Ron Shah is the CEO of Obvi, a collagen supplement business he founded with 2 friends in 2019 and now with 30 million in sales across DTC and retail. Jason invited him onto the show to get underneath the idea of runaway success to find out about the incredible amounts of preparation that went into being ready to build a sustainable business in an already saturated market.
In this episode of Ecommerce Building Blocks Jason interviews Ron about what it was like to found Obvi. Ron and his other two co-founders set themselves up for success by doing a huge amount of research and preparation in their careers previous to venturing into entrepreneurship. Jason and Ron get into the details of what it is like to work with friends, and how to clearly define roles within the leadership structure of a company. For the bulk of the episode, Ron shares the step-by-step process he and his co-founders used to jump-started Obvi with their own money in the already extremely saturated supplements market. They were able to make their initial ad-spend work super efficiently by almost immediately developing a community of loyal customers and going back to them repeatedly to get feedback on exactly what products they wanted to use. This created a positive feedback loop of innovation and retention that is still going today. Once you hear the Obvi story you will realize 1.) Ron’s success isn’t by chance and 2.) it is possible to build your own business without funding if you prepare yourself and make a good plan.
Ron’s Twitter: https://mobile.twitter.com/obviceo
Ron’s linkedin: https://www.linkedin.com/in/ronak06
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[00:00:00] Ronak Shah: And we get this question so often, right? Like how did you launch so much so quickly? And like the oversimplified answer is just ask them what they want and then deliver what they asked. The reason the market is. So saturated is because there is no barrier to entry. You can create a supplement brand and come out with it within 14 to 21 days right now.
[00:00:20] Jason Wong: can start, you can start, but can you sustain it starting and sustaining a two whole different things. So true.
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And smooth communication so that you can spend less time on organizing and more time on growing your brand. Learn more and historic for free air thought. I MC that is a I R I N C. Hello, everyone. Welcome back to another episode of the building blocks podcast. Today, I'm joined by Ron Shaw, who is the founder and CEO of.
Welcome to the show.
[00:01:35] Ronak Shah: Jason, thanks so much for having me. I'm a big fan of all the materials you've been putting out and a big fan of your show. So honored to be
[00:01:42] Jason Wong: on. Oh man. I'm flatter. We're still building, we're catching up to you. Uh you're in the supplement space, so it's not like we're competitive at all.
And it seems like given in the supplement space most of your life, right? Like I went through your LinkedIn, you've been doing supplements as an agency. You've. Work for them. You've owned like couple, tell me a little bit more about like, like what led to you ABI.
[00:02:07] Ronak Shah: Um, so a lot of our journey started at a company called.
Um, and that was back in 2012. It's where I actually got to meet usher and my partner and my other partner on kit as well. We were just employees there. Um, and we handled a lot of the marketing, finance, and design. Um, so us three had three different skillsets. Um, but we kind of came together. And from there you were able to really learn like, oh wow, we love.
Um, first of all, for this product, cause you get to see instant gratification through customers. Secondly, on the side of like being able to innovate so quickly, And come out with products. We love both facets of it. Um, so we went on to start our own marketing agency focused on helping health and wellness brands, um, called goes through media.
So we launched that in 2014, ran that for five years, worked on about 25 different clients. In those five years, we were in a more of a boutique agency. We never hired employees. It was just the three of us. Um, so the three of us would go into different health and wellness brands that were startups. We would redo their packaging design website.
We would also go. And older paid media finance ops innovation pipeline. So almost like, like came in as like a little bit of a sweet, uh, C-suite type of thing. Um, did that for five years, our, our main goal was to always start our own brand. Um, but we said if we could learn. Um, how to do certain things and what not to do, um, marketing agencies, one of the best ways to do that, you know, cause technically you can, you can work with other brands and learn from it.
So, um, that was kind of our career tracks of employees for a supplement brand. A marketing agency for supplement brands, focus, and then getting to start our own. Finally in
[00:03:49] Jason Wong: 2019, I love that. I've always told people that if you want to start your own brand, go work for someone else and learn the ins and outs of it because it's not as glamorous as people think it is.
You can just gone Alex breasts or some products and launch on store and call it a day. There's so many things like finances, marketing, operating a team, managing employees that people don't see. And you guys gather all that information and then launch. And then what, three years? $30 million is that right?
[00:04:19] Ronak Shah: That's correct.
Um, the cool part was, was we really are passionate about being bootstrapped and truly believe that if you can be creative, you can actually bootstrap a business to scale. And that's truly one of our top tier goals is to be able to prove that, um, so yeah, three years 30 million, um, we've, um, been able to scale quite a lot.
Um, and, um, you know, we're D to C brand or DDC focus. It's not like a lot of sales came from retail, so it's been a fun journey so far without,
[00:04:52] Jason Wong: yeah. DDC, Stephanie getting tougher. Now they still have her before. Um, I don't have to say the obvious. Um, and it seems like you guys are doing well in retail and also with DDC, where do you really see your business?
Is this more of a, Hey, we're gonna start migrating over to. Or you're still going to stay strong in DDC.
[00:05:10] Ronak Shah: You know, there comes to this point of scale discussion, right, where it's like, all right, you hit certain numbers. Like, let's say, call it 20, 30, even maybe 40, 50 million. And then, you know, you start really discussing and saying, okay, am I going to turn this into like a hundred million dollar D to C brand?
Or am I going to get to a hundred million dollars by bringing 20 to $30 million in from retail, some from, you know, affiliates and you start channeling it. And I think, uh, where we see it is, is we don't want to be super dependent on just one channel of growth. So we're starting to cherry pick certain, um, retailers that want to work with us, and we want to work with them, um, and trying to build a vertical growth strategy rather than super horizontal and get into tons of retail and tons of doors.
And, uh, so far with vitamin Shoppe
[00:06:01] Jason Wong: that strategy's been working. Yeah. I love that. There's this picture I saw where it was you next? Other people who I also know, like in the same space and it was for me, I'm an outsider. I'm like, I'm not competitive with these friends. I'm like, it's cool that I'm seeing my friends succeed and be on the same shelf together.
So congratulations for being in the vitamin shop. I have one down the street. I'll go grab some later. Um, I do want to ask you before. Well, the deeper you work with your co-founders in other capacities before, how did you guys figure out who is CEO CMO and, and the other positions? Cause it's kind of like you both come in at the same place in the same background.
How do you like.
[00:06:44] Ronak Shah: Yeah. A hundred percent. You know, the biggest thing for us was like, we didn't hardly looked at even today. Like even when we hire new employees or like, what title do you want? What do you want in your LinkedIn? The title piece is, is for us just an introduction. Right. And after that, nothing else matters.
So for us, it wasn't like who is going to be this. It was like, okay, Ron, you handled majority of like the front facing finance ops and some of the decisions. You can do this and ask us so marketing driven, it was almost just, it, it was, you know, it made sense. And UNC it being the branding designer and creative guy, chief brand officer just made sense.
And we've all had that kind of like triple threat position kind of power, um, uh, for, and so it wasn't so much a decision. It was. Okay. You know, because we need to have something on paper. This is what it is. But on the background, we're all equal partners, 33% each and equal say in everything. So, um, equal split.
I, I think, um, it's been going well and I'll, and I'll say this, um, with a grain of salt, because it's going well, because us three have no idea how to do each other's craft. We're three craftsmen that we'll know what we have to do for our role, but neither of us can get in each other's lanes. So it's not like, oh, Ash, run the ads this way.
It is more so, oh, what are you doing with that? It's cool. Now here, let me show you what I'm doing with finance, and then I'll get, here's the label I design. It's not whether or not we like it. This is what's going out. And that's why when we have three different lanes to stay in, I think that's why it's going well.
Um, and there's no opportunity to. Really disagree on things. Cause you don't, you just don't get into someone's space.
[00:08:34] Jason Wong: I love that. And I think that's such a like important clarification because a lot of people come in with 50 50 partnerships without understanding that it's not really 50, 50. I don't think it's fair to do 50 50 just because you guys started together.
There's different things that people bring to a table that are just indispensable. And you have to put the value on that too. Uh, I've seen so many 50 50 partnership. For that exact reason. Um, and so for anyone listening, that's one thing that you need to consider. As I have you bring on a partner like Lee outline everything that you guys are doing picker titles properly.
They're pretty arbitrary in the beginning, but that really dictates what you're responsible for and make sure that you're really goddamn good at it.
[00:09:17] Ronak Shah: Yes, that's what you said that the end is make sure you're craftsmen at what you're going to do. Don't just take on a role because it's some someone needed to handle it.
[00:09:28] Jason Wong: I want to dive deeper into the zero to $30 million playbook. It's a fantastic. Um, journey that you've had so far, you guys are in a extremely saturated market. I don't need to tell you that. And learning from a ferry from fairly recent here, they're huge players in the space right now who were lining up these shelves.
They had the massive distribution deals. They have endorsements from top athletes. Tell me in the very, very beginning you guys started with what, $10,000 on your first invoice. Well, walk me through, like, what did, how did that really work? Like how do you use that $10,000 to jumpstart that business? Yeah.
[00:10:06] Ronak Shah: Um, so when we use a $10,000, one thing we knew is we're not putting any more money into this, um, because we didn't have a ton of money. Um, and so when that PO came to us, um, from day one, the ads, we, you know, we started running ads and, and built a website. Our ads had to work. Right because that money that we were spending was on a credit card that technically we didn't have really have the money to pay for it.
So it was the pressure to perform from day one was there, but I'll again, put some green assaults. There is, we have had eight years of experience prior to that. Where we kind of knew, this is the type of website that's going to convert. These are the type of ads that aren't gonna work. You know, this is why flavors are so important because they can create a visual experience for the person.
Cause that's why our first two skews, they were not unflavored collagen. They were flavored collagen. Um, it's why UNC it designed the packaging to be pink because we knew we need scrolls trucks. And, you know, inside of, inside of the Facebook and Instagram experience. So part of it was kind of like engineered to like every piece needs to be perfect online.
So that every penny can make three pennies, you know? Um, so that was from day one was okay. We have to come out a good row as, and I think because we went such a loud and explicit way with our branding and marketing, um, we were able to confer fairly well, right from the get go. This is pre iOS. Again, you know, I always don't want to make anything seem too easy, but it was easier.
Right. I'm sure you can agree to that. It was easier back then. And we luckily got a good headstart from there. It turned into, okay. We need to start coming out with new products because if we can innovate and increase retention, lifetime value very early on, then right away, we're going to be able to keep these customers.
The reason the market is so sad. Is because there is no barrier to entry. You can create a supplement brand and come out with it within 14 to 21 days. Right now, private label create a label labels, take two days to print. Now, put it out, build a website. You'll be launched 21 days. Okay. That's why it's so saturated.
So what we said was one thing that we're going to have to separate ourselves is we're going to keep coming up. That people are going to have no way to forget about us. So if we can keep them in our pipeline, they'll never have any reason to leave us. There will be loyalty. So we have to then figure out, okay, how are we going to launch stuff?
They don't have that much capital. So every launch we had to do have to be a short bet that was when the creation of the community. And that creation of the community was purely first. The reason of we're just going to ask people, aren't asking our customers what they want, because then we can't fail.
Right. If, if they tell us what they want and we create it. So it turned into, you know, us starting to scale on ad, spend us releasing products that people actually ask for. So the sell through rate was very high. And then that turned into a cyclical cycle. So we would keep scaling we'd release new ones.
Our retention was high we'd average, 37 to 40% retention every month. So your unit economics were so well-informed. That each time the cycle ran every two to three months, you were able to almost double it the next time. So that's why we did 178,000, the first year of 5.2 million the second year and third year we did 19 million.
And this year we're on track to do about 25. So, you know, that that's, that was a growth pattern.
[00:13:47] Jason Wong: I love that you guys are so strategic with the way that you guys grew the business. It's a Testament that, you know, you do have to be. You know, so many people think it can really just add a product. And yeah, I I've heard of people pitching me and say, Hey, do you want to start your own private label supplement brand?
Like, no, I don't want to, because I know that it's not sustainable. Like, yeah, you can start, you can start, but can you sustain it starting and sustaining two whole different things. And I love the mythology that you guys had and, you know, asking your product, your customers, what they want and really building it for them and building a community.
So you can continue to engage. And I want to touch a little bit more on new product releases because I think extending the lifetime value is obviously very important. Um, reducing the, the repurchase window is obviously very important to you. So you guys came out with your flavor college in, how did you decide what was the next product to make and how do you know that next product will make people to buy the next order?
[00:14:47] Ronak Shah: Um, I'm going to oversimplify this process. What we did was we, uh, we went to Typeform and we created a survey. It was three questions. What do you, what are your, what's your opinion and rating on our current product lineup? Then our next question was, what do you want to see next from us? And then our third question was what is another category of products you'd like to see from ABI?
So next from ABI was what are the next flavors you want? Okay. And then next category was if ABI didn't have college in flavors, what's another product we should come out. When we did the survey, initially it was with like 200 customers. Their next flavor vote was cocoa cereal. Okay. Cause we launched from foodie, seal and cinnamon.
Cocoa cereal. We launched local cereal. Um, that's, that's the flavor. We took the R and D. We actually went through our manufacturer and shared our survey. We said these top three flavors that are voted. Can we get the R and D flavor for that? Can we begin R and D and can we get a sample? We got cocoa cereal.
And then we went back into our community. And at that point I think we had like 500 members. Um, and we've told them, Hey guys, you all voted for cocoa cereal. We're launching this in two weeks. Sign up to be notified. I think we had like an 80 or 90% sign-up rate on our customer base. When we launched cocoa cereal, I think we had only bought like a thousand units or something.
We sold out in like 40 years. So now we're like, wait, what if we could just keep doing this and take out the guesswork, because that's an income, that's an insane cash conversion cycle. Right. Um, and so we kept doing it and now 44 launches later, total out of all products that we've done every single product besides the first two that we launched was decided by our community through a type of.
[00:16:40] Jason Wong: Wow. I love that. You know, though, actually that the same thing back in 2018, when we were trying to figure out what to create. So like the story, the origin stories, I made the lashes for my girlfriend at the time. Um, but okay. I want to do it, but what can I do better? So I made a tight form, actually, same exact tie form.
I had eight questions. Um, cause most of them are just like name, identify like what school they went to and whatnot. And then the questions I asked were like, you know, what do you currently do? What do you like or not like about it? And if you have the ability to change one thing, what would you change?
And there's actually a lot of common denominators, like, oh, they're irritating. You know, they put my eyes, they fall off and that way, if I could change something, I'll make the band thinner. I will make the hair softer. I'll make the styles more stuff. Yeah, that's easy. I could do all that. And so that's, that's how we make our first four styles.
Um, because you know, I obviously don't know how to make the perfect pair of lashes. So I didn't do the first chapter like you guys did. Um, I asked you, let RP with decide first and I actually collected emails, so I didn't have to go back to them to ask for emails again. I used that email to pre-sell, um, all our stuff with the promise that if you answer this survey, I will give you a free pair of like, On top of your house, or you can do like a 20% off, 30% off.
Um, but you can guarantee that you'll get at least certain amount of people to buy, even if you give them a 30% off. Right? Yeah.
[00:18:04] Ronak Shah: That's uh, that first of all, you took it five steps further. That's incredible. Um, and, but know that it it's so true. And, and so we get this question so often, right? Like how did you launch so much so quickly?
And like the, the oversimplified answer is just ask them what they want. And then deliver what they asked. And if you do those two things, cashflow becomes easy. Predictability becomes easier. Revenue, projections become easier to match. So like, you know, you can almost doctor up your own, your own business by just letting your co becoming consumer centric and let your community build
[00:18:42] Jason Wong: it.
Yeah, absolutely. It's I mean, it's, I'm going to simplify first and that's really how. Most people don't realize that it's not rocket science brand, building an extent. There's a framework that you can follow. Um, and you can do it over and over again. My one of my earlier business, I started a book, a coloring book for memes.
Um, back in 2016, it's called the mean Bible. And I asked you a product without the product. I launched it with a Photoshop vote, a version of what that book would look like, like coloring pages and what. And I did a quarter million without the product. Cause I didn't. I thought, I thought that was like a joke.
I made a Photoshop, I launched it and it went viral online. It went on Reddit, it went on product hunt. Um, went all over Instagram and I made a quarter million dollars and I was like, shit, I don't have a product on hand wrapped together. You know, I look for a print shop. This is like Thanksgiving to November, like late November.
Everyone's puddles. They got backlog of order. So I'm like, shit, I need to launch this. And you know, way I did and capture a lot of that customers. But what I think what me and you are trying to say is that you don't have to launch with a lot of products you can launch with very little product or just an idea of a.
As long as you have like a stupid timeline for one year launching, like you cannot collect someone, someone in launched nine months later, it's not baby printing books. Thankfully only took eight days. Um, but you know what I'm saying? Like, it's not as hard as people think. And I think me and you, at least from what I'm reading online of what you tweet us, we're trying to miss minimize.
This whole industry of, Hey, you need a million dollars to start a business. It's not true anymore.
[00:20:23] Ronak Shah: It's not true. It is not true. And that layer on top of that, you know, the FinTech tools, you know, um, I know you're a big fan of Parker too, but you know, FinTech tools and even just like, uh, inventory financing tools and, you know, you can literally free create an entire model.
Of how you want your business to show up numbers, wise, unit economics wise, what FinTech tools you want to layer on what your margin can be, and then go to production and say, Hey, here's what I want. And then literally come to make it in life. And again, it's scary when it is that simple, because. You know, it creates a lot of opportunity, but at the same time, I think there is a big stigma around, oh man, I don't know how, I don't know how you can get to that number that quick without VC or private equity or angel.
And it's like, well, there's just so many opportunities
[00:21:20] Jason Wong: now. Yeah. I want to wrap up with two questions and they're conflict questions, but what, what was that thing that really unlocked that growth for you guys? You guys went from, you know, a hundred . 5 million the next year. What was that one thing? Was it paid ads?
Was it creative or a combination of multiple things?
[00:21:39] Ronak Shah: Uh, I think it has to be the answer to that has to be a combination of three things. Um, it was branding that was so uniquely positioned. Right? Um, that was so, so it was always whether or not people were going to buy, there were at least going to stop and ask what.
Um, secondly, the community being there as a gateway for all our. Um, as a place where almost from day one, we had brand evangelists. It created a lot of confidence in the consumer purchasing cycle. And then lastly being at a time where again, having someone like Ash on the team, um, on and pro three iOS days, ad spend being able to be scalable from one kid day to five kids.
Without thinking about it, that was very powerful. Um, so I think in combination of those three things, um, cause you can be the best media buyer, but if you have shitty content or you have, um, uh, not the best looking brand, it's not going to do the same damage, you know? So I think you need a combination of few things.
[00:22:48] Jason Wong: left that. And the next thing is what were some of the scariest times you've had as a CEO?
[00:22:55] Ronak Shah: Oh, that's a great question. Um, my, um, my scariest time was actually when we were launching our protein bars, we were supposed to launch them in April. And it was April of 2020. Um, and of course that's height of when all the pandemic stuff started and stuff like that.
It got delayed to July 1st. And when we got our bars at the manufacturing plant, half of them came in. Um, cause they were, they were like coded, you know, and stuff like that. And it was a scary time because in this, in this point you've spent maybe 50, $60,000 on launching a new category. It's not even like an extension to my product.
Um, So, what we ended up doing, you know, was we basically let people know, Hey, as soon as you got our product, don't even open it, put it in the refrigerator. Right. And again, having gateways of communication to our customer base in a community format and email texts, every single channel, we were very upfront and honest, and we had no idea what to expect.
But then it turned into where the, our product became, wait, if you have these refrigerated, they actually tastes like a candy bar. And so it turned into like this huge play on the, on the bars. Like now everyone refrigerates our bar before eating them. So it was like, it was a very scary moment because it, uh, getting into food beverage when you're in the supplement industry, um, to make or break.
Um, but, um, and then I think the one other one that was really scary was when, um, our first, uh, stockout. Uh, where we basically oversold even a few units and we were back ordered what I thought was going to be the end of our business, because everyone's going to be like, why the hell are you stoled out, turned into extreme FOMO that turned into a restock that did double our initial launch.
And then our strategy now has been, we're going to stock out on. And buy limited runs on every run. So we stock out, let FOMO happen. Let the feedback come. The restock has always double our launch now in terms of rev,
[00:25:10] Jason Wong: that's brilliant. That's brilliant. We we've had a few stock-outs too, and we definitely see similar sentiments, but not double that's good.
You're definitely juicing that a lot better than we are. Like, like playing on the FOMO. I need to learn. I, I mean, I love these conversations because I have these calls of a lot of my friends who are founders. And I always get these great tips. And that's really what inspired me to do these shows like these conversations and these awesome, like Ken, I broadcast my conversations with my friends, for the rest of the world that here.
So thank you for sharing that. I'm definitely learning. I'm taking notes. Like if you see me heads down taking notes for me and I'm most likely going to make them listen to this. So thank you for coming on. Thank you. Thank you so much. Where can we find. Um,
[00:25:55] Ronak Shah: I think right now the best places is Twitter. I joined about six weeks ago cause Ashley was really pushing me in, I absolutely am addicted.
Um, so I'll be, I'll be CEO on Twitter. Otherwise LinkedIn, just look up my name. Um, two best places.
[00:26:08] Jason Wong: I'm always on love it. Definitely follow Ron on Twitter. I've had the pleasure of watching him tweet and supporting, um, on the sidelines and just love, love the stuff that you put out there to a vulnerable, um, transplant.
Because I think it's very important for us, at least in this space. If we have an ounce of influence to really show people the real sovereign, your business owners, it's not private jets to The Bahamas every, every weekend. It's a lot of sitting at a warehouse and wondering what the heck do we do now? Or, you know, maybe running out of cash because you, your burn rate just too high.
Like those are the things that no one talks about. I love you guys being so transparent about, so, um, on behalf of everyone, appreciate you and then hope I can have that.
[00:26:54] Ronak Shah: Yeah, absolutely. And Jason, thanks so much for having me again, honored to be able to speak to you and love what you've been doing and sharing and building that Twitter community and offline and online.
[00:27:06] Jason Wong: You just heard an episode of the building blocks podcast. If you like, what you heard subscribe below to keep hearing conversations that I have with brilliant marketers, founders, and innovators on how they built their best ideas.
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