📦 - Avoid These Mistakes...

DTC 605 - Common Mistakes With Outway’s Rob Fraser, UGC Tip Friday, July 19, 2024 Good morning, We’re back again with our second edition of the DTC Summer Series newsletter takeover. 😎 This week, you’re getting learnings directly from the one, the only, Rob Fraser—Founder of Outway Socks. 🧦 Here’s what you’ll find in today’s DTC: ❌ Avoid these common mistakes when trying to scale your ecommerce business! 💡 And…no organization is perfect but quick acting customer support team can make things right. You’re reading this newsletter along with new subscribers from: [Phoenix Bodywork and Wellness](, [Bon + Berg](, and [Attentive](. 👋 DTC TAKEOVER ❌ What Not To Do To Grow Your DTC Business The internet is full of advice on what you should do to grow your DTC business. The latest tech to 10x your sales, the hottest trends to hitch your wagon, endless agency hot takes, and Shopify dashboard screenshots. But most of the available advice won’t help you grow your business. What works for one brand is not directly applicable to another. The path to success is hard to replicate, but each path has common pitfalls worth avoiding. It’s best to spend less time trying to copy what works and more on learning what doesn’t work. By simply avoiding mistakes you’ll be surprised how far ahead you’ll get over time. Charlie Munger said it best: "It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent." 💭 Avoid Advice From The Inexperienced Everyone will have an opinion about how you should build your business. What I’ve learned over time is that your initial insight and gut feeling about what you should be doing is often correct. But it’s tempting to listen to ‘experts’. You’ll think to yourself “surely they know more than I do, so perhaps I should abandon my path and hop on theirs”. Don’t. In 2016 I started [Outway](, a sock brand. The most common advice I received in the first years of building was that I need to expand into additional product categories. Advice from the inexperienced would say underwear is the obvious choice, then sports bras, then t-shirts and pants, and so on. On the surface, replicating early success across product expansions seems like a great idea. But it’s not that simple. Product line expansion too early has many downsides—diverting focus, spreading resources thin, confusing the customer, complicating supply chains, entering competitive markets, and more. Globally, socks are a ~$40 billion market and at the time we were being told to expand product lines we were barely over $1 million in sales. Were we better off expanding product lines and diverting focus or doubling down on the opportunity in front of us? I like to think of product line expansion like running multiple races. Your core product line is the race in which you’re most prepared and in the lead pack. But all of a sudden you catch a glimpse of another race in the corner of your eye and decide to hop the barrier and join. But this isn’t a race you’ve prepared for and now you’re at the back of the pack. And worst yet, you’ve fallen behind in the race you were leading. Before expanding product categories I like to ask myself two questions: - Have we maximized the opportunity in front of us, and if not, will expansion divert the necessary focus and resources to maximize the opportunity? - Are there areas to grow within our core category that we haven’t explored? Over the past 5 years we’ve expanded and contracted product categories more than I’d like to admit. And although some were successful, they were always at expense of the focus and resource allocation required to maximize the opportunity in front of us. On the other hand, I’ve been surprised how many creative ideas have been the result of asking and answering question 2. Within a category there often exists interesting areas of expansion that leverage core competencies. At Outway, continually asking and answering question 2 led to: - Launching a sock subscription program that generated six-figures of recurring revenue. - New collections of kids socks, merino wool socks, and compression socks which have become seven-figure lines of business. - Our [Custom Lab]( business which makes private label socks for the world’s best brands generates multiple seven-figure revenue with great margins and negative cash conversion. - Diversifying channels from one to three with our owned site, Amazon, and retail throughout North America, increasing brand discoverability and accessibility across markets. By doing less and focussing more on what matters, we’ve built a robust, diversified, growing, and profitable business with a unique offering. And we’ve just scratched the surface of what’s possible. On to shiny objects and silver bullets… Keep scrolling for more. 👇 DTC EVENT 👀 Rob Is Joining Us At C-Suite Mastermind. Will You Be There? If you’re a DTC founder or team lead and are wondering if [you should attend our C-Suite Mastermind](, here’s five reasons we think you should: 1️⃣ Elite Networking: Connect with top DTC leaders and potential collaborators. 2️⃣ Intimate Setting: Only 50 seats for personalized, impactful interactions. 3️⃣ Unique Experiences: Whale watching, gourmet dining, and more to inspire and rejuvenate. 4️⃣ Practical Insights: Learn from industry experts like Andrew Wilkinson, Sarah Carusona, Rick Cadotte, and Brock Mamoser. 5️⃣ Growth-Focused Sessions: Get actionable strategies to overcome growth obstacles. Will we be seeing you September 18th and 19th in Victoria, BC? [Secure Your Spot Now]( *Ad DTC TAKEOVER ❌ What Not To Do To Grow Your DTC Business — Part Two 🪩 Avoid Shiny Objects And Silver Bullets The curse of an entrepreneur is that they want it all now. The success of an entrepreneur is that they can remain patient. Success in business requires staying around long enough to make sense of what’s going on. The biggest mistakes I’ve made in business have been the result of impatience. Shiny objects are everywhere – an exciting idea, project, technology, or trend that captures attention and enthusiasm but may ultimately be a distraction from more important tasks or goals. In 2022 we had serious software bloat. We were just piling it on, after all, Twitter wouldn’t shut up about it. Two things that looked great on the surface were our mobile app and referral program. All data pointed to their undeniable success. We put a lot of time into these programs and the sunk time fallacy was real. But I was not convinced that the data was accurate. It appeared too good to be true. So we cut it all out. The result? No changes in our revenue. Instead of adding incremental revenue, they were just driving up costs. Some questions I like to ask myself to avoid shiny objects: - Is this idea something that will help our customer or just our own egos? - Will this technology actually drive incremental revenue? - Is this trend applicable to our product, audience, and/or market? Silver bullets are intoxicating – a solution that is perceived as a simple and seemingly magical answer to a complex problem. It’s common to think that thing you’re not doing is the solution to all your problems and by doing it, you’ll grow like crazy. But in reality, silver bullets don’t exist. Where we’ve searched for silver bullets has primarily been with ‘expert’ hires and agencies. “This agency works with brand x,y,z, they’ll have all the secrets to our growth if we go with them.” “This expert hire comes from brand x, they’ll be able to apply that knowledge and help us scale.” But like I said above, what works for one brand is not directly applicable to another. Searching for a silver bullet is the opposite of patience. It’s seeking a solution that will shorten the timeline to success. Overnight successes are after 10 years in the making. In rare cases this can work out, so I’m not saying don’t take a chance on unique opportunities in front of you. I’m saying be very skeptical and proceed with caution. We’ve never had success by chasing the opportunities that seemed too good to be true. Over the years, our biggest wins have been the compound results of small improvements across our entire business over years. In the spring of 2022 I made a big ‘expert’ hire to lead Outway’s Growth Marketing. I spent considerable time and resources hiring. They had the answers to all our questions and were confident they could scale us to the moon. After three months, they were gone and cost the business over $400k. I knew better, but had to relearn the lesson I shared above – silver bullets don’t exist. Some questions I like to ask myself to avoid silver bullets: - What role did this agency play in the success of brand x,y,z (and I mean, really dig into this). - How instrumental was this ‘expert’ hire from brand x in their success? Did they materially add to the results, or simply ride along the momentum that already existed? - Am I thinking short term and will this silver bullet result in long term downsides to the business (think over discounting, etc). - Is my business in the right spot to work with this agency, make the big hire, or take a chance on a unique opportunity. Sometimes great opportunities simply don’t work because you and/or your business is not mature enough. 🏆 Avoid Competition Focussing on others is a sure way to lose sight of your own path. Business is an infinite game with undefined rules and no finish line. After all, who are you really in competition with? It took a long time for me to figure this out. As mentioned above, I founded a sock business that has created the ‘yoga pant for the foot’. Put another way, we created the only pair of socks you need for sport, work, and play. The ultimate combination of performance, style, and comfort. So naturally, when thinking about competition, common sense would say look to others in the market doing something similar. But is that wise? Socks are an afterthought for the majority of the population. As kids, socks are what our parents buy us and are the world’s least desired gift. As adults, socks become a purchase we make at a department store. We don’t think about it, and look for the best price of a bulk pack of socks. Very few people know that socks can be better and the idea that you’d spend $22 on a single pair seems insane. But there is a small cohort of people that care about their socks. I estimate they make up <5% of the total sock market, and this is the market that our ‘competition’ operates in (their ‘pond’). Other sock brands are fishing this pond, trying to out fish each other, usually by utilizing a new technique (marketing), lure (product), and/or part of the pond (positioning). And sure, we could fish that pond too. But I’m more interested in finding our own pond. That pond is the 95%+ of people in our market that simply don’t know socks can be better. To me, this is an exciting opportunity and it’s entirely up for grabs. So we’re not in competition with other sock brands. We’re solely focussed on how we can generate awareness that socks can be better. I’d encourage you to think about who you’re actually in competition with, if anyone at all. Thanks for taking the time to read this newsletter. It’s written with the hope that you’re able to extract insights and apply them to your life and business. All with the goal of avoiding pitfalls and succeeding in the long term. If you enjoyed this, let me know on [Twitter]( and [LinkedIn](. - Rob 🌐 IN THE SOCIAL SPHERE We can’t control shipping and delivery issues caused by third-party carriers, but we can deliver a great customer service experience by acting quickly. Here’s how Outway turned a negative review into a positive one. 👇 Can't view the image? [Click here]( 📰 NEWS - Amazon Prime Day first day sales [reached $7.2 billion, thanks to a 210% increase MoM in back to school spending](. - Heinz [releases a parody trailer of Deadpool and Wolverine to promote their limited edition Marvel-inspired ketchup and mustard](. - Baskin Robbins [teams up with jewelry designer Susan Alexander to create an Ice Cream Social charm necklace for National Ice Cream Day](. SPONSOR DTC 📥 Got a B2B Biz? Join dozens of B2B companies finding demand-gen success through our niche community of 160k brand leaders and founders this year. [Talk to our team to learn more](. 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