BattlBox is a subscription box business that sells tactical and survival gear to outdoor enthusiasts. In this interview, co-founder John Roman talks about how the company used video content, particularly on YouTube, to drive awareness and sales.
Transcription from audio:
On this episode, you’re going to learn about the story of BattlBox, a subscription business that has grown tremendously through YouTube and has a Netflix show. It’s a great episode you do not want to miss.
Welcome to the 2X eCommerce Podcast. The 2X eCommerce podcast is a show dedicated to digital commerce insights for retail and eCommerce teams. Each week, on this podcast, we interview either a commerce expert, a founder of a digital-native consumer brand, or a representative from a best-in-class commerce SaaS product.
We give them a tight remit to give you ideas you could test right away on your brand so you can improve growth metrics such as conversions, average order value, repeat customers, audience size, and ultimately your gross merchant value. We are here to help you sell more sustainably. We tell entrepreneur stories.
Speaking of which, this episode is an interview I had with John Roman, the Co-founder of a subscription box business called the BattlBox, which has exited. We are loving the interviews with ex-eCommerce founders that are exiting. He’s also a co-founder of another brand that has not exited, which is called Carnivore Club. That’s still going. He’s still very much involved in other aspects of commerce.
What we talk about in this particular episode is more about his backstory and how he started BattlBox. He didn’t really start it out, he joined as an investor and then doubled down when he saw this brand was doing $4 million in run rate. Let me tell you a bit about BattlBox, it’s like a survival subscription-based company. What they do is bundle up tactical and survival gear and present it to their audience or customer base of outdoor enthusiasts and they built a huge following.
The takeaway from this one, which John wanted us to sit with was the fact that they’ve used content to drive the awareness and exposure of the brand and eventually, drive the bottom line. I’m not talking about content marketing or writing blog posts here and there, I’m talking about their deliberate use of video.
He gave us tactics for how they grew their YouTube following to 500 new subscribers per day. That one, you have to pay attention to, and how they use Netflix. Believe it or not, they got a Netflix show called Southern Survival and what the impact of having a Netflix show for your eCommerce brand does to your numbers. It absolutely blew my mind away.
He talked about how they’ve blown up their YouTube channel. Also, on YouTube, he tells us a story about how they got the face of the brand. None of the founders run their YouTube channel but their YouTube channel is over 500,000 subscribers. However, they have a face of the brand, they have an employee running their YouTube channel, and he teaches us exactly how they got the employee to run their YouTube channel.
YouTube is a significant driver for eCommerce. Think about MrBeast, KSI, and John Logan and their ability to use their YouTube fame to drive products. Having an active YouTube channel now in 2022 and 2023 can significantly give you an edge above any other competition. If there’s one reason to read this episode is the YouTube strategy, that content first strategy, and how that YouTube strategy evolved to Netflix. I’ve never had anybody who runs a Netflix show or who owns a Netflix show come on the podcast and it happened so this is a first. It’s brilliant.
I thoroughly enjoyed it. I felt like I was talking to a friend. John is super impressionable and receptive to the questions and sharing his knowledge. We had some common friends. He does know a few people that I know, which was heartwarming too. They sold at a 6X EBITDA. I’m not going to give you too much, you got to read this episode. I will leave you to enjoy. I’ll catch you on the other side. You will enjoy this particular episode because I enjoyed this conversation, for sure.
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John, welcome to the 2X eCommerce Podcast. I’ve been looking forward to this conversation given all that you guys are doing at the BattlBox group and what you’ve done. I know this conversation is going to be super based on not just growth, it’s going to be based on M&A, subscription commerce, and a ton of stuff. A warm welcome to the 2X eCommerce Podcast.
Thanks so much for having me. I’m excited to be here.
Let’s go way back to who you are. What was your childhood like? How did that form your mindset toward business as you grew older? We’d love to find out more about who John is.
A rather normal childhood up until the first thing that was not normal. I did school and went off to university. When I graduated, I decided I wanted to play poker professionally. This was around the time of the poker boom in the early 2000s when you saw poker on TV, a good bit on ESPN, and then it even went mainstream on some regular channels. I wanted to do that and I did that for 4.5 years. It was a very fun 4.5 years.
I went and played in a lot of tournaments in the States but came to London to play in the inaugural World Series of Poker London. I went to Australia for the Aussie Millions, which was an annual tournament. We got some cool traveling and I enjoyed it. Finally, after reading all kinds of books on psychology and poker gaming theory, I couldn’t get myself to the next level. I compare it to an athlete that’s playing on a sports team, you have to be that next level, you have to be an A-plus player to make it to the big leagues, and I wasn’t.
I was B-plus maybe, at best. I was probably just a B player, which is profitable. You can make a living and earn your keep. I’d see a cross from me someone that was maybe my age now and that was still doing that and I didn’t like what I saw, I didn’t want that. I knew if I didn’t figure it out to get myself to the next level, there wasn’t a future from a career standpoint. I decided I’m going to get a normal job like everybody else did when they got done with school. I worked for a publicly traded company in sales, an entry-level sales job.
I was 26 at the time. All my peers at the job were all four years younger than me because I chose to play poker for my first four years. I had success almost instantaneously right away because the last four years prior, I’d put in 12 or 13-hour days and the end result sometimes was I lost money. If you knew anything about pokers, there’s a large skillset and strategy part of it. At the end of the day, a third of it is pure luck on how the cards fall. It’s gambling, that portion. if you can put in large amounts of volume, you can read that mathematical variance. A third of it is still luck. You should put a lot of volume in to offset that.
What’s the remaining 2/3 in poker?
It’s pure strategy. It’s positioning at the table, the position where you are from the button, and the bet size. There are all these little variables. At its core, it’s the cards you’re dealt with, the mathematical decision based on the cards you’re dealt with, where you’re at in the position of the table, and what you do with that hand. Whether you fold, raise, or call, it’s broken down. There’s a mathematical right move to do for every single hand based on where you are. The button moves, which means the blinds move, which means who’s able to act first versus the last move along with the table. Based on your cards, there’s much more of an advantage to being the last one to make an action.
Should entrepreneurs play poker?
I don’t play poker anymore. I got deep into the mathematics of it and there’s value there. The biggest takeaway or at least why I think it shaped who I was is because I’d put in those 12 or 13-hour days and was purely grinding this, sometimes longer days, and I could still lose money. I then jumped into this world that everyone else is in with this sales job and I’m putting 12 or 13 hours in and I can’t lose. I’m not losing. I might not get as many sales as I wanted but I don’t go in the wrong direction at any point. No one else was putting in 12 or 13 hours.
I quickly found that was great. I can put this same grind mentality and I’m going to start outperforming everybody. That’s what happened. I was fortunate and I continued to work hard and I quickly rose up the ranks. We had 700 sales reps and I was the number one sales rep. I moved into an assistant sales manager role for probably nine months to a year and then moved into a sales manager and then as sales director.
After 5.5 years, I decided I’m going to see if the grass is greener somewhere. For the next two jobs, I was building sales organizations. For the first one, they had an indirect sales team but they had zero direct sales so I came on to build their direct sales team. With the venture after that, they had a sales team but it was focused on smaller S&B, small to medium-sized businesses, and they wanted a focus on enterprise sales so I came on to do that.
Along the way, I started trying to invest in companies. I loved what I was doing but I was putting in this grind still every day and I wanted something of my own. I wanted to reap the rewards. I was seeing all this money I was generating. I was paid well but I saw what I was building, I was building these millions and millions of dollar sales units. I wanted to figure something out so I started investing in companies that crossed my desk via the network, most of the are people that I knew, either I went to school with or I had met at a networking event. I started doing that.
If I look back now, all but one of them failed. The one that didn’t fail was BattlBox. I have a Christmas party every year and I invite all people from all my different friend circles. As you get older in life, you have these different friend circles from these different times of your life and this was great because it allowed me to get everybody in one room. A gentleman named Daniel, who I went to school with, came up, and he was running a print house, if you will, called Varsity Inc. They printed t-shirts, hats, and swag for all the organizations that might be at a university.
They had two locations both outside of universities, fraternities, sororities, nonprofits, or any organization that would be at the school. They would go to them to get t-shirts and hats. This was December, a slow time for them. He and I were spitballing about some ideas that he was thinking and we were like, “Let’s figure out a way to work together. What does this look like? We’re not sure.” Fast forward two months later, he comes up with the idea of BattlBox, I heard about it, and said, “I’m in.”
After a quick negotiation, I was able to buy a piece of equity and offer a limited time. The initial deal was five hours a week of high-level general business consulting advisement. We were off to the races. The five hours quickly turned into 10 and it quickly turned into 15. I was working as much on BattlBox as I was on my day job, which was a problem because I was used to putting in these grind sessions for my career and my day job and there wasn’t enough time in the day if I wanted to sleep too. Finally, we hit a culmination in early 2016. We were a little bit over a year old. We had a run raid, that was eight figures at that point.
How many years in business? You brushed through that very quickly.
Sorry.
No. It’s fine. I want the readers to pay attention. How many years did it take BattlBox while you were working passively? We’re talking 10 hours a week to hit eight figures, that’s over $10 million in revenue.
We launched in February 2015. In that first partial year, we did $4.5 million.
Let’s speak about BattlBox. BattlBox is a subscription-based business that sells survival kits. Why do you think it picked up in 2015 so well? Not many businesses launch off the back of the first year and they’re almost midpoint to eight figures. Was there a product market fit? Was the market rowdy at the time? Did you use Facebook advertising to reach your customers? Was it a content marketing fix? How did you blow up so quickly?
A multitude of answers. Early 2015 was the pinnacle of subscription boxes, they were buzzing around that time. It was a cool new thing. Give a company some money and they’re going to send you a random mystery box. People were digging it at the time. You were seeing the rise of some of the then-larger companies like Birchbox, which blew up to this billion-dollar valuation. They had to file for bankruptcy earlier this 2022. You were seeing the rise of a lot of those. A lot of buzz around that anyway at that time.
Facebook was a different world than it is today. We were able to acquire customers for $5. We had an acquisition cost of $5 because that was Facebook back then. I wish I knew what I knew now because, any dollar of debt and anything I could have found scrunched together, I would’ve put toward Facebook. We would’ve scaled quicker and bigger. Because of the subscription box base and how easy Facebook was at the time, it allowed us to get a grasp and a stranglehold on a big chunk of this but it was also a product market fit.
The reason BattlBox was created is a cool story. Daniel was watching his fiance, at the time, get a Birchbox in the mail every month. For those who know BirchBox, there are a bunch of samples, maybe some makeup, some eyeliners, and some lipstick, maybe it’s something to clean your face with at nighttime, traditional female-centric beauty products. He’d watch her every month open the box and there was this genuine excitement of, “What’s in this month’s box?” He had a feeling of, “I can see the joy. I want that for myself.” He’s an outdoorsman so he went online to try to find a box for himself and there wasn’t one.
He quickly came up with the idea. The website and the product are different than it was over seven years ago. We’ve evolved several times over. He wasn’t alone. He couldn’t find it cause it didn’t exist. There were other people looking for it that couldn’t find it either because it was a product market fit need, for sure. Those are the three, right timing with subscription, amazing Facebook acquisition cost in 2015, and the fact that it was a product that didn’t exist.
Finding the brand is difficult. Part of it was luck and timing.
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You joined in 2016. The business blew up in 2016, it was $10 million in revenue at about that time. How did you sustain the success? It’s one thing blowing up and riding a wave, it’s another thing maintaining that. In 2016, the revenue was $10 million. How did that translate over the next five years? What was your revenue in 2016, ‘17, ‘18, ‘19, and ‘20 if you are privy to that data?
It wasn’t easy. When I came on, one of the first things we were all talking about was we were seeing a lot of success with YouTube. We were sending about 30 boxes a month to YouTube influencers in addition to other channels. On YouTube, we were seeing a lot of success. One of the people we were seeing was this guy named Brandon Currin. At the time, we didn’t realize that we had a pre-purchase survey, which is cringe to even say, on our site. It’s like, “Why would we add that?” We did.
It’s all about the data.
We had all the usual suspects, “How’d you hear about us?” We had other where you could type something in and we were seeing this guy, Brandon Currin. People were writing his name in and we look him up, he’s on YouTube, and he’s doing battle box reviews. We can’t find him on our Google sheet of people we sent out the boxes to. We look him up and he’s a paying customer and he’s generating us all of these customers but he’s paying himself. After a couple of months of it, we’re like, “People are loving this guy and loving the videos. They like him as much as they like us, which is pretty cool.”
We called him and said, “You don’t have to pay anymore, Brandon. We’re going to keep sending you the box. You just keep doing you. We appreciate everything you’re doing.” A few months went by and we were continuing to see this trend. We saw that his YouTube following was starting to grow and he was gaining popularity as well at the same time we were. We reached out again and said, “We know you’re giving the box for free but here’s a check for $500 every month. Please, you just need to keep doing this video. This is paramount to us.”
Was he promoting other survival kits or was it predominantly BattlBox?
No. He did a couple of other reviews of some stuff but the one constant on his channel was the monthly review of BattlBox.
It was like a reveal, it was an exclusive unboxing for BattlBox.
It’s a long form. Some people could get through the box and talk about it in two minutes. It was a 25 to 30-minute video, he was explaining the products, why he liked them, and why he didn’t so there was added value. When people would get their box, the first thing they did is they’d opened it up, and then they’d open up YouTube and watch him talk about it.
He was like a virtual salesperson for you. He was unbiased in that way, he’ll tell you the good, bad, and ugly in every package. It was at scale on YouTube and the algorithms picked up that he was building a following and they poured more fuel into his reach.
We were writing the check worth $100. He was in the HVAC industry. These videos on his YouTube channel were his side hustle, his nighttime work when he got done with what he was doing as a career. We said, “This is crazy but do you want to quit that and just do these videos full-time? We think that would be pretty cool.” He’s like, “Yeah, that would be a dream job. Let me talk to the wife and the kids first and see about moving from North Carolina down to Georgia.” We put an offer together that he felt was good and justified so he came on.
Where did he move from?
He was in North Carolina and moved down to Georgia.
Good weather though.
Still, to your point, he moved his family. His kids were in school. This was a big decision. As soon as Brandon came on full-time, the conversation was, “Let’s start popping out more content. We know people love you and we know people love our products, let’s leverage this. Let’s start growing this content piece.” That was a big part of it. Something that naturally comes with content is community.
At the time, we had what was called BattlBoxForum.com. It was almost like a Reddit-style board where you could chat about anything, some of it was BattlBox related and some of it was maybe someone going camping in California and wanting to know some tips for the park they’re going in. It was a lot of like-minded individuals, people who loved to go outdoors. We saw this community building. At that point, we were like, “This is great. This community piece is something special.” We focused on trying to grow that.
Eventually, we took it off of the forum Reddit-style bulletin board and moved it to a Facebook private group. You have to be an active paying subscriber to be in the group. There’s added value there. We do some giveaways. We will do Facebook lives for them. We’ll share some insight into future products with them as well.
We ask them to give us feedback. We have a Google form and Google survey where they can give us product suggestions. We’re in touch with them and communicating with them daily. The community was growing and the content was growing. Those two together, we realized how important both of them were to the business. Without that, we’re just sending out survival products and it’s just not as cool and exciting.
That community and content piece is the soul of the business people connect to and then the transactions are an after-effect, not to diminish the power of operations because you have to send them relevant items but that content piece from the sound of things was important. A quick question about Brandon Currin, did he have equity? Was he fully salaried and an employee? Was he also an investor?
Fully salaried employee.
Till now?
Now, we’re publicly probably traded so he could buy some shares as I could and we could own a piece of the company but that’s not the same. He’s full-time salary as we are since we sold the company.
We’re going to go there. I’ve had conversations in person. On this show, a lot of people talk about content and the importance of YouTube. We’re going to also talk about how you guys transitioned to TikTok, which is an amazing story in itself. They’re always like, “I don’t want to be the face of my brand.” What tips do you have for readers who want to take their content game a notch up? They don’t necessarily want to be the face of their brand but how do they recruit passionate people?
Brandon left North Carolina. He migrated from one state to another with his family most likely because he loved what he was doing. He saw this not just for the salary but he was passionate about it. How do you find passionate faces of brands that are consistent? He could have said, “I’m going to run my own show,” or, “I’m going to run my YouTube channel,” or, “I’ll continue running my own YouTube channel.” How do you get that formula right for longevity, for a 10, 20, or even 30-year-old brand to take it over decades rather than a one-off?
There’s not an easy and super exact formula, like, “Copy and paste this formula and we’re good to go.” Finding the brand is difficult. Part of it was luck and timing in the sense that we didn’t find him when we found the 30 people we were going to send the YouTube boxes to. He was a paying customer. To that point, with community building, caring, and listening to the customers, it’s unusual for a company our size.
All of the leadership is accessible and tagable in the Facebook group, which is a gift and a curse. I get my fair share of tags every day that are not things I want to be tagged in or probably not even in my wheelhouse of what my job description is and what I should be focused on. I do my best to log in there and look at it.
It comes back to building that community. Because we were building that community, we had people like Brandon that saw this community as something that attracted him. To your point earlier, when the relationship was built and there was a bigger opportunity for him to move his family down and come full-time, that’s a little bit different. It’s all part of that core line and core infrastructure of building the community.
Another quick example that illustrates and improves this point is our head of customer experience, a gentleman named Luke Bagley. Luke does an amazing job, has an amazing team, and cares so much for the customers. He was a paying customer. We had the BattlBox forum, which predated the Facebook group with this Reddit-style board. At all times, we have 5 to 7 moderators and they were paying customers. We saw them jumping in and answering questions and playing the role on their own. If someone asks a question about shipping, they’re quick to jump in and help them.
When we identified this, we offer them, “Do you want to be a moderator? Keep doing what you’re doing, be this ambassador, help answer questions, and do a little bit of the administrative side of the Reddit or Facebook group. In return, the $170 a month box, you’re going to receive it for free.” Because of the community, it makes sense. That’s how Luke came on. Luke was a paying customer. We saw him helping customers.
He knew the product arguably as well as we did, if not better. We were like, “Let’s make this guy a moderator.”Luke was a full-time nurse, that’s what he did every day, he went to the hospital. He had this career but his fun time was in this BattlBox community. There was a point where we needed a part-time customer service person and we threw it out to the moderators, “I’m not sure if anybody’s looking for a little bit of a side hustle but 10 hours a week helping us during our busy times with the customer service tickets.” Luke said, “I’d be willing to do that.” He did it and quickly realized he was good at this and enjoyed it.
Over a short period of time, it was like, “A big ask, do you want to stop being a nurse and run our CS team?” He did want to. He made the career change. While one is customer-facing publicly and one’s customer-facing privately in DMs and emails, both are similar. When you focus on community building and building a fun environment for people, this is sometimes the fruits of the labor.
You start seeing these opportunities that otherwise wouldn’t present themselves. Whether it’s the face of your brand, whether it’s someone to run your CS team or be a CS person, you start finding these natural fits that were there the whole time. If you didn’t get to know your customers, you would’ve never had the opportunity to see something standing right in front of you.
Makes a ton of sense. Brandon was doing YouTube videos for himself as a YouTube influencer too. In that respect, he started small and started to grow. How did you structure where he broadcasted? Did he broadcast from his channel still? Your channel has 560,000 subscribers on YouTube. You have about 750,000 subscribers on TikTok, which we’ll talk about shortly. Did he join your YouTube? Did he start to build your YouTube channel? Did he even have a YouTube channel when Brandon was doing the monthly inboxing? How did that pan out?
We had a YouTube channel. Towards the end, before he joined us full-time, he would send us the video file after he posted it on his channel and we’d upload it to ours. We had minimal followers. When he came on, we might have been in the 10,000 or 15,000 range, which was still decent but not anywhere in the same category as today. Him coming on, the focus was the BattlBox channel. One of his main initiatives and main KPIs was to focus on growing this channel, this is an important channel.
We never told him, “You can’t post on your other channel. By all means, if you want to post stuff on that, go for it. Do not try to build that channel. Your new career, your salary is to grow this channel.” It’s a balance. We’ve always had trust in Brandon and we know he’s going to spend the majority of his time building that. If he makes a video and wants to also post it on the other channel, that’s okay too as long as it’s abundantly clear where your focus is during the day while you’re working.
What you do when you’re not working, that’s completely on you. I don’t think it would be fair to expect such but it is a good question because it’s a fine balance. We don’t want to be like, “Brandon, you’re spending all your time on your own channel and not ours.” Brandon was a great team member. With our normal routine of meetings and when we’re discussing his strategy, he cares about the brand. He does what’s always best for the brand.
Do you know a YouTube influencer called Aaron Marino? He runs a channel called Alpha M.
Yeah. He lives in Georgia as well. I don’t have a personal relationship with him but I know of him. I do have a personal relationship with some of his business partners. There’s a brand called Tiege Hanley.
Kelley Thornton.
I know Kelley very well. I know that they brought him on as the face.
His was more an equity share. I don’t know what the deal structure is but I do know he does have equity in Tiege and he already had 1 million followers or more on his original YouTube channel. He’s managing two channels essentially. What’s happening is his core fans from his 1 million-plus subscriber base in his channel, some of them have trickled down to the Tiege Hanley website. They seem to be doing well. He was at our conference this 2022. It’s super interesting.
What was the correlation between the growth of the YouTube channel? How did the YouTube channel grow? How did that impact the business? How have your acquisition channels evolved over time? You were telling me that TikTok is huge today. I’m curious to know from 2016. You said that in 2015 and 2016, you were buying new customers for about $5 through Facebook ads. How has that evolved over that seven-year period to today from an acquisition standpoint?
Acquisition costs have been one of those charts that are sometimes good to see and sometimes bad to see and in this case bad. It’s up and to the right. The beginning of the roller coaster ride, that’s our acquisition cost. Unfortunately, it’s gone up every year. It’s not as enjoyable as we would like. Because of the organic reach and because of the constant new eyeballs we get via content, that helps when you’re looking at,non-channel specific and you’re looking overall at the business. It’s like, “What is our acquisition cost based on new customers we got?”
Overall for the business and total ad spend, the customer acquisition cost is not that crazy. It’s a balance. We need new customers because you always have to offset churn or you start going in the wrong direction. At the same level, it’s content. That organic approach is such a long game. The content piece is traditional SEO. You’re not doing it for that immediate benefit. It’s such a long game and a long play. That’s what it is. To answer your question about YouTube growth, we were slow and steadily adding 500 customers a month, maybe 400 or 600 but 500 a month was pretty much our number. We’re down from our peak. We’re probably adding 1,500 a day.
Do you mean subscribers?
YouTube subscribers. For 6 years, we were adding 500 a month. At this point, we’re down from a peak but we’re at 1,500 a day.
How did you make that leap, from 500 a month over six years and then, more recently, it’s 1,500 a day? That’s incredible.
It was a byproduct of our focus on TikTok. In early 2001, we had a TikTok account.
That’s when we started working on it. We had a TikTok account with zero posts registered to my email. I grabbed the username sometime during the pandemic when we started to see that people were spending time on this app. We didn’t do anything with it and we didn’t know how we were going to do anything with it.
Our focus was content and community but all of our content was long-form content, it was twenty-minute videos. It was a three-part series that were all 30-minute videos on training on something, a deep product review, or product testing. It was all long-form, nothing short, and nothing less than a minute let alone less than 10 or 15 seconds. We were trying to wrap our heads around it.
In February 2021, we hit this point where we were like, “Let’s start attempting it. We can’t keep talking about it and not doing anything. TikTok is here to stay at least for the short term.” Honestly, in February 2021, I thought we already missed it. In reality, we hadn’t missed it. I felt like we had already missed it at the time. We started diving in. Things like TikTok and things that I’m not sure about where we make mistakes along the way and there are lessons learned, I try to document some of it. I put it on a blog I have called Online Queso. I have maybe seven entries from February 2021 to now specifically talking about TikTok and YouTube. It was trial and error. We were making videos.
One thing we knew is we weren’t going to be doing the trending dances, that was not on the brand, and that wasn’t us. No one wants to see a bunch of middle-aged dudes doing TikTok dances that young girls are doing. That’s not us. It’s not the brand and it doesn’t make sense. We saw that there were so many other opportunities on there, there was a lot of other content.
We started testing things, trying to see what worked, and testing everything from length. Are we trying for explosions? Do we want music in the background? Do we want speech-to-text and little subtitles? We were testing everything and trying to find stuff that would work. We’d get a win here and there and every time we got a win, maybe every six weeks, it changed the momentum a little bit.
We were happy if we got over a thousand views on TikTok. We hit a big TikTok that got us 200,000 views. After that, we were getting 2,000 views on every TikTok.If we didn’t get 2,000 views, we were upset. We got another hit and that time we got 1 million views on a video. A good video for us, we expected 4,000. Every little hit, every time we got a home run on there upped the trajectory and the overall reach.
The last video that we did well, we got 39 million views on it maybe. It’s exponentially grown. Along that journey of going from 100 followers on there to 1,000 and we got 10,000 to 100,000. At the end of 2021, we’re sitting around 220,000. We had set this goal of 300,000. We ended up hitting it at the last minute with a good video. Around that time, at the end of 2021, we started hearing a noise that TikTok success was bothering Google. Google had this new product that wasn’t getting momentum called YouTube Shorts.
The algorithm changed. They were treating YouTube Shorts like they were gold. You were getting this headstart cheat code. If you had a YouTube Short to the algorithm, they were going to show it to more people, which meant you were going to get more engagement and more likes and maybe more followers. We said, “For the past ten months, we’ve been coming up with all of this short content. We have this library already of videos. We already have ones that are good. Plus, we were making new ones every week. We can get a head start on YouTube shorts and dump these videos on there.”
To be fair, there’s no TikTok watermark. We’re producing the content and then uploading it to TikTok so we would be uploading it to YouTube. December was a little bit of a learning phase. We were getting a little bit successful but nothing crazy. January rolled around and we put some of our biggest hits from TikTok on YouTube Shorts.
At the end of 2021, on YouTube, we were at maybe 56,000 followers. All of a sudden, we started seeing the same momentum but arguably more of it on YouTube for the same content as TikTok. Both of them were going slow and steady and they went extreme. We were quickly at over 100,000 YouTubers and then 200,000, 300,000, and 400,000. At the same time, TikTok is doing the same thing. We hit a couple of home runs in a row on videos.
It was like clockwork. The same video that performed well on TikTok performed well on YouTube Shorts. Also, the performance was well on Instagram Reels. Instagram Reels doesn’t have as much love on the algorithm for the short video content as YouTube seems to want to give but there’s still a correlation. If it’s good content for one channel, it’s good content for all three.
It’s humans at the end of the day. The platforms know the target audience so they fine-tune it to the same cohort of people. I was going to ask you the Instagram Reels question whether you saw similar success in the growth of your Instagram account, did you? Was it the reach of the videos that you noticed starting to get an uptake?
No, Instagram Reels has not performed the same. We’ll see a successful video that does well on TikTok and YouTube Shorts, it’ll do better than others on Instagram Reels. There’s a correlation between your point of good video and humans are humans and we’re all humans on these different platforms so that makes sense. The follower increase is not the same. We see growth on Instagram but it’s not at all in the same meaningful exponential growth. We’re doing the same thing on that channel. It’s interesting.
What is the formula for a good TikTok? What did you guys figure out that turned your TikTok game around? It was still Brandon Currin who’s the face of your TikTok, right?
It’s still Brandon. We’re still testing. It’s a constant test. We’re trying to figure out what’s better. We have some amazing series and ideas that we’re going to start testing at the beginning of the year that we think could bring us to the next level. We found that it was a combination of a few things that work for us. A lot of product testing. An unusual and cool product that appeals to a large number of people, in turn, which makes sense, would perform well.
From our TV show, we have this little tool that you would keep in your vehicle and has a couple of tools. One is this little sharp thing where you can cut your seatbelt off if you get stuck. At the edge, it has this little point where if you press it into your window, it springs and will break the window. If you get stuck with this little tool that you could keep in your glove box, it can get you out of a bad situation. Maybe you got in a car crash and the car is bent or maybe something more extreme like you weren’t paying attention and you went off the road and you’re in a lake, a pond, or something.
What you do when you're not working, that's completely on you.
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With a product like that, because it appeals, you don’t have to be an outdoor enthusiast to see the value of the product. We want to feature products that are niche but then we also want to occasionally have that product that you don’t have to be an outdoor enthusiast to say, “I want that product too.” It’s a combination of showing the human side, showing that we’re humans, and allowing people to play on the community piece.
At the end of the day, we are a business, and we are a brand. By humanizing ourselves and Brandon showing that he’s just a guy like me and you, he’s just a human being, showing that side has value too. You and I were chatting about how the consumer’s buying patterns are evolving and changing. Consumers want to have a connection with the companies they spend their money with these days. They want to feel some connection. We’re trying to provide that. We’re trying to show that there’s more than this business that ships boxes out every month. That’s paramount, key, and important.
On your main YouTube channel, are you still sticking to longer-form videos or are you keeping them under ten minutes?
We do both. We were always doing long-form content. YouTube Shorts, TikTok, and all that, we see the success there. It’s two different things. We still do the long-form content of our mission, the box review each month, which is 25 to 30 minutes. Every Thursday, we have a long-form drop, whether it’s product testing or some situational training, something north of ten minutes. It’s typically five pieces a month of long-form.
What’s worked out in our favor is we’ll take a lot of the long-form content and we’ll chop it up. The monthly what’s-in-the-box review that we’ve done and that Brandon was doing before he joined the team and we’ve been doing ever since, every box we ever sent has one of these 25 to 30-minute videos. We shoot it in a way where the edges can be brought off and cropped down to a vertical form and it’s perfect for TikTok. We’ll get a ridiculous amount of short-form videos out of the long forms. We’re still shooting some stuff specifically for TikTok, YouTube Shorts, and IG Reels but if we’re shooting the long form and we can also use that, it allows us to run a lot faster.
Speaking of long-form content, you go into Netflix. I don’t think any guest in this show has gotten their brand on Netflix. Do you want to speak about how you got on, Southern Survival, the show on Netflix? How did that transpire? Was it from your YouTube success? I’m keen to find out.
It’s quite an interesting thing that we were able to have that show because it has helped the business tremendously. We were reached out to in 2017. It aired in 2020 and was shot in 2019. Brandon has been on the team for a minute now, he has bearings. We got reached out to by a company called High-Noon Entertainment, a production studio. Have you ever heard of Cake Boss or Fixer Upper?
Fixer Upper, yes.
That’s the two feathers in their hat of shows that they’ve done. Worth noting is both of those shows have a retail piece and a business associated with them as well, which is interesting. They reached out addressed to Brandon and said, “Brandon, love what you’re doing. We have some ideas for a potential show we’d like to run by you.” We all jumped on a call with them and they said the idea. The idea premise was pretty simple, “You guys test gear and determine if it goes in a BattlBox.” That’s what we do anyway. This sounds perfect. We’ll spice it up for TV but this sounds a great opportunity for us.
They want Brandon as the main focus. Brandon has a stage presence if you will and people identify with him and people like him. He brings an unusual but usual type of comedy to the mix, which people appreciate and connect with. It made sense. He was working out of our southernmost remote office. There were four people in that office and they said, “You can come out, we’re going to shoot a sizzle reel, which comes before a pilot. Everybody from that office can be part of the show.” Four people on the show. They came, shot it, and took it to the History Channel.
History Channel sat on it for 6 or 7 months, wouldn’t tell us yes, or wouldn’t tell us. They finally told us no. We were a little bummed out. They had gotten us excited rightfully so. They’re like, “Don’t worry, we’re talking to Discovery Channel next week. We think it’s a better fit for them anyway.” They pitched it to Discovery Channel and Discovery Channel seems interested and then it’s the same thing, for 6 and 7 months, they tell us no.
At this point, it’s been over a year of waiting for two rejections. We’re not feeling great. In January 2019, they’re like, “We have a couple of meetings. We’re meeting with Walmart for their streaming service,” which might be defunct now, I’m not sure. The Netflix meeting goes well and they come back and they say, “Netflix wants this.” Previously, they were trying to shop and get money for the pilot to then shop and try to get money for a full season but Netflix doesn’t play that game. Netflix says, “Yes, we’ll do a season and we want the right of refusal on the next seven.” That’s how Netflix rolls, they change that game. That was in January.
In early February, we were sent this 50-pager legal agreement from Netflix. Our lawyer tells us, “I’m not an entertainment lawyer. This isn’t my wheelhouse. You need to find an entertainment lawyer.” We find one. All this time, we’re still excited. We redlined the whole thing. We’re feeling good. We email it back to Netflix and they quickly respond and said, “We apologize for any missed expectations. This isn’t an agreement to redline. This is the agreement.”
“This is it. Take it or leave it.”
That didn’t go as planned.
Especially when you know the clear loopholes. When you know, you know. You can’t unknow it.
We were like, “Okay. I guess this is it.” We did. Within the second half of 2019, we filmed. They filmed for six months. It was very intense. For the people that were on the show, it was hard because you still had a full-time job and capacity towards the actual business, which arguably is the priority. It was a challenge. Six months of filming. They came back in January 2020.
You had Brandon. You had your head of customer service in the show.
We had Brandon, the face of our brand. We had Steve, the head of customer service for us at the time. We had Mikki, who was in the procurement department putting the purchase orders and the products we wanted to order. We had Daniel, the co-founder. Arguably, Daniel came up with the idea of BattlBox initially. It was the four of them on the show.
What was the format of the show? I’m going to try and watch it. What was the structure?
There’s a theme for each of the eight episodes of season one. If the theme is fire, all of the products are fire related. It’s not exactly how we do things, by any means. We’re looking at this theme and we need to test products to determine if those products can get our BattlBox stamp of approval to then go in a box and send to our customers. A lot of the products we were testing on the show would never end up in the box purely from a financial standpoint. We’re not putting in thousand dollars pieces of equipment. We’re not putting a flame thrower in the box. Sometimes you have to make it for TV.
We did a couple of touch-up shots in January 2020 and then it was crickets in February, March, and April. In May, we were like, “Any progress? Are we doing anything with the show? Is it going to air?” They’re like, “Yeah, it’s going to air. This is the title. We’re thinking it’s going to air sometime later in the year. It’s little information and frustrating for us trying to plan. Shortly after that, in May, they said, “It’s going to be in July and it’s called Southern Survival. You’re not allowed to talk about it but standby. We’ll give you some marketing materials.” It’s crickets again.
Three weeks before launch, they were like, “We’re launching in three weeks. Here are the marketing docs you can use, only this.” It’s not the best experience for a business. Especially with a Netflix original, its talent, actors, and actresses in their viewpoint, which is a completely different mindset from running a business.
We’re trying to forecast what this growth looks like. It’s like, “I need to talk to someone other than a talent manager.” I need to know the analytics of what you’re expecting. We can then do some math on our end to say, “If they behave as X, the converge rate is going to be Y so we need Z many products.” We couldn’t get any support on that side so we were throwing darts hoping that we were right.
What was the net impact of having the brand, BattlBox, on Netflix? I can only imagine that it must have been insane. Do you have any stats on Netflix? What happened?
Leading up to Netflix, we were getting probably about 150,000 to 175,000 unique visitors a month. That was the average month for us. In July 2020 when Southern Survival launched, we had over 1.2 million unique visitors. It was quite a shot up. In August, we still had a few hundred thousand so it wasn’t a complete drop. It’s a slow fall back down.
Now, it finally normalized and it normalized at about 60,000 to 70,000 more than the previous. Now, we’re in the mid-200,000 when you start putting in all the other stuff. Honestly, to this day, every month, we get a few hundred customers into our subscription box product. On the post-purchase, “Where did you first hear about us?” “The TV show.”
It’s tough because it’s a streaming platform. Identifying that traffic outside of a post-purchase survey is tough because it’s all direct traffic, it’s Google organic. Sometimes it’s Google paid, unfortunately. It is what it is. It’s not like they can click the link in the Netflix app and it’s going to tell us some UTM parameters of where they came from. It’s tough. You have to look at the direct traffic and Google organic and reverse into what the uplift is to determine this traffic.
That’s the only drawback. What about the financials? Traffic was 10X. Did the revenue 10X also?
No, I wish it did. The revenue did increase. We were doing probably about $15 million prior. 2020 is a little bit of an anomaly.
COVID.
The Covid boost too. It gets a little bit lost in the shuffle with that. We’re probably about $14 million without Covid and the show. We quickly got into the twenties post-TV show.
Not bad. 25% increase in revenue, which was sustained.
The fact that it still sits on the platform, it’s long in the tooth in the sense that, every day, there are new people watching the show and discovering our brand that way, and then they come into the ecosystem.
We’ve spoken about BattlBox, which, in M&A parlance, is your platform company. You guys have acquired a number of brands, the most prominent being Carnivore. Beyond Carnivore, you mentioned another brand, which is a competitor to BattlBox. Do you want to run us through a summary of your M&A journey thus far? We’ll talk about your acquisition because your group was acquired and it was a big exit for you. Let’s talk about your M&A. Why did you start to think, “We need to start acquiring other businesses and attach to BattlBox?” Many founders stick with their passion project.
I wish I had a better story to say, “It was because we knew we had to go this way and this way.” One of the initial things, when I came on, was that I was transparent with everything. I want to document this because I want to stamp this out and see if we can replicate it. Quickly, in about a year’s time or less, we had launched two additional subscription box products.
We launched one called Barbecue Box, BBQBox.com, which was everything but the actual protein, sauces, seasonings, wood products, recipes, and snacks, everything for traditional barbecuing. We launched Spartan Carton, which was a monthly subscription for supplements, proteins, and workout gear. It’s fitness-related. We launched both of those. We ended up selling both of them to a company. We didn’t grow them as large as we thought we could have. We didn’t think that they had the scale that we were hoping they did.
Which did you sell for?
Both were less than seven-figure revenue, it was a few hundred thousand. Nothing super notable.
What revenues were they doing at the time you sold them?
Barbecue Box was doing about $400,000 in the top line. Spartan Carton may be doing $200,000 or $250,000. We didn’t see a path towards easily getting them over seven figures. We were missing something. Through our network, we found a company that was willing to buy them and pay us a multiplier of EBITDA. We agreed at 3.5X.
For us, it made sense. We were going to get profit for three and a half years. We were putting all the profit back in anyway so it was a nice payday to move on and focus. The company that bought them both were trying to do this eCommerce rollup, and they were called Guy Commerce at the time and their flagship brand was Carnivore Club. That was a Toronto-based company built in 2013. They were on Dragons Den and got a deal. It’s a big gifting and some great content. I liked a lot of what they did. That was their flagship.
They then decided they didn’t want to do that anymore and they sold all their smaller brands to this one person that was trying to do the same.They sold the two companies we sold them and sold to somebody else and all they had left was Carnivore Club. They said to us, “We’re going to sell all these small brands to these guys. Do you want to buy Carnivore Club?” We came up with a deal that made sense. We brought on Carnivore Club.
What’s the deal structure for Carnivore Club?
I want to tell you but, Tim, a friend of mine, the guy that sold it to me, I don’t think he’d appreciate if I told you the structure. It was a good deal. We had it paid off in a short period of time. Granted, in 2019, we get COVID so the meat is delivered to your house.
It’s good timing, to say the least.
We timed it. The business grew quickly and because of that, we were able to pay off.
What do you think you did well to grow? Besides COVID, what did you do? What other operational efficiencies did you put in place? What marketing growth strategy did you put in place to let it grow and allow you to pay off?
There are two parts to it. One is it was our team. We have one guy that was focused on email and he was spending all his time on email. All of a sudden, we realize that for a short little additional effort using the same strategies, we can test the same type of email over here. There’s not much overlap between the two. It’s not like someone’s going to see the similarities. It was a lot of that. Adding the additional business with the exception of the procurement side wasn’t a massive lift. That’s how we were able to run so fast and see the success.
In addition to the people and the team, we have this tech stack. There’s marketing tech, backend stack, and everything that is our tech stack. It’s there because we’ve tested it. We’ve tried other vendors and products. We know that this is our wheelhouse and with all these products, we know how to leverage them best. We’re most comfortable with these platforms. It’s replicating that. For our management, we needed everybody and everything on both. Everything needs to be using the same core infrastructure. Otherwise, if you’re in Klaviyo over here and MailChimp over here, you have to know both platforms and it doesn’t make any sense. The team and the tech stack are the benefits.
One of the big benefits is we took on the Carnivore Club team into our team and we saw synergies on both sides. I’ll give you an example, Curtis. Curtis was running Amazon for all the smaller brands they and Carnivore Club. He had lost a smaller brand right before they sold to us. BattlBox has an Amazon presence. We’re paying an agency 10% of the revenue for them to run it so it was expensive. All of a sudden, we have a full-time team member that can take that over. There’s an instant cost saving on the flip side of that because we no longer have to pay the agency.
It’s all savings.
There’s the cost savings piece. Now we have more top-line revenue. We can go back to our credit card processor and say, “We have more revenue. We need the same deal and we want it for both. Give us an umbrella package, shipping rates, and suspects like that you can say.” Even in some platforms, “We have two brands now. Please give us a discount.”
It happens a lot with Shopify Plus. Did you share customer data?
We did not. All the brands ran completely independently. We don’t share data now. As a BattlBox customer, we have some flows set up where if we feel that you are not going to buy from BattlBox, we might serve up an email and say, “We realized you haven’t bought from us. We’ve been sending you emails for six months now. Have you heard of Carnivore Club?” We’ll do that. We’ll occasionally highlight a brand for each other. All the data is completely siloed.
It’s a pure opt-in to transition. There are two things I want to talk about before we leave, your team structure and what makes a rock-solid team in your opinion for a brand churning over $25 million in revenue. There’s a content piece, that acquisition, that spokesperson, which we could see in the form of Brandon. What happens behind the scenes? What should you have? What does your marketing team look like and your operations team look like? What’s been your team size? I’m speaking specifically about BattlBox because I don’t want to complicate things with Carnivore Club.
Our team size is a little bit larger than most but it’s because all of our warehouse fulfillment is done in-house. We don’t have a 3PL. Because of that, the majority of our employees are in our actual physical warehouse.
That’s the thing with subscription businesses, most subscription businesses don’t lend themselves well to 3PLs. The complexity there and that novelty on a monthly basis with new products. You’re shipping, right?
Yeah. If stuff gets in late with the additional fees, quickly, the economics aren’t there either. Outside of that, when you look at our core team, we do have the usual suspects on the C-suite. We have a controller, which is paramount for us to have. We have a procurement manager who leads the charge on products. Jumping into the marketing side, we have Brandon Currin who is the face of the brand and focuses on content. We then have Walter. Walter focuses on the other side of marketing, traditional digital marketing. We have an advertising agency and an affiliate agency that he manages. We outsource both of those.
Email is done in-house on Walter’s team and her name is Megan, she’s our marketing coordinator. She’s focused on the influencer relationships and the ambassador relationships. She helps a lot with the email. We have Mark. Mark is the social media manager. He’s managing the social media channels, scheduling posts, and creating basic content like image still content, and some videos occasionally. He’s scheduling all of that.
On the customer service team, we have Luke, who was a customer that then came. He runs customer experience. He has a team of three that are traditional CS agents. We have Patrick. Patrick is on his team as well. He’s our phone sales guy. We have win-back campaigns. When a customer churns from us, they put a couple of email flows. Eventually, Patrick gets them and he picks up the phone to call them and try to win them back. We have Curtis on the indirect sales side. Curtis focuses on our Amazon sales, our eBay sales, the Tundras of the world, and wholesale channels. Anything non-direct-to-consumer website, those his sales channels. That’s pretty much it.
How do you scale a subscription business with ever-changing SKUs on Amazon or eBay? Is it just direct? Do you sell directly there, the SKUs?
It’s such a challenge. Jay is our video editor. He’s very important. He’s a complete rockstar.
Does he shoot also? Is he behind the camera? Does he do post-production exclusively?
No. Up until 2021, Brandon was farm-to-table himself. He was the face and he did the editing. He was a one-man show completely for five years. When we said, “We’re doubling down on content. We need this TikTok piece to work. We need to grow this.” Part of that was there wasn’t enough bandwidth. We said, “Let’s get you a video editor. You just have to worry about filming, the content, and toss it to Jay, and Jay Jay can handle the rest,” which allowed us to get our input out. We’re in the process of, hopefully, finding another video editor to support Jay so that we can pop out even more content.
Back to your question. The Amazons and the eBays of the world, it’s a challenge for us because, and it’s something we don’t do a good job of and it’s on our initiatives for 2023 to do better at. To your point, we’re the subscription box. We might be putting a product in and we know it’s going to do well so we’re like, “We’re going to order 3,000 extra of that because we know it’s going to sell well on our site, on Amazon, and on eBay.”
We put it on Amazon and it had great sales momentum and great sales velocity and now we’re about to run out. We’re ordering another 3,000. We can’t get the price point we need for it to make sense from an economic standpoint. We’re not putting in the giant order to get the price point down. We’re in a weird spot where, eventually, it dies out, which is the worst thing you want to ever do.
On Amazon.
Because of that, it’s a wreckable system and it’s not the right way to do it. We’re going to try to find and identify these core flagship products that we should always have evergreen, anything that we know will have velocity. That’s part of our focus in 2023. The issue is it’s cost prohibitive because we’re constantly having to put our money back out for future products. We’ve got to figure it out.
There are some financial products and inventory finance products that you could lend yourself to, there’s one called Treyd, which would give you about 90 days. It’s 1% a month.
Not bad.
They pay the invoice for you to your suppliers and you get going and that frees up cashflow and buys you time.
1% is super fair.
It’s fair enough. They work on a base rate. With your deal, why did you sell? Did you think it was good timing? This has certainly been a passion project for your team. It’s not been an individual effort at all, three co-founders, and a spokesperson. Brandon has been amazing on the outside. What was the feeling like? Who did you sell to? Do you mind briefly talking about the exit?
Sure. We were at an interesting crossroads. The three co-founders were Daniel, Patrick, and myself. Daniel was ready to be done and was ready to retire. He maybe lost the passion that he once had and Patrick and myself still had it, we wanted to continue. We wanted to take BattlBox to the next chapter. It’s a little bit of a conundrum there. We have two options. We can figure out how to purchase Daniel out and buy the business back where it becomes the two of us or we can take a little bit of money off the table or take money off the table and find a buyer.
Looking at the first option, the reality is we all have this multiplier whether it’s 5, 6, or 7X that we want off EBITDA. If the business stays the same size, that means it’s 5, 6, or 7 years payback. Patrick and I wanted to give Daniel what we’ve all agreed as a fair price. If we don’t grow it and it stays the same size, it’s going to take 5, 6, or 7 years to pay this back. We’re probably having to personally guarantee it. It starts to become scary. We built this but is it worth this to us? We weren’t sure.
The alternative is we are all going to get paid. This is potentially the end but maybe we find a partner that we like. We went through the process of putting this on the market and we had a few offers. The second offer we got was the largest offer from a monetary standpoint, it was from a private equity firm. I loved that they were honest, transparent, and black and white on what they wanted to do.
It quickly became clear that our team did not have a lot of job security moving forward. If they had someone that worked on email or they had someone that did the books, they don’t need our guy. It wasn’t a warm feeling at all. It was like, “This is cold. This isn’t our culture.” We all care and we’re all passionate. We’re all friends, we’re work friends. We weren’t comfortable doing that. We did take that offer.
Our focus was content and community.
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At the same time, we were talking to EMERGE who ended up acquiring us. EMERGE shared this vision. something that was attractive was their motto all of these acquisitions were going to be run as independent business units. Nothing fundamentally was going to be changed but there was going to be buying power, best practices, and stuff that could be shared, maybe physical warehouses that could be shared as they stacked up more companies.
Of course, we took the great offer from the private equity firm and showed it to EMERGE because we identified that we thought that they were the closest thing to a partner. We’re like, “These guys are offering us this, can you get a little bit closer?” Ultimately, we came up with a deal with them. The deal is up to $19 million. There was $11 million US that was paid upfront, no stock, and just pure cash. There was around $2 million that is guaranteed deferred revenue to us.
Over how long?
It’s over a three-year term. That’s $2 million so that takes us to $13 million and the other $6 million. The total number was $19 million. The bonus earn-out is not guaranteed. We have to hit certain growth goals. It broke into three yearly and completely independent buckets. We got some great money upfront but now, we have a decent amount of money that we can earn by staying focused.
You’re still retained as the CEO of BattlBox, that’s what your LinkedIn profile shows.
Yeah.
Do you have a salary as a CEO?
I have a salary and they think it’s a lot, it could be more, but we’ve agreed on it. BattlBox, the entity that existed before, still pays it.
Fair enough.
We’re in control of that, which is great. We renegotiated what the salary would be.
What growth targets have you been tasked to grow over the next three years?
They looked a little conservative and we were super confident as they were a low double-digit growth. We’re talking 15% or 20%. It’s super attainable. Of course, we did sell coming before the pandemic started to bring eCommerce down a little bit. The was the 2025 numbers. You don’t stay in 2025 when the pandemic ends. You look at 2019.
It’s more like for like.
It’s a weird little blip on the radar. We’re still going up to the right. When you take the pandemic and the Netflix show as the baseline, it does make the growth a little bit challenging.
You need another Netflix show.
We’ve got to figure it out.
Thanks for sharing that. How long was the transaction? How long did it take to close the deal?
It took so long. We spoke with the guys at EMERGE in February. We had a deal but the LOI was officially signed at the end of March and the beginning of April. The initial plan closed date was July. It was 60 or 75 days or so. We didn’t know what we didn’t know. We thought we were doing a great job with the financials. When they got audited, we were doing many things that we didn’t even know were wrong. One of the things is deferred revenue. We have this big renewal on the 15th of the month but we don’t ship that actual product until the following month in the beginning.
November 15th is the big renewal day for us. We were calling that November Revenue. That’s the December revenue. It’s little nuances like that and then normalizing books and then digging into everything and maybe we were categorizing something incorrectly. The audit is what took so much time. We didn’t end up closing until October.
They had their financial auditors rewrite your financial statements to get to the single source of truth on there.
At the end of March and the beginning of April, the LOI was signed. We didn’t close until the beginning of October. The audit was the big chunk. We had to find an auditor.
That was your task.
Once we did that, there was something called quality of earnings. The entire valuation was based on a multiplier of audited EBITDA.
What multiple did you sell at?
We sold it at six 6X EBITDA. We had to do our auditors but then once we got done, which took months, they had almost a light audit which was called quality of earnings. They’re then looking at the audited numbers and also looking at growth. It was a process. If there was one thing I wish we would’ve done, knowing that we were going to possibly be for sale, expensive as it may be having audited finance, it would’ve been beneficial.
It would have saved you time. Waiting for 6 or 7 months from an LOI to a close is nuts. It feels like forever. Interesting stuff. When you put it on the market, did you work with a broker? Was it through a broker? Did you put it up in a marketplace? Did you go with a specialist? Was it hush-hush?
It’s funny. Tim Ray, the guy that we sold Barbecue Box and Spartan Carton to and that sold us Carnivore Club, I was talking to him and I told him we were going to be selling. He’s like, “I used this broker on this deal before Carnival Club if you want to look at him. His name was Tim too. Talk to him.” We hit it off. We gave him the financials. We didn’t sign anything but we’re just chatting. He’s a broker. He’s like, “I have a bunch of companies in my network I can reach out to.”
He starts reaching out to people. Meanwhile, Richard, our CFO, goes through a more formal process. We went to WebsiteClosers.com. He goes through that process and they then send over the agreement in exclusivity. I have this Tim guy working these deals so we said, “Tim’s reached out to these 40 people. There’s an exclusion list. If these 40 come through, it’s Tim.”
It’s Tim’s deal.
They agreed to it so we were good with it. WebsiteClosures brought us a lot of calls. That private equity offer was from them. Tim, one of the 40 he reached out to was EMERGE, and he got the deal. It’s cool to see the little guy win sometimes. He got it. We did both. WebsiteClosures were great to work with. They didn’t get the deal. I respect their process and they put it in front of a lot of people because we had a lot of phone calls from their efforts.
Makes a lot of sense. I can’t not talk about the hoodie you are rocking, Recharge. We’re talking subscriptions. They’re a sponsor of the 2X eCommerce Podcast. You mentioned your tech stack. What does your tried, tested, and battle-ready tech stack look like?
On the Recharge side, we’ve been with them for over five years so it’s quite a while. What we love about them is the open API. Our development team can build what we want to have exactly. They’re fun to work with. It’s a great team. As they’ve grown, we’ve grown. They’re not a vendor. It’s a true partnership. They care about us succeeding and we care about them. It’s cool to see it. The front-end stack is Shopify Plus and Recharge. For BattlBox, we have a mobile app on iOS and Android app.
Is it natively built? Is it latched on a platform?
It was natively built. We do utilize OneSignal.
For notifications.
From a mobile app, we’re using Shopify’s mobile SDK. We’re using Recharge’s API. We’re using OneSignal. On the marketing tech, we’re big on Wonderkin. We’re using Northbeam. We were with Trustpilot and we switched to Northbeam. Klaviyo, Zapier, Klikly, and Instapage. We use Yapo for some stuff.
Why do people sigh when they mention Yapo?
I’m not alone. They gobbled up a bunch of companies. It’s the SaaS model where they get you in, they try to get you into a couple of different, buckets, and then they’re going to raise the price. It’s like clockwork. Every year, it’s like, “It’s time to renegotiate but we’re not going to give you a better deal. It’s now 40% more.” The stickier you are because of what you’re using them for, the bigger that increase is. I don’t get warm and fuzzy, which is a shame because they do have some decent products. On the back end, we’re using Gorgias for our CS and Cloudflare. We use Google Suite, Avalara, and ShipStation. We use Finale for inventory. That’s pretty much it.
What’s your WMS, Warehouse Management System?
We just have inventory management system. We don’t have a warehouse management system. It’s Finale Inventory.
John, you’ve been super helpful. Before I let you go, we have these evergreen rapid questions where I ask founders. I’m going to ask you about 6 or 7 questions. If you could use a single sentence to answer each of the questions, it’d be brillo. Are you a morning person?
I am not but I force myself to be.
What’s your daily morning routine like?
I wake up every morning at 6:00 AM. Honestly, before BattlBox, I woke up every morning at 4:30. I start waking up at 6:00. I’m in front of the computer catching up on email. 6;00 to 9:00 AM is my most efficient time because no one else is up yet and rocking and rolling. All those tasks that have been on my to-do list for days, the harder stuff that takes time, I’m able to knock everything in the morning. I’m not a morning person by any means. I have to set three alarms to get up.
Are you in sports?
I am not. I wish I were. I need to prioritize time and I don’t.
What are two things can’t you live without?
An energy drink every morning. It’s not healthy but I have one every morning. I don’t drink coffee.
There’s one I’m drinking called TENZING.
How is it?
It’s a natural energy and purely from plants. It gives me sustained power without a drop of coffee. It lasts for about 90 minutes and that’s it.
I’d say an energy drink and good food.
I’m with you, amen to that. What book are you reading or listening to?
I’m not. You and I spoke about the content and community and the MrBeasts of the world, how they’re reverse engineering and ending up with these businesses that are huge because of that. I’m not going to be a listener. I’m not a demographic for MrBeast. I’m probably a little bit older past the sweet spot. I’m listening to the MrBeasts of the World. There are dozens like this. He’s a great example.
All these content creators that have now snuck into the business, I’m listening to their content and their podcasts. I’m trying to understand their mindset a little bit more. We both ended up not quite in the same place but in this business world. We did the brand and then content and community. They did content and community and then the brand. I want to better understand it. Right now, I’m ingesting as much content from content creators to understand how we can do better. Naturally, we’re not going to be looking at the equation the same way they are.
No, you’re not. Most of them are entertainers and entertainment is broad and addictive. You tend to stick with your entertainer. You guys are a niche and you serve a purpose and there’s a certain persona. Although you did mention the car thing, which I will buy. The seatbelt cutter and glass breaker are amazing. The final question is, what has been your best mistake to date? By that, I mean a setback that’s given you the biggest feedback.
The best mistake to date comes to me right away. I can’t give you one sentence about it. In 2015, 99% of our traffic was on Facebook. We were running Facebook ads and that was our number one lead source by a lot. Labor day of that year, we’re planning to have this wild three-day sale. We have all the creatives. We’re going live Friday with all the ads. This is going to be the biggest weekend we’ve ever had with certainty, not even 100% confidence.
On Friday, at 5:00, all of our ads and our ad account got turned off, deleted, and canceled, “You are off of Facebook.” That’s where we were acquiring 100% of our customers. We were getting some organic customers from Brandon and YouTube. With advertising dollars, the lion’s share was coming from Facebook. We went from these great days we were having to nothing over the weekend.
Long story short, we couldn’t get ahold of anybody. Talking to someone on Facebook, good luck. We got lucky and one of our customers worked for Facebook, worked in a department that sat next to the auditing team. This is when we had the bulletin board, it was like, “I’m going to walk over there and see what I can do.” Within a couple of hours, we were back on. It’s pure luck because we were talking to our community.
That was the best mistake because, at that point, we got back up and running but we said, “We will never be this dependent on a single platform.” It’s not good business to have all of our eggs in one basket. We weren’t advertising on Google at the time. We weren’t trying anything else. We quickly diversified and we stayed diversified. We don’t want anything to be too much of a pull for us. Things obviously will have success somewhere and scale it up and it might take a lion’s share for a short period of time but we don’t want that to ever be the sustainable model.
John, thank you so much for giving us your time, your advice, and your experience. It’s been an amazing conversation. For those who want to find out more about BattlBox, it’s BattlBox.com. Are you active yourself? I’ve followed you on your Twitter and Instagram. You’re on LinkedIn. Are you actively building an audience on any platform? Would you like the readers to join you on any platform or which would it be?
I’m horrible at Twitter. I’ve never been able to dedicate the time needed to do Twitter. I am active on LinkedIn.
Give John a follow, for sure, on LinkedIn.
I have a blog, OnlineQueso.com, where a lot of the things we’ve chatted about, I’ve written about it as we were going through it like lessons learned and mistakes we make. It’s an unfiltered view of the behind-the-scenes of some of the things we’re trying to accomplish.
I’ve seen some familiar faces on there. John, we could go on and on. You’re an incredible soul. You’ve built a meaningful and substantial business with the right heart. Thank you for coming on the 2X eCommerce Podcast. It’s been a pleasure having you.
Thank you so much. This was so much fun.
Cheers.
Cheers.
Welcome to the 2X eCommerce Podcast. The 2X eCommerce podcast is a show dedicated to digital commerce insights for retail and eCommerce teams. Each week, on this podcast, we interview either a commerce expert, a founder of a digital-native consumer brand, or a representative from a best-in-class commerce SaaS product.
We give them a tight remit to give you ideas you could test right away on your brand so you can improve growth metrics such as conversions, average order value, repeat customers, audience size, and ultimately your gross merchant value. We are here to help you sell more sustainably. We tell entrepreneur stories.
Speaking of which, this episode is an interview I had with John Roman, the Co-founder of a subscription box business called the BattlBox, which has exited. We are loving the interviews with ex-eCommerce founders that are exiting. He’s also a co-founder of another brand that has not exited, which is called Carnivore Club. That’s still going. He’s still very much involved in other aspects of commerce.
What we talk about in this particular episode is more about his backstory and how he started BattlBox. He didn’t really start it out, he joined as an investor and then doubled down when he saw this brand was doing $4 million in run rate. Let me tell you a bit about BattlBox, it’s like a survival subscription-based company. What they do is bundle up tactical and survival gear and present it to their audience or customer base of outdoor enthusiasts and they built a huge following.
The takeaway from this one, which John wanted us to sit with was the fact that they’ve used content to drive the awareness and exposure of the brand and eventually, drive the bottom line. I’m not talking about content marketing or writing blog posts here and there, I’m talking about their deliberate use of video.
He gave us tactics for how they grew their YouTube following to 500 new subscribers per day. That one, you have to pay attention to, and how they use Netflix. Believe it or not, they got a Netflix show called Southern Survival and what the impact of having a Netflix show for your eCommerce brand does to your numbers. It absolutely blew my mind away.
He talked about how they’ve blown up their YouTube channel. Also, on YouTube, he tells us a story about how they got the face of the brand. None of the founders run their YouTube channel but their YouTube channel is over 500,000 subscribers. However, they have a face of the brand, they have an employee running their YouTube channel, and he teaches us exactly how they got the employee to run their YouTube channel.
YouTube is a significant driver for eCommerce. Think about MrBeast, KSI, and John Logan and their ability to use their YouTube fame to drive products. Having an active YouTube channel now in 2022 and 2023 can significantly give you an edge above any other competition. If there’s one reason to read this episode is the YouTube strategy, that content first strategy, and how that YouTube strategy evolved to Netflix. I’ve never had anybody who runs a Netflix show or who owns a Netflix show come on the podcast and it happened so this is a first. It’s brilliant.
I thoroughly enjoyed it. I felt like I was talking to a friend. John is super impressionable and receptive to the questions and sharing his knowledge. We had some common friends. He does know a few people that I know, which was heartwarming too. They sold at a 6X EBITDA. I’m not going to give you too much, you got to read this episode. I will leave you to enjoy. I’ll catch you on the other side. You will enjoy this particular episode because I enjoyed this conversation, for sure.
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John, welcome to the 2X eCommerce Podcast. I’ve been looking forward to this conversation given all that you guys are doing at the BattlBox group and what you’ve done. I know this conversation is going to be super based on not just growth, it’s going to be based on M&A, subscription commerce, and a ton of stuff. A warm welcome to the 2X eCommerce Podcast.
Thanks so much for having me. I’m excited to be here.
Let’s go way back to who you are. What was your childhood like? How did that form your mindset toward business as you grew older? We’d love to find out more about who John is.
A rather normal childhood up until the first thing that was not normal. I did school and went off to university. When I graduated, I decided I wanted to play poker professionally. This was around the time of the poker boom in the early 2000s when you saw poker on TV, a good bit on ESPN, and then it even went mainstream on some regular channels. I wanted to do that and I did that for 4.5 years. It was a very fun 4.5 years.
I went and played in a lot of tournaments in the States but came to London to play in the inaugural World Series of Poker London. I went to Australia for the Aussie Millions, which was an annual tournament. We got some cool traveling and I enjoyed it. Finally, after reading all kinds of books on psychology and poker gaming theory, I couldn’t get myself to the next level. I compare it to an athlete that’s playing on a sports team, you have to be that next level, you have to be an A-plus player to make it to the big leagues, and I wasn’t.
I was B-plus maybe, at best. I was probably just a B player, which is profitable. You can make a living and earn your keep. I’d see a cross from me someone that was maybe my age now and that was still doing that and I didn’t like what I saw, I didn’t want that. I knew if I didn’t figure it out to get myself to the next level, there wasn’t a future from a career standpoint. I decided I’m going to get a normal job like everybody else did when they got done with school. I worked for a publicly traded company in sales, an entry-level sales job.
I was 26 at the time. All my peers at the job were all four years younger than me because I chose to play poker for my first four years. I had success almost instantaneously right away because the last four years prior, I’d put in 12 or 13-hour days and the end result sometimes was I lost money. If you knew anything about pokers, there’s a large skillset and strategy part of it. At the end of the day, a third of it is pure luck on how the cards fall. It’s gambling, that portion. if you can put in large amounts of volume, you can read that mathematical variance. A third of it is still luck. You should put a lot of volume in to offset that.
What’s the remaining 2/3 in poker?
It’s pure strategy. It’s positioning at the table, the position where you are from the button, and the bet size. There are all these little variables. At its core, it’s the cards you’re dealt with, the mathematical decision based on the cards you’re dealt with, where you’re at in the position of the table, and what you do with that hand. Whether you fold, raise, or call, it’s broken down. There’s a mathematical right move to do for every single hand based on where you are. The button moves, which means the blinds move, which means who’s able to act first versus the last move along with the table. Based on your cards, there’s much more of an advantage to being the last one to make an action.
Should entrepreneurs play poker?
I don’t play poker anymore. I got deep into the mathematics of it and there’s value there. The biggest takeaway or at least why I think it shaped who I was is because I’d put in those 12 or 13-hour days and was purely grinding this, sometimes longer days, and I could still lose money. I then jumped into this world that everyone else is in with this sales job and I’m putting 12 or 13 hours in and I can’t lose. I’m not losing. I might not get as many sales as I wanted but I don’t go in the wrong direction at any point. No one else was putting in 12 or 13 hours.
I quickly found that was great. I can put this same grind mentality and I’m going to start outperforming everybody. That’s what happened. I was fortunate and I continued to work hard and I quickly rose up the ranks. We had 700 sales reps and I was the number one sales rep. I moved into an assistant sales manager role for probably nine months to a year and then moved into a sales manager and then as sales director.
After 5.5 years, I decided I’m going to see if the grass is greener somewhere. For the next two jobs, I was building sales organizations. For the first one, they had an indirect sales team but they had zero direct sales so I came on to build their direct sales team. With the venture after that, they had a sales team but it was focused on smaller S&B, small to medium-sized businesses, and they wanted a focus on enterprise sales so I came on to do that.
Along the way, I started trying to invest in companies. I loved what I was doing but I was putting in this grind still every day and I wanted something of my own. I wanted to reap the rewards. I was seeing all this money I was generating. I was paid well but I saw what I was building, I was building these millions and millions of dollar sales units. I wanted to figure something out so I started investing in companies that crossed my desk via the network, most of the are people that I knew, either I went to school with or I had met at a networking event. I started doing that.
If I look back now, all but one of them failed. The one that didn’t fail was BattlBox. I have a Christmas party every year and I invite all people from all my different friend circles. As you get older in life, you have these different friend circles from these different times of your life and this was great because it allowed me to get everybody in one room. A gentleman named Daniel, who I went to school with, came up, and he was running a print house, if you will, called Varsity Inc. They printed t-shirts, hats, and swag for all the organizations that might be at a university.
They had two locations both outside of universities, fraternities, sororities, nonprofits, or any organization that would be at the school. They would go to them to get t-shirts and hats. This was December, a slow time for them. He and I were spitballing about some ideas that he was thinking and we were like, “Let’s figure out a way to work together. What does this look like? We’re not sure.” Fast forward two months later, he comes up with the idea of BattlBox, I heard about it, and said, “I’m in.”
After a quick negotiation, I was able to buy a piece of equity and offer a limited time. The initial deal was five hours a week of high-level general business consulting advisement. We were off to the races. The five hours quickly turned into 10 and it quickly turned into 15. I was working as much on BattlBox as I was on my day job, which was a problem because I was used to putting in these grind sessions for my career and my day job and there wasn’t enough time in the day if I wanted to sleep too. Finally, we hit a culmination in early 2016. We were a little bit over a year old. We had a run raid, that was eight figures at that point.
How many years in business? You brushed through that very quickly.
Sorry.
No. It’s fine. I want the readers to pay attention. How many years did it take BattlBox while you were working passively? We’re talking 10 hours a week to hit eight figures, that’s over $10 million in revenue.
We launched in February 2015. In that first partial year, we did $4.5 million.
Let’s speak about BattlBox. BattlBox is a subscription-based business that sells survival kits. Why do you think it picked up in 2015 so well? Not many businesses launch off the back of the first year and they’re almost midpoint to eight figures. Was there a product market fit? Was the market rowdy at the time? Did you use Facebook advertising to reach your customers? Was it a content marketing fix? How did you blow up so quickly?
A multitude of answers. Early 2015 was the pinnacle of subscription boxes, they were buzzing around that time. It was a cool new thing. Give a company some money and they’re going to send you a random mystery box. People were digging it at the time. You were seeing the rise of some of the then-larger companies like Birchbox, which blew up to this billion-dollar valuation. They had to file for bankruptcy earlier this 2022. You were seeing the rise of a lot of those. A lot of buzz around that anyway at that time.
Facebook was a different world than it is today. We were able to acquire customers for $5. We had an acquisition cost of $5 because that was Facebook back then. I wish I knew what I knew now because, any dollar of debt and anything I could have found scrunched together, I would’ve put toward Facebook. We would’ve scaled quicker and bigger. Because of the subscription box base and how easy Facebook was at the time, it allowed us to get a grasp and a stranglehold on a big chunk of this but it was also a product market fit.
The reason BattlBox was created is a cool story. Daniel was watching his fiance, at the time, get a Birchbox in the mail every month. For those who know BirchBox, there are a bunch of samples, maybe some makeup, some eyeliners, and some lipstick, maybe it’s something to clean your face with at nighttime, traditional female-centric beauty products. He’d watch her every month open the box and there was this genuine excitement of, “What’s in this month’s box?” He had a feeling of, “I can see the joy. I want that for myself.” He’s an outdoorsman so he went online to try to find a box for himself and there wasn’t one.
He quickly came up with the idea. The website and the product are different than it was over seven years ago. We’ve evolved several times over. He wasn’t alone. He couldn’t find it cause it didn’t exist. There were other people looking for it that couldn’t find it either because it was a product market fit need, for sure. Those are the three, right timing with subscription, amazing Facebook acquisition cost in 2015, and the fact that it was a product that didn’t exist.
Finding the brand is difficult. Part of it was luck and timing.
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You joined in 2016. The business blew up in 2016, it was $10 million in revenue at about that time. How did you sustain the success? It’s one thing blowing up and riding a wave, it’s another thing maintaining that. In 2016, the revenue was $10 million. How did that translate over the next five years? What was your revenue in 2016, ‘17, ‘18, ‘19, and ‘20 if you are privy to that data?
It wasn’t easy. When I came on, one of the first things we were all talking about was we were seeing a lot of success with YouTube. We were sending about 30 boxes a month to YouTube influencers in addition to other channels. On YouTube, we were seeing a lot of success. One of the people we were seeing was this guy named Brandon Currin. At the time, we didn’t realize that we had a pre-purchase survey, which is cringe to even say, on our site. It’s like, “Why would we add that?” We did.
It’s all about the data.
We had all the usual suspects, “How’d you hear about us?” We had other where you could type something in and we were seeing this guy, Brandon Currin. People were writing his name in and we look him up, he’s on YouTube, and he’s doing battle box reviews. We can’t find him on our Google sheet of people we sent out the boxes to. We look him up and he’s a paying customer and he’s generating us all of these customers but he’s paying himself. After a couple of months of it, we’re like, “People are loving this guy and loving the videos. They like him as much as they like us, which is pretty cool.”
We called him and said, “You don’t have to pay anymore, Brandon. We’re going to keep sending you the box. You just keep doing you. We appreciate everything you’re doing.” A few months went by and we were continuing to see this trend. We saw that his YouTube following was starting to grow and he was gaining popularity as well at the same time we were. We reached out again and said, “We know you’re giving the box for free but here’s a check for $500 every month. Please, you just need to keep doing this video. This is paramount to us.”
Was he promoting other survival kits or was it predominantly BattlBox?
No. He did a couple of other reviews of some stuff but the one constant on his channel was the monthly review of BattlBox.
It was like a reveal, it was an exclusive unboxing for BattlBox.
It’s a long form. Some people could get through the box and talk about it in two minutes. It was a 25 to 30-minute video, he was explaining the products, why he liked them, and why he didn’t so there was added value. When people would get their box, the first thing they did is they’d opened it up, and then they’d open up YouTube and watch him talk about it.
He was like a virtual salesperson for you. He was unbiased in that way, he’ll tell you the good, bad, and ugly in every package. It was at scale on YouTube and the algorithms picked up that he was building a following and they poured more fuel into his reach.
We were writing the check worth $100. He was in the HVAC industry. These videos on his YouTube channel were his side hustle, his nighttime work when he got done with what he was doing as a career. We said, “This is crazy but do you want to quit that and just do these videos full-time? We think that would be pretty cool.” He’s like, “Yeah, that would be a dream job. Let me talk to the wife and the kids first and see about moving from North Carolina down to Georgia.” We put an offer together that he felt was good and justified so he came on.
Where did he move from?
He was in North Carolina and moved down to Georgia.
Good weather though.
Still, to your point, he moved his family. His kids were in school. This was a big decision. As soon as Brandon came on full-time, the conversation was, “Let’s start popping out more content. We know people love you and we know people love our products, let’s leverage this. Let’s start growing this content piece.” That was a big part of it. Something that naturally comes with content is community.
At the time, we had what was called BattlBoxForum.com. It was almost like a Reddit-style board where you could chat about anything, some of it was BattlBox related and some of it was maybe someone going camping in California and wanting to know some tips for the park they’re going in. It was a lot of like-minded individuals, people who loved to go outdoors. We saw this community building. At that point, we were like, “This is great. This community piece is something special.” We focused on trying to grow that.
Eventually, we took it off of the forum Reddit-style bulletin board and moved it to a Facebook private group. You have to be an active paying subscriber to be in the group. There’s added value there. We do some giveaways. We will do Facebook lives for them. We’ll share some insight into future products with them as well.
We ask them to give us feedback. We have a Google form and Google survey where they can give us product suggestions. We’re in touch with them and communicating with them daily. The community was growing and the content was growing. Those two together, we realized how important both of them were to the business. Without that, we’re just sending out survival products and it’s just not as cool and exciting.
That community and content piece is the soul of the business people connect to and then the transactions are an after-effect, not to diminish the power of operations because you have to send them relevant items but that content piece from the sound of things was important. A quick question about Brandon Currin, did he have equity? Was he fully salaried and an employee? Was he also an investor?
Fully salaried employee.
Till now?
Now, we’re publicly probably traded so he could buy some shares as I could and we could own a piece of the company but that’s not the same. He’s full-time salary as we are since we sold the company.
We’re going to go there. I’ve had conversations in person. On this show, a lot of people talk about content and the importance of YouTube. We’re going to also talk about how you guys transitioned to TikTok, which is an amazing story in itself. They’re always like, “I don’t want to be the face of my brand.” What tips do you have for readers who want to take their content game a notch up? They don’t necessarily want to be the face of their brand but how do they recruit passionate people?
Brandon left North Carolina. He migrated from one state to another with his family most likely because he loved what he was doing. He saw this not just for the salary but he was passionate about it. How do you find passionate faces of brands that are consistent? He could have said, “I’m going to run my own show,” or, “I’m going to run my YouTube channel,” or, “I’ll continue running my own YouTube channel.” How do you get that formula right for longevity, for a 10, 20, or even 30-year-old brand to take it over decades rather than a one-off?
There’s not an easy and super exact formula, like, “Copy and paste this formula and we’re good to go.” Finding the brand is difficult. Part of it was luck and timing in the sense that we didn’t find him when we found the 30 people we were going to send the YouTube boxes to. He was a paying customer. To that point, with community building, caring, and listening to the customers, it’s unusual for a company our size.
All of the leadership is accessible and tagable in the Facebook group, which is a gift and a curse. I get my fair share of tags every day that are not things I want to be tagged in or probably not even in my wheelhouse of what my job description is and what I should be focused on. I do my best to log in there and look at it.
It comes back to building that community. Because we were building that community, we had people like Brandon that saw this community as something that attracted him. To your point earlier, when the relationship was built and there was a bigger opportunity for him to move his family down and come full-time, that’s a little bit different. It’s all part of that core line and core infrastructure of building the community.
Another quick example that illustrates and improves this point is our head of customer experience, a gentleman named Luke Bagley. Luke does an amazing job, has an amazing team, and cares so much for the customers. He was a paying customer. We had the BattlBox forum, which predated the Facebook group with this Reddit-style board. At all times, we have 5 to 7 moderators and they were paying customers. We saw them jumping in and answering questions and playing the role on their own. If someone asks a question about shipping, they’re quick to jump in and help them.
When we identified this, we offer them, “Do you want to be a moderator? Keep doing what you’re doing, be this ambassador, help answer questions, and do a little bit of the administrative side of the Reddit or Facebook group. In return, the $170 a month box, you’re going to receive it for free.” Because of the community, it makes sense. That’s how Luke came on. Luke was a paying customer. We saw him helping customers.
He knew the product arguably as well as we did, if not better. We were like, “Let’s make this guy a moderator.”Luke was a full-time nurse, that’s what he did every day, he went to the hospital. He had this career but his fun time was in this BattlBox community. There was a point where we needed a part-time customer service person and we threw it out to the moderators, “I’m not sure if anybody’s looking for a little bit of a side hustle but 10 hours a week helping us during our busy times with the customer service tickets.” Luke said, “I’d be willing to do that.” He did it and quickly realized he was good at this and enjoyed it.
Over a short period of time, it was like, “A big ask, do you want to stop being a nurse and run our CS team?” He did want to. He made the career change. While one is customer-facing publicly and one’s customer-facing privately in DMs and emails, both are similar. When you focus on community building and building a fun environment for people, this is sometimes the fruits of the labor.
You start seeing these opportunities that otherwise wouldn’t present themselves. Whether it’s the face of your brand, whether it’s someone to run your CS team or be a CS person, you start finding these natural fits that were there the whole time. If you didn’t get to know your customers, you would’ve never had the opportunity to see something standing right in front of you.
Makes a ton of sense. Brandon was doing YouTube videos for himself as a YouTube influencer too. In that respect, he started small and started to grow. How did you structure where he broadcasted? Did he broadcast from his channel still? Your channel has 560,000 subscribers on YouTube. You have about 750,000 subscribers on TikTok, which we’ll talk about shortly. Did he join your YouTube? Did he start to build your YouTube channel? Did he even have a YouTube channel when Brandon was doing the monthly inboxing? How did that pan out?
We had a YouTube channel. Towards the end, before he joined us full-time, he would send us the video file after he posted it on his channel and we’d upload it to ours. We had minimal followers. When he came on, we might have been in the 10,000 or 15,000 range, which was still decent but not anywhere in the same category as today. Him coming on, the focus was the BattlBox channel. One of his main initiatives and main KPIs was to focus on growing this channel, this is an important channel.
We never told him, “You can’t post on your other channel. By all means, if you want to post stuff on that, go for it. Do not try to build that channel. Your new career, your salary is to grow this channel.” It’s a balance. We’ve always had trust in Brandon and we know he’s going to spend the majority of his time building that. If he makes a video and wants to also post it on the other channel, that’s okay too as long as it’s abundantly clear where your focus is during the day while you’re working.
What you do when you’re not working, that’s completely on you. I don’t think it would be fair to expect such but it is a good question because it’s a fine balance. We don’t want to be like, “Brandon, you’re spending all your time on your own channel and not ours.” Brandon was a great team member. With our normal routine of meetings and when we’re discussing his strategy, he cares about the brand. He does what’s always best for the brand.
Do you know a YouTube influencer called Aaron Marino? He runs a channel called Alpha M.
Yeah. He lives in Georgia as well. I don’t have a personal relationship with him but I know of him. I do have a personal relationship with some of his business partners. There’s a brand called Tiege Hanley.
Kelley Thornton.
I know Kelley very well. I know that they brought him on as the face.
His was more an equity share. I don’t know what the deal structure is but I do know he does have equity in Tiege and he already had 1 million followers or more on his original YouTube channel. He’s managing two channels essentially. What’s happening is his core fans from his 1 million-plus subscriber base in his channel, some of them have trickled down to the Tiege Hanley website. They seem to be doing well. He was at our conference this 2022. It’s super interesting.
What was the correlation between the growth of the YouTube channel? How did the YouTube channel grow? How did that impact the business? How have your acquisition channels evolved over time? You were telling me that TikTok is huge today. I’m curious to know from 2016. You said that in 2015 and 2016, you were buying new customers for about $5 through Facebook ads. How has that evolved over that seven-year period to today from an acquisition standpoint?
Acquisition costs have been one of those charts that are sometimes good to see and sometimes bad to see and in this case bad. It’s up and to the right. The beginning of the roller coaster ride, that’s our acquisition cost. Unfortunately, it’s gone up every year. It’s not as enjoyable as we would like. Because of the organic reach and because of the constant new eyeballs we get via content, that helps when you’re looking at,non-channel specific and you’re looking overall at the business. It’s like, “What is our acquisition cost based on new customers we got?”
Overall for the business and total ad spend, the customer acquisition cost is not that crazy. It’s a balance. We need new customers because you always have to offset churn or you start going in the wrong direction. At the same level, it’s content. That organic approach is such a long game. The content piece is traditional SEO. You’re not doing it for that immediate benefit. It’s such a long game and a long play. That’s what it is. To answer your question about YouTube growth, we were slow and steadily adding 500 customers a month, maybe 400 or 600 but 500 a month was pretty much our number. We’re down from our peak. We’re probably adding 1,500 a day.
Do you mean subscribers?
YouTube subscribers. For 6 years, we were adding 500 a month. At this point, we’re down from a peak but we’re at 1,500 a day.
How did you make that leap, from 500 a month over six years and then, more recently, it’s 1,500 a day? That’s incredible.
It was a byproduct of our focus on TikTok. In early 2001, we had a TikTok account.
That’s when we started working on it. We had a TikTok account with zero posts registered to my email. I grabbed the username sometime during the pandemic when we started to see that people were spending time on this app. We didn’t do anything with it and we didn’t know how we were going to do anything with it.
Our focus was content and community but all of our content was long-form content, it was twenty-minute videos. It was a three-part series that were all 30-minute videos on training on something, a deep product review, or product testing. It was all long-form, nothing short, and nothing less than a minute let alone less than 10 or 15 seconds. We were trying to wrap our heads around it.
In February 2021, we hit this point where we were like, “Let’s start attempting it. We can’t keep talking about it and not doing anything. TikTok is here to stay at least for the short term.” Honestly, in February 2021, I thought we already missed it. In reality, we hadn’t missed it. I felt like we had already missed it at the time. We started diving in. Things like TikTok and things that I’m not sure about where we make mistakes along the way and there are lessons learned, I try to document some of it. I put it on a blog I have called Online Queso. I have maybe seven entries from February 2021 to now specifically talking about TikTok and YouTube. It was trial and error. We were making videos.
One thing we knew is we weren’t going to be doing the trending dances, that was not on the brand, and that wasn’t us. No one wants to see a bunch of middle-aged dudes doing TikTok dances that young girls are doing. That’s not us. It’s not the brand and it doesn’t make sense. We saw that there were so many other opportunities on there, there was a lot of other content.
We started testing things, trying to see what worked, and testing everything from length. Are we trying for explosions? Do we want music in the background? Do we want speech-to-text and little subtitles? We were testing everything and trying to find stuff that would work. We’d get a win here and there and every time we got a win, maybe every six weeks, it changed the momentum a little bit.
We were happy if we got over a thousand views on TikTok. We hit a big TikTok that got us 200,000 views. After that, we were getting 2,000 views on every TikTok.If we didn’t get 2,000 views, we were upset. We got another hit and that time we got 1 million views on a video. A good video for us, we expected 4,000. Every little hit, every time we got a home run on there upped the trajectory and the overall reach.
The last video that we did well, we got 39 million views on it maybe. It’s exponentially grown. Along that journey of going from 100 followers on there to 1,000 and we got 10,000 to 100,000. At the end of 2021, we’re sitting around 220,000. We had set this goal of 300,000. We ended up hitting it at the last minute with a good video. Around that time, at the end of 2021, we started hearing a noise that TikTok success was bothering Google. Google had this new product that wasn’t getting momentum called YouTube Shorts.
The algorithm changed. They were treating YouTube Shorts like they were gold. You were getting this headstart cheat code. If you had a YouTube Short to the algorithm, they were going to show it to more people, which meant you were going to get more engagement and more likes and maybe more followers. We said, “For the past ten months, we’ve been coming up with all of this short content. We have this library already of videos. We already have ones that are good. Plus, we were making new ones every week. We can get a head start on YouTube shorts and dump these videos on there.”
To be fair, there’s no TikTok watermark. We’re producing the content and then uploading it to TikTok so we would be uploading it to YouTube. December was a little bit of a learning phase. We were getting a little bit successful but nothing crazy. January rolled around and we put some of our biggest hits from TikTok on YouTube Shorts.
At the end of 2021, on YouTube, we were at maybe 56,000 followers. All of a sudden, we started seeing the same momentum but arguably more of it on YouTube for the same content as TikTok. Both of them were going slow and steady and they went extreme. We were quickly at over 100,000 YouTubers and then 200,000, 300,000, and 400,000. At the same time, TikTok is doing the same thing. We hit a couple of home runs in a row on videos.
It was like clockwork. The same video that performed well on TikTok performed well on YouTube Shorts. Also, the performance was well on Instagram Reels. Instagram Reels doesn’t have as much love on the algorithm for the short video content as YouTube seems to want to give but there’s still a correlation. If it’s good content for one channel, it’s good content for all three.
It’s humans at the end of the day. The platforms know the target audience so they fine-tune it to the same cohort of people. I was going to ask you the Instagram Reels question whether you saw similar success in the growth of your Instagram account, did you? Was it the reach of the videos that you noticed starting to get an uptake?
No, Instagram Reels has not performed the same. We’ll see a successful video that does well on TikTok and YouTube Shorts, it’ll do better than others on Instagram Reels. There’s a correlation between your point of good video and humans are humans and we’re all humans on these different platforms so that makes sense. The follower increase is not the same. We see growth on Instagram but it’s not at all in the same meaningful exponential growth. We’re doing the same thing on that channel. It’s interesting.
What is the formula for a good TikTok? What did you guys figure out that turned your TikTok game around? It was still Brandon Currin who’s the face of your TikTok, right?
It’s still Brandon. We’re still testing. It’s a constant test. We’re trying to figure out what’s better. We have some amazing series and ideas that we’re going to start testing at the beginning of the year that we think could bring us to the next level. We found that it was a combination of a few things that work for us. A lot of product testing. An unusual and cool product that appeals to a large number of people, in turn, which makes sense, would perform well.
From our TV show, we have this little tool that you would keep in your vehicle and has a couple of tools. One is this little sharp thing where you can cut your seatbelt off if you get stuck. At the edge, it has this little point where if you press it into your window, it springs and will break the window. If you get stuck with this little tool that you could keep in your glove box, it can get you out of a bad situation. Maybe you got in a car crash and the car is bent or maybe something more extreme like you weren’t paying attention and you went off the road and you’re in a lake, a pond, or something.
What you do when you're not working, that's completely on you.
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With a product like that, because it appeals, you don’t have to be an outdoor enthusiast to see the value of the product. We want to feature products that are niche but then we also want to occasionally have that product that you don’t have to be an outdoor enthusiast to say, “I want that product too.” It’s a combination of showing the human side, showing that we’re humans, and allowing people to play on the community piece.
At the end of the day, we are a business, and we are a brand. By humanizing ourselves and Brandon showing that he’s just a guy like me and you, he’s just a human being, showing that side has value too. You and I were chatting about how the consumer’s buying patterns are evolving and changing. Consumers want to have a connection with the companies they spend their money with these days. They want to feel some connection. We’re trying to provide that. We’re trying to show that there’s more than this business that ships boxes out every month. That’s paramount, key, and important.
On your main YouTube channel, are you still sticking to longer-form videos or are you keeping them under ten minutes?
We do both. We were always doing long-form content. YouTube Shorts, TikTok, and all that, we see the success there. It’s two different things. We still do the long-form content of our mission, the box review each month, which is 25 to 30 minutes. Every Thursday, we have a long-form drop, whether it’s product testing or some situational training, something north of ten minutes. It’s typically five pieces a month of long-form.
What’s worked out in our favor is we’ll take a lot of the long-form content and we’ll chop it up. The monthly what’s-in-the-box review that we’ve done and that Brandon was doing before he joined the team and we’ve been doing ever since, every box we ever sent has one of these 25 to 30-minute videos. We shoot it in a way where the edges can be brought off and cropped down to a vertical form and it’s perfect for TikTok. We’ll get a ridiculous amount of short-form videos out of the long forms. We’re still shooting some stuff specifically for TikTok, YouTube Shorts, and IG Reels but if we’re shooting the long form and we can also use that, it allows us to run a lot faster.
Speaking of long-form content, you go into Netflix. I don’t think any guest in this show has gotten their brand on Netflix. Do you want to speak about how you got on, Southern Survival, the show on Netflix? How did that transpire? Was it from your YouTube success? I’m keen to find out.
It’s quite an interesting thing that we were able to have that show because it has helped the business tremendously. We were reached out to in 2017. It aired in 2020 and was shot in 2019. Brandon has been on the team for a minute now, he has bearings. We got reached out to by a company called High-Noon Entertainment, a production studio. Have you ever heard of Cake Boss or Fixer Upper?
Fixer Upper, yes.
That’s the two feathers in their hat of shows that they’ve done. Worth noting is both of those shows have a retail piece and a business associated with them as well, which is interesting. They reached out addressed to Brandon and said, “Brandon, love what you’re doing. We have some ideas for a potential show we’d like to run by you.” We all jumped on a call with them and they said the idea. The idea premise was pretty simple, “You guys test gear and determine if it goes in a BattlBox.” That’s what we do anyway. This sounds perfect. We’ll spice it up for TV but this sounds a great opportunity for us.
They want Brandon as the main focus. Brandon has a stage presence if you will and people identify with him and people like him. He brings an unusual but usual type of comedy to the mix, which people appreciate and connect with. It made sense. He was working out of our southernmost remote office. There were four people in that office and they said, “You can come out, we’re going to shoot a sizzle reel, which comes before a pilot. Everybody from that office can be part of the show.” Four people on the show. They came, shot it, and took it to the History Channel.
History Channel sat on it for 6 or 7 months, wouldn’t tell us yes, or wouldn’t tell us. They finally told us no. We were a little bummed out. They had gotten us excited rightfully so. They’re like, “Don’t worry, we’re talking to Discovery Channel next week. We think it’s a better fit for them anyway.” They pitched it to Discovery Channel and Discovery Channel seems interested and then it’s the same thing, for 6 and 7 months, they tell us no.
At this point, it’s been over a year of waiting for two rejections. We’re not feeling great. In January 2019, they’re like, “We have a couple of meetings. We’re meeting with Walmart for their streaming service,” which might be defunct now, I’m not sure. The Netflix meeting goes well and they come back and they say, “Netflix wants this.” Previously, they were trying to shop and get money for the pilot to then shop and try to get money for a full season but Netflix doesn’t play that game. Netflix says, “Yes, we’ll do a season and we want the right of refusal on the next seven.” That’s how Netflix rolls, they change that game. That was in January.
In early February, we were sent this 50-pager legal agreement from Netflix. Our lawyer tells us, “I’m not an entertainment lawyer. This isn’t my wheelhouse. You need to find an entertainment lawyer.” We find one. All this time, we’re still excited. We redlined the whole thing. We’re feeling good. We email it back to Netflix and they quickly respond and said, “We apologize for any missed expectations. This isn’t an agreement to redline. This is the agreement.”
“This is it. Take it or leave it.”
That didn’t go as planned.
Especially when you know the clear loopholes. When you know, you know. You can’t unknow it.
We were like, “Okay. I guess this is it.” We did. Within the second half of 2019, we filmed. They filmed for six months. It was very intense. For the people that were on the show, it was hard because you still had a full-time job and capacity towards the actual business, which arguably is the priority. It was a challenge. Six months of filming. They came back in January 2020.
You had Brandon. You had your head of customer service in the show.
We had Brandon, the face of our brand. We had Steve, the head of customer service for us at the time. We had Mikki, who was in the procurement department putting the purchase orders and the products we wanted to order. We had Daniel, the co-founder. Arguably, Daniel came up with the idea of BattlBox initially. It was the four of them on the show.
What was the format of the show? I’m going to try and watch it. What was the structure?
There’s a theme for each of the eight episodes of season one. If the theme is fire, all of the products are fire related. It’s not exactly how we do things, by any means. We’re looking at this theme and we need to test products to determine if those products can get our BattlBox stamp of approval to then go in a box and send to our customers. A lot of the products we were testing on the show would never end up in the box purely from a financial standpoint. We’re not putting in thousand dollars pieces of equipment. We’re not putting a flame thrower in the box. Sometimes you have to make it for TV.
We did a couple of touch-up shots in January 2020 and then it was crickets in February, March, and April. In May, we were like, “Any progress? Are we doing anything with the show? Is it going to air?” They’re like, “Yeah, it’s going to air. This is the title. We’re thinking it’s going to air sometime later in the year. It’s little information and frustrating for us trying to plan. Shortly after that, in May, they said, “It’s going to be in July and it’s called Southern Survival. You’re not allowed to talk about it but standby. We’ll give you some marketing materials.” It’s crickets again.
Three weeks before launch, they were like, “We’re launching in three weeks. Here are the marketing docs you can use, only this.” It’s not the best experience for a business. Especially with a Netflix original, its talent, actors, and actresses in their viewpoint, which is a completely different mindset from running a business.
We’re trying to forecast what this growth looks like. It’s like, “I need to talk to someone other than a talent manager.” I need to know the analytics of what you’re expecting. We can then do some math on our end to say, “If they behave as X, the converge rate is going to be Y so we need Z many products.” We couldn’t get any support on that side so we were throwing darts hoping that we were right.
What was the net impact of having the brand, BattlBox, on Netflix? I can only imagine that it must have been insane. Do you have any stats on Netflix? What happened?
Leading up to Netflix, we were getting probably about 150,000 to 175,000 unique visitors a month. That was the average month for us. In July 2020 when Southern Survival launched, we had over 1.2 million unique visitors. It was quite a shot up. In August, we still had a few hundred thousand so it wasn’t a complete drop. It’s a slow fall back down.
Now, it finally normalized and it normalized at about 60,000 to 70,000 more than the previous. Now, we’re in the mid-200,000 when you start putting in all the other stuff. Honestly, to this day, every month, we get a few hundred customers into our subscription box product. On the post-purchase, “Where did you first hear about us?” “The TV show.”
It’s tough because it’s a streaming platform. Identifying that traffic outside of a post-purchase survey is tough because it’s all direct traffic, it’s Google organic. Sometimes it’s Google paid, unfortunately. It is what it is. It’s not like they can click the link in the Netflix app and it’s going to tell us some UTM parameters of where they came from. It’s tough. You have to look at the direct traffic and Google organic and reverse into what the uplift is to determine this traffic.
That’s the only drawback. What about the financials? Traffic was 10X. Did the revenue 10X also?
No, I wish it did. The revenue did increase. We were doing probably about $15 million prior. 2020 is a little bit of an anomaly.
COVID.
The Covid boost too. It gets a little bit lost in the shuffle with that. We’re probably about $14 million without Covid and the show. We quickly got into the twenties post-TV show.
Not bad. 25% increase in revenue, which was sustained.
The fact that it still sits on the platform, it’s long in the tooth in the sense that, every day, there are new people watching the show and discovering our brand that way, and then they come into the ecosystem.
We’ve spoken about BattlBox, which, in M&A parlance, is your platform company. You guys have acquired a number of brands, the most prominent being Carnivore. Beyond Carnivore, you mentioned another brand, which is a competitor to BattlBox. Do you want to run us through a summary of your M&A journey thus far? We’ll talk about your acquisition because your group was acquired and it was a big exit for you. Let’s talk about your M&A. Why did you start to think, “We need to start acquiring other businesses and attach to BattlBox?” Many founders stick with their passion project.
I wish I had a better story to say, “It was because we knew we had to go this way and this way.” One of the initial things, when I came on, was that I was transparent with everything. I want to document this because I want to stamp this out and see if we can replicate it. Quickly, in about a year’s time or less, we had launched two additional subscription box products.
We launched one called Barbecue Box, BBQBox.com, which was everything but the actual protein, sauces, seasonings, wood products, recipes, and snacks, everything for traditional barbecuing. We launched Spartan Carton, which was a monthly subscription for supplements, proteins, and workout gear. It’s fitness-related. We launched both of those. We ended up selling both of them to a company. We didn’t grow them as large as we thought we could have. We didn’t think that they had the scale that we were hoping they did.
Which did you sell for?
Both were less than seven-figure revenue, it was a few hundred thousand. Nothing super notable.
What revenues were they doing at the time you sold them?
Barbecue Box was doing about $400,000 in the top line. Spartan Carton may be doing $200,000 or $250,000. We didn’t see a path towards easily getting them over seven figures. We were missing something. Through our network, we found a company that was willing to buy them and pay us a multiplier of EBITDA. We agreed at 3.5X.
For us, it made sense. We were going to get profit for three and a half years. We were putting all the profit back in anyway so it was a nice payday to move on and focus. The company that bought them both were trying to do this eCommerce rollup, and they were called Guy Commerce at the time and their flagship brand was Carnivore Club. That was a Toronto-based company built in 2013. They were on Dragons Den and got a deal. It’s a big gifting and some great content. I liked a lot of what they did. That was their flagship.
They then decided they didn’t want to do that anymore and they sold all their smaller brands to this one person that was trying to do the same.They sold the two companies we sold them and sold to somebody else and all they had left was Carnivore Club. They said to us, “We’re going to sell all these small brands to these guys. Do you want to buy Carnivore Club?” We came up with a deal that made sense. We brought on Carnivore Club.
What’s the deal structure for Carnivore Club?
I want to tell you but, Tim, a friend of mine, the guy that sold it to me, I don’t think he’d appreciate if I told you the structure. It was a good deal. We had it paid off in a short period of time. Granted, in 2019, we get COVID so the meat is delivered to your house.
It’s good timing, to say the least.
We timed it. The business grew quickly and because of that, we were able to pay off.
What do you think you did well to grow? Besides COVID, what did you do? What other operational efficiencies did you put in place? What marketing growth strategy did you put in place to let it grow and allow you to pay off?
There are two parts to it. One is it was our team. We have one guy that was focused on email and he was spending all his time on email. All of a sudden, we realize that for a short little additional effort using the same strategies, we can test the same type of email over here. There’s not much overlap between the two. It’s not like someone’s going to see the similarities. It was a lot of that. Adding the additional business with the exception of the procurement side wasn’t a massive lift. That’s how we were able to run so fast and see the success.
In addition to the people and the team, we have this tech stack. There’s marketing tech, backend stack, and everything that is our tech stack. It’s there because we’ve tested it. We’ve tried other vendors and products. We know that this is our wheelhouse and with all these products, we know how to leverage them best. We’re most comfortable with these platforms. It’s replicating that. For our management, we needed everybody and everything on both. Everything needs to be using the same core infrastructure. Otherwise, if you’re in Klaviyo over here and MailChimp over here, you have to know both platforms and it doesn’t make any sense. The team and the tech stack are the benefits.
One of the big benefits is we took on the Carnivore Club team into our team and we saw synergies on both sides. I’ll give you an example, Curtis. Curtis was running Amazon for all the smaller brands they and Carnivore Club. He had lost a smaller brand right before they sold to us. BattlBox has an Amazon presence. We’re paying an agency 10% of the revenue for them to run it so it was expensive. All of a sudden, we have a full-time team member that can take that over. There’s an instant cost saving on the flip side of that because we no longer have to pay the agency.
It’s all savings.
There’s the cost savings piece. Now we have more top-line revenue. We can go back to our credit card processor and say, “We have more revenue. We need the same deal and we want it for both. Give us an umbrella package, shipping rates, and suspects like that you can say.” Even in some platforms, “We have two brands now. Please give us a discount.”
It happens a lot with Shopify Plus. Did you share customer data?
We did not. All the brands ran completely independently. We don’t share data now. As a BattlBox customer, we have some flows set up where if we feel that you are not going to buy from BattlBox, we might serve up an email and say, “We realized you haven’t bought from us. We’ve been sending you emails for six months now. Have you heard of Carnivore Club?” We’ll do that. We’ll occasionally highlight a brand for each other. All the data is completely siloed.
It’s a pure opt-in to transition. There are two things I want to talk about before we leave, your team structure and what makes a rock-solid team in your opinion for a brand churning over $25 million in revenue. There’s a content piece, that acquisition, that spokesperson, which we could see in the form of Brandon. What happens behind the scenes? What should you have? What does your marketing team look like and your operations team look like? What’s been your team size? I’m speaking specifically about BattlBox because I don’t want to complicate things with Carnivore Club.
Our team size is a little bit larger than most but it’s because all of our warehouse fulfillment is done in-house. We don’t have a 3PL. Because of that, the majority of our employees are in our actual physical warehouse.
That’s the thing with subscription businesses, most subscription businesses don’t lend themselves well to 3PLs. The complexity there and that novelty on a monthly basis with new products. You’re shipping, right?
Yeah. If stuff gets in late with the additional fees, quickly, the economics aren’t there either. Outside of that, when you look at our core team, we do have the usual suspects on the C-suite. We have a controller, which is paramount for us to have. We have a procurement manager who leads the charge on products. Jumping into the marketing side, we have Brandon Currin who is the face of the brand and focuses on content. We then have Walter. Walter focuses on the other side of marketing, traditional digital marketing. We have an advertising agency and an affiliate agency that he manages. We outsource both of those.
Email is done in-house on Walter’s team and her name is Megan, she’s our marketing coordinator. She’s focused on the influencer relationships and the ambassador relationships. She helps a lot with the email. We have Mark. Mark is the social media manager. He’s managing the social media channels, scheduling posts, and creating basic content like image still content, and some videos occasionally. He’s scheduling all of that.
On the customer service team, we have Luke, who was a customer that then came. He runs customer experience. He has a team of three that are traditional CS agents. We have Patrick. Patrick is on his team as well. He’s our phone sales guy. We have win-back campaigns. When a customer churns from us, they put a couple of email flows. Eventually, Patrick gets them and he picks up the phone to call them and try to win them back. We have Curtis on the indirect sales side. Curtis focuses on our Amazon sales, our eBay sales, the Tundras of the world, and wholesale channels. Anything non-direct-to-consumer website, those his sales channels. That’s pretty much it.
How do you scale a subscription business with ever-changing SKUs on Amazon or eBay? Is it just direct? Do you sell directly there, the SKUs?
It’s such a challenge. Jay is our video editor. He’s very important. He’s a complete rockstar.
Does he shoot also? Is he behind the camera? Does he do post-production exclusively?
No. Up until 2021, Brandon was farm-to-table himself. He was the face and he did the editing. He was a one-man show completely for five years. When we said, “We’re doubling down on content. We need this TikTok piece to work. We need to grow this.” Part of that was there wasn’t enough bandwidth. We said, “Let’s get you a video editor. You just have to worry about filming, the content, and toss it to Jay, and Jay Jay can handle the rest,” which allowed us to get our input out. We’re in the process of, hopefully, finding another video editor to support Jay so that we can pop out even more content.
Back to your question. The Amazons and the eBays of the world, it’s a challenge for us because, and it’s something we don’t do a good job of and it’s on our initiatives for 2023 to do better at. To your point, we’re the subscription box. We might be putting a product in and we know it’s going to do well so we’re like, “We’re going to order 3,000 extra of that because we know it’s going to sell well on our site, on Amazon, and on eBay.”
We put it on Amazon and it had great sales momentum and great sales velocity and now we’re about to run out. We’re ordering another 3,000. We can’t get the price point we need for it to make sense from an economic standpoint. We’re not putting in the giant order to get the price point down. We’re in a weird spot where, eventually, it dies out, which is the worst thing you want to ever do.
On Amazon.
Because of that, it’s a wreckable system and it’s not the right way to do it. We’re going to try to find and identify these core flagship products that we should always have evergreen, anything that we know will have velocity. That’s part of our focus in 2023. The issue is it’s cost prohibitive because we’re constantly having to put our money back out for future products. We’ve got to figure it out.
There are some financial products and inventory finance products that you could lend yourself to, there’s one called Treyd, which would give you about 90 days. It’s 1% a month.
Not bad.
They pay the invoice for you to your suppliers and you get going and that frees up cashflow and buys you time.
1% is super fair.
It’s fair enough. They work on a base rate. With your deal, why did you sell? Did you think it was good timing? This has certainly been a passion project for your team. It’s not been an individual effort at all, three co-founders, and a spokesperson. Brandon has been amazing on the outside. What was the feeling like? Who did you sell to? Do you mind briefly talking about the exit?
Sure. We were at an interesting crossroads. The three co-founders were Daniel, Patrick, and myself. Daniel was ready to be done and was ready to retire. He maybe lost the passion that he once had and Patrick and myself still had it, we wanted to continue. We wanted to take BattlBox to the next chapter. It’s a little bit of a conundrum there. We have two options. We can figure out how to purchase Daniel out and buy the business back where it becomes the two of us or we can take a little bit of money off the table or take money off the table and find a buyer.
Looking at the first option, the reality is we all have this multiplier whether it’s 5, 6, or 7X that we want off EBITDA. If the business stays the same size, that means it’s 5, 6, or 7 years payback. Patrick and I wanted to give Daniel what we’ve all agreed as a fair price. If we don’t grow it and it stays the same size, it’s going to take 5, 6, or 7 years to pay this back. We’re probably having to personally guarantee it. It starts to become scary. We built this but is it worth this to us? We weren’t sure.
The alternative is we are all going to get paid. This is potentially the end but maybe we find a partner that we like. We went through the process of putting this on the market and we had a few offers. The second offer we got was the largest offer from a monetary standpoint, it was from a private equity firm. I loved that they were honest, transparent, and black and white on what they wanted to do.
It quickly became clear that our team did not have a lot of job security moving forward. If they had someone that worked on email or they had someone that did the books, they don’t need our guy. It wasn’t a warm feeling at all. It was like, “This is cold. This isn’t our culture.” We all care and we’re all passionate. We’re all friends, we’re work friends. We weren’t comfortable doing that. We did take that offer.
Our focus was content and community.
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At the same time, we were talking to EMERGE who ended up acquiring us. EMERGE shared this vision. something that was attractive was their motto all of these acquisitions were going to be run as independent business units. Nothing fundamentally was going to be changed but there was going to be buying power, best practices, and stuff that could be shared, maybe physical warehouses that could be shared as they stacked up more companies.
Of course, we took the great offer from the private equity firm and showed it to EMERGE because we identified that we thought that they were the closest thing to a partner. We’re like, “These guys are offering us this, can you get a little bit closer?” Ultimately, we came up with a deal with them. The deal is up to $19 million. There was $11 million US that was paid upfront, no stock, and just pure cash. There was around $2 million that is guaranteed deferred revenue to us.
Over how long?
It’s over a three-year term. That’s $2 million so that takes us to $13 million and the other $6 million. The total number was $19 million. The bonus earn-out is not guaranteed. We have to hit certain growth goals. It broke into three yearly and completely independent buckets. We got some great money upfront but now, we have a decent amount of money that we can earn by staying focused.
You’re still retained as the CEO of BattlBox, that’s what your LinkedIn profile shows.
Yeah.
Do you have a salary as a CEO?
I have a salary and they think it’s a lot, it could be more, but we’ve agreed on it. BattlBox, the entity that existed before, still pays it.
Fair enough.
We’re in control of that, which is great. We renegotiated what the salary would be.
What growth targets have you been tasked to grow over the next three years?
They looked a little conservative and we were super confident as they were a low double-digit growth. We’re talking 15% or 20%. It’s super attainable. Of course, we did sell coming before the pandemic started to bring eCommerce down a little bit. The was the 2025 numbers. You don’t stay in 2025 when the pandemic ends. You look at 2019.
It’s more like for like.
It’s a weird little blip on the radar. We’re still going up to the right. When you take the pandemic and the Netflix show as the baseline, it does make the growth a little bit challenging.
You need another Netflix show.
We’ve got to figure it out.
Thanks for sharing that. How long was the transaction? How long did it take to close the deal?
It took so long. We spoke with the guys at EMERGE in February. We had a deal but the LOI was officially signed at the end of March and the beginning of April. The initial plan closed date was July. It was 60 or 75 days or so. We didn’t know what we didn’t know. We thought we were doing a great job with the financials. When they got audited, we were doing many things that we didn’t even know were wrong. One of the things is deferred revenue. We have this big renewal on the 15th of the month but we don’t ship that actual product until the following month in the beginning.
November 15th is the big renewal day for us. We were calling that November Revenue. That’s the December revenue. It’s little nuances like that and then normalizing books and then digging into everything and maybe we were categorizing something incorrectly. The audit is what took so much time. We didn’t end up closing until October.
They had their financial auditors rewrite your financial statements to get to the single source of truth on there.
At the end of March and the beginning of April, the LOI was signed. We didn’t close until the beginning of October. The audit was the big chunk. We had to find an auditor.
That was your task.
Once we did that, there was something called quality of earnings. The entire valuation was based on a multiplier of audited EBITDA.
What multiple did you sell at?
We sold it at six 6X EBITDA. We had to do our auditors but then once we got done, which took months, they had almost a light audit which was called quality of earnings. They’re then looking at the audited numbers and also looking at growth. It was a process. If there was one thing I wish we would’ve done, knowing that we were going to possibly be for sale, expensive as it may be having audited finance, it would’ve been beneficial.
It would have saved you time. Waiting for 6 or 7 months from an LOI to a close is nuts. It feels like forever. Interesting stuff. When you put it on the market, did you work with a broker? Was it through a broker? Did you put it up in a marketplace? Did you go with a specialist? Was it hush-hush?
It’s funny. Tim Ray, the guy that we sold Barbecue Box and Spartan Carton to and that sold us Carnivore Club, I was talking to him and I told him we were going to be selling. He’s like, “I used this broker on this deal before Carnival Club if you want to look at him. His name was Tim too. Talk to him.” We hit it off. We gave him the financials. We didn’t sign anything but we’re just chatting. He’s a broker. He’s like, “I have a bunch of companies in my network I can reach out to.”
He starts reaching out to people. Meanwhile, Richard, our CFO, goes through a more formal process. We went to WebsiteClosers.com. He goes through that process and they then send over the agreement in exclusivity. I have this Tim guy working these deals so we said, “Tim’s reached out to these 40 people. There’s an exclusion list. If these 40 come through, it’s Tim.”
It’s Tim’s deal.
They agreed to it so we were good with it. WebsiteClosures brought us a lot of calls. That private equity offer was from them. Tim, one of the 40 he reached out to was EMERGE, and he got the deal. It’s cool to see the little guy win sometimes. He got it. We did both. WebsiteClosures were great to work with. They didn’t get the deal. I respect their process and they put it in front of a lot of people because we had a lot of phone calls from their efforts.
Makes a lot of sense. I can’t not talk about the hoodie you are rocking, Recharge. We’re talking subscriptions. They’re a sponsor of the 2X eCommerce Podcast. You mentioned your tech stack. What does your tried, tested, and battle-ready tech stack look like?
On the Recharge side, we’ve been with them for over five years so it’s quite a while. What we love about them is the open API. Our development team can build what we want to have exactly. They’re fun to work with. It’s a great team. As they’ve grown, we’ve grown. They’re not a vendor. It’s a true partnership. They care about us succeeding and we care about them. It’s cool to see it. The front-end stack is Shopify Plus and Recharge. For BattlBox, we have a mobile app on iOS and Android app.
Is it natively built? Is it latched on a platform?
It was natively built. We do utilize OneSignal.
For notifications.
From a mobile app, we’re using Shopify’s mobile SDK. We’re using Recharge’s API. We’re using OneSignal. On the marketing tech, we’re big on Wonderkin. We’re using Northbeam. We were with Trustpilot and we switched to Northbeam. Klaviyo, Zapier, Klikly, and Instapage. We use Yapo for some stuff.
Why do people sigh when they mention Yapo?
I’m not alone. They gobbled up a bunch of companies. It’s the SaaS model where they get you in, they try to get you into a couple of different, buckets, and then they’re going to raise the price. It’s like clockwork. Every year, it’s like, “It’s time to renegotiate but we’re not going to give you a better deal. It’s now 40% more.” The stickier you are because of what you’re using them for, the bigger that increase is. I don’t get warm and fuzzy, which is a shame because they do have some decent products. On the back end, we’re using Gorgias for our CS and Cloudflare. We use Google Suite, Avalara, and ShipStation. We use Finale for inventory. That’s pretty much it.
What’s your WMS, Warehouse Management System?
We just have inventory management system. We don’t have a warehouse management system. It’s Finale Inventory.
John, you’ve been super helpful. Before I let you go, we have these evergreen rapid questions where I ask founders. I’m going to ask you about 6 or 7 questions. If you could use a single sentence to answer each of the questions, it’d be brillo. Are you a morning person?
I am not but I force myself to be.
What’s your daily morning routine like?
I wake up every morning at 6:00 AM. Honestly, before BattlBox, I woke up every morning at 4:30. I start waking up at 6:00. I’m in front of the computer catching up on email. 6;00 to 9:00 AM is my most efficient time because no one else is up yet and rocking and rolling. All those tasks that have been on my to-do list for days, the harder stuff that takes time, I’m able to knock everything in the morning. I’m not a morning person by any means. I have to set three alarms to get up.
Are you in sports?
I am not. I wish I were. I need to prioritize time and I don’t.
What are two things can’t you live without?
An energy drink every morning. It’s not healthy but I have one every morning. I don’t drink coffee.
There’s one I’m drinking called TENZING.
How is it?
It’s a natural energy and purely from plants. It gives me sustained power without a drop of coffee. It lasts for about 90 minutes and that’s it.
I’d say an energy drink and good food.
I’m with you, amen to that. What book are you reading or listening to?
I’m not. You and I spoke about the content and community and the MrBeasts of the world, how they’re reverse engineering and ending up with these businesses that are huge because of that. I’m not going to be a listener. I’m not a demographic for MrBeast. I’m probably a little bit older past the sweet spot. I’m listening to the MrBeasts of the World. There are dozens like this. He’s a great example.
All these content creators that have now snuck into the business, I’m listening to their content and their podcasts. I’m trying to understand their mindset a little bit more. We both ended up not quite in the same place but in this business world. We did the brand and then content and community. They did content and community and then the brand. I want to better understand it. Right now, I’m ingesting as much content from content creators to understand how we can do better. Naturally, we’re not going to be looking at the equation the same way they are.
No, you’re not. Most of them are entertainers and entertainment is broad and addictive. You tend to stick with your entertainer. You guys are a niche and you serve a purpose and there’s a certain persona. Although you did mention the car thing, which I will buy. The seatbelt cutter and glass breaker are amazing. The final question is, what has been your best mistake to date? By that, I mean a setback that’s given you the biggest feedback.
The best mistake to date comes to me right away. I can’t give you one sentence about it. In 2015, 99% of our traffic was on Facebook. We were running Facebook ads and that was our number one lead source by a lot. Labor day of that year, we’re planning to have this wild three-day sale. We have all the creatives. We’re going live Friday with all the ads. This is going to be the biggest weekend we’ve ever had with certainty, not even 100% confidence.
On Friday, at 5:00, all of our ads and our ad account got turned off, deleted, and canceled, “You are off of Facebook.” That’s where we were acquiring 100% of our customers. We were getting some organic customers from Brandon and YouTube. With advertising dollars, the lion’s share was coming from Facebook. We went from these great days we were having to nothing over the weekend.
Long story short, we couldn’t get ahold of anybody. Talking to someone on Facebook, good luck. We got lucky and one of our customers worked for Facebook, worked in a department that sat next to the auditing team. This is when we had the bulletin board, it was like, “I’m going to walk over there and see what I can do.” Within a couple of hours, we were back on. It’s pure luck because we were talking to our community.
That was the best mistake because, at that point, we got back up and running but we said, “We will never be this dependent on a single platform.” It’s not good business to have all of our eggs in one basket. We weren’t advertising on Google at the time. We weren’t trying anything else. We quickly diversified and we stayed diversified. We don’t want anything to be too much of a pull for us. Things obviously will have success somewhere and scale it up and it might take a lion’s share for a short period of time but we don’t want that to ever be the sustainable model.
John, thank you so much for giving us your time, your advice, and your experience. It’s been an amazing conversation. For those who want to find out more about BattlBox, it’s BattlBox.com. Are you active yourself? I’ve followed you on your Twitter and Instagram. You’re on LinkedIn. Are you actively building an audience on any platform? Would you like the readers to join you on any platform or which would it be?
I’m horrible at Twitter. I’ve never been able to dedicate the time needed to do Twitter. I am active on LinkedIn.
Give John a follow, for sure, on LinkedIn.
I have a blog, OnlineQueso.com, where a lot of the things we’ve chatted about, I’ve written about it as we were going through it like lessons learned and mistakes we make. It’s an unfiltered view of the behind-the-scenes of some of the things we’re trying to accomplish.
I’ve seen some familiar faces on there. John, we could go on and on. You’re an incredible soul. You’ve built a meaningful and substantial business with the right heart. Thank you for coming on the 2X eCommerce Podcast. It’s been a pleasure having you.
Thank you so much. This was so much fun.
Cheers.
Cheers.