In this podcast, you’ll learn from Marshall Haas, the CEO of Need/Want, a store that sells a variety of unique products that you can't help but want.
Find out how Need/Want built a $2.5 million portfolio of single-product stores using the power of positioning.
In this episode, you'll learn:
- How they came up with and tested their positioning using Facebook ads.
- Why you should meet with manufacturers in person.
- The pros and cons of being completely transparent with your business’s numbers.
Listen to Shopify Masters below…
Show notes:
Transcription
Felix: Today, I'm joined by Marshall Haas from NeedWant.com. That's N-E-E-D-W-A-N-T.com. NeedWant makes products that solves problems. Their most recent products are Peel, a cell phone case that does not ruin the aesthetics of your phone, and Smart Bedding, which is a premium linen bedding featuring smart design details and no retail markups. It was started in 2014 and based out of St. Louis, Missouri. Welcome, Marshall.
Marshall: Hey, thanks for having me.
Felix:酷。你的公司有九个不同的产品。Everything's really cool with that. You go to NeedWant.com. You see a listing of all these different products. Give us an idea of what is the NeedWant company and what are some of the other products you guys sell.
Marshall: We're structured a little different than most companies. Each of the brands you just listed, like Peel and Smart Bedding, are all technically their own company and then they're just wholly owned by NeedWant. Then everybody in the company works under NeedWant. Nobody's dedicated wholly to any company. We all kind of do our roles in each aspect of one, whether it's operations or marketing or whatever. Basically, NeedWant kind of operates everything. In a way, you could call us a studio or an umbrella company. It's kind of like a hybrid model of doing a few different brands all under one roof.
Marshall:是啊。I've always done entrepreneurial projects. My background's in architecture. I used to want to be an architect and I worked in a firm for I think 3-1/2 years from 17-20 or 21, something like that. I realized a year in it just wasn't for me. I saw who I'd be when I was 50 and I was just like no. I used money from working there to start different little projects. That was kind of my education in entrepreneurship was using that money. I used to have an architectural rendering firm where I used the background in architecture.
Basically, if you'd see a sign outside of a building or a construction project showing what it's going to look like when it's finished, that's architectural rendering. I used to have a little company that would do those projects and it was all outsourced to a group in the Philippines that I partnered with. That was kind of my first foray into outsourcing and things like that. I did that for a few years. I dabbled with iPhone apps. Before NeedWant, I had a project management company, software, tech startup. We were brought onto MetaLab. They basically acquired our team. During that period, it's kind of gray. When it all started is when I started dabbling with physical products and that's kind of how I met John, my co-founder, but, yeah, that's kind of like a quick overview of my background, so architecture and then tech and then physical products.
Felix:是啊。Very cool. That transitioned from tech, software, and not very tangible products over the physical products. Were you able to bring on any of the skills that you learned from your past businesses that weren't necessarily selling physical products over to your new businesses that are now solely physical products?
Marshall: Yeah, I think one of the biggest things is just overall in any business is positioning. Why are you better, different, or what's the new take on that industry that is different with what you do and how you communicate that. Those kind of principles I think apply to most any business. Design. Design's really important in tech. That's just always been really important to us. That carries over, as well, into anything in my opinion.
Felix: Yeah, I think positioning is a really important one that you bring up because it's really laying foundation, almost the direction that you're going to bring your company is going to matter and basically drive the entire company and your brand from there on, so it's something that you almost have to get right, not necessarily solid or concrete from the beginning, but you definitely have to have a good idea of how you want to position your company. Do you have any tips on an exercise or how someone out there is listening and doesn't really feel like their product or their brand or their company really stands out from the competition, how do you figure out your positioning?
Marshall: I don't know if we necessarily have a formula or anything. It's a little bit of research of seeing what else is out there and then it's a lot of ... John and I used to sit down and talk together on whether it was the notebook or the bedding or our Peel cell phone cases. In my opinion, it's always great to own an idea. Peel was the first super thin iPhone case. The idea was it doesn't ruin the aesthetic of your phone. There's a million cell phone cases out there, but that was what we were all about. That's what we owned.
When you think of Peel, you think that's the thinnest one. If I want a case that doesn't ruin my phone's good looks, that's the one for me. Anytime you can own an idea like that, and that's what people think of that in that genre of product, they think of you, that's the best thing in my opinion. Otherwise, you're just kind of, okay, it's a me too. It's a rubber cell phone case. How is this one different? The opposite side of the spectrum on cell phone cases is an Otter Box. If you want ultimate protection, you think of Otter Box. That's how they've positioned themselves and that's what they stick with.
Felix:是啊。
Marshall: We always look for that, kind of interjecting yourself into that space in a new way, instead of just we sell this and we're just one more guy who sells the same thing. We just definitely never want to be that.
Felix: Yeah, I think positioning ... To do positioning well, you have to be comfortable knowing and coming out and saying that your product's not for everybody. I think that's an issue that a lot of maybe new entrepreneurs run into where somebody asks them, "Oh, what is your store? What is your product?" They kind of list out all of these customers and demographics. They want to serve everybody. When you do that, you end up serving nobody, right?
Marshall: Totally.
Felix: Yeah, I think that's a big part of it, too. This kind of leads me to the next question, which is how differentiated do you need to be because let's say you come up with positioning for Peel cell phone cases, the cell phone case that does not ruin the aesthetics of your phone. You came up with that kind of positioning and then you went out into the market place and found another company that has something similar to that. I can't think of a good example, but let's say that they're also going after the market of people that want protection of their phone, but don't want to ruin the aesthetics of it, would you still move forward with that or would you try to go down another level deeper to differentiate yourself even more? How do you know when it's enough when it comes to differentiation?
Marshall: The quick answer is it just always depends. In that example, if somebody's doing it and doing it really, really well, and they're clearly owning it, then, I don't know, maybe we shy away from that product and we do something else. Just because you find someone that's doing it in a similar positioning as you're thinking of doing, I wouldn't say that should stop you. We definitely try to look at it like are they marketing this well? Okay, that's their position, but does anybody even know about them? Can we come in and own this market because they don't know how to acquire customers or whatever it is.
That hasn't been the case ever, but if that ever was, yeah, I would look at, okay, they exist, but does anybody know about them? Are they finding people? Are they getting the word out? Yeah, it really depends how deep you want to go or how niche you want to go with your particular product. For us, it was a pinpoint. We knew a lot of other people had the similar pinpoint of okay, I just spent all this money on this expensive iPhone and now I'm going to ruin this great device, the best in the world, Johnny Ive's design and I'm going to slap this giant hunk of rubber onto it and not get to enjoy this-
Felix:是啊。
Marshall: Phone that I just shelled out a bunch of money for. Honestly, we didn't really do any testing. That product is John's, but we brought it on. I know John really didn't do any testing. It was just a gut thing, and it definitely was the case where a lot of people resonated ... That positioning resonated with a lot of people.
Felix:是啊。这是一个很好的点因为我阅读l of your descriptions on NeedWant.com, and they all ... When I'm reading them, they're written really well where I'm like, wow, I can understand that. It speaks to me or doesn't speak to me immediately. It's almost like, yes, that's the exact problem that I have and exact solution that I'm looking for. I think that's that a really important point in about how to actually test your positioning. I know you're saying that you haven't done that with Peel or John hasn't done it with Peel, but is that a process you go through today where you come up maybe a thesis for position and then find ways to test it? Do you do that today?
Marshall: Sometimes. One example is Smart Bedding. When we were working on that, before we launched, we knew it was going to help you to not make your bed or to make your bed faster. Before we launched the Kickstarter, we put up a landing page to kind of collect early interest via email. We tweeted out, and I think we bought a few Facebook ads for it. It was just a landing page with a logo, a headline, and then an email opt-in form. We tested that headline. It was basically a tagline.
我认为我们测试四个或五个不同的口号,which attempted to explain it [inaudible 00:11:46] and it was never make your bedding. I don't remember what the other ones were, but we split test that. We did A, B, and C and split traffic on all of them and the headline never make your bed again was just a clear winner. That resonated with so many more people. So many more people opted in to learn more. We launched. That was just an obvious winner where it was like, okay, that's the best way to position this and explain this to people. Or at least intriguing enough for them to want to know more. That's one way we split tested things before.
Felix: Yeah, so you basically have a landing page and then you A, B test a few different headlines or taglines, and whichever one has the most conversions, whether that means signups or I guess if you want to really, really step it up to test even more to see if anybody's going to pre-order depending on your headline. That's how you figure out which one is the one that resonates with the most people. Are you just driving Facebook ads? Running Facebook ads to drive traffic to that landing page?
Marshall:是啊。Maybe we spent $200 on Facebook ads. Otherwise, John and I tweeted it out and sharing it with people that follow us. It probably got, I don't know, a few thousand unique visitors. To us, that was large enough to implement, to figure out what was the best position.
Felix:是有意义的。Cool. Once you guys decided to launch your first product ... Which one was that? I see a few here. Was it the Mod Notebooks? Was that the very first one or was that the second product that you guys put out?
Marshall: Sir, technically, the first one was Smart Bedding. That's how John and I started working together. That being said, we're super green with manufacturing and had a ton of problems with our manufacturer, and that one was in limbo for literally over two years. Really, we just relaunched that one at the end of January this year, so that's "our newest product", but technically, it was our first one.
Felix: What was the idea behind this? How'd you guys come up with the positioning behind this one? What kind of problems were you trying to solve?
Marshall:是啊。That was kind of my first physical product idea. It was before John and I met. The idea was making your bed sucks. There's got to be a better way. I'm one of those people that likes sleeping with the top sheets. There's a lot of benefit to that. Some people just don't use top sheets, and that's fine. I'd wake up with top sheet bunched at my feet or the top sheet would be off one side and your duvet's off the other.
In my mind, the definition of making my bed was always fixing my top sheet and kind of realigning it with the duvet, and then just kind of making it center. The idea was what if you attach those two pieces together in a way where they still felt like they were free flowing and you could just disconnect them and just use your top sheet if you get hot. What if there's a way to do that? I originally started with the idea it was just to make a little snap system between the two where you just buy the snaps and attach it to your bedding.
There was no really elegant way to do that, so I realized it would just make more sense to just build it into the bedding in the first place. I did a bunch of prototypes just for the local seamstress and eventually found the best way of doing it, so that was the idea. Was to making your bed easier, or kind of cut it our completely. It comes down to really two things. There's a snap system along the left and right edge of the top sheet and the duvet cover, so those two stay aligned.
The other difference is most bedding, the top sheet is actually cut to be about a foot to a foot and a half wider than the duvet cover, so it sticks out and it forces you to have to tuck in the sheet around the bed. To be honest with you, most people don't do that anymore in this day and age. Those two things basically is how we solved that problem and really making your bed now consists of just realigning the duvet. It's all one piece now. You kind of ruffle it and then you're done. Effectively, you don't have to make your bed anymore.
Felix:是啊。I really like that tagline never back your bed again. Were you able to validate this one before pursuing it any further because I know you were doing some prototypes, but the next step after that obviously to scale it up and get it out to a manufacturer. Before we get it to the manufacturing part, were you able to find out if there was a market for a product with this kind of positioning?
Marshall: From there, we just went directly to Kickstarter. We found a manufacturer at the time we thought was good. More on that later, but yeah, from there we decided to kick-start it. Honestly, a lot of our stuff we're not super great at testing. Kickstarter is an amazing way to validate your idea. There's certainly more testing you can do before that, but yeah, we just went straight to Kickstarter from there.
Felix: Right. Kickstarter campaign, the one that you ran, there was a goal of $10,000. Ended up raising almost $58,000 and 442 backers. Did you ever expect it to surpass your goal by this much?
Marshall: We certainly wanted it to. We saw at the time there's stuff that did, just blew past their original goals. We were definitely trying to get it past 10K. I always recommend people to set the goal as the lowest as possible where you can still produce the thing and deliver on your promise, but the last thing you want is the goal to be so high that you don't reach it, but you still had enough funds to still make the thing, so 10K becomes the bare minimum of what we needed to really kick it off. We were definitely pleased though.
Felix: Yeah, I like that idea of starting as low as possible. I've heard other Kickstarter campaign creators doing the same thing because it's also a lot easier to pitch the story of a Kickstarter product that all ready surpassed its goal. There's a lot more compliments behind that than trying to get PR or press for a campaign that's struggling to meet its goal, so there's that piece of it. Obviously, you want to be able to reach your goal so you can actually collect the funds. I think there's an exercise if people happen to go there, right? Trying to figure out what is the minimum that they need. How did you guys figure out how much you needed and what did you end up spending the $10,000 on?
Marshall: We reached out to a lot of manufacturers and figured out ahead of time who was going to produce this thing for us. That was 100% dictated how much we needed to raise. Figuring out what the minimal order quantity was and then the cost per unit and all that is basically what got us to that. It was a little over 10K. It was probably like 11 and change. We just needed 10. We could come up with the rest if that's all we raised. It was 100% the manufacturing around it.
Felix: You raised the funds. Then I think this is when it sounds like the horror story begins with manufacturing. What happened after you finished the campaign and decided to go ahead and get these made?
Marshall: Yeah, geez. It's a 2-year timeline, but to make a really long story as short as possible, it was just a dishonest manufacturer. Everything that could have gone wrong went wrong and stuff that we just never would have imagined went wrong. First, it was coming in two batches. We had six colors. I think three were in the first batch. It was supposed to take 30 days. That's not unreasonable. Most manufacturing takes 30 days and another 30 days to ship to you from overseas, and that was just blown past by like eight months. You're really just at the mercy of this manufacturer. What they're relaying to you is the reasons why and it was a lot of excuses.
That one finished, shipped to us. We used them to ship it instead of finding our own freight company. Who knows if they ever actually put it on the boat, but that one got damaged at sea, and also it was supposed to take 30 days, but they shipped it the cheapest way possible where effectively it travels around the world. It hit every continent before it was getting to a port in New York. Then it arrived damaged, or at least it looked like it was damaged, so they claimed the insurance, started that one over.
The second one I think they just lost hope with us or ... They basically closed up shop or at least closed down any form of contacting them and their website or anything. Everything went wrong. It's a really tough position to be in because we were just relaying. We had every intention of delivering this product. You got these angry backers. You're just trying to relay to them the best information you can gather. It's hard to get good information from someone who's unreliable. It was tough. We were super green with manufacturing. Looking back, we just didn't know what we were doing.
This new time around, we went over, met with the manufacturer, and actually oversaw the whole first production. Really, eventually, what he had to do was just call it. We had to realize that it's just never going to come, and we basically were out all that money and began looking for a new manufacturer. We were just honest with backers. Luckily for us, based on model of NeedWant, we had this business that had other companies that were bringing other revenue that allowed us to fund this new manufacturing run and eventually make it right with our original backers and deliver on the original promise. That was tough. That was basically the hardest thing I've ever been through. You have 500 people that are angry with you over here. On the other side, you've got this dishonest manufacturer that you should have never got into business with in the first place, and then you're out the money and you're trying to figure out where to get the money to start run and you've lost 100 grand in this whole ordeal. The model NeedWant definitely saved us in that situation.
Felix: Wow, that's definitely probably a lot of entrepreneur's horror story about having all these sales all ready made, but then you couldn't deliver. It was not necessarily their fault. It was the partners and the vendors that they worked with. When you look back on it now, were there any red flags that you noticed looking back on your experience with that manufacturer?
Marshall: The order was really, really big. To be honest, there really weren't any red flags, but the thing that we didn't do that we should have is ... On an order that size, we should have gone there in the first place. Anytime we haven't ever met with a manufacturer now, it's because we're ... It's not going to be great, but we're okay if literally the worse thing happened and they just ran with the money. We're okay at losing those funds.
If it's a small enough order where we can't really justify going there for the first production run, but at the same time if the worse thing is if they're going to close up shop and we're out ... Let's say the order's 5 grand or something, we're okay with losing that. It's really the way we operate now. Sometimes, it doesn't make sense to go over there. This rule only applies to a new manufacturer in the first production run. After that, if they deliver, there's a good chance that they're going to keep delivering on that product and quality and everything. Yeah, it was a big order and we should have gone over there to oversee the thing.
Felix: You said that a couple times about how these manufacturers might close up shop. Is that a common experience that you, not necessarily that you have, but you've heard of others having where they-
Marshall: No, no. Not really. I just meant that in the case of "closing up shop"-
Felix: Your experience.
Marshall: No, it hasn't really happened to us except for this guy. I just meant that in the context of them just taking your money and running and there really was no shop in the first place. A scam artist through and through.
Felix: I see. You said that nowadays for a first production run for a new manufacturer you make sure to oversee the production run. It sounds like you go there in person and meet with them. Is there anything else that you do to make sure that you feel safe with investing your funds into a large order before ... What else do you look out for?
Marshall: Obviously, you should definitely get production samples and get that perfected before you start. Just make sure they can tweak and modify it and get it to where you're happy with it. If you can't afford to go over there, there's definitely companies that can go visit as an independent third party on your behalf and scope out the manufacturer and make sure they're legit and there's not children working there or there's a real business and there's real people there actually producing what they say they are. Other than that, yeah, the best thing you can do is just go over there and poke around and meet with them and have them show you the facilities and all that and just spend time with them.
Felix:你是说100000美元已经基本上,瞧t of money spent on this first experience, but you had the NeedWant business model, like you were saying, in the business all ready, which helped keep things afloat and it actually helped you deliver on the pre-orders. What did you have going on at NeedWant at the time? What kind of products or services or what was being offered to kind of fund the company?
Marshall:这是又两年,所以当我们eventually made the call and was like, all right, this is never going to happen. Let's start looking for a new manufacturer. By that point, we owned Peel. We had acquired that from John. We had Mod Notebook. We had Emoji Masks. Those three were paying the bills and allowed us to kind of stomach that. Definitely not rolling in cash. That was a hard thing to basically produce something two times over, but yeah, those were the products that funded that.
Felix: Let's talk about Mod Notebooks next. What is Mod Notebooks and what is the problem that it solves?
Marshall: Mod is a high-quality paper notebook. The cool part though is in the back page of the notebook there's a pre-paid shipping envelope. When you're done with the notebook, you take your notes like normal with pen and paper or pen and whatever you want to use. We basically will digitize it for free once your done. You drop it in this nice envelop that's built into the back page, drop it in the mailbox. You don't have to put a shipping label on it or anything. It's all ready good to go. Think like Netflix DVDs back when they were still DVDs with the return label. You just drop it in there. It comes to us, and within five days we digitize it. We have a companion app that allows you to kind of flip through all of your Mod Notebooks. That also syncs with Drop Box, Ever Notes and Microsoft's One Note. The idea is you can have the best of both worlds. You can take your notes, analog with pen and paper, and then have the benefits of access and storage and having it forever, so it's kind of blending analog and digital is the idea.
Felix: Did you go to Kickstarter for this one, too?
Marshall: Yeah, we actually did. That one is a little different. The idea was slightly different. Basically the same concept, but it was a subscription model. It was going to be get a new notebook every month and with the new shipment you send the old one back to us. We launched it as that on Kickstarter. The overall idea of having the best of both worlds resonated with people, but the by and large feedback from everybody was like, hey, I love this idea. I just don't want it on a subscription basis. I might fill my notebook in six months or two months or whatever. It might always change. We actually ended up instead of ... I think we were on track to or maybe we had all ready passed it.
Instead of finishing the campaign and having to build up this product that everybody wanted a slightly tweaked version to and then having to re-release it, we ended up cancelling the Kickstarter about halfway through and telling everyone we're going to relaunch under the same idea, but not on a subscription basis. It allowed us ... We knew people wanted it. At that point, John and I just self-funded it and built it ourselves with our own funds instead of Kickstarter funds and then launched it about three or four months later and just launched it to those existing people that backed and then new customers, as well. Yeah, kick started it, but didn't finish it on Kickstarter.
Felix: Was that a hard decision to make because you're all ready having a campaign that's rolling. People are interacting and commenting. They are loving the product 95% of the way, but just want this small tweak to it. Was it a hard decision to make to cancel the campaign?
Marshall:哦,是的。肯定的。我们确实讨论/ that a lot, but in the end it made sense because the alternative was going down that path knowing everybody wants a different version of it, so you have to build out the one version, deliver on your original promise, and then we knew we were going to be better off to then tweak it. You have to build out that. There's different resources that go to those two different variations on the concepts. In the end, you're leaving money on the table in the short term, but I would say most of those people who had back in the first place, then bought the new one once we relaunched it, so it was just delaying the funds really is what it was.
Felix: When you cancel a Kickstarter campaign, do you still have the ability to contact the people that all ready backed it?
Marshall: Yeah, at that time, you definitely did. I don't know if you still do. Maybe they've closed that. I'm not sure. But yeah, at the time, we did.
Felix: Yeah, I guess that does definitely help with the situation because it's not really, like you're saying, not completely losing the potential customer. You can still reach out to them later when you have a more refined product that they definitely want. The last thing you said previously that kind of gives me this question is that you decided to self-fund it this time rather than going back to Kickstarter with the new version of Mod Notebooks. I guess the question is if you could self-fund, why not go back to Kickstarter and why did you decide to self-fund instead.
Marshall:是啊。Kickstarter people seemed to just follow that space. There's a growing number of projects that raise a lot of money, get a lot of high, and then fail to deliver. By self-funding it and building it and then launching, you basically do all that messiness behind the scenes and then you figure it out and then you launch. It's tough making a physical product. Things don't always go according to plan. Sometimes, your projections are off on what it's going to cost until you actually get into it. We didn't want to be ... Coming back to Smart Bedding, we didn't want to be one of those companies that is a story where we launched all this interest and then it failed to deliver. A bunch of people lost their money. We just so didn't want to be one of those companies.
That's a growing trend I think these days where there's projects that raise millions of dollars on Kickstarter, and then they bust and they close up shop. It was a tough call. We decided to redo it. For us, our way of making it right with all these people that hung on for two years is we actually just went to the drawing board, totally improved on every aspect of it. Really, the main thing was we switched from cotton to linen, so actually our cost to manufacture each set more than doubled from the original concept and we just delivered that to the original backers that originally backed us. Really, for us it was like we paid three times over for the original project or the original bedding.
Again, that was our way of making it right with people and thanking them for hanging on for two years. Yeah, it's definitely tough bringing a product to market, and I think by self-funding, building it and then being able to launch and it ships and gets to you in two days, you can just feel safe and you've all ready figured out manufacturing. If you look at the data, there's tons of people that launch these things with amazing teams behind them, and they still fall through and fail because some numbers were off or whatever the reason is.
Felix: That's interesting. Did you feel less pressure by self-funding rather than going through the Kickstarter route?
Marshall:是啊。You definitely come up with the funds up front, and that's pressure, but it's a good kind of pressure. It's your money on the line.
Felix: Right. You don't have to worry about disappointing other people.
Marshall: Right. Exactly.
Felix你显然对智能床上用品。It sounds like you probably didn't profit it from it at all. It sounds like a lot of money you put into it. You guys have made it right with that, but when you launched the Kickstarter campaign I guess the first time with Mod Notebooks, did that kind of history affect trust from the Kickstarter community at all? Did it ever come up?
Marshall: The Smart Bedding to the Mod-
Felix: Yeah, just the Smart Bedding experience with the delay. Obviously, eventually you made it right with all the customers, but were people hesitant to fund the Mod Notebooks campaign?
Marshall: No. Only because having been two years later, I think definitely, but I think those two were launched ... John and I actually had the idea for Mod or what became Mod Notebooks when we were filming the marketing video for Smart Bedding, so I think we actually launched that Kickstarter just shortly after that Smart Bedding one, so that one was still ... At that point, we thought and so did our customers that it was going to be delivered in the next couple months, so at the time, it wasn't this kind of project in limbo that's looking like it's going to fail. But, 100%, that would definitely have an effect on things. We wouldn't have done that had it been about two years in and it still hasn't delivered.
Felix我想谈一谈营销ob欧宝娱乐app下载地址behind all of this because all the products. I'm looking at a lot of these and I could see myself buying a lot of these products, but I'm assuming that the marketing has to be obviously different between all of them. It must be challenging trying to market all these different products at different times. They're all going to different destinations. What is that experience like for you guys?
Marshall:是啊。For those listening, we touched on it. Everything is it's own website. Smart Bedding is SmartBedding.com. Peel has it's own website. There is no real ... If somebody learns of it NeedWant, that's great and they hear about all of our products, but if we acquire a customer for Peel, they may never hear about the others. Yeah, we definitely have to think about how we acquire customers for each one. They're not all sitting under one store or anything like that. It's definitely been different. Up until about June last year, everything was word of mouth. That was the only thing.
We had done zero advertising. The way we had acquired customers were, one, word of mouth. Two, was press, and then, three, we had the NeedWant blog had some good content on it, and we had driven a lot of people that way that then went to the homepage and saw everything else that we made. We're kind of known for really radical transparency with some of our projects. Up until that point, that's kind of all we had. We were growing, but it definitely was much slower than figuring out advertising or more channels and acquiring customers.
Fast forward to about June, maybe August last year. We started to dabble with advertising on Facebook and Twitter and eventually Instagram and Pinterest. We started with Peel. We had the best conversion rates on that one and the best margins on that one. We worked with a firm, and really, about a month in, we had kind of figured it out, advertising enough to at least make it profitable, so every dollar that we spent on ads, we could tie back to profitable revenue. Really, for the last year, that's been the biggest growth channel for us is Facebook ads. Dialing that in has been on our number one growth channel.
Felix: Awesome. Sounds like word of mouth, press, blogging, and the Facebook ads are the main keys. I want to talk a little bit about each one starting with your blog. You were saying that you guys are super transparent. I think I saw something about this, too, with your projects you guys create. What are I guess the pros and cons of that because I've seen this movement I think more so in the technology space where people are publishing income reports and being really transparent about how much money they're making, what they're spending their money on. I guess the cons that come with it are also there's maybe more pressure, maybe attract the wrong kind of attention. What has your experience been like with being transparent with your projects?
Marshall:是啊。We started it early on. The first blog post was us sharing numbers on different case studies and we kind of stumbled into it. We were writing those posts because they were fun and we realized a lot of people love numbers and seeing that kind of stuff. Honestly, there was no high-level strategy on any of that. It was just this is fun. Let's keep doing it. People enjoy it. The benefits are certainly hard to quantify, but we've met a lot of awesome people and we've become known for this thing and it just helps overall, but speaking of the cons of it, you open yourself up to copycats and people stealing or trying to build exactly what you've built based on a case study like Emoji Masks, for example.
We were the first ones to do that and now there's copycats. I think there would have been either none or way less had we not published the numbers on that a month into it. Whatever. It's fine. I'm sure we left money on the table by doing that, but I still see the benefit in being transparent and sharing with people. It builds community. It helps build our brand. It's just fun. Again, I keep coming back to that. It's just fun, and we'll continue to keep doing it.
Felix:是啊。I think if this is helping build a brand and drive traffic to your site, then maybe overall, at the end of the day, it might be more beneficial than harming, even your bottom line, at the end of the day. But like you're saying, it's really hard to quantify that kind of thing.
Marshall:是啊。For us now, it's transparency when possible. When possible are the key words. There's certainly competitive reasons not to share some things. We default to okay, we'll share this, but if there's a reason not to or a really good reason not to, we won't sometimes, but it just depends now.
Felix:是有意义的。你提到的新闻。早期on, that was a key driver of traffic for you. What is the strategy there? How do you pitch the press to cover the products that you're putting out.
Marshall: Yeah, I think coming back to positioning. That helps a ton with getting press I think. Some of it, they found us via the Kickstarter campaign. Certain blogs and journalists, they're looking for something new to write about. They want you to exist so they have something to write about. We got lucky on some of them where they just found us, but others, you just have to graft a short and compelling pitch. Look for journalists. If it's a large blog, look for journalists that cover that type of product. Not everybody writes about everything in tech. If it's a tech blog, some guys focus on the Internet of things or whatever. You have to match up with what they write about.
They all publish their email address or there's a general tips email address. It's just a grind of reaching out to people and trying to get in front of them, whether it's email or Twitter or whatever. Again, I would definitely urge people to keep it short and sweet, having something that's just interesting and resonates with them goes a long way. If it's not really anything new, it's not interesting to them. Having some solid positioning and positioning in a way where it feels like it's new and exciting, that definitely helps.
Felix:是啊。I think it's an important point that the people that you're pitching these publications, they're all people that are trying to do a job, as well, and they want good stories, so if you can help them do their job by giving them a good story, then they're much more likely to listen and obviously feature you, so I think that the positioning part comes into play because not only is it a good positioning, kind of gives you a hint of what the story is, but then also keeps it short and sweet, like you were saying, to get your message across as soon as possible. Facebook ads. You just started dabbling in that. You said you guys originally hired an agency to help you with it.
Marshall:是啊。From the start, we worked with this agency. I think when we started, we put aside $10,000 that we were okay with losing. It was a massive experiment. You have to spend money on ads to figure out if it will work, and it might not and you have to be okay with losing that money. If it isn't working, then you shut it off and you stop losing money. We worked with them. I think the original idea was to spend 3-4 grand for 3-4 months, 10 grand overall, but lucky for us, they were able to figure out some ad units and targeting that, or at least break even, is the number one thing we were trying to hit, and then from there you can kind of work down. Yeah, it ended up working out. Great guys we work with.
Like I said, it was a massive experiment. There's always different marketing channels and ways of acquiring customers. We had this list of different ideas and they were all question marks up until we tried them. Some are going to work and some are not. For us, it was just slowly saving up money to use our resources to find out if one or the other was going to work or not and some work and some don't and that's great because then you at least know and you can move on to the next one.
Felix: Do you remember some of the things that you learned with that experience? Either about Facebook ads or just about your customers?
Marshall: Nothing that really stands out. I don't manage it day to day. It's this agency we work with. We have this weekly call, so I'm not super into the nitty gritty of it. I know you have to get into just really targeted niche audiences and so we're always looking for new audiences that fit with the positioning of Peel and minimalism or whatever it is that resonate with them. For us, I think the interesting thing was even if we just break even, if we just break even on it, yeah, we're not making any money, but going into it we knew the word of mouth around that particular product was really, really high.
The number one thing you walk around with is your phone and people constantly see our case or they think there's no case, and they comment, "Hey, you idiot. You don't have a case on your phone. That's so dumb." You're like, "Actually, I do." That's a great word of mouth situation where they can share our product. Breaking even on a product like that where there's such a high word of mouth quotient on it, we're okay with that because that drew in and it brought in more customers in the future. Yeah, I think for that, look, and if you have a high word of mouth and there's different ways of figuring that out going into it, being okay with breaking even is fine.
Felix: Awesome. In the spirit of transparency, can you tell us how successful is the entire NeedWant business today?
Marshall:是啊。We're a little over two years into it. First year, I think we did around 300K in top line revenue. Then second year we did just over doubled. I think we did 700,000 and some change. Then this year, we're on track, depending on the holidays, to somewhere between 2-1/2 to 3 million this year.
Felix: Wow, that's amazing. What's the team like? Is it just you and your partner? Who's behind the entire NeedWant business?
Marshall:是啊。We have, including founders, we have seven employees, then two part-time, as well. The team consists of myself, I act as CEO. My co-founder, John, is head of product so he's working on future products and then additional products for our existing brands. Then David who is our third co-founder. He came on about a year in. Heads up design. He does all of our design for everything, whether it's packaging, the websites. We have an operations guy, Jason, who oversees all operations as far as shipping logistics and all that. He works with our fulfillment center. We use an outsourced fulfillment center. Then there's head of support, Jenny. Then we have an assistant/editor. She also helps edit our Minimums publication. We've got a few content sites that kind of serve as free advertising for us. She heads that up and also just overall assistant for the company.
Felix: Awesome. Thanks so much, Marshall. Peel.com, SmartBedding.com, ModNotebooks.com, EmojiMask.com were the four products that we talked about today, but just go to NeedWant.com. You'll see all of the products and the links to all of them. Again, thanks so much for coming, Marshall. Is there anywhere else you recommend our listeners go and check out if they want to follow along with what you're up to?
Marshall: I think NeedWant.com should point them in the right direction. We've got everything linked up on there.
Felix:酷。I guess for any other podcast listeners out there, I know you guys also put out podcast episodes. Is that also at NeedWant.com?
Marshall:是啊。You can find it on there, but it's also called Hatching if you look for it in iTunes.
Felix: Awesome.
Marshall: It's more of the same. We talk about kind of the inner workings of our company and share different numbers and what's been working and what hasn't, things like that.
Felix: It's very cool. It looks like some of the topics, most recent episode is about Smart Bedding launch and revenue numbers. You talk about biggest sales months and all that. It looks like a lot of great transparent things I think the audience is going to love. Cool. Thanks so much for coming on.
Marshall:是啊。Thanks for having me.
Felix: Thanks for listening to Shopify Masters, the eCommerce marketing podcast for ambitious entrepreneurs. To start your store today, visit Shopify.com for a free trial.
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About The Author
Felix Thea is the host of theShopify Masterspodcast, the ecommerce marketing podcast for ambitious entrepreneurs, and founder ofTrafficAndSales.comwhere you can get actionable tips to grow your store’s traffic and sales.