[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.

[00:00:19] Jason Wong: Yeah, you

[00:00:20] Jason Wong: can start, you can start, but can you sustain it starting and sustaining a two whole different things.

[00:00:24] Ronak Shah: So true.

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[00:01:25] Jason Wong: Hello, everyone. Welcome back to another episode of the building blocks podcast. Today, I'm joined by Ron Shah, who is the founder and CEO Obvi.

[00:01:34] Jason Wong: 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 on.

[00:01:42] Jason Wong: Oh man. I'm flattered. 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

[00:01:50] Jason Wong: and it seems like you've been in the supplement space most of your life, right? Like I went through your LinkedIn, you've been doing supplements as an agency. [00:02:00] You've done work for them. You've owned like couple, tell me a little bit more about like, like what led to Obvi.

[00:02:08] Ronak Shah: So a lot of our journey started at a company called Shreds.

[00:02:11] Ronak Shah: And that was back in 2012. It's where I actually got to meet Ashvin and my partner and my other partner Ankit as well. We were just employees there and we handled a lot of the marketing, finance, and design. So us three had three different skillsets. But we kind of came together. And from there you were able to really learn like, oh wow, we love working, 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 loved both facets of it. So we went on to start our own marketing agency focused on helping health and wellness brands, called Ghost3 Media.

[00:02:52] Ronak Shah: So we launched that in 2014, ran that for five years, worked on about 25 different clients. In those five years, we were more of a [00:03:00] boutique agency. We never hired employees. It was just the three of us. So the three of us would go into different health and wellness brands that were startups. We would redo their packaging design, website.

[00:03:10] Ronak Shah: We would also go in and handle their paid media, finance, ops, innovation pipeline. So almost like, like came in as like a little bit of a suite, C-suite type of thing. Did that for five years, our, our main goal was to always start our own brand. But we said if we could learn how to do certain things and what not to do. A marketing agency is one of the best ways to do that, you know, cause technically you can, you can work with other brands and learn from it.

[00:03:38] Ronak Shah: So, that was kind of our career track. So, employees for a supplement brand, a marketing agency for supplement brands focused and then getting to start our own finally in

[00:03:48] Ronak Shah: 2019.

[00:03:49] Jason Wong: 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.

[00:03:59] Jason Wong: You can't [00:04:00] just go on ali express , source some products and launch your own 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 gathered all that information and then launch. And then what, three years? $30 million is that right?

[00:04:18] Ronak Shah: That's correct.

[00:04:20] Ronak Shah: 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, so yeah, three years 30 million, we've, been able to scale quite a lot.

[00:04:44] Ronak Shah: And, you know, we're a DTC brand, we're DTC focused. It's not like a lot of sales came from retail, so it's been a fun journey so far with Obvi.

[00:04:52] Jason Wong: Yeah. DTC's definitely getting tougher. Nowadays than ever before. I don't have to say the obvious. And it seems like you guys are [00:05:00] doing well in retail and also with DTC, where do you really see your business?

[00:05:03] Jason Wong: Is this more of a, Hey, we're gonna start migrating over to retail or you're still going to stay strong in DTC?

[00:05:09] 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 DTC brand?

[00:05:28] Ronak Shah: 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, 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, retailers that want to work with us, and we want to work with them, and trying to build a vertical growth strategy rather than super horizontal and get into tons of retail and tons of doors.

[00:05:59] Ronak Shah: And, so far [00:06:00] with Vitamin Shoppe that strategy's been working.

[00:06:02] Jason Wong: Yeah. I love that. There's this picture I saw where it was you next to 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.

[00:06:17] Jason Wong: So congratulations for being in The Vitamin Shoppe. I have one down the street. I'll go grab some later. I do want to ask you before we get in a little deeper, you worked with your co-founders in other capacities before. How did you guys figure out who is CEO, CMO and the other positions? Cause it's kind of like you both come in at the same place and the same background.

[00:06:41] Jason Wong: How do you pick that?

[00:06:43] Ronak Shah: Yeah. A

[00:06:43] Ronak Shah: hundred percent. You know, the biggest thing for us was like, we never looked at even today. Like even when we hire new employees we're 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.

[00:06:59] Ronak Shah: So [00:07:00] 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 Ash us so marketing driven, it was almost just, it, it was, you know, it made sense. And Ankit being the branding designer and creative guy, chief brand officer just made sense.

[00:07:22] Ronak Shah: And we've all had that kind of like triple threat position kind of power, 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, equal split.

[00:07:46] Ronak Shah: I think, it's been going well and I'll, and I'll say this, 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 [00:08:00] that we 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.

[00:08:10] Ronak Shah: 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 Ankit, 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.

[00:08:26] Ronak Shah: 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.

[00:08:47] Jason Wong: There's different things that people bring to a table that are just indispensable. And you have to put the value on that too. I've seen so many 50/ 50 partnership fail for that exact reason. [00:09:00] And so for anyone listening, that's one thing that you need to consider is that if you bring on a partner like outline everything that you guys are doing. Pick your titles properly.

[00:09:09] Jason Wong: 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.

[00:09:16] 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 someone needed to handle it.

[00:09:25] Jason Wong: You know, I want to dive deeper into the zero to $30 million playbook. It's a fantastic. Journey that you've had so far, you guys are in a extremely saturated market. I don't need to tell you that. And starting from a very recently too, they're are huge players in the space right now who were lining up these shelves.

[00:09:46] Jason Wong: 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 [00:10:00] work? Like how do you use that $10,000 to jumpstart that business?

[00:10:03] Ronak Shah: Yeah. So when we used the $10,000, one thing we knew is we're not putting any more money into this, because we didn't have a ton of money. And so when that PO came to us, 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.

[00:10:30] Ronak Shah: So it was the pressure to perform from day one was there, but I'll again, put some grain of salts there is is, we 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.

[00:10:55] Ronak Shah: Cause that's why our first two SKUs, they were not unflavored collagen. They were [00:11:00] flavored collagen. It's why Ankit designed the packaging to be pink because we knew we needed scroll stoppers. 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? So that was from day one was okay, we have to come out a good ROAS, and I think because we went such a loud and explicit way with our branding and marketing, we were able to convert 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 [00:12:00] value very early on, then right away, we're going to be able to keep these customers.

[00:12:04] Ronak Shah: 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, 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.

[00:12:23] Ronak Shah: So what we said was one thing that we're going to have to separate ourselves is we're going to keep coming out with stuff 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?

[00:12:43] Ronak Shah: We 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 started. And that creation of the community was purely at first the reason of we're just going to ask people, are going to ask our customers what they want, because then we can't [00:13:00] fail, right. 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 inflated, 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 but 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 was the growth pattern.

[00:13:45] 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 prepared. 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, [00:14:00] Hey, do you want to start your own private label supplement brand?

[00:14:02] Jason Wong: 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 methodology 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. Reducing the repurchase window is obviously very important to you. So you guys came out with your flavored collagen. 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?

[00:14:44] Ronak Shah: Yeah.

[00:14:45] Ronak Shah: I'm going to oversimplify this process. What we did was we went to Typeform and we created a survey. It was three questions. What 's your opinion and rating on our current product lineup? [00:15:00] 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 Obvi?

[00:15:09] Ronak Shah: So next from Obvi was what are the next flavors you want? Okay. And then next category was if Obvi didn't have collagen flavors, what's another product we should come out with? When we did the survey, initially it was with like 200 customers. Their next flavor vote was Cocoa Cereal. Okay. Cause we launched from Fruity Cereal and Cinnamon Cereal.

[00:15:29] Ronak Shah: Cocoa Cereal. We launched Cocoa Cereal. 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.

[00:15:48] Ronak Shah: And then we went back into our community. And at that point I think we had like 500 members. And we told them, Hey guys, you all voted for Cocoa Cereal. We're launching this in two weeks. Sign up to be [00:16:00] 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.

[00:16:09] Ronak Shah: We sold out in like 48 hours. 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. 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 Typeform.

[00:16:36] Jason Wong: Wow. I love that. You know, doe actually that the same thing back in 2018, when we were trying to figure out what to create. So like the story, the origin story is I made the lashes for my girlfriend at the time. But okay. I want to do it, but what can I do better? So I made a Typeform, actually, same exact Typeform.

[00:16:54] Jason Wong: I had eight questions. Cause most of them are just like name, identify like what school they went [00:17:00] to and whatnot. And then the questions I asked were like, you know, what do you currently wear? What do you like or not like about it? And if you have the ability to change one thing, what would you change?

[00:17:10] Jason Wong: And there's actually a lot of common denominators, like, oh, they're irritating. You know, they poke 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 subtle. Yeah, that's easy. I could do all that. And so that's, that's how we make our first four styles.

[00:17:29] Jason Wong: 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. I actually let our team 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, all our stuff with the promise that if you answer this survey, I will give you a free pair of lashes on top of your order. Or you can do like a 20% off, 30% off.

[00:17:54] Jason Wong: But you can guarantee that you'll get at least certain amount of people to buy, even if you give them a 30% off. [00:18:00] Right?

[00:18:00] Ronak Shah: Yeah.

[00:18:01] Ronak Shah: That's that first of all, you took it five steps further. That's incredible. 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?

[00:18:13] Ronak Shah: And like 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 it.

[00:18:39] Jason Wong: Yeah, absolutely. It's I mean, it's, I'm going to simplify first and that's really how it is. Most people don't realize that it's not rocket science brand building. To an extent, there's a framework that you can follow. And you can do it over and over again. My one of my earlier business, I started a book, a coloring book for memes.

[00:18:57] Jason Wong: Back in 2016, it's called the Meme Bible. [00:19:00] And I actually made a product without the product. I launched it with a Photoshop 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.

[00:19:15] Jason Wong: I made a Photoshop, I launched it and it went viral online. It went on Reddit, it went on Product Hunt. 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 looked for a print shop. This is like Thanksgiving to November, like late November.

[00:19:34] Jason Wong: Everyone's closed, they got backlog of order. So I'm like, shit, I need to launch this. And you know what 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 product. As long as you have like a suitable timeline for when you're launching, like you cannot collect someone's money and launch nine months later, it's not baby. [00:20:00] Printing books thankfully only took eight days. 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 is we're trying to demystify this whole industry of, Hey, you need a million dollars to start a business. It's not true anymore.

[00:20:19] Ronak Shah: It's not true. It is not true. And that layer on top of that, you know, the FinTech tools, you know, I know you're a big fan of Parker too, but you know, FinTech tools and even just like, inventory financing tools and, you know, you can literally pre- 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 [00:21:00] 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.

[00:21:13] Ronak Shah: And it's like, well, there's just so many opportunities

[00:21:16] Ronak Shah: now.

[00:21:17] Jason Wong: Yeah. I want to wrap up with two questions and they're kind of big questions, but what, what was that thing that really unlocked that growth for you guys? You guys went from, you know, a hundred some K to 5 million the next year. What was that one thing? Was it paid ads?

[00:21:32] Jason Wong: Was it creative or a combination of multiple things?

[00:21:35] Ronak Shah: I think it has to be the answer to that has to be a combination of three things. It was branding that was so uniquely positioned. Right? 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 it is.

[00:21:57] Ronak Shah: Secondly, the community being [00:22:00] there as a gateway for all our traffic. 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, on and pre iOS days, ad spend being able to be scalable from 1K a day to 5K a day, without thinking about it, that was very powerful. So I think in combination of those three things, cause you can be the best media buyer, but if you have shitty content or you have, 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.

[00:22:44] Jason Wong: I love that. And the next thing is what were some of the scariest times you've had as a CEO?

[00:22:51] Ronak Shah: Oh, that's a great question. My scariest time was actually [00:23:00] when we were launching our protein bars, we were supposed to launch them in April. And it was April of 2020. And of course that's height of when all the pandemic stuff started and stuff like that.

[00:23:15] Ronak Shah: It got delayed to July 1st. And when we got our bars at the manufacturing plant, half of them came melted. Cause they were, they were like coated, you know, and stuff like that. And it was a scary time because 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.

[00:23:40] Ronak Shah: 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 [00:24:00] honest, and we had no idea what to expect.

[00:24:02] Ronak Shah: 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 bars. Like now everyone refrigerates our bar before eating them. So it was like, it was a very scary moment because it, getting into food beverage when you're in the supplement industry, can make or break you.

[00:24:26] Ronak Shah: But, and then I think the one other one that was really scary was whenour first stockout happened. 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 sold out, turned into extreme FOMO that turned into a restock that did double our initial launch.

[00:24:52] Ronak Shah: And then our strategy now has been, we're going to stock out on purpose, and buy limited runs on every run. So we [00:25:00] stock out, let FOMO happen. Let the feedback come. The restock has always double our launch now in terms of the revenue.

[00:25:06] Ronak Shah: That's brilliant.

[00:25:07] Jason Wong: That's brilliant. We we've had a few stock-outs too, and we definitely see similar sentiments, but not double that's good.

[00:25:13] Jason Wong: 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 with 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 can I broadcast my conversations with my friends, for the rest of the world to hear.

[00:25:38] Jason Wong: So thank you for sharing that. I'm definitely learning. I'm taking notes. Like if you see me heads down taking notes for my team 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 you?

[00:25:51] Jason Wong: I think

[00:25:51] Ronak Shah: right now the best places is Twitter. I joined about six weeks ago cause Ash was really pushing me in, I absolutely am addicted.

[00:25:58] Ronak Shah: So @obviceo [00:26:00] on Twitter. Otherwise LinkedIn, just look up my name. Two best places.

[00:26:04] Ronak Shah: I'm always on.

[00:26:05] Jason Wong: Love it. Definitely follow Ron on Twitter. I've had the pleasure of watching him tweet and supporting on the sidelines and just love, love the stuff that you put out there to a vulnerable, transparent.

[00:26:19] Jason Wong: 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 side of running your business. It's not private jets to The Bahamas 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.

[00:26:41] Jason Wong: Like those are the things that no one talks about. So I love you guys being so transparent about it. So, on behalf of everyone, appreciate you and then hope I can have that.

[00:26:50] 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.

[00:26:59] Ronak Shah: So [00:27:00] appreciate you.

[00:27:01] Jason Wong: You just

[00:27:02] Jason Wong: 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.

[00:27:12] Jason Wong: Now, if you want to learn how you can turn your best ideas and build something massive out of it. Visit my website bbclass.co or follow my Twitter @eggroli.

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