This is a follow up story for The Nut Button. If you're interested in reading how they got started, published about 2 years ago, check it out here.
Hello again! Remind us who you are and what business you started.
Hey Starter Story — we’re Davis + James, the pair behind The Nut Button, a push-button toy that leverages the virality of a meme. Since our last feature on Starter Story in 2019, we’ve grown our single-SKU store into an international business with over 8 SKUS selling in seven countries. We’re excited in 2020 to be approaching a huge milestone: a million in revenue to date.
Tell us about what you’ve been up to! Has the business been growing?
In January of 2019, James and I earned 200,000+ miles from a few large inventory orders and credit card sign up bonuses. We promptly booked a month-long tour of Asia to visit our factory. Every Chinese New Year we give every worker in the factory a bonus, and we were fortunate enough this time to do it in person in a little red envelope (or hong bao). After we got back from Asia, we started pushing our own Shopify store and have seen a 400% increase in sales on our eCommerce storefront.
Just accept that you probably don’t know as much as you think you do and get ready to learn.
“Yo dude… what if we made The Nut Button… an app?” So yeah, we made a one-button app that says nut when you click your screen and it kind of blew up. We see about 20-30,000 daily opens, all of which are monetized. With a ~$0.50 eCPM on our banner ads, it brings in a decent amount of nutbux™ each month.
Last week we decided to hire a real developer (James’s brother, keep it nepotistic) and add some functionality improvements as well as interstitial ads. This new ad format averages around $9 eCPM, which would be 1,800% more than our banner ads now.
2020’s been the year of TikTok -- James and I love watching people throw up funny nut videos. Anyone reading this with a fire TikTok -- if you have a good idea for a video, email it to us and we’ll ship you a button for absolutely no cost. ([email protected]).
- 35-40% year over year growth.
- $250,000 in revenue for 2019.
- COGS down 15% from 2019.
- ~$600 app profit per month.
In January 2020 we became ineligible for the Amazon Small + Light program which gave us an FBA fee discount. As a result, our bottom line took a small hit.
Trump’s tariffs have raised our import fees significantly.
What have been your biggest lessons learned in the last year?
The last year’s been a huge learning experience for me, not only with The Nut Button but in regards to my personal life as well.
I’ve been playing poker semi-seriously for the past few years. After running up a $5,000 bankroll over the span of a few months, I decided I was going to take my roll to Las Vegas to check my skills. A few weeks later I ended up taking 2nd place at the Venetian main event for $129,000 in my 3rd poker tournament ever (Reddit story here).
Instead of trying my luck in vegas, I joined Venture for America — a selective fellowship that helps mobilize young entrepreneurs into disinvested cities (a project Andrew Yang founded and led before he ran for office). For the program, I moved from NYC to Detroit, and along with some very smart individuals in the fellowship network, I have a project in the works which I hope will be my next StarterStory feature.
What’s in the plans for the upcoming year, and the next 5 years?
Every year we think that people will finally stop buying this dumb product, yet every year our sales continue to grow. We received an offer of around $275,000 for full equity of the business earlier this year but ultimately concluded that was under market value and decided to reevaluate at the end of the year. Having a mainly passive business that allows for remote work is a real blessing during these times, and we’re in no rush to give it up. It also gives us the cushion and opportunity to focus on new business ventures at relatively low risk.
Our new app update should be rolled out in the coming weeks, and I know James and I are both very excited about that. We’re also launching a brand new product that will be ready for Q4 -- just in time for the holiday season, which is when nearly 1/3rd of our yearly profits roll in.
We would absolutely love to get into retail, but have seen little success with our emails and cold calls to purchasing agents -- most of whom have no idea what the hell our product is let alone have any belief that people would buy it.
If anyone thinks they can expand our reach there, we’re always open to talk -- and we’ll definitely work out a very fair commission for any retail accounts.
Have you read any good books in the last year?
I was actually grabbing shifts in my spare time at a used bookstore in the East Village for the past year or so. One of the more interesting books that I’ve read recently is Left to Their Own Devices by Julie Albright. It’s extremely relevant to why I thought TNB would succeed in the first place -- you have an entire generation of people who are glued to their phones. Tinder’s taken over coffee shops, it’s easier to send Venmo than to handle cash, and Instagram is a way to see others while still remaining socially distanced. If you can stay ahead of the trends and figure out what’s coming next in these unprecedented times, you’re going to crush the next few years.
Advice for other entrepreneurs who might be struggling to grow their business?
“By the time you’re done with a job, you know how to do it.”
-- this is something my father always told me when I was helping around in his shop (he is a machine fabricator and small business owner).
To me, this means two things:
1. Don’t let not knowing how to do something stop you.
I had no idea how to have a product manufactured overseas until I did. I had no idea how to start an eCommerce business until I did. I had no idea how to run successful marketing campaigns until I did.
2. If you keep doing these things, you’re going to get really damn good at them the second, third, and fourth time around. Learning is all about iterating.
I think the greatest contributing factor to success is unrelenting confidence that you really can learn anything.
James hit on most of the practical points. Just accept that you probably don’t know as much as you think you do and get ready to learn. Coming into The Nut Button, neither James nor I had any idea of what we were doing but somehow, someway, we made it work. Thanks to anyone who’s supported us up to this point, and hopefully the nuts keep flying for years to come!
Are you looking to hire for certain positions right now?
If you want to intern for us and you feel as if you can add immediate value, shoot us an email.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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