Learn from Fast Growing 7-8 Figure Online Retailers and eCommerce Experts

EPISODE 383 101 mins

The Best of 2022

About the guests

Kunle Campbell

Welcome to the 2X eCommerce podcast ‘Best of 2022’ series. I am excited to share with you some of the most impactful episodes from 2022. It was such a great year for the podcast and it was so hard to make a choice as to which episodes to include in this series. All in all, there was so much content to choose from.

In 2022, we, as a collective, my amazing podcast guests, and I recorded a total of 63 episodes for a combined 3,325 hours of listening time, all of it is jampacked with the latest and greatest cross-functional eCommerce brand-building tips, tricks, and advice. Most importantly, the personal and sometimes deeply touching stories of the guests themselves. Stories of determination, trial, tribulation, defeat, picking yourself back up, brushing yourself off, and going on to achieve greatness.

Unique ways of thinking that shift the way we behave and change the way the world does things. Innovation, entrepreneurship, and building best-in-class customer-centric brands that deliver not only products but promises of a better world, a more sustainable future, healthier products, and healthier people.

As you can see, I had a tough decision to make when deciding which episodes to include in this ‘Best of 2022’ episode. I am confident that the episodes that I’ve selected will provide valuable insights and inspiration for anyone in the eCommerce industry. I’ve compiled my top 12 podcasts from the year into a series of mini-episodes from which you can expect to learn a ton.

This is going to be an amazing episode so stay tuned, take out your notepad, or open up your notetaking app on your laptop or phone. There is going to be a lot to take away from this one and you don’t want to miss a second. Every mini-episode has something that will move the needle for your eCommerce business and add to your bottom line. Without further ado, let’s get started with the Best of 2X eCommerce 2022.

Covered Topics:

  • Howie Panes: Health is Wealth – How to have both with a Billion Dollar Mindset
  • Matt Bahr: Building a Future-Proof Attribution Framework
  • Evan Padgett: The Subscription Commerce Advantage
  • Simon Severino: Strategy Sprints for eCommerce Leaders
  • Mike Stevens: The Foundational Growth Strategies and Playbooks of 16 DTC brands
  • Ayo Disu: Octillion is Helping Commerce Founders Preserve and Build on their Brands’ Legacy at Exit
  • Michael Hershfield: The Rise of ‘Save Now, Buy Later’ in Wake of BNPL – Accrue Savings
  • Oren Schauble: 9-figure M&A Roll-ups and Product Innovation
  • Kosmo Khosravi: From $500 to $50M+: The Story of Kosmos Q
  • Nathan Hirsch: What you need to know about Bookkeeping for eCommerce
  • Paul Okhrem: Ukraine: How the eCommerce Industry Can Help
  • Steven Sashen: Xero Shoes: How Steven Sashen is Leading the Barefoot Movement with a Digital-Native Minimalist Footwear Brand Pt. 1


  • 03:27 – Howie Panes: Health is Wealth – How to have both with a Billion Dollar Mindset
  • 13:50 – Matt Bahr: Building a Future-Proof Attribution Framework
  • 22:15 – Evan Padgett: The Subscription Commerce Advantage
  • 29:38 – Simon Severino: Strategy Sprints for eCommerce Leaders
  • 38:06 – Mike Stevens: The Foundational Growth Strategies and Playbooks of 16 DTC brands
  • 44:11 – Ayo Disu: Octillion is Helping Commerce Founders Preserve and Build on their Brands’ Legacy at Exit
  • 51:41 – Michael Hershfield: The Rise of ‘Save Now, Buy Later’ in Wake of BNPL – Accrue Savings
  • 59:25 – Oren Schauble: 9-figure M&A Roll-ups and Product Innovation
  • 01:07:00 – Kosmo Khosravi: From $500 to $50M+: The Story of Kosmos Q
  • 01:16:11 – Nathan Hirsch: What you need to know about Bookkeeping for eCommerce
  • 01:25:06 – Paul Okhrem: Ukraine: How the eCommerce Industry Can Help
  • 01:34:24 – Steven Sashen: Xero Shoes: How Steven Sashen is Leading the Barefoot Movement with a Digital-Native Minimalist Footwear Brand Pt. 1

Links & Resources:


Facebook Group • Continue the Conversation

The eCommerce GrowthAccelerator Mastermind Facebook Group has just launched.
It is a community…

✔️ for founders and experts passionately involved in eCommerce
✔️ for the truly ambitious wanting to make an impact in the markets they serve
✔️ for those willing and open to help and share with other members

Here is where to apply to join the Facebook group



This episode is brought to you by:

This episode is brought to you by Klaviyo – a growth marketing platform that powers over 25,000 online businesses.
Direct-to-Consumer brands like ColourPop, Huckberry, and Custom Ink rely on Klaviyo.

Klaviyo helps you own customer experience and  grow high-value customer relationships right from a shopper’s first impression through to each subsequent purchase, Klaviyo understands every single customer interaction,  and empowers brands to create more personalized marketing moments.

Find out more on klaviyo.com/2x.

This episode is brought to you by Gorgias, the leading helpdesk for Shopify, Magento and BigCommerce merchants.

Gorgias combines all your communication channels including email, SMS, social media, livechat, and phone, into one platform.

This saves your team hours per day & makes managing customer orders a breeze. It also integrates seamlessly with your existing tech stack, so you can access customer information and even edit, return, refund or create an order, right from your helpdesk.

Go to Gorgias.com and mention 2x ecommerce podcast for two months free.

This episode is brought to you by Recharge, the leading subscriptions payment solution for Shopify merchants.

Recharge helps ecommerce merchants of all sizes launch and scale subscription offerings. Recharge powers the growth of over 15,000 subscription merchants and their communities—turning one-time transactions into long-term customer relationships.

Turn transactions into relationships and experience seamless subscription commerce with Recharge.

Find out more on rechargepayments.com/2x.


Welcome to the 2X eCommerce podcast ‘Best of 2022’ series. I am excited to share with you some of the most impactful episodes from 2022. It was such a great year for the podcast and it was so hard to make a choice as to which episodes to include in this series. All in all, there was so much content to choose from.

In 2022, we, as a collective, my amazing podcast guests, and I recorded a total of 63 episodes for a combined 3,325 hours of listening time, all of it is jampacked with the latest and greatest cross-functional eCommerce brand-building tips, tricks, and advice. Most importantly, the personal and sometimes deeply touching stories of the guests themselves. Stories of determination, trial, tribulation, defeat, picking yourself back up, brushing yourself off, and going on to achieve greatness.

Unique ways of thinking that shift the way we behave and change the way the world does things. Innovation, entrepreneurship, and building best-in-class customer-centric brands that deliver not only products but promises of a better world, a more sustainable future, healthier products, and healthier people.

As you can see, I had a tough decision to make when deciding which episodes to include in this ‘Best of 2022’ episode. I am confident that the episodes that I’ve selected will provide valuable insights and inspiration for anyone in the eCommerce industry. I’ve compiled my top 12 podcasts from the year into a series of mini-episodes from which you can expect to learn a ton.

This is going to be an amazing episode so stay tuned, take out your notepad, or open up your notetaking app on your laptop or phone. There is going to be a lot to take away from this one and you don’t want to miss a second. Every mini-episode has something that will move the needle for your eCommerce business and add to your bottom line. Without further ado, let’s get started with the Best of 2X eCommerce 2022.

Health is Wealth – How to have both with a Billion-Dollar Mindset

In this section, we will hear from Howard Panes, a pioneer in the electronic cigarette industry and Founder of the eCommerce brand Stealth Fitness, as he recounts his journey to scaling his first company, LOGIC e-cigs, to $100M in sales in the first 18 months of operation. Howard shares details about filing patents and building an innovation pipeline, as well as the process of selling the company to Japan Tobacco through the help of Goldman Sachs, a rigorous process he never could have imagined when he was pounding the pavement from dawn until dusk day-in-day-out to get LOGIC e-cigarettes in stores.

He also talks about The 4-Hour Workweek and why it has never been his thing and probably never will be and how he spent his time and money after selling his company in 2016 (he had a little fun with the proceeds but as you’ll learn he didn’t slow down for long and it was no time at all before Howie was back in the game with his next business idea). He also shares about his personal brand and the “Howie Method”, which is about leading your life with health and originality.

Howard’s energy, tenacity, and mindset are absolutely infectious, and that is possibly the greatest skill you can have as anybody in eCommerce, whether you’re a founder, marketing professional, or brand builder – it’s the mindset and the ability to think like a brand builder, to think like someone like Howard, who, through some strong first principles, a lot of sheer tenacity, and a powerful mindset can will into a reality that which was yesterday but an idea. Without further ado, let’s get started with the final snippet for my best of 2022 podcast.

After three years, we acquired a lot of IP. I was big into trademarks and filing IP on functionality, puff counter. We filed a lot of patents for our innovation pipeline. We wanted to have a good innovation pipeline. We found out through earlier meetings that companies that want to buy us like to see an innovation pipeline. We wanted to build out an innovation pipeline.

We met with several companies. My partner, Eli, had reached out to Goldman. We did have a relationship there. We did have interested parties but we said, “Let’s reach out to Goldman, maybe they have some clients that may be interested.” It happened to be that Japan Tobacco was one of their clients and we were able to put the deal together.

With all that you’re doing, because the audience is eCommerce, what percentage did the digital eCommerce account for in your top line?

It was very little. Ours was mainly convenience stores. Also, we have Walgreens and some big pharmacies. Mainly, 95% was in-store as opposed to eCommerce.

In 2016, you don’t have the company. You have a ton of cash in the bank. What’s life from 2016 to 2022 look like? Obviously, we know you have a health product now. Paint us a picture of what happened immediately. Did you go on holiday? Did you splurge? Paint that picture, please.

I bought $15 million or $20 million worth of cars. I splurged on cars. I started getting into social media with Instagram. I wanted to talk about the story and try to help others and motivate them. Some people see it as showing off. I see it like, “Look at what’s possible.” I didn’t go to an Ivy League school. I was not a good student. I’m a muscle guy. I like to hang out in the gym. How smart can that dude be?

I tell people, “Believe in yourself.” I call it the HOWIE Method. I look deep into myself and I said, “What stamped on me when I was at a young age?” I’ll do it simply. The H is health, you got to lead your life with health. Health is wealth. The O is originality. You got to look in your mirror and that is you. You’ve got to be you, be real, and be proud. You can like other things from other people but bring them to you. You’re the guy or gal that was born special with all the talents. You have to find them. You have to look deep inside you.

The W in Howie is work. You got to put the work in. There’s no hack in hard work. Tim Ferriss talks about the 4-Hour Workweek but I never found the 4-Hour Workweek. Mine was 80 to 100 hours. I did that for twenty years. I’m still working 75 hours a week because I love it. I’m passionate. I want to make a difference. I want to make breakthroughs. That’s me. Not everybody has the same goals or what makes them happy.

For me, business is sports. I’m not going to run 100-mile marathons. I’m not doing triathlons. I’m not climbing Mount Everest. It’s okay. For me, my Mount Everest is, “What’s the next company I can build? How can I do something that’s a game changer and never existed in the world?” That’s where the I comes in, innovation. How do you innovate? How do you do something different? Instead of being a copycat, how do you innovate, do something different, solve a problem, and offer something good to the community and society that can help people feel better and look better? That’s where Stealth Fitness came in.

E is one of the best, it’s energy. Energy is what drives me. Energy moves the world. Energy is the power. In the morning, you sun gaze, you look into the sun and let that energy come into you. Everything is about energy. The HOWIE method like the five habits I talked to you about before, it’s five simple things, health, originality, hard work, innovation, and energy. It’s five easy things that can help you make a difference.

When you talk about 2016, I bought a ton of cars. I bought a bunch of real estate. I was like, “I got to get back into fitness and health. What can I do to be a game changer in this space?” When I say game changer, it became a fitness gaming company. We did start as a product that’s called Stealth Fitness. I said, “Most of the world doesn’t work out. Most people aren’t fit. There are hundreds of millions of obese children.”

How do you get people to work out? Get into a habit. Start your day with a win. Instead of making your bed in the morning, what else can you do that’s like brushing your teeth and that easy to spark that internal flame to get yourself fit and feeling good? I came up with it and I said, “The plank is probably the best exercise and easiest to do. It’s the least stress on the body, although it’s hard. If you could hold a plank for 1 to 3 minutes, you’re getting hard work. I said, “The problem is if you look at planks, it’s a problem.”

Everybody hates planks because they’re boring and they’re sitting down looking at their phone waiting for the time to go by or they’re watching a YouTube video. I said, “Imagine if someone can plank and play games at the same time on their phone.” We created Stealth Fitness. You have a 360 degree. You’re on the board and you’re planking and playing games. My body is the controller of the game. We developed a whole gaming platform. I’m playing a game and the accelerometers on the phone are feeling the angles of the board.

It’s that sense of gravity on the plank in your forearms. When you tilt left or right, you’re moving left or right. It’s almost hepatic.

I’m playing the game. We built the whole gaming fitness company based upon one exercise, the plank, and we sold over 1 million of them.

You sold a million of these.

Over the last five years. You talk about eCommerce, this is an eCommerce company. I went from the opposite. It’s funny. I went from selling in-store now to selling direct to the home and building a subscription model.

You sold over 1 million Stealth Core.

We’re shooting videos for the Stealth Squat product and then we’re coming out with Stealth Cycle. This this is going to be a monster. I love it because we have 75,000 on our Facebook.

You have a community.

There’s a community of 75,000 strong on Facebook. People go to each other across the country to plank with each other. It’s the friendships that have been built and the motivation in the scores. There are challenges. There are new games and groups. It’s amazing. It’s become this vertically integrated fitness company, Sealth Fitness. Stealth is health.

Matt Bahr Building a Future-Proof Attribution Framework

Now, we move into something that is timeless and evergreen for any direct-to-consumer brand. In this snippet from my podcast with Matt Bahr, Co-Founder & CEO of EnquireLabs, Matt discusses the importance of using attribution, personalization, and conversion rate optimization to grow your eCommerce brand.

As a leading expert in the field, Matt’s insights on these topics are invaluable for any direct-to-consumer brand looking to build a sustainable competitive advantage. I included this snippet in my ‘Best of 2022’ podcast because of the relevance and timeliness of these topics in the eCommerce industry and the practical tips and strategies Matt provides for implementing them in your business.

It doesn’t matter what channels you are using, attribution is always key, it doesn’t matter who your customers are, personalization is essential. It doesn’t matter what business you’re in or what campaigns you are running, conversion rate optimization will help you adapt to changing conditions and help create next-level campaigns. You’re sure to get something great out of this one.

We group this into four categories. We have attribution. Attribution-related questions are like, “How did you hear about us? How long have you known about us?” To understand the consideration window. There’s a different way to phrase these for returning customers as well if you’re trying to understand attribution for returning customers. Attribution is the first one.

The second one is general personalization. Think of what other data points would you like in your ESP that would allow you to send better emails. One of our favorite questions is, “How would you classify yourself?” The example I’ve given is we work with this company that sells this piece of hardware to educators, hobbyists, and professionals. It’s clear user personas that allow them to then send personalized content follow-ups, etc.

That’s definitely something we recommend to all our customers, like, “What are your user personas?” It’s funny how often we hear like, “We know them.” You haven’t needed to know them because you traditionally invested in Facebook and Facebook found the different personas. Knowing them is going to help you optimize creative and a ton of other things.

The third one is CRO, conversion rate optimization. Surveys are an incredible tool for getting started with CRO. Questions like, “How was your shopping experience?” I typically recommend starting that one with a single response like, “Good,” or, “Bad,” or, “Great,” with follow-ups on each of them. It’s like, “What can you tell us about it?” Or use emojis, however you want to talk with your brand voice, and then have the user follow up. “It was great.” “What was so great about it?”

This is an easy way to learn like, “It was good,” and then you’ll hear customers be like, “I spent ten minutes looking for your return policy.” You should probably take your return policy and start to link to it near the add to cart button. Make it more accessible so these customers don’t have to dig deep and find these data points.

Just to run through them, attribution, personalization, CRO, and fourth one is general customer research. This is where all survey platforms historically have sat, in the research corner. We always talk about operational or operationalizing this data. It’s like, “How do we put this data to use in real-time?” Historically, survey data has always been for research. The research questions that are super valuable are questions like age and gender, like, “Why did you buy today?” That crosses the customer research and CRO side of things. Start to understand more about your customers.

The holy grail of all this is combining all this data. Now you have a customer who has answered maybe 5 or 6 questions like what channel are they coming from. Now we know like, “People who purchase for this reason are this age and gender from TikTok, are different from people who purchase for this reason are this age and gender who came from TikTok.” There are these two TikTok audiences that you are always grouping into one. We see that all the time.

As far as utility, you’ll see us move beyond post-purchase this 2022. We’ll start to look a little bit more like some of these legacy survey players. We talk about our Question Stream, not surveys. We don’t use the word surveys anywhere on our product because we want people to think about this linear conversation with customers like, “What can you learn?” You’ll see things like NPS and other more traditional survey things coming out of us later this 2022.

At the core of it, EnquireLabs is a customer insights platform.

Exactly. The difference between us and survey platforms is this continuous conversation. Every customer has a customer ID versus most survey platforms today. You create a survey and then you add questions to that survey, and then you say, “Who do you want this question to target?” For us, it’s like, “What do I want to learn?” You create a question and each question could have its own targeting. Hypothetically, you and I could purchase somewhere, maybe via email in the future, and get completely different surveys based on our algorithm or the way that a customer has set up our platform.

The Subscription Commerce Advantage

In this episode of the 2X eCommerce Podcast, we heard from Evan Padgett, a 20-year veteran of all things eCommerce, specifically subscription commerce. Subscription commerce is a lucrative way to operate if you can do it right. It not only brings good steady revenues but also makes using your product a habit for your customers, something powerful. Not to mention that when it comes to getting acquired, investors will look favorably upon your business if it has good strong subscription revenues if you have low churn.

Evan brings a wealth of experience to the table, having worked in and led as a C-Level Executive in multiple billion-dollar brands such as JustFab & ShoeDazzle, Thrive Market, and now running a growth firm called Stealth Venture Lab where he is the Chief Operating Officer. In this snippet, Evan delves into the topic of team building, which is essential for any growing startup. Evan shares his insights on how to structure a direct-to-consumer eCommerce business for scale to $100 million in revenues and beyond, and how to identify the key players to make it happen.

He also talks about the importance of having a dynamic duo of visionaries and integrators to make the business successful. If you’re part of a business that is close to reaching the $100 million mark or aims to do so one day, then you will get a lot of valuable insights from Evan in this following short snippet of our conversation. Let’s jump in and help you prep your hiring strategy for $100 million and beyond.

Let’s delve into team building. You can speak to VC setups, the Fabletics and Thrive Market. In 2022, if you were a growing startup, you’ve shown some traction and it’s been bootstrapped and basic, how would you structure your direct-to-consumer eCommerce business for scale? You’re looking to grow it to the $100 million-plus stratosphere. Who would you put in the mix to make this happen? You’re speaking to founders, essentially.

I’ve been a part of a lot of management systems like the Rockefellers, all these different tools that you can use to run your organization. We run something called EOS, the Entrepreneurial Operating System. Brent and I work hand in hand. They have something that’s called the VI combo, visionary and integrator. Visionaries are the creative people, the blue-sky dreamers, the people that are persistent optimists that can never be turned off, the this-is-going-to-change-the-world mentality. My business partner, Brent, changes the world. He’s an amazing person.

There are the integrators. That’s me, in this case. I make visionary dreams come true. I’m the person that is in there making it happen. I worked for dynamic duos in my whole career. Granted, there were only two other jobs before this. At the top of JustFab Inc., now known as TechStyle Fashion Group, you have Adam and Don. They were a visionary-integrator combo. At the time when I was at Thrive Market, you had Nick Green, you had Sasha who was another co-founder there, and you had a guy by the name of Gunnar Lovelace. They were visionary-integrator combos there as well. They had a vision and they have people to get it done.

If I’m starting a brand right now, I’d look at myself as an integrator. I need a visionary to be that blue-sky dreamer. Step one, get that in place. If you’re that visionary, get yourself an integrator because that’s how you make your dreams come true. Beyond building a team, now you got your two co-founders. You got your partnership going.

Let’s leave the fact that you need capital and all that, the fundamentals you need. When you’re trying to find growth and marketing, you want a marketer that understands philosophically what you’re trying to build. Call it your head of marketing. They’re probably a director or vice president level somewhere that can do anything. They roll up their sleeves.

Don’t skimp out on your marketer. If you are trying to build a direct-to-consumer, customer acquisition-focused company, make sure from the get-go, you have an awesome direct marketer on your team. An awesome direct marketer in your team doesn’t necessarily mean that they follow Gary Vee’s podcast and everything he’s done and they’ve read all the books. You need practical application. I look for people that have worked at big-budget brands, brands that I know spend millions a month because that experience is worth much more than every book you could read and every podcast you can listen to. The hands-on experience there, someone that’s managed millions of dollars themselves and it’s not scary to them, those are the people you need on your team.

If you’re trying to build a $100 million brand and you’re spending $30 million to $40 million a month a year probably on advertising at a certain point, you don’t want that mismanaged. You don’t want that to be on the CEO or the COO. You have a visionary who’s looking into the future, blue-sky dreaming. You have an integrator who’s rolling up their sleeves, getting the team right, and making sure that we’re scalable. That’s usually a COO profile. You have an awesome marketer. Don’t forget what matters most, your customers. You need somebody that is customer-empathetic. Usually, they are brand-focused that can be the voice of the customer and what the customer needs to hear. They need to be able to shake things up even at that founder level a little bit and have a voice at the table that says, “I hear you. You want to sell this for that price.”

On the ground level, customers are going to buy that. That’s not a great customer experience. If you have those four pieces without the nuance of like, “We need technology,” or, “We need graphic designers,” and all these things. You need production work, but those four corners of the bedsheet, in my opinion, would help you build out anything. If you have those four people in place, you can build anything and do something well.

Strategy Sprints for eCommerce Leaders

This next entry in the ‘Best of 2022’ list is packed full of insights, it’s full of simple tips, powerful ways of thinking and operational processes, and counterintuitive pathways to growth. I can’t emphasize enough how much valuable information you’re about to download in the next few minutes. In this snippet, Simon Severino shares valuable insights on hiring and firing principles and how to avoid the fate of Rome and other fallen empires. Simon is a highly respected business consultant who has worked with companies such as Google, Roche, and AbbVie.

He is the creator of the Strategy Sprints™ Method, which doubles revenue in 90 days by getting owners out of the weeds. I couldn’t go past this snippet for the ‘Best of 2022’ podcast because Simon’s advice on hiring, firing, and scaling is crucial for any direct-to-consumer brand looking to grow and thrive in today’s competitive market. He stresses the importance of setting clear standards and following through on them, as well as keeping operations simple as the company grows. This is essential advice for any business owner looking to build a sustainable, successful brand. Let’s hear what Simon had to say.

It’s the vision, the hiring, the competitive analysis. Number four is culture. You have governance and you need all the rules. What is the minimum standard that if you don’t deliver, you’re out? You have to execute on that. I’m sorry to say that, but you have to fire quickly. This is the hardest part. It’s not complicated. It’s simple and straightforward, but it’s hard to do on an emotional level. I took many rounds until I got it right and did it on a professional level.

It’s tough because we have to be quick and you have to be objective. This goes back to why onboarding is important. In the onboarding, if you use our tool, it’s a spreadsheet, you will write down specifically what your expectations are in terms of quality of time estimations. What do you expect? You will need this document filled out at that moment when you have to fire because otherwise, on what are you basing this decision?

You have to be quick and you have to have that document. We call it the Job Scorecard with all the tasks, expectations, current results, and target. You need to show the delta once and say, “What’s your plan to change that? Go change that.” One week later, “Show me what you changed. Nothing changed.” That sounds hard. If you don’t do it, this will be the signal for everybody else that the standards here are not consequential, and then you’ll have no standards. That was the beginning of the end of the Roman Empire after 700 years of glory. They started to cut corners, and every other empire later on.

What’s the fifth layer? We talked about establishing a vision. Your vision in three years’ time should be five pages. Hiring and firing quickly, competitive analysis on a monthly basis, speaking to features, and also establishing certain metrics to compare yourselves against. The fourth was culture and the governance of your operations, what are the rules and what are your minimum standards. Then having the check facility check back on it to ensure that everything is going along that culture and governance route. What would be the final pillar?

The final one is to keep the whole firm simple while it grows. That sounds easy, but it’s not easy at all. Everybody who has scaled the company knows for each country, there will be one legal situation that pops up and then you will have lawyers, and then you will have a new contract, and then a new SOP, and then a new variation. Things start to get bloated and complicated easily.

It’s important that you keep things simple. Otherwise, your firm will soon feel like a corporation. Believe me, nobody wants to work in a corporation anymore. They never wanted to, but now they have the chance. They can go take the stimulus, buy Bitcoin, and be much happier. It’s important now that we keep things simple. By the way, Bitcoin can make everybody happy right now. Not financial advice. Be quick.

The key to keeping things simple is on two levels. In the SOP manual, make sure things are just five sentences, no screenshots, super simple. All processes are simple, fun, and repeatable. That’s one thing. Make sure if you have a COO, that’s their job. If you don’t, then make it your job for a while. Things need to stay simple as you grow. Otherwise, you will get crazy because every country has a different text and different legal. If you make that overrun you, you will soon be lost in the woods and not see the trees anymore. Keep things simple on the SOP side.

The other side is the number of projects and activities that people run. We help our clients limit the number of projects that they run at a time. We tell them, “Don’t run more than ten projects per quarter.” We always plan 90 days and in those 90 days, we allow ten projects. They have to discuss which are the most important ten projects. There is a helpful triage question to define because when they do the list for the first time, it’s around 50 to 70 projects per refer. Sometimes even 100, 120.

Let’s say they make a list of 60 projects that they are running right now. As a CEO, how can you help all departments slim down and prioritize? We ask three questions. If they hit 1 of those 3 boxes, they stay on the list. If not, they’re off the list for these 90 days. They might go into a backlog but in those 90 days, ten projects and they have to tick 1 of those 3 boxes. “First, does this project increase our sales frequency by 25%?” That means either shortening sales time or cross-selling more.

Second question, does it increase by 25% the price we charge for the same thing? This is important for marketing. Should we do this marketing campaign or not? If we can charge a higher price because the story is better and the positioning is better, yes, but marketing has to show it during those 90 days. Otherwise, no. It’s just an awareness campaign. Don’t waste your time and money on that.

The third, can it increase the conversion rate by 25% out of the existing leads? Same amount of leads on your website, same amount of leads on your platforms, but the conversion rate is 25% higher. That might be from cart to finish or from start to cart, but it must be a relevant conversion metric for you, not just in the awareness or engagement stage, but in the closing, in the purchase zone.

The Foundational Growth Strategies and Playbooks of 16 DTC brands

As a Co-founder and CEO of Peppersmith and with 8 years on the start-up team at Innocent Drinks, our next podcast guest has a wealth of experience in the industry and shares valuable insights on the two types of entrepreneurs, and how successful businesses always put the customer first. His name is Mike Stevens, and he was at the forefront of bringing consumer packaged goods to the direct-to-consumer space.

As I mentioned earlier, customer centricity will always be in fashion and will never fail to deliver value for your business. Here in the following snippet, Mike highlights the importance of truly understanding and serving your customers in order to achieve sustainable growth. You will learn how to find gaps in a market, improve a mature product or service with convenience, and simple ways to use customer or user feedback to find million-dollar customer pain points that need to be solved. I won’t keep you waiting, let’s get straight into it.

You’re a strategy and top-level growth-oriented in the way you’re thinking because you’re a founder. Is there any recurring theme you noticed across all fifteen case studies every founder should have when thinking about going on this journey or if you’re already on this journey, what to have in place as a foundational cornerstone to growth?

I met some fantastic people. These founders got some incredible backgrounds. They’ve done some interesting things before they set up their businesses. It was great to understand who they were. One of the huge themes that came out of those conversations was all the founders were problem solvers. They wanted to help and serve people.

In my observation, in my world, there are two types of successful entrepreneurs. There are those entrepreneurs who see a gap in the market. They’re like, “There’s more demand than supply in a particular area. I can exploit that opportunity and I can make some money from it.” That’s one type of entrepreneur. That’s not to be dismissed because there are some hugely successful individuals and businesses out there following that strategy.

There’s the second type and this applies to pretty much every founder that I met. Right in The Direct to Consumer Playbook, they want to solve problems and help customers. They do it in a customer-centric way. There are examples of that there. Bloom & Wild is a fascinating business. They sell flowers. The reason Aron set up Bloom & Wild is that he noticed what a frustrating experience sending flowers was or trying to give someone a bunch of flowers.

If you think about buying and sending someone flowers, it should be a joyful thing but it wasn’t. It was poor quality products. It wasn’t a high price and inconvenient. It wasn’t a great experience. He figured it out. This was something he wanted to do better. He did all the things that worked out, “How does the supply chain work? How does the customer service work? What do people want?” He set up Bloom & Wild and his big innovation was sending flowers through people’s letterboxes. Several years on, that’s the thing. It wasn’t back then. It was a way of doing things bigger.

Snag is a brand that you hadn’t heard of. Snag is a tights company. They sell other products as well now. When I interview Brie, the founder who’s fantastic, a of couple years ago, she was focused on tights. The reason they went into tights is that Brie had an experience walking out the high street where her tights fell down. She had the conversation in the pub, “I’ve had this embarrassing experience. My tights fell down. Why are tights so rubbish? Does anyone else have problems with tights?” Our mate said, “Yeah. Whatever size, shape, or age they were, we can’t get good tights.” She was like, “I can solve this problem.” She went out and set up Snag.

Heights is another good example. Heights was set up by Joel and Dan, who had a business before and the business didn’t go that well and had quite a tough time. They were having some problems with mental health. They were struggling. It was through those experiences in terms of looking after their own health, they discovered that there were opportunities in supplements. They call it Brain Care, which is how to look after yourself a bit better. They took that and learned from individual pain and applied it to a wider market. The whole thing is about not selling as many bottles of pills as possible. It’s about helping as many people as possible. This was a big thing. It says, “How can we best help our customers?”

Also, as a founder and strategist, one of the other things that all these brands do well is cover all the bases. They do product development, marketing, finance, supply chain, data analysis, and customer service. They have to do all of these things because if you don’t execute these things well, you’re going to suffer. Particularly in the D2C space, it’s competitive. You’ve got to do everything well to get it right.

It goes back. These businesses have a mission and purpose. They want to serve. Also, another example that comes out of that is the amount of incremental product development. They want to get better every day and data is a big part of that. Taking products and making them a little bit better each time they make them so they can serve their customers better is a huge part of what they do.

Octillion is Helping Commerce Founders Preserve and Build on their Brands’ Legacy at Exit

It was truly an honor and a pleasure to have Ayo Disu, my co-founder at Octillion Capital Partners, make his first official podcast appearance on our show. Not to mention that it was in this episode that we launched OCP to the world. As a relatively new company in the industry, it was great to have the opportunity to sit down together and enable our listeners to learn from our hard-won knowledge and specific approach to investing and management.

I’ve chosen my favorite snippet from the episode to share with you so that you can uncover valuable tips and guidelines for entrepreneurs looking to maximize the value of their business in the event of a potential acquisition. Ayo takes you through everything you need to know in less than ten minutes, from keeping finances separate to having all assets ready to go, to understanding the multiples of a business, and the importance of building a strong brand.

This conversation provides valuable insights for anyone looking to navigate the acquisition process. If you’re an entrepreneur looking to sell your business in the future, this is one you don’t want to miss. Without further ado, let’s start your six-minute primer on everything acquisitions from Ayo himself.

Should we give entrepreneurs some guidelines on how to prep up their house for potential acquisitions not necessarily from us but to get the highest value in the markets? That is valuable. Do you have any tips for operators?

One is to make sure you have a business bank account that’s separate from your personal account. We dealt with a seller and their finances were a bit muddled up. What that does is increase the time and also complexity. The other thing is to get all your assets ready. For example, if you like P&L, screenshots, and things like that, have them in a file ready to go. If any potential buyer wants to access some of these things quickly, you have it there. It makes it more of a professional and a seamless process as opposed to if they’re asking you for this, you have to wait for this. The buyers can get frustrated because they’re seeing a lot of things in the market, so as long as you’re prep and ready to sell.

The other thing is understanding the multiples of your business. Your business is not valued based on your revenue, it’s based on your net profit. It’s understanding, “I need to take out all the cost to sell. I need to take all the expenses. I can then get my net figure and then use the appropriate multiple to value that business.”

Be flexible to different structures. Maybe you might even reinvest, rollover a portion of your money into the business. You’re like an investor in that business moving forward. There are different things. If you can read any books or listen to any videos. Shopify has a guide as to how to buy a business as well as how to sell a business. Maybe look at some resources like that.

The only thing I’ll add there would be the processes. Make sure you codify everything in your organization. It’s almost like a turnkey. You’re handing over some of the buyer systems. With that, you’re good to go. You’re maximizing your multiples. Build your brand. Build your brand, folks.

We’re all about the brand. We love the brand. We want to buy consumer brands that are listed with real passion.

Speaking of brands or branding, what are your thoughts on brand equity? I’ll share mine. If you don’t have a brand book, if you don’t have an identity, if I go into your Instagram feed and I remove your username on Instagram, I browse through your feed top level and I don’t know who you are, you’re doing a bad job at branding. That should also translate to other experiences. Branding is about experiences and feelings. It’s primal. It should touch people emotionally. It should trigger an emotion when people come across it.

For more quantifiable bits for branding, you should have your brand book and everything should be in order. If an acquirer is coming to acquire your brand, they know your branding systems. You should have systems. Not just systems on how we fulfill orders or how we buy media but you should have a brand system. That maximizes it.

It’s about the feeling it delivers to people, to your audience, to your community. The outcome of branding is community. Sometimes you could brand with certain words and products. If all of what you’re doing is colors and typography and it doesn’t translate to bringing people together as a community or through events or what have you, you’ve not necessarily done the full job on branding.

Before we wrap up, I want to say that Octillion Capital Partners for me is legacy building from my personal point of view. I’ve served in the industry for a while as a helper and I’m still a helper in the industry. Moving into ownership, being an operator is key. That’s one big reason I’m in Octillion. Ayo, do you have any final words?

I’m excited about the future. I look forward to acquiring brands and taking things from there, growing these brands to household names, and making a positive impact on the communities that we serve. We’re looking forward to working with KC and building the team. We have a couple of interesting people in the pipeline that we’re going to be bringing on should everything go according to plan.

The Rise of ‘Save Now, Buy Later’ in Wake of BNPL – Accrue Savings

In this snippet from my podcast, Michael Hershfield, the founder, and CEO of Accrue Savings, shares his personal journey as a Canadian immigrant to the US and serial entrepreneur. He recounts his experiences starting his first tech company in Toronto in 2007, the mental health challenges he faced after it failed, and his move to New York in pursuit of his dream of entrepreneurship.

He also shares how his experience as an immigrant has shaped his perspective and how it has influenced the creation of Accrue Savings, a merchant-embedded shopping experience that rewards consumers for saving. This introduction is included in my best of 2022 podcast because Michael’s story highlights the importance of perseverance, resilience, and the role of personal experiences in shaping a successful direct-to-consumer brand.

I grew up in Vancouver, Canada. I started my first tech company in 2007 in Toronto. I thought it was the king of the world starting a company. I raised a little bit of money. It’s funny, it’s not the competition. I raised $250,000 and $500,000 when I raised my seed round. How small when you look at valuations today? I thought it was the most amazing thing and I got the bug.

2009 happened and the company did not work out. I moved to New York because I wanted to go to that place. At that time, Toronto was not blooming as a tech ecosystem as it is today. I moved to New York in pursuit of my dream of entrepreneurship and being around entrepreneurs. I had a lot of scars from that first experience. The mental health challenges of being an entrepreneur and the ups and seeing yourself in a way that maybe the world doesn’t see you when things don’t work out hurts.

I needed to pick myself up. I moved to New York for an amazing job in an early tech New York 2009 and 2010. I’ve been at a number of jobs in New York over the years. I was at WeWork and had a bunch of jobs including co-working sales business. I have had lots of different experiences. Accrue is my first entrepreneurial startup since that 2009 unwinding. My own personal journey seeing the United States and seeing New York through the eyes of an immigrant lends itself to the company that I started today.

It’s powerful. At WeWork, you were in the product, sales, and the like. With Accrue, why eCommerce, savings, and retail? Are you exclusively for a digital solution for commerce for eCommerce or do you transcend commerce? Are you going to be in retail stores and retail experiences?

The consumer experience is all about introducing a savings account embedded through the merchant to offer to the consumer. That consumer may buy in-store but may buy online. It’s omnichannel. Ultimately, it’s a use case. It’s about empowering the consumers to buy and save on their terms. We haven’t talked about the user experience but Accrue is offered both online and embedded in the consumer experience. We also already have merchants that are using us with their sales team. Some of our partners have high ticket prices and use sales teams on the phone.

The idea here is that no matter where there is an offering to a consumer to potentially buy something, there isn’t just one path, which is a credit option, “Can I offer you a credit alternative?” There should be a savings alternative for consumers to buy on their terms. You can take Accrue today and go in store for any of our partners and use the e-card to make the purchase. We produce a Visa debit card, ultimately, what a consumer saves out for to make the purchase. It’s omnichannel in the end-use case and current state. The best place for this to manifest is where consumers are.

We know that consumers surf the web. 80% to 90% of consumers never get to the checkout. Merchants are competing for their eyeballs and ultimately for their dollars. Let us provide a solution, which is Accrue, for brands to offer consumers the opportunity to save up for something well before they’re able to make the purchase. Ultimately, they’ll make the purchase to the consumer whether it’s physical or online.

Let’s step back to your backstory. When you started, your wife gave you an ultimatum. It was for a period of time and you had to sprint. Do you want to break down the first three months of starting Accrue Savings and then we’ll move into the experience?

When I talk to prospective entrepreneurs and founders, I talk a lot about working in a box to validate an idea, this sprint mentality, and not being addicted to your passion or vision. Sometimes you need to validate something before you dive in. For me, I had the time, two kids, and a mortgage. I left WeWork. My wife is an amazing partner. She and I talked a lot about what I was going to do next. Frankly, in January of 2021 when I left WeWork, I was very much looking for a job. I couldn’t escape this idea, this view of the world that the world was missing something important.

I spent a couple of weeks interviewing. I went to my wife in February of 2021 and I said, “This needs to exist in the world. Merchants need to offer savings accounts in the world.” She said to me, “We have 100 days.” Starting on March 1st of 2021, she and I agreed on two KPIs, two business metrics that I had to hit. One of those metrics was not fundraising. Can I prove that consumers will use this product? I did an extensive enterprise-grade consumer research study with a consumer research firm that validated this. I had to prove it to her. I had to get three merchants to commit to trial this product all in 100 days.

Did you have a product?

To decide that I was starting this company. I hadn’t even started the company yet. A hundred days go so quickly. When you’re relentless and you want something, it’s amazing how much you can do in those 100 days. I prodded my network for conversations with retailers and got the consumer research work done. A hundred days later, I had five retailers that committed to using the product and an extensive consumer research report, which serves as the baseline of the company.

9-figure M&A Roll-ups and Product Innovation

In this next best of 2022 entry, you will meet Oren Schauble, a serial entrepreneur and builder, he talks about the M&A roll-up strategy that grew his business to a market cap of 80+ million dollars, and led to an IPO on the OTC markets. An M&A roll-up strategy is a method of growing a company by acquiring and consolidating smaller companies in the same industry. This approach allows a company to quickly expand its market share, product offerings, and revenue streams. It also enables the company to gain economies of scale and increase efficiency.

Oren’s story of using an M&A roll-up strategy to take his business public is a great example of how this approach can be a successful way for companies to grow and expand. He shares his experience combining three different companies, starting with 70 team members and growing to 350 by the time he left the company. He also provides insight into the complexities and regulatory aspects of a business operating at that scale and the challenges of going public on the OTC markets.

As a successful direct-to-consumer business builder, Oren’s experience is valuable for anyone looking to grow their business through an M&A roll-up strategy. That’s why I included it in my ‘best of’ podcast for 2022, to highlight the importance of these topics for direct-to-consumer brands which are rarely discussed but can be powerful for your brand. If your goal is to one day IPO your company, then Oren’s episode on the 2x eCommerce podcast is a must listen, here’s just a little of what he had to say.

I’d like to find out more about Unrivaled. In your experience with Unrivaled, it was a cannabis brand based in California. How many team members were there? How many founders were there with you?

It started at about 70 team members when I came in. The first step was combining three different companies. There was a retail store in Southern California. There was a brand in California and there was a distribution company in Oregon. It’s about 70 employees overall. By the time we ended, it ended up being about 350 or so. By the time I stopped working there, it continued. In that initial start there, it was four founders. I came in operationally. I was helping configure and grow the business in addition to them.

Over time, multiple of them exited the business. Right as the merger is complete, they help facilitate some of that and then they move on to other things. We ended up bringing in a new executive team, who would be specific for the public vehicle, who have experience managing businesses of that size and dealing with the complexities and regulatory aspects of a business that is operating at that scale.

What can we learn? This was a roll-up. It was an M&A growth story, which eventually led to IPO-ing from LinkedIn. It IPO’ed to $3.5 million or so. What takeaways did you get from that experience with Unrivaled in terms of using a roll-up strategy towards building better product offerings and building out your business eventually?

This was a pretty big roll-up. Our market cap when we went public was $80 million or $90 million. There were a lot of different businesses there. We did price at $60 million in 2021. It was a pretty large size business but what I didn’t realize is that we went public on the OTC markets, in particular, OTCQX.

What’s an OTC?

They don’t allow plant-touching cannabis businesses on the NASDAQ or the stock exchanges and so there are tier stock exchanges. I didn’t even know that existed. I had worked on two projects previously that had gone on to the NASDAQ and they had done what’s called a Reg A Plus Fundraise and then they had eventually gone fully IPO. I was familiar with that process at least tangentially. The more companies I led, the more projects I worked on.

I didn’t realize that there’s this whole sub-infrastructure of these other exchanges. There is what’s called the Pink Sheets, which is basically, OTCPNK. They allow you to be public unlisted but you don’t have to have audited financials so it’s considered relatively risky. You can put your business out there and whatever you say your numbers are, you don’t have to have some compliant accounting business checking it but you can still be public and invest in it. That’s an option there.

You have built it all the way up to where we were at OTCQX, which is the most akin to being a larger public company. You have to have your audits done regularly. There are a ton of compliance and regulatory requirements but you’re still not quite on the NASDAQ or the Canadian Stock Exchange and things of that nature. That raises some interesting opportunities for entrepreneurs for me because we did it at this relatively large size. You don’t have to be that size.

If you want to have a lower level of compliance to be on some smaller exchanges, that may cost you $100,000 or less every year. If you want to operate on the OTC at the highest scale, maybe that’s $500,000 every year in compliance, additional staff, and things like that. That means that you can access potential public investment. You can access liquidity for yourself and your shareholders if you can generate a certain amount of share volume even with smaller businesses.

What readers out there running eCommerce businesses should be looking at especially now, where we have an economic downturn, assuming it’s going to continue, is look at how you can combine with a few other businesses? If you have a beauty brand, how can you find 4 or 5 other beauty brands or brands that are similar that have SaaS that ties over a beauty or influencer management company in beauty, a small retail chain so you can vertically integrate or manufacture?

How do you combine 4 or 5 smaller businesses into a larger business, save some money on costs and say, “We’re going to centralize accounting and marketing. We’re going to vertically integrate our manufacturing.” Let’s say you all had a $2 million business but now, all together, you have a $10 million business. How do you take that combined set of businesses and say, “We want to do our own little roll-up and bring that on to the public markets.” Also, be able to say, “We believe we’re worth this multiple on this and we’re going to tell that story to investors. We’re going to hire PR and we’re going to go figure that out.”

That’s an interesting opportunity to combine those things and execute on getting a vehicle, especially while the market is low. As the market starts to grow, take advantage of that growth and help tell your story. What I learned through this process is that this is much easier. Getting onto NASDAQ is hard and you need to have an investment bank underwriting unit and all these factors. Getting on some of the smaller exchanges is not that hard.

Any entrepreneur who’s gone through the process of starting their own business and some level of fundraising can figure it out. That vehicle being accessible and the idea that you can combine a few companies and do that yourself is a huge opportunity. All kinds of entrepreneurs that are connecting online should be thinking about how they’re doing that with their businesses and the businesses of their friends to create more value as an aggregator or as a roll-up.

From $500 to $50M+: The Story of Kosmos Q

In 2X eCommerce Podcast episode 355, (or Season 7, Episode 13 for those listening on Spotify or Soundcloud) I had the pleasure of speaking with Kosmo Khosravi, the CEO of Kosmo’s Q, a $50M+ BBQ company. Kosmo’s journey from bootstrapping his business with no loans, credit, or outside investment to scaling it to 8 figures and beyond is truly inspiring.

He has a wealth of knowledge on how to help eCommerce companies scale, I suggest that later you go and listen to the full episode. Kosmo’s story is truly an inspiring one. In the snippet you’re about to listen to, he talks about the power of omnichannel strategies. The importance of diversifying your sales channels and being present across multiple platforms is crucial for any direct-to-consumer brand looking to scale.

Kosmo’s insights into the “upstream-downstream method” of reaching audiences and the importance of stepping outside of your comfort zone to reach new audiences are something that any business owner should take note of. That’s why I included this excerpt in my ‘Best of 2022’ podcast as it provides valuable insights on how to grow a direct-to-consumer brand in today’s eCommerce world and one that aligns with my own views and experiences. Let’s hear what Kosmo has to say.

The other question I wanted to ask was around how you approach channels. That layers two ways of looking at channels. One is sales channels, where the sales come, the ding dings, through the website, marketplaces, whether it’s big wholesale orders. We’ve already addressed the second classification channels, which are marketing channels that you use to reach new audiences and communicate. Going into your sales channels, I did mention you’re an omnichannel brand. How important has it been to the majority of Kosmo’s Q in 2022?

It’s been very important in omnipresence. If you see us on Facebook, I want you to see us on Instagram, TikTok, Twitter, Snapchat, YouTube, and all of the channels. We have the content. There are platform-specific audiences. Send it all out. The same thing with our retail partners. I believe in a method I like to call my upstream-downstream method. Meaning, it’s easy to get on a boat and do nothing and go downstream. I can talk to everybody.

My downstream are my friends, family, people around me, and the people that I get to relax and talk to. My sidestream is the little creeks that go up. Those are my mom-and-pop hardware stores and barbecue shops. Those are the people that take a little bit more effort to get into but once you get into them, it’s usually smooth water. You can have a conversation and it’s very natural.

The hardest one, this is what I believe that you should wait to crack last, is your upstream. Anybody that’s ever tried to row anything upstream knows it is extremely difficult, but you don’t grow from safety. You only grow when you step outside of your comfort zone and do something that’s tough, hard, and makes you work.

Those upstream ones are large retailers that may have 20, 30, 50, 100, and 200 locations. They’re harder to get into. They’re harder to get in front of the right person. They’re harder to try to sell them on. They try to beat you down on price. It’s extremely difficult. The amount of product that they can turn in one day versus me selling at a barbecue competition, the numbers aren’t the same. That’s why it takes more work to get into those. That’s my method. I don’t know if it’s right but it works.

Where can you get Kosmo’s Q products upstream now from the big retailers?

There’s Amazon, Ace Hardware, Walmart, soon-to-be Lowe’s, and True Value. I don’t know if you’ve ever been to a Buc-ee’s.

No, but I have been to Walmart. Are you measuring any conversions from other channels to D2C where people are trialing Kosmo’s Q rubs or injections or powders in these sidestream or upstream channels and saying, “I could see the website here, it’s Kosmo’sQ.com.” Then they come to your website to build that direct one-to-one relationship.

What you need to know about Bookkeeping for eCommerce

In 2022, for episode 364 of the 2x eCommerce podcast, titled “What you need to know about Bookkeeping for eCommerce”, I had the pleasure of speaking with Nathan Hirsch, a lifelong entrepreneur and the CEO of EcomBalance and Outsource School. Nathan is best known for co-founding FreeUp.net in 2015 and scaling it to $12 million in yearly revenue before having it acquired in 2019. He is a true expert in the field of eCommerce, and in this snippet, he discusses the importance of accounting strategies for eCommerce brands.

Nathan emphasizes the need for a bookkeeping service that understands the nuances of eCommerce and how it can create a mess if not done correctly. He also talks about the importance of having clean books and knowing your numbers when it comes to exiting your business and how it can lead to a successful exit. He also gives you a clear strategy for doing so in your own business. That’s why I included this excerpt in my “Best of 2022” podcast, as it provides valuable insights on how to optimize your accounting strategy that really is invaluable to any founder or brand.

Through our market research and what we’ve known throughout the years, if you’re an eCommerce seller and you hire a bookkeeper that doesn’t understand eCommerce, that’s going to create a huge mess. There are a lot of nuances that appear in an eCommerce business, whether it’s Amazon fees, Shopify fees, cost of goods sold, or inventory that don’t appear in other businesses. You want to make sure whatever bookkeeping service you hire knows eCommerce well and that’s what we bring to the table.

To not just speak only about eCommerce balance on this podcast, can you speak to an exit? You went through the exit of FreeUp and it went well. From a finance perspective and also a personal perspective, what do you think led to the clean exits you had with FreeUp?

First of all, we had immaculate books going back several years. One of the first things that we did in FreeUp before we were even profitable is we hired a bookkeeper. They kept track of our books every single month. We were getting reports even when we weren’t revenue positive and weren’t profitable. We saw our expenses and we made decisions.

What happened is not only did we have clean books that pass due diligence but that initial conversation that we had with the buyer where they asked a lot of questions about our business, we knew our numbers. When they asked about our profit margin, our number of clients, our revenue, and the direction it was going, we had answers to these questions.

Down the line, when they got access to our books and dug into them, everything they saw in our books matched exactly what we told them on the initial call. It built a lot of trust. It shows that we knew our business, we knew our numbers, and we weren’t making stuff up. That’s a big part of it. I know a lot of people that buy businesses in the eCommerce space. If the person they’re buying from doesn’t know their numbers and they don’t have immaculate books, they’re not touching that business. That’s the bare minimum.

The other thing of having good books allows you to do is, first of all, if you’re doing an accrual basis for eCommerce, that is going to allow you to have a better multiple. Joe Valley at Quiet Light who owns a company called EXITpreneur talks all the time that if you want to maximize your eCommerce business sale, having an accrual basis is incredibly important. It also allows you to have the right deductions. Most businesses sell at a multiple. The multiple could be 3 times, 5 times, 10 times, or whatever it is that EBITA is earnings before taxes and appreciation. What you’re able to do is deduct certain things.

For example, if I have a conference that I go to every single year, the person buying my business doesn’t have to pay for that conference. That $10,000 conference sponsorship can turn into a multiple of four so that could be an extra $40,000 that you sell it from. Having clean books allows you to do certain things like deducting conferences. It allows you to get the highest multiple but it also allows you to sell your business, to begin with.

Should we speak a bit more about accounting on an accrual basis? Do you want to break it down so readers can have a better understanding of what it means to run your accounting on an accrual basis?

Think of cash basis accounting. Let’s say that you pay a vendor, it goes on your credit card, or you receive money. The second it goes into your bank account or the second it’s charged on your credit card, it goes into your books. Let’s say you bought inventory. If you spent $50,000 in inventory today, if you do cash basis, that’s going to show up in your books right now even though you might be selling that $50,000 over the next three months.

If you do accrual basis, whether your cost of goods averaging or you’re recognizing it when you make that sale, that $50,000 is going to be spread out over three months. Let’s say you’re doing cash basis. You might show a huge loss in January but a lot of profit in February, March, and April because of that $50,000 one-time charge. That doesn’t tell you anything. You can’t make a decision based on a huge loss and lots of profit when that inventory was made for 3 months, 4 months, or whatever it is.

If you’re doing an accrual basis, you’re going to have a much more accurate picture of what you’re making every single month even though that $50,000 was charged in January. There are other things too. Let’s say you’re selling retail and you’re on Net 90 where Walmart doesn’t pay you for three months, accrual lets you factor that in. Whereas with cash basis, it’s not going to hit your books until you get that payment from Walmart.

Having a cruel basis for an eCommerce business is incredibly important. For FreeUp, it’s less important because we were charging clients and then paying freelancers a week later. There was no Net 90 or Net 180. It was cashflow positive. For most eCommerce businesses, accrual makes a lot more sense not only for making decisions every month but also for going to sell your business.

Ukraine: How the eCommerce Industry Can Help

In this, perhaps the most powerful episode of the year, I was joined by Paul Okhrem, the founder of ELogic Commerce – a Ukraine-based company that services omnichannel brands to deliver eCommerce solutions to serve different markets. As the east of Ukraine plunged into chaos, Paul’s western Ukraine-based business opened its doors to provide job vacancies to those who lost their livelihood due to the effects of Russia’s invasion of Ukraine. They also offered relocation packages to those who decided to flee from the war-torn area and live in safety.

I was moved by Paul’s resilience and the resilience of all those in Ukraine. Paul is nothing but class and intellect, and a real asset to his home country. He and his team continued to work from wherever they could, from wherever there was an internet connection, often turning basements into offices so they could work in the safety of these makeshift shelters and continue to support their families and their country. It was incredibly moving stuff, and a best of 2022 podcast would not be the same without Paul’s character and the powerful story of resilience shared by all Ukrainians. Without further ado, let’s hear from Paul himself.

“They’ve turned their home basements into offices. They were joining work calls while moving their families abroad and they stayed there offering their support, hope, and homes to people who are moving from other regions. We had a few people who were remote and they were moving quickly to Chernivtsi in safer places.”

To break down how you’re structured, how many employees do you have?

We have more than 150 engineers and 20 managerial staff, which means that we have business analysis teams, we have project management teams, and DevOps teams, which are not related to delivery concurrently.

You’re predominantly in Western Ukraine to be specific. You’re dialing in from Chernivtsi.

We have offices but most of our managerial team is located in Europe and Estonia, Tallinn. For myself, since I was born in Ukraine, I’m often here. Since we have a lot of staff here, it’s pretty important when this time happens that you’re on the ground with the team and you show them your support. Sometimes you make tough decisions.

Leading forward is the key thing. In Ukraine, you’re in three cities in the southwest. You’re closer to the border of Romania, Mordovia, Hungary, and Slovakia. I hear the west is relatively calmer to the eastern and center of Ukraine. Has the army progressed? Has there been any fighting or any attacks on your side of the country?

Historically, the western part of the country is closer to Europe mentally and geographically. That’s why it’s not smart for their army to come here because there are a lot of fighting people, aggressive people who don’t like their country who are politically far from them. That’s why the attack was focused on the eastern borders of the country and the central part. Here, we feel that there are a lot of refugees coming from different parts of the country.

The official statistics prior to our conversation say that, for example, the city where I’m located right now, for the past few weeks, got 80,000 people more. It’s a similar situation to all the other cities in the western part of the country. We get a lot of requests from friends coming from Kyiv or Kharkiv to find apartments for them. We get a lot of requests from our competitors on the labor market to help them to rent offices. We get a lot of requests from people who are closer than we are to the danger to relocate here. We relocated our staff here to make them safer.

You’re in Chernivtsi and you also have two office centers in Ternopil, which is North West from you, and Khmelnytskyi, which is in the North East but they’re all western. We’re doing this episode on Friday, the 11th of March 2022. It was the 24th of February when the invasion started. You guys are in the thick of things from an eCommerce delivery standpoint. What happened? What did you do? How was it received? Was staff stranded anywhere? How did you get everything on board? Did people get deployed? Did people decide to join the army? How have you managed the whole chaos in the country and managed it in a state of calm because you sound calm right now?

We weren’t calm on February 24th, 2022. Even the official statement to our partners, even though we’re connected every day, came a week from that period. On February 24th, 2022, we faced a scenario that was hard to predict or even planned for. Our management team had to respond immediately and our top priority at the time was the safety of our staff and performance as it can be.

When you hear news about the war, you’re not productive but still, you have the plan need to do. For example, some of our team members were closer than we might have imagined. They’ve turned their home basements into offices. They were joining work calls while moving their families abroad and they stayed there offering their support, hope, and homes to people who are moving from other regions. We had a few people who were remote and they were moving quickly to Chernivtsi in safer places.

That’s insane, getting into your basement and saying, “I’m going to work.” What about the internet? I hear Elon Musk was putting a Starlink in Ukraine quite rapidly. How are you guys connected to the internet? What about power and utilities? The West is relatively safe but what about employees in affected areas?

The first thing I did after it got a bit calmer was to call my friend who is a network engineer and knows about all the networks in the country. Most of the cables are located under the ground and it’s 1.5 meters under the level of the ground. To destroy the connection, you need to get a missile to hit the ground at the point where the cable is located okay. It’s a bit decentralized because magistral cables are coming from Europe and other parts.

Elon Musk supported us and the first part of Starlink was sent to the army so they can connect with each other. They even developed a connector to a cigar plug in the car so the army can connect with each other so it’s important for communication. We bought Starlink to provide the pickup channels to our offices. We understand that our offices are a good shelter as well because we were always renting these spaces, which are in the modern areas, safe areas, and they have basements. They have good infrastructure so some people are still working from the office and others are remote. As for the internet, it’s pretty good.

When we talk about electricity, gas, and all this stuff, it’s perfectly well here. We get no disruptions at all. In the eastern part, we have to chat up developers and local developers who are communicating. There are some people who stay in their homes while the missiles are hitting Kharkiv for example. The case for our people, they were fortunate but there are less fortunate people. We understand that our main mission here is not to stay safe but also to help people who lost their jobs because their companies were destroyed. That’s also important.

Xero Shoes: How Steven Sashen is Leading the Barefoot Movement with a Digital-Native Minimalist Footwear Brand Pt. 1

Next up, we’ll hear from Steven Sashen, the Co-founder of Xero Shoes. In this snippet, Steven discusses the unconventional approach he took to building his business, a digital native minimalist footwear brand. Rather than keeping his business model and products a secret, Steven made a series of videos showing how to make his products and gave away the entire business model to the public. He’ll tell you why that technically could have broken his business completely, and also how he knew it wouldn’t.

Steven highlights the importance of creating value and building a community for direct-to-consumer brands. Steven’s approach is a reminder that giving away the farm does not have to mean the end of a business but can lead to growth and success. Some fun facts about Steven: he is one of the fastest runners today in the United States in the 55+ men space.

He started his company with just $40, and today, they are doing over $12M+ in sales annually and are selling their footwear in 55 countries across the world. Steven was also featured on Shark Tank, turning down a $400K funding offer from Kevin O’Leary in return for 50% of the company. Curious to hear more? Then I won’t keep you waiting, let’s get started.

We’ll search with a caveat. I gave away the farm. I made a bunch of videos showing exactly how to make our product and if you bought our materials but also if you didn’t buy our materials. I gave away the entire business model, knowing that most people weren’t going to do it and if they did, that’s cool. I have no problem with competition. It was all those videos that started it and then they were the other organic search as well but the video drove it significantly.

Were these YouTube videos?

It was on YouTube and Vimeo. There were 50 different video platforms. YouTube was the number one driver though.

It sounds to me like you’re building community because with your videos, you’re getting attention from an audience of people and some of them are going to take action, given that the content and information you’re giving to them was valuable.

You nailed it. Yes, it’s creating value, that’s number one but you use the phrase building a community. I was doing something a little more subtle than that. I was tapping into existing communities. There was, at that time, a burgeoning barefoot running community that was showing up. There were some blogs and Google Groups, etc. I was showing up where people were already having a conversation about what I was doing, and injecting myself into that conversation by providing actual value and then moving them over to what we were doing as a result of that and then that would grow also.

I met a guy more than ten years ago who said, “I saw your videos and I started making sandals and I’ve never bought anything from you.” I said, “Great. I did it because I’m trying to change the world, not trying to get money out of everyone’s pocket and this is changing the world. I’m happy to hear it.” Because I learned to make my own footwear, it was like having a superpower and then I started repairing appliances that I had. Instead of throwing them away and buying new ones, I started repairing them. I started making other things and I started gardening.

It opened up this whole idea of having agency in your life, instead of turning everything over to some corporation, which is an ironic thing to say now that we’re selling footwear. You can still go out and make a pair of sandals the way human beings have been doing it since the beginning of human beings. It’s not rocket science, or as they said back then, “It’s not rocket science.” If you’re going to make actual footwear, that’s a whole other story. You can’t do that on your own easily.

That concludes our ‘Best of 2022’ series for the 2X eCommerce podcast. I hope you’ve enjoyed these episodes as much as I enjoyed putting them together. Remember, the eCommerce industry is constantly evolving but the principles shared by our guests in these episodes will always be relevant. From maximizing the value of your business for potential acquisitions to building a strong team to putting your customers first, these episodes have covered a wide range of topics that will help you take your eCommerce brand to the next level.

If I could add one thing to this podcast on top of everything that you’ve learned from your guests, it is to always always be looking for cross-functional growth opportunities. Don’t take each snippet from this podcast in isolation, find opportunities to leverage one off another for your eCommerce brand specifically. Of course, I highly recommend listening to each individual podcast featured in this episode in its entirety. We’ll have a full list in our show notes for this episode.

Thank you for tuning in and I look forward to bringing you even more valuable insights and inspiration in the coming year. Until next time, keep building, scaling, and innovating your eCommerce brand and all the best for 2023 – make sure you tune in to this year’s round of podcast episodes so you’re always staying one step ahead.

About the host:

Kunle Campbell

An ecommerce advisor to ambitious, agile online retailers and funded ecommerce startups seeking exponentially sales growth through scalable customer acquisition, retention, conversion optimisation, product/market fit optimisation and customer referrals.

Learn from eCommerce Entrepreneurs & Marketing Experts

Get Free Email Updates by Signing Up Below:

Podcasts you might like