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Episode 64: Kickstarting your way into business

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All Xero Gravity episodes

Hosted by Elizabeth Ü

How do berries inspire people to raise $10,000 in just 13 hours?

Half the answer is Brian Quach, one of two founders behind Tree To Tub (formally known as Soapberri), an environmentally-friendly soap business bubbling with success.

On Xero Gravity 64, Brian talks about how his passion turned into a shower of Kickstarter contributions that brought him and his business partner’s gentle brand of soap to market.

You’ll hear why his creative ingredient mix — led by three months blogging, ChompSocial (Instagram analytics and automation), nature and product pics on Instagram, and a landing page — lassoed 5,000 warm leads. And how Tree to Tub’s reward bundles and soapberry lookbook made a huge splash with their first customers.

All that plus sneaky hacks, the sudsy soapberry story, and why Brian feels a responsibility to make the world a better, bubblier place.

Small Business Resources:

Episode transcript

Host: Elizabeth Ü [EÜ]

Guest: Brian Quach [BQ]

EÜ: Hi everyone. I'm Elizabeth Ü and this is Xero Gravity.

Today our guest is Brian Quach, co-founder of Tree To Tub. It was his work with a multinational berry company that inspired him to launch his own small business.

His startup began with a successful Kickstarter campaign, but as is often the case with these successful campaigns, he and his business partner had started putting their plans to work long before actually launching.

BQ: We actually thought that we didn't need to raise money because the way we structured the business, we didn't have to be committed to any capital outlay. Basically we partnered with a savvy soap manufacturer who could take the raw material and produce it to spec. So I mean essentially any funding that we get would be used in either marketing activities such as advertising and our working capital, which is essentially our inventory.

EÜ: And so how much did you imagine that you were going to need to raise at that point when you wanted to do more marketing?

BQ: Yeah, we were thinking like, you know, 10K or something. And so, I mean that’s why we created this Kickstarter. We're like, "Okay, we probably need to raise 10K to get this going." That was our original funding goal, which actually when we launched our Kickstarter, we raised that in just thirteen hours.

EÜ: Wow! That's impressive.

BQ: Yeah I mean, it's crazy. Like we launched it: I remember it was like at 5:00am. We're staying up the whole night just getting everything ready, and our first order, our first backer came in at 5.30am, just thirty minutes after. And the ball just started rolling there. We were on the phone hitting up our friends and family. We're emailing the blogs, making sure, "Hey, you remember, you told me you'd send this post. Send it out. Now's the time." And everything just like trickled in and snowballed, and we got everything done within just, by dinnertime basically, and that was the start of our Kickstarter campaign.

EÜ: Wow! That is highly unusual. But I also want to point out that you did a lot of work ahead of time, so you clearly already had the list of friends and family that you needed to call, and you mentioned that you emailed blogs. So you obviously had already written a list of the different blogs that would be willing to run a story or put something out to their audiences about what you were doing. How did you know how to prepare ahead of time?

BQ: We started preparing three months ahead of time, and really, the main activity that needs to be done is generate leads. Essentially we banked on the power of social media. So that's leveraging our Instagram accounts with pretty pictures of nature and our product. That's using blogs. So there's a lot of blogs out there that are written by green moms or people who do yoga, and they're interested in using products that are not only environmentally friendly, but they're gentle and they have a really cool back story.

And we did a couple of other tricks. Say, like we had an awesome landing page, so all these other channels would feed into the landing page that would have sort of like an email opt-in form, where people would have a chance at winning some free product. So basically the idea is to rack up all those emails, a bunch of lists of people, and when the day comes and your Kickstarter launches, you will have prepared in having some sort of audience to market the Kickstarter campaign.

EÜ: How many people do you think were on your list by the time you actually launched the campaign?

BQ: Yeah, so that's an interesting one because we have a good list and a bad list.

EÜ: Oh!

BQ: The good list we had around 5,000 leads, and the bad list we had around 50,000 leads. So, but let me tell you about this bad list thing. We had this offer to get a chance to win a free product limited-time offer — just a chance to get it. And what we didn't do was to say that there's only a limit of one hundred of these. At this time we were like making this stuff in our kitchen and there's no way we could have given an unlimited supply of course. But, you know, we didn't really, you know, pick that up, and there’s a lot of these deal sites like Freebie.com or something, that all they do is find websites and businesses that are just down to give free stuff.

We got picked up by one of them without our permission, and then it just went viral.

EÜ: So this wasn't a contest. This was anyone that gives you their email address, they are going to get this free thing?

BQ: That's how they marketed it, but for us, it was pretty clear for us that it's limited and it's a chance.

EÜ: And so this good list of 5,000 people, how did you find them?

BQ: I basically used this tool called ChompSocial. It's C-H-O-M-P Social dot com. It's basically this Instagram automation tool, which essentially allows you to follow and unfollow different users based on a specified hashtag or users that follow a specified account. So let's say I have Tree To Tub. It's a natural organic soap and I think my audience is the same as say Dr. Bronner.

EÜ: Ah…

BQ: On this tool I could say, okay, copy the followers from Dr. Bronner. Follow them back. Dr. Bronner they have, you know, tens of thousands of followers and this tool will automatically follow the maximum rate of people who also follow Dr. Bronner's. And then a portion of them will, you know, they'll follow me back. They'll be like, "Oh hey, some guy named Tree To Tub followed me. I guess they look really cool. Let me follow them back."

So we grew from zero followers to around 6,000 in just a few weeks with this tool. Basically really helped kickstart our Kickstarter campaign.

EÜ: But you still needed to convert Instagram followers to people who had actually opted into your email list. So how did you do that?

BQ: Yeah. Basically the trick here specifically with Instagram, is to keep your profile on private. So, number one, that makes them want to follow you so that they can see your content. Number two, the only content they can see is your hyperlink and bio where it says, "Hey, like you know, get your chance to win a free sample at www.TreeToTub.com. That redirects people to the hyperlink and the website.

EÜ: Yeah, that's sneaky. [Laughs]

BQ: It's sneaky. We do have a lot of growth hacks like this.

EÜ: I'm so impressed at how much time you spent building your community ahead of time, but were there other forms of raising capital that you had considered?

BQ: In terms of other sources of sources of funding other than Kickstarter, I mean there's, you know, raising private capital. There's you know, getting a business loan. There's a couple other ways, but crowdfunding is really, really useful because you can use it to assess market demand, you can use it to profile a customer audience that at that point in time you know almost nothing about, and it's in itself a fully functional marketing platform that will serve you not only during your campaign, but well after it too.

We always say that like hey we're a successfully, you know, Kickstarter-funded project. We're interesting and people automatically pick up and say, "Oh wow, these guys are creators, they're cool." And to this day, you know, several months after the Kickstarter we can still say that.

EÜ: You're so right. It really is something that serves you long after the campaign. It's not just a one-off I'm going to get $10,000 from the loan. It's suddenly you have a whole bunch of really committed ambassadors for your product and for your brand who are hopefully going to support you as you launch the next product line or as you launch the next scent or the next flavor, whatever it might be. So when you were structuring the campaign itself, how did you know what types of rewards to offer for backers of different levels?

BQ: Yeah, so that’s an interesting question. I mean, I think structuring the reward tiers is really important to any successful campaign. There's essentially a few things that you sort of have to do. One is to offer a super-low reward tier that's basically a thank you. That's so you can get people’s emails for later. It's basically like you're paying $1 for an email lead that you can sell to in the future. It's a way for you to rack up the number of backers that you have and that boosts up your SEO. You should also do a super early bird, like I was mentioning earlier, to give back to your early supporters or I guess your network of friends that you've primed to kick start the campaign. And you should also have, if possible, some digital assets to give for free or to, you know, have people share the campaign.

So for our digital asset, we actually created a book about soapberry. It's got everything from the history of the soapberry, how it’s been used in the past, how you can use it today in ten different ways, and the back story to our journey as the founders and the rest of our team. It's always good to have some things to be able to give.

EÜ: And then, for the rest of the campaign, it sounds like you were using this as a sales platform ultimately. Is that accurate?

BQ: Yeah, that's correct. I mean, I think in our specific case, we completed our product development pretty early, so we were like for sure going to give our backers product. I know a lot of Kickstarters or crowdfunding campaigns where you don't necessarily get the thing you crowdfunded for, but for us it's like, yeah, this is almost a store. Like whatever you buy you'll receive it in about a month.

EÜ: And at that point it sounds like you already had enough information about pricing and how much to charge people who are backing at certain levels. I mean you hear so many horror stories about crowd funding campaigns that are wildly successful in terms of the number of backers or in terms of meeting and exceeding and quadrupling a hundred X times their goal, but it sinks the business because they hadn't actually priced things properly. So how did you crunch the numbers to make sure that you were pricing things appropriately?

BQ: Well it's good to know what you're gaining and what you're losing on any given sale, on any given product. That's really important. And what needs to be taken into account is a fully burdened cost. It's not just the cost of the goods and the direct materials, but it's also the cost of the freight. I mean for us, that’s, you know, freight from Taiwan to U.S., that's the cost of warehousing, the cost of fulfillment and shipping to the end customer and all the packaging and stuff that is needed to create a full product, and that includes the glue sticks that we use to glue the ends of our boxes together. It's that deep. When we get into the cost margin, we get that detailed. That's really important to understand.

EÜ: I was going to ask you about some of your more premium products or some of the Kickstarter backer tiers that you had in the campaign to encourage people to spend more. What are some other examples of that in addition to the gift pack you just described?

BQ: Yeah, so bundling is a necessary component in a profitable company. For us, you know, you can either choose to buy a single bottle or you can choose to buy a gift set. The gift sets — it makes a lot more sense. First of all you get it in this beautifully-crafted custom care box. You get two bottles instead of one. And the kicker is you get a bag of berries for free. And this is a drawstring cloth bag of raw wild soapberries in which you can use to wash your hands or just throw the bag in the laundry and it'll clean your laundry.

EÜ: Oh wow!

BQ: So that's actually the part that we want to push out and give to people because it's all about the experience. It's all about reconnecting with nature and be like, "Wow, you know, this is just a dried piece of fruit. If I didn't know any better I thought it would be a raisin, but, you know, this thing can clean my hands and I don't have to use any other chemical for it?"

EÜ: What happens if you do eat it?

BQ: Nothing. It's fine. It's just really bitter. What makes it so sudsy is actually also what makes it pretty bitter.

EÜ: Right. So not recommended? [laughs]

BQ: Not recommended. Not recommended.

So the soapberry actually grows naturally all over Taiwan, all over India, China, even like Honduras, Puerto Rico. It grows in a lot of places, and it's just never used. It's completely unused material that we basically take and harvest. We sun dry them and then we process them to create the most, you know, world's most gentle shampoo and body wash.

My co-founder Michael, when he grew up in Taiwan, his grandma and her generation, they only used the soapberry.

Men on average consume eighty chemicals a day from body care while women consume two hundred different chemicals. Basically in the body care products used today in America, there's eleven thousand different chemicals that are in use. In America, we only have longitudinal data for safety, for about a thousand of these, about ten percent of them.

EÜ: Right, right. Here, just try this and let's hope for the best.

BQ: Right, right, right and you know, it’s just like, there's a few companies that create the bulk of the product and it's based on effective, efficient cost production, and these industrially processed chemicals that haven't really changed for the last forty or fifty years.

EÜ: This business clearly is not only a passion for you, but it's also fulfilling your desire to make the world a better place. What is your vision for success?

BQ: So my vision for success is to really you know, change the way people approach the products they buy. Today a lot of people are just walking into the grocery store or their supermarket and grab something that has these fancy labels and broken promises. And they don’t understand, okay, what impact does that decision have to everything else in this world that's, you know, interconnected and interdependent? That's why I want people to rethink and reconsider. When you're buying something, you know, what's the environmental impact or who's making it? What's the intention for the product? How does it make you feel? How does it inspire you to, you know, to go about your everyday life?

To me, it's kind of obvious that for anyone in sort of my position or status or education, we have sort of a responsibility to make the world a better place when we leave it.

EÜ: Well, even the way that you've approached funding your business goes back to everything you just said about what impact does this decision have on everything else that you do. And the value that you stated so strongly is connection, clearly doing a crowdfunding campaign rather than just getting a loan really fostered a much stronger sense of connection between all of your backers. I mean I have to believe that those values are throughout all of your operations. So it’s quite admirable what you've done.

BQ: Thanks so much.

EÜ: So we're going to finish up with our question countdown, which is five quick questions and five quick answers. Are you ready?

BQ: Ready.

EÜ: What business book or idea has made the biggest impact on your life and why?

BQ: You know, I'd say the book would be the 80/20 Principle by Richard Coke. He's one of the founders of the management consulting firm called LEK, I used to work at. The idea is simply 80/20. It's definitely a critical point to understand in entrepreneurship. It's basically like okay, twenty percent of your input of the activities you do will yield eighty percent of your overall outcome, your overall output. That is to say some things you do create enormous value compared to the most things you do. In entrepreneurship you simply can't do anything, so you might as well do the things that create the most value in the most efficient way.

EÜ: What's the one thing you can't live without?

BQ: I guess meditation. That's my bread and butter for being you know, centered and focused and having a blissful life.

EÜ: And the most useful app on your phone right now?

BQ: This app isn't a phone app, but it's on the web app. It's ChompSocial. It's basically replaced a full time hire for me for social media, so I can't recommend it enough.

EÜ: And in one sentence, what's the greatest lesson you've learned throughout your small business journey?

BQ: Entrepreneurship is completely consuming. I've seen people rise up and fall with it as they become so attached. Their identity becomes synonymous with the success or failure of their company. And I just see so many people punishing themselves so hard just because their business isn't doing as well. And, you know, I just, you know, I think there's a better way. Go hang out with your friends once in awhile. You know, take a hike. Spend some time in nature and have that regular piece of silence a little bit every day.

EÜ: And finally, what skill do you want to enhance this year?

BQ: That’s sales. I mean, sales isn’t, it's just not something that's really taught in school. You know, I've never been a savvy salesman. But, you know, I think you don't have to be a shady used car dealer when you're talking about like, you know, improving in sales.

EÜ: Please don't be. [laughs]

BQ: I mean definitely not for me. But you know, you should be able to adapt to your customer's level of understanding. And being able to communicate your product or anything you have to offer that may be valuable to that person in the best way possible.

EÜ: Well you have offered so many valuable things with what I have found to be your excellent communication skills over the course of this interview, so thank you so much for everything that you shared in terms of not only building your community and using Instagram and these other social tools to build up your email list, but also how to put all that to bear with a successful crowdfunding campaign.

BQ: Thank you. It's been a pleasure to be here.

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EÜ: That was Brian Quach, co-founder of Tree To Tub. Thanks for listening to Xero Gravity. Make sure you tune in next week because we'll be chatting with Meryl Johnston, a small business owner whose ultimate goal is to only work as many hours as she wants to every week. Stay tuned for her story about crafting the perfect work-life balance. We'll see you then.

 

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