“I’d tried cold process soap, bought at a farmer’s market,” he told me. “I really enjoyed it. I have always had sensitive skin and have been interested in these kinds of products. After using that soap, I thought there must be other men like me who’d enjoy that, too. So I decided to attempt and find those clients.”
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Fast forward to 2021, and Dr. Squatch, Haldrup’s company, sells its own organic soaps and other grooming products for men. Revenue in 2020 was approximately $100 million, having burst from $5 million only 18 months earlier.
How can a company grow from $5 million to $100 million in 18 months? I asked him that question and a lot more in our current conversation. The whole audio version of our conversation is below, followed by a transcript, which can be edited for length and clarity.
Eric Bandholz: Tell us about Dr. Squatch.
Jack Haldrup: We are a men’s personal care manufacturer. We focus on organic products for men. Soap is our hero merchandise. It is what we started with, and it is our main category. We have recently launched a deodorant that is off to a fantastic start. We attempt to create a product that’s formulated and natural for men.
Haldrup: Totally. There is a lot to take there. The men’s grooming market isn’t as fragmented as other types, such as female-oriented products.
Bandholz: Take us back to the first days of Dr. Squatch. You are essentially selling among the most commoditized products.
Haldrup: I began the business in 2013. I had been considering it for perhaps six months prior to that. At the time I had been reading”The Lean Startup.” I was looking to begin in a market related to my personal experience. I certainly didn’t conduct market research and conclude that soap is a fantastic category.
I had attempted cold process soap, bought at a farmer’s market. I truly enjoyed it. I have always had sensitive skin and have been interested in these kinds of products. After using that soap, I thought there must be other men like me who’d enjoy that, too. So I decided to attempt and find those customers.
Bandholz: Can it be purely online initially?
Haldrup: I had been doing online, yes. However, my business partner and I made lots of door-to-door earnings at local boutiques. That was a massive part of our company for the first couple of years. It was not sophisticated. We did not go to a lot of trade shows.
We drove to Portland, Seattle, and down to California and solicited smaller shops to resell our soap. It wasn’t the most effective way to scale a company.
My spouse was a sales man than me. I was pursuing the internet approach. He gave us a base to invest in ecommerce. But knocking on doors was definitely a learning process. A good deal of people took a chance on us since we were there.
Bandholz: It seems like he is no longer your spouse.
Haldrup: That is right. He’s a great friend and has been for the majority of my life. But we had a different vision for the firm. I started the business and then brought him eight months . That lasted for a couple of decades. He had been essential during that time, helping us scale. But he did not want to handle the next phase of this journey concerning growth.
Bandholz: What was that stage? Outside investors?
Haldrup: Yes, external investors. We were completely bootstrapped for the first five or six decades. I didn’t want to continue down this route. I wanted to truly scale it, or allow it to be passive or find a new job to work on. I didn’t want to keep it small.
I bought out my partner a year and a half before we took out money. I was basically the sole owner then.
Bandholz: So you raised money and found the magic button to scale the organization.
Haldrup: That is right. There is a lot to unpack here. First of all, I shifted my vision for the firm. I began thinking bigger. I developed to be open to meeting investors and raising cash. I met a couple of people and finally chose an investor which I felt could add a whole lot of value. The business is located in Los Angeles. They invest in consumer companies. Their portfolio companies are a tight-knit group, almost like an advisory community.
It has gone exceptionally well for us. We had maybe five people on the group and about $5 million in earnings at the moment. And fast forward to now, a year and a half later, we have got 150 people on the group. We have built a manufacturing center, and we are going to do over $100 million in sales in 2020. Paid video and media has been a big driver of that. I don’t have any regrets.
Haldrup: We have used YouTube and Facebook, but that movie put us on the map. We made the first video with that celebrity in 2018. I was in San Diego at the time. We had been working with a marketing agency there, but we wanted something larger and more impactful. So we decided to make a viral video.
The agency found him in a comedy series for San Diego’s funniest comic. They approached himand he agreed to do it. We had no idea what we were doing — just creating an experience with video.
That was before our external investment. We were about a $3 million business afterward. We spent about $18,000 on the movie. It was a gigantic expense at the moment. It was scary, really.
Bandholz: so that you put your faith in it and cranked it up from there.
Haldrup: Yes. We utilize a straightforward post-purchase survey to understand where people first heard about us. We see a whole lot of attribution from YouTube that does not come through on its metrics.
Bandholz: We utilize a wonderful post-purchase app named Grapevine for $3 a month which makes it possible for us to ask that one question of how folks find us.
Haldrup: For sure. Grapevine is extraordinary. I suggest it to everybody. I was blown away at how simple and impactful it’s.
Bandholz: You guys are heavy on subscriptions. Is that a huge part of your company?
Haldrup: It is definitely a huge part of our organization, about 30 percent of total earnings. Every company that sells a consumable product should provide subscription enabled ecommerce. There is no downside.
Certainly we have clients canceling. They have too many additives, or they do not like the item. But it’s still is a valuable part of our company.
Bandholz: You are running Shopify and ReCharge, but you need a personalized flow for individuals with the subscriptions.
Bandholz: What percent of revenue comes from the site versus Amazon?
Haldrup: We get about 85 percent of our earnings from our website and the remainder from Amazon. We’ve got boutique retailers who sell a little here and there. We are hoping to expand into bigger brick-and-mortar retailers during the next few years.
Shopify is a excellent platform. We transferred from Cratejoy in February of 2020. We saw dramatic improvements concerning on-site performance, in addition to on the backend, addressing the data. We’ve experienced no gigantic challenges with Shopify thus far. We’ve got no plans to alter.
Bandholz: Are you still working with the advertising agency? What is the agency’s function?
Haldrup: Yes, we are still a customer. We do all our own paid media purchasing and paid media optimization. We’ve got an internal team concentrated on that. For content, it is a mixture of external and internal. The agency brings a good deal of creative stuff to life. They also have the experience concerning shooting and editing the movie.
It a retainer-based connection, plus an extra amount for the movie work.
Bandholz: Where can people follow your organization and purchase products?
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