
We've donated tens of thousands of dollars in bed sheets to homeless shelters to isolate symptomatic individuals from the general population. We love doing stuff like this. But we were gonna do 15% sent off and 15% donated.
And in some meeting this morning, somebody said, "Yeah. 2020 has been a hell of a year. I wish our special was 20% off and 20% donated. So we could have some fun with that."
And I just paused and I was like, "Why didn't anybody bring this up before. Of course. It's genius. Of course we're going to be '20-20'."
So now, literally on a dime, we just changed all of our advertising, all of our emails, all of our website messaging, all of our discounts or stuff that was queued up on Amazon to be 20% off plus 20% donated.
So that way, we can say things like "It's the most fun you'll have all year to see '2020'." or like "It's the happiest you'll be all year to see '2020'". And it makes so much more sense.
Even though it's another 10% off the bottom line, I think that content and that messaging and that discount level will convert at a much higher level and probably offset that and you'll see greater revenues at about the same bottom line.
So that was just like one of those intuitive decisions that I just immediately made that seems obvious in retrospect. And we'll just have to see how the data shakes out.
Yeah, and it's just so on-brand for you guys.
Yeah, it's just that it's a bit (laughs). So if any additional bits we can add to the roster, I'm always for it.
Awesome. So I just want to just dive right back into the Kickstarter.... Indiegogo. I'm sorry. I don't really want to get this to death.
But I just wanted to ask a more specific question. So would you have rough numbers of the overall A, cash investment for that initial launch?
That's honestly the zero to one. That's giving it your all. And then also the time commitment that you were putting into this?
Oh! Well, so that's the thing about the time commitment is that it... I was working 18 hour days,7 days a week, for probably 18 months.There was a point where I was...And this is after launch.
There was a point where I was in the warehouse, 8 hours a day, 10 hours a day packing boxes, lifting hundreds of pounds here and there with my team trying to get orders out for holiday, while on the phone with investors raising a C-round wall.
Then during lunch and at night, doing all of the holiday marketing, because it was [the] November of 2018-December 2018. All the holiday content and emails and website updates and CEO stuff on top of it.
So the time commitment just can't be understated. And no one should start a business if they're not looking to work 100 hour weeks, for at least for some period of time. But I also hate that like hustle porn.
So I'm not glorifying it. It's terrible (laughs). But then in terms of the financial investments specifically, I made a budget. And I basically budgeted and I said, "Look, I think that I can get to market and ship products with... I think it was something like $150,000. And that's what I need."
And I was like, "I know I can... I think I can make $100,000 in this crowdfunding campaign and that means I need another $50,000 from somewhere else." And that... That was everything from photography, to testing samples, to shipping estimates for our first 1000 units to all of the 5% that we are going to give to Indiegogo, to what I needed to pay my crowdfunding agency, to the hourly wage that was paying my intern...
So it was just a number of different things on top of each other that made up the initial budget. And then from there, I took that budget and I went to...
And this is a very privileged thing to say, but I went to different people --not investors necessarily-- different people that knew me and trust me, and who were my mentors in my prior company.
And I said, "Hey, I'm starting this company. Here's the business plan. Here's the business model. Here's the financial model. Here's a 3-year look ahead. Would you be interested in getting me an angel round of financing?"
And from 6 different people, I collected checks ranging from $5,000 to $10,000 to $20,000, and pooled together $60,000 from 6 people that trusted me very implicitly. And there were people that said no.
I probably talked to 10 people. 6 said yes and 4 said, "No, I don't want to do this." And that $60,000 was then on top of a $15,000 initial investment that I made to the company from my own savings.
So I had $75,000 of pooled cash. And I knew that before the crowdfunding campaign. I had to spend $5000 upfront on my Indiegogo agency, I had to spend another $10,000 at least in marketing, another probably $5000 for photography and videography all in together to get everything that we needed from a content perspective, and then miscellaneous probably another $5000 here and there.
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So I knew that before Indiegogo launch, I was going to spend $25,000 of that $75,000 And then in order to get started in production, I had to wire another $25,000 for our initial production run to our manufacturing partners in India.
So that was another $25,000 out of the $75,000 down so I was left with $25,000 in cash ahead of the Indiegogo launch. And that... I believe we used $15,000 to $20,000. I can't remember the exact amount on Facebook ads throughout the course of the campaign.
And we turned that into 10X on that, for the campaign itself. So basically, we went in with $75,000 all in, and we came out with about a quarter of million dollars out.
And that was the initial jumpstart for the company. And it was a quarter million dollars after Indiegogo fees, taxes, credit card fees, payments to our Indiegogo agency.
And that was the cash that we were left with coming out of that. You just want it to be conservative, subtract 20% from your Indiegogo take to just be conservative on how much cash you're actually going to have when it's all said and done.
And that's the breakdown of our initial numbers to get the market.
Awesome. And I just want to kind of point something out here that you skirted over. But I know it's how it works with these Kickstarter, Indiegogo agencies, they take a percentage of the win, right?
Yeah. And it depends on the agency that you use. I won't name anybody aside from the folks that I work with. Again, they're called Russell Marketing.
I do not get a kickback from them or any type of fee. I just love Will Rusell and his team. He's my spiritual co-founder. We don't work with them anymore.
We outgrew them from an agency perspective because they're more of a crowdfunding expertise. But they're stellar. Anybody else... And I don't mean this... Eh, actually, I do mean this pejoratively.
Most other agencies (laughs) in this crowdfunding space are just sharks. They're just terrible people. They're predators.
They will say, "Oh yeah. We need a $5,000 setup fee or $2,000 setup fee. And then we'll spend our own money on our advertisements,and you get 80% of the sales and we get 20%.”
“And how awesome is that? That way, you're guaranteeing yourself a 5x return on ad spend. And it's our spend, you don't even need the budget. Oh my gosh. You're an early entrepreneur. You're full of hopes and dreams. You're optimistic. give us your money. And we will make this happen for you."
You give them your money. They spend... You give them $5,000 or $2,000 whatever the setup fee is. They end up spending $500 of it on their initial test ads.
They get back to you they say "Hey, sorry. The test ads didn't perform at the level that we need. And you can't expect this to allocate our capital to underperforming clients. Do you?"
And they go allocate it somewhere else, they tell you to F-off and you're out $4,000 or $5,000, 3 weeks worth of time... And now you've been taken advantage of as an early entrepreneur.
And that is what every agency in this space does except for, in my experience, Will Russell and Russell marketing. And I get so frustrated when I think about those crowdfunding agencies preying on the hopes of early entrepreneurs.
Absolutely. And just for everyone listening that's like "He should have that guy on the podcast." I, absolutely, am getting that email after this so don't worry.
(laughs) Yeah. For sure. Yeah, I'll hook you up with Will. He's a great guy. A British guy. He doesn't necessarily identify as British but that's one of the things I think about him...
...[having that] accent. But so he actually.. And I'll just segue for a second. Every other crowdfunding agency that I talked to you... And I talked to all the ones that... If you Google Kickstarter agency... I'm not gonna name names, but there's like 3 or 4 that come up.
And I talked to all them and I think 2 of them... One of them outright rejected me. They were like, "It's not interesting. You're not going to make enough money. We only work with people that make over $100,000."
And then a week after we launched, they were emailing me. "We'd love to work with you! Work with us!" They don't... They have no idea what's going to hit and what's not.
The 2nd one, I think, said "Yeah, we'll work with you. Give us a big setup fee." And that just didn't get a good feeling from them. And then the other couple were just... I just got this really "sharky" feeling.
And I even paid one of them $2,000 and then they did exactly what I said. And they f'ed off after they spent the initial $800 out of it. And they took the other $1200 and put it in their pocket.
And Will, by contrast, actually got on the phone with me as a human being, talked me through what I was thinking, helped me understand why I would pursue one goal versus the other, per strategy.
He then did research into the bedding space on Kickstarter and Indiegogo in the past. He saw that Brooklinen had done like a $236,000 Kickstarter in 2014. He saw other bedding brands had done 6-figure Kickstarters.
And he said, "I think we can make this work. I only work with campaigns. I think we can do $100,000. And I think that YOU can." And he's telling me... He told me his fee. Exactly what you're talking about. A small, upfront fee, plus, percentage take on the back end...
And I'll let people negotiate with him themselves on what that looks like. And then he flew out to Boulder to whiteboard it with me, before any money ever changed hands.
And that was the moment that I realized I really wanted to work with this guy, because he was investing a few hundred bucks into a roundtrip ticket.
And he went skiing for the weekend. So he got a ski trip out of that, too. But, I don't know. People you trust are worth their weight in gold. And there's too few of them out there.
Again, you're just dropping awesome knowledge bombs here and walking people through that. And I have said it before on the podcast.
And I think it is rare that anyone other than a founder is going to help you find product-market fit. And I think you might have just given me a glimpse into rethinking that.
Yeah. Will, I think that the trick is that he's seen... Now it's just a podcast about Will. I'm gonna send them this and tell him he owes me some type of champagne bottle. But he taught me a lot of what I know about crowdfunding.
And because he's seen so many founders come through and come to life, and he is a CEO, himself, of his own agency. So he's also founder and CEO.
So I think he just has a different perspective on it. And it holds true that working with other people on his team was good, but not never as good as working with a founder. It's completely a different feel.
Absolutely. Let's fast forward a bit now.
You guys are... You've grown a ton. Now we're into 2020. Pandemic. Black Friday is right around the corner. This won't come out until probably February though, if I'm being honest.
What do things look like now? You know what I mean? What's the landscape These days? You guys are out of that startup phase.
Now, you're what people would necessarily consider as "scaling". That is what the terms that are being thrown around in space. So what's, what's different between now and then?
It's just a different skill set. It's a totally different skill set. I'm really good at doing 80% of everything with 20% of the time. I'm just a big 80-20 dude.
And I will crush customer service for a few hours, then I'll go to... This was back in the day in 2018, when it was just me in my bathrobe in bed with my dog Harvey. Shout out to Harvey.
He's got his own webpage: sheetsgiggles.com/harvey. He's the best boy and our VP of Barketing.
But so basically, that was like do the manufacturing, do the supply chain management, create the product designs, negotiate with the manufacturers, do the customer service, create the content for the ads, do the photoshoots, build the shot list, write the scripting for the videos you're doing, monitor that in the Facebook ad performance...
It was just everything. And if you're a high functioning lunatic like me, you can do it and scale to... I think, before I ever hired a single employee, we had already made our first over half a million dollars in revenue.
And we... And that was in our first six months. And then we had [been] close to our first six-figure month but we had reached like $90,000 in one month. And I was literally in the warehouse shipping boxes.
And I know it's still a baby because I say that was 25 months ago, like October 1, 2018 was 25 months ago. And we just hit 2 years in sales and shipping. And we go in from our close to $100,000 month 2 years ago in November of 2018.
I think we did $90,000 that month to November 2020 will be our first million dollar plus month in 2 years. And that can give people the idea of the scale that we're at. I don't think that it's like...
To some people, they'll hear a million dollar month and in my mind, I have to take time to smell the roses and and be like "This is really awesome." If you told me this two years ago, I would have said "Absolutely".
But to some people, you know, you say a million dollar a month and they brush it off and say "Oh, Allbirds did that month 6. So, whatever." And I think it's just all relative. You'll never...
Comparison is the theft of joy. And I think that I get very happy when I think about this weird, little company adult scaling to an 8-figure run rate in less than 2 years. But the challenges are completely different.
Now, I move from a founder who's doing everything to a CEO who facilitates and finances everything. And it's a less fun job. I don't enjoy it as much. I deal with a lot more problems. A lot more emotional problems, a lot more people problems.
I am constantly trying to figure out how to put more money into the business without necessarily diluting us or taking on bad debt terms. I'm always pushing the team to hit more aggressive goals, which can be a stressful thing, especially during a really challenging year that 2020 has been.
I don't get to do much of the content that used to be my lifeblood. But it's about finding joy in the work product of your team, because my team does some good sheet. (laughs)
They do some good stuff, man. And, and I, this year has been an exercise in the last 6 months of telling myself that more people than you are capable of really great content and capable of building a really good brand.
And I'm just really, really pleased with how I think I'd personally have grown into the role, even though it is less fun than it used to be.
I can relate so hard. We've grown a lot this year, our team has doubled, and I do absolutely nothing that I used to do. And it's crazy to... I wouldn't have thought this is what I'd be doing now.
Right? Exactly. You get really good at a bunch of different things. And I'll put it this way, a founder skill set is fundamentally different from a CEO skill set.
And that's why a lot of founders really actually fail or struggle in the transition. And I'm saying that as someone who is at full-blown risk of failing in the transition. We'll see how it goes. And that's why people hire seasoned CEOs..
...take over from them as a founder. It happens all the time. And it's not a bad thing. I actually used to look at it as a bad thing. When I was in my 20s and I would hear about a founder at a company, hiring a CEO to take over their business for them.
I used to say "How can somebody run somebody's business for them better than they could themselves?" And now I realized, "Oh, it's just a completely different skill set from going from 0 to 1, versus 1 to 2, versus 2 to 10."
And I think right now, we're probably at the... We're probably past 2, I guess. I don't know what revenue level you consider different stages of a business.
But we're 2 years into this thing. And I'm trying to figure out how to forecast inventory for 200 SKUs, and bringing enough inventory financing to have working capital for 90 day turns and (laughs) figuring out hiring and scaling a team and doing this all forcibly remote in a pandemic riddled year. It's been wild man.
I can only imagine how it is on your side of it. The one thing I do want to point out with [is] oftentimes people blur the lines between founder and CEO.
And I want to say, there is nothing... There's nothing you're giving up as a founder if you hire a CEO except a little bit of money...
...compared to what you own of the company.
Right. Right. Oh yeah. You might bring in somebody and pay them a salary and give them some of your founders equity, but l hiring a seasoned CEO can be a great call. AndI think that I've really worked...
I've hired a CEO coach. I've gotten mentorship. I really worked hard on the skill set. But something as trivial as... And I say trivial. It's actually crucial: The packaging.
We had a meeting on that this morning, where the team had redesigned and revamped the packaging.
And I was aware they were doing it and I saw the initial drafts and I provided feedback into the process. But that packaging is my baby. That unboxing experience is Colin McIntosh [from] start to finish. And everything from the notes, to the bit, to the copy, to the designs, the doodles, to the experience, zero plastic... [It's] a really great unboxing.
That was something so crucial to me and so important to me.
And now my team is telling me today like, "Yeah, we've already submitted the designs. And if you need to change anything super big last minute, let us know. But we don't want you to make any major changes, because it'd be a pain in the ass."
That's something that really made the hair on the back of my neck stand up.
And I'll double check everything but I have to remind myself like "You hired these people. You pay them good money. You trust them. You hand picked them. They can do a good job. Don't reprimand them for doing their jobs without you." But it's a challenge. I'm a bit of a control freak. I think all founders are.
Yeah. Yeah. I think one of the biggest learning curves that you have when you start to grow your team is you gotta delegate, obviously.
But you're not delegating a to-do list. That is a recipe for disaster. You're delegating outcomes.
Oh yes. Yeah. It's so funny that you say that because when I hired my initial team members, I was straight up delegating a to-do list.
I was like, "Great, you're gonna do this. And then you're going to do this. And here's the things that you're going to take off my plate. Take off my plate."
And it's okay with customer service. And it's okay, to some extent, with production and supply chain management.
But it's not okay with marketing and it doesn't scale with any department. And that's one of my biggest lessons. And frankly, I took the company from $0 and an idea that I wrote on a piece of paper to over 2 million dollars of venture capital investment and our first several million dollars in sales, pretty much for myself.
Crosschannel.com and Amazon, I think we had over 75 SKUs before I hired anybody else like so I took it pretty far. But the last 18 months since we hired our first employees in February 2019...
So it's been about 20 months since our initial hires. And then we've only had, for the majority of the company, only 3 or 5people. And now we have 8. It's still very small the amount of work that 8 people are able to do versus one is astronomical, as long as you give them the ability, the autonomy, and the tools to unlock that work.
And that actually has been really interesting for me is the realization I used to be a recruiter. And so one of the lessons I used to have as a recruiter is people hire people like themselves.
And that's true for both negative things like hiring the same gender, hiring the same race, as it is for positive things like hiring for the same personality and skill set traits that you're looking for in the role.
That's why you always want the interviewer to be the perfect person that you could hire again for the role. And I just have to tell myself, "Look, you hired 7 little mini Colins that are super hostile to micromanaging, that hate 9 AM meetings, that don't like being overloaded, that don't like all the things that I hated about my past jobs. So don't micromanage them, otherwise you will lose people."
And that's what I have to remind myself of pretty much every day.
This has been one of my favorite interviews I've done this year. Colin, I can't thank you enough for coming on the podcast. Obviously everyone, go check out his amazing brand. Sheets and Giggles. Sheetsgiggles.com.
Is there anything I forgot to ask you, though, that you want to share with the listeners before we go?
I hope I didn't take too much time away from the questions. If there's anything else that your listeners like to hear, any specific questions or one thing that's helpful for everybody out there, I'm happy to answer before I go.
The main thing I would say is that... And hopefully it's inspirational is any... I don't know how you feel about this, Chase.I hope you feel the same way.
But for people that are in a good spot already where it's like you have a good job, or you have graduated from a good school, you have good prospects, maybe you have a little bit of savings in the bank. And it's a very privileged position to be in. So I don't take it for granted.
And I wish everybody had the same starting position that I had, from where I came from and in my backup plan. But if you have a good backup...
If your backup is, go work at Amazon, go work at Microsoft, like your backup is go have a stable 9 to 5, then I would hope everybody out there would take the time to start their own company and give it a shot and spend 6 months trying to build something of their own.
Because if your alternative is to just continue on the same path that you're already on for the next 4 years, 6 months isn't gonna change that. But it might change. It might change in a negative direction. It might change in a positive direction.
So I hope I really did inspire people to give it a shot. Try to start their own thing. And it might be the best decision you ever made. It was for me, for sure.
Awesome. I love that. And I'm right there with you. Investing in yourself is always going to be a positive thing in your life.
Yeah. Absolutely. And it's not... I made sure I did it in my late 20s when I had no kids, no mortgage, no roots, no life. Man, I see entrepreneurs with families and I am so impressed and blown away and don't know how they do it.
And I just can't imagine not being able to just do this when I was a single, young guy. But I hope that people out there take the chance and take the plunge. AndI hope this is helpful for some people that are at that zero to one stage.
Absolutely. I'm sure it will be and I know we'll circle back next year, have you back on and talk about what's changed.
Oh, that'd be great. Yeah, I would love that. I love doing that. And we can see if it's... Hopefully it's all been good.
I hope so as well. You take care.
Alright. Thanks, Chase.
I cannot thank our guests enough for coming on the show and sharing their journey and knowledge with us today. We've got a lot to think about and potentially add to our businesses. Links and more information will be available in the show notes as well.
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