Most of the advice asked for by founders I meet are about DTC strategies, specifically relating to brand, but that’s rarely the limiting factor for growth.
There’s a big difference between building brand and running the business.
h/t @TaylorHoliday for inspiring this thread.
There’s a big difference between building brand and running the business.
h/t @TaylorHoliday for inspiring this thread.
VC backed DNVBs can bypass basic fundamentals to growing a business.
Cashflow management realities are floated by venture funding for accelerated growth, allowing companies to dominate a vertical very quickly, expected to get paid back in 90-120 days.
Cashflow management realities are floated by venture funding for accelerated growth, allowing companies to dominate a vertical very quickly, expected to get paid back in 90-120 days.
This just doesn’t work for bootstrapped DTC businesses. Here are a few FUNDAMENTAL things to look for as a small eCom business doing between 500k and 10m / year.
💵Cashflow💵
Financial models and projections used for long term decision making for your business are NOT universal.
Look at product <> purchase behavior. If it's single purchase - eg wallets - then LTV doesn’t mean squat. You need every purchase to be AOV:CAC positive.
Financial models and projections used for long term decision making for your business are NOT universal.
Look at product <> purchase behavior. If it's single purchase - eg wallets - then LTV doesn’t mean squat. You need every purchase to be AOV:CAC positive.
If you sell a consumable, replenishable product, definitely look at LTV and the payback period for acquiring a customer. High LTV doesn’t mean you can spend that to acquire a customer.
In other words, don’t go broke in the first month trying realize your 120-day 6x LTV:CAC dream.
Taylor has a comprehensive video on it here.
Taylor has a comprehensive video on it here.
📊Demand planning📈📉
You and your agency are focused on optimizing and spending against high ROAS campaigns, but you need to have the inventory to fulfill those orders.
You and your agency are focused on optimizing and spending against high ROAS campaigns, but you need to have the inventory to fulfill those orders.
Know which of your products are moving and at what velocity, and which ones are collecting dust and racking up storage fees with your 3PL.
Your agency & your ops team need to truly collaborate. Don’t get stuck when you sell out of a high demand product that's out for weeks.
Your agency & your ops team need to truly collaborate. Don’t get stuck when you sell out of a high demand product that's out for weeks.
LTV Drivers
Understand which products drive the highest LTV. This can be pretty hard to do by parsing raw data. A simple fix is to organize your FB campaigns by product and not by activity (prospecting, retargeting, sales etc).
Understand which products drive the highest LTV. This can be pretty hard to do by parsing raw data. A simple fix is to organize your FB campaigns by product and not by activity (prospecting, retargeting, sales etc).
If you split your campaigns by leading product in ads, you’ll be able to learn directionally which products drive highest LTV, though attribution will never be perfect.
Quick note: @TaylorHoliday and I are working on some tools to help founders with these challenges. Keep an eye out.
