This is a follow up story for Outlaw Soaps. If you're interested in reading how they got started, published over 1 year ago, check it out here.
Hello again! Remind us who you are and what business you started.
HOORAY! It’s great to be back! So much has changed since we originally talked about Outlaw Soaps, and we’re excited to share our learnings with Starter Story readers!
In short, we make exciting sundries for adventurous people.
In less-short, we realized that if we could smell our favorite things (campfire, leather, whiskey… even the high desert on a cool morning), we could remind ourselves of the things we love to do, and be inspired by those things all the time. So we created this line using whatever methods we could figure out with our (very) limited resources… starting with handmade, cold process soaps.
We knew that natural ingredients and ethical production practices were important for us, but would the market be interested in smelling like a campfire? Well, yes. It turns out they are! (thank goodness!)
Tell us about what you’ve been up to! Has the business been growing?
We’ve grown our website business by about 5x and our wholesale and Amazon business by at least 2x since we last talked! It has been a WILD adventure, let me tell you. A friend of mine who has been in the industry said she’s seen more businesses choke on too much business than she’s seen starve to death from lack of business, and that’s been the story of 2019. Russ (my husband and our co-founder) has been working with the production manager to quickly scale up production to meet demand.
You’ve got an iron stomach, and you know what has to be done. You just have to do it.
The biggest change was our recent explorations into Facebook advertising. I changed the way I thought about the acquisition, and that change in perspective really changed our whole business. In 2018, I thought that if every new customer from Facebook cost $12, and I was selling an $8 bar of soap, I was losing $4. Not mathematically sustainable, right? In 2019, someone advised me to think about the lifetime customer value. I realized that our lifetime customer value was more than $70, so a $12 cost-of-acquisition was actually not bad at all! And once we started crafting better and better ads, and really tracking Return on Ad Spend (ROAS), we’ve been able to sustain a pretty great return over time (at least 1200%).
In a pretty random stroke of luck, a very popular blog did a story about our Fire in the Hole campfire, gunpowder, and whiskey soap. Because of that story, our bar soap sales went through the roof. Since bar soap is a very intensive product to produce, we’ve been struggling to keep up with production. We’ve been out of stock of at least one of our most popular soaps all year this year. It has been rough.
In addition to the growth in our website sales, Whole Foods decided to expand our line to include body wash and lotion, and we went to a few big trade shows, so in addition to the direct-to-consumer channels, our wholesale channel is also doing well… one of the people we added to the team as a Sales Manager, so she has been keeping mighty busy!
Last year, we had two employees working full time. Now, we have four full-time employees and six part-time employees, with a handful of contractors who swoop in and help out occasionally. To say we’ve had growing pains is an understatement. We had to let one employee go because she just couldn’t really scale with the company on many levels. I’ve been filling in for her, which is exhausting (her replacement starts on Monday, thank God).
Letting that employee go was probably one of the hardest things I’ve ever done. I care deeply about people’s happiness, and she definitely was not happy. It was a hard few months as we led up to that moment, and since it was our first “firing” as a company, we all felt very bad about it. But our team and our company are much stronger for it, so I learned a powerful lesson about how important it is to have the hard conversations, even if you don’t want to.
Of all our years in business, this has been a year of so many lessons. I have been very grateful to be a student, and look forward to the year ahead.
What have been your biggest lessons learned in the last year?
It’s one of the most often-repeated mantras in business: Hire slow, fire fast.
I’m going to be totally honest about this situation because I recently heard a podcast interview with the founder of Nutpods, and her honest words about how hard it was to let her trouble employee go helped give me the strength to do what I knew had to be done. If I can be that voice of courage for anyone else, I’m willing to go through the awkwardness of sharing this story.
I mentioned that I had to fire an employee, and that was definitely the biggest challenge of this year. In the past year and a half, I spent my time out of the fulfillment room because I was working so hard to avoid a conflict with this one employee. Given our rapid growth, I’m sure you can see how this would be a problem. The fulfillment room had become a bottleneck, slowing our ability to get a product to our customers, and I was too afraid of this employee to get in there and see what efficiencies I could bring.
This is not to say I feel the employee was to blame… I take full responsibility for not having the courage to take ownership over the condition of my own company. But I was intimidated and avoided confrontation, so I let it ride.
The combination of my business coach and my board member strongly urging me to let this employee go finally forced me to take a hard look at the ways I had to be selflessly courageous in the face of this employee… this issue was bigger than me. It was about the survival of Outlaw Soaps. If I wanted the company to continue, I needed to have the strength to do what had to be done… as Scott Belsky says in his very wise book, The Messy Middle, I had to “Do my f**king job.”
So I did my effing job.
I went through the process of writing her up and putting her on a performance improvement plan. Her performance did not improve. I went on a month-long work trip. When I returned, I let her go on the very morning of my return. It was awful.
Since that day, I have had to do her job and my job. I made so many improvements in the fulfillment room that we can now send 400 packages per day (vs 150). I haven’t been able to sleep. I haven’t had weekends. The job became all-consuming… but we’re all stronger because of it, and our workplace culture is much better. After I let this employee go, it turns out that other people were as intimidated by her as I was. Lots have changed.
I now believe that if someone isn’t doing their job better than I can do it, I need to get in there and help them get to the place where they’re better at it than I am. I should be the least skilled person in my organization.
Here’s Russ helping out in the fulfillment room on a Saturday:
It was really hard work to do her job and my job, but ultimately, it was worth it.
And this week, we finally hired someone to take that job on!
What’s in the plans for the upcoming year, and the next 5 years?
2020 is all about scaling up. We’re going to be outsourcing some aspects of our production and focusing on what we’re uniquely suited to do: make incredible soap and delight our customers.
We’ll be entering the bold world of venture capital since the most important thing is building a factory that can meet the production needs of a world of filthy, filthy Outlaws. If you know anyone with a spare $2Million, we’re in the market. ;)
We’ll also be going to more trade shows. This year, we went to our first three trade shows, and were a big hit! It was so much fun that we’ve decided to do more of that.
Here I am with a mural I painted for our booth:
Have you read any good books in the last year?
SO MANY GOOD BOOKS!
My friend sent me Venture Deals by Brad Feld and Jason Mendelson, and it has been a revelation. I was traipsing through the fields of venture capital not aware of the gopher holes and snakes hiding in the grass.
I also have re-read The Messy Middle* by Scott Belsky, which I consider one of the most important books for any mid-stage entrepreneur. It’s hard to keep the faith when you’re seeing progress, but not *the life-changing progress you had hoped.
I read Malcolm Gladwell’s David and Goliath, which is about how little companies like ours can have outsized advantages over huge corporations because of our agility and our cunningness, and our willingness to do things those big corporations just can’t do. For example, customers asked for air fresheners, so I made some calls and ordered air fresheners. There was no committee or feasibility study, I just did it.
I’m always up for a good business book, so if anyone has any especially great notes, please leave them in the comments.
Advice for other entrepreneurs who might be struggling to grow their business?
Do. Your. Effing. Job.
If there’s something you’re avoiding because you’re afraid, hey, that’s fine. We’ve all been there. Most of what we do as entrepreneurs are so scary that regular humans don’t have the stomach for it. And you’ve got this amazing superpower of resiliency that most people don’t have… it’s why you started this wild ride / endless slog (alternatingly, right?) in the first place. You’ve got an iron stomach, and you know what has to be done. You just have to do it.
Stay resilient. Stay strong. Stay courageous. Do your job.
Are you looking to hire for certain positions right now?
We’re looking for seasonal customer service folks. And if you live in Grass Valley, we’re probably looking for production folks!
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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