Justin has created a physical product with a very strong digital presence. Their Facebook page has over 250k likes, and their YouTube videos have received millions of views. He has a deep understanding of product virality.
→ What is Diamond Candles
→ What kind of growth did he experience
→ What are some difficulties or challenges he experience
→ How did he achieve 250,000 likes on his Facebook fan page organically
→ His deep understanding of product virality
→ What makes the good viral loop
→ His best advice to anyone trying to grow a startup
→ And a whole lot more
Bronson: Welcome to another episode of Growth Hacker TV. I’m Bronson Taylor and today I have Justin Winter with us. Justin, thanks for coming on the program.
Justin: Glad to be here. Glad to be.
Bronson: Here. Absolutely. It’ll be unique because you’re in a category that a lot of other startups watch this or not in. So we’ll get to learn some new kinds of tricks and things. But you’re the founder of Diamond Candles. So tell us, what is diamond candles?
Justin: Yeah, diamond candles. We are a home fragrance company. We are online only. So don’t know specifically as kind of a name alludes to, we actually make candles that have a real range inside of each. Earth friendly, all natural. So I handle so each ring and you know, talking about everywhere it’s going to be worth at least $10. So a comparable to something that, you know, a female might find at the department store or something like that. But it’s still going to be where it out jeans, match outfit, that type of thing. But there’s also the chance that it might so one might find a ring where 100, a thousand or up to $5,000. Wow. So kind of a jack box kind of concept. Yeah. So spicing it up, making things a little bit more fun. A high level of anticipation. Yeah. So that’s. That’s awesome.
Bronson: So is this kind of like a lottery tickets for women who don’t know they have a gambling problem? Is that what this is?
Justin: No, no, no. So, yeah, no. I mean, they love it. What we find is that, you know, we have about let me see, the average household owns about 12, $15 on home fragrance products every month. So this is a yeah. So I am definitely a consumable up there with laundry detergent and groceries. So it’s something.
Bronson: That you want to be in, so.
Justin: Right. Yeah. So I think there’s a practical utility to, you know, a, you know, fragrance in your room or getting rid of a bad, bad smell. But then it’s also something that predominantly female I just really, really enjoy. So we’re kind of in this great, great space. People are already buying it, but we’ve figured out a way to make it more fun and hopefully with, you know, a little bit better quality or people are used it.
Bronson: Yeah, absolutely. Now, I don’t know what you guys have kind of publicly released, but what kind of growth have you experienced there? You know, any numbers you can tell me? Well, whatever you’re comfortable with sharing.
Justin: Right. Right. Yeah, I know. So it’s been been really exciting. So we’ve been around for just a little over two years technically from when we really just first started testing the waters back would have been Valentine’s Day. 2011 is when we kind of opened up shop and decided to test this out there and see how how things look. So what we did, you know, first of all, it’s still very much figuring things out. We need to clear in a million in revenue for our first four months. So way above what certainly we would have expected. And then now with where we’re at, we’re at a at about a $20 million run rate case right now. So it’s been been pretty crazy and keeping up with the physical product and keeping in demand, we actually manufacture it. Right. So and so problems that, you know, most guys are having, but it’s been a lot of fun.
Bronson: Well, let me ask you about some of those problems. You know, in your opinion, is it harder to grow a physical product company than it is to grow kind of an online only company? What are some of the difficulties there?
Justin: Yeah, no, it’s it’s different, I guess, you know, naturally harder or easier. You know, certainly there are some additional complexities with cash flow and inventory and things like that to kind of scale things, particularly on the outside money. And so we are not taking any outside money. So it’s very much, you know, we saw a dozen candle stay ones, the products that made the candles for day two, you know, it’s kind of rolling it over to where we are now. So definitely a lot with and since we’re manufacturing things ourselves, you know, we found that, you know, roughly about every quarter, you know, we had to double production completely. So starting from a very, very small footprint, about 2000 square feet, maybe a little less, I think it was where we were at. And now we’re in a place about ten times that. So kind of have some of those bumps in the road. Exciting challenges to have, but definitely, definitely different and some different skill sets with that based than, you know, just the online only part of it.
Bronson: Yeah, that’s great. So kind of looking back over the last couple of years, what are some of the key things you’ve learned about growing an e-commerce company that maybe you didn’t know on day one?
Justin: Yeah, yeah. There was a lot we didn’t know anyone, definitely. So it’s been very soon with us figuring things out. One of the exciting things, and I think you can see this in a lot of the e-commerce market as a whole right now, there’s kind of what media mix kind of put the two different categories of of the. Old guard like the Internet retailer 500. You know, put a UPC code on a website and sell it and stuff, you know, Amazon all the way down to maybe a so-called, you know, they’re selling soap, except it’s just branded for soap. I mean, is it that much really different than Amazon? You know, they might argue with me on that, but I would say it’s not a very decent one or so. But then it’s kind of the new guard here, which is the very tech influenced e-commerce, right? Where we see companies like bonobos to a degree, or even a working partner, which is a little bit more of a pure play kind of Internet retailer way to like a About.com rights for a sneak peak or something like that. So, you know, for us, in terms of our learnings, we have some great people running the race with us in different markets that we’re able to kind of rub shoulders with. But it’s definitely a huge, wide open field in many ways. There is so much opportunity in different products, kind of whether it’s kind of more, you know, long tail of a physical goods or it’s actually a buddy of mine sells hair extensions online and just online. And it’s taking it to, you know, probably those numbers without asking. But, you know, they do a lot of stuff on YouTube and, you know, not much else. And and they’re doing really, really well. Like, you know, something, you know, they’re definitely kind of mid-market size, you know, over $1,000,000 a year very, very easily type thing. So it’s just it’s interesting interesting to see all these different brands out there and how they’re trying to be unique, have a story, offer better experiences targeted for their product line. So just put in the bathrooms.
Bronson: Yeah. Is that really the main difference in the new guard? And the old guard is crafting that experience, crafting something unique for that vertical? Or is there other is there something else that really different differentiates online a more.
Justin: Right, right. I think I think with some brands that are vertically integrated like us, there are some, you know, supply chain operational efficiencies that can be added in Warby Parker is very typical example. You know, are they doing something super revolutionary with technology? You know, not not necessarily. It’s not like, you know, maybe like a fab, which is maybe a little bit more like I mean with things. But, you know, they’ve been able to change it industry from our cost structure standpoint and efficiencies there, you know, so we’re able to piggyback on that similar concept because we don’t have physical brick and mortar stores, which for the whole fragrance industry, you can also, as an example, being the largest at about a billion a year, there is huge network of physical brick and mortar retailers operating for them as well as third party retailers. So because we don’t have that, you know, we have, you know, extra margin to be able to do things with. So the question is, well, what are we doing with, you know, what do we do with it that’s going to make a difference and, you know, outbreak through things. That’s how we can afford to use the rings as an example. So, you know, there’s definitely, I think in the ones that are really going to be around, it’s that unique story and then figuring out how how can we use technology to really enhance the product experience that’s better than what other people have. So it’s I mean, I think it’s kind of multiple things to stand on. How can we do things differently here? Operations, supply chain lines, technology. Right. You know, so it’s all customer service and you got a lot of ways to stand out at the end of the day.
Bronson: Yeah, that’s great advice. Now, you guys have done some really interesting things to gain users, things that I’m pretty sure no other candle company has ever done. For instance, you guys achieved 250,000 likes on your Facebook fan page organically. I looked yesterday, I think it was over ten 50,000 now. Okay. Tell us, how did you achieve that organically?
Justin: There you go. Growth hacking, right? Yeah. That’s that’s all I hey. Yeah, no. So so for us, I think is unique for us. Very early on we figured out, you know, we knew this was going to be a fun experience for people, but, you know, kind of go to market like what does that look like? We figured out very early on and we almost literally launched on Facebook. So I guess Facebook has been part of our DNA from day one in the early days. I mean, I was literally on Facebook like five or 6 hours a day, every day for like months, particularly when, you know, we didn’t have a dedicated social media person. So a lot of that was, you know, figuring out product, figuring out how can we get people to tell them more people, right? And this is all we have. We don’t have a marketing budget, right? You know, it’s me and you know who we can afford to feed me, right? You know, and then my particular, you know as well who are running lots of things as well. So, you know, for us, we figured out early on that the value is in in many ways the experience initially. So the excitement and the anticipation. All you have to do is go to YouTube and search the diamond candles and pull up one of these videos and you’ll understand a little bit about what I mean.
Bronson: No, I know exactly when I did that last night. And I was like, there’s a whole, like, subculture hidden world of, like, unboxing these candles that I knew nothing about. But anyway, back to Facebook. Tell us what you’re doing there.
Justin: Yeah, exactly. So. So you’ve got excitement in that moment. You know, what is the most low friction way to capture that moment? In a delightful way, it’s the photos. So with that, we figured, hey, when people were sort of taking each of these photos with their phones, hey, this is the ring I got. You know, this is this is my candle type thing, being able to easily tell that story. It was something that they enjoyed and they’re like, sugar, oh, you know, I got $100 ring or Hey, or do you like this one? That type of thing. So very early on we figured, hey, if we get more people doing that, spreading that more, like we’ll be good, right? That was kind of that was kind of the hack, right? So for us, we did a lot with incentivizing people, both with the culture, even on the label actually. So, you know, we have a call to action to take a photo and share the experience on your physical product. Yeah. So we kind of created this culture where because the products are different. Well, I’ve never heard of candles. What is it? Oh, there’s a ringing a candle. What you do is you share this experience with others via photos. Right. That is part of the thing. Like, you don’t not do that. This is different. So we do things differently. So it’s creating a culture of expectation. And certainly we would run, you know, test out different incentive schemes, so to speak, with contests and things like that or, you know, hey, you know, upload photos in the first photo, people who do over you do this, that type of things. And so people genuinely enjoy coming back and seeing the pictures of the rings of other people. So it created an environment that I think for a lot of, you know, the problem that I do have is, you know, who cares about a Facebook page? Like what value is there for me to where I’m going to think about tomorrow and want to come back to your page, which I can’t find anywhere else? So we’re able to create a value, you know, in the media. We just happen to be Facebook. And certainly our target market is usually on Facebook. And then, you know, with that, I mean, that in many ways was really it. So other than that and finally, you know, working to find influencers who had some number of, you know, followers on Facebook or they were, you know, the mom blogger type or, you know, fashion bloggers or something like that, like getting, you know, getting it for a free product or even if it wasn’t free and saying, hey, don’t send people to our website, some of our Facebook page because that that, you know, that third party wow, look at all these photos people are getting was kind of a result page in many ways.
Bronson: So yeah.
Justin: Josh So, so kind of funneling people through that social group chain before the website I think is really what did it for us. We were able to create about a year. Strategically, we sent everybody there before they came to the site and because it was compelling enough, we didn’t worry that a significant portion of people were going to follow up on our conversion funnel to actually get this right.
Bronson: Now, that makes a lot of sense because when I first went to the site, it was probably a week or two ago and I had one impression of the company. And then last night I look at a YouTube video and then go back to the site and I feel completely differently about what guys are actually doing because I went to the social channel first. So that’s a great kind of tidbit of information to prime the pump, let them see something on another platform, possibly because that goes it’s counterintuitive. We think, no, get them to the site. Obviously, that’s where the sale happens when really there may be some kind of pre marketing needs to happen there. Let me ask you about the incentives. You said you played around with different incentives. You know, the first one to do this? The first time to do that. Did you guys learn anything about those contests and incentive programs, maybe things that you tried that just you thought were going to be awesome, that bomb things that you didn’t know would work well and they did awesome because we’re always trying to figure out context and schemes to do things on different platforms, you know?
Justin: Right. Right. So true. Yeah. I mean, probably in the areas we had a, a purchase referral friend program, very easy for people to be able to want to click to Facebook and they’re sharing things actually are cure become you know actual get put it in their cure because they’re great platform guys and all we want to do is run multivariate tests on lots of different things. But you know, predominantly of which, you know, particularly early on was the incentive level. So we would run tests on, hey, you know, so people make a purchase, you know, pop up, hey, you know, share this with your friends. And if someone makes a purchase, you know, we’ll give you, you know, a $4 credit for like $4.90 back for $5 or $6. Right. And we’d run that and say, hey, I’m dollars is a nice ring to it. People respond better. And he was actually offering a code item to people or sharing with and then we could test those incentive levels as well. So it was a double sided incentive program. And then, you know, beyond that, we’re able to test everything all the way down to the thumbnails on the Facebook share. To the preselected text thumbnails, the headers, everything like that. So really, you know, I am working very closely with bit to optimize that particularly early on and that’s actually been very interesting about the social referral component. Just because it is so unique in our market is very reticent to share, you know, this store with other people. So you know, really, really looking back and kind of testing those things was huge for us and that was really the primary share mechanism we had early on and is still predominant today in many ways, but then secondarily incentivizing people for different things. We would run stuff where we would do, you know, we would use different social contests, promotion platforms where it’s a photo contest or it’s a video contest, things like that. We would run a video contest and figure out, you know, how, you know, obviously the additional work required for something like that out of our fan base, you know, what’s the participation rate? You know, what’s the value in those, you know, generated content which we have it, you know, versus hey, let’s try photos, you know, so we have a higher dissipation rate, you know, of that total, you know, kind of higher testing those things. So, you know, we at the end of the day, you know, we, we tried to and we do a lot of just getting nicks, right? Because you got to kind of keep things different people anyway, you know. So we have different themes, but you would kind of guess if you did you become like a pyramid, almost like, you know, the bottom effects, you know, a giveaway, you know, enter an email is getting the lowest barrier to entry, highest level participation. And you kind of give your way up, right? You know, you’re going to have asking for more work, but the retention payoff is to larger. So we kind of vary up and down with things. And certainly early on I even now I mean growing those numbers with give away low barrier to entry tools really allowed us to rapidly grow up that volume. You know, you see relatively short period of time, you know, direct paid acquisition, budget support.
Bronson: Yeah. And you mentioned a clear bit. Tell us real quick what is clear bit for our audience in case it might be a tool they need to use.
Justin: Yeah. Yeah. So sure, it is a social referral platform. So they are a free accounts which people can get in and use it. So and not just kind of post-purchase for e-commerce, but also other kind of different, other different action people being able to, you know, one click and share typing in different social networks. They have a very extensive multivariate testing platform, super marketer friendly to be able to, you know, just drop the code in and get the install ongoing and then run all types of stuff you can imagine there. And then they also do have kind of an enterprise level services account where if someone doesn’t have the time to focus full time and they can come on in and work more of an incentive basis. So it’s kind of like a part time marketing team that’s always working every week to run for you and getting the automated channels.
Bronson: Perfect just, you know, thought to be a good tool for people to know about, you know, in case they needed something like that. IN Now, you know, we talked about this already a few times, but it really does seem like, you know, people just go crazy when they’re opening up their handle and they burn it down to the point that they can get the ring out. I mean, it just like it’s such a good experience. It really delights them. Do you think that’s something other startups should consider is really finding kind of their ring moment? If there’s something they can put into the product that’s just awesome, different, surprising fun, or is this just something you’ve been able to do but probably is not replicable? Oh, what’s your thoughts on that?
Justin: Right. Yeah, no, I think that’s a great line of thought because, you know, there’s some people I’ve seen where, you know, you can you know, you can see where they’re trying something. But either for maybe even you personally like, it doesn’t really matter to me, you know. So I mean, I think for us, the excitement and the fun for some demographics and some verticals that might not matter at all, like that’s not really going to move the needle. But for us, move with the candles and kind of context around candles. And, you know, I’d be not necessarily a huge cable guy leading up to this myself, but my wife juju having candles, right. You know, Brenda, you know, my partner is usually a lot of candles understanding that this is an enjoyable an experience. So, you know, how can you know we you know, we have that heart up, right. And and, you know, certainly you can kind of see the conjecture about, you know, he’s not really going to move the needle for people or, you know, what is the you know, I don’t know. What if you make candles and we are I don’t know. I can’t only X, Y, Z. And if you buy a candle, you know, we give a candle to someone in the music candle, right. Yeah. I don’t know. Right, right. So or buy one, get one type thing. But let’s say that’s the only value, right. Is that something where for the average person in the market. It’s going to be enough of a factor that converts them to be, you know, make a transaction compared to another product, right. Warby Parker is a great example. Warby Parker is not only buy one, get one. If that’s all they were, they wouldn’t be anywhere near where they are. You know, there’s other very distinctive kind of value propositions that they be able to do in their market, which clearly resonates with, you know, with that a market. So I think in many ways it’s just more fun, right? You know, whether it’s handbags or like toilet paper, like whatever. I don’t know, you know, how do we make, like, you know, T-shirts, handbags, like, you know, maybe maybe there’s something where it’s like, hey, you know, you set it up pricing wise, and with your margins, you’re able to say, hey, you know, we buy, you know, buy one. And then maybe I’m surprised, like, you know, someone say, hey, we’re gonna send you a free one. Like, and that’s kind of like you’re saying, right? You go down your cost structure and then once you give someone a free product, right? Make it easy for them to share that people are so blown away by that. Like, you know, 80% of everyone is sharing that and then giving that to someone in need, you know, or a friend or whatever, whatever it is, it’s some kind of creative hook that resonates with the market in a way that fits well, is difficult. But, you know, it’s kind of a mix between understanding your market kind of consumer psychology, understanding what excites people and what works for people and enticing, you know, at the end of the day, just kind of figuring out you’re talking to people and then minimum viable product getting something out there.
Bronson: Yeah, it seems like it’s a it goes back to that new guard, old guard with e-commerce because the old guard doesn’t think like this at all. But the new guard, you know, for instance, you know, people order off Zappos and then all of a sudden they get next day delivery unexpectedly. Like that’s the new guard kind of given their experience. You know, I think about a fad. I mean, I’ll be missing that a few times already. We order something more fab, you know, last month. And they sent us a free poster in there. And I mean, you know, it’s like, what do I need a free poster for? And yet I’m excited about it, you know.
Justin: And I’m glad.
Bronson: I have it. My wife thinks it’s cool, too, you know? And so it’s just those little things. It seems like what the new guard is doing or they’re not trying to be have these, you know, margins at all profit. They’re willing to reinvest in the experience with those margins, which I think is a big deal. You know, that really can be a leg up on the competitors.
Justin: Yeah. And I think there’s a so traditionally the e-commerce game is really a zero sum game because it’s, you know, let’s just say of handbags as an example. Right now, let’s say there’s five retailers selling handbags online. How, you know, how are they getting customers? You know, ABC, Traditional Asia, they’re all bidding against each other. So really the entire game comes down to conversion rate, right. And some of those important metrics, you know, we can convert people slightly better than everyone else, right? Our average order is slightly higher. And I think this guy is slightly higher. We can afford to pay slightly more from this acquisition channel. Right. And then it’s just a little bit more it’s just game, right? So instead of saying, you know, we we have gone we’ve run up some very minimal tests, but nothing that’s contributed to the bottom line at all. But we don’t do any great acquisition right now. I mean, I think it’s something that, you know, we’re looking at doing in the future. We should, you know, leave it on the table for another reason. But, you know, you in being able to figure out something without playing that game, right? We’ve been able to create something different, you know, something that’s that meaningful. So, you know, when you can’t you know, you can’t win a game like don’t play your game like making your game, right? We made it different. We didn’t play it by Hogan. So yeah, it’s great.
Bronson: You know, we had a game Biyani, the co-founder of Udemy, come on. And he talked about pay per click as being a a business model competition. He said whoever has the best business model wins. You know, just like what you said, there’s five of them. They’re all trying to figure out how to eke out the best margins to pay the most per click. So it’s like you can play the business model game if you want to, but you have to have the best margins, the best business model, whatever, or you can play the experience game, which is ignore that and just bring them in some other route that makes them have a more connection to your brand anyway.
Justin: So right, right. Yeah. Like a good practical example, we ran some tests on mobile pay per click and now they’ve made some changes with kind of combining that with desktop. But if you look at, you know, top ten, top 20 results or anyone who’s paying for people ads right now and you look at their sites, you know, running the check for mobile, you know, there’s like one or two out of like 30, right? So and when we ran tests for that for the desktop and we had an extremely healthy conversion rate, which even for desktop we can be immediately profitable with that, which was great. But we’ve ran stuff with mobile and specifically looked at, you know, our cost there it was like seven times is probably just like is thought it was crazy, right?
Bronson: No competition, right?
Justin: Yeah. Because there was this market looking for it. But the market is so behind us. Traditionally, these particularly these retailers, they sell candles and things like that. You get a little more old school maybe. So in many ways you can kind of look at know, maybe not the biggest, fanciest markets, but maybe these big markets. I mean, you know, we’re talking so it’s like a six. Your market. So now pretty sizable but you’re just being five steps ahead having available right now, which is a huge competitive advantage. You know that if you want to do I mean, you could sit and live on that all day long if you like it. You know, it’s easy.
Bronson: And that’s good advice for entrepreneurs. I you know, we’re always drawn to the bleeding edge markets and the new technology. But if you can back up and do something that’s not as exciting in the middle of a market, it may be wide open for someone that has this way of thinking about, you know, everything to come in and kind of dominate release, gain a good amount of share.
Justin: Yeah, it’s just it’s taking and, you know, there’s there are people who are kind of doing this. It’s not I know of this, but, you know, it’s that, you know, it’s the TechCrunch fodder of like the new cool marketing stuff, the new cool tech. Yeah. Like, you know, take that and and bring it to the more old school market, right? So have your foot there. Bring it here and you’re just going to, like, blow things up because all these guys, you know, you know, it’s just not here, you know? So how many.
Bronson: Years is it going to be before Yankee Candle has adjusted on staff? I mean, ten years, maybe, you know, 15. I mean, really.
Justin: I’m going I’m going to.
Bronson: You know, I mean, you know, that kind of person where it’s like, I know that they think like this and they, you know, have this as their M.O. I mean, we’re decades away from them having a growth hacker on staff, you know?
Justin: Yeah. Yeah. I mean, you know, and even I mean, you just the traditional they’re a big company probably. Right. Which is they’re not going to be taking Footrests and Mercedes the limo popping out sweet brands or something. But you know, like, you know, a company of that size giving out anytime soon is obviously pretty well in any market, you know?
Bronson: Yeah, absolutely. Now, you’ve mentioned you didn’t take any VC money. I want to ask you, do you think that’s made you really disciplined and helped your business or is it hurt you because you couldn’t just throw money at problems and run fast?
Justin: You know, it’s interesting. You know, you know, it’s really pros and cons each certainly. I mean, I think it has made us obviously more frugal, you know, you know, can I defacto you’re not in my choice but yeah, I think it has made us more scrappy with things because, you know, if we had, you know, a few million dollars like monthly paid acquisition spend, really easy to sit here and just play the acquisition game on them. All right. That wasn’t a focus, particularly if you don’t have any pressure from investors to, you know, bridge the next level, you know, and we go, you know, we’re cheap or I keep running confronting subprime, you know, but because, you know, you know, really all our profits being poured back into steering the factory and inventory, you know, sitting here and saying, hey, you know, what can we do for free to take over over the next like two months? You know, it’s like, okay, how are using the blog now? Really happy with it. Let’s look at some best practices in other industries. Let’s craft something that’s going to resonate more. Our industry, you know, it’s sort of attracting like crazy, right? And then let’s let’s start testing this. You kind of forces you to do that getting right now. You know, for some additional context, now, 50% people in manufacturing, we have really only other than my my two partners and co-founders, David and Brenda, we really have one other person in house at all. He’s just a, you know, our product management and social media and everything like that. So, you know, it’s very much our hey, hey, Josh, you know, hey, David, you know, everyone always get in the room and we use a blog. They’re like, you know, how do we take Pinterest from 10,000 followers to 100,000 in the next three months? You know, let’s find all the top pinners, right? And let’s kind of contact them. Let’s set up, you know, that type of thing. You just. That’s your only choice. Yeah.
Bronson: No, it’s great. It makes you scrappy for sure. Yeah. Now, you’re also a growth consultant on clarity, and you’ve advised over 50 startups either on clarity or just offline, you know, talking to them. And you mentioned your profile on clarity that one of the things that people can ask you about is viral loops. So I’m going to ask you about viral loops. Tell us what makes a good viral loop.
Justin: Right. You know, and again, at the end of the day, I think. I think for us it starts kind of ground zero, you know, with products, right? So for us, you know, viral loops and tracking and kind of building on it has been very easy and continue to be easy because we’re starting from a viral loop of, you know, like one over one, like day one, right? Yes. People are just telling people and, you know, you think about it even on the rig component. And actually one one of the one of the little sample room, you know, this is like a $10 race for the winner. Kind of hard to see. But, you know, when people get this ring, you know, what do women do with rigs? They wear them, right. You know, so we’re they’re out with other girlfriends. Right. And they got the purple top on. It’s matching the purple rig. You’re like, girl, that, you know, that’s a nice ring, right? Where do you get like, I got in a candle. Would you just like, let me tell you and all you guys are candles, right? So, you know, on just relatively anecdotal surveys and things that we’ve done, you know, the average person tells 3 to 4 people off line that end up turning in to a purchasing decision. Wow. So that’s actually underneath the text. So so with that in, you know, viral loop and, you know, creating viral leaps, you know, right now in many ways, we don’t have as many environments. We have this hugely you know, we have a huge buyer group with our products. Right. And that’s been huge. It allowed us to continue to grow. You know, we have a viral loop with our post-purchase work for our friend program, right? Because we know that on average people are offering this number of people, you know, this amount of people are in a clear sense of our conversion rate to get their thing. But, you know, other than that and we’re working on a lot more for the future because there’s a lot of potential with what we’re doing to kind of hard at New Start aspiring running our product line for the full kind of home fragrance catalog and things like that. But you know, we don’t have a lot of separate individual lives, but I think it’s something where, you know, day one, you know, it starts with the value creation. And it’s just amazing to be valuable in the mechanics of how people are sharing and things like that in many ways can kind of fall into place. You know, how can we deliver the most out of the people, you know, in this kind of one instance in kind of product lifecycle and, you know, certainly testing very quickly and figuring out what that biggest thing is, securely optimizing around it.
Bronson: No, that’s great. I love what you said about viral because, you know, so many people watching this just because of where their product is at and what their product is, they’re forced to go with option B, which is, hey, let’s do a referral program. That’s kind of the only game in town. Like we hope that works. We hope those shared on Twitter or Facebook and we’ll give them something. But in reality, that’s what you do. If you can’t do option eight, which is create a product that is viral and then, you know, optimize other things and that’ll help. But that’s not going to be the main source of like what’s going on there. And so for people watching this, if they’re still trying decide what product to do, pick something that’s inherently viral. If you’ve already picked, then you’re stuck with option B, good luck with it. It’s not bad. It’s just it’s not as good, right?
Justin: Yeah, I know. Exactly. And, you know, you know, obviously lots of examples. I mean, but there’s going to be things where, you know, you know, you can have this double sided marketplace kind of, you know, can I draw in some examples where the increasing value of the product increases, as, you know, the relative social, you know, number of people participating with you increases, right? So like, you know, Evernote, right? You know, which I use a lot and a lot for things. You know, Evernote does not bring any more value. You know, 100 of my friends are right. It’s not any better or any worse, but, you know, Pinterest, Facebook, so and so forth. Right. Obviously, it’s great. Yes. I have a lot of friends on Pinterest because, you know, there’s more utility there. But I mean, you know, in many ways, Pinterest on its own is still very valuable. Right. And that’s what helps kind of keep them going, you know, before they you know, they kind of reach that. So it’s, you know, if you’re kind of determining kind of where you are, you know, in terms of, you know, your product line, you know, digital e-commerce is for whatever and, you know, figuring things out. And I guess you could probably make the analogy Diamond Candles is, you know, with Pinterest, they’re five like candle products, right? Because candles before, you know, you didn’t really have a huge incentive to telling people about it. But, you know, but now you just kind of in the product and there’s more utility is that happens because you’re having fun with your friends. You know, like, don’t women like to go shopping together? It’s not fun shopping alone. You know, for me it is. Right. But I think, you know, it just feels right. But yeah, my wife, you know, I mean, she’s off with, you know, ten year olds or whatever, you know. So but yeah.
Bronson: It’s great. So you guys have done a lot with social, obviously. You know, we talked about the Twitter 50,000 Facebook likes. I think your YouTube videos have had over 1 million views, you know, an aggregate of all the people watching these things, which of course, is driving traffic. And you’ve consulted with a lot of. Reason you’ve seen, you know, their social strategies. Give us some examples. If you have any of companies that are kind of building in social into the product in clever ways, you know, maybe just to inspire people watching this.
Justin: Right? Right. I don’t.
Justin: Yeah, I don’t know. That’s a really good question. B. There are some. Let me see. There’s some great Indian country bankers, rich people who they’re maybe working on in museums that are inherently social, where the product is more social. Wally Wally Doodle, I believe, is a children’s clothing retailer, which is predominantly online, and they’ve done some really, really cool things with Facebook. I think they have near a half million fans, but it’s up to where basically, you know, you comment on their posting and then you’d automatically be like an invoice. Right. So if people wanted to buy it content here. So, you know, when you’re in your feed and you’re seeing the three or four posts today of the new outfit and there’s you know, you can see all the people were buying, right? It’s all in there. You Facebook. Right. But, you know, that’s not making dresses, maybe more apparently viral for like a cute little girls, like some dress or whatever. You know, I think I think, you know, Warby Parker is a great example, you know, with the glasses, you want to share this to other people and, you know, get feedback for, you know, how it looks and everything. There’s a guy I’m talking with, he’s a pretty early on in a furniture company, actually, and he’s trying to do something different in furniture. And what I think he’s looking at doing is it’s having a very, very strong kind of social referral kind of component to it, where basically pricing wise and everything, you know, you would be stupid not to, you know, if you know something, maybe typically that house costs $2,000 where someone would typically buy it, you know, they’re getting it, you know, they’re iterating on operations. It’s supply chain or getting on a boat straight from China type thing. So they’re getting it significantly less. So resources are 2000, you know, make it they’re going to sell it. Sell it at 1000. Right. But they’re not really sell it for 500. Right. Because, hey, if you like get like one other person in the store or give you 500 bucks or something like that where it’s just like, you know, they can you just don’t bother bucks but they jacked it up. But it’s still like a difference to where it still makes a difference from that sticker price over there. And you know, and in order to meet high level of participation just as they waited things so you know beyond that no was like think of offhand but that those are.
Bronson: Great examples and and I like those examples because they’re industries that most people in a show we’re not talking about we don’t hear about furniture companies that they do that. So I’m glad you have examples like that. And I love what you just said about margins. You know, if you have that much margin to work with, you can get really creative with incentives that you just you can’t do otherwise. So that’s awesome.
Justin: Yeah, actually, a quick thought. One of the interesting things and I do it for fun sometimes if you go to the Internet retailer, top 1000 listing, you can see all the top 1500 volume retailers out there. And when you get to those 500 list, you can see some pretty random stocks, right? You like RC toys or something like that, you know, but you know, find some of these industries, right. And then, you know, learn about the supply chain, right. That you’re finding, hey, all of these guys, they’re outsourcing to like the same factory in China to make the handbags or whatever. And maybe there’s one company who owns like 80% of the market or whatever it might be. But hey, don’t call it the factory in China. Like figure out how much the cost is. They can make the stuff for you. You just need two different designs, right? And they’re selling this stuff for like, you know, 200 bucks and it’s costing them 20. Yeah. Like, wow, you know, hey, I can come in. You know, maybe there’s an incentive on the pricing where it’s a little bit better, but with all that margin, like, there’s some creative things you can do to inspire people to to do things. So it’s kind of fun to practice, go through that list, see some of the random companies like doing ten, $20 million a year selling random crap and be like, How could I do this? You know? And it’s kind of fun exercise. Yeah.
Bronson: And people, you know, might think that, well, then the competitor could drop their price, but they can’t. That’s the problem. I mean, that’s the innovator’s dilemma we talked about really briefly earlier, which is they already have a whole set of cost now with their with their employees, with their own marketing, with whatever, that they can’t just now drop the price. But where you’re, you know, the newcomer entering the market, you know, you don’t have all this stuff going on already. So you can do whatever you want with your margins. And so that’s why it’s hard to compete and that’s why there’s a place in the world for start ups, period.
Justin: Yeah. Yeah. And that’s where it when you see it, mostly it’s going to be speedier if they’ve been around for any length of time and they have it pretty easy to any of these companies, call them up on being true to how many employees they have to figure out some inefficiencies in their cost structure or in their headcount or things like that. With, you know, we started on Shopify as a e-commerce platform and I think they just updated the pricing. But you know, on account like after like a 30 day free trial is like 14 bucks a month. Like not right? Like throw it up on Shopify like and we literally like, you know, we used a straight Shopify beat up until like two months ago. So, so like literally is literally the stock team. Like the logo was, you know, logo contest, the labels label contests, right? So we get to go to designers who we got on to do stuff for. Ongoing. But, you know, we’re willing to do that. You know, our main course was just so low in through just some basic plugins and things through Shopify utilizing third party consulting centers like Amazon and things like that in the past to automate so much of these business practices where your competitors do have like 20 people and you can get done with like one or two and just you have better automated systems, you’re not using a fax machine, just a really basic stuff that you like those exist anymore. Right. But they do. If you come in, you cut a lot of that out. You make these more efficient. There’s just no there’s a lot of stuff to do.
Bronson: Yeah, I think people would be shocked if they knew the true inefficiencies in the markets that they’re considering competing in.
Justin: Yeah. Yeah. And that’s you know, and that’s one of those things. The more you learn about the efficiencies, the more exciting you’ll get. Right. That’s what where things for me when I see other industries are talking to a guy who’s working somewhere I know a little bit about the industry and like, Oh, you’re going to kill it, right? What you’re going to use because he’s got you so slow and messy or whatever, right? Or it takes them like a month to decide to do anything. Right. And you can do something in a second. You just get your product right and that’s worth getting in. And I guess, you know, you work at a company in one of these industries to really get in there and learn what’s going on, work there for six months at some low level pay position or something part time, I don’t know. I get a feel for it, you know, and then it gives you kind of networking knowledge.
Bronson: Yeah, that’s great. Now, we talked about morality quite a bit and we talked a lot about the social side of things. Do you ever use email as a part of your virality? You know, you send out emails and they’re sending stuff to their friends or anything like that.
Justin: Right. Right. You know, so part of the post-purchase, just friends are going to be our, you know, platform, which curates the email is a part of that. So we do see participation with email with sending out some of those correspondence. You know, it’s not a huge driver for us right now, but we do see a lot of potential that particularly in the back end kind of lifecycle marketing piece of it. I mean, we’re reworking a lot of that now just because, you know, just to give an idea. Right. You know, in many ways, you know, we’re step by step. We’re now like everything. Day one, you got drop 5 million bucks on it. But typically, you know, you know, since we started, we come out with a new product, you know, every so often, you know, ever every two or three months for a while. And we. The only time we would email our list would be, Hey, we got a new product. Check it out. That was it, right? We’re, you know, look in you, check your inbox and you’re getting like a daily email from bonobos. Right. You still open them because their pictures are cool. We’re like, oh, man. Right. You know, or whatever. Like that. Right? You’re like, Oh, man, but I can be doing this a lot better. Big time, low hanging fruit, you know. So a lot of attention there on lifecycle marketing in a bit as well. As, you know, we’re building a lot more kind of viral loops around parts of the product experience than just kind of the post-purchase element of it that will look to utilize email to a higher degree or at the end of the day, whatever works better. So if, you know, referrals via Facebook are worth three times as much. What we’re going to really focus on a big Facebook email about, you know, research or whatever.
Bronson: Yeah, yeah, totally. Well, this has been awesome. Let me ask you one last question. Kind of high level. You can take it any direction you want. What’s the best advice that you have for anyone that’s trying to grow a startup?
Justin: Yeah, you know, that’s a great question.
Bronson: The million dollar question.
Justin: Yeah, I know. That’s a big one. The best advice, I mean, I would say, you know, always be a student, right? So, you know, always be looking at other industries, learning about how things work. That’s something I enjoyed in many ways. You know, I was, you know, the garbage man. I’d be doing this for fun. I think it’s fire, right? I was like a big video game prize. You know, learning about other industries, how things work, always, constantly feeding yourself with information. I have a personal, like information diet in like systems around that with aggregating RSS feeds and things like that that consume a relatively large amount of information. Every week I listen to the podcast on three X, The Speed Ride to Town on podcasts.
Bronson: You’re the other person that does that.
Justin: Yeah, the other person, right? Yeah. So fun stuff like that. Right. So always being a student, always learning because there’s always something, you know, next week I’m going to see some article or some strategy like, Oh, that fits perfectly. And so being there in always learning part of that and increasing that, learn this, oh, this makes all of this day one. But having others other having just having friends with people and being friends with people who are doing similar things. When you find something cool, it’s going to be dog for them to send it to them. Have that back closed network of people you can talk shop with regularly. You know, look for other industries that you can iterate on, right? If that’s the direction you’re going with things. So you’ll always be learning and always be testing, you know? It’s a lot of fun.
Bronson: Yeah, absolutely. Well, Justin, this has been such a good interview. Thank you again for taking time out your schedule and for coming on.
Justin: Yeah, no, it’s. It’s a pleasure. Glad I could be.
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