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Chapter 1
Don’t Bullshit Yourself About Digital Business
John Fiorentino first learned the power of selling products directly to consumers from an unlikely (and Canadian) source: pop superstar Justin Bieber. In 2010, John dropped out of college and took a job working on branded-product launches for “the Bieb.” There, he saw up close “how powerful this direct relationship with an audience can be if you have the right brand, the right story, and a product that people are really receptive to.” John remembers watching Bieber’s manager spend whole days on Twitter engaging with fans, giving Justin “that little pop” that allowed him to break out from the pack of wannabes and go mainstream. “It was just crazy to watch,” John says, noting that the music industry seemed to be all about creating products and selling them directly to an audience of devoted fans.
After six months with Bieber, John returned to school, designing and marketing several fashion products of his own on the side. None caught fire, but John wasn’t concerned. He continued to mess around with new business ideas after graduating, and by 2016, after several years of subsistence-level living, John raised $1 million to found a tech start-up. Good, right? Not in John’s mind. The more John learned about what it would mean to take on venture money, the more he soured on the idea. As he saw it, he’d kill himself running the company for five years and then either sell it for $1 billion or fail and wind up with nothing. Better, he thought, not to get into it at all. So that’s what he did. He returned all of the investor money and closed his business.
At this point, you might wonder if John had a psychological complex around success. He had no money—he couldn’t afford an apartment and had to couch-surf. But John did have one thing: an enduring drive to make products and sell them to customers. For the next year and a half, he wrote a blog called Good Ones about cool new products he encountered, all the while searching for a unique product that he could produce and successfully bring to market without taking on outside capital. For his daily needs, he relied on two credit cards that allowed him to go a year before repaying.
By 2017, Good Ones had amassed a following of ten thousand people—not much, but enough to get rolling. John had also hit on an idea he just had to pursue: a weighted blanket that helped with sleep. A few months later, with a single prototype in hand, he launched the blanket on Kickstarter, partnering with a media company to provide publicity. The Gravity Blanket, as John called it, was a success beyond all expectations. Within twenty-four hours, John had raised $400,000. A month in, he had an astounding $4.7 million in preorders. John had to scramble to find a partner to produce tens of thousands of blankets all at once, a task that required three weeks of twenty-hour days, but he was off and running. Today, Gravity Blanket does $20 million in revenue annually and is growing rapidly.
The Glitz and Glamour of Selling Naked
John’s success would seem to validate a prevailing stereotype about selling naked: that it’s a quick and alluring path to riches. People read about the eye-popping valuation on The Honest Company, Jessica Alba’s all-natural home goods company, or the $3.35 billion sale of Chewy, the popular online pet retail store, or the “overnight” success of a company like Kylie Cosmetics, and they think they’re just a few keystrokes away from claiming their digital fortune. Marketers at traditional product or retail brands see the success of these start-ups and likewise assume that success will come easily to them and their teams once they jump in.
On one level, all those budding entrepreneurs and ambitious marketing execs aren’t wrong. Although John’s story is an extreme case, it’s relatively easy to launch a new direct-to-consumer product with little capital, or to obtain capital if, unlike John, you want it. Think of it from a risk/reward standpoint. Since you’re entering an established product category, it’s clear that a consumer market exists. People needed and wanted glasses long before Warby Parker came onto the scene, and contact lenses before Ben and I started thinking about Hubble. Further, it’s hardly a leap to think that at least some consumers would love it if these products were cheaper and delivered right to their door. (I’ll offer tips for perfecting your pitch in Chapter 3.)
As far as building your business goes, we’ll see that it’s fairly easy to pull off as well, if you know what to do. Most of the thousands of direct-to-consumer businesses operating today are hawking commodity products. An ecosystem of suppliers and vendors exists that makes it easy to start selling naked (discussed in Chapter 6), and with the right incentives you can find experts to help you with manufacturing and other areas that are new to you (Chapter 4). Promoting your product on Facebook and developing a solid financial model (Chapters 8 through 11) aren’t rocket science, either.
Yeah, but Is Selling Naked Really All That?
Maybe not. There’s another truth about direct-to-consumer businesses that you don’t always hear, and which you should consider as you decide whether to proceed with such a venture. As easy as it can sometimes be to launch one of these companies, it’s more than hard to turn them into stable, successful businesses. The several dozen or so companies that have become famous for selling naked pale beside the hundreds that have popped up only to sputter out within a few months or a couple of years. Even when companies do succeed, it’s a grind for those involved, and profitability often proves elusive. It’s not surprising that John wasn’t so keen on sticking around after launching the Gravity Blanket. He’d already lived through the fun part. What lay ahead was a lot of stress and grinding.
As I’ve discovered while running Hubble, e-commerce companies are kind of like wildcatting in the oil business: those first couple of drops of oil gush out of the earth, but that doesn’t mean subsequent drilling and refining will be cheap or easy. Or think about running a conventional retail store. If your store is open nine hours a day, you’re on for those nine hours, serving customers, preventing theft, and keeping the shelves stocked. If your store is open twenty-four hours a day, your customers expect—and deserve—that same experience around the clock. You, in turn, can expect far less than the requisite eight hours of sleep. Between 5:00 p.m. Friday and 9:00 a.m. Monday (aka “the weekend”), Hubble gets over twenty-five hundred customers, and those folks want the same level of service as people ordering during normal workday hours.
Despite these challenges, Ben and I have chosen to stick around, and to help others with selling naked as well. Despite all the uncertainty and effort, we believe e-commerce is still an attractive option for brand or retail start-ups that lack the resources to launch any other way, even if they imagine developing a physical retail presence down the line. It’s also an area in which incumbent product companies should invest, if only to better understand the brands eating their market share.
If you aspire to a career in marketing at a large brand, you, too, must know what it now takes to directly access consumers. The best way to learn is to sit down and do it.
