Building partnerships and mailing lists as an entrepreneur can be one of the trickiest and most elusive parts of the game. Targetting the right people, understanding brand identity – it’s all a delicate ecosystem to navigate.
The good news is, when it comes to mailing lists and partnerships, we have all the answers you need from the mastermind and guru himself: Colin Darretta.
Co-founder of a number of successful companies including WellPath, a health and wellness plan) and DojoMojo, a software company that helps you build partnerships, Darretta has all the answers.
Not only has Darretta got decades of experience under his belt, but he also has the distinct honor of managing to build a 1million person email list in 1 year, and is the master of monetizing mailing lists.
Nathan: The first question that I ask everyone that comes on is, how did you get your job?
Colin: Yeah, a circuitous path is the short answer. The long answer is, I came out of the finance world, started doing investment banking at Goldman Sachs, and then went to one of the big New York hedge funds, learned a tonne, but also found that ultimately to be somewhat soul-crushing work, as I think a lot of ex-finance people are prone to say. I got super into health and wellness during that period. I think it was a counterbalance to how fundamentally unhealthy everything else about my lifestyle had to be, working those 100 hour work weeks which everyone hears about. That became my hobby and my passion, an dit was one of these classic cases where something that I became interested in as a side hustle to … became the platform for my main thing, which initially was Wellpath.
So, I left the hedge fund world and decided that there was a lot of things that the health and nutrition, CPG industry wasn’t satisfying for someone like me. I’ve always operated under the operative belief that I’m not a special little snowflake, and that my problems are probably problems shared by other people. That’s the fundamental precept of effectively every business that I’ve had my hand in founding, has always been that if you solve your problem, and this is not a novel statement, if you’re solving your own problem you’re probably solving a problem for a lot of other people unless it’s a really, really niche edge case sort of problem.
That’s what we did with Wellpath, and quite frankly that’s what we did again with DojoMojo and most recently with Finn, the third business.
Nathan: Got you. I see. Can you tell me when did you launch Wellpath?
Colin: We launched Wellpath in 2015, and not that you asked, but it was first couple of years as an entrepreneur were fraught with challenge. We did far more wrong than we did right. There’s the old Kevin Costner movie, Field of Dreams, where there’s a voice, and I’m going to butcher the exact verbiage, but there’s a voice in the ether telling him “If you build it they will come.” I think a lot of entrepreneurs, myself included, felt that if I go out there and I build this product and it’s novel, and it’s innovative, and it’s a better product than anything on the market, customers will just ultimately show up at my doorstep. So, I under-indexed how important marketing was going to be. This is 2015, before kind of entrepreneurship had gotten quite as big and as before there wasn’t as much literature on entrepreneurship as there is today, and before there were podcasts like this one.
That kind of led us down a really challenging period for a couple years that ultimately then led us to the idea that became DojoMojo and how we developed large email audiences as a primary mechanism for early stage customer acquisition for businesses.
Nathan: Wouldn’t you say …. did you have a co-founder for Wellpath?
Colin: Yep, sure did. I had a co-founder for Wellpath who’s the same individual that I co-founded DojoMojo with. We bought on a third partner in 2018 who has now worked with us on Wellpath and Finn, which is the recently launched brand, and is working with us on all of the subsequent brands as well as has been party to our fundraising efforts and everything that we’ve done in the past couple of years.
Nathan: Got you. When you said when you launched Wellpath it was fraught with challenges, how did you come up with the idea and what exactly happened?
Colin: We couldn’t figure out how to get to an audience. Within the nutrition and wellness space, eyeballs on channels like Facebook and Google were really expensive, and then continue to be expensive. While those two channels will always be important tools in your toolkit when it comes to customer acquisition, if they’re the only two, you’ve got a bit of a problem because you might hit a certain amount of relatively inexpensive acquisition on those two platforms, but at some point that well will dry up.
What we were really fortunate is both my business partner and I have remained active angel investors in and around the New York ecosystem, whether it’s consumer tech or also CPG. What we saw was other businesses doing partnerships of various forms, but some simplest things like sweepstakes where the skim might work with Equinox and Shape Magazine for instance. The three of those brands would promote a giveaway to all their audiences, and in a legally compliant way, compliant with privacy law which obviously is changing day to day, but still this tactic is entirely compliant, they would be able to effectively barter that one another’s audience attention as well as anyone who entered in the ultimate giveaway they would share in those emails.
As opposed to the traditional way of acquiring first party data, whether it’s an email or phone number, which is either at the point of sale or on a light box on your website, doing these partnerships would enable you to acquire instead of a couple hundred emails a day, you’d be acquiring thousands upon thousands of emails through these partnerships, sometimes 25,000, 50,000 in one fell swoop. The problem that we were watching these brands encounter was there was no infrastructure to actually support these partnerships being executed. So, if you wanted to go work with someone at the skim for instance, you had to get a warm introduction or reach out to that person on LinkedIn. As we all know, we’re all inundated with LinkedIn messages, who are more likely than not to just ignore that message.
If you didn’t have a warm intro, that part was very hard. Then on top of it, as many early stage entrepreneurs can probably empathise, if you basically were able to get all these partners a crowd, you still needed to then go have someone and devote resources to building the backend infrastructure to actually run a giveaway, or whatever else, what sort of partnership you might be doing. That’s having precious engineering resources as well as your own precious bandwidth as an entrepreneur being directed at something that’s probably not core to your product. We saw that there was a hole in the market for an actual tech solution that would have a network of brands. DojoMojo now has about 10,000 brands on it. Anyone from the likes from the brands that I just mentioned on down to all the Hearst properties, and the Condé Nast properties, all the way to very early stage startups.
There’s kind of a menu of brands contingent on the size of your own company. So, we built a network for those brands as well as we built the infrastructure so if you want to run these sorts of partnerships you could use what effectively became a Wizzy Wig. You wouldn’t have to hire contractors or use your own engineering resources to accomplish it.
Nathan: With Wellpath, you built a million person email list in a year effectively from brokering these partnerships.
Colin: Yeah, the partnerships alongside other mechanisms to kind of supercharge our email list. The thing I would say is it wasn’t any one tool… It wasn’t just doing giveaways with a bunch of partners. You need to use everything in concert. We do these giveaways. We’d also have the light box set up on our landing page. We’d also do content swaps for instance, with specific media partners. So, Wellpath is a nutrition wellness site, so we would content swaps with… At the time, we were doing it with brands like Well & Good, and Mind, Body, Green, and other publishers. Ultimately, DojoMojo was built to do all of those things. It was the somewhat classic case of we were building a solution for Wellpath’s own problems. I was sitting there as an entrepreneur trying to build an e-commerce business, and knowing that if I could acquire a lot of emails that I could ultimately try to sell my product too anyway, that would help me scale my e-comm business.
Then we had this software business on the side where we said, “Why don’t we built the exact tools we need to go succeed with our e-comm business.” Thanks to that, we were able to profitably scale Wellpath into the eight figures and beyond, and we did it without ever raising more than basically $1 million of capital. So, super capital efficiently. I think that’s the one thing that partnerships and email as a channel still enables, the channels like Facebook and AdWords might not, is you can be really capital efficient about it because you can go do email acquisition effectively for the cost of your labour as opposed to if you want to scale using Facebook and Google, it takes hard dollars.
So, we were entrepreneurs who we hadn’t raised enough capital. We needed to find a more cost effective way. The lack of capital gave us a lack of options, so it forced a certain amount of discipline on us. And email, and then direct response marketing where the key [inaudible] for us to ultimately go build the Wellpath business and now we’re doing it over again with our third business.
Nathan: Got you. I’m curious, once you would build this email list, what would that experience look like to encourage someone to buy a product? Because from my experience, when you get people to join an email list from a giveaway or some sort of freebie or swap, sometimes they just want the freebie, or they just want the giveaway, and it’s not the best kind of quality potential prospect.
Colin: That’s a great question. That’s where a lot of people tend to go wrong with it, is they treat an email acquired through what I call a higher funnel activity the same way as they treat an email that they might acquire on a light box on their website. Those two people are fundamentally different individuals, so far as someone who came to your website, informed themselves about your product, and gave you their email is someone who’s clearly interested and relatively well educated about your product. Therefore, the way you email them in so far as the drip campaign that you’re going to feed them should look very different from someone who might have only the barest level of familiarity with your brand.
Our approach with anyone that we consider a higher funnel email acquisition is to lead actually with content before we follow up with commerce. We have a full-time editorial staff and have a content site at ThePathMag.com, which produces original content, the vast majority of which never even mentions anything about our products. We’ll have banner ads for Wellpath on there, and occasionally we’ll mention our products, but for the most part we believe that we need to educate, engage and empower your readership and that’s how you actually activate those emails.
The sale for us comes down after the third or fourth email. The first several are just oriented to how do we get this person engaged about this newsletter? How do we get them excited to read the content that we’re putting out there? Where brand, after brand, after brand goes wrong is they acquire an email that’s not particularly well qualified, and they don’t go through the trouble of qualifying it because they just want to try to get that quick sale. Unsurprisingly, a huge amount of those emails are going to churn out of their ESP very quickly, or they’re just never going to engage and you’re going to remove them yourself, otherwise it’ll damage your IP rating.
I think that people investing in a drip campaign that really over-indexes on telling a story and finding a narrative for your brand, and why this person should care is super important before you ever try to make the sale.
Nathan: When it comes to opens and stuff like that, how long would you run a drip campaign for and stuff like that for those kind of people?
Colin: Sure. Our drip campaigns are typically email campaigns on a three day separation cadence. We’ve tried a lot of different things. We found that that tends to work best. We’re really disciplined. If someone doesn’t open any of our emails after basically three months, we jettison them from our list and then down the road we can try to do re-engagement campaigns. A lot of people have this wrong headed idea of a big email list is a good thing, like the number is all that matters. The reality of that obviously is an unengaged email is actually not only is it useless, it’s actively harming you by sitting in your email list.
Even on the emails that we basically acquired through giveaways, we still have open rates of over 20%. That’s because when someone isn’t engaging with us, we don’t want them in our email list. Similarly, we make it really easy for people to unsubscribe. Again, there’s nothing more frustrating for a consumer because we’ve all been in this position of not being able to actually unsubscribe effectively, and it does significant harm to your deliverability. Deliverability is the name of the game when it comes to email, particularly when you’re acquiring a lot of less qualified emails because if you’ve done good practises in the past, then those new less qualified emails you get, you’ll still get into their inbox and that gives you a bite at the apple.
Then it’s up to them to engage with your email list or not. If they don’t, you want to get them right out of there. At any given time, we’ve probably acquired now with Wellpath specifically about 2.5 million emails to date. We’re probably only emailing 650,000 or 700,000 people every month because there’s a bunch of people that have just churned out, and that’s okay. I really want to emphasise that no one should fight tooth and nail to keep someone in their list that doesn’t want to be there.
Nathan: When it comes to asking for the sale and trying to turn that prospect into a customer, how long have you seen it usually takes from a giveaway versus a light box scenario?
Colin: Sure, the light box, particular if you use, and this is a whole different subject, but light box for [inaudible] we found to be really, really effective at converting people. That, you lead with the sale because someone’s already, for lack of a better term, on the hook. So, our first SMS message will be some tiny discount to try to get that… Whether it’s 10% or something, to that effect, to try to get the sale closed right then and there. Whereas with email, it’s going to be after we’ve received someone’s email, they’re not even going to get any sort of message that indicates how they could purchase our product probably for almost 10 days.
After that, our golden ration of content to commerce is 2-1. So, we’re always putting out at least twice as much content as we are sending emails that are trying to get them to transact on something. For us, where we’ve got a broad enough amount of skews, we’ve got about 10 different skews that cover a wide gamut of wellness and nutrition needs, there’s a very good chance that someone isn’t going to be exposed to the product that actually might resonate with them for a month. What we’re more oriented towards is the speed of time between that email acquisition and converting them, as it is to just get them really engaged with our email flow and have them opening all of our content emails every time they come because that’ll get us a bite at the apple, after bite of the apple, after bite of the apple.
We’ve found that there have been people who have been reading our content for six months before they’ve ever made a purchase. Then there’s some people who get the first piece of content, find their way to our product and ultimately purchase there. It really does have a wide range. The great thing about email is having that person’s email address in your list costs you very little provided they’re engaged. So, we don’t need to rush them to it. We’d rather engender a lot of trust and loyalty to the brand and focus on creating good customers as opposed to just creating quick customers.
Nathan: Yeah, I love that, and that makes sense. When it comes to the content piece, and you said that you have a whole editorial team, how do you make sure that… Let’s just say you did a partnership with the skim. You did a giveaway. How do you make sure that you find and identify the right people, because not everybody from the skim would be interested in health and wellness because it is more niche than the skim is quite broad. How do you work that out?
Colin: Yeah, so I think the type of partnerships you’re doing, for instance the type of giveaways and what have you, is going to have a big indication on who’s going to enter. If you’re doing a wellness giveaway that’s say a trip to Costa Rica for a seven day yoga retreat, that is going to self-select a certain type of person. What we’ve found is the first and most important thing that you can do is select the right partners. When we worked with Equinox, obviously, or maybe not obviously, but a gym with an affluent health and wellness crowd converts really, really well for us. The skim actually also converts really, really well for us when we’ve partnered with them.
We tend to orient ourselves towards finding partners that make intuitive sense, people who are in the health and wellness sphere. That’s by far the most important decision you can make. A lot of people go wrong there because a lot of people… Brands orient themselves again towards, “I want to work with bigger partners,” rather than, “I want to work with better partners.” I would tell you that any day of the week, if you select the right partners even though you might acquire far fewer emails, they’re ultimately going to convert at a many a times order of magnitude rate. The discrepancy can be as great as… I’ll give some metrics. We’ll convert about 1.5% of every email we acquire when we partner with the skim.
We’ve partnered, I won’t mention whom, but we’ve partnered with some brands that have a pretty good reputation on targeting health and wellness, but we thought they were going to engage audience, and we converted less than .1% of the emails we acquired. So, the delta can be super wide. It’s hard to ever get it perfectly right. There’s a certain degree of trial and error that you work with various brands and sometimes they’ll surprise to the downside, and sometimes they’ll surprise you to the upside. What we’ve found is your intuition though generally will direct you correctly when you kind of as an entrepreneur create your 10-20 perfect brands that you’d love to partner with, within the realm of being realistic.
Every health and wellness brand probably says Nike. That’s necessarily achievable for if you’re a small brand. But provided you’re being realistic, you’ll tend to be right on nine out of 10 of those. Where things go really wrong from an engagement perspective is when you start to go really far field of what your brand is and you’re kind of making these rationalisations as to, “Well, maybe these guys work as a partner. I get that they have nothing to do with my brand, but I think they’re target demographic similar,” and that’s when things start to go a bit sideways.
Nathan: When it comes to building Wellpath, you said you didn’t have as much capital to go to Facebook ads, PPC, but at the same time you could have spent that $1 million that you raised on that and make it work, true?
Colin: Candidly, I think we spent unwisely enough early on where by the time we got to the point and said, “All right, maybe we should make a harder run at other marketing channels,” like for instance Facebook, we just didn’t have enough cash left in the bank, really transparently. It forced us to get scrappy because you can’t go do the sort of learnings you need to do once you’re down to your last $150K-$200K, because what most agencies would have told us, because we’re now doing much more significant spending in the way of Facebook and Google on our other brands given where we’re at, most people say, “Hey, if you can’t spend $25K or $30K a month and expect for your first three months or so to just not be that cost effective from a ROAS perspective, you’re going to have a really hard time succeeding on Facebook or on Google.”
Even then, I look at a lot of comps out there and people are finding ways to do it profitably, but certainly not an LTV to CAC of three plus times, which people more often orient that as a kind of SaaS metric to be focused on but I think it’s true in CPG as well of you should try to be orienting yourself to ultimately getting better than 3-1 LTV to CAC for any given channel. It’s okay if you have a couple of channels that are helping drive the other ones that you’re not able to achieve that on, but if your only channel is going to be Facebook and then you’re hoping that’s going to drive enough organic noise that you can average your customer acquisition cost down far enough such that your ratios work, that’s a tough game and it’s only getting tougher.
I think people who don’t think about other channels are really risking limiting themselves. The metaphor that I use that’s a little bit hokey because I’m not even a golfer, but I think of most people are familiar with the game of golf. If you’re going golfing, it’s a little bit like digital marketing where you have a bunch of clubs in your bag if you’re going to be successful. Maybe Facebook’s your driver, and Google is your putter, and they’re the two most important clubs, and you’re going to use them the most. But if they’re the only two you have, you’re not going to shoot a very good round of golf no matter how good you get at those two specific things.
That’s the …… that we’ve really embraced: email and partnerships, and direct response marketing have become an enormously important club in our bag. We also were invested in making sure that we have other clubs in our bag. We think that that’s a big part of actually why we’re ultimately being more successful on channels like Facebook and Google because the truism that consumers will react more positively when they’re seeing your brand in place, after place, after place and that will ultimately get the conversion. While it makes attribution a nightmare sometimes because they could be exposed in a bunch of different places, at the end of the day the thing that we ultimately care most about is are we acquiring customers in a cost effective way that enables us to continue to scale our businesses.
Nathan: Yeah, no. I think you make a good point there. I appreciate your honesty. Omnichannel, you have to work towards mastering the mole. It just depends on which that you can start with, if it’s early days, bootstrapping or raising VC, you’ve got a limited amount of funds that you’re trying to multiply. Whatever situation you’re in, you need to just focus on one channel, get it working, then move to the next one once those wheels are turning. It sounds like for you guys a big unlock was the partnerships and the email swaps, and the giveaways. Then when did you launch DojoMojo?
Colin: DojoMojo launched I guess end of… It was in a bit of a beta, but call it end of 2016. One thing that was great about building a partnership marketing software was we never did any paid advertising for it. It got to over 10,000 brands simply by virtue of word of mouth because what we found, most of the partnerships on Dojo are multi-brand partnerships, which is to say that it’ll be four, or five, or six brands all partnering on a single partnership. What we found is when someone would have a successful partnership they’d say, “Boy, I want to go do another one. I have this brand in mind. I might know someone at it. I’m going to invite them onto the platform.” So, all of DojoMojo’s growth, the whole network and community that’s developed around Dojo was effectively people who showed up organically and signed up of their own volition.
Nathan: It is a common thing that you’re not in the SaaS world, but you need to build internal tooling to now help your core business grow. So you build that internal tooling and then you’re just like, “Okay, maybe there’s something here because people ask about if they can use it,” or whatever. You didn’t wait that long to move into that though, because you started Wellpath I think you said 2015.
Colin: 100% right. We kind of banged our heads against the wall with Wellpath for a bit over a year before we said, “Man, what are we not getting? Is there any other way we could grow?” Really fortunately, like I said, we saw other people using the partnership strategy, but they didn’t have internal tooling or any tooling to help facilitate it. It made it super laborious to execute the strategy. When I first tried to execute the strategy, I wasn’t even thinking about us going and building a tech solution for it. I said, “Oh, I’ll just go do this. I’ll go on LinkedIn and send hundreds if not thousands of messages, and get a 5% hit rate on those messages,” and then have my engineering team instead of being building the backend infrastructure for our personalised wellness products, they were building the landing pages for giveaways.
At some point I was like, “This is a little bit silly. Why isn’t there any infrastructure? Why hasn’t anyone ever built that?” That was the catalysing moment for us to say, “Well, let’s just go build a solution for ourselves.” I think pretty early on though, this wasn’t one of those cases where we said, “Let’s build our internal tooling,” and we never have any plans of letting anyone else use it. I think pretty early on we saw a lot of people were using the strategy. We saw that people were using it with this piecemeal lack of real tech solution to do it, and we said, “Boy, if this is actually a real strategy that works for brands, and we can actually build a tool that makes it a lot easier, that could be a real business in and of itself.”
What ended up happening is my business partner, Alex, split off to go effectively run DojoMojo on a day to day basis, where I’m his co-founder and sit in our leadership meetings. I went to run Wellpath on a day to day basis. We’re both in the same office. DojoMojo and Wellpath share office space, so you can think of we’ve got 50 people under one roof, but they’re working on two separate companies. The beauty of that is so much of DojoMojo’s product development is informed by the needs that Wellpath continues to have, because Wellpath is Patient Zero for DojoMojo and continues to be several years on now. People who run product over at DojoMojo will walk over to someone on the Wellpath team and kind of be getting that immediate real time feedback.
Nathan: Yeah, so yeah but it’s interesting in the sense that you started with a direct-to-consumer brand, but then also out of the same time, because of your inherent pains, you’ve spun out a SaaS product and you’ve kind of turned kind of like a cost centre into a profit centre in some way, shape or form. Yeah, it’s not a traditional path, but very, very smart, and I praise you for that. So, you said you’re launching more brands. Why is that? That is a common thing I see amongst e-commerce founders. They don’t just stick with one brand. They tend to want to launch more. Why?
Colin: Sure. The kind of next stage of our journey was we had this thesis that the strategy we used to really capital efficiently build Wellpath using DojoMojo as well as some of our other internal know-how, and the team was one that we could do across a handful of brands. Part of that was also informed by we thought that there was a lot of niches that people haven’t really touched because they go ignored by the venture community particularly on the consumer side, where you look at categories and you say, “All right, maybe that’s a $200 million market,” and every venture capitalist will say, “If $200 million is the total market and you were to take 25% market share, you build a $50 million business, that’s not interesting for venture investment.”
We heard that refrain often, so we’d look around within the broader health and wellness universe and say, “There’s definitely those pockets,” and those pockets are getting if not outright neglected, they’re getting neglected by the better entrepreneurs because the better entrepreneurs are wanting to go after the whale so to speak. So, we said, “Well we can, from a single holding company, actually go out and build these businesses that maybe the ultimate outcome for them is they only get to $25 million, or $30 million, or $40 million of top line, but they can have a super developed customer base. They can be great profitable business with exit opportunities to larger strategics.” If we do it several times over where we go build four or five businesses like this, it can still be in aggregate a large economic outcome.
What we’ve been able to do, we launched the second brand on September 9th. We’re launching the third brand on the CBG side in mid-January. We’ve been able to take the same team, by and large the same engineering infrastructure, to take all the audiences we’ve already developed with Wellpath and use them to kind of function as a springboard for Finn, which is the pet brand that we just launched with the plan that we’re going to continue doing that. Now Finn has a 200,000 person email list of it’s own. Wellpath promotes Finn products. Finn promotes Wellpath products. Ultimately, we’re building an ecosystem where each brand will have it’s own content and community, and both the email audiences as well as across all over traditional channels, and each one will be able to support the next in this virtuous cycle.
Nathan: I’m curious, you said that this pet brand Finn, you’re able to promote to Wellpath audience and vice versa. That doesn’t seem just top level, like there would be much congruency there.
Colin: Sure, I think what, and I can’t take ownership of this, my business partner often talks about thinking about audiences a little bit like how we think about so many other under-utilised assets in this modern day. So, Airbnb, one of the principles of it was you have an under-utilised asset in the form of your apartment when you’re not there that you could rent out. Uber was the under-utilised asset, is the tonnes of cars that are sitting in parking garages the majority of the day. We started to think about audiences as under-utilised assets, particularly for commerce brands.
If you’re Wellpath and you have 10 products, at some point, even if someone loves reading your content, they might have made the determination that hey, none of this guy’s 10 products are for me. So, telling them about it for the hundredth time doesn’t do us much good. That person might be a pet owner for instance, and might be interested in pet wellness. If we promote some of Finn’s products, there’s actually… Certainly, they’re not going to be as engaged with Wellpath products if they’re a Wellpath reader, but there is a decent chance, there’s a lot of pet owners out there, that they might engage with that.
It enables us to use these email lists that we have and utilise them better as opposed to just kind of shouting and to avoid, and promoting the same 10 products over and over and over again. The same goes for Finn in our opinion. If someone’s buying and reading about pet wellness and products that can support their pet’s health, there’s a reasonable likelihood, or at least a potential, that they would care about buying products to support their own health. The through line about all the brands that we’re building is they’re all going to be touching wellness, which we think creates a narrative consistency in theme across of them, and the opportunity to cross sell. Which, to your point, isn’t perfect.
I think the Finn audience and the Wellpath audience is different. They’re different brands. They have different ways that we write the content and a myriad of things. But nonetheless, there’s enough overlap that it’s proven reasonably effective thus far.
Nathan: Yeah, no that’s interesting. Launching a pet brand into recession, smart play. It’s one of the industries that is often not affected during these times. I’m curious as well, what is the next brand that you’re working on launching?
Colin: Sure. I can’t give too much away as it relates to it, because it’s in somewhat stealth. We are basically going to be taking certain ancient super foods that have never been put into a delivery mechanism that we’re working on, a delivery mechanism that I would coin as much more enjoyable than either putting a powder in your smoothie or taking a pill. And taking these ancient super foods that for specific reasons largely related to they taste really, really bad. No one’s ever figured out how to put them in tasty delivery mechanisms. So, that’s what we’re launching in January. We’ll come out the gate with four skews.
Nathan: This sounds like this is a very scalable play, because you’ve got the blueprint. You use your email strategy. You can still… I’ve got internal know-how probably most likely across influences, influence of marketing and PPC, using various pay channels. You’ve got your metrics. So, you’ve got the recipe to scale this out across multiple brands, and then have an overall holding company. How do you manage around simplicity versus complication, because oftentimes these strategies sound sexy, and they could work very, very well, but the operational cost across having so many different brands can be quite stressful or is tough. What’s your take there? I saw you laugh or smile, so [crosstalk]. Yeah.
Colin: I think you’re 100% right. I’d be being dishonest with you if I said we’d completely figured that out one yet. I think it takes a certain special kind of hubris to suggest that you’re trying to build multiple brands at once, and that the complexity of doing that will never become a challenge. It’s a thing that myself and the rest of the leadership team have wrestled with a fair bit when it comes to even some “simple” things like, “Well what roles would live at the operating company levels? What roles would live at the platform level?” An easy one for us to make a decision on was, well engineering will live at the platform because most CPG companies have… The way their engineering needs tend to work is you need a lot of engineering if you’re going to go do a new site build, or something like that for a short amount of time.
Then most of the time you don’t need that much in the way of engineering resources. You’re doing conversion rate optimization and that sort of stuff, but you don’t need a full-time engineering team in a meaningful way. Then there’s a lot of roles even, like design for instance, where well maybe early on a brand doesn’t need a full-time designer, but pretty quickly you want to have a designer who owns the brand voice entirely. The way we’ve architected it out, and this is in flux, and I think we’ll be in flux until we have a brand that gets to $40 million and have a bunch of different irons in the fire, but the way we’ve architected it out so far is our goal is buy a brand. By the time a brand gets to about $20 million it should have largely a dedicated team of it’s own because at that point it’s a real company.
Wellpath’s getting to that point right now. What we are working on now is trying to figure out what the timeline will generally look for when certain roles go in house at the brand level and away from the platform level. I think that’s the tricky thing to find out, of making sure that you’re doing it soon enough that the brand benefits from having a full-time resource in whatever role that is, but not so soon that the brand’s PNL is completely out of whack. I think we’ve got some learning to do on that. We’re still what I’d call in the second inning of our journey on building the holding company.
Nathan: Yeah, I got you. I appreciate your honesty, man. Yeah look, I think it will be a challenge. It’s fun now, that idea of having many different brands. Effectively, you’re building your own internal agency, and then that agency serves the different clients, but you control it all. Okay, awesome. Well look, we have to work towards wrapping up, Colin. I’m mindful of your time. It’s getting late where you are. Two last questions, question number one was just around kind of any final words of wisdom or anything you’d like to share, anything I didn’t ask you that you would have liked me to ask you? Then second is, where’s the best place people can find out more about your various brands?
Colin: Sure. I’ll answer them in somewhat reverse order. Innovation Department is our holding company’s website. It’s InnovationDept.com. That’s where we kind of have the latest news about the entirety of the portfolio, and where things like job postings, et cetera. I should note we are actively hiring. We’re really proud that we get to say that in the midst of COVID. As it relates to kind of words of wisdom, I think there’s such a wide audience for people listening to this podcast. I think when it comes to early stage people, and I’d heard it said but I never fully internalised it, I mean it is not a straight path. We spent the first two years what I felt like in abject failure. We have times where it feels like we’re getting kicked in the butt, and then times where things are going really well.
The best advice my dad ever gave me, which is the same advice that I tell everyone on our team is, this too shall pass. But I don’t normally say it when things are going really badly. I actually try to remind people of that when everything seems to be going our way, because the good times will end just as surely as the bad times. Things do tend to even out, particularly when you just kind of continue working at it and persistence goes such a long way in this game. Picking up the phone and making that extra call has served me so well that I often have thought that the people who end up succeeding over the longterm are just simply the people who are able to stay in the game in the longest and keep at it. That’s certainly been the case with us.
Nathan: I love it man. Thank you so much for your time. I really appreciate it.
Colin: Awesome. Thanks, Nathan. Thanks for having me.