In this episode, we’re going to learn about how three Canadian founders got together to solve the issue of excessive sweating with a simple yet groundbreaking medical device called Dermadry. It’s a great episode you do not want to miss.

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Welcome to the 2X eCommerce podcast show. The 2X eCommerce podcast is dedicated to digital commerce insights for retail and eCommerce teams. Each week, on this podcast, we interview a commerce expert, a founder of a digitally native consumer brand, or a representative of a best-in-class commerce SaaS product.

We give them a tight remit to give you ideas that you can test right away on your brand so you can improve commerce growth metrics such as conversions, average order value, repeat customers, your audience size, and ultimately your gross merchandise value or sales. We are here to help you sell more directly to your customers.

In this episode, I interviewed Mathieu Mireault. He is 1 of 3 Co-founders at a medical device company called Dermadry. I’m a customer because I do have excessive sweating issues. I remember growing up, I would sweat on my palms every time. I had sweat in my armpits. You can see the patches in my armpits. I bought one of their devices, Dermadry, and used it a couple of times. It seemed to work.

I got the opportunity to speak with one of the co-founders and it’s a phenomenal story. They’re doing in excess of $10 million in revenue a year. They’re a synergistic type of team where one person came up with the invention and the other sorts out marketing and the other sorts out operations and finance. That pillar is there.

We talked about how they raised some capital to run the business, how they ran the initial tests in the business, what it feels like running a $10 million-plus business in revenue, and what it looks like from the driver’s seat from an operational standpoint. They manufacture every part of that device in Canada. The interesting thing is they do it in-house, which is phenomenal. That’s attention to detail from a vertically integrated standpoint.

We talked about what they’re geared towards doing. In five years’ time, they want to build a $100 million company. One of the constraints there is the fact that it’s a medical device, meaning that there’s friction when customers want to purchase it, particularly in the United States. I had to fill out a disclaimer form so that it was classified as a medical device. I didn’t have to pay importation tax and VAT because I ordered it from the UK from Canada when I purchased it.

It’s interesting that there are opportunities going through doctors who can recommend the device at scale. We discussed their B2B opportunities. The B2C game that they’re playing is quite interesting because they’re tight with retargeting. They’re effective with the performance marketing on social. If you type out excessive sweating anywhere you are in North America or even the UK, their ads will turn up. They’re proactive with that.

It’s an interesting conversation. He’s a friendly chap. He’s humble, most especially. Without further ado, I’d like you to enjoy the show. I shall catch you on the other side. Do let me know how it goes. If you haven’t already, hit the follow button on whatever podcasting platform you listen to this podcast. Leave us a review on iTunes if you have a chance. The last time I got a review was months ago and that shouldn’t happen. Please, leave us a review. Enjoy this episode meanwhile. I shall catch you on the other side. Thank you. Cheers.

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Welcome to the 2X eCommerce podcast, Mathieu. A pleasure to have you.

Immense pleasure. Thank you so much for having me on.

Back in 2019, on Black Friday, I took the plunge and purchased one of your kits. It was for the armpit, the hands, and the feet. Incredible product, I have to say.

It’s such an honor. I can’t believe that. What a beautiful coincidence. That was very smart on your behalf because the price has increased a lot.

Put in the resale market to make $1 or $2. You’re set out in the market to solve this excessive sweating problem. I’ve had excessive sweating for as far as I can remember. I’m talking secondary school. I’m talking about when I was 12 or so. I know younger people have this issue. You’re 1 of 3 co-founders. What did each of you do prior to Dermadry and how did Dermadry was ideated and then eventually brought to market?

Dermadry is like a lot of startup stories. It was invented to solve a problem. One of the co-founders had excessive sweating on his hands and feet. When you have excessive sweating, it takes complete control over your life. He was going on a date with a girl and his hands were so sweaty. The girl took his hands and was like, “Why are you so shy?” He was like, “I’m not shy. My hands are always sweaty.” He took him off his game.

A lot of things happened in this life where he said to himself, “I need to find a solution for my excessive sweating. He built a homemade iontophoresis machine and it worked wonders on him. He had no more sweaty hands, no more sweaty feet. His confidence came back. He took control over his life. He talked to me and then one of my other friends. We’re all friends since high school. We said to each other, “This is such an amazing thing that we can’t keep it from ourselves. We need to share it with the world.” That’s how it started, this desire to bring some amazing solutions and help as many people as possible.

Does he have a science background or a STEM background? How did he put it together? It’s an electronic device with aluminum. It’s very clever. It has to be rudimental but there are some electronic components to it.

This is considered a medical device called an iontophoresis machine. The way it works is we send a very little electrical current to the surface of the skin and it comes and disturbs the connection between the nerve and the sweat gland. The nerve cannot send any more signals to the sweat gland to tell it to produce some sweat.

Maxime, the person who had excessive sweating, worked in finance back in the days. He was a total nerd at the same time. His dad was an engineer. He was the person who would always look at documentaries on how things were done. With that kind of experience, he built this small and rudimentary machine at home. That was our prototype.

Me and my other colleague have more of a marketing background. I have a Master’s in Marketing and the other colleague who was a co-founder worked in eCommerce marketing. With this kind of background, two people who had more of marketing background and him who had a more of an engineering background, we set about creating this company.

A lot of people say, “You guys must all be engineers. You guys must know the science behind it.” The truth of the matter is, not at all. When we started off, we were just people who had an intuitive business sense. We knew that people who didn’t have medical devices are bad at marketing. We were looking at the website of our competitors and we’re like, “This is like the Stone Age of the internet.” We were looking at how they did Google Ads. We were surprised because there were no Google Ads.

This gave us the clear intuition that it was going to be so easy to beat them because the ad spending was going to be very low to be able to sell a machine. Of course, on Facebook, the same thing, the ad spend was going to be very low because we had no competition. All of these things made us want to understand better how the machine works.

Because we saw a big business opportunity, we set ourselves, “Let’s learn everything about this technology. Let’s go all in.” Five years later, here we are. We have a medical device, an iontophoresis machine, which is the best-sold iontophoresis machine in the history of this type of solution. We’ve changed thousands of lives and we help people take control of their excessive sweating.

Incredible story. There’s so much to unpack there. To add to that, five years on, you’re in the $10 million to $20 million in revenue in GMV range. You sell D2C as well as Amazon. There are a lot of runways you’ve created. Let’s go back. How did you come to the go-to-market? You’ve spotted the opportunity, you’re looking at search data, and you’re very data-driven. It’s a big problem.

You’re probably looking at people searching for excessive sweating and you’re like, “There’s no product out there capable enough to solve this problem effectively besides the incumbent deodorants,” which do not solve the problem when you think about it. It just makes you smell a bit better when excessive sweating comes. It doesn’t stop it. How did you come to market? Where did you have that initial production run? Was it locally there in Canada? Did you outsource it? Get into a bit of detail in the early beginnings of how you moved the first few thousand units.

We did a lot of market research. Because Maxime had hyperhidrosis, and excessive sweating, his whole life, he knew better than anybody else what it meant to have the condition. He also knew that there were no good solutions out there. Deodorants don’t work. When you go to your doctor, it’s hard to talk about your hyperhidrosis because a lot of times, when you mention this problem, people say, “It’s not a real problem. It’s just having a bit of sweat.” For people who have hyperhidrosis, it’s all they think about.

Early on, we wanted to put this product on the market. We thought that we were going to be in the market in the next six months. The thing is, it’s a medical device so we needed to do a bunch of tests. We need to get certified by Health Canada. It was such a long process. Every six months, we said to each other, “In the next six months, we’re going to be on the market and it’s going to be awesome.” It took two years for us to be on the market but those two years allowed us to better understand the market. It allowed us to try out some new marketing strategies and have a very soft launch. It became the best in our field.

You were funded by an Angel investment is what I would think.

We were very lucky in Canada because we have an amazing ecosystem for startups. We are all self-funded. Meaning that it was either banks, friends, family, or local government who gave us or lent us the money. We have not diluted any of our shares. For us, that’s one of the things we’re the proudest of because we are 100% owners of the company. We take all the decisions, the good ones, the bad ones. We’re very happy with how it went.

What about production? How did you produce your first 1,000 units?

We produced the first 1,000 units the same way we’re producing them today. From day one, we wanted to take ownership of the production to be able to understand what are the flaws of our design and be able to make them better as soon as possible. Since day one, we do the manufacturing and its production from our own offices here in Montreal. We’re located in Montreal, Quebec, Canada and this is where we ship from. The machine that you received in the UK was shipped here from Canada. If I knew it was you, I would have sent you some bagels and maple syrup with that order.

To be honest, with COVID, we realized that the bet that we made to manufacture everything here paid off because we have a lot of friends in eCommerce. As soon as COVID hit, their sales increased, like a lot of people. The problem with them was that they had a container that was stuck in China and it took them six months to get that container. Because of that, they went bankrupt. Whereas we had all the stock here and we built everything here. That saved us at that moment because we were able to ship as many units as we wanted to.

What about the components over COVID, the actual things that go into manufacturing? How did you hedge against some thought risk?

We’re lucky because a lot of the components of our machine are electronics. When it comes to electronics, it’s not that different in terms of cost to build it here or in China because it’s the machines that produce it. We make our carts here in Canada. That’s the most important part of the machine. Most of our components don’t even come from China, which sounds surprising.

When you’re a medical-grade company, you cannot compromise on quality. You cannot compromise on the companies that you work with. Initially, we worked with a lot of companies and we’d say to them, “We need this certificate because of course, we’re a medical company. Are you complying with these norms?” They were like, “Tell me which norm you want us to be compliant with. I’d make sure that my Photoshop team will send you the right certificate.”

At that moment, we realized that China, I know they’re amazing for a lot of things, but maybe for this type of high-quality device, it’s not the best. Of course, there’s the risk of being copied, which we have already a lot. All in all, making sure that our main components do not come from China has been a good bet, especially because of COVID.

You’re from a marketing background. You’re in a very unique situation, in the sense that there was no competition but there was a problem. How did you start turning up to people that had this problem? Was it searched? Was it social? What did you do first?

Initially, we did everything that was low-cost. We started off with Google Ads, and then we went to Facebook. The moment where we started to get more popular and more well-known was when we started working with affiliates because we are a very weird solution. You could tell me what you thought about the solution when you saw it first. We tell people, “Put your hands or feet in the water and then connect the machine to electricity and then put electricity in the water,” which is everything that your parents said not to do.

We worked with affiliates. People would go online, either on YouTube or Instagram and they would say, “I tried this machine. It worked wonders on me. Now my hands, feet, and underarms are dry.” That is when the business started popping off. As you could imagine, the search volume for an iontophoresis machine is not very high.

Affiliate marketing for us was the way to go. When we started becoming more well-known, then everything else became much easier. We had more people looking for our website. Google Ads perform better. Facebook ads perform better. Now, of course, we’re using TikTok a lot. TikTok ads perform better.

You’re evolving. You have a demonstrable product, in the sense that there was a problem and there’s a certain way you have to do it to get the product to work. You’re working with these affiliate partners that are content producers on YouTube, particularly. What advice do you have to merchants in a similar situation as yourself at that time in terms of affiliate relationships, commissions, managing, nurturing, and getting the best out of your partners?

We always had a strategy of letting our partners do what they do best. Initially, we would send out scripts, we would send out templates, etc. It was never as good as when we just gave them a machine, gave them very little headlines, and then let them roll. Somebody follows a YouTuber because they love what they do. If you try to change them, then they’re not going to love them anymore. We enable the affiliates to do the best that they can, try not to control the message, which is very hard when you’re marketing, and let them be the best that they are. That’s why you chose them.

In terms of commission structure and also attribution, what if I first learned about Dermadry on a YouTube channel from affiliate X and I ended up searching for Google at the end of the month because that’s when I get paid for Dermadry? How did you sort out those challenges and what’s the compensation structure like?

Most people who work with affiliate marketing are still trying to sort that out because it is hard to understand. We work with the two methods. One is cookie attribution and the other one is coupon codes. When a person uses a coupon code of an affiliate, they’re going to get the commission. Same thing with cookies. With the cookies, it’s harder to track because let’s say you go to one affiliate video, then you go to another affiliate video, then you go to the third one, the cookie tracking is only going to track 1 of these 3 partners.

A lot of people might feel like they’re producing content for nothing so we offer a 5% commission for most affiliates. Of course, if we have a doctor or if we have Kanye West or a celebrity who talks about our machine, we would offer a much bigger commission. Usually, it runs around 5%, keeping in mind that our machine right now is retail at almost $500. 5% of $500 is a very interesting commission. We have people where it’s almost their full-time job. It is very interesting to do affiliate marketing for products that are more high-end. Sometimes I’m like, “Maybe I should quit my job and start doing affiliate marketing.”

How would you attract the right affiliates? What do you think are the barest essentials for merchants looking to get the best of the best in this ever-competitive world of creators?

We have tried so many other different things and we have realized that the only affiliates that work are people who have the problem. People who can attest to the fact that it works well, that talks from an honest perspective about why having hyperhidrosis is worrisome, and how their lives changed because of the machine. If the message does not sound honest and if it doesn’t seem like it is coming from an honest experience, then we’d never see their sells.

We have worked with affiliates that are very popular, let’s say mid-range influencers, and the results were zero. We have worked with affiliates with a very small following but who had a hyperhidrosis problem and the results are tremendous, freaking unbelievable. In our case, and maybe it doesn’t apply for everybody, working with people who have hyperhidrosis is the main criteria.

What we do is we go on YouTube and click sweaty hands. We find everybody who talks about having problems with sweaty hands, contact all of these people, and send them a free machine. We make sure that if they have a following, we would give them an enticing commission promise. We let them work their magic.

I also recall the YouTube video that swayed my decision on this. It was an ITV This Morning video. They were swearing Dermadry in that video. How did you get that? Was that also part of your PR, part of your media efforts?

Yes. We’re very lucky because the media hears about our machine and they become enticed because it’s such an odd way to treat your hyperhidrosis. A lot of media has contacted us. In the UK, we had the BBC contact us. We had a lot of different radio stations contact us. It is a fun thing to talk about when you’re at the beginning of summer. Of course, PR is 100% based on our strategy. When it works, it is the best return on ad spend but it doesn’t always work. Like a lot of companies, we sent thousands of pitches and never two got picked up. The one that got picked up creates so many sells that are very worthwhile.

Looking at other acquisition channels, beyond the affiliates, what are the key channels you’re using to acquire new customers?

It’s selling via banners that are very well established such as Amazon or Costco. When people see your product on these banners, they automatically trust the product and automatically trust the buying process. If it’s been approved, let’s say by Costco, because they have it on their shelves, the client is going to know that it works and they’re not going to think that this is just a gimmicky product. That helped us out tremendously.

The other ones, of course, are distributors because they know their market very well. As a global company, we do not know how people in the Philippines purchase machines and what they think about in their buying cycle. For example, having Filipino and Thailand distributors, which opened up, that has helped us out tremendously.

Of course, being a medical device, having doctors recommend our machine has helped us out tremendously. We have about 30% of our sells come from doctors. We do congresses to meet them. We go to their offices to meet them. We send them informational pamphlets. We’re getting our name out there at the most possible.

It’s a well-oiled machine and very well coordinated. In regards to what you’re seeing in Facebook, Instagram, and TikTok, I’m going to throw that out to you in terms of what’s the landscape now, especially you as a merchant? How’s it changing?

Everybody who has been in eCommerce has not slept that well since iOS 14 has been implemented. I know that for a couple of weeks afterward, we were like, “We need to change our business model from A to Z.” In the end, it hasn’t been as bad as we thought but it makes our life much more difficult. Everybody has noticed it. Since the changes that Facebook has made, their stock has dropped almost 50%. They lost almost 50% of their value.

I’m surprised that we didn’t see more eCommerce shut down because a lot of eCommerce only are marketing via Facebook and that iOS 14 changed the game. What we need to do is have much more compelling content and TikTok for us was the platform for that. In a matter of months, we were able to have more followers than we have on Instagram which we worked on for years. TikTok helps to have compelling and interesting content.

To be honest, I don’t know if it is for you or for the readers, I almost never go on Facebook or Instagram anymore. I’m always on TikTok because it’s so much more fun. We’re following the global trends. YouTube is always very fun because there are more people who go on YouTube to find answers than on Google. If you want to learn how to cook a recipe, you don’t say how to cook an omelet on Google. You go on YouTube and you watch somebody do it.

Same thing for a machine. We’ve had a lot of amazing reception on YouTube. I’m very concerned about the state of eCommerce in the future because of Facebook’s change. A lot of people who do, let’s say drop shipping and all these models, are going to need to adapt and evolve very quickly because it makes the game so much harder for people in marketing.

We talk very little about dropshipping on the podcast. Our focus is on DTC eCommerce brands. There are certainly lots of battle cries at the moment. Stores are getting shut down. Stores have been acquired at very interesting multiples and prices because SDE has progressively gone down. There has been an uptake, particularly to products that speak to the demographic under 40 in TikTok. It’s making its strides slowly, some very aggressively. I’m on your TikTok page and I can see a lot of content creators. Is your TikTok strategy to work with content creators or do you have a face of the brand? Do you have content that’s generated by your brand? What’s your approach to TikTok marketing now?

We had an employee who herself has almost a million people who follow her so we were like, “Take control over TikTok. We don’t know what we’re doing. You’re doing such a good job on your TikTok.” She has a lot of fun with it and she’s doing an amazing job so we let her have full creative control. Sometimes for affiliates who don’t want to have some content on their own page because it’s personal, they just send us videos that we use.

It’s a bit of both. Most of it is in-house and some of it is outsourced. Of course, our biggest video that we ever had on TikTok was with the collaborator of Dr. Shah, who is considered the godfather of medicine on TikTok. We had almost 8 million views on his video. He talked about us. That was an amazing experience. It’s a very fun platform. We’re still learning. Everybody’s still learning because they’re evolving pretty quickly. I would say to anybody and everybody out there, just have fun with TikTok because it’s so much easier to have a viral video than on YouTube, Instagram TV, or Facebook videos.

Most of his posts are over a million. This guy knows how to create content.

We were super lucky because when we called this agent to work with him, his agent told us that he loved our machine because his brother-in-law was using Dermadry. It was a magical connection.

That’s the reason we’re having this conversation now because we got the opportunity. I was like, “I know Dermadry. I used Dermadry. Let’s do it sooner rather than later.” Those are tweets put out by Novell. I don’t know if you know Novell. He was like, “Your marketing isn’t working, that’s why you’re doing a lot of sales. Your product isn’t working, that’s why you’re doing a lot of marketing.”

In your case, when you do a little bit of marketing because the product is so good, it’s an average. The product has given marketing leverage. It’s like a flywheel. For some other brands, the product isn’t doing much. There’s no moat in their product. It’s another #MeToo. They’re trying to get those emotional levers to say, “This is our market. This is what differentiates us from our markets. This is our marketing message.” They’re always trying to work out that copying a message to convince people to try. It’s interesting.

You said a lot of good things. Since November 2019, when I purchased my Dermadry, I haven’t gone back to your store. I’m getting emails from you. I know who you are, for sure. There were a few upsells like the pads for the armpits, which I haven’t purchased so it might be dirty. What does your returning customer rate look like purchase frequency?

Our product is too good because we don’t have any recurring customers. We thought initially that a lot more people would purchase a machine more often. We sell towels and underarm pockets, and people don’t buy them that much. That is something that we initially thought we would have more revenue from and we don’t have that much.

As you may know, usually when you acquire a customer, let’s say if you’re advertising, etc., the first sell you make is almost at a loss. It’s when you do the 2nd, 3rd, and 4th sell that you make a profit out of that person. In our case, we don’t have that opportunity. At the first sale, we need to make sure that we make a positive return on ad spend.

You have a high AOV. You alluded to the fact that it’s $500. It gives you a leeway for your CAC, Customer Acquisition Costs.

People who have hyperhidrosis would be willing to give anything they have to make sure that they don’t have sweaty hands anymore, their feet don’t stink anymore, and they don’t need to change shirts four times during the day. A lot of people say, “This is the best money I’ve ever spent in my life.”

We could go on and on. It was interesting finding out more about the behind-the-scenes growth techniques you’re using over at Dermadry. You’re a medical device company. You need a doctor’s prescription in the US. You’ve done a terrific job from so many perspectives. For those readers who want to find out more about Dermadry, what is the best way to reach out to you?

Our website is probably the best way, Dermadry.com. We have Instagram @Dermadry, Facebook, and TikTok. You could go see our YouTube page. If not, you could see our Amazon page. We are very open if you have any questions. We are here to help people who have excessive sweating and maybe iontophoresis. Maybe Dermadry is not the right solution for you, but please reach out and we will make sure that we will find the right solution for you because we are not here to sell a product, we’re here to help people who have hyperhidrosis.

You couldn’t have said it any better. Thank you so much, Mat.

Thank you so much for having me on and have a great afternoon.

Cheers.