DTC Podcast Episode 491: Scaling to $1B While Spending Just 5% on Ads – The Simple Modern Playbook

Release Date: March 17, 2025
Host: DTC Newsletter and Podcast
Guest: Brian Beckham, Co-Founder of Simple Modern

1. Introduction to Simple Modern’s Journey

Timestamp: [02:04]

Brian Beckham shares the inception story of Simple Modern, highlighting his and his co-founder Mike’s five-year experience at a penny auction e-commerce company. This foundational period underscored the dangers of over-reliance on digital ads, shaping their mission to build a brand less dependent on high advertising spends.

Notable Quote:
"We wanted to create a brand that was not dependent upon digital ads."
— Brian Beckham [02:14]

2. Navigating the Drinkware Market

Timestamp: [04:57]

Brian discusses the landscape of the drinkware category when Simple Modern started in 2015. Competing against established brands like Yeti and Hydro Flask, Simple Modern identified an opportunity in offering a broader range of colors and styles, treating drinkware as a fashion accessory rather than a mere utility.

Key Points:

• Market Positioning: Differentiating from premium brands with high margins and low-cost competitors.
• SKU Strategy: Initially offering up to 45 colors to maximize customer choice, later optimizing to 30 to reduce decision fatigue and stock issues.

Notable Quote:
"We're playing in a fashion category far more than a product that people are just buying for drinking water."
— Brian Beckham [00:00]

3. Amazon as the Growth Engine

Timestamp: [08:01]

Amazon served as the primary growth platform for the first few years, leveraging the digital shelf to offer extensive product variations. Simple Modern’s strategy involved:

• Maximizing SKU Count: Offering a wide array of colors to dominate search placements.
• Branded Search: Achieving 50% of sales through branded queries, minimizing dependency on competitive ad spending.

Notable Quote:
"The beautiful thing about E-Commerce is that the shelves are digital and they don't have limits to them like physical shelves do."
— Brian Beckham [08:01]

4. Advertising Strategy: Minimal Spend, Maximum Impact

Timestamp: [10:46]

Maintaining a low ad spend (approximately 5% of sales), Brian emphasizes the importance of organic growth through strong brand presence on Amazon. Key strategies include:

• Branded Search Optimization: Driving 50% of sales through customers specifically searching for Simple Modern.
• Targeted Ad Spend: Allocating ad budgets to competitor and relevant keywords where organic ranking is challenging.

Notable Quote:
"We've been able to grow our branded search to be 50% of our sales on Amazon."
— Brian Beckham [11:23]

5. Expanding Beyond Amazon: Target Retail Partnership

Timestamp: [12:27]

Once established on Amazon, Simple Modern expanded into Target, significantly enhancing their distribution. The transition was facilitated by:

• Sales Data Leverage: Demonstrating top performance on Amazon to secure shelf space at Target.
• Consistency in Conversion: Ensuring products that performed well online continued to excel in physical retail environments.

Notable Quote:
"We were able to make the jump over to Target which was very much a game-changing expansion for us in our distribution."
— Brian Beckham [12:27]

6. Diversifying Marketing Channels

Timestamp: [16:47]

While maintaining low ad spend, Simple Modern recognizes the necessity to build brand awareness. Efforts include:

• TikTok Shop Utilization: Making influencer partnerships accessible without heavy margins, focusing on seasonal and innovative products to drive viral content.
• TV Advertising Trials: Experimenting with television ads to assess their impact on Amazon and website sales, showing promising initial results.

Notable Quote:
"TikTok shop has been a little bit of an unlock for us in that it's made Influencer accessible to a brand that doesn't have huge margins."
— Brian Beckham [17:50]

7. Product Development and Innovation

Timestamp: [25:27]

Brian highlights Simple Modern’s commitment to product excellence and innovation, which has been pivotal in maintaining their premium brand status. Recent initiatives include:

• Launch of Trevi: A new brand in the electrolyte space, leveraging Simple Modern’s playbook to penetrate the consumable market.
• Kids’ Product Line: Developing specialized products like leak-proof kids’ bottles and backpacks, capitalizing on high repeat purchase rates.

Notable Quote:
"We've launched a new brand called Trevi that is in the electrolyte space."
— Brian Beckham [25:27]

8. Core Principles Driving Success

Timestamp: [29:54] & [30:11]

Brian discusses the 25 principles that have guided Simple Modern towards nearing $1 billion in sales. Key principles include:

• Customer Trust: Emphasizing reliable product quality to earn and maintain customer trust.
• Viewing Mistakes as Tuition: Encouraging a culture where mistakes are learning opportunities, fostering innovation and resilience.
• Mission-Driven Hiring: Prioritizing hires who align with the company’s mission over those with merely technical skills, ensuring long-term commitment and team cohesion.

Notable Quotes:
"Customer trust is earned in drops but lost in buckets."
— Brian Beckham [30:11]

"We care very much about like our hiring process and hiring missionaries instead of mercenaries."
— Brian Beckham [35:27]

9. Company Culture and Generosity

Timestamp: [36:58] & [37:27]

Brian elaborates on Simple Modern’s internal culture, focusing on generosity and relationship-building:

• Impact Over Profits: Aiming to be an impact machine that positively affects everyone it touches rather than solely focusing on financial returns.
• Relational Approach: Building strong, meaningful relationships with manufacturers and employees alike, exemplified by hosting annual banquets for factory workers in China.

Notable Quote:
"We want the company to positively impact everybody that it touches."
— Brian Beckham [37:27]

10. Future Growth and Expansion Plans

Timestamp: [25:27] onwards

Looking ahead, Simple Modern plans to continue expanding within and beyond the drinkware category:

• Trevi’s Growth: Aiming for Trevi to potentially surpass Simple Modern by increasing subscriptions and customer base.
• Further Retail Partnerships: Continuing to secure shelf space with major retailers like Kansas basketball and other college sports teams.
• Broadening Product Lines: Exploring new categories while maintaining a focused brand identity to ensure consistency and trust.

Notable Quote:
"We're a very ambitious group. The early returns have been good so far."
— Brian Beckham [25:27]

Conclusion

Brian Beckham’s insights into Simple Modern’s strategic growth underscore the importance of brand strength, smart advertising investments, product innovation, and a mission-driven company culture. By maintaining a low ad spend while maximizing organic growth through platforms like Amazon and Target, and fostering a culture of generosity and continuous learning, Simple Modern exemplifies a robust DTC brand poised for continued success.

Final Notable Quote:
"Ultimately, we're wanting to scale the company as an impact machine as much as anything."
— Brian Beckham [37:27]

For more detailed insights, follow Brian Beckham on LinkedIn or Twitter, and explore the 25 principles that have been instrumental in scaling Simple Modern to near $1 billion in sales.