Intro: Hey all, it’s Nathan Resnick from Sourcify and today we’ve got another epic guest on eCommerce On Tap. This is a show about the Entrepreneurs, Creators and Agencies that make up the eCommerce world and the stories behind how they grew. Crack your brew because here comes another amazing episode.
Nathan: Hey, What’s up it’s Nathan Resnick today, we’ve got another amazing episode today on eCommerce On Tap, my guest is Tim Nybo founder and CEO of Vincero Collective, and how’s it going on today? Thanks so much for joining us.
Tim: Hey, doing well, always happy to hop on and chat some business.
Nathan: 100%. Well, before we dive into eCommerce and how you have grown so fast, I really want to learn more about your background. I always want to understand how founders have grown their 8 figure eCommerce stores and so how did you even get started in the eCommerce world?
Tim: You know, right when we graduated University back some 8 years ago, we made the choice to move to China.
Nathan: You just decided to move to China randomly?
Tim: It was really bold, not really thought through in any type of sense, we couldn’t use chopsticks at the time let alone put in an ounce of thought into, “Hey! We want to manufacture products that would be awesome.” Obviously back then, you know, there wasn’t a ton going on in terms of the business world, we had just come out of the depression—not the depression but that’s what it felt like when we were out of College.
Nathan: What year was that?
Tim: We graduated in ‘10.
Nathan: So 2010, you moved over to China and then what happened?
Tim: You know we just tested ourselves, I mean, threw things at the wall for 4 years before we landed on Vincero. But it was making a lot of product, connecting with a lot of people- that was really important for us.
Learning how to be broke, pushing yourself to your wits end, so to speak, before you really start making strides just in terms of understanding business, why some concepts work, why some products work, why some products don’t; Just all the things that go into making a sustainable venture work.
There’s just so much that goes into it and I think that’s what a lot of people that are teaching this stuff this day and age don’t put through to their audiences enough. That it’s not like, “Oh here is this one part if you understand this, then you got it all figured out” and that’s what all these years in China allowed us to do is learn month by month all of these different things which was hard and not easy and it took a lot of time, it took a lot of struggling that’s for sure, but that’s the way you got to do it, you’ve got to put yourself through the wringer.
Nathan: And so tell me about some of those first tests that you ran in China. So you guys moved over there, I know it was you and a few friends; what were some of those first businesses that you worked on?
Tim: Yes, so going over there, I don’t know how to date your audience is on things going on back then but Shopify build a business had just started; they can just hand out their first winner so to speak, right?
And it was Dodo cases if I’m remembering correctly that’s their name, and so the iPad was just becoming a huge thing and of course we knew that meant the 2 was going to come out and then all the competitors: the Blackberry, Motorola, everyone is releasing a tablet.
And so, our genius idea when we’re moving over there was, we’re going to come up with another tablet case brand. Since we’re going to have boots on the ground in China, we’re going to be able to beat everyone else to the market. And that was really our thought process, so that’s why we went over there and that was just a straight crash and burn.
Nathan: What went wrong in that first business? I mean I’m trying to think in terms of, it sounds like a good strategy, you guys got the boots on the ground, you know as soon as they release a version you’re probably going to try to go gung-ho with the factories and try to produce at least a sample [oh we did way more than that!] so what went wrong?
Tim: I remember being in those factories for the first time, so funny, we made up fake business cards, trying to be all “Kids fresh off a University campus” you got to kind of throw yourselves in there. I’ll never forget those first factory visits. But because our idea was to beat things to market, I mean talking about it, it’s clear where all the mistakes happened but long story short, we ended up ordering thousands of cases and the buttons, it was off our dimensions. I don’t even know how we were able to unload them on a wholesale auction website to get some of our costs back but yeah that was the first thing we ever tried to manufacture.
You go over there and you have all this ambition, like, “Oh man, we’re going to get so much momentum, we’re going to do this, we’re going to do that” and so that was like instantly harsh reality of like, “Oh we don’t know anything about what’s going on.” That was the first crash and burn.
Nathan: That’s crazy. So after that burn, what was the next step? I know you guys started a few other businesses, I want to lead up into what you’ve got going on today.
Yeah so, what were the next kinds of projects that you were working on after that tablet case company?
Tim: Yes, so we spent a lot of time, you know, even during that first process, the cool thing about being over in China was networking with so many of the other guys that are out there making products.
And when that first thing happened, we had already networked with some other people that were running sourcing companies or operations and making everything from glass bottles to watches. We were connected to the watch industry since right when we basically first got over there we had some guys that were actually doing really well with some brands that aren’t even around today but at that time, they were doing pretty good.
And so, what we started getting into was trying to find sourcing clients just so we can get more experience in the manufacturing game without risking anything, like what we did the first time was just risk all of our own stuff, all of our skin was in the game and sourcing even if it was the smallest of orders, products for other people allowed us to get some of their skin in the game to allow us to really learn the ropes of what was going on out there.
And so, it was a long winding process for us. I would say, in our progression when it comes to manufacturing it was dipping our toes in, being a lot more risk conscious going forward after that first venture and then also learning a ton from our people who became really good friends out there for us that had been sourcing for a lot longer than we had, and they really helped speed up our process for sure.
Nathan: That’s amazing, I mean I think it’s such a dynamic because you guys started on the factory side of the table, the the supply chain and manufacturing side of the table, where a lot of eCommerce entrepreneurs start on the flip side or the marketing side or start on the business development side and they don’t really understand how to manufacture these products.
Tim: Well, I think what it did teach you especially even starting from that first mistake, it teaches you how easy it is for small mistakes to affect the end customer, right? To how small details of the manufacturing process can make or break the successful aspect of a product. It doesn’t have to be like, “Oh how we miss measurements” like a newbie totally did. It can go down anything; any type of management over the manufacturing process has massive ramifications for the end product that you’re delivering to a consumer. And having hands-on experience doing that was just invaluable for where we’re at today.
Nathan: That’s amazing and so I want to talk about some of those other launches because I know you’ve been a part of a lot of crowdfunding campaigns and help run and spearhead a lot of projects, what was that kind of dynamic, flash back like 4-5 years ago when you were launching some of these campaigns, what was the dynamic like? Was it just dipping your toes in the eCommerce that was built through crowdfunding? And how does that tie into the market and how you see companies spending hundreds of thousands of dollars on ads spent on a Kickstarter campaign?
Tim: You know when we were over there, especially in the first few years, all of our attention was focused in on trying to figure out how to manufacture products.
We were young, we were hungry, we didn’t have to look like—we didn’t have really peripherals if that makes sense, it was just focused in, on the grind, learning how to manufacture. And then after a few years went by, we realized “Hey, we’ve got to develop an end game” because manufacturing for other clients, if you’re going to do that type of business, that means we’re going to stay out here as well, and it sucks to be honest, you don’t want to stay out there and it also sucked- the idea of just following orders of other people and how they want their products.
As you know, we’re very detail oriented people, especially being drawn to the manufacturing game right, getting things right. Now, other companies and stuff like that that are making products especially in this day and age, their manufacturing for cost or for other reasons that you know as a manufacturer that that’s totally not going to give yourself or your customers the best product.
But when you manufacture for other people, you’re following their orders and you’re executing on their products. So our end goal became, “Ok, let’s get into the manufacturing game where we’re developing our own products, we have a final say in what we get to make, and actually the final control over what we’re sending the customers” and that ended up becoming the light at the end of the tunnel.
We were like, if we can figure out a way to be doing that, to where we have the full control and we can actually have our fingerprints totally, you know, all over the products that we’re making from start to finish, that would be amazing.
And right at that time that’s when, you know, through the grapevine, because again, networking was always a huge thing for us especially out there because you’re kind of on an island. And so through the grapevine, Kickstarters and the Indie Go Gos were all the rage.
It was almost the perfect timing for us with coming up with that end goal of really developing your own brand product from start to finish and these crowdfunding options coming around because at the time still, we didn’t have enough money to throw a few hundred thousand dollars behind a product.
Nathan: And at that time in Gaungzhou, when you were over there with the rise of crowdfunding, were people just going crazy trying to throw products up there? Or what was that kind of dynamic because you’re at the factory floor, you’ve got the ability at your fingertips to produce samples and get campaigns up… I mean were people just going crazy trying to put up a campaign?
Tim: It’s exactly like that but you know, it was like the new coming. It starts in the beginning days, you had people throwing up projects just throwing up and raising a few hundred thousand dollars. It was in those days and Kickstarter would basically, if your campaign showed, it would convert, they would just slap you right on the front page and so basically all the traffic on Kickstarter would see your project without barely leaning back in marketing on your end. So a frenzy was definitely happening, people are throwing up projects left and right, and it definitely instilled a sense of false hope, so many of these people that were launching projects over there too, it was like “Oh I’ve got this speaker, I’ve got this gadget” or whatever, “I go out and do seventy/eighty/one hundred grand, this is going to be huge brand.”
And I say frenzy because it was so new and such a short cut that not enough attention was paid to what happens after. Business online in the online world isn’t a site like Kickstarter– easily and freely sending you traffic.
Nathan: Exactly. Let’s talk about that dynamic real quick, kind of moving forward in terms of, even back then too you have successful campaigns that are doing 6-7 figures but after that campaign they die out or they hit a homerun on their campaign, like 2-3 years ago the Coolest Cooler became the most funded products on Kickstarter and I think some of their backers haven’t even received the coolers that they pre-ordered a few years ago, it’s crazy. So what’s that dynamic after a campaign? And from someone that’s done that so many times and has turned these campaigns into successful eCommerce companies, what are some of the steps that you have to take to prepare going from a crowdfunding campaign to a successful eCommerce company?
Tim: That’s a long-winded answer that I can hit you with. I think first and foremost, what gets people into a ton of trouble is not knowing how to manufacture the thing that they’re crowdfunding for. Sure, maybe they’ve got a prototype but how do you make that at mass? Do you have any idea what fulfillment looks like? People put 20% of their thought into it when they need to be putting in 100% of thought into it because it’s all surface level, this crowdfunding stuff right, like it is a shortcut in the sense where you can get people on your bandwagon.
However, they can’t see behind your closed curtains; so it’s up to you as a creator to make sure what they’re supporting, what they’re getting on, is something that you’ve actually done the work to actually deserve them getting on your bandwagon.
And so, many people concentrate on the superficial, the look of the campaign, the marketing campaign that’s important, but really what’s important is being true to the people that are backing you. And that means doing your homework, knowing that you can fulfill the promises that you’ve made, knowing that you can deliver, and knowing that you can give them service once you do deliver, it’s the basic pillars of commerce that get overlooked in this age of, “Hey, let’s go raise money.”
Raising a lot of money isn’t cool, raising money to build a business that’s going to continually give you money every month, that’s cool. But it’s hard to tell people that when they’re just starting out.
Nathan: I think you just hit the nail on the head right there where you see so many companies, whether they be software oriented or commerce oriented, look at All Birds or Casper, some of these massive fast-paced growing eCommerce companies that have raised 20-30 million dollars and sometimes don’t even have revenues to back it up just based on that hype.
And then for the founders to see a return on that raise, they’ve got to sell the company for at least half a billion or more. I mean it’s almost crazy for investors and for founders to take that big of a gamble when raising money. And so, you know, talking about that dynamic between turning your crowdfunding campaign into an eCommerce company, do you mind diving into one of the campaigns that you guys turned into an eCommerce company and seeing that transition and diving into that different experience whether it be fueled by Kickstarter, Indie Go Go, and then going onto Shopify or BigCommerce.
Tim: Yes, so we launched back in late 2014 and it was an all Italian marble watch, and again, our company is very directly representative of who we are. Again, I’ll go back to our skill as an entrepreneur is we’re pretty meticulous. That starts with the products that we make and when we we’re launching those campaigns we were ready to fulfill on them.
And so, you know when we had those dates up on our campaign, we beat our delivery dates. We were that prepared. We went directly into Shopify and then we went on the front end marketing perspective, we went at that strategy the same way we do with products, meticulous; learning one strategy after the other and then really prioritizing “what’s going to get us to farthest with these current resources?”
Yes, so with Facebook at the time, it was like the lowest hanging fruit but the lowest hanging fruit that would have the greatest effect on what we were trying to accomplish. So, we put so much of our energy into learning everything that there was to do with Facebook ads, finding and locating and tracking down the experts that knew how to market products, ecommerce products specifically, on Facebook. And we spent all of our time, learning how to do that and then from there….
Nathan: So, does that mean you joined? I want to ask about that real quick because I know so many eCommerce entrepreneurs that are tuning in, they are always interested in trying to understand how to run ads effectively on Facebook or other social media channels. By learning, does that mean you signed up for courses? Does that mean you just watch as many free videos on YouTube as you could? Does that mean you just tested different ads? What did you do to learn Facebook ads?
Tim: Honestly, we did. We did it, that was how we learned and of course reading everything that we could find. We’re in a few groups, different mastermind groups and that kind of stuff. But it was all trial and error and looking especially in those groups and just talking to different people, reading different articles, then we test them and then we test it and then we test it and then we test it and then you live in your ads manager especially in that first year, we would live in there and you could feel the pulse of your ads if that makes sense, to this is working, that’s working, that’s working, this is working, that’s working, that’s working, if you do that for that many days in a row, you know you become the expert.
And for us back in the day, everything was about efficiency. Again, I think you know companies are a pretty good representation of the people that are running them and so if you relate that back to what you were saying about raising a ton of money and stuff like that, it’s really up to the person that’s running the company, what path they want to take it.
I urge people to really think about what do you want your company look like? What do you want your involvement in your company to look like? Because that directly affects the strategies that you have to implement as you try and go towards that path. For us, you know and our enjoyment business is wearing things, getting better every day and in the end delivering products that go above and beyond the promise that we make to our customers.
And so, we were meticulous about our growth, we were efficient about our spend and we were just kind of knocking Dominos over as we went, we were out there and our plan was never to go, “Hey! Let’s just scale no matter what” we scaled profitably, we scaled smartly, and in the end, that’s really allowed us to have full control of our business now entering our fourth year.
Nathan: You know, I was listening to the Podcast with the founder of Casper mattresses the other day and he was saying that a lot of times they aren’t even return ads been driven per customer per say, they’re looking at the lifetime value. I think that’s a different kind of scaling dynamic because they’re hoping that the customer goes and tells a friend about their product , and so is everyone else but if they’re being very profit driven in terms of their growth and just looking at the top line, it’s a different dynamic because Casper raised almost like $30 million in that business. Or 100 million now and it’s crazy.
And so, it’s just a kind of dynamic of how they’re focusing in and one of the questions I want to ask, because we get a lot about Facebook ads, is do you think there are certain strategies that work across different campaigns? And let’s say, you know, a guy that ran Facebook ads for an underwear company and they’re still selling directly through Shopify and they optimized their Facebook campaign for their underwear company, could they come in and see your ads manager and figure out how to optimize it as well? Do you think the strategies could work across data sets or does it really depend specifically on the data that you’re collecting and really making decisions off of for your company?
Because you know we hear a lot of experts out there that say “I made just one tweak and the return outspend grew by 10x” and is that just a load of BS or is that really actually applicable to see across datasets, how these certain strategies can relate?
Tim: Well I’ll bring it back to one thing you mentioned at the beginning of this call, what we’re talking about in the beginning, people get stuck on the surface level of things and so advertising on Facebook is still advertising.
And so you can break it into two different parts right, your analytical data driven strategies and skills that it takes and that is a part of it, you have to know and be able to recognize what the numbers are telling you in order to come up with your next moves.
But everything on the ad side starts with the creative conception right? Are you advertising to people? That’s where– like start thinking about “Ok, if my end goal is someone for us to become a watch purchaser, well then if they’ve never heard about us, how do I introduce them to us? If they’ve heard about us or they haven’t purchased, then what do I say to them? And then if they’ve heard about us and they’re interacting with us a lot but they haven’t purchased what is my next move?”
That’s where advertising starts, it doesn’t matter that it’s on Facebook. And people forget that, they’re like “Tell me the strategy how to sell my product” it’s like well, “How do you sell your products?”
And then let’s apply that to Facebook. So it’s really a two pronged thing and everyone’s looking for the shortcut on Facebook. And the people that understand that, there are ways to advertise products and those products don’t have to be in the same niche or anything like that, they get the idea of selling and advertising to people. So understanding that concept of selling and then applying that with people that are very data driven and especially are affluent on the Facebook platform? Yes, that’s a complement of skills that can be very successful across different products.
I love this whole focus on cost per acquisition or ROI. You can always throw back, “Oh, I have 10x on my advertising” been like, “Ok so did you not want to grow?” I can get 10x by spending a thousand dollars. But what if I want to spend twenty thousand dollars a day? You can’t expect 10x.
So, people focus on these surface level dynamics without actually talking about the meat and potatoes, like, “Ok, what does that mean, what was your strategy? Do you have a really high return on your ads because you’re just coasting?” The hardest thing to do is to come up with efficient strategies that scale, and then once you go past strategies that scale, how do you do it in terms of efficiently for your business because the larger you get the numbers get larger, the metrics you’re looking for change. And I think that’s something that you learn as you grow.
Nathan: I want touch on that, just briefly before we kind of dive into the next questions and we’ll be wrapping up here in the next 5 minutes, but one of the things that I really want to understand, for a company as big as Vincero, how do you guys manage that ad spending and calculate ROI across platforms because I’ve seen you guys run native ads, and been featured on Bro Bible and Total Frat Move and all these you know amazing media outlets.
How do you guys calculate a lifetime value or a return on ads spent across these platforms when you’re running ads on so many different channels?
Tim: Yes, so you know that’s the analytical part of it. You’ve got to be meticulous about your data. And again, because there are so many platforms that you’re crisscrossing in between in terms of both prospecting and retargeting, it’s never going to be a perfect science. But it can be pretty close and so we’re monitoring all of our ads spent on a daily basis, even sometimes hourly, depending on which location we’re advertising in. And everything is monitored that closely in terms of the store and how it’s performing and how it’s performing on our different platforms including Amazon and stuff like that; everything has– in this strategy what you’re talking about, it changes as you grow. In the beginning, we were very dollar-in dollar-back risk-averse, growing efficiently. I needed that money back because I needed to do other stuff with it.
The larger you get, the more platforms you’re on, it’s more like a boat in the ocean where it’s like you’re going with the momentum and then you’re adding on different platforms and it’s all pushing you forward, and as long as you know what direction you’re heading in and the strategies and why you’re going down that route and why you’re spending money on this and why are you spending money on this, you can efficiently then use the data that you’re getting to make better decisions.
No matter what type of marketing you’re on, you’ve got to know how you’re performing, whether it’s influencer marketing whether it’s Facebook, whether it’s Pinterest, whether it’s affiliate, you got to know where you’re at on a daily basis there so you can make decisions on a monthly basis about the direction that you want your company to go in.
Nathan: Got it, that makes sense. One of my last questions here, you know, we kind of talked about the eCommerce entrepreneurs, guys that are running ads and kind of coasting and I feel like that’s probably going to be addressed towards a lot of the dropshipping entrepreneurs that we have tuning in; we’ve had a lot of questions come up of dropshipping entrepreneurs looking to create their own brands or their own private label companies, what are your thoughts on drop shipping versus actually trading your own brand and custom products?
Tim: I would take that back to the entrepreneur themselves, what do they want to do? It always starts with that, a personal question. Dropshipping different things, are you an entrepreneur because you want to be an entrepreneur? What is success you? What gets you going?
That’s where you got to start with, you know, for us we love coming up with ideas, manufacturing and delivering to people and having people go, “Wow! This is way more than I thought I was going to get.”
That’s what we’ve been, so the only way we can accomplish that is by making our own products. If your passion is marketing and stuff like that, dropshipping is a great way to get going into the business but that’s a personal question: What do you want to be doing? What gets you going? What’s your point? Why are you an entrepreneur? Why are you doing what you want to do? Once you answer that question, then the path becomes a lot clearer. Is the way to accomplish that with your own brand, is it to start a SAS company, is it to do anything, you know, you always got to get down to the nitty gritty, get granular, be truthful with yourself and then reverse engineer and the process will be a lot easier in terms of “Am I doing the right thing or not?”
Nathan: It makes a lot of sense, that’s an incredible analysis. I think a lot of people kind of dive into the actual dynamics behind dropshipping and creating their own brand but I think everyone tuning in has to ask themselves what drives them? You know, what’s going to you know wake you up in the morning to go put in work and make stuff happen?
The last question here– what’s next for you guys? I know you guys have grown incredibly in the past 2 years in business and seeing your watches and products all over online and the Internet and even in person, I start seeing people wear your watches and it’s incredible; what’s next? Where’s the Angola? Where are you kind of taking this in the next few years?
Tim: We’re growing; you know, we were in that growth phase. It’s exciting and we’re all just hunkered down concentrating on getting better every single day, every single month. I think, even relating it back to that question, making sure that you know what you’re doing and why you’re doing it and that makes the rest of the process a lot easier.
We still every day are working just as hard as we were 3 years ago when we started because our goal is still the same: to deliver unrivalled value in our marketplace. Value that customers haven’t seen, our goal is to get that reaction when people get our products go, “Wow! I should have paid way more for this, I will come back, I will buy a lot more from you guys.”
And that’s why we do what we do, making it this type of value and this type of quality accessible to people, that’s what gets us going and so what’s our plan? To keep doing that. I think if you’re honest with yourself and you start at that point with your business, the business comes up like that. Your customers can see through all of it, especially when they look at physical products, they can know, “Ok there’s a ton of care that went into this.”
In this day and age, those are the type of companies that people want to shop with, there’s not enough of them and people can see through all the noise and that’s really what they’re looking for– people that care about what they’re making because it shows through in the final product. So for us we’re going to continue jamming on that stuff for as long as we can think of. The market’s changing so fast, there are so many exciting new marketing things that you can do. Marketing is just a way to get out to the world what you’re doing, and if you love what you’re doing and if you’re doing it for the right reasons, then any new marketing channel is just a new opportunity to expand your message.
Nathan: That’s amazing, well, Tim, thanks so much for coming on eCommerce On Tap. If people want to get in touch or buy a watch where can they find you?
Tim: vincerowatches.com
Nathan: Awesome! Tim, thanks again for coming on; guys that was another episode of eCommerce On Tap. Tune in for the next one and thanks again for listening.