Best in class: 7 brands that seem to get it right-- what they're nailing, and what to take notes on.
People who think different deserve to get their flowers! My opinion based on a few things I've learned in the consumer world.
This one is long. Settle in. Open it up in browser. Take your time.
I’m drinking a medium Dunkin’ Cold Brew with two pumps of sugar-free coconut syrup. The ratios were off so I had to bring it home and add a healthy glug of my favorite pistachio milk to it. Now it’s perfect.
On the bike ride home I listened to one of my favorite songs, Your Love by The Outfield, and one of my other favorite songs, the remix of Your Love by The Outfield by Diplo. Then I lamented how this Katy Perry cover of Your Love by The Outfield never made it mainstream.
I really miss the year of Katy Perry’s debut when she was an indie darling. It’s all been downhill since Teenage Dream… whoever is in Katy Perry’s body right now is not actually Katy Perry, but I leave this kind of celeb reporting to the best, Hunter Harris. I miss the early 2000s— specifically 2007-2010— a lot, I don’t care how toxic a belief that may be… Viva Old Katy… Viva JoJo… Viva Lindsay Lohan on SNL… Viva Tumblr…
This episode of mailbag listener questions from Nik Sharma and Moiz Ali’s podcast about the DTC world was bang on for me. Listen if you’re interested in some of the biggest/most common mistakes that founders and operators of consumer brands fall prey to. I agree with pretty much all the takes, including:
People spend way too much money on agencies, particularly creative or site or email design ones— there’s no need. I didn’t spend too much money myself, but when I look back, I think I could have indexed less on brand initially (I’d redo it all in less than a year anyways) and gone with something (a Shopify template, that is) out of the box that got dressed up with splashy colors and imagery. I agree with Moiz that “most agencies are mistakes.”
People focus too much on acquiring their first customer and read that as a strong success signal, when in DTC, acquiring the first customer is child’s play. It’s acquiring the 1,000th and 5,000th customers that’s hard as hell. I wrote about this a little bit in my issue below, I think people don’t talk about it enough and that’s how you have so many “zombie” DTC brands whose engines gave out halfway through the road trip:
Contrary to popular belief, your revenue can go down. You can go backwards. If you need a year to regroup, to make sure your margins stay solid, to restructure so you can become profitable, to preserve some cash balance and test alternative ways to acquire customers now that platforms have shifted— that is very okay. Maybe you will believe it when you listen to Moiz say it, as an exited serial founder and investor, but I understand that entrepreneurial and VC culture work hard to make you think that you have to be riding a rocketship straight to the moon or your business is shit and unhealthy. People who fear a drop in sales or a down year tend to overspend, take on untenable debt and risk bankruptcy. (I know this now because I am in the “distressed asset” biz, as they say!)
The only take I disagree with is that brands should repost every time a person tags the brand or the product in their Instagram stories. Nothing makes me want to unfollow an influencer or brand faster than tapping through endless reposts from people I don’t know or care about of the same thing over and over and over again. Just me? Would love to hear your thoughts in the comments.
One of the most interesting things about working in an M&A adjacent role is the deal flow. I’ve learned a lot about bankruptcy from my boss(es), and I’m glad for those new learnings, since much of the rest of my day-to-day is really familiar— the product may change, but the ins and outs of operating a DTC brand can really feel the same, no matter the product.
This is all to say, I’ve learned that:
You actually never know if a sexy brand is doing well or not from the outside. They may have taken on too much debt, and the industry talking heads and happy customers will truly never know. I am very often surprised by what and who come our way. You simply can never know.
The mechanics of operating a consumer brand are exhausting, boring and hard right now, it’s a slog no matter what you sell or who you are— so people who are managing to find the mental space to still come up with inspiring ideas or who have the balls or cash to do things differently are triply impressive.
There are a bunch of folks who are standing out to me right now. I thought I’d take the time to shout them out. I am purely a bystander: I know no one at these brands, I know nothing of their financial situations behind the scenes.
Yeah, yeah— you’ve seen everyone talk about how great Graza is, what a dream job it’d be to work at Flamingo Estate, how Jolie seems to print money out of thin air or how cool Vacation sunscreen is. Let’s go a little deeper, eh?
Psst— this letter was a labor of love. If you like this, you’ll love my other stuff, so consider becoming a paid subscriber, where the real magic happens.
Paid subscribers, thank you, love you, you make this possible!
Tombolo
Wins award for: most creative, fun, and voice-y emails.
I don’t know how I got on this email list, all I know is that I open every single one, they’re delightful, and over time I’m thinking I want to buy something just to support whoever is making these emails. I think about writing them all the time to tell them whoever makes the emails rocks.
On LinkedIn it looks like a small team, so my bet is either on the Design and Brand Manager or an agency— though these emails are too good to be made by an agency, in my opinion. (If you want to flatten your emails so they are the exact opposite of these— quirky, bright, voice-y, brand forward, brilliant— go hire an agency to do your emails. They’ll make sure they get the job done real quick… the job being eviscerating any brand individuality or identity. Don’t get me wrong, I get the allure— I make all the design elements, copy, and assemble every single Prima email myself. It’s a huge pain in the ass. I get wanting to outsource it. Perhaps this is why I admire Tombolo’s so much.)
Anyways, raising a big Painkiller to toast the Tombolo team. I love you and I want to work with you. Your spirit is contagious.
Negative
Wins award for: miraculously growing and staying true to themselves as a bootstrapped, DTC-only brand.
I really can’t believe how long Negative Underwear has been around with only their site as their sales channel. It’s actually been over a decade, and the only thing they have for sale on another site is a collab they did with Jenni Kayne that the JK team is retailing on their own DTC channel. Incredible. If you work in this space, you know how hard channel discipline is and how tempting it can be to open yourself up to a wholesale account or an online marketplace that could throw you a few (thousand) bucks for some inventory you desperately need to move to generate cash for your next run of inventory.
Even better, Negative has expanded their assortment SO much since they started with their core line. That expansion takes real capital and I’m assuming real commitment from customers. It does seem like Negative is a bootstrapped business, based on what I found online. To me, this is fucking incredible.
P.S. I own one or two items I’ve had for at least five years. I’ve worn one out until there are multiple holes in it and I am still not willing to stop wearing it or to throw it away— so clearly they’ve grown and put down amazing DTC roots for a reason, the product love is real and enduring.
Nori
Wins award for: actually “reinventing the category” and not just abusing that phrase as the overused platitude it is.
Nori actually went ahead and made a critical update to a household staple— the iron— and reinvented it for the modern consumer. Since they released their first product, a hair-straightener-esque iron that’s portable and takes up very little space, making it a lot easier to use than the whole board and plug-in iron rigamarole, they’ve launched a few companion SKUs. I can’t speak to the success or individuality of those items, like a fabric pilling trimmer or a laundry hamper, but the original product has incredible legs. It feels like an absolute “duh!”
I’ve been wanting to buy one forever, only laziness and frugality hold me back— $120 is a lot for an iron.
People talk often about Jolie, and they have a brilliant team that I’ve worked with and love. Nori has the same edge as Jolie (minus the filter subscription revenue stream), though it seems to garner less industry chatter on ecommerce Twitter, podcasts, etc.
Lentiful
Wins award for: solving a national problem with a clever, cost-effective solution that meets people where they are.
I first found out about Lentiful on Alison Cayne’s podcast. If you don’t know Ali, she’s the founder of Haven’s Kitchen— which, back in my day, was a school and an awesome place that my coworkers went to go pick up lunch, and has since evolved into a sauce brand with amazing distribution and a lot of fans of their squeeze pouches. Ali’s given me some really great advice when I was a founder struggling to grow and fundraise, and I got to work with her team a bunch at Thingtesting— now, I mostly follow along on her podcast, where she recently hosted Ben Bacon, founder of Lentiful.
The episode blew me away, I couldn’t believe it. I was jealous of Ben Bacon— he had a brilliant fucking idea and I wish I’d had it! I’d give it a listen, but to try to distill it into salient points:
America grows a ton of lentils. We export them, mostly, because Americans don’t know what to do with lentils in the kitchen.
Lentils are a regenerative crop, they’re also really good for us— super protein and fiber rich. They’re also shelf stable and affordable.
Americans still tend to eat pretty poorly, the Standard American Diet is killing us. Because of our culture around work and life, we are often rushing and “too busy” to sit down for real, balanced or healthful meals throughout the day.
Ben put lentils in those microwaveable oatmeal cups with delicious seasonings and dried veggies. You add 2/3 a cup of water and microwave for a minute and fifteen seconds, and then you have a really cheap, healthy, filling, delicious snack or lunch.
Each cup/serving is under $5, 200 calories, and they ship for free from Lentiful’s site in variety packs so you can try lots of flavors. They’re also on shelf at Whole Foods, Walmart, and pretty much all the other grocery stores.
Best of all, the unit cost on something like this is pretty remarkable, the product is shelf stable with a long shelf life, and Ben has done what so many other founders fail at: he’s not gotten overwhelmed by the potential of the product and done “too much” by focusing on all the 8 or 9 different core attributes or thing about the product that are cool— he’s zero’ed in on convenience and the average American when he’s doing his marketing.
His other big win? He is bootstrapping this baby, and he’s the only full time employee. Incredible.
I ordered an 8-pack of Lentiful before I was even done with the podcast and I’ve been eating it most days. It solves an essential problem for me which is that I simply cannot cook 3 healthy sit-down meals for myself a day, and my hanger makes me an emotional terrorist to myself and others if left unaddressed. Lentiful has usurped Zero Acre Farms and Algae Cooking Club as the sustainable food brands that I am most obsessed with and bullish on.
Quince
Wins award for: breaking the marketing mold.
Quince makes “dupes” of the things that you love from your favorite brands: athleisure from Lulu, Vuori or Beyond Yoga, socks that rival Bombas, sheets indistinguishable from Parachute’s, fisherman sweaters that could pass for Jenni Kayne. This is not unique— Italic has the same business model— but they seem to be thriving as Americans feel the pressure of a rising cost of living and a world increasingly run by brands, our ultimate overlords.
But what’s most interesting to me is that Quince never runs sales. They do not succumb to the same “training” of the customer that so many DTC brands fall prey to— myself included— where the customer can only be incentivized to convert via email if you barter for their loyalty with a flash sale or an exclusive code. Sure, Quince does the standard welcome offer— at this point of late stage capitalism, would be almost crazy to not— but not much else by way of discounting.
I like this. It is insanely rare.
For what it’s worth, they seem to be doing quite well— I hear them run ads on virtually every big “women’s interest” podcast I listen to. They have a differentiated rewards program where you can shop on “partner” sites and get a discount— presumably some sort of juiced up affiliate program— and then get Quince store credit to use after your purchase has been verified on that site.
Stoney Clover Lane
Wins award for: turning a commodity into a memorable experience.
In my rough draft, all I wrote was “Stoney Clover. Like Build-a-bear for adults.”
That sums up most of it— the brand has a brilliant influencer strategy that all dovetails nicely around how well they’re able to create and curate an experience around customization, whether via embroidery or patches that are sewn on. It really is the adult equivalent of a Build-A-Bear. New York’s influencers flock to Stoney Clover pop-ups and Instagram the DIY process more voraciously than they Instagram the inside of the Hermes store in Capri a month later.
Amazon is awash with Stoney Clover dupes— it’s not hard, they make simple, solid colored pouches and dopp kits out of synthetic fabrics. They charge $78 for them (or more). If you want to customize them— and you probably do— that’ll cost extra. Letters start at $14 each. (I said start at— there are hundreds of options seemingly, and many typefaces cost more.)
In recent years, they’ve grown into huge collaborations: Disney, the NFL, Coca-Cola, a SCL Barbie, even Gilmore Girls. It’s sort of genius— there’s a bottomless market for pouches to store your shit in, so long as we keep living in a capitalist society that keeps encouraging us to buy shit in the first place. (Also, pouches inevitably need to be replaced after there are spills, stains, and life happens to them.) This market works for an 8 year old girl as much as it does a 50 year old woman, depending on the SKU.
This is (another) one of those businesses I just wish I’d started first… though clearly they’ve got some special sauce. Not every pouch business is collaborating with Coke and Barbie just because they know how to slap a patch that says “MAKEUP” on the front.
Transcendence Coffee
Wins award for: built-in growth potential.
Ever heard of this one? it’s a bit of a misnomer— they don’t make coffee— but like SCL, it falls under the bucket of “I wish I’d started that!”
Transcendence essentially makes pourable, gourmet sugar. They’re syrups that are intended to flavor your coffee, though clearly there’s lots more you can do with sugar. In fact, I think they’d crush it even more if they dropped “coffee” from the name— it seems like they used to sell coffee but no longer do, which I consider a wise move. I love how they feature recipes on the product pages so you can easily see 10 ways to use your syrup, helping you justify the buy.
They’ve done a Dutch Speculaas Cookie Syrup collab with Diaspora Co, and they’re currently running a Cinnamon Social Syrup with Ole & Steen. “Cinnamon social” may not sound like much, but this promises to make your coffee taste like a Danish cinnamon bun, which, yeah. Sign me up.
I’d seen Transcendence with the two flavors they had at launch— Algerian Baklava Syrup and Indian Gulab Jamun— but neither tempted me enough to make a purchase. (They’re about $20 each!) The Ole & Steen collab, however? It was smart to collab with a bakery, because it made me think about how much I would spend on that same coffee at a bakery— vs. how many I could make at home for the same price ($22).
That said, does that napkin math actually make sense when Transcendence tells you to use 3-6 tablespoons (the sugar-free person in me is screaming internally) per coffee to make it taste good? A bottle that small goes pretty fast when you use 6 tablespoons, and frankly, maybe that’s the point— a repeat rate and a subscription could be really good here.
Speaking of good here: how amazing do you think the margins are on liquid sugar bottled with spices? I’m jealous of that supply chain and those COGS.
But what makes me most excited about this brand here is not what it is now, but potential— product is an insanely great lever for growth here. Just think of the collabs and how all their future product partnerships will bring them a net-new audience (while still serving their legacy customers with novelty and new intrigue)… that’s an incredible growth fly-wheel, and I’d use it to build my business up while perfecting a few core SKUs to bundle and upsell along with the collabs.
Some random ideas for Transcendence product collabs that could delight customers and grow Transcendence’s audience:
A flavor with Salt & Straw inspired by one of their kooky ice creams
A cereal milk flavor with Milk Bar or Magic Spoon
Any flavor, really, with Chamberlain Coffee
Strawberry milk syrup with Oishi (this would kill it for matcha drinkers)
Banana pudding flavor with Magnolia Bakery
Chocolate chip cookie syrup with Levain
Pistachio croissant flavor with Tache (this might be my favorite of the ideas here)
A chai syrup with Kolkata Chai or Dona Chai
Brown sugar granola or cookie granola or even vanilla pecan granola flavor with Purely Elizabeth
A play on Rose Los Angeles’ lychee martini flavor1
Do something crazy with Pop Up Bagels, maybe add something to the flavored butter selection of the week?
Custom flavor with a big influencer, off the top of my head: Tinx, Jessel Taank, Meredith Hayden, Half-Baked Harvest chick… who else?
Ahhh… can you tell I have always worked in partnerships? This gives me such a nice smooth brained feeling. I would love to do this, honestly. Transcendence, hire me to run your partnerships!
That’s a wrap for today!! If you have besties at any of the above brands, send this to ‘em and we’ll do a follow up AMA, Q&A, or quickie interview. That’d be fun.
What other non-obvious brands2 do you think should have gold-medaled here? What did I miss or what are you feeling inspired by? My love language, as you know, is the comments section.
This letter was free, but if you liked it, consider perusing the archive or upgrading to a paid subscription.
xx
(By the way, to the team at Rose— you are being too cool for school by not linking your website on your Instagram and leaving hundreds of confused commenters hanging about where and how you ship! There is such a thing as too cool for school!)
Please don’t say Jolie, Graza, Vacation, Flamingo Estate or Rhode… think different!
Re: stories reposts– I personally think as you’re building the brand in the earlier days it’s important to repost stories for social proof! And around launches. But it should always be done with a curated eye so that not everything is posted
Tried lentilful for the first time this really liked the flavor and convenience of the soups.