To state the obvious, starting and growing a DTC brand is hard… even if you’ve been in the industry for years. Jese Pujji is the founder and CEO of Gateway X, a bootstrap venture studio that helps build businesses in the DTC space. Jesse has been working with and growing brands for years from the outside looking in. But even for him, when he tried to build a brand from the inside out, there were some real challenges and lessons learned.
On this episode of Up Next in Commerce, Jesse told me all about that first DTC venture, Poophoria, and the mistakes he made getting it off the ground. But he also talked about all the successes he’s had and the advice he’s been giving to the brands that come to him looking to take their companies to the next level. He talked about which channels to focus on, and why founders should really only hone in on one when they’re starting out. And he also gave us a peek into the future of mobile and why you should be looking at TikTok’s strategy as a benchmark for your own. Enjoy this episode.
Main Takeaways:
- You Can’t Please Everyone: One of the mistakes brands make is not having a clear enough picture of who their target consumer is. It does not pay to be broad. Just because everybody drinks water doesn’t mean starting a water company and selling to the whole world will work. You need to hone in on a persona or two and speak to those people very specifically, otherwise your message will get lost in the shuffle. Research, talk to potential customers and build products and marketing that address them specifically.
- Stop Channel Surfing: When putting content out early on, founders should pick one channel and find people who know how to run the campaigns. But, as the founder, you need to be involved in what you’re saying and who you’re talking to. By doing that you can make the economics work on a specific channel and then move on. Trying to focus on multiple channels concurrently is a recipe for disaster because they are each incredibly complex and nuanced. Plus, when you work on one at a time, you are able to learn and master new skills and then transfer them.
- Tik Tok Talk: If you think about how revolutionary Facebook was 10 years ago, many believe that TikTok is in the same position to change the way we experience web and mobile content. The immersive experience, lack of a traditional feed, and the addictive nature of the platform is becoming a roadmap for brands that want to engage customers long-term, especially on mobile.
For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.
Key Quotes:
“My playbook was outdated personally. So I started spending a lot of money and it wasn’t, you know, it was, the economics were okay. They weren’t terrible, but they were, they weren’t great either. And someone was like, ‘what are you doing? That’s not how you start a brand. You need to like spend 50 bucks a day and like really let Facebook learn you and figure that out.’ And, and then we ran into. I was building a bunch of creative and then spending, you know, $5,000. Like I called my friends at Facebook and I was like, ‘can you remove my account, spend limit?’ And they’re like, ‘sure, Jesse, like, you know what you’re doing?’ And I was like, ‘yeah.’ It turns out I didn’t really know what I was doing. So I was spending in bursts trying to figure out which creative would work. And everyone was like, dude, that’s not how you do it anymore… you’ve been the CEO of a 200-person company for eight years. Like, you don’t know what the hell you’re doing. And that was like good and humbling.”
“I’ve always done B2B. And my only B2C orientation has been doing growth marketing for brands who already knew who their customers were. And so everyone was like, ‘Well, who’s our customer, Jesse? Do we have a perspective on that? ‘And I was like, ‘Oh, like everyone poops, like, I don’t know, tests, like try stuff. Let’s see what happens.’ And one of the biggest learnings when we started talking with smart people out there who built brands was you have to have a persona. You have to think about who this person is. You have to really speak to them in a very specific way, especially in categories that are competitive and commoditized.”
“One big theme we’re seeing in the future of all of mobile how are people going to consume and engage with information? And so you think about like, Facebook came out with the newsfeed and the last decade has been about the newsfeed, right? You go to Facebook, LinkedIn, websites are designed that way. Everything’s scrolling and it’s changing now. Now it’s more pictures, videos, and more immersive experience. Like Tik TOK does not have a feed anywhere. And TikToK is as addictive, if not more and way more immersive and rich than, obviously Facebook stories and Snap stories. And those kinds of things are really rich. And so we’re thinking a lot about TikToK specifically as a channel. It feels to me like at Facebook felt 10 years ago, it’s distinctive, but there are some similar elements of algorithmic orientation and other things that we think are really powerful. And then we think it’s not going to stop there. Like websites themselves will change a lot in the next five years and it will be way more video-first, way more interactive and immersive than what they are today.”
“A lot of founders who come and talk they go, ‘Okay, I’ve got my marketing strategy, Jesse, I’ve got Google Ad Words and I’ve got Facebook and we’re gonna do email marketing. And I got one person they’re going to do all that stuff.’ And I’m like, ‘I don’t think that’s going to work.’ One person only has a certain number of hours in the day and you don’t know how you don’t know what message is going to resonate on Facebook, you don’t know what types of email headlines are gonna work yet. And so I’ll encourage founders often to pick one channel. My rule of thumb is 90 to 120 days on a channel requires over 50% of one founder’s time. And then it also requires probably someone who knows Facebook… But as the founder, you want to be very involved in the what are we saying? Who are we saying that to? Did a lot of people engage in that? Oh, no, not really? Okay. Well, let’s try this. Let’s try saying this instead.’ And really iterating that narrative and that story to make the economics work on a specific channel. And it actually takes, in my experience, that level of depth and dedication for a period of time. And then it’s like, okay, now we’ve done enough here, we have enough things that are okay. Now I can zoom out and maybe I can go spend time on another channel. But doing them concurrently is usually a recipe for disaster because it’s literally time in the day that you have to go and build those things.”
“I’m not betting on TikToK because of some technical thing happening this moment. I’m looking at the broader trends and going, ‘Whoa, this is going to be a huge platform.’… So I would flip the question around to some degree, which is not, does it work or is TikToK working for you, but it’s almost like, how can you make TikToK work? What do you need to do? Do you need to create a vanity URL so that all the traffic goes to that anywhere else so you’re sure that the people are going from there? There’s all these various things you can test. Can you give a coupon code? There’s ways that you may have to do some gymnastics and adjust your body to what TikTok is doing to make it work, which is what we had to do in the early days of Facebook. But at the end of the day, there’s a billion engaged people on that platform who are watching, I don’t know, 10, 20, 30 minutes a day of that stuff. And the question is, how do you connect with them and how do you find ways to make it work?”
“I want to normalize people just going like, no, like those markets, you know, I think you could build a $30 million top-line business here. And I don’t think you could build a bigger business than that. And that’s great. That’s okay. Like anyone, any human who builds a $30 million top line business will, their life will, will change and they’ll get to live the entrepreneurial dream.”
Bio
Jesse Pujji is the Co-Founder & Executive Chairman at Ampush. Prior to Ampush, Jesse was an investment professional at Goldman Sachs. In that role, he made $10m to $50m investments in public and private companies in the auto, education, and new media industries. Before Goldman, Jesse worked as a consultant at McKinsey & Company in New Yorkand Dubai focusing on the internet media, eCommerce and telecom industries. Jesse graduated from The University of Pennsylvania’s Wharton School with a dual concentration in Finance and Entrepreneurship, and a second degree in Political Science. Jesse can be found playing tennis, watching the NFL (Rams), traveling, debating policy and politics, and coming up with useless business ideas (e.g., self erasing chalkboards). He was born and raised in St. Louis, Missouri.
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Transcript:
Stephanie:
Welcome back to another episode of Up Next in Commerce. I’m your host, Stephanie Postles, CEO at Mission. Today on the show, I have Jesse Pujji, who’s the founder and CEO of Gateway X. Jesse, so happy to have you here.
Jesse:
Thanks for having me, Stephanie. I’m excited.
Stephanie:
Yeah. Me too. I would love to start with an introduction of yourself because you have a really cool background, you’ve done a lot of things, you’ve founded companies, investor, adviser. It just seems like you do everything, so I was hoping you could kind of give listeners a bit of an intro to yourself.
Jesse:
Yeah, yeah, for sure. So my quick story, I was born and raised in St. Louis, my dad was an immigrant entrepreneur, so kind of grew up seeing him. He had a travel agency, a real estate business and I was very much the kid who was lemonade stand or selling popcorn tins door to door, just always excited and kind of commercial in my own way. Freshman year of college, I met two guys, Nick Shah and Chris Amos, and when we were I think sophomores, we bought a domain which was ampush.com, which is the first two letters of our last names, Chris Amos, Jesse Pujji, Nick Shah, and we’re like, “One day we’ll start a business with this.” We all went to Penn and if you know anything about Penn, it’s very pre-professional so it was like, “Okay, first we’ve got to go work on Wall Street and see what that’s all about.”
Jesse:
So we all spent some time doing that and our hearts weren’t just quite in it and it was the middle of the financial crisis and so 2010 we all moved out west and just said we’re going to start a business, and we were big and still are big on bootstrapping and kind of being able to be profitable and kind of sustainable and some friend said, “Hey, you’re good with numbers, data. Go look at digital marketing,” and we started poking around digital marketing and a long story short, that was right around the time Facebook was launching their self-serve ad platform and we … Somewhat on a whim, the summer of 2010, we’re like, “Let’s try to run some Facebook ads.” We had a few clients and they started working really well. Like they had high engagement and I built some of the first ads, they were really specific to an audience, it was like substitute teachers, it was telling them to get a master’s and teaching degree from Kaplan University who was one of our clients and next thing you know, the performance was really strong and we said, “Okay, let’s go do more and more of this.”
Jesse:
And in early 2011, we got a call from Facebook and they said, “Who the hell are you guys? You’re one of our top 100 global advertisers. Like your name is next to Mastercard or whoever and come meet us,” and we came in with a 25 slide deck of all the product features that were missing and at that time Facebook had no API, it had no bulk upload tool. It was literally you have to build every ad in the interface one by one and we had people in India just … We would send them a spreadsheet and they would be uploading one ad at a time all day long essentially so we could get enough sort of scale there.
Jesse:
So we had all these product ideas and features for them. They said, “Oh. This is really cool. Like we’re actually looking for third parties to build software around and kind of be ecosystem partners to us, we’ll give you guys access, we’ll feed you leads, would you be interested?” And we were like, “Yeah. Sure. We’d love to be in that business.” So we built some software, we tried to sell software to companies and nobody wanted to buy it. They said, “I need services. I need people to actually do this.” We didn’t know what an ad agency was, we had never lived in that world at all, and we were like, “Okay, well they need people to run the ads. So let’s go hire young, smart kids from top schools or from consulting or investment banking,” because that’s all we knew and that’s actually turned out to be quite a talent [inaudible] for us and a real advantage over time.
Jesse:
And if you go back to 2011-2012, the first 20 customers, 10 of them you wouldn’t recognize their names because the businesses didn’t work out. But the other half are like Dollar Shave Club, Blue Apron, Peloton, Uber, Supercell. Like all these companies who were just getting off the ground at that time, and so kind of from that 2011-2012 period, we were just growing super fast and the business grew to several hundred million dollars in ad spend by 2015, we sold a minority interest to this company called Red Ventures in late 2015 which [inaudible] partial exit, and they really helped us turn the business from like a fast-growing, breakeven business to a more sort of moderate-growing but very profitable business, and then we had this great issue … There was no venture money in the business, it was like, “Oh, we have cash flow, what could we do with this?” And that’s when we started investing in a bunch of D2C brands, we acquired a business, and then a couple years ago I decided … My heart was really in building kind of a …
Jesse:
I really love starting businesses and kind of the entrepreneurial piece of it and I was like, “I want to start a business that starts businesses,” and so that’s kind of what Gateway X is. It’s sort of … I call it like a bootstrap venture studio. So we’re launching a bunch of companies, most of them … Or all of them have like a D2C theme, so they’re either brands themselves or they’re kind of enablement businesses and they’re all businesses that we’re trying to be very capital-efficient in the way that we launch them. So that’s me.
Stephanie:
That’s awesome. So what kind of brands do you put in or do you have in Gateway X? Like are there any themes or names that I would maybe know of?
Jesse:
Probably not. I wrote a big thread about the first brand we launched called Poophoria and Poophoria is the happy feeling you get when you have a good number two and it’s a funny story, right? Like I had done a lot of thinking towards the end of last year, and I stepped away from day to day CEO role at Ampush in kind of March of 2020, and then sort of took the back half of 2020 off, and got settled. I moved my family back to St. Louis and I was like, “Oh, what should I do? What should I start?” Researching all these spaces, and I got to January and it was like one of those moments where I was like, “I just got to start doing something. Like it doesn’t have to be the right thing for [inaudible], I just want to start doing something, and if I have an idea, I’m going to turn off my investor brain. I’m just going to do it,” because you always learn when you do things.
Jesse:
So I was talking to my wife in January and it was like … I was like, “I want high margin, 60%+ margin subscription, solves a real problem,” and we were kind of joking, we were kind of going through the list of issues people have and she’s like, “Well you’re always talking to your uncle,” my uncle’s a GI doctor and she’s like, “About your issues. What about that?” I was like, “Well …” Kind of laughed, and then I started poking around. I was like, “That’s kind of an interesting space.” Like if you look at P&G and Unilever, all of them have nine figure plus businesses, nine figure EBITDA businesses selling Metamucil and selling Align Probiotics. There’s no major brand in the space. There’s a couple startups who have been doing some interesting things, and again, I just sort of said, “This is good. Let’s run with this.” Then I was like trying to think of an angle and I was like, “How come no one’s being funny about this?”
Jesse:
So I thought being funny could be a good angle, and I called my uncle, and I was like, “Tell me more about digestive health. I thought there was maybe a prescription medication, like a Hims where you could prescribe something.” He was like, “No, it’s much simpler than that. Take this fiber and magnesium and take this probiotic with these strands,” and he had this insight that I didn’t know which is like … He’s like, “Pooping is the most important indicator I’ve got health … Like that’s the thing you have to fix and the thing that tells you if it’s going right or wrong.” I was like, “All right, that’s like an interesting angle.” And then I came across this word, which is actually like a pseudo-scientific word, Poophoria, and I was like –
Stephanie:
Oh, it’s a real word? I thought you made it up.
Jesse:
It’s a word scientists use. It’s an actual feeling. No it’s like a real … You have nerves in that area that are triggered and it’s a real term. It’s like a pseudo-scientific [inaudible].
Stephanie:
That’s great.
Jesse:
So I was like, “All right, this sounds interesting.” Then I kind of went into this how fast, how cheap can I stand this up, and we got it up in less than four months, for probably less than $50,000.00, including the whole supply chain, launching ads initially.
Stephanie:
And the [inaudible].
Jesse:
Yeah, basically two products, yeah exactly. There’s like fiber magnesium and then this probiotic with the specific strands he suggested and it was interesting. Like we got it going, we learned a lot. Like the cool stuff we learned was like yes, you can do this fast. It’s easier than ever to start. It was really easy to get it off the ground.
Jesse:
And then in the model that we’re doing, we want the economics to really be profitable from early on and we really struggled with that. So we … What I mean by that is we wanted to be first order profitable from an acquisition perspective and one struggle for me was like at Ampush, I had been running … We run, the average spender is probably spending $20 million and my playbook was outdated personally. So I started spending a lot of money and the economics were okay, they weren’t terrible, but they weren’t great either. And someone was like, “What are you doing? That’s not how you start a brand. You need to spend $50.00 a day and really let Facebook learn you and figure that out,” and then we ran into –
Stephanie:
What were you doing before that? Because I’m sure people were like, “Am I doing that?”
Jesse:
I was building a bunch of creative and then spending $5,000.00 … Like I called my friends at Facebook and I was like, “Can you remove my account spend limit?” And they’re like, “Sure Jesse, like you know what you’re doing.” And I was like … It turns out I didn’t really know what I was doing. So I was spending in bursts, trying to figure out which creative would work and everyone was like, “Dude, that’s not how you do it anymore.” Like, “Dude, you’ve been the CEO of a 200 person company for eight years. You don’t know what the hell you’re doing.” That was like good and humbling.
Jesse:
So we learned a lot about getting it built quickly, the supply chain up, like that was super helpful stuff to kind of build that infrastructure. The biggest mistake we made, and what we’ve sort of done with it now is it is still around, so you can still buy it if you’re listening, go get some Poophoria if you want to have a 10 out of 10 poop. We got the economics to like a three or four x … Three or four sort of payback period which is just … It would require a lot of capital to scale that business and this is not how we’re doing things.
Jesse:
We started another business which has been cashflow positive since its third month which I can talk about and doesn’t have this issue. So we have interesting comparison points where we’re going, “Yeah, we’re not going to do this.” Even though you could probably scale this and turn it into something, like we want it to be profitable from early on. And I think the big thing we were missing and it’s kind of funny for me because I’ve always done B2B and my only B2C orientation has been doing growth marketing for brands, who already knew who their customers were and stuff, it’s like … Everyone was like, “Who’s our customer? Jesse, do we have a perspective on that?” And I was like, “Oh. Like everyone poops, like I don’t know. Test. Try stuff. Let’s see what happens.” And one of the biggest learnings when we started talking with smart people out there who have built brands was you got to have a persona, you got to think about who this person who this person is, you got to really speak to them in a very specific way, especially in categories that are competitive and commoditized. Which certainly digestive supplements are, so we talked to guys like Mike [Duda], and he’s built [inaudible] and he’s like, “It’s a fun concept, but who’s the customer?” And I was like, “I don’t know.”
Jesse:
It sounds obvious now to say it, and then the other thing we did which makes sense is we started talking to the customers and we started learning a ton about the words they used and how this makes them feel and the issues and so rather than … We debated a lot of should we relaunch Poophoria, we learned a ton about the customer and we picked a specific customer and we’re launching a new product later this month that we really think is going to really speak to a specific customer that we’re excited about.
Stephanie:
Wow. That’s an awesome story. Okay, so I want to hear about the other company now that you launched and you’re like it’s cashflow positive within a couple months. I want to hear how you went about building and thinking about that company in a different way and as maybe someone like you who’s thinking, “Okay, if I were to build something right now from day one and I want it cashflow positive,” like what’s the playbook that you’re using now to kind of figure that out or think through that?
Jesse:
Yeah, yeah. I mean I wish I could say that I orchestrated these things and that some of it, some of, there is a … One thing I’m learning a lot from my coach and stuff is like just trusting my energy and doing things and then being able to reflect and iterate and change things versus overthinking things upfront. Which I’m sure everyone has, that resonates to some degree with everyone. This was a business I would not, if you had asked me a year ago, is this on your list, I would have said not really. But we had … At Ampush, we had built out a 50-person offshore team that was … That handled all the rote tasks related to growth marketing. QA my URLs, make sure the UTM parameters are set up, take this creative and cut it in eight different variations, and this was a team that we had taught how to do all of these different things. They didn’t know how to do growth marketing prior to meeting us, so we sort of hired them and trained them on doing this.
Jesse:
A lot of Ampush alums go on to run growth, did a bunch of brands, that’s like a pretty common career path, and you get coffee, I get coffee with them and go, “Oh, how is it going? Do you miss Ampush?” Their top three list, I was like, “What do you miss most?” And one of the top three things they would say they miss is this offshore operation, and I’m like, “Are you trying to tell me … Why can’t you go do this? Like there’s probably … ” And they go, “No, there’s no company who does offshore growth marketing.” I was like, “That seems so strange to me.”
Jesse:
Then I invested in a bunch of companies, D2C brands, and I meet with their marketing organizations and it was taking them a really long time to get things done that I thought should be getting done in half the time and I asked a few times ago, they go, “Oh, it’s because the person who is supposed to be doing the Facebook ads spends half their time reporting.” And I’m like, “Why aren’t you outsourcing that?” “I don’t know, we don’t know what to do with that.”
Jesse:
So the second business is called Growth Assistant. It’s growthassistant.com, it’s a great domain and we literally place offshore, we embed offshore talent inside of marketing organizations to take on all of the kind of rote tasks. So we hire them, train them, and then place them inside of brands and they’re sort of embedded employees and it’s only $2,500.00 a month.
Stephanie:
Wow. I need this for [inaudible] and stuff.
Jesse:
Yeah. There you go. Yeah, there’s time.
Stephanie:
I’ve realized it’s very different than … Like I went through and was trying to hire a growth marketer for a while for podcasting and it’s such a different world. Everyone’s applying and they have D2C knowledge, other things, I’m like, “I just need someone to help with this.” So I might check it out and see what [inaudible].
Jesse:
Yeah, and what’s interesting is I didn’t … I was reflecting with my Ampush co-founder Nick about this and he was giving me good feedback and he goes, he goes, “Well of course that one is so much more successful, Jesse. Like you know the customer, you know the problem. You didn’t even have to explicitly think about it because those are our former employees, they’re brands we worked with, you know them so well that you were able to build an offering for them just literally off the top of your head because you know them so well.” That’s why that business is growing … It’s doing multiple millions in ARR already. It’s not even a year old.
Stephanie:
Wow.
Jesse:
And it’s profitable.
Stephanie:
Congratulations. That’s amazing.
Jesse:
Thank you. Thank you. Yeah, and … Yeah, so that’s like a tale of two cities so far. The two businesses we’ve started and kind of where they stand, but the really good learning … I mean there’s good learnings and I’m starting to build a framework in my mind of, “Oh yeah. Customer, customer, discovery. How do we get the story right?” Like there are definitely pieces to this, and there’s … In some ways, I’m relearning a lot of things I had learned when I first started Ampush in a way that hopefully can turn into something that will become more repeatable over time.
Stephanie:
Yeah. That’s very, very cool. I mean when thinking about the platforms right now that everyone’s using, I want to hear kind of your perspective of how brands and companies should be thinking about the platforms that they’re tapping into? Everyone is supposedly moving off Facebook, trying out other things. I know you’re mentioning mobile before this recording and I kind of want to hear you’re looking into a crystal ball, like what are you guys predicting right now when it comes to starting a company and building from scratch and trying to attract an audience in the right way and connecting with them the right way?
Jesse:
Yeah, for sure. I mean before you think about platform obviously, I’ll take that a couple different directions. Before you think about platform I think thinking about who you’re talking to, who is the audience, and we have found the persona … Again, this might be very basic if you’re an experienced D2C but for me I was like, “Oh. You have a single person and you really try to build something for that single persona, that single person, because even though you know it’s going to attract more than that single person, it gives you a focal point that’s really powerful. And for our new product, it’s a 51-year-old woman, her name is Holly. She’s a real person, she’s a real estate agent, she’s attractive, she’s on the go a lot, and we literally like … Multiple times a day in our office, you’ll go like, “Would Holly think about it that way? Would her mind …”
Jesse:
So I think that’s the first step. Then it’s like what story, what narrative are you telling, how are you telling that story. Those are kind of the two starting points I would go and then from a platform basis, I think like … We still think Facebook and Instagram are quite powerful. Obviously, I think for Twitter, Twitter for B2B, I mean Growth Assistant gets 50% of its leads from Twitter organically, which is sort of insane.
Stephanie:
Wow. That’s great. Twitter for the win.
Jesse:
Twitter is still early days I think, and then we believe … Like one big theme we’re seeing in the future of all of mobile is just like how are people going to consume and engage with information, and so you think about … Like Facebook came out with a newsfeed and the last decade has been about the newsfeed. You go to Facebook, LinkedIn, websites are designed that way. Everything is scrolling, everything is … And you go now, it’s changing. Like pictures, videos, a more immersive experience like TikTok does not have a feed anywhere, and TikTok is as addictive if not more and way more immersive and rich than … Obviously Facebook stories and Snapchat stories and those kinds of things are really rich, and so a) I think we’re thinking a lot about TikTok specifically as a channel. It feels to me like Facebook felt 10 years ago. It’s distinctive, but there are some similar elements of algorithmic orientation and other things that we think are really powerful.
Jesse:
And then I think like we think … It’s not going to stop there, like websites themselves will change a lot in the next five years and it will be way more video first, way more interactive and immersive than what they are today. Like the idea of … It’s almost like a newspaper, you’re like reading this text and scrolling around and tapping, and think about how much information you get from reading a blurb on a website versus watching a 10-second TikTok video. It’s just so different. So that’s thematically, we’re spending … And there’s a bunch of I think things that flow from that. The way you create content, the way you tell stories, all that stuff.
Stephanie:
So do you think consumers are ready right now to go to a website and interact that way? Like do you see any brands who are kind of tapping into that strategy and shifting, so it’s not just the newsfeed style and they’re actually having a very experience-oriented website? Is there anyone that you’re watching who’s doing it well?
Jesse:
There’s … What’s it called, Supergreat.Reviews.
Stephanie:
Let me look.
Jesse:
That’s a really good one.
Stephanie:
Supergreat.Reviews?
Jesse:
Supergreat Reviews, something like that. I think they do a really nice job of being immersive. I mean I’ve seen like … There’s like the Instagram story style thing in the ESPN app, so you can watch your plays. You could watch the plays, the best plays or whatever. [inaudible]
Stephanie:
Oh yeah, I’m looking at Supergreat now.
Jesse:
Popshop Live, there’s like a mobile experience that’s like live selling and stuff. But yeah, I think this form factor, this approach, that’s really been designed for the true mobile experience first is going to become dominant. We’re not ready to announce it yet but we’re working on an idea like this for ecommerce businesses that we’re really excited about.
Stephanie:
That’s awesome. I can’t wait to hear about it. How should brands be adjusting then how they’re thinking about content? Because I’m sure many of them are still not fully tapping into video and thinking about how should presenting my product in a different way, how would you advise them right now or what do you think would be a good way to go to get [inaudible]?
Jesse:
Yeah. I think … There’s underneath success on all of these channels and marketing, there’s certain types of skills that you build, and I think that’s oftentimes a thing a lot of founders miss. And one thing I was going to say earlier to the question is I get a lot of founders who come talk to me, both ones I’ve invested and ones that I haven’t, they kind of go, “Okay, I’ve got my marketing strategy. [inaudible] I’ve got Google AdWords and I’ve got Facebook and we’re going to do email marketing and I got one person. They’re going to do all that stuff.” And I’m like, “I don’t think that’s going to work. Like one person only has a certain number of hours in the day, and you don’t know what message is going to resonate on Facebook. You don’t know what types of email headlines are going to work yet.” So I’ll encourage founders often to pick one channel and my rule of thumb is 90+, 90 to 120 days on a channel, requires over 50% of one founder’s time and then also requires probably someone who knows Facebook … Some founders go, “Oh, do I need to go learn Facebook Ads?” I go, “You could, but that’s a tough thing. You can find people on sites like Growth Collective or MarketerHire who know how to run the campaigns themselves.”
Jesse:
But as the founder, you want to be very involved in the what are we saying, who are we saying that to. Oh, did a lot of people engage in that? Oh, not really. Okay, well let’s try saying this instead. And really iterating that narrative and that story to make the economics work on a specific channel. And it actually takes in my experience that level of depth and dedication for a period of time, and then it’s like, “Okay, now we’ve done enough, here we have enough things … Okay, now I can kind of zoom out and maybe I can go spend time on another channel.” But doing them concurrently is usually a recipe for disaster. Because it’s literally time in the day that you have to go and build those things.
Jesse:
So anyway, underneath that, underneath those things, you develop certain skills. Like I get really good at copywriting or photography has to be a really compelling skill or even the way that I phrase questions is a really valuable skillset I have to build into my site and my marketing because it matters, and I think the like … First person short video storytelling is a skill I would aspire to, we are aspiring here and would encourage people to aspire to build and in some ways you go, “Yeah, of course Jesse, that’s …” But on the other hand, you go, “That’s like a pretty new skill.”
Stephanie:
Yeah. Like a selfie video telling [inaudible].
Jesse:
Staring into this thing and in 10 seconds, being able to give a video that people find compelling, interesting and makes them want to do something. We’re in the first or second inning of that, and I just think … That’s as a starting point, now obviously there’s how you manipulate the TikTok, what do you put first, what do you put second. There’s all these specific skills around that but I think genuinely connecting with a human being and telling a story with first-person video in a short time is a thing where I’m like, “Let’s get really good at that skill.”
Stephanie:
Yep. I agree. Do you think just the founders should be doing that or should you be having your entire marketing team thinking about that? Because I always think like, “Should we be tapping in?” Like you have all these great employees around you, why not get [inaudible] their stories?
Jesse:
100%. No no no. Yeah, I think of these as organizational skills, right? Whenever you peel back on any company that’s been really successful, again, there’s like the outputs you see in the world and maybe their numbers and stuff but underneath that there’s always a set of unique skills that the company developed firsthand that were not just like … Then that’s [inaudible], “Oh, could you just do my Facebook ads for me?” And I go, “That’s not how it works. You actually have to develop the messaging and the approach and every piece of it in some sense is entrepreneurial.” But yeah, I think it’s everyone in the organization. Even like … I would go as extreme as to say like do your job interviews happen that way. Can you screen resumes can that way? Can you interact and build a library of [inaudible] content internally where someone’s like, “Okay, this is what I did on this project.” Like that’s the way you really live a skill, and all of a sudden, in a year, everyone’s like, “Wow, this company is crushing it,” and no one ever talks about what happened.
Jesse:
In this case it could be they just got … They made first-person narrative videos such a core thing to who they were and showed up everywhere that all of a sudden, they were finding … They were developing the playbook on it before there was a playbook to develop on it.
Stephanie:
I love that. I’m even taking notes on that one. That’s great. So what other questions are founders coming to you with? Like what are you being asked maybe multiple times where like there’s a constant theme around the same thing.
Jesse:
Yeah, yeah. That’s a great question. One common question I get is like, “Can you help me find a growth marketer?”
Stephanie:
Yeah.
Jesse:
“Oh my gosh. I need a person who does growth marketing.” That’s the most in-demand skillset, and it’s worth unpacking that as an interesting trend in the world and kind of what I tell them typically which is if you can find a person or the right culture fit, you can pay them all that stuff, hire them, great. It’s going to take you three to six months and it’s like a 50% failure rate. The reason is … Some of it’s culture fit and other things but this is a new discipline, and this is [inaudible] Growth Assistant is like 20 years ago, everyone knew software engineering was important, they couldn’t find a software engineer and nobody quite understood how it worked and all of these outsourced firms, multiple billion dollar companies like Wipro, even Accenture to some degree, that’s all they do essentially, they find offshore engineers.
Jesse:
We think the same thing is going to happen in growth marketing, which is part of the thesis there. But I think … What I tell people is it’s a new discipline and it’s like … You know there’s like investment banking and trading and they’re very quantitative, analytical people and that’s what they do. There’s like traditional marketers who are creative, there’s internet people who are hustly, they try things, they’re risk … And you kind of need all of those things in one skillset and in one person and it turns out that is not often common to have those many different things in one skillset and so part of my advice, and obviously I’m a little bit biased because we did this at Ampush, is we tended to hire for the rigor, the analytical thinking, because we found that harder to teach, and then tried to find people who had a bent that was creative and entrepreneurial, and then we tried to foster that creativity and entrepreneurialism.
Jesse:
So that’s kind of my advice oftentimes is can you find yourself a consultant or investment banker who fits a certain bill and this stuff is very learnable and it’s very … Like interestingly, the tactics are very psychological and sometimes feeling illogical because the way you market is to tap into certain biases of people and get them curious, but the actual way the math of all this stuff works is highly quantitatively rigorous, and so once a person understands that and [inaudible] you find a lot of things, so that’s a very common question I’m getting is like how do I hire a growth marketer, how do I get someone working, how do I get someone training. It’s just a tough thing to do right now. What other questions am I commonly getting?
Stephanie:
Yeah, what ones? So that was a great one, and I can definitely see why you’re getting asked that a lot.
Jesse:
Yeah, I mean we talked about the channel thing. That’s obviously a common question. I get a lot of questions, this is probably worth spending a second on, on org design and kind of how to manage the org. When do I find an agency, when do I not find an agency sort of thing and obviously, like a lot of things, it starts with who’s at the top. Like if none of the founders know much about customer acquisition growth marketing and haven’t taken the time to learn it, it could be very challenging. And that’s … Even someone who’s cracked the code on it without following my 90 day 50% rule, I still tell them to double back and dig in because I’ve seen lots of companies at the growth stage … I don’t want to say fall apart, but struggle deeply because they wake up one day and the economics of their business is not as good or something goes wrong in a way that they don’t know how to solve the problem.
Jesse:
It’s very common for Ampush, Ampush tends to take on companies who have reached about $10 million in annual media spend, and it’s extremely common for us to go in and the media budget is 80% Facebook, and of the 80% Facebook, 80% of that is a single creative. So literally, a business that might be doing $20, $25 million is being driven 60% by one creative, and it’s very common, and a big part of what Ampush does is tries to diversify that and expand it and test into different concepts and all that different stuff. But –
Stephanie:
How many creatives should they have? Like when thinking about it, what’s a good number that you kind of go for?
Jesse:
We would say something more like you should be testing 10 to 20 creatives a week and two to three concepts a week. Something like that. And then however many are working you can have. It’s not like … There’s no best practice of how many to have or not have, but where I was going with that is like there’s a very common … There’s a very common issue that occurs where the founder doesn’t know what to do, “Okay, my head of growth left and I don’t know how to design the org. When do I bring it in? When do I not bring it in and how do I staff this?”
Jesse:
I tend to talk a lot about again who are you as the founder and then what’s the next level down, is that person, do they fit … To what extent are they rigorous and quantitative, entrepreneurial, creative, those three vectors and then what do you need to plug in below that and then I tend to believe, a lot of times marketing is separate from product and dev, and I’m a big fan of have a growth marketer leading, have campaign management, have a designer, have a developer, and have almost like a product analyst type of quantitative person. So to me, that’s the three to four person team internally that’s running something like that and I think the unique parts are particularly the developer.
Jesse:
But [inaudible] happening in a lot of organizations when the developer sits inside of the typical product or the marketing stuff gets pushed to the bottom of the queue every time and in some ways, you just need to siphon it out and run it independently.
Stephanie:
Got it. I don’t know how many brands think about getting a developer on board right away. That’s something that I would think would be hired out, agency, but if no one knows how to manage it and they’re like I don’t know what I’m looking at.
Jesse:
That might be the case … Totally, yeah, that might be the case. But even then, there has to be like a developer who is not … Who is specifically working with marketing and who is not encumbered by non-marketing stuff. Otherwise the market stuff never gets done and then it’s like [inaudible] keeps going up and it’s like, “Well, you’re not testing any new landing pages. You’re not testing any new signup flows. So of course …”
Stephanie:
Yep. Got it. So I want to go back to talking about TikTok for a second because a lot of founders who have come on here have very mixed results. I know you’re like betting big on TikTok and you see that as kind of like Facebook from 10 years ago, and people right now are saying, “It’s hard to even measure it, like attribution and figure out if it’s working, and we get these crazy high impressions and then actually like our conversions, I can’t even tell if we’re getting any.” So I want to hear your thoughts on why I’m hearing that from a bunch of founders and where you think it’s headed.
Jesse:
Yeah, yeah. I guess I’m going to sound a little bit like an old man, but let me tell you the story of Facebook.
Stephanie:
Please.
Jesse:
When we first launched on Facebook, they had no tracking pixel. There was no way to track, we had to track it ourselves. We built our own pixel to track it. We would regularly go 24 to 48 periods where their whole interface would go down. It wouldn’t work. Once we were integrated into their API, their API would change so fundamentally every 90 days, it would take two weeks of all of our engineers working in order to catch up with it, and 10 other example stories like that.
Jesse:
Again, maybe I’m an old man or I have the perspective of … Like I’m not betting on TikTok because of some technical thing happening this moment. Like I’m looking at the broader trends and going, “Whoa, this is going to be a huge platform,” which is sort of what we did with Facebook and we paid a high tax. We made a lot of money being early to Facebook, but we also paid a high tax of like a nascent early platform and so I would flip the question around to some degree which is not does it work or is TikTok working for you, but it’s almost like how can you make TikTok work. What do you need to do? Do you need to create a vanity URL so that all of the traffic goes to that vanity URL so you’re sure that the people are going from there? There’s all these various things you can test, can you give a coupon code.
Jesse:
There’s ways, you may have to do some gymnastics and adjust your body to what TikTok is doing to make it work which is what we had to do in the early days of Facebook. But at the end of the day, there’s a billion engaged people on that platform who are watching, I don’t know, 10, 20, 30 minutes a day of that stuff and the question is again, how do you connect with them and how do you find ways to make it work?
Jesse:
So we aren’t doing large scale stuff yet on TikTok. We’re doing a bunch of like waitlist testing and things. But we found it to be frankly way better than Facebook was 10 years ago, and a pretty strong platform, pretty easy to use, easy to leverage. The creative is obviously the most challenging thing there but we haven’t found any major issues with tracking just yet. It’s super early though, so I’m not sure I would know them even if there were.
Stephanie:
Yep. I love that. That’s a great answer. So I want to hear maybe a contrarian view from you in the world of D2C, like what’s something that you believe that maybe other founders wouldn’t agree with you on?
Jesse:
I’ll have to spice this up a little bit. I believe more enterprise value will be created by $20 million brands than by billion dollar brands.
Stephanie:
Okay. Why?
Jesse:
More total enterprise value. Because I think the promise of Shopify internet ecommerce is far more specific … I don’t like the word niche, but far more specifically tailored solutions for people. Not just the products themselves but the brands. I think most brands, so I think there’s like a lot of pockets of 100,000 people out there that there’s a specific problem you can solve for them. I think it makes more sense and is easier to build a brand that’s of that size and oftentimes, capitalization for those brands makes more sense because you’re not putting a lot of money into them versus the billion dollar, like the Casper type situations that are … These things that high fly and then go down. And I think a lot of these things or a lot of these brands are being pushed to grow in ways that are not natural to what their market and customer actually needs, and I think as that … In the 10, 15-year horizon, as that kind of like levels out, we’re going to look at it and go, “Oh my gosh. There’s a trillion dollars across 10,000 $20 million brands.” [inaudible] versus there’s like $100 billion in the 50 to 100 unicorns that have been created.
Stephanie:
Yep. Yeah. That’s a good view. I mean I’ve always thought that when it comes to raising money as a brand of will your investors … I mean they’re going to want you to return the fund if you’re there. Like you have to be there for a reason, and so what are they going to have you … What growth metrics are they going to be pushing you into and having you think about that maybe you wouldn’t do otherwise? How do you think a brand should think about bringing on investors?
Jesse:
I think early on, you can probably raise a little bit of money without a major issue because raising a million or two dollars, even a $50 million outcome is good for everybody. I think once you get onto the more traditional venture path of the $10 million raises plus, the enterprise value that you … You have to generate for those returns. You just have to make sure that you have a vision and you’re going to do that, and oftentimes I don’t think that’s the case and people do it because they’re supposed to do it because they’re supposed to raise venture and it ends up being kind of a worse outcome for t hem and everybody else.
Jesse:
And some of it is just like encouraging founders to be more honest with themselves about both what they want as well as like how big their market could truly be and what a win would look like. Because you’re just taught to say, “Oh, like my market is huge.”
Stephanie:
Yeah. Everyone.
Jesse:
It’s so big, right? And I think … I want to normalize people just going like, “No, this market’s … I think you could build a $30 million top-line business here and I don’t think you could build a bigger business than that.” And that’s great, that’s okay. Like any human who builds a $30 million top-line business, their life will change and they’ll get to live the entrepreneurial dream and so there’s nothing wrong with having a massive vision and for disrupting a product or whatever like a [inaudible] type thing that’s really game changing, [inaudible], but it’s okay if you don’t have that and it’s totally … So I just think there’s too many people raising money who are going to have a real tough time returning the capital they’re taking in a way that’s compelling to their investors and so it’s making again them do all these awkward gymnastics of trying to grow and scale a business which … At the end of the day, it just increases the risk for a file, and maybe the founder’s experience isn’t quite what they want it to be either.
Stephanie:
Yeah, yeah. Completely agree. So the last thing I want to touch on is you have helped grow companies through growth marketing, you’ve had your own companies. There’s probably a lot of secrets that you’re kind of seeing right now. You’re like, “Ooh. That’s a good one. I don’t want to tell anyone.” I want to kind of hear what you’re seeing and you’re most excited about maybe in the past month or two that you think is new and game-changing and you’re not even sure if you want to share it, it’s so secretive.
Jesse:
That’s a great one. I mean I said one earlier which is like Twitter organic marketing for Growth Assistant is blowing my mind at like how many leads we’re getting from it.
Stephanie:
How are you getting those leads? Is it all just through good tweets, engaging tweets, tagging people, just the simple basics of Twitter?
Jesse:
I think it’s a standard playbook. I think it’s like some of it has [inaudible] obviously because I’ll retweet things that the brand will push out there. But yeah, I think it’s relevant. It’s helpful content, it’s kind of plugging it in a way that doesn’t feel like it’s quite plugging it. We launched it in August I think. It’s got 1,500 followers already, which is kind of crazy to me because it’s this random like offshoring business. But I think that’s a secret.
Jesse:
Twitter for that business has been way more commercial than I expected it to be. That’s kind of a big surprise. What are other good surprises that I don’t want to share? Here’s one that I have been playing around with and interestingly we did this on Facebook also that I have jokingly told people in six months there’s going to be an article written about us. We’re trying like text-only ads on TikTok.
Stephanie:
Okay.
Jesse:
And the reason we’re doing that is because they are super cheap and fast to make, because I believe with the voiceover capability and a good story, anything works. Like there’s no reason it shouldn’t work. It can only get better with actors and things, but like the core story … It’s like it grabs people’s attention. Like it’s distinctive. So that’s one –
Stephanie:
Especially a good voice. Like a narrator style voice [inaudible] –
Jesse:
Well they have … Like I don’t know if you’re on TikTok, but they have that standard voice. There’s a standard voice attached to any of the TikTok things.
Stephanie:
Yeah. That’s great. Well, thank you for sharing your secrets. I had a feeling you would have a couple good answers and I have actually never asked that question on an interview before, so …
Jesse:
Oh good.
Stephanie:
You were a good guinea pig. Jesse, thanks so much for hopping on here today. Yeah, like I said, I really had a blast. So until next time, where can people find out more about you and Gateway X?
Jesse:
Yeah, our website is gateway.xyz. We’re always looking for challenging people to join what we’re building and then I’m on Twitter, just jspujji, P-U-J-J-I.
Stephanie:
Awesome. Thanks so much.
