How I grew my Business from Less than $300 per month to $62K per month in Less than a Year, with Rohan Gilkes

Rohan Gilkes a serial entrepreneur and has founded a number of companies. He has recently bought the subscription service business, ‘Wet shave club’ through Reddit and through re-branding , re-designing and re-launching, has taken it from $300 per month in revenue to $62K per month in profit in less than a year. Rohan saw the benefits that the business already had and knew that the model works.

 

In This Interview You'll Learn...

  • 00:59  About Wet Shave Club and why Rohan decided to buy it
  • 05:31  Rohan’s take on competition
  • 06:30  The first thing that Rohan did once he had bought the company
  • 11:52  How Rohan marketed his product and what was the most successful
  • 17:38  The figures and how Wet Shave Club expanded
  • 19:12  How Rohan scaled up quickly
  • 24:16  Wet Shave Club going forward
  • 29:30  Rohan’s advice for people trying to get their first business off the ground

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Show Notes

Podcast transcript:

Starting from Nothing – The Foundation Podcast
Guest Name Interview – Rohan Gilkes
Introduction: Welcome to Starting from Nothing – The Foundation Podcast, the place
where incredible entrepreneur show you how they built their businesses
entirely from scratch before they knew what the heck they were doing. Now
here’s your host, Andy Drish.
Andy: Welcome everyone to another episode of Starting from Nothing, The
Foundation podcast, Andy Drish coming at you from Boulder, Colorado.
Today, we have Rohan on the show with us.
Rohan’s a serial entrepreneur, the founder of handful of companies. Today,
we’re going to be focusing on Wet Shave Club. He’s been featured in the
Washington Post, Mixergy, The Startup Foundation. He’s a member of The
Young Entrepreneur Council, and has his hands in a lot of other things.
Today, we’re going to specifically talk about the story of how he built or how
he bought the website on Reddit and grew that into a business that
generated a little over $60,000 in December. Rohan, what’s up man?
Welcome to the show.
Rohan: Thanks, man, thanks. What’s going on?
Andy: Tell us about Wet Shave Club. Where did this all come from? How did it start?
Rohan: Sure. I hang out on Reddit or Entrepreneur. I was just there one day and
there was a guy that hosted a thread about selling his Wet Shave Club
business. At the time, he had about 35 subscribers and about $300 worth of
revenue per month. He want to get rid of it. I kind of felt that based on the
fact that the model was proven out by Dollar Shave Club and a few other
companies that I could probably get it, rebrand it, and make it work. Here we
are.
Andy: You see a post on Reddit and he’s making $300 a month?
Rohan: Yeah.
Andy: How many sales is that?
Rohan: That’s $300 per month in sales. So that was $300 a month in revenue, yeah.
Andy: Oh, in revenue.
Rohan: Yeah.
Andy: So he’s making almost nothing.
Rohan: Yeah, very low.
Andy: Margins can’t be more - $100, maybe.
Rohan: Probably, yeah. That’s probably the best case, yeah.
Andy: Wow! Interesting. Okay, cool. How much did you buy that company for?
Rohan: We bought it for $4,000.
Andy: Four grand.
Rohan: Yeah. I just said probably 15 times revenue, and it will get to work. It may
have been a little bit overpriced at the time, but I liked the industry. I also
liked the domain name because it’s kind of really good as far as SEO would
go. I also like the fact that he had done a lot of the ground work, like getting
set up on subscription service platform and all this additional work that
would’ve been kind of a pain in the butt for me to start from ground zero.
With all that, I figured –
Andy: What about the subscription service platform? Can you talk about that a little
bit?
Rohan: Oh yeah, sure. When we bought it he was using, and we still are, we’re still
using Cratejoy. Cratejoy is probably … it’s a subscription service what Shopify
is to regular e-commerce.
Andy: Got it. So, in terms of they’re hosting your website and everything, they're
not actually fulfilling selling all your products for you, correct?
Rohan: Right. That’s correct. They don’t fulfill.
Andy: Do you guys fulfill?
Rohan: We do, yeah. We have a warehouse probably ten feet from where I’m sitting.
Andy: Really?
Rohan: Yeah.
Andy: That’s awesome. So you guys are taking care of all the packaging and sending
everything out to your audience here.
You see the website. You see $4,000 is what you guys decide on. Talk a little
bit more about why this versus everything else that you could be doing?
What were you doing in the meantime?
Rohan: In the meantime, I’ve been working on a couple different projects. I felt like I
had some time that I could devote to a new project. I think why this one
stood out to me was because – like subscription is so hot right now, and
people have already been introduced to the idea of having them box come to
their house every month, they pay a monthly fee, just comes out of their
credit card. I felt like I did not have to do a lot of educated about the whole
process and the model and so on. It’s so already done by Harry’s Dollar Shave
Club, quite a few others in a variety of other industries. With all of that
ground work already done, I felt like I was able to come in and make
something happen.
Andy: Seeing Dollar Shave Club, wouldn’t you think that they dominated the market
already? How are you going to compete with Dollar Shave Club if they're
doing it cheaper and they’ve got more exposure and all that?
Rohan: I think this lens – This is one of those things where it is a little bit of a
misconception in how things were in reality as it relates to competition. For a
lot of people, they will look at an opportunity and say, “Oh, the marketplace
is saturated” or “The competition is too sophisticated.” The way how I see it,
like how things really work is that you’ll have several players in the same
industry and they could all be doing very, very well. I look at competition in a
way where I want there to be competition. I want to be competing against
other companies that have already laid the groundwork for me. When I see
competition, I’m happy. I know the model works, I know how the company’s
being made, and there’s no magic involved. That’s how I look at it.
Andy: Got it. Then when you bought it, what was the first thing you did?
Rohan: The first thing we did was rebranded the website.
Andy: Why that?
Rohan: Because I think a lot of what happens online is emotion. People take action
based on emotion. Like how they feel about the website, how they think the
product is going to make them feel at the end of the day. People’s decision
making is really influenced by what they see and how they feel, and branding
has to be right. For me, I can’t move forward with a project unless the
branding is right, and it feels like I myself would actually make a purchase on
this website. In its initial state, that was not the case, so that was the first
thing we did was to rebrand it, redesign it, and relaunch.
Andy: Got it. It’s almost like – Did it take a lot of time and energy and money to get
everything rebranded and rebuilt?
Rohan: No, we went to 99designs.com and I guess pay like $700. We got a coder for
maybe $400. $1100 we were out the gate with a new website, and I wrote
the copy. Yeah.
Andy: Badass, dude. Five grand in so far, what do you start doing first?
Rohan: After rebranding of the website, we still had a little bit more branding to do.
We had to rebrand the box because the box – The subscription service, the
box is critical. It’s critical. You have to have high quality products, of course.
The box is like the first … After the actual website, the box is going to be the
first part of the experience. Online, the subscription box services, their entire
communities that are there for the unboxing experience so that has to be
really, really high priority.
After the website, we went on 99designs again and got a box design. We
changed the actual packaging, the design of the box, the look and feel of it.
That was step number two for us.
Andy: Got it. Buy the website, rebrand it all, rebrand the box, then what?
Rohan: Then we expanded the product line. This is probably the most difficult part of
the process so far because we had to say – Okay, when we first bought it this
guy was selling just soaps so you would get a box instead of soaps that you
use to prepare your face to shave with, but we felt like we wanted to raise
the price from $12 per month to close to $30 per month and we wanted to
provide a full shaving experience. In order to do that, we had to expand the
product line and get our own branded razors, blades, brushes, after shave,
pre-shave. We expanded the product line and raised the price by almost a
factor of three.
Andy: How did you know what to expand the product line into if you didn’t have
that many customers yet? How did you know what people would buy or
want?
Rohan: We went on as many wet shave forums as we could find. That would be
where we would find people that all they do is talk about wet shaving, they
show pictures of their products, they post the stuffs that they’re going to buy
next. That’s what we did. I had not wet shaved before I bought the company
so I had to go through a period of time where we researched as much as
possible. We did that on Reddit, on Badger & Blades – that’s another forum.
Yeah, we just kind of went where people are and figured out what they like
and we went from there.
Andy: So you’ve never done a wet shave before this?
Rohan: No, I have never wet shaved before this. Yeah.
Andy: Are you guys creating the products or are you sourcing them from
somewhere? How does that work?
Rohan: We source everything. For most of the soaps and lather products, we would
get them in the U.S. Some things we get on Etsy, like soaps. You’ll find a lot of
people on Etsy, they are soap producers. Just go on etsy.com and tell them,
“Hey, we have this company and we would like to buy some soaps from you.
What’s your best wholesale rate?” Then razors, we would get them from
Southeast Asia. Just found this company through a Google Search and they
worked out. Yeah, we source all of our products. Yeah.
Andy: Got it. So buy the site, rebrand it, rebrand the boxing, expand the product
line, raise prices, when do you start marketing?
Rohan: As this was happening, we were still marketing. This was the point where we
really started to ramp it up. Because now with a really good presentation, we
could then trust that our marketing dollars would be better spent and we will
have better conversion rates. This is the point where we really ramp it up
after our product line was a little bit more extended.
We kicked things off on Instagram, Facebook, Twitter, but the thing that
really got things moving for us was we reached out to bloggers and
YouTubers and just sent them a box. “Hey, this is our company, blah, blah,
blah. Here’s the box. We would love you to write a review for us if you like
it.” That’s the thing that really got things ramped up for us.
Andy: Tell me a little bit about that. How did you know who to reach out to and
what did you say when you sent them the box?
Rohan: We started first with – Online with subscription box services, there are a
[unclear 00:13:07] that all they do is review subscription boxes.
Andy: No way.
Rohan: That’s like the core – Yeah. It’s pretty crazy. We reached out to those folks
first because that would be a guarantee win for us. Send the box and pretty
much almost always they’re going to write a review, take really nice pictures,
give you a link back to your site as well which is super valuable. After we
exhausted that group, then we started looking for bloggers that talk about
grooming, men’s grooming, or they talk about manly stuff like auto blogs,
and some construction – random things; anything that would appeal to a
man. If you had a blog and you respond to our email, we sent you a box.
Andy: What’s it cost to send somebody a box?
Rohan: It costs about between $12 and $14.
Andy: To send them one box?
Rohan: To send them one box.
Andy: Did you know how long until you wanted to breakeven when you went into
this business like how much money you're going to put into it? Did you have
all that budgeted?
Rohan: No, actually. For us, we kind of just get to work. We got a line of credit on
Kabbage. Have you heard of kabbage.com?
Andy: No, what’s that?
Rohan: kabbage.com is a site where you can go on and you can attach – Kabbage can
look at your API, look at your credit card revenues, and extend you a line of
credit. This is what we were doing monthly. You can say, “Hey, we’re looking
for a loan and this is what we’re doing.” It kind of came through in one or two
days.
Andy: That’s pretty awesome.
Rohan: We had $15,000 line of credit from Kabbage and I figured that if we were
able to wrap it up, we would be able to pay them back and then make some
money along the way, and it worked out. It wasn’t like a really formal budget.
This is where we’re going to be.
Andy: We’re going to try it and see what happens. Was this in May? Is that what
you said?
Rohan: Yeah. We bought it in the end of April and started doing – our thing started in
May.
Andy: Great. And how did revenue expand? How’s that expanded over the past six,
seven months?
Rohan: The first – and maybe we probably did – we may have done maybe $1500 in
May, maybe. The next month, June we did about $5,000.
Andy: Wow!
Rohan: Yeah. It kind of ramped up a little bit. Then in September or so when I did the
case study, we did $22,000.
Andy: Wow!
Rohan: Yeah. Then December, we did $62,000.
Andy: What do you think is attributed to such incredible growth in six months?
Rohan: I’ll say that there is a component of this business that would be good even if
we were not very, very good because the community is really, really
passionate. The really, really passionate community of people like they would
be on forums all day taking pictures of their products in their bathrooms and
stuff that they’re going to get next. It’s a super passionate crowd of people. If
you can find a community like that, and you provide quality stuff, you’re
going to do well. It’s almost like – Unless we messed up, we were going to get
some traction.
Andy: It sounds like the community is super passionate about it but do you describe
yourself as being passionate about this?
Rohan: I’m passionate about business. I can’t say I'm passionate about wet shaving.
It’s something I’ve never done. Before I bought the company and even now, I
don’t really wet shave. My partner, Kevin, he wet shaves every day. That’s a
cool thing. He tests all the products and makes sure that they’re good and so
on. But for me, I’m more about the metrics. Is it going to work? Are we able
to scale it up? It’s a cost per acquisition lowered and the lifetime value of the
customer, I’m that guy. I’m passionate about the metrics and making sure
that things are going to work. Yeah.
Andy: How do you two split your roles in the company then?
Rohan: We’re still so small that a perfect separation between our roles. Kevin, he
understands shipping, he understands logistics really, really well. He
understands social media really, really well. I think I’m more of the branding
guy and more of general customer acquisition and keeping an eye on the
numbers as well.
Andy: Nice.
Rohan: Yeah, I’m that guy.
Andy: Wow, man! It sounds like a wild ride scaling up that quick. How have you
been able to fulfill everything?
Rohan: Yeah, man, it’s been pretty crazy.
Kevin, when we first bought – he used to live in California. I was like, “Man,
you want to work on this with me?” He was like, “Yup.” So he drove from
California four days to my house and we were shipping from my living room.
That kind of got too crazy, of course. We got a warehouse in Tampa and we
hired someone from Reddit. We made a post on Reddit, you know, “We’re
looking for our first employee.” We lucked out with an amazing girl, her
name’s Julia. The three of us got to work. Since then, we’ve hired two other
people, and we just ship, work, market, build traffic, and it’s just same thing
over and over every day.
Andy: My story is that there’s a sense of boredom in that? Is there excitement in
that for you?
Rohan: Absolutely. There’s no boredom for me. Even though there are some things
about the company that are predictable and some things that are kind of set
in stone, like the logistics are set in stone, or ordering lead time is pretty
much set in stone, we kind of know the whole thing’s going to flow through
the warehouse, that’s pretty much already laid out. But beyond that,
everything is new every single day. Every single day is new. Are we going to
get on TechCrunch or not? Are they responding to our emails or not? Our
marketing, traffic building is completely new every single day. I’m energized
to be at work, 100%.
Andy: Cool, dude. Cool. I feel happy hearing that. I could tell when you’re describing
it. It was like …
Rohan: Yeah. No, man, it’s awesome.
Andy: It sounds like the most important thing has been giving product reviews from
people. Is that still the case at 60 grand a month in revenue?
Rohan: Yeah. I think that’s something that we’re going to never stop doing; we’re
going to never stop doing that because each review is an opportunity to get
traffic that we would have otherwise not gotten. Each review is also a link to
our website as well. If our cost is $14 for that, I would do it all day if possible.
Andy: What’s your average lifetime value right now?
Rohan: Lifetime value for us at about 140, 150. We can do acquisitions at about 30 or
so. I mean we’re happy.
Andy: Nice .If you're listening, if you're not familiar with terms like cost per lead,
average lifetime value of a client, basically what he’s saying is around $130,
$140 is the life of a client. So how much money they’re going to spend over
that period. When you know that number, the amount that you can spend to
acquire a customer increases. I think it’s safe to say that the people who
dominate the market, who tend to win in business are the people who can
spend the most money to acquire a customer.
Rohan: Absolutely.
Andy: You're happy spending $20, $30 to make sure you get that because you know
it’s going to be worth $140 on the backend.
Rohan: Yeah, absolutely.
Andy: Awesome.
Rohan: Crazy ride, man. Crazy ride.
Andy: How did you have the confidence to buy a website like this and do the
rebranding thing? What stuff you’ve done in the past that you knew that this
would – Didn’t know that it would work but you had an idea it sounded like?
Rohan: Yeah. I guess I’ve been making a living online for the last three years, three
and a half years. It’s pretty crazy to think about right now. I started a
platform to connect home cleaners with people who wanted their homes
cleaned. Three and a half years ago, probably seven or eight months in, it was
enough to quit my job and I’ve been building online businesses ever since.
Even before I was making a living online, I’ve been trying things online. I’ve
been trying all types of projects, failing, losing money, fail, fail, fail, win, win,
win, that’s what it looked like for me. I’ve done this for a couple years, yeah.
Andy: Got it. Got your battle scars, got the worrying lessons out of the way, it
sounds like.
Rohan: Yeah, absolutely. Yeah.
Andy: Where do you see yourself, your guys going forward? What’s next for you
guys?
Rohan: I think we’re going to have our first $100,000 month in March, that’s where
we’re shooting for. From here on out, we have some different initiatives to
go after this year. We want to be in Barber shops, we are looking at a deal
with a pretty big box store that – I can’t reveal them yet but they’re going to
have some pretty big moves this year. Later on in the year, we want to do
some more international stuff. We already ship internationally but we would
like to instead of shipping to the UK, we would like to have fulfillment
actually taking place in the UK. There’s quite a few things happening that if
they work out, we could be a much bigger company by the end of this year.
Andy: What’s the ultimate goal for you with this business?
Rohan: What’s going to happen? We would love to grow to $5 million, $10 million
annual and either take on some VC and try to blow it out, maybe exit, that’s
also – maybe do a full exit and just sell it. Or maybe keep it, and run it, and
grow it, and just make it a lifelong company.
I can’t say we know for sure how things are going to shape out and what the
real ultimate goal is, it’s going to depend on what happens over the next two
to three years. But it’s a company that we enjoy running, it’s fun, our
customers are super cool. I see it’s something it’s going to be a long-term
play for us in some way.
Andy: Got it. So either five to ten million or build it as a company for life and let it
run.
Rohan: Let that bad boy run out, yeah, absolutely.
Andy: Badass, dude.
If someone’s getting started and they want to go this route, because I feel
like so many people struggle with ideas. Where do you get the idea to get
started? And getting that baseline product market fit thing validated and
knowing that there’s a market for something, what advice do you have for
them?
Rohan: That is probably the most crazy on point question you can ask because that’s
the question that I get the most. Of every other question, that’s number one
question I get. My answer is it’s pretty much like this.
For me, I don’t want to look for an idea. I don’t want to look for an idea
because looking for an idea limits you to – It limits you to have to be more
creative than I’d like to be. I look for things that someone has already
validated the idea for me.
In this case with Wet Shave Club, my thinking was like Dollar Shave Club and
Harry’s and a few more companies, they have already validated this idea.
They’ve already proven that it worked; they’ve already proven that they’re
able to keep customers on board; they’ve attracted VC money so there has
been some due diligence there. This model works.
So I could either see what works and go do it, maybe make a little twist to it
but we’ll do something very similar and chase it in my own way, or I could try
to be the only person in the world doing this one magical idea that I came up
with.
The second option is a lot more risky. It puts my capital at risk, which I don’t
like to do. It puts success – Success becomes more of a gamble when you
have to be unique. I’ll end that with saying that I stay away from trying to find
super unique and creative ideas. I want to find ideas that have already been
validated, and they skip that process, and get to work. That’s kind of how I
look at it.
Andy: I love it, man. I love the counter intuitiveness of it because I think – when I
look at my life, the ideas and concepts that generally have had the biggest
impact on me are usually very counterintuitive to what the majority of
society believes about business, or relationships, or health and fitness,
whatever it is. Whenever I hear something that’s counterintuitive, my ears
always perk up.
Rohan: Awesome.
Andy: Beautiful, dude.
Any other advice you would have for somebody just getting started, getting
that first business off the ground? What would you tell them?
Rohan: Something else that comes to mind is if this is your first business, I will look
for a business that you have already spent money on in some way. This
almost ties into the first one. It’s just something that if you can check your
bank account over the last year, you’ve actually spent some money on this
thing, or you’ve spent some money on something in the very, very similar
industry. It’s super important that this thing be viable and not be like a
unicorn idea. For me, I call these things unicorn ideas where I’m going to
build this thing, I’m going to make it very, very popular, get a lot of traffic,
and then I’ll figure out how to monetize it later. That thing, later never
happens, for me at least.
For people that are just starting now I would say, find something that you're
actually spending money on or you know people that are spending money on
this thing. Get something that’s very, very simple that you can start with a
low startup cost. You pay attention to branding because that’s the one thing
that’s going to drive how must it cost you to acquire a customer is like crazy
… MVP is important, minimum viable product, but you don’t want your
design to be minimally viable. You want it to be on point as possible. So get
your branding right.
Last thing I would say is if you can possibly go after something where you can
get recurring revenue, you're going to set yourself up to be more successful,
or at least increase your chance of being successful. Because your customer
acquisition cost can to be a little big higher, you're going to make mistakes in
the beginning so you're going to want it to be higher. Recurring revenue will
protect you and it’s going to make things work out a little bit better if you can
possibly end up in the industry that allows for recurring revenue.
Andy: Beautiful, dude.
Rohan: I have a mouthful but …
Andy: That’s awesome, man. If people want to reach out to you and follow up, ask
you questions, learn more about what you're up to, where can they do that
at?
Rohan: Yeah. twitter.com Rohan Gilkes. Where else do I hang out? facebook.com,
Rohan Gilkes. rohan@wetshaveclub.com. I don’t mind shooting me an email
if I can answer any questions. That’s about it.
Andy: Awesome, dude. Thanks for coming on.
Rohan: Thanks for having me, man. I’ve been hearing – Finding out before we talked
one of my friends sent me a link to your site. He was like, “Man, you should
really try to get on there. These guys are awesome.” Soon after, somehow,
things aligned and we actually linked up. I'm really happy to be on.
Andy: Funny how the world works. It’s very awesome.
Rohan: Absolutely.
Andy: Awesome, man. Well, I’ll catch you later.
Rohan: Alright, thank you.
Closing: Thank you for joining us. We’ve taken this interview and created a custom
action guide so you know exactly what action steps to take to grow your
business. Just head over to thefoundationpodcast.com to download it for
free. Thanks for listening and we’ll see you next week.

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