Happy Sunday!
If you’re reading this, I hope you’re feeling relaxed, have had an amazing weekend, and you’re sitting down, with your feet up, a beverage in your hand, and you’re ready to dive into a fun email talking about learnings from a founder who sold his business for $100M cash.
As everyone knows, Moiz and I co-host Limited Supply together. We’ve done over 80 episodes together over the last few years, discussing pretty much every topic you can imagine in the world of ecommerce, retail, and CPG.
What most people don’t know is that we first met at ShopTalk about 5 years ago. We both looked at each other and thought, “Wait, I know who you are!” From there, we met 3 more times at ShopTalk, and then continued to build our friendship over the next few months in LA, Austin, NYC, or wherever we would both happen to be. Eventually, Moiz moved back to NYC, we started to workout and grab lunch on a weekly basis, and that’s how Limited Supply began!
Over the last few years, he’s helped me think through strategy, ops, manufacturing, cash management, how to get more of those sweet sweet credit card points and a whole lot more.
He’s an incredible partner and an even better friend. Before I get into what I’ve learned from Moiz, I have a few things I wanted to share — you can also follow him on Twitter/X here.
This coming week I’ll be hosting a live episode of Limited Supply at The Whalies with Bryan Cano, the VP of Marketing at Nood.com. If you need a ticket, use code NIKVIPTICKET on their site!
You may have also noticed the referral program at the bottom of the newsletter — it’s now live! If you share the newsletter with a colleague or friend, you’ll now get rewarded! If you share it with 1 person, you get a deck with all the best tactics from the last 52 newsletters. If you share it with more, you can earn a Jolie, Airpods or a MacBook Pro!
Alright, let’s get into today’s newsletter… Here are a few things that I’ve noticed or learned from Moiz that anyone could benefit from:
The Importance of Staying Lean
Moiz built Native into doing more than $1M in annual revenue per employee before he sold.
He’s the king of staying lean and maximizing ROI on every dollar spent.
He might even tell you that he stayed too lean at times but he ran an incredible business that I really admire. I feel like Moiz was almost a decade early to figuring out that a hyper lean team was how you succeed in DTC. This was before the monster $50M+ growth rounds and the multi hundred person DTC teams that have occurred in the space since.
Instead, Moiz built a highly profitable business on a single hero product (deodorant) and scaled the crap out of it with a very small team. For a long time, he ran the ads himself (To past 8 figures in revenue I think). It’s always been inspiring and I still believe that this is the model that more founders should utilize today.
Jolie is another great example of building an epic business with a lean team. If you’re a badass operator like Moiz or Ryan, just know that it can be done.
Meta is Still King
Despite the issues that some brands are having with Meta over the last few weeks, it is still the most important marketing channel for DTC brands and it has been that way for more than 10 years.
Moiz got this right and he’s been a champion for Meta ever since. It’s amazing just how far you can get with Meta alone. I’ve seen brands do tens of millions in DTC revenue on Meta without any other significant paid channels. Native is one of those brands. Hint was another.
I think Moiz has always been a very wise voice in the community reminding people just how powerful and significant Meta can be if you get it right. I know the platform is having issues right now but I have faith they will fix it soon.
In general, I also think a common mistake that new entrepreneurs make is that they distract themselves too early in the process with wanting to be everywhere (i.e on Meta but also on TikTok, YouTube, Google, Pinterest, Snap, podcasts, etc all at once.) Moiz has reminded me many times that Meta alone can scale a company past 10M+/year.
With Meta, Moiz and I always recommend leveraging creator-generated or user-generated content in your ads. According to a Meta report that we got from our client, they see with creator ads that ROAS is up 35%, CPA is down 21% and CPM is down 29%. Using a platform like minisocial is a no-brainer for something like this — you pay per project, own the license to use the content however/wherever you like, there’s no AI BS… it’s real people choosing your creators, and you get the organic reach of these creators when they post it too. We use minisocial with our clients, you should try it too!
How to Manage Cash
If you listen to the pod, you know that Moiz loves cash management. He’s always talking about things that he’s investing in (whether that be Meta, Shopify, real estate, startups, or treasury bills). When it comes to business cash management, Moiz is the reason why I keep all of my idle cash in treasury-bills that earn yield.
It was a 2-3 minute decision that made me a lot of money and I have to thank Moiz for that. For a while, I didn’t do this and I realized I was throwing money away. Moiz convinced me and it’s been one of the highest ROI, quick 2-3 minute decisions that I’ve made over the last year.
Reviews & Repeat Purchase Rates
Another thing that I like from Moiz is his view on early metrics for success. Basically, he thinks that when you are getting a new business off the ground, the two most important metrics are generally reviews and repeat purchase rates if you are selling a consumable product. (and of course net margin and CAC)
Reviews are so important because they immediately tell you what is and isn’t working about your product or business. They are sacred in the world of DTC and you should treat them that way. You also need to be aggressive about getting these reviews. Anything you can do to learn about the flaws (or benefits) of your product is enormously valuable to you as an entrepreneur. Send surveys, offer discounts, offer free gifts with their next purchase etc to get a review. As a founder, you should also personally call or email your early customers and follow up multiple times. The learnings are always worth it. Additionally, anything you can do to increase your social proof with more of these reviews is always worth its weight in gold.
Another Moiz metric is all about focusing on repeat purchase rates for consumable products since they tell you whether or not you have a real sustainable business. If people keep coming back and repurchasing, there is something special about what you’re building. This is when you know that your business has potential and you should stick with it and keep pushing to see how much bigger it can be.
The importance of finding an incredible contract manufacturer and meeting face to face
As most people know, Moiz introduced me to Mary Berry who’s been an all-star collaborator for me and for several of the brands that I work with. That intro alone changed my life in many positive ways.
I think that Moiz and I both agree that if you are at any level of scale, you need to have an extremely close relationship with your contract manufacturer. We love Mary because not only is she one of the best in the world at what she does, she’s only a quick flight away (this is a lot better than choosing a manufacturer in another country where it’s a bit harder to just hop on a plane).
Moiz is a big proponent of the idea that if you work with someone at a high-level for more than 6 months, you should go see them in person. I agree with this and I think your product manufacturer might be the most important individual to go see on that list.
You need to be on text with these people for when you might want to make changes or when issues arise. This is something I’ve observed from Moiz and I definitely believe that almost everyone should operate this way.
How Not to Get Screwed by Your 3PL
Moiz has beef with many 3PLs because he wants them to do right by the brands that they serve. He’s definitely taught me a lot about how to pick a good 3PL and how to deal with the bad ones.
Oftentimes, beyond marketing spend or raw product costs, your 3PL might be the most expensive line item on your P&L. Many brands might even end up paying more to their 3PL than they do to their manufacturer or their own team.
Moiz taught me how to combat and remove hidden fees, how to deal with lost or damaged goods, bad customer service, bad inventory management and organization, etc from a 3PL.
This tip is worth millions of dollars over the lifetime of your business. 3PL fees add up! He beats the drum so loudly on this topic because it matters and I think it’s helped a lot of people in the space. That’s why I like to recommend Tondo Fulfillment — if they can’t beat your rates, they’ll pay you $1000 + they are not venture-backed or run by a corporation… it’s run by 2 passionate warehouse experts.
Why You Need To Protect your Oceanfront Real Estate
When it comes to ads, Moiz has this great analogy about thinking of your ads as beachfront Malibu real estate.
You are showing off your product to the world (just like you are showing off a new home to buy) and you want that listing to be as flawless and clean as possible. Great imagery, great title, a great sign out front with good copy etc, but most importantly, you need to keep the loiterers and the trolls away.
When you pay Meta for ads, you are paying them for valuable real estate on their platform.
When you do this, you will often get mean and annoying comments (many times from people who aren’t even customers of the brand!) trying to bring you down. Moiz reminds us that it’s our duty as marketers to protect our Malibu real estate on our ads.
That’s why if you are spending anywhere from $1-20K/day+ on ads, the number one thing you should be doing (outside of making the best creative possible) is spending time on comment moderation.
The way Moiz puts it is, would you be happy if someone came up to your Malibu apartment and spray painted your garage saying that your building (aka brand) sucks? Absolutely not. You are paying the rent and have the right to remove these negative comments from your valuable real estate. To do so, the best strategy is hide, block, and delete. You have to do it in this order or else they will come back and complain.
And on the flipside, you also need to respond to every positive comment or simple question which will dramatically amplify reach and build trust with anyone who sees the ad.
Doing this is by far one of the easiest ways to lower your CPAs on your campaigns. Prospective buyers always love to see responses from the brand!
KISS (Keep it Simple Stupid)
Moiz has an incredible way of staying focused and keeping the main thing the main thing.
He wrote a short post on X that sparked these ideas.
The main point is that he sees 4 big reasons why people fail. Mainly because they are focused on the wrong thing.
1. Is focusing on revenue only (instead of sustainable profit, healthy unit economics, a moat, building a strong team, and a path to exit)
2. Is focusing on vanity.
Yes, it's cool to be on CNBC and have a billboard in Times Square but it’s not a scalable way to increase real sales.
3. Not Focusing on Today.
Moiz sees a lot of people focus on things that are completely irrelevant to them. Should they change 3PLs today? Should they launch this or that product? Should they spend time thinking about hiring a CMO or a VP of Product this week? Meanwhile they are thinking about this while only doing $10K/month. Instead, they should be focused on making more money.
4. Is laziness. Moiz believes that a lot of people on the sidelines think winning is easy. It’s not. And being lazy is the fastest way to fail. According to Moiz (and I agree) winning in business will require 10X more effort than you think.
Success in Anything Takes a Long Time.
Moiz also posted once that Native's first Black Friday earned them less than $10,000 in revenue. Four years later, they did $614,676 on Black Friday.
I can’t even imagine what Native made on BFCM in 2023.
The point is, outsized success takes time.
Years and years of time.
The most important thing to focus on is progress and compounding every year. The numbers might look small today, but in 4-5 years later, you could have a multi 8 or 9 figure brand that does $600K+ sales in a day. Keep going.
Incredible Customer Service is a Competitive Advantage
This one’s obvious but I think it’s so true. In a listener mailbag, Moiz talked about how one of his first hires is always customer service.
It’s the backbone of any good brand.
Not having strong customer service is one of the fastest ways to make people never come back (or worse) they will tell their friends and it will have ripple effects for you.
But the reality is, having great customer service isn’t that hard. You just have to prioritize early on.
So before you make your 3rd design hire or 2nd ops hire, always invest in customer service and training to make this right asap. It’s a massive lever for the longevity of your brand that a lot of early stage founders overlook.
The importance of being involved in the community and going to DTC dinners
I find it funny because there are a lot of memes and jokes about DTC dinners. I’m a fan of community-led dinners and have gone to many of them throughout my career.
Moiz also used to host a business brunch when he just started building Native in 2015. From the people that went to his brunch:
- Two of them had companies sell for $1 billion.
- Moiz sold his company for $100M.
- And another person had a company sell for $25M.
The incredible people that you can meet and the amount of value (and just generally good and fun times that you can have) far outweighs the cons.
Another thing I really respect is that Moiz has continued to stay active and go to these dinners after all of these years. Even after all of his success, he’s still a man of the community and is regularly at events, dinners, and conferences. He certainly doesn’t have to be, but he still goes. I love that about him.
Money alone won’t make you happy. The people that you do your journey with will.
And last but not least, I’ve learned from Moiz that money alone won’t make you happy. The people that you do your journey with will.
Moiz has a unique perspective on this topic because he’s lived it. His advice carries a lot of weight. He’s seen the end of the tunnel and the reality is, even for how helpful money is, it’s not everything.
What’s more important is enjoying the journey and having great people around you who you can build and create with. It’s been an important reminder as I keep building as well.
Alright, that’s it for this week.
What else have you personally learned from Moiz?
Email me something you’ve learned or observed and I’ll forward some to him. I’m sure it will make his day.
Okay, onto some fun stuff:
Vendor of the Week:
Parker — The go-to finance platform for eCommerce brands doing $5m per year in revenue.
When Parker launched a couple of years ago, it was best-known for it’s payment-floating credit card product. Today, Parker is a finance platform for brands still offering the card designed for consumer brands, but they now also offer bill financing to extend invoice payments up to 90 days.
With a Parker card, you can 3-6x your credit duration with 0 interest, because of the rolling payment terms. With AMEX or Brex, you would average 15-20 days, but with Parker, it’s at least 45 (though, you can get up to 90 days).
If you’re a brand applying to Parker, you can expect a fast approval process due to their proprietary eCommerce underwriting process. Once you use Parker, you’ll get access to their card, bill pay, banking and business analytics to help you understand your numbers and grow efficiently.
If you’re ready to see what Parker can do for your business, book a demo on this beautiful landing page!
Don’t go another quarter using the wrong financial products. Moiz would be very unhappy with you!
That's all for this week
Although today’s newsletter was a bit different, I’m curious to know how you liked it! Feel free to reply and let me know — it’s helpful to me!
It’s Sunday night, the Final Four are on, NBA is getting into the playoffs, Roland Garros is coming up, and so is summer. It feels like we’re at the beginning of a great spring/summer season. I hope you have an amazing upcoming week, get 9 hours of sleep tonight, feel hydrated, and have an amazing upcoming week.
If you plan to go to the Whalies, shoot me a DM and let’s meet up there — I’ll be there all day.
See you next Sunday!