How We 10X'd Our Revenue In One Year
This is a follow up story for Plain Jane. If you're interested in reading how they got started, published over 4 years ago, check it out here.
Hello again! Remind us who you are and what business you started.
I’m Evan and I started Plain Jane in April of 2018. We’re a CBD flower company based in Ashland Oregon. Many people are now familiar with hemp-derived CBD products due to the rapid explosion in CBD products. We manufacture and sell CBD hemp flower-based products including joints, cigarettes, flowers in jars, kief, moon rocks, and many more.
Our products are federally legal and we sell to most of the states in the US. We have more than 6,000 customers a month and generate over $275,000 a month in revenue. We’ve bootstrapped the business using profits, growing sustainability and profitability. My business partner and CEO, Lindsey Holthaus and I are the only executives and we have 16 full-time employees.
Tell us about what you’ve been up to! Has the business been growing?
In our last update, we were doing less than $25K/month so the size of the business has really exploded. The competition, market size, laws and everything about the industry is changing very rapidly. We’ve been able to expand our business by continuing to vertically integrate to improve our products and customer experience. By ignoring what everyone else is doing (in particular, recruiting every celebrity ever known), we’ve built a business based on good economics and value for the customer.
Understanding your sales channels almost should take priority in building features unless you have particularly deep expertise and insight.
Our business has primarily grown due to word of mouth. We believe our value as a business is to provide the highest quality CBD flower at the best price. We manufacture our own products as well as handle our own fulfillment. We’ve partnered with some great farms who’ve enabled us to grow dramatically. We’ve also recently started our own farm to produce new strains and genetics we couldn’t find currently being grown.
Digital has been central to our growth. It’s around 85% of our revenue. We utilize many different channels to find new customers. SEO, micro-influencer marketing, and paid advertising are the biggest channels for us online. We’ve recently figured out how to use Google Ads in our category (which is hard!) and we’re seeing a Customer Acquisition Cost of $9 and first purchase of $32. Our repeat rate from our first to our second order is around 28% which is on the high end of standard for our industry.
We find that our customers continue to come back over and over again is because we offer the best products at the best prices. Lindsey and I have moved the business to Southern Oregon to become neighbors with the farmers that grow the best CBD flower. We think that’s where it starts.
What have been your biggest lessons learned in the last year?
So mistakes in the CBD industry, especially for companies that handle hemp flower, can be brutal. Bootstrapping a business was very difficult and there were many black swan type problems that significantly threatened the business.
The ever-evolving legal situation continues to pose a risk for our industry. The current interim rules proposed by the USDA, for example, require lab testing done through DEA-certified labs. None of the actual labs used by hemp or cannabis companies in Oregon actually have this certification. The regulations are still being changed and we encourage people to comment here.
Our business also faced significant internal challenges. Primarily, the other co-founder, Duane wanted to move the business in a very different direction. Lindsey and I wanted to continue our momentum and as a result, we ended up parting on good terms. It was difficult for me to part ways with my best friend but it ultimately ended up being for the best.
The biggest lessons I learned from working on Plain Jane revolve around how I personally handle stress. When situations arise, I’ve found that I’m able to better control my initial panic reaction. Certain things out of my control used to weigh on me heavily and now, I feel better able to observe without the worry.
For example, theft is a forever problem for every eCommerce company. People use stolen credit cards, mistakenly issue chargebacks, and all sorts of other problems. I used to take it really personally. I find myself doing a better job of just focusing on my response and reducing our fraud rate.
What’s in the plans for the upcoming year, and the next 5 years?
Our big push for 2020 is retail expansion. We think that convenience stores and more traditional retailers are opening up to our products. I think nationwide distribution is likely for our industry in general and Plain Jane has a good shot at it.
We’re also continuing to grow our business in other ways including most recently, launching new CBD brands (in 2 months). We think we can offer some higher quality products at better prices than most people currently due to our vertical integration. CBD products are still extremely overpriced and they have no recreational value. I’ve never liked the whole luxury aspect applied to most brands.
Over the next 5 years, I don’t really have any clue. There’s a lot of opportunity in the hemp market, not just the CBD market. New cannabinoids like CBG are emerging. The legalization of cannabis is also a strong possibility in the next five years. I see many opportunities for growth but I don’t know quite what it’ll actually look like.
Have you read any good books in the last year?
I live on a rural farm so I drive a lot. I recommend audiobooks. Libraries will give them to you for free. A few I enjoyed from 2019:
- Dark Money: Jane Mayer
- Everybody lies: Seth Stephens-Davidowitz
- The Alchemist: Paulo Coelho
- The Smartest Guys in the Room: Bethany McLean
- Genghis Khan: Jack Weatherford
Advice for other entrepreneurs who might be struggling to grow their business?
Starting a business is one of the most difficult things I’ve done. It’s a painful marathon and all of the decisions seem half chance. The reward is that you have a lot of autonomy and exposure to the upside if it goes well.
My biggest piece of advice is not to beat yourself up too much. Often I see founders self deprecate based on how their business is doing at that particular moment. I guarantee you that the world will throw plenty of problems at you without you adding more. Most of the decisions I make are half chance anyways. I’ve found repeatedly that the best thing to do after making a significant mistake is to not do that thing again. Beating myself up has rarely helped.
As for finding that initial traction, stop asking people if they would use something and ask them if they’d buy it. Building products is always about starting with customer needs and working backward. If you don’t know if someone would pay you for something, your first job is to ask and figure it out. I wouldn’t just build something you think is cool. At least 50% of running a business is making sure your product, whatever it is, is sold in increasing amounts. I think understanding your sales channels almost should take priority in building features unless you have particularly deep expertise and insight.
Are you looking to hire for certain positions right now?.
We’re looking for the following roles:
- retail sales manager (remote)
- google ads manager (remote)
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
Plain Jane has provided an update on their business!
Over 1 year ago, we followed up with Plain Jane to see how they've been doing since we published this article.
Hey! 👋 I'm Pat Walls, the founder of Starter Story.
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